DCIT, CC-2(3), KOLKATA, AAYAKAR BHAWAN POORVA V. MAXCAB INDUSTRIES PVT. LTD., KOLKATA

ITA 2590/KOL/2024

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which had deleted an addition made by the Assessing Officer (AO) regarding unexplained cash credits amounting to \\u20b99.45 Crores, claimed to be bogus unsecured loans. The assessee, Maxcab Industries Pvt. Ltd., had received these loans from various parties, which the AO initially treated as unexplained due to the inability to verify the creditworthiness and genuineness of the transactions. However, the CIT(A) found that the assessee had provided adequate evidence to substantiate the loans, including the repayment of these loans in subsequent years, and that the lenders had responded to notices under Section 133(6) of the Act. The Tribunal, referencing similar cases and precedents, upheld the CIT(A)'s decision, dismissing the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779289 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2021-2022
• Appeal Filed On: 18-12-2024
• Other Referred Cases: PCIT v. Ambe Tradecorp (P.) Ltd., DCIT Vs. Dailmer Industries Pvt. Ltd., Poddar Realtors vs. ITO, ITO Vs. Kayathwal Estate (P) Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVEEN KISHORE
• Assessee Lawyers: SOUMITRA CHOUDHURY; NANDINI SUREKH
• Keywords: Unexplained cash credit; Documents seized; Onus to prove; TDS; Search and seizure; Accommodation entries; Bogus loan; Bogus
• Section: 143(3); 68; 131; 133(6); 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI SONJOY SARMA, JM ITA No.2590/KOL/2024 (Assessment Year:2021-22) DCIT, Central Circle-2(3), 4th floor, 110 Shantipally, E.M. Bypass, West Bengal-700107 Vs. Maxcab Industries Pvt. Ltd. 67/C, Balaram Dey Street, West Bengal-700006 (Appellant) (Respondent) PAN No. AANCM1997Q Assessee by : Shri Soumitra Choudhury & Ms. Nandini Surekh, Shri Pranabesh Sarkar, ARs Revenue by : Praveen Kishore, DR Date of hearing: 04.09.2025 Date of pronouncement: 16.10.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals), Kolkata-20 (hereinafter referred to as the “Ld. CIT(A)”] dated 21.10.2024 for the AY 2021-22. 02. The only issue raised by the revenue is against the deletion of addition of ₹9.45 Crores by ld. CIT (A) as made by the ld. AO under Section 68 of the Act in respect of bogus unsecured loans. 03. The facts in brief are that assessee filed the return of income on 05-02-2022, which was subsequently revised declaring total income at ₹87,530/-. The return of income was processed under Section 143(1) of the Act. The assessee company is a group company of Goel Group of Cases. A search was conducted under Section 132(1) of the Act and Printed from counselvise.com Page | 2 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 a survey under Section 133A of the Act as well were conducted on the Goel Group of Cases on 15-03-2022 during which certain incriminating documents were seized of various persons relating to the group including the assessee. The assessee company is engaging in the business of trading in raw materials of electric goods such as steel and copper terms etc. The case of the assessee was selected for scrutiny and statutory notices were duly issued and served upon the assessee. During the course of search operation, it was observed in the search by the search team that the group was engaged in routing its own unaccounted fund through shell companies in the guise of unsecured loans. The loans raised during the year by the assessee from eight parties were ₹9.85 crore. The details thereto is extracted in Paragraph 4.1 of the assessment order. Thereafter, the learned AO discussed the incriminating material and came to the conclusion that assessee has taken accommodation entries. The ld. AO also extracted the statement of Shri Arun Nangalia and Shri Jivendra Mishra Kothari. The ld AO came to the conclusion that the assessee could not prove the creditworthiness and genuineness of the transmissions. The learned AO observed on examination of the Excel file in the laptop of Navin Kumar Saffar that assessee had taken accommodation entries in the form of loans. The learned AO also noted that the notices issued under Section 133(6) of the Act could not be served by the inspector as they were not existing in their addresses. The learned AO also noted that the summons issued under Section 131 of the Act were also not responded by the parties and finally added the amount of ₹9.45 crore to the income of the assessee as unexplained cash credit. The learned AO also disallowed the interest payment made by the assessee in respect of these loans. The learned AO further added 0.5% of the total Printed from counselvise.com Page | 3 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 amount raised towards commission charges thereto making an addition of ₹4,92,500/-. 