Unexplained Cash Credit on ₹31.15 Lakh Loan Repayment: ITAT Upholds Deletion Confirming Genuine Repayment Through Banking Channels [Read Order]
The ITAT confirmed that the unsecured loan given in the financial year 2019-20 was duly repaid during the assessment year 2020-21, and the assessee, a registered NBFC, had substantiated the transaction with loan confirmations, audited accounts, tax returns, and bank statements.
![Unexplained Cash Credit on ₹31.15 Lakh Loan Repayment: ITAT Upholds Deletion Confirming Genuine Repayment Through Banking Channels [Read Order]](https://images.taxscan.in/h-upload/2025/07/07/2060517-unexplained-cash-credit.webp "Unexplained Cash Credit on ₹31.15 Lakh Loan Repayment: ITAT Upholds Deletion Confirming Genuine Repayment Through Banking Channels [Read Order]")
The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the Revenue’s appeal against the addition of ₹31.15 lakh as unexplained cash credit, upholding the deletion by the Commissioner of Income Tax (Appeals)[CIT(A)] and confirming genuine repayment through banking channels. The Revenue-appellant,challenged the order dated 31.12.2024 for the AY 2020-21 passed...
The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the Revenue’s appeal against the addition of ₹31.15 lakh as unexplained cash credit, upholding the deletion by the Commissioner of Income Tax (Appeals)[CIT(A)] and confirming genuine repayment through banking channels.
The Revenue-appellant,challenged the order dated 31.12.2024 for the AY 2020-21 passed by CIT(A). In this case,New Charan Kanwal Finance company Pvt. ltd.,respondent-assessee,filed its return for the assessment year 2020-21, declaring income of ₹25,27,240. After a search and seizure in the Balaji Group case, a notice under section 153A was issued.
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The assessee filed the return and submitted documents. The Assessing Officer assessed ₹31,15,000 as unexplained cash credit under section 68 and section 115BBE, treating it as an unsecured loan. The CIT(A) allowed the assessee’s appeal. The Revenue then filed an appeal.
The Revenue counsel challenged the order, saying the CIT(A) wrongly deleted the addition because the assessee did not prove the lender’s identity and creditworthiness. The assessee admitted receiving ₹31,15,000 as an unsecured loan in 2019-20 but later claimed it was a refund during the appeal. The counsel said the monetary limit for appeals did not apply as the case was exceptional.
The assessee counsel disagreed, saying the loan was received and repaid through proper banking channels. They said the assessee had lent ₹31,15,000 earlier, which M/s Popular Tie-up Pvt. Ltd. repaid with interest by cheque. The counsel supported the CIT(A) decision.
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The two member bench comprising Pradip Kumar Choubey (Judicial Member) and Rakesh Mishra (Accountant Member) heard the parties and reviewed the order. It found that the company had given an unsecured loan of ₹31,15,000 to its group company in the financial year 2019-20.
The loan was fully repaid, without interest, during the assessment year 2020-21. The company regularly filed returns and had RBI approval as an NBFC. It submitted documents like loan confirmations, audited accounts, tax returns, and bank statements to prove the repayment.
The appellate tribunal noted the loan was given on 13 March 2020 and repaid on 16 March 2020 with no Tax Deducted atSource (TDS) deducted.
After examining the facts and the CIT(A) order, the ITAT found no error and dismissed the appeal.
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