SURESH KUMAR BANTHIA,KOLKATA V. DCIT, CENTRAL CIRCLE 4(3), , KOLKATA

ITA 835/KOL/2025

AI Insights

The case involves an appeal by Suresh Kumar Banthia against the order of the Commissioner of Income-tax (Appeals), which confirmed the addition of \\u20b911,35,00,000 as unexplained investment. The addition was initially made by the Assessing Officer based on documents and statements related to unaccounted cash loan transactions. The Tribunal examined the relevance of the seized documents and the validity of the retracted statement of the assessee. It was concluded that the documents did not provide clear evidence of the alleged transactions, and the retracted statement could not be the sole basis for the additions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 777047 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2025
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2020-2021
• Appeal Filed On: 22-04-2025
• Other Referred Cases: ACIT Vs. Satyapal Wassan, CBI Vs. VC Shukla, Rakesh Goyal Vs. ACIT, Mohan Foods Ltd Vs. DCIT, CIT vs. SM Agarwal, Jayanti Lal Patel, NK Malhan Vs. DCIT, CIT Vs. Chandra Chemouse P. Ltd., MM financiers (P) Ltd. Vs. DCIT, Mongra Metals (P) Ltd. Vs. ACIT, Pooja Bhatt Vs. ACIT, Atual Kumar Jain Vs. CIT, SK gupta Vs. DCIT, CIT Vs. S. Khader Khan Son
• Laws Referred To: Income-tax Act, 1961
• Court: TRIBUNAL
• Department Lawyers: SANAT KUMAR RAHA
• Assessee Lawyers: S.M. SURANA; SUNIL SURANA; ARS
• Keywords: Set aside; Corroborative evidences; Document seized; Peak credit; Documents seized; Retraction
• Section: 143(3); 142(1); 132; 131; 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.835/KOL/2025 (AY:2020-21) Suresh Kumar Banthia 147 Banthia House Mahatma Gandhi Road, Burra Bazar, Kolkata-700007, West Bengal Vs. DCIT, Central Circle-4(3) Aayakar Bhavan, Poorva, 110 Shantipally, E.M. By Pass, Kolkata-700107, West Bengal (Appellant) (Respondent) PAN No. AEVPB2317L Assessee by : S.M. Surana, & Sunil Surana, ARs Revenue by : Sanat Kumar Raha, DR Date of hearing: 29.07.2025 Date of pronouncement: 18.09.2025 O R D E R Per Rajesh Kumar, AM: This an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals) Kolkata-27, (hereinafter referred to as the “Ld. CIT(A)”] dated 06.04.2025 for the AY 2020-21. 02. The only issue raised in ground no.1 is against the confirmation of addition of ₹11,35,00,000/- by the ld. CIT (A) as made by the AO in respect of peak investment without there being no evidence of any investment made by the assessee so as to determine and compute the peak investment. The ground no.2 to 10 are in support of ground no.1. Printed from counselvise.com Page | 2 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 03. The facts in brief are that the assessee filed the return of income on 01.02.2021, declaring total income of ₹1,74,57,470/-. The assessee is the key person of the group known as Citizen Group. The assessee having two proprietorship concern namely; M/s M.P. Industries and M/s M.P. Industries (FSEZ). A survey u/s 133A of the Income-tax Act, 1961 (the Act) was conducted on the assessee on 19.02.2020 as well as on M/s Citizen Umbrella Mfg. ltd and Suresh Kumar Banthia. The AO noted that some incriminating documents marked as USK/1 to USK/31 containing the loan transactions arranged through brokers were seized during the search action u/s 132 of the Act on Shri Uma Shanker Kasera and documents marked as AKK/1 to AKK/12 were seized from the flat of his son Shri Anil Kumar Kesara. Similarly, document marked as JBS/1 to JBS/25 were seized from the business premises of Shri Jai Bhagwan Sanwaria. These documents were stated to have contained the details of cash transactions. The total number of 88 pages seized documents which contained the details of unaccounted cash loan transactions pertaining to the assessee shri Suresh Kumar Banthia. Allegation during the survey was that during the above search on the house of finance brokers namely ‘Kaseras’, ‘Sanwaria’ on 30.11.2018, some incriminating material/documents were found which revealed that assessee / citizen group has made cash loan/ advances to different parties. The ld. AO dealt with such incriminating material from page no.1 Para 2 of the assessment order till page no.4. The ld. AO also in para no.5.1 from page no.5 relied on the documents marked CUMS/2, page 12, CUML/1 and other pages of CCUML/2, page no. 43 impounded in the course of survey in the premises of M/s Citizen Umbrella Mfg. ltd. The ld. AO thereafter vide para no. 5.2.1, relied on SKB/1 and CUM/2, observing that SKB/01 pages 16, 26 and 27 and CUMS/2 pages Printed from counselvise.com Page | 3 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 10,12,14,24,26,27 and 28. The ld. AO in para no.5.2.2 relied on the explanation of the assessee that assessee in his statement recorded in the course of survey u/s 133A of the Act accepting that cash loans were given out of books of accounts. The ld. AO also noted that the assessee admitted in the said statement that there was suppression of double digits and that the loans were given through Pawan Mundhhra and Gajraj Choraria. The ld. AO also extracted the statement of the assessee dated 19.02.2020 from page no.9 to 19 of the assessment order. In para no.55, the ld. AO has quantified the unaccounted cash transactions carried out through finance brokers ‘Kaseras’ and ‘Sanwaria’. Finally, in para no.7.2, of the assessment order, the income was quantified for different assessment years and similarly in para no.7.3, the cash flow and telescoping of addition was made thereby determining the addition to be made u/s 69A of the Act. Finally, the ld. AO made an addition of ₹3,01,59,831/- towards using for advancing cash loans by the assessee as unexplained money u/s 69A of the Act and ₹4,46,38,775/- was added towards interest earned from advancing of cash loans as unexplained money u/s 69A of the Act in the assessment framed u/s 143(3) of the Act. 04. In the appellate proceedings, the ld. CIT (A) after taking into consideration the contention of the assessee enhanced the income to ₹11,35,00,000/- by observing and holding as under: - “7.3.12. The AO has worked out for the AY 2020-21, an addition of Rs.7.47,98,606/-. The AO has not taken into account the entire incriminating material found in the survey for estimating the addition for the AY 2020-21 because of telescoping with previous years as tabulated above. 7.3.13. During the appellate proceedings, the assessee contested by raising appeals against the AO's order for the AY 2016-17, 2017-18 & 2020-21. The assessee raised legal grounds against the reopening u/s 147 of the IT Act with reference to AY 2016-17 & 2017-18. The assessee raised objection for the AO's reopening u/s 147 of the Act and contended that the assessments for the AY 2016-17 & 2017-18 should have been Printed from counselvise.com Page | 4 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 considered u/s 153C of the Act instead of 147 because the assessee is covered by the provisions of 153C of the Act as 'Other person' on whom no warrant was executed and material found at the search premises of persons covered u/s 132 of the Act on whom warrant was executed. The objections raised by the assessee on legal grounds were allowed and the assessments for AY 2016-17 & 2017-18 were annulled by the undersigned. To protect the interest of revenue, an enhancement notice for the AY 2020-21 has been issued to the assessee by considering all the impounded incriminating material. In respect of the said enhancement, a show-cause notice was issued to the assessee on 03.12.2024, relevant portion of the same is as under: \"It is observed that a survey operation was conducted in your case on 19.02.2020 and several materials with Id mark SKB/01, SKB/02, CUML/1 to CUML/8 & CUML/HD/1 were impounded during the said survey proceedings. On perusal of the assessment order of AY 2016-17 (page no.30 to 37), impounded material with Id mark SKB/01, it is noticed that cash loan provided to several finance brokers amounting to Rs.54,17,50,000/- was found to be unaccounted. It is also noticed that the date mentioned on the said impounded documents evidencing providing of cash loans by the assessee pertains to AY 2020-21 only. However, on perusal of the asst. order for the AY 2020-21, it is observed that the same amount of Rs.54,17,50,000/- was not considered by the AO for addition. It is also observed that the AO had suo-moto formed a cash flow statement of the assessee for AY 2016-17 to AY 2020-21 in respect of the said unaccounted cash loans by adhering telescoping method. In that process, the amount of Rs. 54, 17,50,000/- escaped assessment. Hence, you are directed to show cause that why your income for the AY 2020- 21 should not be enhanced by the undersigned by Rs. 54, 17,50,000/-. The requisitioned reply should reach this office by 09.12.2024,\" 7.3.14. In response to the same, the assessee had filed its submission on 19.12.2024 objecting such enhancement. Relevant portion of the same as under: \"It may please be noted that the AO himself has analysed in the notice u/s 142(1) dated 13.1.2022 para 18(a) that these loans are given for short period The assessee also alternatively submits that the duration of loans in cash loan financial markets as could be gathered from the brokers ranges between three- four days to 2 months It can also be seen from CUML/1 para 5.1.1 of the assessment order that on 4.2.2020 there is receipt of 2687/-from Steller as against 2500 given on 2. 12 This shows that the duration was two months This can also be seen from the next entry that there is payment of 750 on 4.1. and receipt back on 4.2.2020 which was given on 412020. Thus, the duration was only one month Therefore, the duration maximum can be taken at 1 to 2 months even if the figures deciphered by the Ld. AO with regard to the loans are accepted. This gives an average 8 cycles if not more. The total of the investments have been computed as stated in the show cause notice is 54,17,00,000/- Thus, the said total should at least be divided by 8 which gives a figure of Rs. 6,77,12,500/ It may be seen that even the highest peak when SKB 01/26 & SKB/27 is looked into the highest peak on single day comes to Rs 11,35,00,000/- Therefore, without admitting, it is submitted that the Printed from counselvise.com Page | 5 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 investment never exceeded the aforesaid figures even if whatever stated by the AO with regard to the investment for It may also be seen that the initial investment which the AO has calculated was always available apart from the interest which entered into the cycle of the investments cannot has to be considered and separate addition cannot be made more so when the aforesaid peak is kept in mind It may also be stated that the Ld. AO has given a finding that the amount was generated out of business activities. Thus, the provisions of sec 115BBE cannot be applied and the addition can only be considered as income from business and for the purpose of computation of tax. the provisions of sec 115BBE may not be applied. In view of the above there is also no case for initiation or imposition of penalty in this case\" 7.3.15. The assessee in his submissions he had informed that these loans were given for short period and the duration of such cash loans as could be gathered from the brokers in 'cash loan financial markets' ranges between three-four days to 2 months. Therefore, it is claimed by the assessee that the duration maximum can be taken at 1 to 2 months even if the figures deciphered by the AO with regard to the loans are accepted. This gives an average 8 cycles if not more. The total of the investments has been computed as stated above is Rs.57,59,40,238/-. Thus, it is justifiable that the said total should at least be divided by 8 which gives a figure of Rs.7,19,92,529/-. It is noticed that when the impounded material with identification mark SKB-01/26 & SKB/27 is looked into the highest peak on single day on 01.10.2019 comes to Rs.11,35,00,000/-. Therefore, it is legitimate to treat the investment in cash loans and corresponding receipt of cash interest can never exceeded the aforesaid figures of Rs. 11,35,00,000/- during the subjected FY. Therefore, the total peak credit of the cash flow is Rs. 11,35,00,000/-. As a result, the addition in the hands of the assessee is to be taken at Rs.11,35,00,000/-. Hence, the total addition u/s 69A is enhanced from 7,47,98,606/- to ₹11,35,00,000/- (The enhancement comes to ₹3,87,01,394/-). Consequently, these grounds raised by the assessee are dismissed. Penalty proceedings u/s 271AAC of the Act are initiated separately for the enhancement of ₹3,87,01,394/-.” 05. The ld. AR vehemently submitted that the search in the house of the finance brokers Sanwaria and Kasera and the documents found from that search have nothing to do with the assessment year in question since admittedly the search in their house took place on 30.11.2018 that too prior to start of the impugned assessment year. Therefore, the ld. counsel submitted that the search in their case and material, if any, found from their search had nothing to do with the Printed from counselvise.com Page | 6 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 computation of total income of the assessee for the assessment year in question. Thus, the findings in the assessment order given by the AO at page1 to 4 and 26 to 45 are fully irrelevant for the purpose of assessment of income for the assessment year in question. It is further submitted that the retraction of retraction on the basis of letter filed by the assessee on 11.11.2020 was correct as in the said letter the assessee categorically stated that the entries in the impounded documents CUML and SKB were irrelevant or they were part of regular books of accounts. The AO stated that the assessee failed to submit any evidences before the IO in support of his claim, however, contrary to that the assessee duly submitted that the said entries were irrelevant for which there could not have been any evidences. The ld. AR submitted that negative could not be proved. The ld. AR argued that it was for the Ld. AO to prove that the entries were relevant with reference to the material and corroborative evidences on record and that investment had in fact been made. 06. It is submitted that some jottings were found in the impounded papers but for which there was no corroborative evidences. The Ld. AO stated the name of Shri Gajraj Choraria and Shri Pawan Mundra on the basis of statement recorded u/s 133A. The Ld. AO did not issue any summon to Shri Gajraj Choraria and Shri Pawan Mundra even though phone no of both of them were given to the Survey party as well as to the Ld. AO. The ld. AR argued that they were not examined to corroborate the statement recorded from the assessee. However apart from the statement and jottings in the impounded papers, no other corroborative material was found to show that the assessee made any cash loans to any person and that too through the said brokers Mundra and Choraria. While discussing the modus operandi of Printed from counselvise.com Page | 7 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 cash loans, the AO referred to some Rukka being receipt of cash loans signed by the borrowers. However, even though number of cash loan transactions have been referred to by the Ld. AO in the assessment order for the assessment year in question but no receipt of cash loan by any person named as borrowers during the assessment year in question was found and impounded. No entry in any books of accounts for giving any loan by the assessee was found. There was no evidence for any source of cash money which was available for giving the loans. No evidence has been brought on record to show generation of cash money. No undisclosed business or any bill or voucher for any other income was found and impounded. Further there was nothing to show that even in any impounded paper there were same/similar entries. In defense of his argument the ld. Counsel for the assessee relied on the following decisions: - i. ACIT Vs. Satyapal Wassan (2007) 295 ITR (AT) 352 (Jabalpur) ii. CBI Vs. VC Shukla 3 SCC 410 iii. Rakesh Goyal Vs. ACIT (2004) 87 TTJ (Del) 151 iv. Mohan Foods Ltd Vs. DCIT (2010) 123 ITD 590 (Del) v. CIT vs. SM Agarwal [2007]293ITR43(DELHI) vi. Jayanti Lal Patel [1998] 233 ITR 588 (Raj). vii. NK Malhan Vs. DCIT (2004) 91 TTJ (Del) 938. viii. CIT Vs. Chandra Chemouse P. Ltd. (2008) 298 ITR 98 (Raj.) Printed from counselvise.com Page | 8 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 ix. MM financiers (P) Ltd. Vs. DCIT (2007) 107 TTJ (Chennai) 2000 x. Mongra Metals (P) Ltd. Vs. ACIT 67 TTJ 247 (All. Trib) xi. Pooja Bhatt Vs. ACIT (2000) 73 ITD 205 (Mum. Trib) xii. Atual Kumar Jain Vs. CIT (2000) 64 TTJ (Del. Trib) 786 xiii. SK gupta Vs. DCIT (1999) 63 TTJ (del. Trib) 532 xiv. CIT Vs. S. Khader Khan Son-SC 2012 (25) taxmann.com 413 07. The ld. DR on the other hand relied on the order of the first appellate authority by submitting that the additions were made by the ld. AO and enhanced by the ld. CIT (A) on the basis of material seized during the course of search on ‘Kaseras’, ‘Sanwaria’ the finance brokers and also on the basis of statement recorded during the course of said search. The ld. DR submitted that though the statement recorded of the assessee, which was retracted latter, the assessee admitted to have done these cash transactions in the form of loan transactions and therefore, the appeal of the assessee may kindly be dismissed by upholding the order of the ld. CIT (A). 08. After hearing the rival contentions and perusing the materials available on record, we find that undisputedly there was search on finance broker ‘Kaseras’ and ‘Sanwaria’ during which certain documents were seized which are stated to have contained the details of cash transactions/ loans by the assessee. The said search took place on 30.11.2018. Thereafter, a survey was conducted on the assessee and M/s Citizen Umbrella Mfg. ltd. during which the Printed from counselvise.com Page | 9 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 statement of the assessee was recorded u/s 131 of the Act. Admittedly, the search was conducted on a date which falls prior to the start of the assessment year i.e. A.Y. 2020-21 and even the start of the financial year relevant to A.Y. 2020-21. Therefore, material found during the course of said search on ‘Kaseras’ and ‘Sanwaria’ has nothing to do with the assessment of income in the assessment of the assessee. Therefore, we hold that finding recorded by the ld. AO at pages no. 1 to 4 and 20 to 45 are not relevant for the purpose of assessment of income for the year under consideration. We also note that the assessee retracted his statement given during the course of survey u/s 133A of the Act immediately on 24.2.2020 which was within 5 days of the date of survey by filing affidavit on the ground that the statement was taken under coercion and there was no corroborative material found during the course of survey. In the said retraction, the assessee also stated that entries in the impounded documents CUM1 and SKB were not relevant or they were part of the books of account maintained by the assessee. Therefore, we find merit in the contention of the assessee that the ld. AO could not bring on record any substantive material to corroborate the entries the documents/material seized. We also note that though the name of Gajraj Choraria and others Pawan Mundhhra were taken by the finance brokers as stated above i.e. Pawan Mundhhra and Gajraj Choraria and others, however, their statements were not recorded nor any summons were issued even though their phone numbers as well as addresses were given to the survey party as well as to the ld. AO. We note that apart before the statement and jottings in the impugned papers, no corroborative materials were there to show that the assessee was involved in advancing any cash loans through the said brokers Gajraj Choraria and Pawan Mundhhra. We find that the ld. AO Printed from counselvise.com Page | 10 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 has relied on the pages/documents impounded viz SKB/1, CUML/1, CUML/2 as is apparent from the order. We have examined the said papers/documents and find that nothing comes out of the said documents to show that there was any investments made by the assessee. We note that thus there was no material before the AO which corroborates the conclusion of making huge investments by way of giving loans and earning interest thereon. There is no supporting materials or evidences in corroboration of impounded papers of making investment by the assessee. We further note that no statement of any broker or borrower was brought on record. 09. We further find that the revenue has relied on the statement of assessee recorded u/s 133A of the Act by the IO on 19.02.2020 which was retracted on 24.02.20. Thus, the retracted statement cannot be the basis or evidence to make the addition. We also note that after retraction of the statement no further statement of the assessee was recorded by the IO or by the AO in the course of assessment proceedings. The CBDT in its instruction F.286/98/2013 dt. 18.12.2014 has also directed the revenue to avoid obtaining admission of undisclosed income without evidences. 010. We also note that the ld. AO has noted that the assessee has received and re-invested through Satish but nowhere the ld. AO has stated that from where he has picked up the said name. We note that from the papers impounded from M/s Citizen Umbrella Mfg. ltd. that there is no mention of assessee’s name that there was debit as well as credit entries in the name of Satish on the same day but there was no mentioning about any interest or investments and there was no justification for adding two zeros to the said figures. Therefore, considering the facts and circumstances of the case and the nature of Printed from counselvise.com Page | 11 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 documents which contains only jotting, we are of the view that there can be best described as dumb document as there was no corroborative material to support the entries made in the said documents and therefore, no adverse inference could be drawn against the assessee. The case of the assessee is squarely covered by series of decision; (i) Satyapal Wassan (supra) (ii) VC Shukla (supra) (iii) Rakesh Goyal (supra) (iv) Mohan Foods Ltd. (v) SM Agarwal (supra) (vi)Chandra Chemouse P. Ltd.(supra) (vii) S. Khader Khan Son (supra). We also find supports in the decision of Hon’ble Apex Court the case of Vinod Solanki & Others vs. UOI (SCC 537 209) wherein it has been held as under: \"22. It is a trite law that evidences brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidences, which would lend adequate assurance to the court that it may seek to rely thereupon. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention but we must also notice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded.\" 011. The judgment of Hon'ble Delhi High Court 293 ITR 43 may also be cited wherein the Ld. Court dismissed the revenues appeal. The finding of the Ld. Tribunal in the said case vide para 10 was as under: - \"We have ourselves examined the contents of the document and are unable to draw any clear and positive conclusion on the basis of figures noted on it. The letters 'H.S.', 'T.2' and 'D-Shop' cannot be explained and no material has been collected to explain the same. Likewise, the figures too are totally unexplained and on the basis of nothings and jottings, it cannot be said that these are the transactions carried out by the assessed for advancing money or for taking money. Thus, in our opinion, this is a dumb document.\" Printed from counselvise.com Page | 12 ITA No. 835/KOL/2025 Suresh Kumar Banthia; A.Y. 2020-21 012. In view of the above decisions and facts of the assessee’s case, we are inclined to set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition. 013. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 18.09.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 18.09.2025 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 "