PRAMOD LAKRA DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -11(1), KOLKATA, KOLKATA V. RUDRAMUKHI VINTRADE LTD. , KOLKATA

ITA 136/KOL/2025

AI Insights

The case involves an appeal by the revenue against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi, which had partially allowed the appeal of Rudramukhi Vintrade Ltd., a company accused of receiving unexplained cash credits. The revenue challenged the relief of Rs 1,48,00,000 granted to the assessee, arguing that the CIT(A) erred in law and fact by not appreciating the judicial principles and guidelines laid down in previous cases. The Tribunal noted that the CIT(A)'s order was set aside in a separate appeal by the assessee, and thus, the current appeal by the revenue did not survive as the issues would be re-examined afresh.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714171 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Assessment Year: 2013-2014
• Other Referred Cases: Pr. CIT Vs. Swati Bajaj, Pr. CIT2, Kolkata(C)-2, Kolkata Vs M/s BST Infratech Ltd., Pr.CIT(Central)-1, Kolkata vs NRA Iron & Steel Pvt. Ltd., Sumati Dayal v. CIT, CIT Vs. Durga Prasad More
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Unexplained cash credit; Income from undisclosed sources; Accommodation entries
• Section: 147; 148; 144; 68

Judgement Text

" आयकर अपीलीय अधिकरण कोलकाता 'डी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA श्री प्रदीप क ुमार चौबे, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 136/KOL/2025 Assessment Year: 2013-14 DCIT, Circle-11(1), Kolkata Vs. Rudramukhi Vintrade Ltd. (Appellant) (Respondent) PAN: AAFCR9464F Appearances: Assessee represented by : Deep Agarwal, AR. Department represented by : S.B. Chakraborthy, Addl. CIT, Sr. DR. Date of concluding the hearing : 26 June, 2025 Date of pronouncing the order : 08 August, 2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the revenue is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2013-14 dated 25.09.2024, which has been passed against the assessment order u/s 147 r.w.s. 144 of the Act, dated 25.09.2021. Printed from counselvise.com Page | 2 I.T.A. No.: 136/KOL/2025 Assessment Year: 2013-14 Rudramukhi Vintrade Ltd. 2. The appeal is filed late by 46 days. However, on the basis of the application dated 15.01.2025 filed seeking condonation of delay, there is seen to be sufficient cause and the delay is hereby condoned and the appeal is admitted for adjudication on merits on the following grounds of appeal: “1. That on the facts of the case and in law, the CIT(A) erred in giving relief of Rs 1,48,00,000/- to the assessee without any valid reasoning and in the absence of any cogent evidence towards proof of the identity and creditworthiness of the relevant parties from whom the assessee received such fund into its bank account and genuineness of the transactions to the extent of Rs. 1,48,00,000/-. 2. The Ld. CIT(A) has erred in facts and in law in not appreciating the judicial principles laid down in the matter of Pr. CIT Vs. Swati Bajaj reported in 2022 SCС Online 1572 (Cal) wherein the Hon'ble High Court at Calcutta laid down guidelines on the manner in which the allegation against the assessee has to be considered. 3. 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. CIT2, Kolkata(C)-2, Kolkata Vs M/s BST Infratech Ltd.in 161 taxmann.com 668 (Cal) dated 23.04.2024, which is an earlier decision of Hon'ble High Court having a Precedence value? 4.On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) has failed to appreciate the principle which has been laid down by the Hon'ble Supreme Court in the case of Pr.CIT(Central)-1, Kolkata vs NRA Iron & Steel Pvt. Ltd. (412 ITR 161) [2020] 117 taxmann.com 752 (SC). 5. The Ld. CIT(A) has erred in facts and in law in ignoring the judicial principles laid down in the matter of Sumati Dayal v. CIT [1995] 214 ITR 801 (SC). 6. The Ld. CIT(A) has erred in facts and in law in not taking cognizance of the judicial principles laid down in CIT Vs. Durga Prasad More 1973 CTR (SC) 500: [1971] 82 ITR 540 (SC). 7. That the appellant craves leave to add to and/or alter, amend, modify or rescind the grounds hereinabove before or at the time of hearting of this appeal.” 3. Brief facts of the case are that the Assessing Officer (hereinafter referred to as Ld. 