Assistant Commissioner Of Income Tax vs Bhatia Finvest Pvt. Ltd.

“a. The Ld. CIT (A) did not appreciated the fact that the findings, the assessee has made transaction of Rs. 20.40,000/- during the year under consideration to M/s Highrise Securities Private Limited which is non-descript companies and has no genuine business. The entity is managed and controlled by Shri Himanshu Verma the entry operator.

b. The Ld. CIT (A) did not appreciated the fact that the findings, of search proceedings on the entry operator. Shri Himanshu Verma as well as the Galaxy Group, establishes that the assessee along with associated entities was indulged in accepting huge cash, out of books, hooked 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 his beneficiaries.

c. The Ed. CIT(A) has not appreciated the fact that the Non-descript entities involved with Sh. Himanshu Verma gives non genuine transaction, on account of accommodation entries in the form of bogus loan/purchase/sales, which were given taken in so a sophisticated manger 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.

d. CTT(A) has erred in not appreciating that these entry providers have established a organized tax evasion racket and are working in such a large scale which is against the economic security of nation.

e. It is settled position that once the counter party is found to be a paper company with no real business. Banking channel payments cannot confer legitimacy on the transaction (CII V. N.R. Portfolio P. Ltd. 263 CTR 456 (Del.). The CIT(A) erred in holding that repayment alone proves genuineness. On the contrary, repayment itself may be a circular movement of funds arranged to give colour of authenticity.

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

g. The grounds of appeal are without prejudice to each other.

h. That the appellant craves to add, amend, after or modify any grounds of appeal at the time of hearing.

7.

We have heard rival submissions in the light of material placed on records. We have noted that as far as reliance of the Revenue in the case of J.K. Global ITA No.3260/Mum/2023 is concerned, this Tribunal on identical facts had passed an order in the case of Bhawani Finvest Pvt. Ltd. in ITA No.6303/Del/2025 through order dated 25.03.2026 holding as under:-

“8.

We have heard rival submission in the light of material available on records. We have noted that the ld. AO has vividly demonstrated in his assessment order extracted hereinabove that the assessee was having connections with accommodation entry providers. We have also noted that the ld. AO has extensively brought out in the assessment order while analyzing statements of entry providers Shri Himanshu Verma and Shri Deepak Agarwal and their employees Ms. Sonia, etc that a web of shell company was created to route accommodation entries and that the assessee was beneficiary of one such company. On the issue of justification of loan qua its repayment, we have noted that a co-ordinate Bench of the Mumbai Tribunal in the case of J.K. Global (supra) held as under:-

“..7. Considering the facts of the case in toto and in the light of the decisions of the coordinate bench (supra), we have no hesitation in confirming the addition made u/s 68 of the Act for the captioned Assessment years. The contention of the ld. counsel that the loans have been re-paid during the year under consideration therefore the set off of the same should also be given to the assessee does not hold any water as it has been established that the impugned loans were nothing but accommodation entries and the repayment is also nothing but return of accommodation entries therefore, the money which has been brought in the garb of unsecured loan is nothing but the unaccounted money of the assessee and the repayment of the same does not make any sense….”

9.

Thus, we have noted that the argument of the assessee regarding the justification of impugned loan of Rs.2 crores on account of repayment cannot be accepted. In respectful compliance to the decision of Hon’ble Mumbai Tribunal in the case of J.K Global(supra), we are of the considered view that the relief accorded by the ld CIT(A) is not based upon correct understanding of the facts of the case. We, therefore, set-aside the order of the ld. CIT(A) and confirm the addition of Rs.2 crores made by the ld. AO. Similarly, we also confirm the addition made by the AO of Rs.15,06,164/- on account of interest and of Rs.6 lakhs on account of commission. The appeal of the Revenue is therefore allowed….”

8.

We have further noted that in the case of Global Stainless (supra) on nearly identical facts, a co-ordinate Bench of this Tribunal had, while dismissing the appeal of the assessee had held that once a loan has been treated as bogus on account of having connections with accommodation entry providers, the repayment of such loans would not make them genuine. The Tribunal has held as under:-

6.

It appears from the above that the Ld. CIT(A) has also taking into consideration the case sought to be made out by the assessee to this effect that the unsecured loan was squared up in the subsequent years through banking channel as and when the appellant had liquidity the loan was duly paid off and claimed that no addition was to be made in the current year on account of cash credit, which was further reiterated by the ld. Counsel for the assessee appearing before us, concluded that as the unsecured loan received by the assessee has already been held to be bogus in the preceding paragraphs and rejected such case of the assessee. Having regard to the entire aspect of the matter, the conduct of the assessee particularly in not cooperating with the authorities below in not discharging onus under Section 68 as regards the genuineness of the transaction to the satisfaction of the Ld. Assessing Officer or that the submissions that the transactions having been made through banking channel or the companies were the income taxassessees registered with the Registrar of Companies is also found to be not sufficient enough to prove the transaction genuine it is held that the unsecured loans received by the appellant as bogus. In that view of the matter, as the loan has already been held as bogus the repayment of loans in the subsequent years does not make the transaction genuine, in our considered opinion, is the correct observation of the authorities below. We have further considered the order passed by the ITAT Mumbai Bench in the case of J.K. Global, reported in 167 taxmann.com 15 which were relied upon the Ld. CIT(A). The addition made under Section 68 of the Act on account of unsecured loans taken from companies from 20.10.11 to 20.12.2013 as information received from the DGIT, Investigation that the assessee had taken accommodation entries in the form of bogus unsecured loans from the said companies operated by Shri Praveen Kumar Jain found to be rightly applicable on the identical facts and circumstances of the case in hand. The loans since having been repaid during the year under consideration, therefore, the set off of the same by the assessee as rejected by the ITAT Mumbai Bench is found to be squarely applicable in the instant case. As the impugned loans in the case in hand, is nothing but accommodation entries the return of accommodation entries by paying it off through banking channel cannot give a seal of sanctity to the impugned transactions already held “bogus”. Thus, we do not find any reason to interfere with the order passed by the Ld. CIT(A). Hence, this appeal preferred by the assessee is found to be devoid of any merit, and, thus, dismissed.”

9.

Thus, we have noted that the argument of the assessee regarding the justification of impugned loan of Rs.2 crores to Odissa Finalease Pvt. Ltd. and Rs.1,75,59,653/- to M/s TISH Consultants Pvt. Ltd. on account of repayment cannot be accepted. In respectful compliance to the decision of Hon’ble Mumbai Tribunal in the case of J.K Global(supra), of this Tribunal in the case of Global Stainless(supra) and in the case of Bhawani Finvest Pvt. Ltd. (supra), we are of the considered view that the relief accorded by the ld CIT(A) is not based upon correct understanding of the facts of the case. We, therefore, set-aside the order of the ld. CIT(A) and confirm the addition of Rs.2 crores and Rs.1,75,59,653/-made by the ld. AO. The appeal of the Revenue is therefore allowed.”