SARNATH FINANCE LTD.,BAREILLY vs. INCOME TAX OFFICER-2(2), BAREILLY

BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law Assessment Year:2017-18 2

BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the Order of Assessment and in disbelieving the stand of the appellant that the loan advanced by it to borrowers, in the normal course of business, was recovered by the assessee and in doing so has erroneously ignored positive evidence available on record and purely rested its decision on conjecture and suspicion, which is illegal. The Assessing Officer as also the Commissioner of Income Tax (Appeals) has not lawfully appreciated the submissions made by assessee and evidence available on record concerning the repayment of the loan; the additions are not legal, particularly as the appellant is a NBFC, the parties were examined on oath by the Assessing Officer, confirmation was received as also documentary evidence in the shape of loan agreements, books of accounts, transaction performed through banking channel, audit of Books etc; irrespective of such overwhelming evidence, the repayment of the loan has been treated as unexplained cash credit by the Assessing Officer, most unjustifiably.

BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts while confirming the addition made by the Assessing Officer for Rs.4,50,000/- as unexplained Cash Credit u/s 68, which sum of money represents repayment of Loan given to Mr. Vivek Tandon by the appellant. ADDITION OF Rs. 4,50,000/-

BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming an addition Rs.42,00,000/- as unexplained Cash Credit u/s 68 which sum of money represents repayment of loan taken by Ahuja Goods Carrier (P) Ltd. The appellant being a NBFC has advanced loan and the disputed Assessment Year:2017-18 3

BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has failed to consider that appellant is a registered NBFC Company and makes provision for Non-Performing Assets (NPA), Mr. Vivek Tandon and Ahuja Goods Carrier (P) Ltd. were NPA accounts in its Books. These debtors were regularly shown as NPA in the Returns filed by appellant before Reserve Bank of India and that the Assessing Officer has not rejected the Books of Account nor has there been ever any dispute concerning the RBI filings.

BECAUSE, wholly without prejudice and in the alternative, if the Assessing Officer is of the opinion that debtors appearing in the Books of Account and reflected against the names i.e. Mr. Vivek Tandon and Ahuja Goods Carrier (P) Ltd. have become bankrupt and/or are not the persons who have the means to repay the loaned amount, then the assessee deserves to be permitted a deduction towards bad debts from its taxable income.

BECAUSE, on the facts and in the circumstances of the case, the additions sustained by the Assessing Officer cannot be made under Section 68 of the Act as the assessee is a duly registered NBFC and the recovery of loan appearing as credits in its Books of Account is a genuine business transaction and accordingly, the provisions of Section 68 have no application.

BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law in failing to appreciate that the impugned order of assessment was itself illegal and bad in law as the order has not been passed by competent jurisdictional Assessing officer.

BECAUSE, the Ld. Commissioner of Income Tax (Appeals) has grossly erred in rejecting the appeal of the assessee without providing the assessee with a due and proper opportunity of hearing and has also ignored material available on record including the submissions made by assessee therefore the impugned order deserves to be set-aside and quashed.”