AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 920
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....case was reopened under section 147 of the Act on the basis of information received from the Investigation Wing pursuant to search and seizure action conducted under section 132/133A in the cases of certain entities including Vibgyor Capital Holding Pvt. Ltd. and others, in connection with alleged front-running activities. 3. During the course of such investigation, certain financial transactions were found linked with the assessee.The Assessing Officer recorded that, as per information received, the assessee had allegedly received accommodation entries in the form of unsecured loans aggregating to Rs. 6,70,00,000/- from two entities, namely, Ganak Conglomerate Pvt. Ltd.(Rs.5,00,00,000/-) and Nanuan Finance Pvt. Ltd. (Rs.1,70,00,000/-). It was further noted that Ganak Conglomerate Pvt. Ltd. was found to be a shell entity controlled by entry operators, as revealed in search proceedings in other connected cases, and was engaged in providing accommodation entries. Based on the aforesaid information, the Assessing Officer formed a belief that income chargeable to tax had escaped assessment and accordingly issued notice under section 148 on 31.03.2023 after obtaining approval of the ....
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....itted that no independent enquiry was conducted by the Assessing Officer to disprove the evidences placed on record. The Ld. CIT(A), after considering the material on record, accepted the contentions of the assessee and deleted the addition of Rs. 5,00,00,000/- made under section 68 of the Act. 7. Aggrieved by the relief granted by the Ld. CIT(A), the Revenue is in appeal before us. The grounds raised by the Revenue read as under: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 5,00,00,000/- made under Section 68 of the Act, ignoring the cogent evidence and incriminating material gathered during the search which established that Ganak Conglomerate Pvt. Ltd. was a shell entity providing accommodation entries. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in in relying solely on the bank statements and audited financials of Ganak Conglomerate while completely ignoring the findings of the Investigation Wing and the assessment order from a different jurisdiction which conclusively proved the non-genuine nature of the said entity. 3. On the facts an....
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....umber, which makes the notice invalid as per Circular 9/2019 dated 14.08.2019. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in not adjudicating the fact that the assessment order was passed without providing any opportunity of cross-examination, or without conducting the cross verification with the other party, but merely relying on the assessment order of the third party and the information received from investigation wing. 5. The Respondent craves to add, alter, classify, reclassify, delete or modify any of the above grounds of appeal and requests to consider each of the above grounds without prejudice to one another. 9. During the course of hearing before us, the Ld. Authorised Representative (AR) invited our attention to the factual foundation of the reassessment proceedings as recorded by the Assessing Officer and submitted that the entire reopening and consequent addition under section 68 is purportedly based on three independent search actions referred to in the assessment order. 10. The Ld. AR submitted that the Assessing Officer has referred to a search and seizure action carried out in the case of Shri Vire....
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....ically held that the assessee had duly discharged the onus cast upon her under section 68 of the Act. 14. The Ld. AR pointed out that the Ld. CIT(A) has recorded a categorical finding that the amount received from M/s Ganak Conglomerate Pvt. Ltd. was in connection with a proposed property transaction with one Mr. Mukesh Shah, which ultimately did not materialize, and therefore, the entire amount was repaid. It was highlighted that the Ld. CIT(A) has specifically noted that the bank statements of the assessee and the lender corroborate the receipt of funds, onward payment to Mr. Mukesh Shah on 17.09.2018, and subsequent repayment through banking channels, culminating in full repayment of Rs. 5,00,00,000/- by 09.09.2019.The Ld. AR further submitted that the Ld. CIT(A) has also taken note of the financial position of the lender company, observing that the financial statements of M/s Ganak for A.Y. 2019-20 reflected shareholders' funds of Rs. 21.68 crore, thereby evidencing its financial capacity. It was also noted that Form 26AS entries reflecting property-related transactions were furnished. Referring to para 7.2 of the appellate order, the Ld. AR submitted that the only reason fo....
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....g to Rs. 47,30,00,000/-, besides other borrowings (under the head "Short Term Borrowings"- note No. 2.3"). It was thus submitted that the lender was not a paper entity devoid of financial capacity, but had access to substantial funds through institutional borrowings. 18. The Ld. AR submitted that the availability of such funds in the financial statements of the lender, coupled with the banking trail evidencing the movement of funds, clearly establishes the creditworthiness of the lender and genuineness of the transaction. It was contended that the Assessing Officer has failed to controvert these documentary evidences and has proceeded merely on general observations derived from third-party investigations without conducting any independent enquiry in the case of the assessee. 19. On the strength of the aforesaid findings, the Ld. AR submitted that the order of the Ld. CIT(A) is well-reasoned and based on appreciation of evidences on record, and does not call for any interference. 20. The Ld. Departmental Representative, on the other hand, strongly relied upon the order of the Assessing Officer. 21. We have carefully considered the rival submissions and perused the orders....