ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 4(1), KOLKATA, KOLKATA V. BURNPUR CEMENT LIMITED, BARDHAMAN

ITSSA 29/KOL/2025

AI Insights

The case involves multiple appeals by the revenue against Burnpur Cement Ltd., concerning the assessment years 2011-12, 2015-16, and 2016-17. The appeals were directed against the orders of the Ld. CIT(A), which had deleted the additions made by the Assessing Officer regarding bogus sales of investments and unexplained cash credits. The tribunal examined the procedural aspects of the appeals, including the condonation of delays in filing, and the substantive issues related to the additions made by the Assessing Officer under sections 153A/144 of the Income Tax Act, 1961. The tribunal found no incriminating material to support the additions and upheld the CIT(A)'s decisions based on established legal precedents.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713099 (ITAT-KOLKATA)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: misc
• Other Referred Cases: PCIT Vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxman.com 399 (SC), PCIT vs. Ambe Tradecorp (P.) Ltd. (2022) 145 taxmann.com 27 (Gujarat), Poddar Realtors Vs. ITO in ITA No. 265/Kol/2023, order dated 22.06.2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. K. TULSYAN
• Assessee Lawyers: RAJA SENGUPTA; PRINTED FROM COUNSELVISE.COM
• Keywords: Unexplained cash credit; Document seized; Documents seized; TDS; Accommodation entries; Bogus
• Section: 132; 153A; 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA [Before Shri Rajesh Kumar, AM& Shri Sonjoy Sarma, JM] I.T(SS).A. No. 27/Kol/2025 Assessment Year: 2011-12 & I.T(SS).A. No. 28/Kol/2025 Assessment Year: 2015-16 & I.T(SS).A. No. 29/Kol/2025 Assessment Year: 2016-17 ACIT, Central Circle - 4(1), Kolkata Vs. Burnpur Cement Ltd. Appellant Respondent Date of conclusion of Hearing 13.05.2025 Date of Pronouncement 31.07.2025 For the Appellant Shri A. K. Tulsyan, AR For the Respondent Shri Raja Sengupta, CIT, DR ORDER Per Shri Rajesh Kumar, AM All these captionedappeals filed by the revenue are directedagainst theseparate orders of Ld. CIT(A),Kolkata-27dated 09.10.2024, 25.10.2024 & 26.10.2024for AY 2011-12, 2015-16 & 2016-17 arising out of assessment orders passed u/s. 153A/144of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by DCIT, Central circle-4(1), Kolkata all dated 31.12.2018. 2. The issues involved in all these appeals are interconnected and relate to the same assessee, they are clubbed and heard together for the sake of brevity and convenience. First, we take up ITA No. 27/Kol/2025 3. At the outset, we observe from the appeal folder that there is a delay of 300 days in filing the appeal by the department and in support of this a condonation petition was filed. It was stated in the condonation petition that the delay has occurred due to obtaining the administrative approval Printed from counselvise.com 2 IT(SS)A Nos. 27 to 29/Kol/2025 Burnpur Cement Ltd.AYs 2011-12, 2015-16 & 2016-17 from the competent authorities, which took quite a long time and accordingly, the delay may be condoned. The ld. AR, on the other hand, did not oppose the condonation of delay. Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing. 4. The issue raised by the revenue is against the deletion of addition of Rs. 70,00,000/- by Ld. CIT(A) as made by the Assessing Officer on account of bogus sale of investments. 4.1. The facts in brief are that the assessee filed the return of income on 27.09.2011 declaring total income at Rs.1,10,58,510/-. The case of the assessee was selected for scrutiny and assessment was accordingly framed vide order dated 28.03.2014 determining the total income at Rs.1,13,58,510/-. Thereafter, a search action u/s. 132 of the Act was conducted on 20.10.2016 and assessee was also covered under the said search. Accordingly, notice u/s. 153A was issued to the assessee on 11.04.2017, requesting thereby to file return of income for the year under consideration. In response to notice u/s. 153A, the assessee filed return of income on 21.08.2018 declaring total income at Rs.1,10,58,509/-. During the course of assessment proceedings, the statutory noticed along with the questionnaire was issue which was duly replied by the assessee. The Assessing Officer, thereafter taking into consideration the submissions and evidences filed by the assessee made the addition of Rs.70,00,000/- on account of sale of investments by the assessee during the year by treating the same as non-genuine. 