ACIT, Central Circle-25 vs Chandgi Ram Real Estate Consultants Pvt. Ltd.

“a. Whether the Ld. CIT(A) has justified in allowing the appeal of the assessee only on technical ground and not considering the merit of the assessment order.

b. The Id. CIT(A) erred in ignoring the sustentative evidence collected by the Department and in holding that absence of AO's independent enquiry invalidated the addition. Departmental information, corroborated by sworn statements, is credible material and cannot be brushed aside.

c. The Ld. CIT (A) did not appreciated the fact that the findings, of search proceedings on the assessee as well as the Galaxy Group, establishes that the assessee along with associated entities was indulged in accepting huge cash, out of books, booked bogus expenses, and taking bogus accommodation entries aggregating "routing the unexplained money" in parallel black economy of entire Galaxy Group willingly to evade taxes as per the requirement of beneficiaries.

d. That the Ld. CIT(A) erred in deleting the addition of Rs.8500000/- w/s 68 of the I.T. Act towards bogus ENTRY/LOAN on account of payment to non descript company M/s Highrise Securities & Trading Private Limited ignoring Investigation Wing findings, books of accounts(Ledger) and statements of operators confirming that the concern was only an accommodation entry provider.

e. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law.

I. 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.”

“5.18

I have further carefully gone through the submission of appellant along with paper book. From the reply filed by appellant following facts emerged by the mere perusal of submissions filed by the assessee during assessment and appellate proceedings.

1)

The lending company in the instant case (i.e. M/s HSTPL) is registered NBFC with RBI and AO has not brought anything in the assessment order which shows that there is any adverse finding of RBI on its activities.

ii) The company is regularly filing its forms to MCA and AO again did not bring anything in the assessment order which shows that there is any adverse finding.

iii) The lending company has substantial turnover in the relevant assessment year which has not been questioned by the AO in assessment order. Rather AO relied on general finding of investigation report that "these companies have meagre turnover"

iv) The lending company has declared profit of more than Rs. 65 Lacs in the relevant assessment year which cannot be said that it has meagre income by any imagination as claimed in the investigation report on which AO heavily relied.

v)

It has shown huge share capital, and Reserve, which have been purportedly used for the lending of loan. The AO has not brought anything in the assessment order which can establish that these funds are artificial. AO failed to bring anything in the assessment order or from past assessment records which shows that these funds.

vi) The lending company's financial shows it is in business of NBFC and has shown interest income in its profit and loss accounts as receipt from operations and on the same line the company has also shown administrative expenditure with substantial fixed assets required for running a NBFC business.

vii) It is irrefutable fact that the said loan was interest bearing and same was duly paid by appellant after deduction of TDS.

viii) Above all the AO has not brought any evidence in the assessment order which reflects that cash originated from the coffer of appellant and travel to lending company or any transaction which shows that cash have been generated by appellant company. The AO has not disturbed the debit side of profit and loss accounts from where cash can be generated. Moreover, nothing found in the assessment order which shows the appellant has its some activity by which he can generate unaccounted cash for taking accommodation entry. Therefore, there is not even circumstantial evidence has been brought in the assessment order which shows cash have been delivered to entry operators in lieu of cheque.”