INCOME TAX OFFICER, KOLKATA V. VENKATESH INTERNATIONAL EXIM PVT LTD, KOLKATA

ITA 1456/KOL/2024

AI Insights

The case involves Venkatesh International Exim Pvt. Ltd., which was accused by the Income Tax Officer of receiving unexplained cash credits from shell companies associated with the Banka Group. The Assessing Officer made an addition of Rs. 20,00,112 under section 68 of the Income Tax Act, considering these entries as accommodation entries. The CIT(Appeals) reversed this decision, citing insufficient evidence from the Assessing Officer to substantiate the claim. The Revenue appealed to the ITAT, arguing that the CIT(Appeals) erred in allowing the assessee's appeal without proper verification of the facts. However, the ITAT upheld the CIT(Appeals)' decision, agreeing that the Assessing Officer had failed to provide necessary details to prove the transaction's genuineness.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397173 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Other Referred Cases: Aashna Developers Pvt. Limited in ITA No. 417/AHD/2022, Pr. CIT(Cen.)-2, Kolkata -vs.- M/s/. BST Infratech Ltd. in ITAT/67/2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Unexplained cash credit
• Section: 148; 68

Judgement Text

" ITA No. 1456/KOL/2024 (A.Y. 2013-2014) Venkatesh International Exim Pvt. Limited 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) I.T.A. No. 1456/KOL/2024 Assessment Year: 2013-2014 Income Tax Officer,…………………….…………Appellant Ward-12(1), Kolkata, Aayakar Bhawan, 7th Floor, P-7, Chowringhee Square, Kolkata-700069 -Vs.- Venkatesh International Exim Pvt. Ltd., …Respondent 2F/11, Unit No. 902, Block-4B, Eco Space Business Park, New Town, Rajarhat, Kolkata-700156 [PAN: AAECV2648C] Appearances by: Shri L.N. Dash, Addl. CIT(D.R.), appeared on behalf of the Revenue Shri G.S. Kedia, A.R. and Ankeeta Lohia, A.R., appeared on behalf of the assessee Date of concluding the hearing: March 12, 2025 Date of pronouncing the order: May 29, 2025 O R D E R The present appeal is directed at the instance of Revenue against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 27th May, 2024 passed for Assessment Year 2013-14. 2. The appellant is a Private Limited Company, which filed its return of income for assessment year 2013-14on 02.10.2013 ITA No. 1456/KOL/2024 (A.Y. 2013-2014) Venkatesh International Exim Pvt. Limited 2 declaring total loss of Rs.64,512/-. Information was received from Investigation Wing that the assessee is one of the beneficiaries, who has availed benefit from shell companies floated of Banka Group. Accordingly notice under section 148 of the Act was issued on 31.03.2021. The assessee filed return of income in response to notice under section 148 on 30.04.2021 declaring loss of Rs.64,512/-. Thereafter the ld. Assessing Officer issued notice under section 143(2) of the Act to the assessee and the same was served on the assessee. In response to the notice issued under section 143(2), the assessee had filed objections but the ld. Assessing Officer did not consider the objections raised by the assessee saying that the objections are not maintainable and concluded the assessment by making an addition of Rs.20,00,112/- under section 68 of the Act. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). 3. After considering the submissions made by the assessee, the ld. CIT(Appeals) allowed the appeal of the assessee by following the decision dated 10.01.2024 of the ITAT, Ahmedabad Bench in the case of Aashna Developers Pvt. Limited in ITA No. 417/AHD/2022. 4. On being aggrieved, the Revenue preferred an appeal before the ITAT and raised the following grounds:- (1) That the CIT(A) erred in taking decision in favour of the assessee without any verification on the issue. (2) The CIT(A) has erred in ignoring the settle position of law in respect of provision of sec. 68 of the Act that onus of proving the identity and creditworthiness of the parties from whom the assessee received money and genuineness of such transaction is on the assessee. ITA No. 1456/KOL/2024 (A.Y. 2013-2014) Venkatesh International Exim Pvt. Limited 3 (3) That the appellant craves leave to add any new ground or alter any of the grounds of appeal and to place arguments during the course of hearing of the appellate proceeding. (4) Whether on the facts and circumstances of the case, the Hon’ble High Court has committed substantial error in law in not following the judicial principles laid down in the matter of Pr. CIT(Cen.)-2, Kolkata -vs.- M/s/. BST Infratech Ltd. in ITAT/67/2024 dated 23.04.2024, which is an earlier decision of Hon’ble High Court having precedence value. 