'AO') was in receipt of a credible information wherein routing of funds amongst several shell/jamakharchi entities with financial hollowness and without any business rationale had been Printed from counselvise.com Page | 3 I.T.A. No.: 136/KOL/2025 Assessment Year: 2013-14 Rudramukhi Vintrade Ltd. unearthed. It was found that several bank accounts were maintained in the name of different proprietorship firms whose sole proprietor was Shri Dipu Ghosh (PAN ATAPG1940N) and the total cash deposit observed collectively in all the 4 bank accounts was Rs. 15.57 Crore. It was observed that the cash was being remitted to accounts of different entities either within the same day or on a subsequent date. There were four corporate entities in which all the funds were pooled apart from the four proprietorship firms and the status of all the four companies was “Struck Off” as per the RoC database. The Ld. AO examined the cash trail as per the bank accounts and noted that a cumulative sum of Rs. 3,89,00,000/- was received by the assessee, which was transferred from M/s Afterlink Commercial Pvt. Ltd., M/s Overtop Vanijya Pvt. Ltd., M/s Jalnayan Vinimay Pvt. Ltd. & M/s Pachmurti Vincom Pvt. Ltd., the details of which are mentioned at page 3 of the assessment order. On analysis of the return for AY 2013-14, it was found that the assessee had disclosed total income of Rs. 27,900/- vide acknowledgment No. 779148511190913 on 19.09.2013 and no regular assessment was made. Accordingly, the assessment was reopened u/s 147 of the Act and notice u/s 148 of the Act was issued. The assessee furnished documents and reply in response to the notice issued. The Ld. AO was of the view that mere showing the transactions in the books does not make it a genuine transaction as the companies with whom the transactions were made are shell/paper/jamakharchi companies. It was held that the assessee had provided accommodation entries to the shell companies to the extent of Rs. 3,89,00,000/- during the financial year relevant to AY 2013-14 and the sum was added to the income of the assessee and total income was assessed at Rs. 3,89,00,000/-, as the assessee had not filed any return in response to the notice u/s 148 Printed from counselvise.com Page | 4 I.T.A. No.: 136/KOL/2025 Assessment Year: 2013-14 Rudramukhi Vintrade Ltd. of the Act. However, the income disclosed in the original return filed was not added while making the addition. 3.1 Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who considered the written submissions filed by the assessee, the facts of the case and the ground-wise submissions which related to purchase of equity shares of M/s Fairlink Mercantile Pvt. Ltd., M/s Favourite Shoppers Pvt. Ltd. and other such 27 companies which were sold during the year amounting to 1,09,700 unquoted equity shares to 4 companies for a total consideration of Rs. 3,89,00,000/-. The details are mentioned at pages 4 to 9 of the appeal order. The Ld. CIT(A) considered the submission and summarised the finding as under: Sl no Particulars Evidence produced Whether accepted. 1 Bank statement showing receipt of money. Copy of bank account with KVB, Salt Lake branch, Kolkota (account no 310628), BOB (0902020000887). Bank statement shows receipt of money during FY 2012-13. But immediately after credit of the amount, the amount is withdrawn leaving a negative cash balance. A copy of the bank statement of account with KVB is attached herewith. The debits are in the name of companies whose shares are purchased. 2 Explanation for source of credit in the bank account. Copy of share bills, sale bills of entities. There is credit entry of Rs 20 lakhs and 25 lakhs as well as 18 lakhs in the name of Jalnayan Vinimay Pvt Ltd. Jalnayan has been sold 12600 unquoted equity shares for a total consideration of 63 lakhs. Though the assessee has not been able to show a direct link between the sale of shares and receipt of money, still credit is given towards Rs 63 lakhs as money is credited during the year. Similarly in the case of Overtop Vanijya the total sale consideration receivable is Rs 11400000. Out of that bank account shows a credit of Rs 28 lakhs which is given credit. In the case of After Link a credit of Rs 57 lakhs is found out of the total receivable of Rs 1.32 cr. Even though a one to one correlation between sale of shares and credit in the bank account is not proved by the Printed from counselvise.com Page | 5 I.T.A. No.: 136/KOL/2025 Assessment Year: 2013-14 Rudramukhi Vintrade Ltd. taxpayer, considering the bank statement credit for Rs 1.48 cr is given. 4. The request for cross examination of the accommodation entry provider was not considered necessary by the Ld. CIT(A). The Ld. CIT(A) has also considered the judicial pronouncements in the cases mentioned below: i) CIT v. P. Mohanakala 291 ITR 278 (SC) ii) Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR 1 (SC) iii) Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC) iv) CIT Vs Durga Prasad More (1971) 82 ITR 540 (SC) 4.1 The Ld. CIT(A) accordingly concluded as under: “7.4 It is therefore obligatory on the part of the assessee that it explains the nature and source of credits in its books of accounts out of which the cash deposits were made in the bank account. However, in the instant case, the assessee has failed to discharge its legal obligation by furnishing any explanation, which is found satisfactory in the opinion of the assessing officer. Therefore, the source of these cash deposits remain unexplained. This is more so in the backdrop of demonetisation. Clearly, the assessee has utilized its own unaccounted income held in the form of SBNs to deposit in its bank accounts by routing the same through his books of accounts. As no explanation regarding the source of cash deposited in the bank accounts has been provided, corresponding credits to his books of accounts remain unsubstantiated. 