Archana Agarwal Vs ITO (ITAT Kolkata)
JDA Advance & Loan Repayment Cannot be Treated Bogus – Sec 68 Addition Deleted Where Amount Refunded & Transactions Through Banking Channel – ITAT Kolkata
AO treated ₹70 lakh received as earnest money under Joint Development Agreement as bogus sundry creditor alleging shell company involvement & added u/s 68. Further, repayment of earlier loan of ₹21.07 lakh was also treated as bogus. CIT(A) confirmed additions.
ITAT held that advance received under JDA was duly supported by agreement, confirmations & bank records and was subsequently refunded on cancellation of MOU; hence assessee was not beneficiary and addition u/s 68 was unsustainable. Tribunal relied on Ambe Tradecorp (P) Ltd. principle that once transaction is repaid through banking channel, credit entries cannot be viewed in isolation.
Regarding loan repayment, ITAT observed that loan accepted as genuine in earlier year cannot be treated as bogus at time of repayment, especially when documentary evidence & banking trail exist. Orders of AO & CIT(A) set aside and additions deleted. Assessee appeal allowed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
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 09.07.2025 for the AY 2016-17.
