DCIT, CENTRAL CIRCLE - 4(4), KOLKATA, KOLKATA V. VIKAS KUMAR AGRAWAL, KOLKATA

ITA 2112/KOL/2024

AI Insights

The case involves an appeal by the revenue against the order of the Ld. CIT(A) which had allowed the assessee's appeal regarding the addition of Rs. 8,00,070 to his income for the Assessment Year 2017-18. The assessee, Vikas Kumar Agrawal, had declared a total income of Rs. 9,54,420 and faced a reassessment following a Supreme Court decision. The Assessing Officer (AO) added Rs. 8,00,070 to the assessee's income, suspecting it to be from a shell company. The CIT(A) reversed this decision, finding that the assessee had provided sufficient evidence to prove the loan's genuineness, which was promptly repaid within the same financial year. The revenue challenged this decision, but the Tribunal upheld the CIT(A)'s findings, dismissing the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35880 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Union of India & Ors. Vs. Asish Kumar Agarwal
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Bogus
• Section: 148; 68

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “एसएमसी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH: KOLKATA Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय एवं Įी संजय अवèथी, लेखा सटèय क े सम¢ [Before Shri Pradip Kumar Choubey, Judicial Member &Shri Sanjay Awasthi, Accountant Member] I.T.A. No. 2112/Kol/2024 Assessment Year: 2017-18 DCIT, Central Circle-4(4), Kolkata Vs. Vikas Kumar Agrawal (PAN: AHPPA 0699 B) Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 20.02.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 17.03.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से None For the revenue / राजèव कȧ ओर से Shri Gautam Patra, Addl. CIT DR ORDER / आदेश Per Pradip Kumar Choubey, JM: This is an appeal preferred by the revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-27, Kolkata (hereinafter referred to as the “Ld. CIT(A)”] dated 13.08.2024 for the AY 2017-18. 2. Brief facts of the case of the assessee are that the assessee filed its return of income for AY 2017-18 declaring total income of Rs. 9,54,420/-. The assessment of the assessee was reopened in pursuant to the decision of Hon’ble Supreme Court in the case of Union of India & Ors. Vs. Asish Kumar Agarwal. The assessee has been asked to 2 I.T.A. No.2112/Kol/2024 Assessment Year: 2017-18 Vikash Kumar Agrawal comply the notices issued u/s 148 of the Act but there was no compliance on behalf of the assessee as a result of which the AO has assessed the income of the assessee by adding Rs. 8,00,070/- by holding that the assessee had nothing to explain regarding the credit of Rs. 8,00,070/-. 3. Aggrieved by the said order the assessee has preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been allowed on merit by holding that the assessee has discharged its onus by providing details of aforesaid loan creditor from the creditor to verify the veracity of the loan taken and directed the AO to delete the addition of Rs. 8,00,070./-. Being aggrieved and dissatisfied the revenue has preferred an appeal before us. 4. The ld. D.R challenges the impugned thereby submitting that the Ld. CIT(A) has erred in deleting the disallowed bogus unsecured loan amounting to Rs. 8,00,070/- taken from a shell company namely M/s Gopalpriya Commercial Pvt. Ltd. had used the syndicate of paper/shell companies of Banka Group. The Ld. D.R has further submitted that the nature of the case related to the accommodation entry falling within the exceptional clause (h) of the para no. 3.1 of filing of appeal as per CBDT circular no. 5/2024 dated 15.03.2024. 5. Contrary to that, the Ld. A.R has firstly argued that the tax effect is below the monetary limit and there is nothing in the impugned order to establish the appeal of the revenue has been covered under the exceptional clause (h) of CBDT Circular NO. 5/2004. The Ld. Counsel further submits that the Ld. CIT(A) has rightly been held that the loan amount was returned in the same period and the assessee has furnished several documents to establish creditworthiness and genuineness of the parties. The Ld. A.R submits that there is no illegality in the impugned order. 6. Upon hearing the submission of the counsel of the respective parties, we have perused the record of the assessee as well as the order passed by the Ld. CIT(A). As per the assessment order, the assessee has used the syndicate of paper /shell companies of 3 I.T.A. No.2112/Kol/2024 Assessment Year: 2017-18 Vikash Kumar Agrawal Banka Group. The AO has held that the assessee has failed to prove the identity, creditworthiness of the parties and genuineness of the transactions by filing necessary evidences. On perusal of the order of Ld. CIT(A), it appears to us that Rs. 4,00,000/- was taken as loan but the same was returned immediately in the same year and the amount was repaid in nine days only. The assessee has filed following documents which are as follows: a) Copy of ledger a/c in the books of GPCPL b) Copy of confirmation of a/cs. c) Copy of relevant Bank statement of GPCPL d) Copy of ITR acknowledgement of GPCPL e) Copy of relevant bank statement of the appellant. 7. The Ld. CIT(A) in its order held which are essential to reproduce the same here in below-: “ 6.2.2 However, on perusal of the report of the investigation wing it is noticed that the said loan of Rs.4,00,000/- was wrongly taken twice for assessment purpose. It is evident from the submission of the assessee, that the assessee had only received Rs. 4,00,000/-from M/s GPCPL on 26.07.2016 through banking channel and due to certain discord happened between the assessee and the lending party, the same was returned immediately to M/s GPCPL on 03.08.2016 within 8 days only. In support of the same, the assessee had submitted confirmation of accounts from M/s GPCPL, relevant ledger copies, respective bank account statements reflecting the aforesaid transactions. It is also noticed that the assessee had submitted all the requisite details and documents in respect of M/s GPCPL viz. PAN, Address, ITR copies, Source of Fund of M/s GPCPL to extend such loan to the assessee.. On verification of the same, it is found that the lending entity M/s GPCPL is active in MCA/ROC site. Hence, the assessee had proved the three primary ingredients of Section 68 of the Act i.e. , identity, creditworthiness and genuineness of the loan transaction as well as the said lending entity.” 8. It appears to us that the AO did not find any cash deposit or cash trail during the assessment proceedings. It is pertinent to mention herein that the loan was repaid by the assessee to M/s GPCPL in the same FY i.e. 2016-17. 4 I.T.A. No.2112/Kol/2024 Assessment Year: 2017-18 Vikash Kumar Agrawal 9. Going over the order passed by the Ld. CIT(A), we do not find any infirmity in the impugned order, accordingly, the appeal of the revenue is hereby dismissed on merit as well as on tax effect. In the result, the appeal of the revenue is dismissed. Order is pronounced in the open court on 17th March, 2025 Sd/- Sd/- (Sanjay Awasthi/संजय अवèथी) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 17th March, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- DCIT, Central Circle-4(4), Kolkata 2. Respondent – Vikas Kumar Agrawal, 7th Floor, Room No. 702, Narayani Building, 27, Brabourne Road, Kolkata-700001 3. Ld. CIT(A)-21, Kolkata 4. Ld. Pr. CIT- Central-1, Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "