TaxTMI 
TaxTMI 
2026 (8) TMI 1428
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....e, an information has been received on Insight Portal, a search action u/s. 132 of the Act was conducted on 20.7.2022 in the case of SMC Group and others. During search related investigation the introduction of capital in Log Hut Builders and Developers Pvt. Ltd. was examined. AO noted that assessee company has taken accommodation entries from various non-descript entities. The entity M/s Paras Fincap Pvt. Ltd. and M/s IDIR Tradex Pvt. Ltd. are some entities, enquiry of which revealed that these are shell companies /paper companies. The assessee has entered into the respective transactions amounting to Rs. 99,00,000/- with M/s IDIR Tradex Pvt. Ltd. and amounting to Rs. 25,00,000/- with M/s Paras Fincap Pvt. Ltd. during the year under consideration. Thereafter, statutory notices were issued and in response thereof, the assessee filed its reply stating that the assessee has took loan of Rs. 99 lacs from M/s Idir Tradex Pvt. Ltd. and of Rs. 25 lacs from M/s Paras Fincap Pvt. Ltd. for working capital requirement of the assessee and it was also submitted that it has paid loan in AY 2020-21. AO observed that assessee has taken the accommodation entries amounting to Rs. 25 lacs and Rs. 99....
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....noted that these transactions have been made by the assessee company through banking channel and all the lender entity are assed to tax. More particularly, it is the contention of the assessee that entire loan has been repaid before the initiation of impugned proceedings. The assessee company has maintained its books of account in accordance with law and the same are audited by the Chartered Accountants and no defect have been pointed out in the audited books of account of the assessee company. The case laws cited by the Ld. DR are distinguishable to the facts of the case in hand. Therefore, in view of the aforesaid discussions, we find force in the contention of the assessee about the genuineness and creditworthiness of the transactions, hence, the addition sustained by the ld. CIT(A) amounting to Rs. 99 lacs is hereby deleted and accordingly, the consequent addition on account of interest paid amount is also deleted. Since we have decided the case on merits, other pleadings have rendered academic. Accordingly, the ground raised by the Assessee in AY 2017-18 are allowed and ground raised by the Revenue are dismissed. Resultantly, the assessee's appeal is allowed in very terms and ....
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....ised by the revenue and decide the issue in favour of the assessee. 6. Further, as regards addition of Rs. 5,90,651/- on account of treating interest paid to the lenders i.e. M/s LVS, M/s HGCSL and M/s Sirsa Deposits and Advances Pvt Ltd.) SDAL) as unexplained expenditure by AO. Since the addition made u/s. 68 of the Act in respect of loans pertaining to M/s LVS and M/s HGCSL was deleted as aforesaid, thus, it is proved to be genuine transaction, accordingly, the interest paid to the said lending companies in aggregating to Rs. 4,41,966/-, after complying to TDS provisions, was rightly held to be allowable business expenses and accordingly, deleted, which does not need any interference on our part. As regards remaining amount of interest of Rs. 1,48,685/- was paid to lender M/s Sirsa Deposits and Advances Limited (SDAL). It is noted that the alleged payment has been made out the fund available in the bank account of the appellant-company meaning thereby that payment has been made out of the explained sources, which establish from a copy of confirmation of account of M/s SDAL in the books of assessee company for AY 2018-19 to 2021-22 (APB Pages 534-539). After perusing the same, ....
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....rom M/s Shubh Traders, thus, the addition in dispute is not sustainable, hence, the same is deleted. 9. In view of above, the ground raised by the Assessee in AY 2018-19 are allowed and ground raised by the Revenue are dismissed. Resultantly, the assessee's appeal is allowed in very terms and revenue's appeal is dismissed as infructuous. AY 2019-20 10. As regards addition of Rs. 25,00,000/-, it is noted that during the year under consideration, the assesse has taken total loan of Rs. 25 lacs from M/s LVS Financial Services Pvt. Ltd. (LVS). It is observed that Ld. CIT(A) has noted that assessee has satisfied all tests identity, creditworthiness, and genuineness of the loan of Rs. 25 lacs availed from entity which is NBFC and the said loan has also been repaid in the subsequently. This company has paid taxes and declared profit in the relevant assessment year. It is noted that addition of loan was received from NBFC i.e. M/s LVS, amounting to Rs. 25 lacs u/s. 68 of the Act is made without cogent or circumstantial evidence and hence, not sustainable, thus, the same was rightly deleted by the Ld. CIT(A), accordingly, we affirm the same. 11. As regards addition of Rs. ....
