NAVIN BANSAL,KOLKATA V. ITO, WARD 44(3), KOLKATA

ITA 763/KOL/2025

AI Insights

The case involves an appeal by Navin Bansal against the order of the National Faceless Appeal Centre, Delhi, which confirmed the additions made by the AO regarding bogus loan liabilities and unexplained cash credits for the Assessment Year 2015-16. The Tribunal found that the loans in question were recorded in the balance sheet of the assessee and were not taken during the year under assessment, thus should not have been treated as bogus. Additionally, the Tribunal noted that the transactions with M/s Maheswary Spat Limited were supported by bank statements and continued over multiple financial years, undermining the claim of these being unexplained cash credits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772532 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP LAKRA
• Assessee Lawyers: AMIT AGARWAL
• Keywords: Set aside; Unexplained cash credit; Bogus loan; Liquidation; Bogus
• Section: 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM ITA No.763/KOL/2025 (Assessment Year:2015-16) NavinBansal 48D Muktaram Babu Street, Ram mandir, Kolkata-700007 West Bengal Vs. ITO Ward 44(3), Kolkata 3, govt Place, Kolkata-700001, West Bengal (Appellant) (Respondent) PAN No. ABBPB8111B Assessee by : Shri Amit Agarwal, AR Revenue by : Shri Sandeep Lakra, DR Date of hearing: 30.07.2025 Date of pronouncement: 26.08.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT (A)”] dated 11.02.2025 for the AY 2015-16. 2. The ground nos.1,2 and 3 are not pressed at the time of hearing and therefore, dismissed as not pressed. 3. The issue raised in ground no.4 is against the confirmation of addition of ₹5,53,500/- by the ld. CIT (A) as made by the ld. AO on account of bogus loan liability from two creditors i.e. Shri Sushil Kumar Sharma and Sushil Kumar Sharma (HUF), by treating the same as unexplained cash credit. Printed from counselvise.com Page | 2 ITA No.763/KOL/2025 Navin Bansal; A.Y. 2015-16 3.1. The facts in brief are that the assessee filed the return of income on 30.09.2015, declaring total income at ₹6,50,510/- which was processed u/s 143(1) of the Income-tax Act, 1961 (the Act). Thereafter, the case of the assessee was selected for scrutiny under CASS as limited scrutiny and statutory notices u/s 143(2) and 142(1) of the Act along with questionnaire were duly issued and served upon the assessee. During the course of assessment proceedings, the ld. AO observed that the assessee has loans outstanding from Shri Sushil Kumar Sharma and Sushil Kumar Sharma (HUF) for which confirmations were not produced, but when the assessee did not reply to the same, the same were added to the income of the assessee as bogus liability. 3.2. In the appellate proceedings, the ld. CIT (A) simply affirmed the order of the ld. AO on the ground that the assessee has failed to furnish the evidences before the ld. AO by ignoring the fact that the evidences were duly furnished before the ld. CIT (A) during the appellate proceedings. 3.3. After hearing the rival contentions and perusing the materials available on record, we find that the ld. AO has added loans outstanding to two parties namely; Shri Sushil Kumar Sharma of ₹3,37,500/- and Sushil Kumar Sharma (HUF) of ₹2,16,000/-. We observe on the basis of the documents filed before us, including ledger copies and balance sheet and profit and loss account that these were the loans taken in the earlier year and not during the year and the ld. AO has simply treated these loans as bogus liability for the reason that the assessee has not furnished any confirmations. Similarly, the ld. CIT (A) by ignoring the facts on record and evidences filed by the assessee simply confirmed the finding of the ld. Assessing Officer. We note that these were the loans taken during the Printed from counselvise.com Page | 3 ITA No.763/KOL/2025 Navin Bansal; A.Y. 2015-16 earlier year and mere non-furnishing of confirmations by the assessee during the assessment proceedings should not result in the making of additions of these loans as bogus liability. We have failed to understand as to how the authorities below have arrived at finding that these were bogus liability when these were duly shown in the balance sheet of the assessee. Consequently, we reverse the order of the ld. CIT (A) and direct the ld. AO to delete the addition. The ground no. u is allowed. 4. The second issue raised in ground no.5 and 6 is against the confirmation of addition is of ₹38,27,076/- by the ld. CIT (A) as added by the ld. AO on account of outstanding lability in respect of M/s Maheswary Spat Limited in respect of transactions undertaken in the earlier years as unexplained cash credit. 4.1. The facts in brief are that during the course of assessment proceedings the AO noted from the bank statement furnished by the assessee that assessee paid ₹5.00 lacs each from M/s Maheswary Spat Limited on 13.06.2016, 14.06.2026 and 15.06.2016, leaving outstanding balance in the subsequent year at ₹23,27,076/-. The ld. AO referred to the inspector report dated 11.12.2017, stating that the office of the M/s Maheswary Spat Limited was found to be closed as the company is under liquidation. The ld. AO thereafter treated the same as bogus liability and added to the income of the assessee as unexplained cash credit on the ground that the subsequent payments by cheque to the said parity did not prove the genuineness of the transactions with the said party. 4.2. In the appellate proceedings, the ld. CIT (A) affirmed the order of the ld. AO without taking into consideration the evidences on record. Printed from counselvise.com Page | 4 ITA No.763/KOL/2025 Navin Bansal; A.Y. 2015-16 4.3. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has been regularly dealing with M/s Maheswary Spat Limited. The balance as on 01.04.2014 was ₹98,27,076/- and during the F.Y. 2014-15, the total payment of ₹60 lacs was made vide three account payee cheques of Rs. 20,00,000/- leaving the closing balance as on 31.03.2015 at ₹38,27,076/-. As noted above, the assessee paid ₹15 lacs in the subsequent financial year by account payee cheques which has been verified by the ld. AO from the bank statement furnished by the assessee during the assessment proceedings. Therefore, it is sufficiently clear that how a liability could be non-genuine, which was coming over from the earlier year and the payments were made by account payee cheques in the preceding and subsequent financial year. We note that the confirmations could not be produced from the said party as the company has gone into liquidation. The assessee has also filed a confirmation from the official liquidator before us. Considering these facts and circumstances, we are of the view that the order passed by the ld. CIT (A) is incorrect and cannot be sustained. Accordingly, we set aside the same on this issue and direct the ld. AO to delete the addition. 5. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 26.08.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 26.08.2025 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 5 ITA No.763/KOL/2025 Navin Bansal; A.Y. 2015-16 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 "