7.5 Under the facts and circumstances as above, it is clear that source of credits in his books of accounts amounting to Rs 389,00,000/- during the year remains unsubstantiated. The assessee has offered no satisfactory explanation about the nature and source of credits in its books of accounts. The total amount of credits which are accepted are given in the Table above, the total of which comes to Rs 2.41 crores. Considering the facts and circumstances or the case, these credits in his books of accounts are treated as unexplained cash credits under section 68 of the Act and added to the income of the assessee. This is to be taxed at special rate as per the provisions of the section 115BBE of the Act. The addition of Rs 24100000 is upheld. VIII. In the result the appeal is partly allowed.” Printed from counselvise.com Page | 6 I.T.A. No.: 136/KOL/2025 Assessment Year: 2013-14 Rudramukhi Vintrade Ltd. 4.2 The appeal was accordingly partly allowed and the addition of Rs. 2,41,00,000/- out of Rs. 3,89,00,000/- was confirmed. Aggrieved with the order of the Ld. CIT(A), the revenue has filed the appeal before the Tribunal. 5. Rival contentions were heard and the submissions made and the paper book filed have been examined. It was submitted before us by the Ld. AR that in this case, the assessee had also filed the appeal against the order of the Ld. CIT(A) and the Tribunal, vide order dated 07.05.2025 in I.T.A. No.: 2317/KOL/2025 for the Assessment Year: 2013-14 had set aside the entire order of the Ld. CIT(A) to be done afresh. A copy of the order of the Tribunal was also filed before us. Inadvertently, while hearing the assessee’s appeal, none of the parties requested for clubbing of both the appeals so that a common order could be passed. The Ld. DR could not rebut the submission of the Ld. AR. 6. We have considered the submissions made, gone through the facts of the case and perused the record. A perusal of the order dated 07.05.2025 in I.T.A. No. 2317/Kol/2024 in the appeal filed by the assessee shows that the Tribunal had set aside the order to the Ld. CIT(A) and the relevant para 7 is extracted as under: 7. We have considered the submissions made. Considering the totality of facts and the submissions made and in the interest of justice and fair play, we are of the view that the order of the Ld. CIT(A) may be remitted back to him for deciding afresh all the issues including the issues raised before us and after providing an opportunity of being heard to the assessee as it is alleged by the assessee that the Ld. CIT(A) has accepted partial credits for certain transactions but has failed to apply consistent principle on similar other transactions and the selective approach is unsustainable and fails to appreciate the appellant’s compliance and transparent disclosure throughout the proceedings. The Ld. AO shall also be given an opportunity of being heard and a remand report may be called for, if required, as some of the companies are said to be struck off Printed from counselvise.com Page | 7 I.T.A. No.: 136/KOL/2025 Assessment Year: 2013-14 Rudramukhi Vintrade Ltd. companies as per the RoC’s database. The assessee shall not seek unnecessary adjournments. Hence, all the grounds of appeal are partly allowed for statistical purposes. 8. Thus, since the order of the Ld. CIT(A) has already been set aside to be done de novo, in which direction has been issued to grant an opportunity of being heard to the Ld. AO as well, therefore, the present appeal does not survive and the Ld. AO may avail the opportunity to be provided by the Ld. CIT(A) as and when the appeal is taken up and may make submission before him on all the grounds of appeal taken in this appeal. For statistical purposes, all the grounds of appeal are allowed. 9. In the result, the appeal filed by the revenue is allowed for statistical purposes. Order pronounced in the open Court on 8th August, 2025. Sd/- Sd/- [Pradip Kumar Choubey] [Rakesh Mishra] Judicial Member Accountant Member Dated: 08.08.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 8 I.T.A. No.: 136/KOL/2025 Assessment Year: 2013-14 Rudramukhi Vintrade Ltd. Copy of the order forwarded to: 1. Rudramukhi Vintrade Ltd., C/o. Agarwal Vishwanath & Associates, 133/1/1 A, S.N. Banerjee Road, Pushkal Bhawan, 3rd Floor, Kolkata, West Bengal, 700013. 2. DCIT, Circle-11(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "