2025 (6) TMI 287

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lhi-1/10462/2019-20 arising out of the appeal before it against the order dated 28.12.2019 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the ACIT, Circle-3(2) Delhi (hereinafter referred to as the Ld. AO). 2. The assessee is a private limited company and is engaged in providing micro and small business loan registered with the RBI. The return of income for the year was filed at a loss of Rs. 5,45,62,060/- which was revised declaring a loss of Rs. 5,22,42,666/- and the case of the assessee was picked up for complete scrutiny for the following reasons:- 1. Expenses debited to P&L Account for earning exempt income as per schedule BP of ITR if significantly lower as compared to investments made....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ount of cash deposits by treating it as alleged unexplained cash credits u/s 68/115BBE, is illegal, bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds. 3. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 4. The case of the assessee is that the AO has failed to understand that the customers of the assessee are in unorganized sector and most of them do not have PAN or VAT or service tax or excise registrations and for that reason, they are paying high interest of around 26-28% per annum. It was submitted by the ld. cou....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....iod of FY 2016- 17. 4. Also, vide submission dated 19.12.2019, the assessee company has submitted that it need some time to prepare the details as physical files are not available with the assessee company. As per the provisions of Companies Act, 1956, the books of accounts should be kept at the registered office of the assessee company or at the business premises. Under no circumstances, the assessee company should keep the important documents with the other company leading to failure on part of the assessee company to submit evidences in support of its submissions. 5. The assessee company has requested for additional working days to compile the details vide letter dated 19.12.2019. The first such notice u/s 142(1) asking....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ived. There is substance in the contention of the ld. counsel that as the customers of the assessee are mostly from unorganized sector, they may not be having relevant documents for their banking transactions so as to make repayment of loan only by banking mode. It is quite reasonable and prudent explanation that these borrowers of the assessee may be having the demonetized currency notes and which instead of being deposited with the banks were deposited with the assessee for repayment of the outstanding amounts. Even if the outstanding amounts of loan have been deposited in advance, that cannot be considered a suspicious activity. 9. Nothing is alleged by the ld. tax authorities on the basis of facts and evidences that the loans themsel....