BHUMIKA PATEL,KOLKATA V. ITO WARD 29(1), KOLKATA

ITA 1150/KOL/2025

AI Insights

The case involves Bhumika Patel, the appellant, who contested the reassessment order passed by the Income Tax Officer (ITO) under Section 147 of the Income-tax Act, 1961. The reassessment was based on information that Patel was a beneficiary of accommodation entries involving M/s. Bhoomidev Credit Corporation Ltd., which was alleged to have provided these entries. The ITO added \\u20b925,00,000 as unexplained cash credit under Section 68 and disallowed \\u20b93,14,712 as interest. The Commissioner of Income Tax (Appeals) upheld these additions. However, the Tribunal, referencing a prior acceptance of a similar loan as genuine, ruled in favor of Patel, emphasizing the lack of new evidence to support the disallowance of the current year's loan and interest.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713036 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2010-2011
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Accommodation entries; Bogus
• Section: 147; 142(1); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC” BENCH KOLKATA Before Shri Sonjoy Sarma, Judicial Member and Shri Rakesh Mishra, Accountant Member I.T.A. No.1150/Kol/2025 Assessment Year: 2010-11 Bhumika Patel……………..……...……..…………………....Appellant 6, Burdwan Road, Block A Flat No.-4A/B, Konark Garden, Kol-27. [PAN: ALNPP8896P] vs. ITO, Ward-29(1), Kolkata…………………..………………….…..... Respondent Appearances by: Shri Akshay Rinsia, AR and T N Jaiswal, AR, appeared on behalf of the appellant. Shri Kallol Mistry, JCIT, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 29, 2025 Date of pronouncing the order : July 30, 2025 आदेश / ORDER Per Sonjoy Sarma, Judicial Member: This appeal by the assessee is directed against the order dated 17.03.2025 passed by the NFAC [in short CIT(A)] under section 250 of the Income-tax Act, 1961. 2. Brief Facts are that the case of the assessee was reopened under Section 147 of the Income-tax Act, 1961, on the basis of information received from the ADIT (Investigation), Rajkot. It was reported that M/s. Bhoomidev Credit Corporation Ltd. was engaged in providing accommodation entries, and the assessee was identified as one of the beneficiaries. As per the investigation findings that, a cash amount of ₹75 lakhs was deposited in the books of M/s. Bhoomidev Credit Corporation Ltd., and an amount of ₹66,14,712 appeared as an outstanding loan in its balance sheet in the name of the assessee. Based on this information, the AO recorded reasons to believe that Printed from counselvise.com I.T.A. No.1150/Kol/2025 Bhumika Patel 2 income chargeable to tax had escaped assessment and, after obtaining due approval, issued notice under Section 148. Subsequent notices under Sections 143(2) and 142(1) were also issued. In response, the assessee submitted computation of income, profit and loss account, balance sheet, contract notes, and bank statements. The AO treated ₹25,00,000 as unexplained cash credit under Section 68 and ₹3,14,712 as interest paid, disallowed on the ground of being not substantiated. The AO held that the assessee was a beneficiary of accommodation entries and framed the reassessment under Section 147/143(3) of the Act. 3. Dissatisfied with the above order, assessee went in appeal before the Ld. CIT(A) where the assessee contended that the reopening itself was bad in law, as the reasons recorded referred to a loan of ₹66,14,712, while the addition made was only ₹25,00,000. It was submitted that the sum of ₹38,00,000 had been received in the preceding financial year relevant to A.Y. 2009–10 and had already been subject to scrutiny. Subsequent to the alleged addition of Rs. 38,00,000/relief had been granted to the assessee by the Ld. CIT(A) in A.Y. 2009–10 vide order dated 05.02.2024, accepting the loan as genuine on the basis of confirmation and audited financial statements of M/s. Bhoomidev Credit Corporation Ltd. It was argued that the balance ₹25,00,000 and the related interest of ₹3,14,712 pertained to the same lender and were part of a continuing financial arrangement, and thus should be treated similarly. The assessee also pointed out that, once the earlier year’s loan from the same lender was accepted as genuine, disallowing the current year’s loan without fresh adverse material was legally untenable. However, the CIT(A) confirmed the AO’s addition on the ground that for the assessment year under consideration, the lender did not appear or provide confirmation. Printed from counselvise.com I.T.A. No.1150/Kol/2025 Bhumika Patel 3 4. Aggrieved by the order of Ld. CIT (A), assessee is in appeal before this Tribunal. At the time of hearing the Ld. Counsel for the assessee reiterated that the earlier relief granted for ₹38,00,000 from the same lender clearly established the genuineness of the relationship and financial transactions. It was submitted that the ₹25,00,000 received in the current year was in continuation and that the interest paid of ₹3,14,712 should also be allowed. It was argued that the reassessment and the addition made thereunder are both bad in law, since the reopening was initiated on the basis of alleged accommodation entries totalling ₹66,14,712, but the addition made was restricted only to ₹25,00,000, without any clear nexus to the reasons recorded. 5. On the other hand, the Ld. DR. supported the orders of the lower authorities. 6. We have heard the rival submissions and perused the materials on record. It is not in dispute that for A.Y. 2009–10, relief was granted by the Ld. CIT(A) in respect of ₹38,00,000 received from the same lender, M/s. Bhoomidev Credit Corporation Ltd., based on confirmation letters and audited financial statements. The impugned amount of ₹25,00,000 and interest of ₹3,14,712 also pertain to the same lender and are part of a continuing loan arrangement for the current assessment year in question. We find merit in the contention that when a part of the loan from the same lender has been accepted as genuine in the preceding year, in the absence of any fresh adverse material or evidence of bogus transactions, the remaining loan and interest thereon cannot be disallowed merely because confirmation was not freshly filed during the reassessment. Further, the reassessment initiated under Section 147 was based on a total amount of ₹66,14,712, whereas the addition made was ₹25,00,000. In view of the above facts and consistent with the relief granted in A.Y. 2009–10, we find no Printed from counselvise.com I.T.A. No.1150/Kol/2025 Bhumika Patel 4 justification in sustaining the addition of ₹25,00,000 and disallowance of interest of ₹3,14,712 for the assessment year in question. Accordingly, the addition of ₹25,00,000 made under Section 68 and disallowance of interest of ₹3,14,712 are hereby directed to be deleted. The appeal of the assessee is allowed. 7. In the result, the appeal of the assessee is allowed. Kolkata, the 30th July, 2025. Sd/- Sd/- [Rakesh Mishra] [Sonjoy Sarma] लेखा सदèय/Accountant Member ÛयाǓयक सदèय/Judicial Member Dated: 30.07.2025. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3.CIT (A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "