DCIT,CIRCLE-1, SILIGURI V. VAISHNODEVI BUILDCON PRIVATE LIMITED, SILIGURI

ITA 1382/KOL/2025

AI Insights

The case involves appeals by the Revenue against Vaishnodevi Buildcon Private Limited concerning additions made by the AO under sections 68 and 69C of the Income-tax Act, 1961, related to unsecured loans and interest thereon. The AO had initially treated the loans from M/s Shivaangan Merchandise Pvt. Ltd. as unexplained cash credits and added them to the income of the assessee. However, the CIT (A) reversed these additions after a detailed examination of the submissions and evidence provided by the assessee, which included confirmation of the loan, details of interest paid, and tax deductions at source. The Tribunal upheld the CIT (A)'s decision, noting the lack of independent inquiry by the AO and reliance on the investigation wing's report, which was deemed insufficient to substantiate the additions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783491 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Appeal Filed On: 26-06-2025
• Other Referred Cases: PCIT vs. Sreeleathers, ITO, Ward 2(1), Siliguri Vs. M/s Megasun Merchants Pvt. Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.B. CHAKRABORTHY
• Assessee Lawyers: SOUMITRA CHOUDHURY; PRANABESH SARKAR; ARS
• Keywords: Unexplained cash credit; Unexplained expenditure; TDS
• Section: 147; 148; 143(3); 154; 68; 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN, JM AND SHRI RAJESH KUMAR, AM ITA Nos.1382 & 1383/KOL/2025 (Assessment Year: 2018-19) DCIT, Circle-1 Aaykar Bhawan, Paribahan Nagar, Matigara, Siliguri, Darjeeling, Siliguri, West Bengal-734010 Vs. Vaishnodevi Buildcon Private Limited Room No. 8, Ganeshyan Building, Ground floor, Sevoke Road, Siliguri-734001, West Bengal (Appellant) (Respondent) PAN No. AADCV6874D Assessee by : Shri Soumitra Choudhury & Shri Pranabesh Sarkar, Ars Revenue by : Shri S.B. Chakraborthy, DR Date of hearing: 28.08.2025 Date of pronouncement: 04.11.2025 O R D E R Per Rajesh Kumar, AM: These are the appeals preferred by the Revenue against the orders of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 16/04/2025 for the AY 2018-19. ITA No. 1382/KOL/2025 02. The only issue raised by the Revenue is against the deletion of addition of ₹2,50,00,000/- by the ld. CIT (A) as made by the ld. AO on account of unexplained cash credit u/s 68 of the Income-tax Act, 1961 (the Act) in respect of unsecured loans raised by the assessee during the year. Printed from counselvise.com Page | 2 ITA No.1382 & 1383/KOL/2025 Vaishnodevi Buildcon Private Limited; 2018-19 03. The facts in brief are that the assessee filed the return of income on 29.10.2018, declaring total income at ₹nil. The case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148(1) of the Act on 24.03.2022, after AO received information from investigation wing through insight portal that assessee has received loan from M/s Shivaangan Merchandise Pvt. Ltd. According to the ld. AO, the information received, the said company is either struck off or is a shell company. The ld. AO after following the procedure under the Act issued show cause notice u/s 148A(b) of the Act to the assessee and after taking into account the response of the assessee passed the order u/s 148A(d)of the Act and only thereafter, issued notice u/s 148 of the Act as refereed to (supra). Though the assessee did not comply with the questionnaire and notice issued initially but afterwards furnished all the details/ information qua the said loan including confirmation, details of interest paid and TDS deducted at sources and payment thereof. However, the ld. AO noted that the assessee has failed to provide the satisfactory explanation/ submission/ evidences to explain the said loan from M/s Shivaangan Merchandise Pvt. Ltd. and accordingly treated the same as unexplained cash credit and added to the income of the assessee in the assessments framed u/s 147 read with section 144B of the Act vide order dated 27.03.2023. 04. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee after taking into consideration the reply/ submission of the assessee. 05. After hearing the rival contentions and perusing the materials available on record, we find that the assessee during the year has raised an unsecured loan of ₹2,50,00,000/- from M/s Shivaangan Printed from counselvise.com Page | 3 ITA No.1382 & 1383/KOL/2025 Vaishnodevi Buildcon Private Limited; 2018-19 Merchandise Pvt. Ltd. and paid interest at the rate of 8.5% per Anum which worked out to ₹8,46,061/-. We observe that the lender company is active on the ROC portal as per the database of Ministry of Corporate Affairs and has been regularly filing the return of income. We even note that the assessment has been framed u/s 143(3) of the Act for A.Y. 2018-19, in the case of the lender. We also note that the lender has filed the return of income and paid the tax amounting to ₹23,94,863/- and was having a net worth of ₹51,11,78,732/- during the impugned assessment year. We note that the assessee has filed before the ld. AO the name, address, audited accounts, IT return, bank statement and confirmation etc. and also provided details in respect of utilization of funds raised from the said lender. We note that the ld. AO has not carried out any independent enquiry on the evidences filed by the assessee and only relied on the report of investigation wing. We have perused the order passed by the ld. CIT (A) and find that the ld. CIT (A) has allowed the appeal of the assessee after discussing the facts in detail from para no.5.2 to 5.14 of the appellate order and while allowing the appeal of the assessee has followed the decision of Calcutta High Court in case of PCIT vs. Sreeleathers in ITAT No. 18/2022, IA no. GA/02/2022 dated 14.02.2022 and also the decision of the co-ordinate bench in the case of ITO, Ward 2(1), Siliguri Vs. M/s Megasun Merchants Pvt. Ltd. in ITA No. 1038/KOL/2015 dated 29.03.2019. Therefore, we do not find any infirmity in the order of the ld. CIT (A) which warrant our interference as the order passed is very reasoned and speaking. Since the AO has not done any enquiry on the evidences filed by the assessee before the AO and made the addition on suspicion basis that the assessee is either struck off or is a shell company. Accordingly, we Printed from counselvise.com Page | 4 ITA No.1382 & 1383/KOL/2025 Vaishnodevi Buildcon Private Limited; 2018-19 uphold the order of the ld. CIT (A) by dismissing the appeal of the Revenue. ITA No. 1382/KOL/2025 06. The issue raised in ITA no. 1383/KOL/2025 is in respect of interest of ₹8,46,061/- which was deleted by the ld. CIT (A) by reversing the order of the ld. AO, wherein the said interest was added to the income of the assessee as unexplained expenditure u/s 69C of the Act. Pertinent to state that interest was paid on the loan of ₹2,50,00,000/- taken from M/s Shivaangan Merchandise Pvt. Ltd. Since, we have upheld the order of ld. CIT (A) by dismissing the appeal of the Revenue on the issue of unsecured loan by holding that the ld. CIT (A) has rightly deleted the addition after taking into consideration the reply and submission of the assessee and evidences filed in connection therewith. This being a consequential issue to our decision in ITA No. 1382/KOL/2025 and accordingly, the appeal of the Revenue is dismissed by upholding the order of ld. CIT (A) on this issue. Noteworthy to state that this appeal has emanated from the order of ld. CIT (A) which was passed in the context of order passed by the ld. AO u/s 154 of the Act. 07. In the result, both the appeals of the of the Revenue are dismissed. Order pronounced in the open court on 04.11.2025. Sd/- Sd/- (GEORGE MATHAN) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 04.11.2025 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 5 ITA No.1382 & 1383/KOL/2025 Vaishnodevi Buildcon Private Limited; 2018-19 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 "