TaxTMI 
TaxTMI 
2026 (5) TMI 989
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessment order on the basis of which the AO has made the addition, especially the statement of Sh. Himanshu Verma recorded on oath u/s. 132(4) of the Act recorded during the course of search operation conducted on various premises of Sh. Himanshu Verma Group & Others on 13.04.2017. In his statement, Himanshu Verma on oath categorically admitted that he was involved in the business of providing accommodation entries and for this purpose he was managing and controlling various paper companies through which accommodation entries were provided in the form of Share Premium/loan/bogus sale & purchase etc. Assessment Order has discussed in detail the reason for making addition on the issue of accommodation entry taken in the form of unsecured loan by the assessee from the entities managed and controlled by Himanshu Verma. In view of the statement of Sh. Himanshu Verma and other key persons viz. CA & Auditors, it stands established that the assessee was also one of the beneficiaries and had entered in bogus transaction of Rs. 1,50,00,000/- in the garb of unsecured loan with M/s Highrise Securities and Trading Pvt. Ltd. and Sarvottam Securities Pvt. Ltd. (iv) Whether the impugned ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onse to the same, the assessee filed detailed submissions vide replies dated 11.1.2025 and 17.3.2025, furnishing documentary evidences in support of the impugned loans. The assessee vide its reply dated 11.1.2025, submitted that it had obtained genuine loans from Highrise Securities and Trading Pvt. Ltd. amounting to Rs. 50,00,000/-. These loans were availed for the purpose of repayment of the loan against property obtained from Deutsche Bank Ltd., as the assessee company, being engaged in infrastructure and construction activities, requires substantial funds for the purchase and operation of machinery. It was further submitted that the said loans were repaid alongwith interest to the respective parties within the same financial year, i.e. FY 2019-20. Further, the assessee, vide the aforesaid reply dated 11.1.2025, clarified that the impugned loans were genuine and routed proper banking channels, received from Highrise Securities and Trading Pvt. Ltd. Rs. 1,00,00,000/- and Sarvottam Securities Pvt. Ltd. Rs. 50,00,000/-. The assessee furnished relevant supporting documents in substantiation of the said transactions. After considering the aforesaid, the AO issued a show cause notice ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ue is in appeal before the Tribunal. 3. Ld. DR relied upon the order of the Assessing Officer and stated that Ld. CIT(A) erred in deleting the additions in dispute. 4. On the other hand, Ld. AR has relied upon the order of the Ld. CIT(A). 5. We have heard the rival contentions and perused the records. We find that Ld. CIT(A) has adjudicated the issues in dispute at length by holding as under:- "5. DECISION: 5.1 I have carefully perused the 'Form 35', the grounds of appeal, the Statement of Facts, written submission as well as impugned order. 5.2 Briefly stating the background of this case; the appellant is a company and it had filed its Return of Income (Rol) on 02.12.2020 declaring Total Income at Nil. Subsequently, notice u/s. 148 was issued on 29.03.2024 in compliance to which Rol was filed declaring Nil income on 22.04.2024. The reassessment proceedings undertaken culminated into passage of an order u/s. 147 on 31.03.2025 where additions to the tune of Rs. 1,70,68,000/- were made on three different counts. Impugning such order, the appellant has filed the present appeal. 5.3 The reassessment proceedings were undertaken in view of "in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....med that the onus u/s. 68 has been discharged by it as follows: "(a) Identity of lender - PAN of lender "Sarvottam Securities" and "Highrise Securities" are ABCS6941A and AAACH3402Q respectively. Copy of ITR of lenders is also enclosed. Further both of them are registered with ROC since 1996 and 1994 respectively. (b) Creditworthiness - Sarvottam Securities Private Limited is a Company registered with ROC. It has filed ITR with income of Rs. 65,05,820 and balance sheet is showing net worth of 59.86 crore as on 31st March 2020. This proves credit-worthiness of the lender for loan of Rs. 50,00,000. - Further, Highrise Securities and Trading Private Limited is also a Company registered with ROC. The balance sheet is showing net worth of 4 7.22 crore as on 31st March 2020. This proves credit-worthiness of the lender for loan of Rs. 1,00,00,000. (c) Genuineness of transaction - / would like to state that the company took a loan from the "Highrise Securities and Trading Private Limited" and "Sarvottam Securities Private Limited" amounting to Rs. 1 crore and 50 lacs as under:- Particulars Highrise Securities Sarvottam Securities 30th May 