DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -3(2), MUMBAI vs. VIRAJ PROFILES PRIVATE LIMITED, MUMBAI

& 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd O R D E R PER S. RIFAUR RAHMAN (AM)

2. First we proceed to dispose of the appeal of the revenue. Revenue has raised following grounds in its appeal: - “1. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in holding that the addition is to be made on G.P.basis and not on the entire purchases.

2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in not appreciating the decision of the Hon'ble Supreme Court in the case of N.K proteins [2017] 250 Taxmann 22 wherein it has been held that in cases where the entire purchase transactions is found to be bogus, the addition could not be restricted to G.P additions.

3. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in admitting the new evidence in the form of DGCEI report under Rule 46A of the Income Tax Rules, 1962 without giving opportunity to the assessing officer.

4. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in allowing deduction u/s 80G on the amount of expenditure incurred by the assessee on CSR.

5. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the disallowance of loss of Mark to Market on forward contract, ignoring the CBDT Circular No. 3 of 2010 dated 23.03.20210, wherein, it is mentioned that, the loss so claimed by the assessee in the books of account is a notional loss and cannot be allowed and that decision of Hon'ble Supreme Court relied upon by the Ld.CIT(A) was rendered prior to the issuance of Circular by & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd the CBDT. The appellant craves to leave, to add, to amend and / or to alter any of the ground of appeal, if need be The appellant, therefore, prays that on the ground stated above, the order of the Assessing Officer restored.”

3. Ground Nos. 1 to 3 raised by the revenue relating to relief provided by Ld. CIT(A) on account of bogus purchases to the extent of 94%. We observe that assessee has raised Ground Nos. 1 to 4 in its appeal challenging the decision of the Ld. CIT(A). Grounds raised by the assessee are reproduced below: - “1. On the facts and in the circumstances of the Appellant's case and in law, the Ld. CIT (A) erred in confirming the action of Ld. AO in holding that the Appellant has availed accommodation entries in the form of bogus purchases on the basis of the statement of third parties, for the reasons mentioned in the impugned order or otherwise The Appellant submits that the aforesaid contention being erroneous and unsustainable on facts and in law.

2. On the facts and in the circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the action of Ld. AO in holding that the purchases made by the Appellant from parties namely M/s. Ankit International, M/s. GSP International and M/S SPA Heights Pvt. Ltd are bogus and merely accommodation entries, for the reasons mentioned in the impugned order or otherwise The Appellant submits that the aforesaid contention being erroneous and unsustainable on facts and in law.

3. On the facts and in the circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the addition made by the Ld. AO to the extent of 6% of alleged bogus purchases aggregating to Rs.1,65,72,573/- made u/s 37 of the Act, for the reasons mentioned in the impugned order or otherwise. The Appellant submits that the aforesaid addition being erroneous and unsustainable on facts and prays that the same be deleted.

4. On the facts and in the circumstances of the Appellant's case and in law, the Ld CIT (A) erred in confirming the addition made by the Ld. AO to the extent of 6% of alleged bogus purchases aggregating to Rs. 1,65,72,573/- made u/s 37 of the Act, for the & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd reasons mentioned in the impugned order or otherwise. The Appellant submits that the aforesaid addition being excessive on facts and prays that the same be suitably reduced.”

4. At the time of hearing, Ld. DR brought to our notice relevant facts relating to the above grounds of appeal and requested to set-aside the order of the Ld. CIT(A). Ld. DR filed its written submissions vide letter dated 10.10.2023, for the sake of clarity it is reproduced below: -

1. Bogus purchases- i) Evidences were brought on record by AO and confirmed by the CIT(A) that assessee did not purchase from the three parties mentioned in the trading account. ii) Assessee stick to the contention that purchases were made from these parties and they retracted statement. Assessee never stated that it had purchased from other parties but bills were taken from these bogus. parties. Assessee never submitted the details of parties from whom it actually purchased the material. Assessee never accepted that entries in the books of accounts are false and known to be false. iii) Issue in dispute was whether purchases were genuine or Bogus? iv) Issue in dispute was never how much amount of GP is suppressed by the Assessee" v) Neither department, not assessee appealed for the arbitration, or settlement or amicable solution of this issue in dispute. vi) Therefore, application of GP for Bogus purchases becomes irrelevant consideration as it neither relevant fact, facts in issue nor issue in dispute as per Evidence Act. CIT(A) adjudicated upon the dispute which was not contested by assessee or Revenue.