04. In the appellate proceedings, the learned CIT (A) allowed the appeal of the assessee by holding that the loans raised by the assessee during the year were repaid partly in the current year and partly in the subsequent assessment years the details whereof are attached at page no.354 to 360 PB. The learned CIT (A) while deleting the addition also relied on the decision of the Hon. Gujarat High Court in the case of PCIT v. Ambe Tradecorp (P.) Ltd. (2022) 145 taxmann.com 27 (Gujrat). Finally, the learned CIT (A) held that appellant has discharged its burden to prove the identity and creditworthiness of the lenders and genuineness of the transactions by submitting detailed submission including MCQ datas, the copy of ITRs audited accounts, ledger copies, bank statements before the learned AO as well as before the appellate authority. The learned CIT (A) also noted the loan creditors have also duly complied with the notices issued under section 133(6) of the Act by the AO and hence deleted the addition. 05. After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessee has raised unsecured loans from several parties the details whereof are given in para no. 4.1 of the assessment order. The assessee had taken ₹9.85 crore in aggregate from various parties. The assessee also paid interest on these loans amounting to ₹45,38,923 after deduction of tax. We also note that these loans were repaid by the assessee in the subsequent years which have been discussed in detail by the appellate authority in the appellate folder. We note that the assessee has filed all the evidences from all the lenders before the learned CIT (A) Printed from counselvise.com Page | 4 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 comprising copies of ITRs audited accounts, bank statements, confirmations, sources of funds, MCQ data etc.and the ld. AO has not pointed out any single defects and had not done any further verification but relied on the statement recorded of certain individuals during the course of search. In our opinion, the assessee has discharged its burden by filing all the evidences before the learned AO as well as the learned CIT (A). We even note that the notices were issued under section 133(6) of the Act to the loan lenders which were also duly complied with by the said lenders by furnishing the required details as called for by the learned AO. The learned CIT (A) has recorded a clear-cut finding to this effect in the appellate order. On page number 23, the learned CIT (A) has rightly held that once the repayment of loan has been established based on the documents/ evidences, the credit entries cannot be looked in isolation after ignoring the debit entries despite the fact that the debit entries were carried out in the later year which is the ratio laid down by the Hon'ble Gujarat High Court in the case of PCIT v. Ambe Tradecorp (P.) Ltd. (supra). Therefore, the learned CIT (A) has passed a reasoned and speaking order on the issue while deleting the addition. The learned CIT (A) has also held that the assessee has discharged its onus by filing all the documents thereby proving the identity and creditworthiness of the lenders and genuineness of the transactions. Under these circumstances, we are inclined to uphold the order of the learned CIT (A) on this issue. Besides, the case of the assessee is squarely covered by the decision of this Bench in the case of DCIT Vs. Dailmer Industries Pvt. Ltd. in ITA No. 275/KOL/2025 vide order dated 25.07.2025 which is a group company of the assessee and was part of the same search and all the facts being identical. The operative part of the said decision is extracted as under:- Printed from counselvise.com Page | 5 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 “04. The only common issue raised in various grounds of appeal is against the deletion of addition of ₹11,50,00,000/- by the ld. CIT (A) as made by the ld. AO on account of bogus unsecured loans u/s 68 of the Act. Besides, the ld. CIT (A) also deleted the disallowance of interest of ₹1,10,18,307/- and ₹5,75,000/- on account of commission paid, which were also added by the ld. AO. 05. The facts in brief are that the assessee filed the return of income on 15.02.2022 by declaring total income of ₹3,85,60,090/-, which were processed u/s 143(1) of the Act 31.05.2022. The assessee company is engaged in the business of trading of HDPE/ LLDPE, which is used in manufacturing of cables and conductors. During the year, the Revenue from operation was ₹103,58,43,299/- and other income of ₹1,24,69,622/-. A search action u/s 132(1) of the Act as well as survey u/s 133A of the Act were conducted on the Goel Group of cases on 15.03.2022, of which the assessee was also a part and a related entity. During the course of search on the Goel Group, various incriminating materials were seized which suggested that the group was engaged in common the practice of routing its own unaccounted fund through shell entities in guise of unsecured loans with the help of various entry operators. During the assessment proceedings, the ld. AO noted that the assessee had borrowed during the year two unsecured loans i) of ₹6,50,00,000 from Indian Infotech & software Ltd. and ii) ₹5,00,00,000/- from Manish Co. Pvt. Ltd. The assessee also paid interested on loan during the year to the extent of ₹1,10,18,307/-. The assessee has also opening balance of unsecured loan outstanding as on the beginning of the year. The complete statement of the total loans outstanding on the year end is given by the ld. AO in Para no.5.1 of the assessment order. Thereafter, the ld. AO noted that during the course of search at the residence premises of Shri Navin Kumar Saffar, the laptop, pen drive were seized, wherein the details of unsecured loans from these entities were found. The ld. AO also found that the details of interest paid and commission paid to the brokers were also found therein. The statements u/s 132(4) of the Act of the Accounts Head of Goel Group was recorded, who confirmed that these loans were taken. Besides, the statements of Shri Deepak Goel, one of the Director of Goel Group, who also confirmed the loans was taken by the group company from Shell companies. Finally, the ld. AO noted that Shri Deepak Goel, could not prove the identity and genuineness of the transactions, despite being provided sufficient opportunities and time by the Investigation Wing. Now, the ld. AO relying on the report of the investigation wing and also issuing notice u/s 133(6) of the Act to both the lenders from whom the unsecured loans were raised during the year, the ld. noted that the first lender namely; Indian Infotech and Software Ltd. was served with the notice u/s 133(6) on 22.11.2022 but there was no response. As regards to the other unsecured loan, the ld. AO stated that the notice u/s 133(6) could not be served. Finally, the AO treated the unsecured loans raised during the year as unexplained cash credit u/s 68 of the Act and made an addition of ₹11,50,00,000/- to the income of the assessee by relying o the decision of Hon'ble Apex court in the case of CIT v Durga Prasad More (1971) 82 ITR 540(SC) and Sumati Dayal Vs. CIT ((1995) 214 ITR 801 (SC). The ld. AO also disallowed the interest paid by the assessee on unsecured loans including loans which were borrowed in the earlier years as well as during the year amounting to ₹₹1,10,18,307/-, besides making disallowance of ₹5,75,000/- on account of commission paid towards arranging the unsecured loan by applying a rate of 0.5%. Printed from counselvise.com Page | 6 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 06. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee after taking into consideration the contentions and submissions of the assessee and the evidences filed by observing and holding as under: - “5.0 Decisions: 5.1 I have carefully considered the facts of the case, submission of the appellant and the assessment order. In the assessment order, there have been detail discussions with respect to search on Laser Power and Infra Pvt Ltd. and Goel group of companies and their directors and key persons, wherein certain incriminating documents were found. In the assessment order, there is detail discussions on statements of various persons also. The Assessing Officer has finally come to conclusion that the assessee company has failed to prove the creditworthiness of the