1 Form No. J(2) IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION [INCOME TAX] ORIGINAL SIDE PRESENT : THE HON'BLE JUSTICE RAJARSHI BHARADWAJ And THE HON’BLE JUSTICE SUDIP DEB ITAT/179/2026 IA No.GA/2/2026 PRINCIPAL COMMISSIONER OF INCOME TAX 1 KOLKATA VS M/S KUSHMANDA FINANCIAL CONSULTANTS PVT LTD For Appellant : Mr. P.K. Bhowmick, Advocate Mr. Vivek Gupta, Advocate For Respondent : Mr.Abhratosh Majumdar, Senior Advocate Mr. Pratyush Jhunjhunwala, Advocate Mr. Siddharth Das, Advocate Ms. Swapna Das, Advocate Heard on : September 15, 2026 Judgment (Dictated in Court) on : September 15, 2026 SUDIP DEB, J. : This instant appeal arises out an order dated 17th December, 2024 passed by the Income Tax Appellate Tribunal, “B” Bench, Kolkata in ITA No.2117/Kol/2024 relating 2 to the assessment year 2018-19 at the instance of the revenue. It appears from the stay petition that the appellant has raised the following substantial questions of law : “(a) WHETHER the Learned Income Tax Appellate Tribunal was justified in facts and circumstances of the case and in law in deleting of the addition of income of Rs. 19,21,00,329/-u/s. 69 read with section 115BBE of the Income Tax Act, 1961 considering that the investment/advance/loan was brought forward from the preceding year ignoring that there were no audited accounts or Return of Income for the Assessment Year 2017- 18? (b) WHETHER the observation of the Learned Income Tax Appellate Tribunal suffers from perversity in fact finding as on one hand, the assessee filed copy of bank statements in respect of UBI and IDBI and copies of ledger accounts, audited balance sheets for the Assessment Years 2016-17 and 2017-18 during the assessment proceedings, and on the other hand, the assessee filed a reply only on February 09th, 2021 without any attachment? (c) WHETHER the Learned Income Tax Appellate Tribunal was justified in facts and circumstances of the case and in law in finding the investment/advance/loan appearing in the Balance Sheet as on March 31, 2018 is estimated without any supporting evidence? (d) WHETHER the Learned Income Tax Appellate Tribunal was justified in facts and circumstances of the case and in law for granting relief to the assessee in the absence of essential supporting documents, such as the breakup of loans, advances, and investments, which were critical for verifying the claim made by the assessee during the assessment for AY 2018-192? (e) WHETHER the Learned Income Tax Appellate Tribunal was justified in facts and circumstances of the case and in law in not properly considering the procedural deficiencies and non-cooperation of the assessee, particularly the non-filing of requisite documents, which hindered the Assessing Officer and CIT(A) from conducting a comprehensive verification of the financial transactions involved in the case? 3 (f) WHETHER the Learned Income Tax Appellate Tribunal was justified in facts and circumstances of the case and in law in ignoring the fact that the case was selected for scrutiny under the Computer-Assisted Scrutiny Selection (CASS) system for verification of loans, advances, investments, and high-value transactions, and also by granting relief to the assessee without allowing the AO an opportunity to verify the claim made by the assessee? (g) WHETHER the Learned Income Tax Appellate Tribunal was justified in facts and circumstances of the case and in law in overlooking the procedural requirement under the Income Tax Act, 1961, which mandates the AO to verify the details of investments, loans, and advances through a proper examination of supporting documents? (h) WHETHER the Learned Income Tax Appellate Tribunal was justified in facts and circumstances of the case and in law for acting contrarily to the principles of fairness and due process by granting relief to the assessee, despite the assessee being a non-filer for AY 2017-18 and presence of high-value transactions in the bank accounts, which were not verified due to lack of adequate supporting documentation? (i) WHETHER the Learned Income Tax Appellate Tribunal was justified in facts and circumstances of the case and in law for refusing to restore the case to the AO for verification, despite the non-cooperation of the assessee and the incomplete records submitted, resulting in a flawed decision that undermines the integrity of the assessment process under Section 143(3) of the Income Tax Act, 1961?” At the outset, we have asked the learned counsel for the appellant to satisfy us as to whether the substantial questions of law as raised by the appellant are at all substantial questions of law or not. The learned counsel for the appellant submits that the impugned order of the Tribunal suffers from illegality and the same is perverse as the mandate of Section 69 of the Income Tax Act, 1961 [hereinafter referred to as the said ‘Act’] has not been duly 4 complied with. We have not called upon the learned senior advocate for the respondent since we are deciding whether this appeal can at all be admitted or not. Before deciding this issue, it is important to ascertain the facts of the instant case which are narrated hereinafter. What appears from the record is that the respondent/assessee has filed its return of income for the assessment year 2018-19 reporting total income nil. Pursuant thereto, the case was selected for scrutiny through CASS for verification of transactions and investment/advances/loans. The Assessing Officer found credits of Rs.1,69,69,098/- and Rs.1,68,47,661/- recorded in the bank accounts of the assessee. While passing the order, the Assessing Officer held that the respondent/assessee could not explain the source of the credits. Accordingly, it was held that Rs.3,88,16,759/- was considered as unexplained money as contemplated under Section 69 of the said Act and added to the total income of the respondent/assessee. Further, it appears from the order of the Assessing Officer that it was found Rs.6,74,64,000/- and Rs.12,46,36,329/- recorded in the balance-sheet of the company under the heading investments in unlisted shares and short term loans and advances respectively. According to the Assessing Officer, the respondent/assessee could not explain the source of the assets. Consequently, Rs.19,21,00,329/- was added to the total income of the respondent/assessee as contemplated under Section 69 r.w.s. 115BBE of the said Act. The matter was then carried in appeal and the Commissioner of Income Tax has upheld the order of the Assessing Officer. 