3. The AO relied upon the decision of Hon'ble Gujrat HC in case of NK Industries ltd vs DCIT(2016) 292 CTR 354 wherein it was held that addition could not be restricted to certain percentage when the entire transaction was found to be bogus. Assessee filed the SLP & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd against this order. This decision was upheld by the Hon'ble SC which is reported as NK Proteins Ltd vs DCIT (2017) 250 taxman 22. CIT(A) had not discussed, distinguished this decision. Hon'ble ITAT's order in previous years in case of the assessee also did not consider this ratio decidendi, hence the orders are per incurium.

2. In appellate order, Id. CIT(A) observed that the material has been duly received which was also accepted by AO in para 5.18 on page 13 of the assessment order. Further, Id. CITA) relying on orders passed by its predecessor and Id. CIT(A)-58 in the assessee's own & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd case for earlier years, he restricted the disallowance to the extent of 6% of the bogus purchases.

4. Without prejudice to the above, it is submitted that said issue was subject matter of appeal before Hon'ble Tribunal for earlier years in the assessee's own case The Hon'ble Tribunal, in the order passed in the assessee's own case for AY 2014-15, have considered the identical findings of the AO and submission of the assessee and have noted that the gross profit rate declared by the assessee was more than the industry average and hence, no disallowance is called for However considering the statements of some of the suppliers that they have not supplied the materials to the assessee, the Hon'ble Tribunal restricted the disallowance to the extent of 2% of the bogus purchases in order to avoid revenue leakages. Copy of ITAT order for AY 2014-15 is already submitted during the course of the hearing and copy of the same is enclosed herewith at Anneuxre-1. Therefore, the disallowance, if any, may kindly be restricted to 2%.”