loan creditors, though the Assessing Officer is satisfied with respect to identity of loan creditors. The Assessing Officer has also raised doubt on the genuineness of the transactions 5.2 There was search and seizure operations under section 132(1) of the Act aswell as survey under section 133A of the Act, 1961 on 15.03.2022 and subsequent dates, at the office premises of \"Goel Group of cases' at \"Unit No. 12/4, Rajdanga Main Road, Kolkata - 700 107 and other places as well as at the residential premises of its Directors namely, Devendra Goel, Devash Goel, Purushottam Dass Goel and Key Persons connected with this group. Vide notice dated 20.12.2022 and 21.12.2022, the Assessing Officer had provided copy of some documents allegedly belonging to the appellant company, which in his opinion was incriminating. However, I have gone through the said documents and the reply filed by the appellant during the assessment hearing stage and I come to conclusion none of the details /documents mentioned in the aforesaid notice represent any escapement of income. 5.3 Reference has been made in page 3 to 7 of the assessment order with respect to one excel file found from the laptop of Navin Kumar Saffar, the Chief Accounts Head of Laser Group. Reference has also been made to the statement recorded under section 131 of the Act on 02.03.2023from Navin Kumar Saffar. At the assessment hearing stage, Show Cause notice was issued to the appellant company with respect to the aforesaid statement of Navin Kumar Saffar. There is allegation that the said loan represent accommodation entry transaction. It was submitted by the appellant company that the said data file contains the list of loan transactions (and not a alleged accommodation entry) of Laser Power and Infra Pvt Ltd and not the appellant company. It was also clarified that Navin Kumar Saffar had clarified that the content of each column of the said excel sheet and also clarified that the transaction mentioned in the excel file are relating to interest calculations, TDS and the commission of the finance broker. In his reply, he had submitted that the commission is being received by the finance broker from the lender. Thus, it was submitted that the transaction represent actual loan transaction and not accommodation entry. With respect to cash commission mentioned in the excel sheet.He had also stated that there is some kick back of such commission income earned by the finance broker. Thus, from his statement, it is clear that commission, if any, was borne by the lender to be paid to the finance broker. Incidentally, the Printed from counselvise.com Page | 7 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 appellant company is not the lender and hence, the implication of commission paid in cash etc cannot be drawn in the hands of the appellant company. Under any circumstances, the said data file contains the list of loan transactions of Laser Power and Infra Pvt Ltd and not the appellant company. Thus, in my view, no adverse inference can be drawn with respect to the aforesaid statement of Navin Kumar Saffar. 5.4 Further, in the assessment order, the Assessing officer has referred to the statement of various person such as Arun Nangalia recorded on 15.03.2022, Anuj Bukrediwala dated 16.05.2016, Jivendra Mishra dated 28.09.2014, Raj Kumar Kothari dated 02.03.2016, Subhash Kumar Banka (date of recording his statementnot mentioned in the assessment order) etc. In page 9 of the assessment order, the Assessing Officer has relied on statement recorded of Arun Nangalia dated 15.03.2022, wherein he allegedly confirmed that M/s Dailmer Industries Pvt Ltd. had received accomodation entries from the said M/s Vikas Developers & Promoters Pvt Ltd. ('VDPPL') and Leoline Suppliers Pvt Ltd. ('LSPL'). In this connection, the appellant submitted that the said VDPPL and LSPL are not the loan parties of the appellant in the instant case. Thus, statement of Arun Nangalia has been irrelevantly mentioned in the assessment order. 