201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....com 1618 (Mumbai - Trib.) "Where assessee had taken loan from two parties, since assessee had discharged its initial onus by showing identity and creditworthiness of lenders along with genuineness of transaction by producing confirmation, Ledger, bank statement of lender and income tax returns and assessee had also produced evidence of repayment of loan, impugned addition under section 68 made on account of loan amount received by assessee was not justified." (d) CIT v. Jai Kumar Bakliwal [2014] 46 taxmann.com 206 (Rajasthan HC) "Where loans were repaid and the transactions were through banking channels, no addition under Section 68 was justified." (e) DCIT v. Rohini Builders [2002] 256 ITR 360 (Gujarat HC) "Suspicion cannot replace evidence; where identity and genuineness are established and repayments are made, no addition is warranted." 5.4.6. The addition of Rs. 4,50,000/- relating to commission payment had been made u/s. 69C which is related to addition of Rs. 1,50,00,000/- u/s. on the premise of unexplained credit. Once the addition u/s. 68 becomes indefensible, the corresponding addition of commission payment is also untenable. The appellant has as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and repaid through banking channel, interest was paid and TDS was deducted. Similarly, loan of Rs. 50,00,000/- was received from Sarvottam Securities Private Limited which has disclosed total income of Rs. 65,05,820/- for A.Y. 2020-21. In this case also confirmation was filed by the appellant; the loan was received and repaid through banking channel, interest was paid and TDS was deducted. 5.4.10. Here, the ratio of several judicial pronouncements, in similar facts and circumstances is relevant to recall. The important decisions in this regard are as under: 1. where assessee obtained unsecured loans from multiple lenders, since lenders were well- established entities with disclosed transactions and substantial financial reserves and loans were repaid through banking channels and no evidence suggested they were non-genuine, additions made u/s. 68 was to be deleted (Deputy Commissioner of income-tax vs. Supreme Holdings and Hospitality (India) Ltd. [2025] 171 taxmann.com 309 (Mumbai - Trib.)[07-01- 2025]) 2. Where assessee took loan from two parties and assessee had furnished requisite material showing identity of loan givers and that assessee was not benef....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ove genuineness of cash deposited in bank accounts of creditors, because under law, assessee can be asked to prove source of credits in its books of account but not source of source - Held, yes - Whether merely because summons issued to some of creditors could not be served or they failed to appear before Assessing Officer, could not be ground to treat those credits as non-genuine - Held, yes - Whether considering totality of facts and circumstances of case, especially fact that Assessing Officer had not disallowed interest claimed/paid in relation to those credits in assessment year under consideration or even in subsequent assessment years, and tax at source had been deducted out of interest paid/credited to creditors, Tribunal was justified in deleting addition made - Held, yes - Whether as there was no substance in appeal and no substantial question of law arose, appeal was liable to be dismissed - Held, yes (Deputy Commissioner of Income-tax vs. Rohini Builders [2003] 127 Taxman 523 (Gujarat)/[2002] 256 ITR 360 (Gujarat)/[2003] 182 CTR 373 (Gujarat)[19-03-2001]) 5.4.11. In the view of foregoing discussion and respectfully following the judicial ratio, the ground no. 6....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ial strength, as reflected in their reserves, surplus, and revenue from operations. The total taxable income of M/s Highrise Securities and Trading Pvt. Ltd. amounting to Rs. 51,69,960/- and M/s Sarvottam Securities Pvt. Ltd. amounting to Rs. 65,05,820/- which clearly demonstrates their financial capacity and establishes that they had sufficient resources to advance the loans in question, thereby satisfactory proving their creditworthiness and the bank statements of the lenders clearly show that the loan transactions were executed through proper banking channels viz. MEFT/RTGS. The genuineness of the transactions is clearly established from the fact that the loans were received through normal banking channels, duly recorded in the books of account of the assessee as well as in the books of lenders. The loans were repaid alongwith the interest during the same financial year, and the interest paid on the loans was subjected to deduction of tax at source in accordance with the provisions of the Act. On perusal of records, the entire loan amount was repaid within a year and nearly one and half years prior to the search proceedings, which clearly establishes the genuineness of the trans....