“5.9 We have heard rival contentions on this issue and perused the record. The assessee is engaged in the business of manufacture and sale of Stainless Steel Products. In the manufacturing of products, the materials purchased by it is melted and converted into the finished products. In the case of trading of goods, the sales quantity could be reconciled with the purchase quantity. However, in the case of manufacturing of goods and when the raw materials is converted into other type of finished goods, the receipt of material can be judged on comparing the manufacturing loss. The gross profit rate declared by the assessee vis-à-vis other comparable companies is another measure to judge the genuineness of purchases. If an assessee has introduced bogus bills without actually receiving the materials, then the natural tendency is to show higher manufacturing loss in order to adjust the quantity details and the same would result in showing lower gross profit rate. 5.10 The submissions made by the assessee with regard to the observations made by the AO are summarized below:- "a. The assessee has submitted the entire documentary evidences such invoices, purchase order, Goods receipt note, stock register showing receipt, bank statement, etc, to establish the genuineness of the purchases and no doubt raised by the AO. b. The acceptance of employee of Mr. P Nandkumar is general in nature without any reference to any material found during the search and the same was duly denied by the CMD Mr. Neeraj Raja Kocchar. c. Reliance on statement of one Mr. Chandra Shekhar Nair who allegedly was carrying out business of certain suppliers is incorrect since he was not a director in any of the said suppliers at the time of search and he has duly retracted the same before AO. Similarly, other suppliers have nowhere & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd given clear statement that they are engaged in providing accommodation entry. d. No evidence of any cash payments/receipts were found at the premises of the suppliers as well as assessee. e. Allegation of use of outside state vehicle may be violation, of Motor Vehicle Rules; however, same has no bearing on income tax. f. Further, the suppliers were called for cross examination and all have confirmed to have supplied material before AO- para 12 of assessment order. g. Second layer investigation into supplier of supplier is not futile since it constitute hardly negligible part of total purchases made by the assessee's supplier. h. Material accepted from above parties accepted by excise from 2013 till 2018. i. Thus, the allegation of AO that parties are not genuine is incorrect. j. Further, it is submitted that the entire raw material has been actually received by the assessee and the same has been consumed by the assessee for manufacturing purpose. Details of the consumption have been duly submitted before AO during assessment proceedings. The manufactured goods have been further exported by the assessee. The assessee has submitted the entire evidence to support the receipt of material, consumption of the same and its output which has been exported. Further, the assessee has also submitted the input output ratio wherein the average manufacturing/burning loss in respect of main product 'billets' is 7.14% as against standard of 10% prescribed by DGFT. The same is placed at page no. 75 of the paperbook. AO has mechanically rejected the same on the ground that no one to one correlation has been submitted by the assessee. It is important to note that in assessee's business where measurement of input and output units is same, the extent of use of raw material can be seen from the quantitative chart showing purchase of raw material and its consumption without going into one to one correlation. Therefore, in such case, input output ratio needs to be accepted. k. Accordingly, the receipt of material and its consumption in the manufacture cannot be doubted. This is more-so when & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd the AO has himself stated that the material has been received by the assessee from open market in para 17 of the assessment order. l. Further it is also submitted that the majority of the suppliers have appears before the Id, AO and confirmed that they have supplied the material to the appellant. m. Further, we also rely on the findings of the DGCEI in the assessee's own case wherein after extensive search, they have concluded that the material has been duly received by the assessee. Kindly refer to conclusion of the DGCEI at page 136 of the CIT (A) order. n. Thus, it is submitted that assessee has duly purchased material from the suppliers. It is possible that the suppliers have themselves procured the material from open market and the same has been supplied to assessee. However, the said fact cannot lead to a conclusion that the purchases are bogus." 5.11 We notice that the AO himself has observed at paragraph 17 of the assessment order that the purchases have been made from open market against the bills obtained from entry providers. We also notice that the assessee has furnished all the relevant documents to prove the purchases, which are narrated in point (a) in the preceding paragraph. As observed earlier, the manufacturing loss declared by the assessee is a relevant factor to determine whether the assessee has received materials or not. We notice that the Ld CIT(A) has given a finding that the manufacturing loss declared by the assessee was within the prescribed limit of SION published by DGFT. Government of India. We also notice that the DGCEI has also conducted search in order to find out whether the assessee has actually received material against the alleged accommodation bills and he has given his opinion that the materials have been received. 5.12 We notice that the assessee has furnished gross profit rate chart before Ld CIT(A) as under:- A.Y G.P rate 2013-14 17.47% 2014-15 17.37% 2015-16 17.43% & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd A.Y G.P rate 2016-17 18.80% 2017-18 17.77% 2018-19 17.16%

The average rate of gross profit declared by the assessee is more than 17%, which was stated to be more than the industry average. The Ld A.R submitted that the above said contention is evidenced by the Transfer Pricing Study conducted by the assessee, wherein the international transactions have been bench marked under TNM method. It is stated that the Transfer pricing officer has accepted the T.P study, meaning thereby, the TPO has accepted the gross profit margin of the assessee to be at par or more than the industry average. Under these set of facts, we are of the view that the Ld CIT(A) was justified in holding that the assessee has actually received materials and hence disallowance of entire amount of purchases is not justified. When the receipt of materials is accepted, the AO's reliance on the statements given by the suppliers or employee/other persons shall become insignificant. 5.13 We notice that the Ld CIT(A), having held so, has proceeded to hold that the assessee would have made profits in purchasing materials from other suppliers. In this regard, the Ld CIT(A) has taken support from the decision rendered by Hon'ble jurisdictional Bombay High Court rendered in the case of Rishabhdev Technocable Ltd (2020) (115 taxmann.com 333) (Bom), wherein it was held by the High Court that in a case where the parties from whom such purchases allegedly made were bogus but the purchases in themselves were not bogus, only a gross profit ratio could be added to the income of an assessee. We notice that the Ld CIT(A) has estimated the said incremental profit @ 6% of the value of purchases, but did not give any basis for arriving at the above said rate of 6%. 5.14 It is the contention of the assessee that, in the facts and circumstances of the case, no disallowance of purchases is warranted, since the manufacturing loss and the gross profit rate declared by the assessee compares well with industry standards. The assessee itself, in the alternative, has submitted that the addition towards incremental gross profit may be restricted to 2% of the value of purchases. In support of this contention, the Ld A.R also relied upon certain case laws (referred supra).