5.5 Again, in page 11 of assessment order, the Assessing Officer has relied on statement recorded of Anuj Bukrediwala dated 16.05.2016, wherein it was mentioned that, Rareview Commercial Pvt Ltd ('RCPL') and RudramalaVyapaar Pvt Ltd. ('RVPL') were alleged shell entities. In this connection, it is submitted that it is relevant to mention here that the statement referred above was recorded about 6 years before the date of search on Goel group. Further, the said RCPL and RVPL are not the loan parties of the appellant in the instant case. 5.6 Again, in page 15 of assessment order, the Assessing Officer has relied on statement recorded of Jivendra Mishra dated 28.09.2014, wherein it was mentioned that, Badal Commotrade Pvt. Ltd. ('BCPL') and Contship Commodities Pvt Ltd. ('CCPL') were alleged shell entities. In this connection, it is submitted that it is relevant to mention here that the statement referred above was recorded about 8 years before the date of search on Goel group. Further, the said BCPL and CCPL are not the loan parties of the appellant in the instant case. As such, it is irrelevant to rely on the statement of Jivendra Mishra. 5.7 In page 18 of assessment order, the LARTA Officer has relied on statement recorded of Raj Kumar Kothari dated 02.03.2016, wherein he referred to companies Zigma Electricals Pvt Ltd. ('ZEPL') and Nyctea Trading Pvt Ltd ('NTPL') are alleged shell entities. In this connection, it is relevant to mention here that the statement referred above was recorded about 6 years before the date of search on Goel group and the name of the appellant has not been mentioned in the said statement. Further, said ZEPL and NTPL are not the loan parties of the appellant in the instant case. 5.8 In page 20 of assessment order, the Ld. Assessing Officer has relied on some statement of Subhash Kumar Banka. It is not mentioned when his statement was allegedly recorded nor copy of such statement was provided Printed from counselvise.com Page | 8 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 during the assessment proceedings. I have examined the records and find that in none of the aforesaid statements, there has been any allegation against the appellant company. Infact, the Assessing Officer has irrelevantly referred to most of such statements. Thus, in my view, no credence can be given to these statements5.9 In the concluding para of the assessment order, the Assessing Officer has finally come to conclusion that the assessee company has failed to prove the creditworthiness of the loan creditors, though the Assessing Officer is satisfied with respect to identity of loan creditors. The Assessing Officer has also raised doubt on the genuineness of the transactions. Detailed discussions has been made with respect to each loan creditors in the assessment order and/or submissions filed by the appellant at the assessment hearing stage. 5.10 Regarding loan taken from Indian Infotech and Software Ltd ('IISL'), I find from the records that during the instant year the assessee company has taken unsecured loan of Rs. 6,50,00,000/- from IISL. Interest on such loan was Rs. 15,55,892/-(subject to TDS of Rs.1,16,694/-). The said loan was outstanding as at 31.03.2021 is Rs.6,50,00,000/-. The said loan was repaid in FY 2022-23 It is seen that Indian Infotech And Software Limited is an Non-Banking Financial Company (Registration No. B-13.00221) registered with Reserve Bank of India and is engaged in the business of financing & investment and training on computer technology and its related activities. As evident from annual report of the said company as at 31st March, 2020, the said company had given aggregate unsecured loan of Rs. 186.28 crores to various parties out of own funds of Rs. 241.60 crores. In the instant year, the appellant had submitted documents like copy of MCA database, copy of ITR Acknowledgment, audited accounts, ledger copies, and copies of extracts bank statements to establish the identity and creditworthiness of the aforesaid loan party and genuineness of the transactions with the loan party during the instant year. I find from the records that the said party was duly served with notice under section 133(6) and the said notice was duly complied. 