MALAY KARJEE, INCOME TAX OFFICER, WARD-38(1), MIDNAPUR, MIDNAPUR V. KURKUTBANDHI SKUS LTD., KURKUTBANDHI

ITA 505/KOL/2025

AI Insights

The case involves an appeal by the Income Tax Officer against Kurkutbandhi SKUS Ltd., concerning the assessment year 2017-18. The Revenue challenged the order of the CIT (A) which had allowed additional evidence and deleted several additions made by the Assessing Officer (AO), including disallowances under section 80P for deduction claims and section 69A for unexplained cash deposits. The CIT (A)'s decisions were based on remand reports and additional evidence submitted by the assessee, which were found satisfactory upon examination. The tribunal upheld the CIT (A)'s decisions, dismissing the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779298 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 07-03-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PANKAJ PANDEY
• Assessee Lawyers: SOUMITRA CHOUDHURY; PRANABESH SARKAR; ARS; PROVIDING LOANSCREDIT
• Keywords: Additional evidence
• Section: 144

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI SONJOY SARMA, JM ITA No.505/KOL/2025 (Assessment Year:2017-18) Income Tax Officer, Ward 38(1), Midnapur, Paschim Medinipur-721101, West Bengal Vs. Kurkutbandhi SKUS Ltd. Kurkutbandhi, Jagardanga, Paschim Medinipur-711121 West Bengal (Appellant) (Respondent) PAN No. AABAK9302K Assessee by : Shri Soumitra Choudhury & Shri Pranabesh Sarkar, Ars Revenue by : Shri Pankaj Pandey, DR Date of hearing: 09.09.2025 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 National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 10.01.2025 for the AY 2017-18. 02. The Revenue has raised following grounds of appeal: - “1. On the facts and in the circumstances of the case, the Ld. CIT (Appeals) has erred in allowing additional evidence at the appellate stage, Inspite of the fact that the conditions that the conditions under Rule 46A was not fulfilled in this case.” 2. The Ld. CIT(Appeals) has erred in deleting the addition of Rs. 24,30,594/- for disallowance of deduction u/s 80P on the ground 2 that there was no material information found indicating any income derived by the assessee by providing loans/credit facilities to its non-members. Printed from counselvise.com Page | 2 ITA No.505/KOL/2025 Kurkutbandhi SKUS Ltd.; A.Y. 2017-18 3. The Ld. CIT(Appeals) has erred in deleting the addition Rs. 2,15,53,700/- for unexplained cash deposit u/s 69A on the 3 ground that day book and cash book of the assessee was examined and it was found that the cash, sales and receipts of deposits from its members are duly recorded. 4. The Ld. CIT(Appeals) has erred in deleting the addition Rs. 26,624/- for disallowance of provision for overdue interest on 4 the ground that the provision for overdue interest has been made as per the I.T Act by the appellant and there is no reason for the same to be added back to its income.” 03. The issue raised in ground no.1 is against the order of learned CIT (A) allowing the additional evidence in violation of Rule 46A of the it Rules, 1962, which is in our opinion is wrong as the learned CIT (A) during the appellate proceedings called for the remand proceedings from the learned AO and it is only after taking into account the remand report, the appeal of the assessee was allowed. Pertinent to note that the remand report has been discussed by the learned CIT (A) on page no. 19 Para 5 of the appellate order. Therefore, the ground no. 1 is dismissed. 04. The issue raised in ground no.2 is against the order of learned CIT (A) deleting the disallowance of ₹24,30,594/- as made by the learned AO by disallowing the deduction u/s 80P of the Act on the ground that there was no material information found indicating any income derived by the assessee by providing loans / credit facilities to its member. 05. The facts in brief are that the learned AO found during the course of assessment proceedings that the assessee is engaged in the activity of accepting deposits under various schemes and also giving loans against such deposits to non-members also. Therefore, the learned AO held that the activity of the society is that of finance business and accordingly held the assessee to be not eligible for Printed from counselvise.com Page | 3 ITA No.505/KOL/2025 Kurkutbandhi SKUS Ltd.; A.Y. 2017-18 claiming deduction u/s 80P of the Act. According to the learned AO, co-operative society engaged main only for its members and providing credit facility to its members are entitled to such deduction u/s 80P of the Act. The learned AO issued show cause notice to the assessee as to why the deduction should not be withdrawn, which was not replied and consequently the learned AO rejected the claim of the assessee u/s 80P(2) of the Act. 06. In the appellate proceedings, the learned CIT (A) allowed the appeal of the assessee after calling for the remand report from the AO and after taking into account the submission and contention of the assessee by observing and holding as under: - “The assessee did not comply with the notices issued by the Ld. AO. Hence, the assessment was completed u/s 144 of the Act. The Ld. AO made a disallowance of Rs.24,30,594/- u/s 80P of the Act. The appellant filed additional evidence during the course of appellate proceedings which were forwarded to the Ld. AO for his comments. The remand report as received from the Ld. AO has been perused. The Ld. AO after examining all the documentary evidence submitted by the appellant has submitted that there was no material information found indicating any income derived by the assessee by providing loans/credit facilities to its non-members.” 