& 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd 5.15 We find merit in the said contentions under the facts of the present case. We noticed earlier that the manufacturing loss declared by the assessee was less than the SION standards prescribed by DGFT. The gross profit rate declared by the assessee was more than the industry average. Hence, in the normal circumstances, no disallowance of purchases is called for. However, since some of the suppliers have stated that they have not supplied the materials and since the AO & DGCEI has opined that the assessee might have procured materials from others, it is possible that the assessee could have made some profit in such an exercise. Hence, in order to take care of revenue leakages, if any, some addition is called for. We notice that the addition has been restricted to 2% in the following cases:- (a) Suman Gupta vs. ACIT (ITA No.4774/Mum/2014 dated 23.8.2017). In this case, this assessee was engaged in Steel business. (b) Geolife Organis (ITA No.3699/Mum/2016 dated 05-05- 2017). In this case, this assessee was engaged in metal business. (c) Timex Art Décor P Ltd (ITA No.7293 & 7294/Mum/2017 dated 18- 10-2019). Accordingly, we modify the order passed by Ld CIT(A) in all these years and direct the AO to restrict the addition on account of non- genuine purchases to 2% of the value of alleged bogus purchases in both the years., i.e., AY 2014- 15 and 2015-16.”

ITA NO. 1213 & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd 11. On appeal, he submitted that Ld. CIT(A) had deleted the said addition by relying on the decision of Bangalore Tribunal in the case of Allegis Services (India) (P.) Ltd. v. Asstt. CIT [IT Appeal No. 1693 (Bang.) of 2019, dated 29-4-2020] and Coordinate Bench decision in the case of Naik Seafoods Pvt Ltd v. CIT [ITA No. 490/MUM/2021] wherein it was held that donations on account of CSR expenditure made to institutions registered u/s 80G are eligible for deduction u/s 80G of the Act. Further, Ld.AR of the assessee relied on the recent decision of Coordinate Bench in Synergia Lifesciences Pvt. Ltd. in dated 20.06.2023. Therefore, Ld.AR of the assessee prayed that the order of the Ld. CIT(A) may kindly be upheld.