5. I have heard both the sides. It was the submission of the ld. Departmental Representative that the ld. Assessing Officer received credible information from the Investigation Wing that the assessee is one of the beneficiaries, who has availed benefit from the shell companies floated of Banka Group. He further argued that the ld. Assessing Officer has gone through the balance-sheet of the assessee-company, which clearly shows that the asseessee is in receipt of Rs.20,00,112/- in the form of loan from the abovementioned shell companies of Banka Group. The assessee was asked to explain the nature of these transactions. The assessee has replied that the assessee-company has not dealt with Banka Group. After examining all the facts, the ld. Assessing Officer came to a conclusion that the transaction is merely an accommodation entry and the assessee has not undertaken any business activity with Banka Group, but ld. CIT(Appeals) without considering the facts properly allowed the appeal of the assessee. Therefore, ld. D.R. pleaded to set aside the order passed by the ld. CIT(Appeals) and uphold the order of ld. Assessing Officer. ITA No. 1456/KOL/2024 (A.Y. 2013-2014) Venkatesh International Exim Pvt. Limited 4 6. On the other hand, it was the submission of the ld. Counsel for the assessee that the assessee-company requested the details of loan transaction, date of loan transaction for an amount of Rs.20,00,112/- and when it was deposited in Bank account of the assessee-company, received the said amount etc., but ld. Assessing Officer has not furnished the above said details. It was the further submission of the ld. Counsel for the assessee that the assessee denied the transaction with Banka Group and also intimated the ld. Assessing Officer very clearly about the non- involvement of any transaction with Banka Group, which clearly shows that the ld. Assessing Officer failed to furnish the date of transaction and Bank details regarding loan amount received by the assessee-company from the Banka Group. He further submitted that there is no entry in the balance-sheet of the assessee-company that the assessee had received loan amount of Rs.20,00,112/- from Banka Group. Inspite of this, the ld. Assessing Officer erroneously made an addition of Rs.20,00,112/- in the hands of assessee-company under section 68 of the Act. He further submitted that the assessee has established all the details before the ld. CIT(Appeals), the ld. CIT(Appeals) after examining all details filed by the assessee, allowed the appeal of the assessee saying that there was no transaction between the assessee- company and Banka Group. Therefore, ld. Counsel for the assessee pleaded to uphold the order passed by the ld. CIT(Appeals). 7. I have perused the material available on record and the orders passed by the lower authorities. It is an admitted fact that ITA No. 1456/KOL/2024 (A.Y. 2013-2014) Venkatesh International Exim Pvt. Limited 5 after receipt of notice under section 148 of the Act, the assessee requested the ld. Assessing Officer to furnish the date of alleged transaction and also informed the ld. Assessing Officer that he has not received any loan amount of Rs.20,00,112/- from M/s. Banka Group. The assessee also furnished the Bank statement before the ld. Assessing Officer as well as before the ld. CIT(Appeals). But admittedly there is no credit in the Bank account of the assessee, especially for an amount of Rs.20,00,112/- as alleged by the ld. Assessing Officer. After considering the above said facts, the ld. CIT(Appeals) allowed the appeal of the assessee saying that- “in the case of the appellant, the Assessing Officer has not provided complete details of the name of the shell company with whom the transaction was undertaken by the appellant and the date of transaction. In the absence of primary details to prove the genuineness of the transaction, the addition made by the Assessing Officer is without proper appreciation of facts and the Assessing Officer is directed to delete the addition of Rs.20,00,000/- towards unexplained cash credit under section 68 of the Act”. 8. After considering the facts and circumstances of the case and the findings of ld. CIT(Appeals), I am of the firm view that the order of the ld. Assessing Officer is lacking in so many aspects i.e. ld. Assessing Officer failed to furnish the details of lender company, date of transaction and credits in the Bank account from the non- existent companies in the books of the assessee and mainly the ITA No. 1456/KOL/2024 (A.Y. 2013-2014) Venkatesh International Exim Pvt. Limited 6 statement of the company confirming the appellant as one of the beneficiaries availed the benefit from the shell companies floated by Banka Group. All these details are minimum requirements to the assessee to rebut the allegations raised by the ld. Assessing Officer against the assessee. Therefore, I have no hesitation to come to a conclusion that the ld. CIT(Appeals) has rightly passed the order and there is no infirmity in the order passed by the ld. CIT(Appeals). Hence, no interference is needed and the grounds raised by the Revenue are dismissed. 9. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on 29/05/2025. Sd/- (Duvvuru RL Reddy) Vice-President (KZ) Kolkata, the 29th day of May, 2025 Copies to :(1) Income Tax Officer, Ward-12(1), Kolkata, Aayakar Bhawan, 7th Floor, P-7, Chowringhee Square, Kolkata-700069 (2) Venkatesh International Exim Pvt. Ltd., 2F/11, Unit No. 902, Block-4B, Eco Space Business Park, New Town, Rajarhat, Kolkata-700156 (3) CIT(Appeals), NFAC, Delhi; (4) CIT - , Kolkata; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. "