ITAT Kolkata Remands ₹13.83 Crore Unsecured Loan Case, Flags Lack of Creditor Verification

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) on 7 April 2026 held that additions under Section 68 cannot be deleted by the CIT(A) without allowing the Assessing Officer to verify the creditors and examine their directors, where the foundational facts regarding identity and genuineness remain untested.

A Bench of Judicial Member George Mathan and Accountant Member Rakesh Mishra partly allowed the Revenue's appeal and remanded the matter involving Anushikha Investments Private Limited for assessment year 2016-17.

The Tribunal held that “the assessee is also directed to produce the directors of the companies for examination before the AO.” It added that the tax officer must give a “categorical finding regarding the identity, the creditworthiness of the creditors and the genuineness of the transactions.”

The dispute involved additions of Rs. 13.83 crore as unexplained cash credits under Section 68 and Rs. 88.18 lakh towards interest expenses under Section 69C.

The Assessing Officer treated loans received from 37 NBFCs as unexplained after directors failed to appear in response to summons and inspectors could not trace certain creditor companies at their registered addresses. The CIT(A), however, deleted the additions after accepting documentary evidence showing that the lenders were registered entities and that the funds were routed through banking channels.

Accordingly, the ITAT found that neither side had fully established its case and sent the matter back to the Assessing Officer for a fresh assessment.