“5. Disallowance of Marked to Market Losses- Losses are calculated as per accounting standards. For the purposes of Income tax, this calculation should be as per CBDT circular 03/2010 dated 23/03/2010. Similar scheme of the Act is applicable for depreciation. As per Companies Act, calculation of depreciation is added back in the computation and calculation as per income tax is claimed as deduction. The same principle is applicable for HTM securities by the bank which requires different account treatment as per Banking Regulation Act/RBI Guidelines and as per Income Tax Act. The case of M/s Woodward Governor India Pvt Ltd 312 ITR 254 was decided on April 2009. CBDT issued circular 03/2010 on 23/03/2010. The circular clarifies the revenue implication transaction involving Mark to Market Losses. This does not conflict or overrides the accounting standards as assessee can keep on maintaining books accordingly. The circular had limited and specific purposes of treatment of such losses for tax purposes. The circular in no way & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd contradicts, overrides, conflict with the decision of Hon'ble SC in case of Woodward (supra) as there is not dispute about the loss. Speculative transactions are complete world in themselves involving short-term, long-term capital gains, speculative gains etc to name a few. Loss from them set of against business loss is oversimplification of these transaction. Claiming this loss as business expenditure as next level of it. The circular 03/2010 is not declared as ultra vires by the HC or SC in any of the judgement. Why the circular is not applicable is not discussed in case laws. The circular gives alternative to accounting standards and not to the decision of Hon'ble SC. Therefore, question of either following circular or decision of SC is mischievous. Such situation is contemplated under the doctrine of harmonious construction of statute, which requires court to interpret the provisions of law in a way not to make any part as redundant. In case of Vaibhavi Trading (P.) Ltd. v. DCIT [2018] 89 taxmann.com 132 (Mumbai - Trib.) the ITAT Mumbai 'F' bench held that Unrealized loss on foreign exchange transactions was a contingent liability because it was no ascertainable as to at what exchange rate transactions of foreign exchange would be realized, thus, such loss was in nature of mark to market basis which could be allowed only at time of actual realization of such loss. In the case of Bechtel India (P.) Ltd. v. ACIT (2017) 82 taxmann.com 30 Delhi Trib.) following was held.- Section 28(i), read with section 43(5) of the Income-tax Act, 1961- Business loss/deductions Allowable as (Forward exchange contracts) - Assessment year 2009-10- Whether where assessee, to avoid any unforeseen losses on account of downfall in foreign exchange rate, entered into forward contracts and sealed amount of foreign exchange rate, which would be receivable to it, assessee immuned itself from any fluctuation in foreign exchange rate - Held, yes - Whether in such circumstances, when it was certain that no additional liability would arise to assessee on maturity of contract, possibility of such liability on balance sheet date also could not arise - Held, yes - Whether, thus, where all forward contracts were settled by way of actual delivery through dollars received on export receivables and there was no extra outgo for settlement of forward contract other than already determined in contract, loss claimed by assessee on account of mark to market losses on account of fluctuation in foreign currency in respect of hedging forward contract was not allowable - Held, yes [Para 4In favour of revenue] Circulars and Notifications: (CBDT) Instruction No. 17 of 2008, dated 26-11-2008 and Instruction No. 3 of 2010, dated 23-3-2010 & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd and case of M/s Woodward Governor India Pvt Ltd 312 ITR 254 was discussed in this order. In the light of the above, order of AO may be restored on this issue.”

ITA NO. 1213 & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd a. Tata Consultancy Services Ltd vs. CIT reported in 108 taxmann.com 41 (2019) b. Emmsons International Ltd. vs. ACIT in dated 14.10.2019 22. Also, it is submitted that the AO has taken contradictory stand wherein income arising on account of MTM has been duly taxed whereas loss has been disallowed It is submitted that the income of Rs.40.99 Cr was offered to taxation in immediately preceding year i.e. AY 2019-20 which has not been disputed by the Department. This contradictory stand of the Department has also been pointed out by the Hon'ble ITAT in the order passed for AY 2011- 12 as discussed above.

“33. Considered the rival submissions and material placed on record, we observe that assessee has regular export business and in order to mitigate the forex exposure, it has booked the forward contract. At the end of the year, assessee has accounted for mark to market loss and profit in the pending forward contracts. In this & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd year, assessee has incurred net loss. It is also observed that in the subsequent Assessment Years the assessee has accounted the net profit and the same was accepted by the revenue and charged to tax. The assessee is consistently following the method of accounting. Therefore, the net loss accounted by the assessee is supported by the export business carried on by the assessee. Therefore, in our view the loss claimed by the assessee is for the purpose of business and allowable business loss. …..

2. On the facts and in the circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the action of Ld. AO & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd in holding that the purchases made by the Appellant from parties namely M/s. Ankit International, M/s. GSP International and M/S SPA Heights Pvt. Ltd are bogus and merely accommodation entries, for the reasons mentioned in the impugned order or otherwise The Appellant submits that the aforesaid contention being erroneous and unsustainable on facts and in law.