07. After hearing the rival contentions and perusing the materials available on record including appellate order and the remand report and rejoinder filed by the assessee, we do not find any infirmity in the order of the learned CIT (A) accordingly, ground no.2 is dismissed by upholding the order of learned CIT (A) on this issue. 08. The issue raised in ground no.3 is against the deletion of addition of ₹2,15,53,700/- as made by the learned AO for unexplained cash deposit u/s 69A of the Act on the ground that day book and cash Printed from counselvise.com Page | 4 ITA No.505/KOL/2025 Kurkutbandhi SKUS Ltd.; A.Y. 2017-18 book of the assessee were examined and it was found that cash sales and receipts from its members were not duly recorded. 09. The fact in brief are that the learned AO during the course of assessment proceedings found that the assessee has deposited cash into the bank account of ₹2,15,53,700/- during the demonetization period and accordingly, notice was issued which was not complied with by the assessee. Consequently, the learned AO added the said amount u/s 69A of the Act to the income of the assessee as unexplained money. 010. In the appellate proceedings, the learned CIT (A) called for the remand report from the learned AO on the evidences filed by the assessee which was duly submitted before the learned CIT (A) and the learned CIT (A) dealt with the said remand report in para no.5 of page no.19 of the appellate order. The learned CIT (A) after taking into account the submission of the assessee and evidences filed including the remand report deleted the addition by observing and holding as under: - “The ground of appeal is directed against addition of Rs.2,15,53,700/- by the Ld. AO u/s 69A of the Act as unexplained money. The assessee did not comply with the notices issued by the Ld. AO. Hence, the assessment was completed u/s 144 of the Act. The Ld. AO made a disallowance of Rs.2,15,53,700/- u/s 69A of the Act. The appellant filed additional evidence during the course of appellate proceedings which were forwarded to the Ld. AO for his comments. The remand report as received from the Ld. AO has been perused. The Ld. AO after examining all the documentary evidence submitted by the appellant has submitted that day book and cash book of the assessee was examined and it was found that the cash, sales and receipts of deposits from its members are duly recorded. The assessee also submitted daily cash flow from 08.11.2016 to 30.12.2016 which was cross checked with cash book, day book, sales register as well as with bank statements. No apparent discrepancy was found. Printed from counselvise.com Page | 5 ITA No.505/KOL/2025 Kurkutbandhi SKUS Ltd.; A.Y. 2017-18 In view of the above, the impugned addition made thereof u/s 69A by the Ld. AO is directed to be deleted.” 011. After hearing the rival contentions and perusing the materials available on record, we find that the learned CIT (A) deleted the addition on the basis of remand report wherein the learned AO recorded the finding that the cash sales and receipts of deposits from its member were duly recorded and assessee also submitted the daily cash flow from 08.11.2016 to 30.12.2016, which was checked with the cash book and day book, sale register as well as bank statement and there was no discrepancy and thus, deleted the addition. Therefore, we do not find any infirmity in the order of the learned CIT (A). The ground no.3 of Revenue’s appeal is dismissed. 012. The issue raised in ground no.4 is against the deletion of addition of ₹24,624/- by learned CIT (A) as made by the learned AO on account of disallowance of provision for overdue interest. 013. The facts in brief are that the learned AO during the course of assessment proceedings observed that the assessee has charged to the profit and loss account the provisions for overdue interest of ₹24624/-. When the assessee did not reply, the learned AO added the same to the return income of the assessee. 014. In the appellate proceedings, the assessee explained the nature of said interest and the learned CIT (A) recorded a finding that the provision for overdue interest has been made as per Income-tax Act, 1961 (the Act) by the assessee and there is no reason for the same to be added back and hence, the learned CIT (A) allowed the appeal of the assessee. Since there is no infirmity in the order of the learned Printed from counselvise.com Page | 6 ITA No.505/KOL/2025 Kurkutbandhi SKUS Ltd.; A.Y. 2017-18 CIT (A), we are inclined to uphold the order of learned CIT (A) by dismissing the appeal of the Revenue on this issue. 015. 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 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 "