5.11 Regarding loan taken from Manish Co Private Ltd ('MCPL'), I find from the records that during the instant year, the assessee company has taken unsecured loan of Rs. 5,00,00,000/- from MCPL. Interest on such loan was charged of Rs. 24,42,740/- (subject to TDS of Rs.1,83,207/-). The said loan was outstanding as at 31.03.2021 is Rs. 5,00,00,000/-. The said loan was repaid in FY 2022-23. As evident from the audited accounts of MCPL for FY 2020-21, that the said company had net worth of Rs. 33 Crores as at 31.03.2020 and PBT of Rs. 58.89 lakhs. The appellant had submitted documents like copy of MCA database, copy of ITR Acknowledgment, audited accounts, ledger copies, and copies of extracts bank statements to establish the identity and creditworthiness of loan party and genuineness of the transactions with the loan party during the instant year. 5.12 In the instant appeal being adjudicated, it has already been discussed in detail earlier that the assessee submitted the requisite documents to prove the identity,creditworthiness of the loan parties, the genuineness of transactions, and also repaid the loan in instant / subsequent years. Further, the AO has not pointed out any specific defects in such evidences filed. Further, the Hon'ble ITAT, Kolkata in the case of Poddar Raltors vs. ITO (ΙΤΑ 265/ΚοΙ./2023 dated Printed from counselvise.com Page | 9 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 22-06-2023 and Hon'ble Gujarat High Court in the case of PCIT vs. Ambe Tradecorp (P) Ltd. [2022] 145 taxmann.com 27 has held that once the repayment of loan has been established based on the documentary evidence, the credit entries can not be looked into isolation after ignoring the debit entries despite the debit entries were carried out in the later years. The relevant portion of the impugned judgements are reproduced here as under: The Hon'ble ITAT Kolkata in Poddar Realtors Vs ITO, (ITA 265/Kol/2023 dated 22.06.2023) in the context of loans which have been repaid, it has been inter- alia held as follows: \"We have heard both the parties and perused the material placed before us and carefully gone through the decisions relied upon by the assessee. The assessee has primarily challenged the addition of Rs.25,00,000/- made by the AO u/s. 68 of the Act in relation to the unsecured loan of Rs.25,00,000/- received by the assessee from M/s Evermore Sales Pvt Ltd. It is noticed that the assessee had filed all documentary evidences which it was required to maintain in the ordinary course to substantiate the identity and creditworthiness of the lender and genuineness of the transaction. On perusal of the records it is noted that the assessee had received the loan on several dates from M/s Evermore Sales Pvt Ltd holding PAN AACCE8179M, aggregating to Rs.25,00,000/- through proper banking channel and that there was no cash deposited in the bank account of the assessee, as wrongly alleged in the recorded reasons. It is thus noted that the reasons recorded prior to reopening proceeded on incorrect assumption of facts and thus ex-facie was was untenable. We further find, that the lender had sufficient own funds to advance the loan to the assessee. The loan is noted to carry interest at the rate of 9%. The assessee has provided the said interest in its books and deducted TDS thereon as well. The interest income has been accounted for by the lender and the same form parts of the retum of income filed by M/s Evermore Sales Pvt Ltd for the relevant AY 2013-14 dated 23.12.2013. The bank statement of M/s Evermore Sales Pvt Ltd evidences that there was no prior deposit of cash before advancement of loan. The loan has been confirmed by the lender and the same was also subsequently repaid along with full interest by the assessee in the year 2014-15. We note that all these documents which were filed by the assessee before the lower authorities have not been found to be incorrect or faulty at any stage. Moreover, the main premise on which the AO made the impugned addition viz., there was a prior cash deposit in the bank account of M/s Evermore Sales Pvt Ltd before advancement of loan has been noted to be factually wrong as there is no cash deposit in account of M/s Evermore Sales Pvt Ltd as well. As noted earlier, the loan was repaid in 2014-15 and, therefore, the allegation of the AO that assessee was a beneficiary of the loan cannot be sustained on these facts and is liable to be deleted. We gainfully refer to the judgment of the Hon'ble Gujarat High Courtin the case of PCIT vs. Ambe Tradecorp (P) Ltd (supra) where it has been held as follows: \"The Tribunal rightly recorded in para 29 of the judgment. \"Once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into isolation Printed from counselvise.com Page | 10 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 after ignoring the debit entries despite the debit entries being carried out in the later years. Thus, in the given facts and circumstances, were hold that there is no infirmity in the order of the Ld. CIT(A).