AI Drafter 
TaxTMI 
TaxTMI 
2026 (5) TMI 1492
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....e centralized by passing an order u/s 127 of the Act. During assessment proceedings, the AO observed that as per the information available on record, on the basis of search conducted in the case of Ankit Bhageria who is an entry provider and who controls several shell companies and provided accommodation entries to various beneficiaries. During the year under consideration, the assessee has entered into an transaction with an entity, namely, Satsai Finlease Private Limited managed and controlled by Ankit Bhageria. From them assessee has taken accommodation entry for an amount of Rs. 2 crores in the form of unsecured loan. Based on the information obtained in search proceedings, it was noticed that several companies were handled and controlled by him and several material were unearthed on the basis of which it was noticed that he gave several accommodation entries to various beneficiaries. Relying on the statements of him and Dinesh Goel who was also a close associate of him, it was established that they were providing accommodation entries qua commission. Based on the above information available on record, the AO came to the conclusion that assessee has taken bogus accommodation en....
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....tion of TDS. Before the AO, the appellant has filed the various documentary evidences which include the confirmation of loan creditor, ITR of the loan creditor, bank statement of the loan creditor, Audited Financial Statement of the Loan Creditors and also the evidence of repayment of the loan within next month. The AO has not pointed any discrepancy in any of the above documentary evidences furnished by the appellant. The AO has merely relied upon the so-called incriminating material including the whatsapp chat found during the course of search. 8.2 On careful perusal of the assessment order, I find that there is no adverse material brought on record by the assessing officer relating to the appellant or its transactions. The assessing officer was not justified in making the addition on the basis of generic allegation in respect of the loan creditor without pointing out anything specific incriminating relating to the appellant or transactions. As per financial, the appellant received loans from M/s Satsai Finlease Pvt. Ltd., which is NBFC registered with RBI u/s 45-IA of RBI Act 1934 engaged in financing and investment. M/s Satsai is incorporated in the year 1996. The appe....
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....rred in deleting the addition to the amount of Rs. 2,00,00,000/- made u/s 68 of the Act, without appreciating that M/s Satsai Finlease Pvt. Ltd. is a shell company controlled by an identified entry operator, Sh. Ankit Bhageria, and that the assessee failed to substantiate the genuineness and creditworthiness of the lender. 2. The Ld. CIT(A) has erred in deleting the addition of Rs. 6,00,000/- u/s 69C of the Act, on account of unexplained commission expenditure, ignoring the material findings recorded during the search in Filatex Group and statements of entry operators. 3. The Ld. CIT(A) has erred in deleting the disallowance to the tune of Rs. 88,767/- made u/s 37, ignoring that such interest pertains to non-genuine loans are not allowable as business expenditure. 4. The Ld. CIT(A) has erred in ignoring the corroborative evidences and statements of Shri Ankit Bhageria, Shri Purrshottam Bhageria and others recorded during search operation and post-search proceedings which conclusively established that unsecured loans were accommodation entries. 5. The Ld. CITCA) has erred in not appreciating that the assessee had failed to discharge the primary on....
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....er the transactions genuine when they represent a circular movement of funds. Whereas in the given case, the assessee had repaid the loan after a month along with the interest. There is no circular movement in this case. Therefore, the case is distinguishable to the facts in the present case. 12. The coordinate Bench in the case of ITO vs. RMP Holdings Pvt. Ltd. (supra) has held as under :- 8. Considered the rival submissions and material placed on record. On careful consideration, it is fact on record that assessee has received unsecured loan from Rabik Exports Pvt. Ltd. only through banking channel. In support of that, assessee has submitted confirmation letters and Balance Sheet and further we observed that assessee has returned the same within three months from the receipt of the above unsecured loan. Since the transactions were only routed through banking channels and assessee has submitted relevant documents as required by the AO. It is also fact on record that the AO has verified the existence of the company as per the address available on ROC records and as per the Inspector's physical report and also jurisdictional AO has confirmed that Rabik Exports Pvt. Ltd. ....
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....is of earning of income. He relied on the decision of coordinate Bench in the case of Addl.CIT vs. Prayag Polytech Pvt. Ltd. (supra), ITO vs. Computer Home Information Plus Pvt. Ltd. (supra) and the decision of Hon'ble Delhi High Court in the case of Pr.CIT vs. Goodview Trading Pvt. Ltd. (supra) and came to the conclusion that income alone is not the criteria for making the loan and also negated the findings of the Assessing Officer that the loan was given immediately after it was received by them and cannot be the ground for making addition u/s 68 of the Act. Finally, he deleted the addition by observing that the assessee has taken loans from these companies for short duration and almost all the loans were repaid during the year itself and only some small amount is outstanding as at the year end and that too is mainly on account of interest. He has reproduced the following chart in his order :- S.No. Name of the Party Loan amount added by A.O. (Rs.) Outstanding balance as at the year end (Rs.) 1 Ace Stone Craft Limited 20000000 2 Arise Infotech Private Limited 5900000 1346065 3 Basera Realtech Private Limited 5200000 NIL 4 ....
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....s from four companies during the year and the Assessing Officer made addition of Rs. 2.51 crores which included commission for providing the entries. 12. We find that the co-ordinate bench in the case of Filatax India Limited vide order dated 30.06.2025 has decided the bunch of appeals. Like assessee in the present case, Filatax India Ltd had also taken loans from the same parties which have been found to be genuine loans by the co- ordinate bench(supra). The coordinate bench of ITAT found that these parties were genuine and their loans were genuine. It would be pertinent to refer to the findings of the order in the case of Filatax India Ltd which read as under: 36. In view of above facts and the circumstances of the case, we are of the considered view that the decision of the Ld. CIT(A) deleting the additions made is based on the appreciation of fact that all the relevant documentary evidences were produced by the Assessee to establish the identity and creditworthiness of the lender companies and genuineness of the transactions. Further based on the legal precedents and the fact that the loans were received and repaid through banking channel had deleted the addit....
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....f loans, there was balance available in the accounts of the lenders, which proves the creditworthiness and genuineness of the transactions. It is also relevant that out total amount of loans of 24.50 crores received from these lender companies, the AO has despite of doubting their creditworthiness, had made the addition of INR. 5.90 crores only meaning thereby the creditworthiness for the remaining amount is not doubted though the facts and the circumstances while granting these loans remained the same. This creates serious doubts about the mode and manner of the additions made by the AO. Once it is accepted that the lender has creditworthiness for part of the amount, the remaining amount cannot be held as unexplained. There is no case of any cash deposition in the account of any of the lender companies at the time of issuing cheques/RTGS in favour of the Assessee. Therefore, Appellant has duly discharged the burden casted upon it u/s 68 of the Act. 40. It is trite law that suspicion, howsoever strong, cannot take the place of proof as held in Umacharan Shaw & Bros. vs. CIT (1959) 37 ITR 271 (SC). The Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd v. ....