5 Challenging the said order, the respondent/assessee has preferred an appeal under Section 253 of the said Act before the Income Tax Appellate Tribunal, "B” Bench, Kolkata. The Appellate Tribunal after hearing the parties had set aside the order of the Commissioner and directed the AO to delete the addition. We have gone through the impugned order. We find from the impugned order that the Appellate Tribunal has categorically recorded in detail about examining the bank accounts of the respondent/assessee in respect of IDBI and UBI Bank and also the audited balance-sheets for the year ended 31.03.2016 and 31.03.2018. The Appellate Tribunal has recorded that the Assessing Officer had added the entire investments as appearing in Sr. No.3 aggregating to Rs.6,74,64,000/- and also the advance to others Rs.12,46,36,329/- as appearing in the audited statements on the ground that the respondent/assessee failed to furnish the supporting documents and also for the reasons as the same remained unexplained. In fact, it appears from the impugned order that the Appellate Tribunal had examined the bank accounts and also the audited balance-sheets of the respondent/assessee and only thereupon came to the finding that the respondent/assessee was able to explain the said transactions. The Tribunal also came to the finding, after considering the bank accounts as also the audited reports that the same could not be added as unexplained investments when the said transactions have been fully disclosed in the books of accounts and also coming over from preceding assessment year. After examining the said documents, the Appellate Tribunal came to the finding that the said investments and advances have been properly explained and set aside the order of the Commissioner of Income Tax (Appeals) and directed the AO 6 to delete the addition. What we find from the impugned order that the Appellate Tribunal has correctly, upon considering the bank accounts as also the audited balance- sheets, came to such finding. It is important to ascertain in this regard that the true scope, meaning and purport of Section 69 of the said Act which is quoted hereinbelow : “69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.” In furtherance thereto, it is also important to ascertain the true scope, meaning and purport of Section 115BBE of the said Act which is also quoted hereinbelow : “115BBE. [(1) Where the total income of an assessee.- (a) includes any income referred to in section 68, section 69, section 69A, section 69B. section 69C or section 69D and reflected in the return of income furnished under section 139; or (b) determined by the Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, if such income is not covered under clause (a), the income-tax payable shall be the aggregate of - (1) the amount of income-tax calculated on the income referred to in clause (a) and clause (b), at the rate of sixty per cent; and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (1).] 7 2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance [or set off of any loss] shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) [and clause (b)] of sub-section (1).]” Section 69 of the said Act contemplates about unexplained investments made by the respondent/assessee. The applicability of the said section arises only when the respondent/assessee fails to offer any explanation about the nature and source of the investments or the explanation offered by the respondent/assessee is not in the opinion of the Assessing Officer satisfactory. It is only when the said section comes into play. Section 115BBE applies relating to imposition of tax when somebody is unable to explain the investments as contemplated in Section 69 of the said Act. What we find from the impugned order that relating to this unexplained investments, the Tribunal has categorically based on the facts has came to the finding that the investments and the loans and advances have been properly explained by the respondent/assessee and that would be evident from the documents made available to the Tribunal. Therefore, it cannot be said that the impugned order is perverse. It is no doubt that the Appellate Tribunal is the last fact finding authority. According to us, the Appellate Tribunal being the last fact finding authority has rightly observed after considering all the relevant facts and documents, that the respondent/assessee has been able to explain the investments and the loans and advances given to others. We hold that since the aforesaid questions of fact have been 8 properly appreciated and dealt with in the impugned order passed by the Appellate Tribunal, there is no perversity or illegality committed by the Tribunal. In view of such, we find that there are no substantial questions of law involved in the appeal and, accordingly, the appeal is dismissed. Consequently, the stay application is also dismissed. There will be no order as to costs. Urgent certified photocopy of this order, if applied for, shall be given to the parties subject to compliance with all requisite formalities. I agree. (RAJARSHI BHARADWAJ, J.) (SUDIP DEB, J.) sd/