4.2. In the appellate proceeding, the Ld. CIT(A) allowed the appeal by holding that there is no incriminating material found during the course of search and accordingly, the Assessing Officer has no jurisdiction to make any such addition by following the decision of Hon’ble Apex Court in the Printed from counselvise.com 3 IT(SS)A Nos. 27 to 29/Kol/2025 Burnpur Cement Ltd.AYs 2011-12, 2015-16 & 2016-17 case of PCIT Vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxman.com 399 (SC). 5. After hearing the rival contentions and perusing the material available on record, we find that the assessee has taken unsecured loan during the year of Rs. 70,00,000/- from M/s. Deesha Timber Pvt. Ltd. We further note that the issue raised in ground no. 1 by the revenue is against the deletion of addition of Rs.70,00,000/- which was made by the Assessing Officer on account of sale of investments by treating the same as accommodation entries, therefore, the very ground of the department is wrong. We also note that in the seized material, there was mention that assessee has received unsecured loan of Rs. 70,00,000/- from M/s. Deesha Timber Pvt. Ltd. which was duly disclosed in the books of account of the assessee. It was also not stated that the lender is a shell company in the said seized documents. Thereafter, the Assessing Officer during the course of assessment proceedings recorded a finding that M/s. Deesha Timber Pvt. Ltd. is a shell company on the basis of the statement of one Mr. Praveen Agarwal recorded by the Investigation Wing, Kolkata on 10.02.2015, which was never furnished to the assessee during the course of assessment proceedings u/s. 153A. Therefore, we do not find any infirmity in the order of the ld. CIT(A) and are inclined to uphold the same by holding that there is no incriminating material found and seized during the course of search by the search team and the Assessing Officer has no jurisdiction to make the addition in the unabated assessment. The appeal of the revenue stands dismissed. Now, we take up IT(SS)A No. 28/Kol/2025. 6. At the outset, we observe from the appeal folder that there is a delay of 3 days in filing the appeal by the department and in support of this a condonation petition was filed. It was stated in the condonation petition Printed from counselvise.com 4 IT(SS)A Nos. 27 to 29/Kol/2025 Burnpur Cement Ltd.AYs 2011-12, 2015-16 & 2016-17 that the delay has occurred due to obtaining the administrative approval from the competent authorities, which took quite a long time and accordingly, the delay may be condoned. The ld. AR, on the other hand, did not oppose the condonation of delay. Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing. 7. We have dismissed the appeal of the revenue in IT(SS)A No. 27/Kol/2025 for AY 2011-12 because there was no incriminating material found and seized during the course of search by the search team and the Assessing Officer has no jurisdiction to make the addition in the unabated assessment. In this appeal also, we apply our decision in AY 2011- 12(supra) mutatis mutandis as the issue is identical and dismiss the instant appeal of the revenue. Now, we take up IT(SS)A No. 29/Kol/2025. 8. At the outset, we observe from the appeal folder that there is a delay of 3 days in filing the appeal by the department and in support of this a condonation petition was filed. It was stated in the condonation petition that the delay has occurred due to obtain the administrative approval from the competent authorities, which took quite a long time and accordingly, the delay may be condoned. The ld. AR, on the other hand, did not oppose the condonation of delay. Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing. 9. In ground no. 1, the revenue has assailed the order of Ld. CIT(A) deleting the addition of Rs.1,25,00,000/- as made by the Assessing Officer on account of unexplained cash credit received by the assessee from paper/shell companies. 