DCIT Vs New Charan Kanwal Finance Company Pvt. Ltd. (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT), Kolkata, on June 23, 2025, dismissed an appeal filed by the Revenue, upholding the deletion of an addition of ₹31.15 lakh made under Section 68 of the Income Tax Act, 1961, as unexplained cash credit. The ruling in the case of DCIT Vs New Charan Kanwal Finance Company Pvt. Ltd. for Assessment Year 2020-21 confirmed that the amount in question represented a genuine loan repayment received through proper banking channels, rather than an unexplained cash credit.
The case originated from a search and seizure operation conducted in the Balaji Group, which led to a notice under Section 153A being issued to New Charan Kanwal Finance Company Pvt. Ltd. In response, the assessee company filed its return of income declaring a total income of ₹25,27,240/-. However, the Assessing Officer (AO) subsequently assessed the assessee’s income at ₹31,15,000/-, treating this amount as an unexplained cash credit under Section 68 read with Section 115BBE of the Act, on the premise that it was an unsecured loan taken by the assessee. The assessee contested this addition, filing an appeal before the Commissioner of Income-tax (Appeals) [CIT(A)], who allowed the appeal and deleted the addition.