\" The Hon'ble Gujarat High Court in the case of PCIT Vs. Ambe Tradecorp (P.) Ltd [2022] 145 taxmann.com 27 (Gujarat)in the context of loans, which have been repaid, it has upheld the order passed by the Hon'ble ITAT and it was held that \"Once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into isolation after ignoring the debit entries despite the debit entries were carried out in the later years. Thus, in the given facts and circumstances, were hold that there is no infirmity in the order of the Ld. CIT-A.\" In this scenario, when the appellant has discharged its onus on ingredients of section 68 of the Act, the action of the AO in considering the loan received by the appellant company of Rs. 11,50,00,000/- as unexplained cash credit u/s 68 is not sustainable and stands deleted. In view of the same, Ground No. 2 and 3 are allowed. Since I am holding the view that additions with respect to loan taken from the above parties is not tenable in the eyes of laws as per discussions made in above paras, the question of disallowance of interest does not arise. In view of the same, Ground No. 5 is allowed. ZOMERARTMENT the same Since I am holding the view that additions with respect to loan taken from the above parties is not tenable in the eyes of laws as per discussions made in above paras, the question of addition of commission income does not arise. In view of the same, Ground No. 6 is allowed.” 07. Aggrieved by the said order, the Revenue is appeal before us. 08. We have heard the rival submissions and perused the materials available on record, we note that the search u/s 132(1) as well as survey u/s 133A of the Act were conducted on Goel Group of cases on 15.03.2022. The assessee was also part of the said group. During the search, according to the ld. AO various incriminating documents were discovered and seized which revealed that assessee had borrowed two money by way of loans, aggregating to ₹11,50,00,000/- from two parties namely; i) ₹6,50,00,000 from Indian Infotech & software Ltd. and ii) ₹5,00,00,000/- from Manish Co. Pvt. Ltd. The assessee filed complete evidences qua the lender companies before the ld. AO, however, the ld. AO by relying on the statement of Shri Jivendra Mishra, dated 28.09.2014, added these loans as unexplained cash credit to the income of the assessee in the assessment farmed u/s 143(3) dated 08.03.2023. Besides the ld. AO also disallowed the interest paid on these loans of ₹1,10,18,307/- and commission paid for arranging such bogus loans amounting to ₹5,75,000/-. The ld. AO noted that in case of Indian Infotech and Software Ltd. notice u/s 133(6) of the Act was served through speed post however, no response was received whereas in case of another lender Shri Manish Co. Pvt. ltd. the notice u/s 133(6) of the Act could not be served. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee by passing very reasoned and speaking order. We note that the ld. CIT (A) has clearly recorded a finding of fact that Shri Navin Kumar Saffar was chief account head of Goel Group and his statement was recorded on 15.03.2022 and he conformed the loan Printed from counselvise.com Page | 11 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 transactions to be actual transactions. It was also noted by the ld. CIT (A) that the documents seized contained the list of loan transactions of Laser Power and Infra Pvt. Ltd and not the assessee company. Therefore, no adverse inference could be drawn from the statement of Shri Navin Kumar Saffar. Similarly, the ld. CIT (A) noted that the ld. AO referred to the statements of Arun Nangalia recorded on 15.03.2022, Anuj Bukrediwala dated 16.05.2016, Jivendra Mishra dated 28.09.2014, Raj Kumar Kothari dated 02.03.2016, Subhash Kumar Banka dated 16.03.2022, and Deepak Goel 10.05.2022 and the ld. AO relied on the statement of Arun Nagalia wherein he alleged that the assessee had received an accommodation entry from M/s Vikas Developers & Promoters Pvt. Ltd., whereas we note that the said parties are not the lenders in the assessee company and therefore, the statement of Shri Arun Nagalia is irrelevant so far as the assessee’s case is concerned. So far as the statement of Anuj Bukrediwala dated 16.05.2016, is concerned, the ld. CIT (A) noted that the statement was recoded six years before the date of the search on the Goel Group and the parties mentioned in the