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Judgment
PER ANUBHAV SHARMA, JM:
These appeals and cross objection preferred by the revenue and Assessee against the orders of the Ld. Commissioner of Income Tax (Appeals)-29, New Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in appeals filed before him against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. AO, for short) passed u/s 147 of the Income-tax Act, 1961 (hereafter referred to as ‘the Act’). Further details of the orders of the lower authorities are as under: -
| ITA No. & AY | Ld. FAA who passed the appellate order | Appeal No. & Date of order of the Ld. FAA | AO who passed the assessment order & Date of order |
| 6965/D/25 2016-17 | CIT(A)-29 New Delhi | Appeal No.: NFAC/2015-16/10368374 Dated: 16.07.2025 | ITO, Ward 5(1) Delhi Dated 30.03.2024 |
| 6966/D/25 2019-20 | CIT(A)-29 New Delhi | Appeal No.: NFAC/2018-19/10368378 | ITO, Ward 5(1) Delhi Dated 29.03.2024 |
On hearing both sides we find that assessing officer had made additions in the two years involved before us on the basis of doubting the unsecured loans received by the assesse from 4 non-banking finance companies which were allegedly involved in providing accommodation entries. In AY: 2016-17 assesse had received a loan of Rs.3,00,00,000/-from M/s K.G. Finvest Pvt. Ltd. and loan of Rs.2,25,00,000/- from M/s Lenient Consultant Pvt. Ltd. and loan of Rs.3,50,00,000/- from M/s Upaj Leasing & Finance Company Pvt. Ltd. Then in AY: 2019-20 loan of Rs.1,25,00,000/- were received from Lenient Consultant Pvt. Ltd. These loans and payment of interest were doubted by the assessing officer and accordingly addition of Rs.2,51,71,335/- was made. In AY: 2019-20 on account of interest expenditure which have been treated as bogus expenditure u/s 69C of the Act. The assessing officer had made addition of Rs.8,75,00,000/- in AY: 2016-17 on account of the loans received from M/s Lenient Consultant Pvt. Ltd., M/s Upaj Leasing & Finance Company Pvt. Ltd. u/s 68 of the Act and the interest was also disallowed u/s 69C of the Act. The same have been deleted by ld. CIT(A) for which department is in appeal and for completeness we reproduce the grounds raised in two appeals before us;
ITA No.6965/Del/2025 AY: 2016-17
“a. The Ld. CIT(A) has not appreciated the fact that the subject Mr. Himanshu Verma and Sh. Deepak Agarwal and Sh. Ankit Bhagaria are only entry provider and willfully involved in the syndicate for organized accommodation entries through there associated entities since long ago despite of many search proceedings conducted on them, hence, these entities are habitually involved in the racket without any fear of Law in force.
b. The Ld. CIT(A) has not appreciated the fact that the Non-descript entities involved with Sh. Deepak Agarwal, Mr. Himanshu Verma and Sh. Ankit Bhagaria give non genuine transaction, on account of accommodation entries in the form of bogus loan/purchase/sales, which were given/taken in so a sophisticated manner with taking care of each step to give the image of legal transaction by utilizing web of bank accounts in different banks as well as books of accounts in respective entities.
c. The Ld. CIT(A) has not appreciated the fact that the existence of these entities as well as genuine business activities at the address could not be established.
d. The Ld. CIT(A) as well as ITAT has upheld/ confirmed that these entities are accommodation entry operator.
e. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law.
f. The grounds of appeal are without prejudice to each other.
g. That the appellant craves to add, amend, after or modify any grounds of appeal at the time of hearing.”
ITA No.6966/Del/2025 AY: 2019-20
“a. The Ld. CIT(A) has not appreciated the fact that the subject Sh. Deepak Agarwal and Sh. Ankit Bhagaria are only entry provider and willfully involved in the syndicate for organized accommodation entries through there associated entities since long ago despite of many search proceedings conducted on them, hence, these entities are habitually involved in the racket without any fear of Law in force.
b. The Ld. CIT(A) has not appreciated the fact that the Non-descript entities involved with Sh. Deepak Agarwal, and Sh. Ankit Bhagaria give non genuine transaction, on account of accommodation entries in the form of bogus loan/purchase/sales, which were given/taken in so a sophisticated manner with taking care of each step to give the image of legal transaction by utilizing web of bank accounts in different banks as well as books of accounts in respective entities.
c. The Ld. CIT(A) has not appreciated the fact that the existence of these entities as well as genuine business activities at the address could not be established.
d. The Ld. CIT(A) as well as ITAT has upheld/ confirmed that these entities are accommodation entry operator.
e. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law.
f. The grounds of appeal are without prejudice to each other.
g. That the appellant craves to add, amend, after or modify any grounds of appeal at the time of hearing.”
Now, though ld. DR has relied the grounds raised which are argumentative in themselves. We find that what is material is that not only assesse had filed all the relevant evidences with regard to identity of creditors but the matter of fact remains that lenders were non-banking financial companies in regard to whom there is no material on record to show that any of the statutory bodies regulating their functions had made any adverse observations. Ld. Counsel has demonstrated before us that the loans were repaid to the NBFC and that same has major bearing on the issue and thereby relying Hon’ble jurisdictional High Court decision in the case of CIT Vs. Vrindavan Farms Pvt. Ltd. (2015) 63 taxmann.com 333 (Delhi), Ld. CIT(A) has deleted the addition of Rs.8,57,00,000/- in AY: 2016-17 and relied Coordinate Bench decision in Real Innerspring Technologies (P) Ltd. Vs. ACIT (ITAT Delhi) to delete the addition made u/s 69C in AY: 2019-20.
Thus, we find no substance in the ground raised by the department. The appeals of the department deserves to be dismissed. The corresponding Cross Objections are rendered infructous and accordingly, dismissed.