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....ly, we affirm the same. Further, the addition of Rs. 1,30,00,000/- was made on account of loan received from the lending company M/s ALPS. As per confirmation from M/s ALPS Management Solutions Pvt. Ltd. it has been confirmed that an aggregate amount of Rs. 1,30,00,000/- was advanced to the assessee company during the year under consideration through proper banking channels and it was confirmed that out of the said amount, a sum of Rs. 20 lacs was repaid by the assessee through banking channels on 24.10.2019. A further confirmation regarding interest on unsecured loan of M/s ALPS Management Solutions Pvt. Ltd. wherein they have charged interest of Rs. 7,76,466/- during the year under consideration on the aforesaid loan advanced by them to the assessee company on which TDS amounting to Rs. 77,647/- was also deducted by the assessee company. As per extract of bank statement of assessee company showing that an aggregating amount of Rs. 1,30,00,000/- was received by the assessee company from M/s ALPS Management Solutions Pvt. Ltd. (amount of Rs. 50,00,000/-received on 18.6.2019 Rs. 60,00,000/- on 20.6.2019 and Rs. 20,00,000/- received on 23.10.2019). Further, a copy of Audited Financia....
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....the assessee must have spent such expenditure for alleged accommodation entry. Thus, the same was rightly deleted by the Ld. CIT(A), therefore, we affirm the same. 17. Further as regards addition of Rs. 1,86,97,328/- u/s 69C of the Act on account of bogus purchases undertaken by assessee company with M/s Khushi Enteprises amounting to Rs. 28,29,500/-; M/s Kohinoor Enterprises amounting to Rs. 1,07,53,917/- and M/s Shree Ganesh Enterprises amounting to Rs. 51,13,910/-is concerned. It is noted from the copy of ledger of M/s Kushi Enterprises in the books of assesse company for the FY 2019-20 shows that the assessee company has made purchase goods worth of Rs. 7,60,000/- on 29.10.2019 Rs. 7,50,800/- on 30.10.2019 Rs. 5,44,700/- on 29.11.2019 and Rs. 7,74,000/- on 30.11.2019 aggregating to Rs. 29,29,500/-. From the sample copies of invoices issued by the vendor entity i.e. M/s Khushi Enterprises alongwith its corresponding transport receipt and w-way bill generated at the time of transfer of goods etc. Copy of relevant extract of the bank statement of assessee company shows that the assessee company made payment of Rs. 17,82,744/- through banking channels to M/s Khushi Enterprises f....
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....aforesaid amount were received through banking channels from identified corporate lenders and every element required under section 68 of the Act i.e. identity, creditworthiness and genuineness was substantiated with (a) master data from MCA portal, (b) audited balance sheets, (c) bank statements and ledgers showing receipt and repayment, and (d) TDS certificate for interest paid. It is the further contention that all these loans were fully repaid. Ld. DR relied on the order of the Assessing Officer. It is admitted fact that the assessee has availed loans to the tune of Rs.81,09,966/- availed from entity which is NBFC and the said loan has also been repaid in the subsequently. This company has paid taxes and declared profit before tax of Rs. 29,04,689/- in the relevant assessment year. It It reveals that the Investigation Report has given general lead about the companies controlled by entry operator. The AO ignored very important fact that this NBFC has accumulated capital and reserves carried over from previous years and without refuting the genuineness of capital and reserves, it is not possible to held the same as an accommodation entry. As the addition loans received by the asse....
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....tal revenue of Rs. 6,91,78,902/- during the year. This proves that that lender entity had sufficient funds to advance the loan to the assessee company and was engaged in genuine business activities. In view of above, the sustained addition of Rs. 31,54,384/- is hereby deleted. 22. Further with regard to addition of Rs. 24,30,000/- made u/s. 69A of the Act relates to sums repaid towards an old loan from M/s Arti Securities and Services Ltd which is an RBI registered NBFC having substantial capital, reserves and profit. There was no loan received in the current year; the opening balance was repaid entirely via banking channels, with full details submitted (ledger, TDS, repayment proofs). It is noted that Section 69A requires that the assessee must be "found to be owner of" explained money, bullion, jewellery, or valuable article, and such ownership must be supported by facts and evidence, however, in the present case the AO has not brought any concrete evidence on record to show that any unexplained cash accrued to the assessee as a result of repayment to the alleged shell company. The mere presumption, unbacked by evidence, is not a valid basis for invoking section 69A. The whole....