TaxTMI 
TaxTMI 
2026 (4) TMI 1188
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.... the assessment order & Date of order Section of the IT Act under which the AO passed the order 8184/Del/2025, 2019-20 CIT(A), Noida-3/10036/2018-19, Dated 28.10.2025 DCIT, Central Circle-1, Noida, Dated 28.03.2024 147 r.w.s. 143(3) 8438/Del/2025, 2021-22 CIT(Appeal), Kanpur-4/10122/2020-21, Dated 28.10.2025 DCIT, Central Circle-1, Noida, Dated 31.12.2022 143(3) 6894/Del/2025, 2019-20 CIT(A), Noida-3/10036/2018-19, Dated 28.10.2025 DCIT, Central Circle-1, Noida, Dated 28.03.2024 147 r.w.s. 143(3) 8437/Del/2025, 2020-21 CIT(A), Noida-3/10016/2018-19, Dated 25.11.2025 DCIT, Central Circle-1, Noida, Dated 28.03.2024 147 r.w.s. 143(3) 6967/Del/2025, 2021-22 CIT(Appeal), Kanpur-4/10122/2020-21, Dated 28.10.2025 DCIT, Central Circle-1, Noida, Dated 31.12.2022 143(3) 2. A search and seizure operation under Section 132 of the Act was conducted in the premises of ACE and Kurle Group on 28.07.2021. Another search action was conducted on ACE and Rudra Group on 04.01.2022. The assessee was one of the searched entities against whom search warrant was issued. During the impugned assessments the AO had examined the unsecured loans ....
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.... given a finding that M/s Sundram Consultants Pvt. Ltd. is a genuine and creditworthy company. In this context, it was also pointed out before us by the Ld. Counsel that the very same entity M/s Sundram Consultants Pvt. Ltd. has been accepted as a genuine lender in the case of appellant's sister concern M/s Bright Buildtech Pvt. Ltd. wherein unsecured loan aggregating to Rs. 32 crores were advanced during AY 2019-20 and no addition of the same was made. 4.5 On the basis of the aforesaid facts and circumstances we are of the considered view that the Ld. tax authorities have adopted an unjustified approach to doubt the genuineness of the transaction. The identity of the lender being NBFC, its creditworthiness on the basis of its financials and genuineness of the transaction of a loan being taken from an NBFC were sufficiently established. We are of the considered view that reasons given by the Ld. CIT(A) for the additions in the hands of assessee, on the basis of assessment for AY 2013-14 in the hands of M/s Sundram Consultants Pvt. Ltd. far stretches the applicability of the provisions of Section 68 of the Act in the case of the assessee. When no material evidence whatsoever was ....
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....y cash component was involved in the transaction invoking Section 68 of the Act was not justified. Thus, this addition on account of interest on unsecured loan deserves to be deleted. 6. The assessee has received Rs. 50 lakhs in AY 2019-20 from Sesun Marketing Pvt. Ltd. as unsecured loan and made payment of interest of Rs. 4,39,570/- in AY 2019-20 and Rs. 3,54,320 in AY 2020-21. These additions have been sustained by the Ld.CIT(A) and in regard to this entity again, the allegation of the AO is that it is a shell company with dummy directors. Similar allegations have been made that the e-mail id of the entry provider was associated with this company and complete bank account statement was not provided. 6.1 Now, again, this is one of the NBFCs involved in the lending business. There is no allegation of any statutory authority finding the activities to be not genuine. 6.2 It also comes up from the contentions of the Ld. Counsel that in the case of Jajoo Rashmi Refractories Pvt. Ltd. (supra), the coordinate Bench has held that this is not a shell company and has the creditworthiness. 6.3 The Ld. counsel has also relied copy of assessment order in the case of this lender com....
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....in the form of ledger account, PAN and bank statement. Then, in AY 2019-20 the assessee repaid Rs. 1,20,00,000/- to M/s Manikaran Mercantile Pvt. Ltd. and the remaining loan was also paid and squared up as on 27.10.2023 by banking channels. 7.3 The Ld. Counsel has also pointed out that in the case of the sister concern L.M. Machinotech LLP for AYs 2019-20 and 2020-21 the loans taken were not doubted nor the creditworthiness was doubted. 7.4 We are of the considered view that the evidences filed by the assessee were sufficient to establish its creditworthiness. The revenue from operations in itself is not sufficient indicator of creditworthiness when otherwise the reserve surpluses and long-term loans and advances were available with the lender to lend the money on interest. The repayment only adds to the genuineness of the transaction. We are also of the considered view that when there is no allegation of the assessee being in any way connected with any of the dummy directors, then, on the basis of the allegation of dummy directors holding position in lender's constitution cannot be material circumstance to doubt the transaction of loan. In the light of the aforesaid circumst....
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....d that audited financial reflect substantial business turnover of Rs. 76.53 crores during AY: 2019-20. Thus, to doubt the transaction was not justified and ld. CIT(A) has rightly interfered to delete the additions. 11. Assessee had received unsecured loan of Rs. 1,20,00,000/- in AY: 2021-22 and paid interest Rs. 16,85,353/- to Quasar India Ltd. Ld. CIT(A) has found the transaction to be genuine and we find that the lender is listed entity in BSE and the relevant documents to establish identity and creditworthiness in the form of income tax returns, confirmation and bank account were furnished to ld. tax authorities. 11.1 Ld. CIT(A) again has got the identity of this lender examined by issuance of summons and getting independent inquiry conducted u/s 250(4) of the Act. 11.2 Ld. AR has pointed out that the entire loan was repaid in subsequent financial years. 11.3 The company has share capital reserve of Rs. 5.5 crores and during the year had total revenue of 6.5 crores. 11.4 Thus, where the company is listed on stock exchange a loan are received from banking channels and paid in subsequent years, the transaction could not have been doubted and ld. CIT(A) has rightly d....