9.1. Facts in brief are that the assessee filed its return of income u/s. 139(1) of the Act on 17.10.2016 declaring a loss of Rs.63,78,89,526/-. Thereafter, search was conducted on 20.10.2016. Notice u/s. 153A of the Printed from counselvise.com 5 IT(SS)A Nos. 27 to 29/Kol/2025 Burnpur Cement Ltd.AYs 2011-12, 2015-16 & 2016-17 Act was issued on 11.04.2017 and the same was complied with on 18.09.2018 by filing return of income declaring the same loss as declared in the original return. Thereafter, statutory notice along with questionnaire was issued. The Assessing Officer during the course of search operation seized a document BCL-15 bearing page no. 157 which stated that assessee has received unexplained loan of Rs.1,25,00,000/- from two parties viz., M/s. Padmakshi Vyapaar Pvt. Ltd. Rs.25,00,000/- and from M/s. Dalhousi Datamatics Pvt. Ltd. Rs.1,00,00,000/-. These loans were also added on the basis of statement of Shri Prawesh Beria recorded on 16.04.2015 in which he accepted that he was Director of several companies including M/s. Padmakshi Vyapaar Pvt. Ltd. which are providing accommodation entries to several beneficiaries. Similarly, the Assessing Officer noted that in case of Dalhousi Datamatics Pvt. Ltd. the same was controlled and managed by Shri Navneet Singhania and in his statement on oath recorded before the Investigation Wing, he admitted that he was involved in providing accommodation entries. Consequently, both these additions were made in the assessment framed as unexplained cash credit u/s. 68 of the Act. 9.2 In the appellate proceeding, the addition was deleted by the Ld. CIT(A) after taking into account the contention and submission of the assessee by observing and holding as under: Printed from counselvise.com 6 IT(SS)A Nos. 27 to 29/Kol/2025 Burnpur Cement Ltd.AYs 2011-12, 2015-16 & 2016-17 9.3. After hearing the rival contentions and perusing the material available on record, we observe that the assessee has taken unsecured loan from two concerns as stated hereinabove and repaid the same along with the interest through banking channel after deduction of TDS. The ld. CIT(A) had recorded a very clear- cut finding to this effect that this loan has repaid by assessee and, therefore, no benefit was derived by the assessee.The Ld. CIT(A) also held that the assessee has furnished all the evidences in respect of these loans before the Assessing Officer as well as before the first appellate authority including loan confirmation, bank statement, ITRs, audited Balance Sheet. Finally, the ld. CIT(A) deleted the addition by holding that the addition is not covered under the provision of section 68 of the Act. The case of the assessee also finds support from the decision of Hon’ble jurisdictional High Court in the case of PCIT vs. Ambe Tradecorp (P.) Ltd. (2022) 145 taxmann.com 27 (Gujarat), in which the Printed from counselvise.com 7 IT(SS)A Nos. 27 to 29/Kol/2025 Burnpur Cement Ltd.AYs 2011-12, 2015-16 & 2016-17 Hon'ble High Court has held that once the repayment of loan has been established based on the documentary evidences then the credit entries cannot be looked in isolation after ignoring the debit entries despite the fact that debit entries were carried out in the later years. Even the case of the assessee is squarely covered by the decision of the co-ordinate bench decision in the case of Poddar Realtors Vs. ITO in ITA No. 265/Kol/2023, vide order dated 22.06.2023. Under these circumstances, we do not find any infirmity or defect in the order of the ld. CIT (A) which warrant our interference. Accordingly, we uphold the appellate order by dismissing the appeal of the Revenue. 10. In the result, all the appeals of the revenue are dismissed. Order is pronounced in the open court on 31st July, 2025 Sd/- Sd/- (Sonjoy Sarma) (Rajesh Kumar) Judicial Member Accountant Member Dated: 31st July, 2025 JD, Sr. PS/SS, Sr. PS Copy of the order forwarded to: 1. Appellant–ACIT, Central Circle-4(1), Kolkata 2. Respondent – Burnpur Cement Ltd. 3. CIT(A), NFAC, Delhi 4. Pr. CIT 5. DR, ITAT, Kolkata, True Copy By Order Assistant Registrar ITAT, Kolkata Bench, Kolkata Printed from counselvise.com "