3. On the facts and in the circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the addition made by the Ld. AO to the extent of 6% of alleged bogus purchases aggregating to Rs.1,65,72,573/- made u/s 37 of the Act, for the reasons mentioned in the impugned order or otherwise. The Appellant submits that the aforesaid addition being erroneous and unsustainable on facts and prays that the same be deleted.

4. On the facts and in the circumstances of the Appellant's case and in law, the Ld CIT (A) erred in confirming the addition made by the Ld. AO to the extent of 6% of alleged bogus purchases aggregating to Rs. 1,65,72,573/- made u/s 37 of the Act, for the reasons mentioned in the impugned order or otherwise. The Appellant submits that the aforesaid addition being excessive on facts and prays that the same be suitably reduced.

5. On the facts and in the circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the action of Ld. AO in making a disallowance of Education Cess amounting to Rs. 1,49,16,706/-, for the reasons mentioned in the impugned order or otherwise The Appellant submits that the aforesaid addition being erroneous and unsustainable on facts and prays that the same be deleted.

6. On the facts and in the circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the action of Ld. AO in disallowing Employees Contribution to Provident Fund amounting to Rs.1,52,12,702/- invoking the provisions of section 36(1)(va) of the Act, for the reasons mentioned in the impugned order or otherwise The Appellant submits that the aforesaid addition being erroneous and unsustainable on facts and prays that the same be deleted.

7. On the facts and in the circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the action of Ld. AO in disallowing a sum of Rs.40,99,190/- by invoking the provisions of section 14A r.w.r. 8D of the Income Tax Act, 1961 as per the grounds stated in the order or otherwise. The Appellant submits that the aforesaid addition being erroneous and unsustainable on facts and prays that the same be deleted. & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd 8. The appellant craves leaves to alter, amend, withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before the hearing.”

20. Ground Nos. 1 to 4 are similar to ground Nos. 1 to 3 raised by the revenue. As we have already adjudicated the issue in the preceding paragraphs, we partly allow the grounds raised by the assessee.

21. With regard to Ground Nos. 5 & 6 raised by the assessee, Ld.AR of the assessee submitted that these grounds are not pressed, accordingly, the same are dismissed as not pressed.

22. With regard to Ground No. 7 which is in respect of disallowance under section 14A of the Act, brief facts of the case are, at the time of assessment Assessing Officer observed that assessee has earned the exempt income of ₹.71,03,332/- and made investments of ₹.30,33,47,000/-. The assessee was asked to furnish disallowance made under section 14A by issue of notice under section 142(1) of the Act. In response assessee has claimed that it has not incurred or claimed any expenditure for earning exempt income, therefore, no disallowance under section 14A was warranted. Assessing Officer observed that as per amended Rule 8D applicable w.e.f. 2nd June, 2016 provides for disallowance of 1% of the annual average value of the investments on & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd income which does not form part of the total income. Accordingly, he held that the administration activities carried by the assessee are towards making investments and assessee was asked why the above Rule 8D should not be considered.

23. In response assessee submitted that assessee has not incurred any expenditure to earn the exempt income and further, it was submitted that assessee has made major investments in group companies which are strategic investments. After considering the submissions of the assessee, Assessing Officer rejected the same and proceeded to make the additions by relying on relevant case laws and disallowed 1% of the average value of investments appeared in the Balance Sheet and disallowed an amount of ₹.40,99,190/-. Aggrieved with the above order assessee preferred appeal before the Ld. CIT(A) and Ld. CIT(A) sustained the additions made by the Assessing Officer.

24. Aggrieved assessee is in appeal before us raising the above ground and submitted that Assessing Officer has not recorded any satisfaction and also he submitted that Assessing Officer has made the disallowance without considering the fact that all the investments have not generated & 2164/MUM/2023 (A.Y: 2020-21) Viraj Profiles Pvt Ltd the exempt income. Therefore, the addition made by the lower authorities are not sustainable.

Order pronounced in the open court on 20th December, 2023.