DCIT, KOLKATA V. M/S NEW CHARAN KANWAL FINANCE COMPANY PVT. LTD., KOLKATA

ITA 453/KOL/2025

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which had allowed the appeal of M/s New Charan Kanwal Finance Company Pvt. Ltd. The Revenue challenged the CIT(A)'s decision on the grounds that the assessee failed to prove the identity and creditworthiness of the party from whom the loan was received, and misreported facts during the appellate proceedings. The assessee, on the other hand, argued that the transactions were conducted through proper banking channels and were duly repaid. The tribunal examined the submissions and evidence presented, including loan confirmations, audited accounts, and bank statements, and found that the CIT(A) had rightly allowed the assessee's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668955 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVEEN KISHORE
• Assessee Lawyers: MIRAZ D. SHAH
• Keywords: Unexplained cash credit; TDS; Search and seizure
• Section: 143(3); 153A; 2

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI PRADIP KUMAR CHOUBEY, JM AND SHRI RAKESH MISHRA, AM ITA No. 453/KOL/2025 (Assessment Year: 2020-21) DCIT, Office of the DCIT, Central Circle-2(4), Kolkata, Aaykar Bhavan Poorva, 4 th Floor, 110 Shantipally, E.M. Bypass, Kolkata-700107, West Bengal Vs. M/s New Charan Kanwal Finance company Pvt. ltd. 32, Om Tower, 4 th Floor, J.L, Nehru Road, park Street, Kolkata-700071 West Bengal (Appellant) (Respondent) PAN No. AAACN5381Q Assessee by : Shri Miraz D. Shah, AR Revenue by : Shri Praveen Kishore, DR Date of hearing: 11.06.2025 Date of pronouncement: 23.06.2025 O R D E R Per Pradip Kumar Choubey, JM: This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals), Kolkata-26 (hereinafter referred to as the “Ld. CIT(A)”] dated 31.12.2024 for the AY 2020-21. 02. Brief facts of the case are that the assessee being a company filed the return of income for the assessment year 2020-21, declaring total income at ₹25,27,240/-. A search and seizure operation were conducted in case of Balaji Group. A notice u/s 153A was issued and in compliance to the same assessee filed the return and submitted various documents. The ld. AO passed the assessment order assessing the income of the assessee at ₹31,15,000/- as unexplained cash credit u/s Page | 2 ITA No. 453/KOL/2025 M/s New Charan Kanwal Finance Company Pvt. Ltd; A.Y. 2020-21 68 of the Act read with section 115BBE of the Act, being unsecured loan taken by the assessee. Aggrieved by the said order assessee preferred the appeal before the ld. CIT (A), wherein the appeal of the assessee has been allowed. 03. Being aggrieved and dissatisfied by the Revenue preferred an appeal. 04. The ld. DR challenges the very impugned order thereby submitting that the ld. CIT (A) has erred in deleting the addition ignoring the fact that the assessee has failed to prove the identity and creditworthiness of the party. The ld. DR has further challenged that the ld. CIT (A) erred in ignoring that assessee has admitted the fact in respect of receipt of ₹31,15,000/- as unsecured loan in F.Y. 2019-20, whereas it misreported the fact during the appellate proceedings by claiming that it was not received of loan rather it was refund of loan received in earlier years. The ld. DR has further submitted that monetary limit for file appeal before the ld. ITAT as prescribed by the CBDT Circular is not applicable in the present case as the case falls under the exceptional laws. 05. Contrary to that, the ld. AR support the impugned order thereby submitting that loans were received through proper banking channels and it was repaid. It has further been argued by the ld. AR that the assessee given a loan of ₹31,15,000/- in the earlier year and the borrow M/s Popular Tie-up Pvt. Ltd has repaid the same with interest in the current year and both the transactions were executed through account payee cheque. The ld. AR supports the impugned order of the ld. CIT (A). 06. Upon hearing the submissions of the counsel of the respective parties we have perused the impugned order and find that assessee company Page | 3 ITA No. 453/KOL/2025 M/s New Charan Kanwal Finance Company Pvt. Ltd; A.Y. 2020-21 had provided an unsecured loan of ₹₹31,15,000/- to one of its group entities M/s Popular Tie-up Pvt. Ltd. during the preceding previous year and the current year (F.Y. 2019-20). The assessee had received the sum along with interest as full repayment of loan. It is pertinent to mentioned here that the company M/s Popular Tie-up Pvt. Ltd., having its registered office at Kolkata. The amount credited in the books for such repayment of the loan was assessed u/s 68 of the Act in the assessment made u/s 153A/ 143(3) of the Act. The bare company is regular filer of the return and having a net worth of ₹3,38,71,195/-. The assessee company was holding NBFC certificate from RBI. The following documents has been submitted by the assessee in respect of the money receipt as repayment of the loan: - “1. Loan confirmation in the year of taking loan (Filed before AO) 2. Loan confirmation in the year of loan repayment (Filed before AO) 3. Audited Accounts of the Payer (Filed before AO) 4. Income Tax Return of the Payer (Filed before AO) 5. Bank Statement of the Payer (Filed before AO) 6. Intimation u/s 143(1) of the IT Act.” 07. We have also gone through the submission made by the assessee before the ld. CIT (A) which had been tabulated by the ld. CIT (A) in its order, which is as follows: - A.Y. / Date Loan given to Popular Tie-up Pvt. Ltd. Loan repaid Interest TDS Closing 2020-21 13.03.2020 ₹31,15,000/- 16.03.2020 ₹31,15,000/- Nil 08. Going over the order passed by the ld. CIT (A), we do not find any infirmity in the impugned order as it appears from the above table that the assessee in F.Y. 2019-20, relevant to A.Y. 2020-21, had advanced Page | 4 ITA No. 453/KOL/2025 M/s New Charan Kanwal Finance Company Pvt. Ltd; A.Y. 2020-21 loan of ₹31,15,000/- to M/s Popular Tie-up Pvt. Ltd. and the same was refunded back to the M/s Popular Tie-up Pvt. Ltd. on 16.03.2020. Accordingly, the appeal of the Revenue is hereby dismissed. 09. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 23.06.2025. Sd/- Sd/- RAKESH MISHRA (PRADIP KUMAR CHOUBEY) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) Kolkata, Dated: 23.06.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "