DCIT Vs Arun Engineering Udyog Private Limited (TAT Kolkata)
Unsecured Loans Repaid with Interest Can’t Be Branded Bogus: ITAT Kolkata Upholds Deletion of ₹46 Lakh u/s 68
Kolkata ITAT ‘A’ Bench dismissed the Revenue’s appeal for AY 2022-23 and upheld the deletion of addition of ₹46 lakh made u/s 68 towards alleged bogus unsecured loans. Tribunal noted that the assessee had furnished complete evidences before the AO establishing identity, creditworthiness & genuineness of loan creditors, and the AO himself recorded a finding that the loans were subsequently repaid along with interest. Merely branding lenders as “shell companies” without any further enquiry or adverse material was held to be unsustainable. ITAT relied on binding Calcutta High Court rulings including PCIT v. Sreeleathers, Dataware Pvt. Ltd., and several recent HC decisions, as well as Gujarat HC ruling in Ambe Tradecorp (P) Ltd., to hold that once documentary evidence is on record and repayment is proved, addition u/s 68 cannot survive. Accordingly, the order of CIT(A) was affirmed and Revenue’s appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals), Kolkata-27(hereinafter referred to as the “Ld. CIT(A)”] dated 13.04.2025 for the AY 2022-23.
