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Facts
The Revenue appealed against the order of the Ld. Commissioner who deleted an addition made by the Assessing Officer. The addition was based on information suggesting the assessee received accommodation entries of Rs. 20,00,000/- from M/s. Aneri Fincap Limited.
Held
The Tribunal held that the Assessing Officer relied on third-party information without corroborative material. The assessee had provided sufficient details to establish the identity, genuineness, and creditworthiness of the lender, thereby discharging the onus under Section 68 of the Act.
Key Issues
Whether the assessee had discharged the onus under Section 68 of the Act by establishing the identity, genuineness and creditworthiness of the lender for the amount received.
Sections Cited
250, 147, 148, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
O R D E R
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Revenue against the order dated 26.06.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2017-18.
In this case, the assessee had declared his total income of Rs. 12,48,190/- by filing return of income for the AY under consideration on dated 23.12.2017. Thereafter, the Assessing Officer (in short ‘Ld.AO’) on the basis of information received from the DCIT, Central Circle 7(2), Mumbai to the effect that the assessee was a beneficiary of the accommodation entry of Rs. Mukeshkumar Jain 20,00,000/- through the entity M/s. Aneri Fincap Limited, which was managed and controlled by Shri. Rajesh G Mehta, reopened the case of the assessee u/s 147 of the Act by issuing a notice dated 15.07.2022 u/s 148 of the Act.
The assessee in response to the notice u/s 148 of the Act, filed his return of income dated 24.04.2023 declaring total income of Rs. 12,48,190/-. Thereafter various statutory notices were issued to the assessee, in response to which the assessee filed the details and claimed that he had taken loan of Rs. 20,00,000/- from M/s M/s. Aneri Fincap Limited vide Cheque no. 123955 dated 04.07.2016 of Oriental Bank of Commerce. The assessee further claimed that said amount of Rs. 20,00,000/- was subsequently repaid on dated 15.05.2018, vide HDFC bank limited Cheque no. 107.
However, the Assessing Officer not being impressed with the said claim of the Assessee, observed as under:
“That M/s. Aneri Fincap Limited was a paper company managed and controlled by Rajesh G. Mehta, in whose group, search and seizure operation was conducted on dated 06.11.2019 and Shri. Rajesh G Mehta was arrested by the GST Department for fraudulent business activates and despite of issuing summons to the Directors of M/s. Aneri Fincap Limited, none appeared for examination. Thus M/s. Aneri Fincap Limited is a paper company not doing any genuine business activity and only engaged in providing bogus accommodation entries.”
The Ld. Commissioner in appeal, by considering the peculiar facts and circumstance deleted the said addition by observing and holding as under:
Mukeshkumar Jain “ That in the statement recorded from Shri. Rajesh G Mehta, it is nowhere appearing that any specific transaction of the assessee with M/s. Aneri Fincap Limited, is mentioned. Further on the request of the assessee, the assessing officer had given an opportunity through video conference, asking Shri. Rajesh G Mehta to attend but he did not attend the video conference. Further financial of M/s. Aneri Fincap Limited shows that it is a NBSC with income of Rs. 40-80 lac regularly in each year over a period of time. Further the assessing officer simply relied on the third party information without giving any specific corroborative material and proceeded in infer that the assessee has shown bogus loan. Therefore, addition made by Ld. AO is not backed by proper material. Whereas, the details furnished by the assessee clearly established the identity, genuineness and creditworthiness of the lender. Therefore, the addition made is not warranted and thereby deleted.”
This Court has given thoughtful consideration of the peculiar facts and circumstances of the case and determination made by the Authorities below and rival claims raised by the parties. This Court observe from the orders passed by the authorities below that the Assessing Officer while making the addition under consideration, has also mentioned the facts that M/s. M/s. Aneri Fincap Limited is being managed by Shri. Rajesh G Mehta, who was arrested by the GST Department for fraudulent activities and Directors of M/s. Aneri Fincap Limited, despite of issuing summons failed to appear for examination, thus said company is a paper company and not doing any business. Further the assessee has not paid any interest on the loan amount, which indicates the transaction, as a bogus transaction.
6.1 Whereas, the Ld. Commissioner by considering the peculiar facts and circumstance of the case specific to the effect that despite of issuing direction to Shri. Rajesh G Mehta to attend the video conference, in order to cross examination by the assessee, Shri. Rajesh G Mehta failed to attend video conference. Further M/s.
Mukeshkumar Jain Aneri Fincap Limited is an NBFC having regular income of Rs. 40-80 lac and the assessee by furnishing requisite details including the bank statements, confirmation from M/s. Aneri Fincap Limited and copies of income of the lender, has duly established the genuineness of the transaction and identity and creditworthiness of the lender and thus on the aforesaid fact, the ld. Commissioner allowed the appeal of the assessee and deleted the addition under consideration.
6.2 As the decision of the Ld. Commissioner in deleting the addition under consideration, is not only based on peculiar facts and circumstances but in fact the same is based on the relevant documents and on the peculiar facts that Assessee has established the identity, genuineness and creditworthiness of the lender and therefore duly discharged his prima facie onus cast u/s 68 of the Act. Thus, the impugned order, in the considered opinion of this Court, is neither suffering from any perversity or impropriety nor illegality. Hence, the impugned order, is accordingly upheld.
In the result, Revenue’s appeal is dismissed.
Order pronounced in the open court on 31.10.2025.