statement of the said person namely Rareview Commercial Pvt. Ltd and RudramalaVyapaar Pvt. ltd. were not the lender parties, who lent money to the assessee. Similarly, the statement of Jivendra Mishra dated 28.09.2014, which mentioned Badal comotrade Pvt. ltd. and Contship Commodities Pvt. ltd. being shell companies but the fact of the matter is that these were not the loan parties who lent money to the assessee. Therefore, the statement of Shri Jivendra Mishra is not relevant. Similarly, the ld. AO refrered to the statement of Raj Kumar Kothari dated 02.03.2016, who referred two companies namely Zigma Electricals Pvt. ltd. and Nyctea Trading Pvt. Ltd. to be shell companies but again these were not loan parties and therefore, the statement is not relevant so far as the assessee is concerned. Therefore, we so far as these observations of the ld. CIT (A) are concerned, we are in full agreement that all the statements are not relevant at all to the assessee’s case. 09. We also note that that the assessee has provided interest on loan of ₹15,55,892/- taken from Indian Infotech and software Ltd. and TDS of ₹1,16,694/- was deducted. We also note that the loan was repaid during the F.Y. 2022-23. The said lender was non-banking finance company registered with RBI and is engaged in the business of financing, investment and training on computer technology and its related activities. We note that the said company has aggregate unsecured loans of ₹186.28 crores given to various parties out of its own funds of ₹241.60 crores. The assessee has filed all the documents like MCA database, copy of ITR Acknowledgment, audited accounts, ledger copies, and copies of extracts bank statements to establish the identity and creditworthiness of the aforesaid loan party and genuineness of the transactions. The ld. CIT (A) even noted that the party has replied to the notice u/s 13(6) of the Act whereas the ld. AO in the assessment order has stated that the party has not replied to the notice issued by the ld. AO. Similarly, in the case of Manish Co. Pvt. Ltd. interest of ₹24,42,740/- was provided and TDS of ₹1,83,207/- was deducted at source. The said loan was repaid in 2022-23. So far as the creditworthiness is concerned the said company has net worth of ₹33 crores and profit before tax of ₹58.89 lacs. The company has submitted before the authorities below copy of MCA Database, copy of ITR Acknowledgment, audited accounts, ledger copies, and copies of extracts bank statements to establish the identity and creditworthiness of the aforesaid loan party and genuineness of the transactions. 010. In our opinion, once the loans were repaid then the provisions of Section 68 of the Act cannot be invoked in respect of the loan transactions as has been held in the Printed from counselvise.com Page | 12 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 case of PCIT vs. Ambe Tradecorp (P.) Ltd. (2022) 145 taxmann.com 27 (Gujarat), in which the 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. Both the decisions have been followed by the ld. CIT (A) while deleting the addition. Under these circumstances, we do not find any infirmity or defect in the order of the ld. CIT (A) which warrant our interreference. Accordingly, we uphold the appellate order by dismissing the appeal of the Revenue. 011. In the result, the appeal of the Revenue is dismissed.” 06. We note that the coordinate bench under similar facts and circumstances has decided the issue in favour of the assessee. The assessee also relied on the decision of the Hon'ble Apex Court in the case of ITO Vs. Kayathwal Estate (P) Ltd. [2022] 139 taxmann.com 317 (SC). Therefore, we are inclined to uphold the order of the learned CIT (A) by dismissing the appeal of the revenue on this issue. The ground no. 1 is accordingly allowed. 07. The other issue raised in the other ground namely ground No. 2 and 3 are consequential in nature. Therefore, we uphold the order of the learned CIT (A) on this issue by dismissing the appeal of the revenue on this issue. Accordingly, the ground number 2 and 3 are dismissed. 08. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 16.10.2025. Sd/- Sd/- (SONJOY SARMA) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 16.10.2025 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 13 ITA No.2590/KOL/2024 Maxcab Industries P. Ltd; A.Y. 2021-22 Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "