DY. COMMISSIONER OF INCOME TAX, NOIDA vs. STAR LANDCRAFT PRIVATE LIMITED, GHAZIABAD

1. The captioned appeals filed by the Revenue are arising from the respective orders of the Ld. Commissioner of Income Tax (Appeals)-3, & Others Noida [“Ld. CIT(A)”] passed under s. 250 of the Income Tax Act, 1961 [the Act] emanating from respective assessment orders passed by the Assessing Officer [AO].

2. The details of additions made in the hands of captioned companies is tabulated as under: S.No. Name of Entity AY Nature of addition Amount(In Rs.) 1. ACE INFRACITY 2022-23 Cash In Hand found u/s 69A 87,25,098.00 DEVELOPERS Disallowance of CSR Expenses u/s 41,72,005.00 PVT LTD. 37(1) Unexplained credit received from 40,00,000.00 Hallow Securities Pvt Ltd. u/s 68 2. ACE MEGA 2019-20 Unsecured loan received from Hallow 40,39,05,000.00 STRUCTURE PVT Securities Pvt Ltd u/s 68 LTD. Cash payment to M/s Gaursons 6,90,00,000.00 Group u/s 69 C 3. ACE RESIDENCY 2021-22 Unsecured loan received from Hallow 12,30,00,000.00 PVT LTD Securities Pvt Ltd u/s 68 Disallowance of Interest paid to M/s 38,75,590.00 Hallow Securities Pvt Ltd u/s 37 4. AJAY REALCON 2020-21 Unsecured loan received from Hallow 8,25,00,000.00 INDIA PVT LTD Securities Pvt Ltd u/s 68 Disallowance of Interest paid to M/s 10,25,032.00 Hallow Securities Pvt. Ltd. u/s 69C 5. ALLURE 2019-20 Unsecured loan received from Hallow 10,26,00,000.00 DEVELOPER PVT Securities Pvt Ltd u/s 68 LTD 2020-21 Unsecured loan received from Hallow 17,74,00,000.00 Securities Pvt Ltd u/s 68 2021-22 Disallowance of Interest paid to 3,53,04,903.00 Hallow Securities Pvt Ltd u/s 37 6. BRIGHT 2021-22 Unsecured loan received from 25,00,000.00 BUILDTECH PVT Dhankalash Distributors Pvt Ltd u/s LTD 68 Unsecured loan received from Hallow 9,60,00,000.00 Securities Pvt Ltd u/s 68 Disallowance of Interest paid to 28,07,855.00 Hallow Securities Pvt Ltd u/s37 7. STAR LANDCRAFT 2020-21 Unsecured loan received from Hallow 64,00,00,000.00 PVT LTD Securities Pvt Ltd u/s 68 Disallowance of Interest paid to 2,83,12,326.00 Hallow Securities Pvt Ltd u/s 69C 2022-23 Unsecured loan received from Hallow 4,50,00,000.00 Securities Pvt Ltd u/s 68 Total 1,83,01,27,809.00 & Others 3. As all the captioned appeals filed by the Revenue are having common issues of addition made u/s 68 of the Act, wherein in all the entities loans received from one company M/s Hallow Securities Pvt Ltd. was doubted and addition was made thus the issues involved in all the appeal are inter-linked, inter-connected. This fact has been admitted by both the parties during the course of hearing before us, therefore, all captioned appeals filed by the Revenue are decided by a common order. We take appeal of the Revenue in for Assessment Year 2020-21 in the case of DCIT vs M/s Allure Developers Pvt. Ltd. as a lead case.

[Assessment Year : 2020-21] M/s. Allure Developers Pvt.Ltd.

5. Against the said order, assessee filed an appeal before Ld. CIT(A) who vide order dated 12.03.2025, partly allowed the appeal of the assessee.

6. Aggrieved by the order of Ld. CIT(A), Revenue is in appeal before the Tribunal by taking following grounds of appeal:-

1. “Whether on facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in deleting the addition of Rs. 17,74,00,000/- made under section 68 r.ws 115BBE of the Income Tax Act, 1961 on amount of bogus unsecured loan allegedly taken from M/s Hallow Securities Pvt. Ltd. without appreciating the fact that the assessee failed to discharge the onus of proving the creditworthiness and genuineness of the transactions appearing in its books of accounts during the course of assessment proceedings.

2. Whether on facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in deleting the addition of Rs. 17,74,00,000/-made under section 68 r.w.s. 115BBE of the Income Tax Act. 1961 on amount of bogus unsecured loan taken from M/s Hallow Securities Pvt. Ltd. without appreciating the fact that the said entity was classified as a confirmed shell company by the & Others Ministry of Finance (Press Release dated 08.06.2018) and categorized as High-Risk Financial Institution by FIU-IND for non- compliance with PMLA and associated rules. It has also been corroborated by the Inspector's report that the company has no physical presence.

3. Whether on facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in deleting the said addition by not considering the facts brought on record by the Assessing Officer during the course of assessment proceeding as well as statements of Shri Ashish Begwani and Shri Vishal Kumar, who have categorically admitted the modus operandi of cash generation and arranging the accommodation entries by the group entities.

4. Whether on facts and circumstances of the case and in law the Ld. CIT(A)-3, Noida has erred in law by admitting the additional evidence filed under Rule-46A of the Income Tax Rules-1962, without referring the reasonable cause which prevented the assessee to produce the same during the assessment proceeding.

5. That the above grounds are without prejudice to each other and appellant craves leave to add or amend any other more ground of appeal as stated above as and when needs for doing so may arise.”

7. Before us, ld. CIT DR submits that the during the course of search, during the search & seizure operation u/s 132 of the Income Tax Act, 1961 carried out at the business premises of the assessee various incriminating documents, books of accounts, loose paper and other material were found and seized. Ld. CIT DR submits that during the assessment proceedings, AO asked the assessee to establish the creditworthiness of the lender company M/s Hallow Securities Pvt. Ltd., in reply to which, assessee furnished various details/documents/ information including statement of bank accounts. As per ld. CIT DR, it is observed by AO that detailed enquiries were made by issuing notices u/s 142(1) of the Act and the & Others assessee had failed to justify the genuineness of the transactions and the sources of the loans.

& Others 12. Ld. CIT DR submits that based on these findings the AO proceeded to examine the sources in the hands of M/s Hallow Securities Pvt Ltd from which the assessee has received funds. Ld. CIT DR submits that after examining the immediate source in the hands of M/s. Hallow Securities, AO reached to the conclusion that besides working as genuine NBFC the said company was doing work of Entry Provider. Ld. CIT DR also drew our attention to the fact that the AO himself has accepted part of the funds received as genuine which were received by it from one company M/s. Teesta Retails Pvt. Ltd., a company of Reliance group. In last, ld. CIT DR submits that after making detailed enquiries with respect to the business activities of M/s. Hallow Securities Pvt. Ltd. AO concluded that the creditworthiness of this company is not established and accordingly her made the addition of loans of Rs. 17,74,00,000/- as unexplained & added u/s 68 of IT Act, 1961. Ld. CIT DR also refer the press release Press Release dated 08.06.2018 wherein the lender company M/s Hallow Securities was categorized as High-Risk Financial Institution by FIU-IND. Ld. CIT DR submits that ld. CIT(A) has deleted the additions made by accepting the additional evidences filed by the assessee without providing the opportunity to the AO to examine those details and without appreciating the fact that assessee has failed to make out the case that it was prevented by sufficient cause in not producing these details before the AO, he thus requested to confirm the additions made by the AO. It is alternatively, requested by ld. CIT DR that the matter may be set aside to the file of the AO for making fresh verification of the details filed by the assessee before the ld. CIT(A) for the first time. He prayed accordingly. Page | 8 & Others 13. Per contra, ld. AR for the assessee vehemently supported the order of the lower authorities and submits that assessee has discharged the burden casted upon it of establishing the identity of the lender company which is not in dispute. Genuineness of the loan transactions was proved as all the loans were transacted through banking channels which fact is neither denied nor controverted by the AO. With respect to the creditworthiness of the lender company, the preliminary argument of the AR is that no incriminating material whatsoever was found during the course of search form the possession of the assessee company or any of its directors and the sole basis of the allegation are the statements recorded of Shri Ashish Begwani and others in the year 2017 where no loan transactions were taken place between the assessee and the lender company thus such statements should not be given any credence.

& Others 15. Regarding the additional evidences filed by the assessee, ld. AR drew our attention to the page 79 of the appellate order wherein the ld. CIT(A) has observed that as many as Nine (9) opportunities were given to the AO through email to file the objections on the issues raised by the assessee however, none of the opportunity was availed by the AO nor any abjection was filed.

That the CIT(A), while disposing of the appeal under section 250(6), conducted 1. independent enquiries from the SFIO as well as Hallow Securities Pvt. Ltd. After due verification, the CIT(A) deleted the additions. A summary of the allegations raised and the findings of the CIT(A) is as under: S.No. Submissions of AR and CIT (A) findings 1. Issues No. 1, (Ground No1 of the lead case):- Financial strength of Hallow Securities Pvt. Ltd.

1. That M/s Hallow Securities Pvt Ltd. enjoys strong creditworthiness, as is evident from its substantial shareholder funds and other financial parameters discussed herein. It is pertinent to note that assessments in the case of Hallow Securities Pvt. Ltd. were completed under section 153C for Assessment Years 2011-12 to 2017-18, wherein the Department has duly accepted the shareholder funds in those assessments.

Table:- B (Shareholder funds ,Total Income and Assessment Orders) AY Shareholder fund ITR Assessment completed Addition made 2011-12 98,33,44,414.00 2510 143(3)/153C 12894/- 2012-13 98,33,46,924.00 71114 143(3)/153C 16678/- 98,34,18,038.00 4510 2013-14 143(3)/153C NIL 98,34,22,548.00 3380 NIL 2014-15 143(3)/153C 98,34,38,025.16 22430 153C read wih 143(3) NIL 2015-16 2015-16 98,34,38,025.16 22430 147 r.w.s 143(3) 3,50,00,00/- 98,79,17,211.24 97,89,010.00 143(3)/153C NIL 2016-17 2016-17 98,79,17,211.24 97,89,010.00 147 r.w.s.143(3) 25,00,000/- 2017-18 98,66,32,998.17 1,17,02,981.00 143(3) 42,00,000/-

Table:-C(Detail of ITR & Shareholder funds from AY 2018-19 to AY 2023-24) AY Amount of Income as per ITR Remarks PB Shareholder fund filed 2018-19 99,28,08,892.00 1,37,10,909.00 17-37 ( ITR, PL & BS) 2019-20 97,47,79,616.00 -54,78,663.00 38-53 ( ITR, PL & BS) 2020-21 98,83,28,731.00 1,41,75,332.00 54-65 ( ITR, PL & BS) 2021-22 96,92,54,108.00 1,73,97,990.00 66-79( ITR, PL & BS) 2022-23 1,01,75,89,907.00 2,49,75,488.00 80-96( ITR, PL & BS) 2023-24 1,02,81,44,525.00 1,06,29,700.00 97-112 ITR, PL& BS) 3. The Ld. AO himself has accepted loans amounting to ₹137 crores as genuine, out of the total loans of ₹304 crores raised, as per the details tabulated in Table No. A above, specifically reflected at Serial No. 7.

4. That the creditworthiness of the company is also evident from the investments made by it in FDRs as well as in mutual funds. The details of the same is tabulated below:- Table D ( Details of Non- Current Investment made by Hallow) FY Investment in Proceeds from redemption Non- Current Remarks PB FDR of Mutual Funds Investment & Others 2017-18 - - 75,52,19,179 Relevant Page No. 28 2019-20 11,50,00,000 - - Relevant Page No. 64 2020-21 6,10,00,000 1,17,05,00,000 - 66-79( ITR, PL & BS) 2021-22 6,50,00,000 25,10,00,000 - 80-96( ITR, PL & BS) 2022-23 11,49,00,000 46,50,00,000 - 97-112 ( ITR, PL& BS) 5. That the companies having sound creditworthiness have made investments in the form of CCDs, namely, Teesta Retails Pvt. Ltd. and Infotel Technologies Pvt. Ltd. These companies possess strong financial standing, and the same has already been accepted by the Ld. AO in the assessment orders of the Ace Group.The details of the same is tabulated below:- Table E ( Details of CCD’s issued by Hallow) FY Name of the Amount Remarks PB Entity to whom CCDs were issued. 2019- Teesta Retails 60,00,00,000 That the AO, in the assessment order of Bright 20 Pvt Ltd Buildtech Pvt Ltd. for assessment year 2021-22, has 2020- Teesta Retails 195,00,00,000 acknowledged that Teesta Retails Private Limited belongs to the Reliance Group, where the Reliance 21 Pvt Ltd Group has made substantial investments.( Refer 2021- Teesta Retails 45,00,00,000 Para 5.13 Page 45 of the AO order ). The AO has 22 Pvt Ltd further stated that Teesta Retails Pvt Ltd. has made Infotel 16,00,00,000 an investment of ₹255 crores in Hallow Technologies SecuritiesPrivate Ltd. Moreover, additional Pvt Ltd information was obtained directly from Teesta Retails Pvt Ltd. by the AO, according to which the total net worth of Teesta Retails is ₹16,654 crores. Therefore, if a company like Teesta Retails Pvt Ltd. is making a substantial investment in Hallow Securities, its creditworthiness cannot be doubted. Total 3,16,00,00,000 6. In order to substantiate the business of NBFC the copy of license issued by RBI were also submitted during the course of assessment proceedings. The copy of the same is enclosed at Page No. 153-156 of the PB.

7. That the Ld. CIT(A) has rightly deleted the addition in respect of theUnsecured loans raised from M/s Hallow Securities Pvt. Ltd.( Refer Page No. 112 of the CIT (A) order of lead case M/s Allure Developers Pvt Ltd. for AY 2020-21).

8. Considering the overall facts and circumstances of the case, once the identity of the lender, its creditworthiness, and the genuineness of the transaction stood established and as such the deletion made by the Ld. CIT(A) is therefore correct and deserves to be upheld.Refer Page no.103 of the CIT(A) order of M/s Allure Developers Pvt Ltd. For AY 2020-21.

& Others 2. Issue No. 2:Poor credentials of shareholders of Hallow Securities Pvt. Ltd. The A.O, at page No. 9 to 17of the order of the lead case M/s Allure Developers Pvt Ltd. AY 2020- 21, has discussed the creditworthiness of the shareholders. However, the Ld. CIT(A) has rightly held that the said issue is not relevant, since there was no increase in share capital during the years under consideration( ReferPara (r), Page No. 77-78of CIT(A) order of lead case M/s Allure Developers Pvt Ltd. AY 2020-21) and, therefore, the same has no bearing on the applicability of section 68. The summary of CIT(A) findings in all the entities is separately enclosed in form of ANNEXURE A Page No 32 of this written submissions.

g. Reliance placed on the statement of Sh. Vishal Kumar, an employee of the Ace Group, has also been misdirected. The Ld. CIT(A) has rightly observed that Vishal Kumar is not an employee of all the companies discussed by the AO..( ReferPara no. (i) Page No. 75-76 of the CIT (A) order of lead case M/s Allure Developers Pvt Ltd. for AY 2020-21) h. That the statement of Shri Vishal Kumar, relied upon by the Ld. AO, was duly rebutted by Shri Pratap Singh Rathi, clarifying that loans were taken from Hallow Securities Pvt. Ltd. and not from Shri Ashish Bhagwani. The said statement, recorded under coercion and challenged before various forums, is neither relevant nor admissible in the absence of corroborative evidence. .( Refer Page No. 112 (para 6 & 7)of the CIT (A) order of lead case M/s Allure Developers Pvt Ltd. for AY 2020-21) i. That it is a matter of record that Ashish Begwani is not a Director of M/s Hallow Securities Pvt. Ltd. and as such its statement cannot be used to determine the genuiness of unsecured loan raised by Ace Group during the assessment years from 2019-20 to 2022-23. .( Refer Page No. 75 para (e) of the CIT (A) order of lead case M/s Allure Developers Pvt Ltd. for AY 2020-21) j. The Ld. CIT(A) has also discussed that standalone statements without any corroborative evidence cannot be used for making additions, and in support, various judicial precedents were relied upon, ultimately deciding the issue in favour of the appellant. .( Refer Page No. 92 of the CIT (A) order of lead case M/s Allure Developers Pvt Ltd. for AY 2020-21) 4. Issue No. 4( Ground No.2 of the lead case):Reliance upon press release of Ministry of Finance dated 08.06.2018 (F/A: 2.1) based on SFIO and CBDT data under "confirmed list" of shell companies and treating the M/s Hallow Securities Pvt Ltd. as a shell entity.

1. The Ld. AO has placed heavy reliance on the CBDT press release by alleging that Hallow Securities Pvt. Ltd. is a shell company. That the Ld. CIT(A) has duly considered the CBDT Press Release dated 08.06.2018 and has reproduced the same while disposing of the appeal. The same is reproduced at pages 69–71 and 82–84 of the CIT(A) order in the lead case of M/s Allure Developers Pvt. Ltd. (AY 2020-21). An entity-wise summary with relevant page references is enclosed at page 33 as Annexure- B of this Written Submission. The CIT(A) had specifically flagged this issue and, in order to verify the facts beyond the press release, resorted for making an independent enquiry from the SFIO u/s 250(4).The inquiry report as received from SFIO is reproduced as under:- Serious Fraud Investigation Office Government of India SFIO/23.01.2025/F. No. SFIO/MRAU/0004/2021/1/30115/2025 23.01.2025 To Dr. Girish Bali Commissioner of Income Tax (Appeals) – 3 A.R.T.O. Complex, Second Floor Sector – 33, Noida – 201301 Subject: Request for Information – Regarding Sir, With reference to your letter no. CIT(A)-3/Noida/2024-25/220 dated 20.01.2025 regarding Hallow Securities Private Limited, it is to inform you that no investigation is initiated / pending / disposal against the captioned company at SFIO.

& Others Yours faithfully, (Munish Garg)Sr.Asstt. Director (MRAU) 3.The information received was forwarded to the AO for comments(Refer Page No 71 para 5.9 and 5.10 of the CIT(A) of the lead case M/s Allure Developers Pvt Ltd. for AY 2020-21 ). The SFIO report at (PB page 157 of the PB)clearly records that no proceedings are pending against Hallow Securities Pvt. Ltd. Despite the enquiry letter and report being shared, the AO failed to respond. His silence shows that the allegation based merely on the CBDT press release lacks evidentiary basis and cannot sustain the addition. 4.The company has duly filed all statutory returns with the ROC and RBI in a timely manner, which was independently confirmed by the CIT(A) through inquiry from Hallow Securities. The copy of the letter submitted by Hallow Securities in response to is enclosed at PB page 370-374.

Issue No. 5 Ground No. 4:- :Inquiry made by CIT(A) from Hallow Securities Pvt. Ltd.u/s 250(4) 1)The Ld. CIT(A), while deleting the addition, has conducted an independent enquiry under section 250(4) of the Act from Hallow Securities Pvt. Ltd. The reply received from Hallow Securities was duly forwarded to the Assessing Officer for comments. Hence, it cannot be treated as admission of additional evidence, since the same was independently called for by the Ld. CIT(A), and adequate opportunity was provided to the Assessing Officer.(Refer Page 80 of CIT(A)) The Ld. CIT(A) has also duly verified the ‘source of source’ by applying the same methodology as was followed by the Assessing Officer. Since the Assessing Officer failed to appropriately verify the ‘source of source’ before making the addition in respect of the loans advanced to the appellant, the conclusion drawn by the Assessing Officer is erroneous and unsustainable in law. The inquiry replies received from Hallow Securities are placed at Page Nos. 286–374 of the Paper Book. PB CIT(A) order Copy of the reply in respect of the inquiry conducted by CIT(A) from Hallow Securities has been duly furnished and shared with both the Assessing Officer and the appellant.” Allure Developers Pvt. Ltd. for AY 2019-20 286-293 48-52,57-62 Allure Developers Pvt. Ltd. for AY 2020-21 294-305 48-56,64-69 Ace Residency Pvt. Ltd. for AY 2021-22 306-314, 326-358 56-62,70-74 Ace Mega Structures Pvt. Ltd. (AY 2019-20), 315-316, 326-358 108 to 109 M/s Star landCraft Pvt. Ltd (AY 2020-21) 317-322 56-60,63-95 M/s Star landCraft Pvt. Ltd(AY 2022-23), 326-358 5-9,12-43 Bright Buildtech Pvt. Ltd(AY 2021-22), 323-358 99-130 Ajay Realcon India Pvt. Ltd.(AY 2020-21) 359-374 55-62, 71-75 2) In enquiry proceedings Hallow Securities Pvt. Ltd., submitted copies of its bank accounts explaining the immediate credits, along with the relevant ledger accounts from which such credits had originated. In addition, loan agreements, confirmed copies of accounts, audit reports, and copies of income-tax returns were also furnished to establish the genuineness of the transactions. All these documents were duly forwarded to the AO and the AR for their comments. 3) The assessee has also submitted a rejoinder wherein it was explained that all the loans extended to the appellant companies were primarily out of the repayments of advances received by Hallow Securities, which had originally been advanced by it in earlier years.The aforesaid forms an integral part of the CIT(A)’s order (refer pages 58–64 of the order in the lead case of M/s Allure Page | 15 & Others Developers Pvt. Ltd. for AY 2020-21). In respect of other cases, reference may be made to Annexure-C at Page No.34 of this Written Submission. 4) After verification of facts It was observed by Ld. CIT(A) that in all cases pertaining to the Ace Group, the loans advanced to the appellant were sourced from immediate credits received in the bank account of Hallow Securities, representing refunds of advances given by Hallow Securities to other concerns. Thus, the amounts were repayments of earlier advances and not out of any fresh unsecured loans raised. The summary of same is tabulated as under:- A Name of CIT(A) Additions Source out Source out Sourced Sourced Y entity order sustained realization of Fresh from from of Unsecured Mutual receipt on advances loan raised Fund DD given in by Hallow Redempti Cancellati earlier securities on on years Pvt Ltd. 1 ACE Page 40,39,05,0 37,75,00,0 5,00,00,0 9 MEGA No.145 00.00 00.00 00.00 - STRUCTU (Para 2 RE PVT No.1) 0 LTD.(Pg 126-137 of CIT (A) order) 1 ALLURE Page 10,26,00,0 10,26,00,0 NIL 9 DEVELOP No.101 00.00 00.00 - ER PVT (Para 2 LTD(Pg No.1) 0 88-93 of CIT (A) order) 2 AJAY Page 8,25,00,00 7,00,00,00 1,25,00,00 0 REALCON No.122 0.00 0.00 0.00 - INDIA (Para 2 PVT No.1) 1 LTD(Pg 102-114 of CIT (A) order) 2 ALLURE Page 17,74,00,0 17,74,00,0 NIL 0 DEVELOP No.111( 00.00 00.00 - ER PVT Para 2 LTD(Pg No.1) 1 95-102 of CIT (A) order) 2 STAR Page 64,00,00,0 48,50,00,0 15,50,00,0 0 LANDCRA No.166 00.00 00.00 00.00 - Page | 16 & Others FT PVT (Para 2 1 LTD(Pg No.1) 139-158 of CIT (A) order) 2 ACE Page 12,30,00,0 9,30,00,00 3,00,00,00 1 RESIDENC No.117 00.00 0.00 0.00 - Y PVT (Para 2 LTD(Pg No.1) 2 102- 108of CIT (A) order) 2 BRIGHT Page 9,60,00,00 8,60,00,00 1,00,00,00 1 BUILDTEC No.183 0.00 0.00 0.00 - H PVT (Para 2 No.1) LTD(Pg 2 164-174 of CIT (A) order) 2 STAR Page 4,50,00,00 1,50,00,00 50,00,000. 1,00,00,00 1,50,00,00 2 LANDCRA No.166 0.00 00 0.00 0.00 0.00 - FT PVT (Para 2 No.1) LTD(Pg 3 122-128 of CIT (A) order) 2 ACE NA 40,00,000. (Not an unsecured loan merely a journal entry) 2 INFRACI 00 - TY 2 3 DEVELO PERS PVT LTD. (Pg 19-23 of CIT (A) order) 5) Furthermore, in some cases where unsecured loans raised by Hallow Securities, were ultimately advanced to the appellant companies (ACE Group). That the CIT(A) also verified the creditworthiness of such lending companies. The summary of the said verification stands tabulated as under: - Name of A.Y. CIT(A) Source Entities CIT(A) Findings entities in order of Unsecured Ace Group Loans Raised by Hallow Securities for Financing Ace Group & Others ACE MEGA 2019- 132to M/s 1. The CIT observed that the company’s STRUCTURE 20 134 Dhankalash shareholder funds stand at ₹79 crore and PVT LTD. Distributors that it has significant non-current Pvt Ltd. investments amounting to ₹34 Crore. It was further noted that in the assessment year 2021-22, the same company filed its return showing total income of ₹8.68 crore and has also made investments in several listed companies.” AJAY 2020- 109 to M/s Drizzle The CIT(A), at page number 109, has REALCON 21 110 Overseas noticed that the funds advanced to the INDIA PVT appellant were raised by Hallow LTD Securities Pvt. Ltd. from Drizzle Overseas which were forwarded to appellant. It was observed that in the case of the amount of unsecured loans from Drizzle Overseas in assessment year 2021-22, the addition was made in the hands of Hallow Securities Private Ltd. Accordingly, if any addition regarding the funds raised by Hallow Security from Drizzle Overseas for the year under consideration is required, it should be made in the hands of Hallow Security and not in the hands of the appellant. The ‘source of source’ theory was not applicable for the relevant assessment year. 110 to M/s “On identical facts as discussed in the 114 Dhankalash preceding case.” Distributors Pvt Ltd. STAR 2020- 151 HFCL Ltd. The CIT(A), at page 151 of the order, LANDCRAFT noted that the AO has taken a 21 PVT LTD contradictory stance on funds from HFCL. At page 70 of the assessment order, the AO accepted credits from Dhankalash Distributors Pvt. Ltd. as sourced from HFCL, thereby acknowledging HFCL’s genuineness and financial capacity. If HFCL is genuine in group assessments and other transactions of the appellant, the same treatment must equally apply to funds received via Hallow Securities Pvt. Ltd. Hence, the addition on account of such credit is unjustified. 151- M/s “On identical facts as discussed in the Dhankalash preceding case.” 152 Page | 18 & Others Distributors Pvt Ltd. The CIT(A), at page 152-154 of the order 152- M/s noted that the lender’s ITRs were 154 Parmesh furnished, and its credibility is evidenced Finlease by Teesta Retails Pvt. Ltd. (considered part of the Reliance Group) investing Rs. 20 crores, which remained outstanding as on 31.03.2020. Balance sheets reflect Rs. 16 crores fully convertible debentures, investments in Network 18, TV 18 Broadcast and Media Matrix Worldwide, and regular revenues of Rs. 9.85 crores (2016-17), Rs. 11.98 crores (2017-18) and Rs. 9.5 crores (2018-19), thereby affirming the strong financial standing of Parmesh Finlease Ltd. 157- Pioneer Hallow Securities Pvt. Ltd. raised a fresh unsecured loan from Pioneer Dealtrade 158 Deal trade Pvt. Ltd. and advanced it to the appellant. Private It is also a matter of record that the AO Limited has already added credits in the hands of Hallow Securities Pvt. Ltd., though the funds advanced to the appellant were excluded. As the assessment order does not specify the entities whose credits were taxed, a query letter dated 03.04.2025 has been issued in the pending appeal of Hallow Securities Pvt. Ltd. (AY 2020-21) to ensure that credits from Pioneer Dealtrade Pvt. Ltd. are taxed appropriately in its hands. ACE 2021- 108 MN Ventures The CIT (A) at Page no. 108 noted that the RESIDENCY 22 Private AO added Rs. 10 crores in the hands of PVT LTD Limited Hallow Securities Pvt. Ltd. for a loan raised from MN Ventures Pvt. Ltd., while the same funds advanced to the appellant were again included in its addition of Rs. 12.3 crores. This results in double addition, making any further questioning of the source unwarranted and uncalled for. BRIGHT 2021- 169-170 M/s “On identical facts as discussed in the BUILDTECH 22 Dhankalash preceding case.” PVT LTD Distributors Pvt Ltd.

& Others STAR 2022- 126-128 Lookline The CIT (A) at Page no. 126-128 of the LANDCRAFT 23 Tradelinks order has noted that the lender reported PVT LTD Pvt Ltd. losses including Rs. 19.87 crores in AY 2020-21, it had Rs. 70.25 crores share premium, revenues of Rs. 10.19 crores, substantial investments of Rs. 14.50 crores, and inventories of Rs. 17.73 crores with holdings in reputed listed and private entities.That the CIT(A) pointed out that the source of source is not applicable in the hands of the appellant as the amendment was brought in statue from Finance Act 2022 which is not applicable during the year under consideration. As it was noticed by the CIT(A) that the loan was raised by Hallow Securities and the creditworthiness of same required to be examined in the hands of Hallow Securities. 6) Moreover, the Ld. CIT(A) has also categorically observed that once the bank credits have already been subjected to tax in the hands of the flagship company, i.e., Hallow Securities Pvt. Ltd., there remains no requirement or justification for remaking the same addition in the hands of the borrower company.( Refer Para No. 2 Page No.111 of the CIT(A) order of M/s Allure Developers Pvt Ltd. for AY 2020-21) 7) It is a matter of record that the entire bank credits in question have already been considered and added in the hands of Hallow Securities Pvt. Ltd. Accordingly, a second addition in the hands of the appellant would amount to double taxation of the very same sum, which is impermissible in law. That the impugned additions were not required to be made in the hands of the appellant, as the “source of source” theory is not applicable for the years under consideration, the same having been made applicable only from Assessment Year 2023–24. In this regard reliance is being placed upon following judicial pronouncements:- i. 2025 (7) TMI 1285 - ITAT DELHI ACIT, ARA Centre, DCIT, New Delhi Versus Filatax India Limited And (Vice-Versa)[Refer Page No. 1-37 of Case Law PB] ii. [2010] 189 Taxman 141 (Rajasthan) HIGH COURT OF RAJASTHAN Labh Chand Bohra * v. Income-tax Officer[Refer Page No. 38-42 of Case Law PB] iii. [2003] 127 Taxman 523 (Gujarat) HIGH COURT OF GUJARAT Deputy Commissioner of Income-tax v. Rohini Builders[Refer Page No. 43 of Case Law PB] iv. [2005] 147 TAXMAN 448 (ALL.)HIGH COURT OF ALLAHABAD Commissioner of Income- tax*v.Jauharimal Goel[Refer Page No. 44-48 of Case Law PB] v. Gaurav Triyugi Singh vs. Income Tax Officer 24(3)(1), Mumbai [2020] 121 taxmann.com 86 (Bombay)/[2020] 423 ITR 531 (Bombay)[22-01-2020] [Refer Page No. 49-51 of Case Law PB] vi. Assistant Commissioner of Income-tax vs. Radha Madhav Developers [2024] 165 taxmann.com 578 (Nagpur - Trib.)[29-07-2024] [Refer Page No. 52-75 of Case Law PB] & Others Issue No. 6(Ground No 1 of the lead case):No Comments on repayment of loan The Ld. AO, while making the addition, failed to appreciate that all the loans and advances received by the group were duly repaid either in the same year or in the subsequent years. It is a settled position of law where the loans have been repaid, no addition can be made under section 68, particularly when in the years of repayment, no adverse inference has been drawn by the Department. It is a matter of record that in the subsequent years no such adverse finding has been recorded in relation to the repayment of these loans. Therefore, the addition as made by the AO is bad in law, and the Ld. CIT(A) has rightly deleted the same. The summary of loan repayments is tabulated as under: - Name of Entity Remarks PB ACE MEGA STRUCTURE P.LTD. 158-164 ALLURE DEVELOPER PVT LTD 165-170 AJAY REALCON INDIA PVT LTD 171-174 STAR LANDCRAFT PVT LTD 175-178 ACE RESIDENCY PVT LTD 179-188 BRIGHT BUILDTECH PVT LTD 189-190 ACE INFRACITY DEVELOPERS PVT LTD.(Based on Journal Entry) 191-195

2. At the outset, it is respectfully submitted that the Ld. CIT(A) has rightly deleted the addition made under section 68 of the Act, after due verification of facts and evidences. a. Compliance with Section 68 requirements: The assessee had duly discharged its onus under section 68 by establishing the identity of the creditors, their creditworthiness, and the genuineness of the loan transactions. Complete documentary evidences were furnished, including bank statements, ledger accounts, loan agreements, confirmations, ITRs, and audited financials of the lending entities. The Ld. CIT(A), after independent enquiry, recorded a categorical finding that all the ingredients of section 68 stood fulfilled.( Refer Page No. 103-104 of the CIT(A) order of M/s Allure Developers Pvt Ltd. for AY 2020-21). In this regard reliance is being placed upon the following judicial pronouncements:- i. Principal Commissioner Of Income Tax-4 Vs. Hi-Tech Residency (P.) Ltd. [2018] 96 Taxmann.Com 403 (Sc)/[2018] 257 Taxman 335 (Sc)[19-07-2018] [Refer Page No. 76 of Case Law PB] ii. 1986 (3) Tmi 3 - Supreme Court Commissioner Of Income-Tax, Orissa Versus Orissa Corporation Pvt. Limited. [Refer Page No. 77-80 of Case Law PB] iii. [2024] 169 Taxmann.Com 724 (Ahmedabad - Trib.) – Abhaykumar Sevantilal Sanghavi V. Acit, Itat Ahmedabad, 13-12-2024. [Refer Page No. 81-93 of Case Law PB] iv. [2023] 154 Taxmann.Com 432 (Gujarat) – Pcit V. Hareshkumar Manilal Somaiya, Gujarat Hc, 03-05-2023. [Refer Page No. 94-96 of Case Law PB] v. [2021] 131 Taxmann.Com 158 (Chennai - Trib.)/[2022] 96 Itr(T) 657 (Chennai - Trib.)/[2021] 191 Itd 548 (Chennai - Trib.) – K.P. Manish Global Ingredients (P.) Ltd. V. Acit, Itat Chennai, 09-06-2021. [Refer Page No. 97-101 of Case Law PB] Page | 21 & Others vi. [2023] 151 Taxmann.Com 403 (Surat - Trib.)/[2023] 201 Itd 404 (Surat - Trib.) – Ito V. Mega Collections (P.) Ltd., Itat Surat, 17-04-2023. [Refer Page No. 102-114 of Case Law PB] vii. [2023] 148 Taxmann.Com 26 (Delhi)/[2023] 291 Taxman 606 (Delhi)/[2023] 455 Itr 664 (Delhi) – Pcit V. Enrich Agro Food Products (P.) Ltd., Delhi Hc, 23-12-2022. [Refer Page No. 115-118 of Case Law PB] viii. [2018] 96 Taxmann.Com 402 (Delhi)/[2018] 257 Taxman 390 (Delhi) – Pcit-4 V. Hi- Tech Residency (P.) Ltd., Delhi Hc, 07-07-2018. [Refer Page No. 119-120 of Case Law PB] ix. [2015] 58 Taxmann.Com 226 (Madras)/[2015] 232 Taxman 197 (Madras)/[2015] 373 Itr 115 (Madras) (Mag.) – Cit V. Mark Hospitals (P.) Ltd., Madras Hc, 03-12-2014. [Refer Page No. 121-124 of Case Law PB] x. [2013] 40 Taxmann.Com 285 (Allahabad)/[2014] 220 Taxman 138 (Allahabad) – Cit- Ii, Lucknow V. Shalimar Buildwell Pvt. Ltd., Allahabad Hc, 25-10-2013. [Refer Page No. 125-127 of Case Law PB] xi. [2022] 138 Taxmann.Com 21 (Calcutta)/[2022] 287 Taxman 194 (Calcutta) – Pcit V. R.M. Commercial (P.) Ltd., Calcutta Hc, 09-02-2022. [Refer Page No. 128-130 of Case Law PB] xii. [2020] 118 Taxmann.Com 452 (Kolkata - Trib.)/[2020] 83 Itr(T) 241 (Kolkata - Trib.) – Mani Square Ltd. V. Acit, Itat Kolkata, 06-08-2020. [Refer Page No. 131-202 of Case Law PB] xiii. [2018] 90 Taxmann.Com 424 (Delhi - Trib.)/[2018] 62 Itr(T) 512 (Delhi - Trib.) – Acit, Central Circle-17 V. Shyam Indus Power Solutions (P.) Ltd., Itat Delhi, 29-01-2018. [Refer Page No. 203-260 of Case Law PB] xiv. [2021] 133 Taxmann.Com 173 (Gujarat)/[2022] 284 Taxman 406 (Gujarat) – Pcit V. Gopal Heritage (P.) Ltd., Gujarat Hc, 13-09-2021. [Refer Page No. 261-264 of Case Law PB] xv. [2014] 42 Taxmann.Com 473 (Gujarat)/[2014] 222 Taxman 125 (Gujarat) (Mag.) – Cit- 1 V. Apex Therm Packaging (P.) Ltd., Gujarat Hc, 20-12-2013. [Refer Page No. 265-267 of Case Law PB] xvi. Commissioner Of Income-Tax, Ahmedabad - Iv Vs. Sachitel Communications (P.) Ltd. [2014] 51 Taxmann.Com 205 (Gujarat)/[2014] 227 Taxman 219 (Gujarat) (Mag.)[21- 06-2014]. [Refer Page No. 268-271 of Case Law PB] b. No incriminating material found during search: It is further a matter of record that no incriminating material was found during the course of search which could support the allegation of the A.O that the assessee had obtained accommodation entries or bogus loans. The addition has been made merely on the basis of presumptions and reliance on the CBDT press release, without any corroborative evidence. Such an approach is contrary to settled principles of law..( Refer Page No. 75para ( f ) of the CIT(A) order of M/s Allure Developers Pvt Ltd. for AY 2020-21). In this regard reliance is being placed upon following judicial pronouncements:-

& Others i. Deputy Commissioner of Income-tax vs. U. K. Paints (Overseas) Ltd. [2023] 150 taxmann.com 108 (SC)/[2023] 294 Taxman 72 (SC)/[2023] 454 ITR 441 (SC)[25-04- 2023]. [Refer Page No. 272-273 of Case Law PB] ii. 2025 (7) TMI 1285 - ITAT DELHI ACIT, ARA Centre, DCIT, New Delhi Versus Filatax India Limited And (Vice-Versa). [Refer Page No. 274-310 of Case Law PB] iii. Commissioner of Income-tax vs. Dilbagh Rai Arora [2019] 104 taxmann.com 371 (Allahabad)/[2019] 263 Taxman 30 (Allahabad)[15-03-2019]. [Refer Page No. 311-315 of Case Law PB] iv. Principal Commissioner of Income-tax vs. Agson Global (P.) Ltd. [2022] 134 taxmann.com 256 (Delhi)/[2022] 286 Taxman 519 (Delhi)/[2022] 441 ITR 550 (Delhi)[19-01-2022]. [Refer Page No. 316-341 of Case Law PB] v. Principal Commissioner of Income-tax (Central) vs. K.R. Pulp and Papers Ltd. [2025] 175 taxmann.com 278 (Delhi)[31-05-2025]. [Refer Page No. 342-354 of Case Law PB] vi. [2024] 162 taxmann.com 792 (Allahabad) – PCIT v. Anshika Consultants (P.) Ltd., Allahabad HC, 25-04-2024. [Refer Page No. 355-358 of Case Law PB] vii. [2023] 148 taxmann.com 94 (Calcutta) – PCIT v. Overtop Marketing (P.) Ltd., Calcutta HC, ITAT/243/2022, 03-01-2023. [Refer Page No. 359-360 of Case Law PB] viii. [2024] 159 taxmann.com 604 (Allahabad) – DCIT v. Paswara Papers Ltd., Allahabad HC. [Refer Page No. 361-363 of Case Law PB] ix. [2019] 111 taxmann.com 89 (Delhi - Trib.) – Prime Comfort Products (P.) Ltd. v. ACIT, ITAT Delhi. [Refer Page No. 364-374 of Case Law PB] x. [2023] 154 taxmann.com 45 (SC)/[2023] 294 Taxman 602 (SC) – PCIT v. Jay Ace Technologies Ltd., Supreme Court, 28-07-2023. [Refer Page No. 375-376 of Case Law PB] xi. [2022] 143 taxmann.com 423 (Orissa)/[2023] 290 Taxman 281 (Orissa) – PCIT v. E- City Projects Lucknow (P.) Ltd., Orissa HC, 05-07-2022. [Refer Page No. 377-379 of Case Law PB] xii. [2014] 45 taxmann.com 203 (Rajasthan)/[2014] 224 Taxman 87/366 ITR 217/267 CTR 396 (Rajasthan) – CIT, Ajmer v. Jai Kumar Bakliwal, Rajasthan HC, 06-02-2014. [Refer Page No. 380-386 of Case Law PB] xiii. [2024] 169 taxmann.com 18 (Mumbai - Trib.) – Rajuram Savaji Purohit v. ITO, ITAT Mumbai (SMC). [Refer Page No. 387-393 of Case Law PB] xiv. [2023] 154 taxmann.com 595 (Ahmedabad - Trib.)/[2023] 105 ITR(T) 186 (Ahmedabad - Trib.) – DCIT, Central v. Heaven Associates, ITAT Ahmedabad, 24-03-2023. [Refer Page No. 394-413 of Case Law PB] c. Repayment of loans/ advances: All the loans/ advances received by the assessee group have been duly repaid either in the same year or in subsequent years. The repayments stand duly recorded in the regular books of accounts, and in the years of repayment, no adverse inference has been drawn by the Department. It is a settled proposition that once loans have been repaid, no addition under section 68 can be sustained in the year of receipt.( Refer Page No. 109 of the CIT(A) order of M/s Allure Developers Pvt Ltd. for AY 2020-21).In this regard reliance is being placed on the following judicial pronouncements:-

& Others i. Income-tax Officer vs. Kayathwal Estate (P.) Ltd. [2022] 139 taxmann.com 317 (SC)/[2022] 287 Taxman 385 (SC)/[2022] 442 ITR 507 (SC)[14-02-2022]. [Refer Page No. 414-419 of Case Law PB] ii. [2024] 164 taxmann.com 162 (Bombay) HIGH COURT OF BOMBAY Principal Commissioner of Income-tax v. Bairagra Builders (P.) Ltd. [Refer Page No. 420-422 of Case Law PB] iii. [2023] 156 taxmann.com 491 (Gujarat) HIGH COURT OF GUJARAT Principal Commissioner of Income-tax (Central) v. Dharmesh Padamshibhai Patel. [Refer Page No. 423-427 of Case Law PB] iv. [2023] 148 taxmann.com 372 (Gujarat) HIGH COURT OF GUJARAT Principal Commissioner of Income-tax (Central), Surat v. Neotech Education Foundation. [Refer Page No. 428-432 of Case Law PB] v. [2024] 164 taxmann.com 764 (Gujarat) HIGH COURT OF GUJARAT Principal Commissioner of Income-tax v. Merrygold Gems (P.) Ltd. [Refer Page No. 433-437 of Case Law PB] vi. [2022] 145 taxmann.com 27 (Gujarat) HIGH COURT OF GUJARAT Principal Commissioner of Income-tax v. Ambe Tradecorp (P.) Ltd. [Refer Page No. 438-440 of Case Law PB] vii. [2023] 156 taxmann.com 75 (Gujarat) HIGH COURT OF GUJARAT Principal Commissioner of Income-tax v. Ojas Tarmake (P.) Ltd. [Refer Page No. 441-446 of Case Law PB] d. Submission in respect of Ground No. 4 raised by department regarding Independent enquiry made by CIT(A) in the case of Allure Developers Pvt Ltd. AY 2020-21 being a lead case. The Ld. CIT(A), exercising powers u/s 250(4), conducted independent enquiries from SFIO ( Refer Page 70 of CIT(A)) and M/s Hallow Securities Pvt. Ltd., which confirmed that the lenders were regularly assessed to tax, had made all statutory filings with ROC and RBI, and no proceedings were pending against them. During the enquiry, M/s Hallow Securities furnished only the documents called for under section 250(4). This issue has been addressed by the CIT(A) in the order u/s 250(6) in the case of M/s Allure Developers Pvt. Ltd., AY 2020-21 (pp. 79–80). Accordingly, the ground raised by the department regarding violation of Rule 46A is not relevant, particularly as all enquiry findings were forwarded to the AO for comments, and no objections were raised (Ref: CIT(A) order, M/s Allure Developers Pvt. Ltd., AY 2020-21, p. 79). e. Submissions to Ground No. 3 raised by department in the lead case M/s Allure Developers Pvt Ltd. for AY 2020-21 in respect of Statement relied upon by AO: It is respectfully submitted that the statement of Shri Ashish Begwani, as relied upon by the department, holds no relevance in the present matter since it pertains to a search carried out in 2016, whereas the appellant had no dealings during that period. Furthermore, no statement of Shri Ashish Begwani has been recorded during the present search proceedings. Therefore, reliance on an outdated statement, in the absence of any corroborative evidence, cannot form a valid basis for making the addition.

& Others Moreover, the statement of Sh. Vishal Kumar, as relied upon by the Ld. AO, has no evidentiary value since he merely stated that the advances against sales or own money against sales was received and the same was used for granting loans. It is a matter of record that the AO has not made any addition in respect of such sales, nor was any evidence found during search to suggest that the loans were raised by exchanging cash. Furthermore, the statement of Sh. Vishal Kumar was duly rebutted by Sh. Pratap Singh Rathi, Director of the assessee company, whose clarification was placed on record. It is also significant to note that Sh. Vishal Kumar is not an employee of all the companies against whom the loan additions have been made.(Ref: CIT(A) order in M/s Allure Developers Pvt. Ltd., AY 2020-21, Page 88-92). It is a settled law that no addition can be made solely based on statement in the absence of any corroborating material. Courts have consistently held that uncorroborated statements, without supporting documents or seized material, do not constitute valid evidence for making an addition under section 68 or any other provision of the Act.  [2024] 161 taxmann.com 813 (SC) SUPREME COURT OF INDIA Principal Commissioner of Income-tax (Central) v. Dwarka Prasad Aggarwal. [Refer Page No. 447-448 of Case Law PB]  2015 ] 53 taxmann.com 306 (Andhra Pradesh) HIGH COURT OF ANDHRA PRADESH Commissioner of Income-tax-II, Hyderabad v. Naresh Kumar Agarwal. [Refer Page No. 449-454 of Case Law PB]  [2016] 74 taxmann.com 35 (Madras) HIGH COURT OF MADRAS Commissioner of Income- tax, Tiruchirapalli v. Smt. S.Jayalakshmi Ammal. [Refer Page No. 455-462 of Case Law PB]  [2023] 156 taxmann.com 346 (Gujarat) HIGH COURT OF GUJARAT Principal Commissioner of Income-tax (Central) v. Naresh Nemchand Shah. [Refer Page No. 463-466 of Case Law PB]  2024] 164 taxmann.com 162 (Bombay) HIGH COURT OF BOMBAY Principal Commissioner of Income-tax v. Bairagra Builders (P.) Ltd. [Refer Page No. 467-469 of Case Law PB] Annexure-A No increase in the share capital of Hallow Securities Pvt. Ltd. and as such the creditworthiness of Shareholders for the concerned years is not relevant AY Name of the Entity Relevant Page No. of Relevant Page No. of AO order CIT(A) order 20-21 AJAY REALCON INDIA PVT LTD Internal Page No. 10 to Para r (Page 83) 18 of the order 20-21 ALLURE DEVELOPER PVT LTD Internal Page No. 9 to Para r ( Page 77-78) 17 of the order 20-21 STAR LANDCRAFT PVT LTD Internal Page No. 10 to Para r (Page 120) 22 of the order 21-22 ACE RESIDENCY PVT LTD Internal Page No. 14 to Para r ( Page 88) 22 of the order 21-22 BRIGHT BUILDTECH PVT LTD Internal Page No. 8 to Para q( Page 143) 15 of the order 22-23 STAR LANDCRAFT PVT LTD(ACE Residency Internal Page No. 11 to Para r ( Page 104) and other Co. were merged) 19 of the order & Others Annexure-B Comments of CI(A) on AO’s reliance upon CBDT Press Release by making Independent Enquiry from SFIO u/s 250(4) AY Name of the Entity Relevant Page No. of AO order Relevant Page No. of CIT(A) order 19-20 ACE MEGA STRUCTURE P.LTD. 9-10 112-113 19-20 ALLURE DEVELOPER PVT LTD 62-64 76-77 20-21 AJAY REALCON INDIA PVT LTD 75-77 90-91 20-21 STAR LANDCRAFT PVT LTD 60-61 125-127 21-22 ACE RESIDENCY PVT LTD 74-76 89-91 21-22 BRIGHT BUILDTECH PVT LTD 131 151-152 22-23 STAR LANDCRAFT PVT 44 108-110 LTD(ACE Residency and other Co. were merged)

Annexure-C Rejoinder filed by the Assessee in response to the inquiry conducted by the Ld. CIT(A) from M/s Hallow Securities Pvt. Ltd. AY Name of the Entity Relevant Page No. of CIT(A) order 19-20 ACE MEGA STRUCTURE P.LTD.( forming part of written 74-84 submission) 19-20 ALLURE DEVELOPER PVT LTD 53-57 20-21 AJAY REALCON INDIA PVT LTD 63-69 20-21 STAR LANDCRAFT PVT LTD 96-113 21-22 ACE RESIDENCY PVT LTD 63-69 21-22 BRIGHT BUILDTECH PVT LTD 131-136 22-23 STAR LANDCRAFT PVT LTD(ACE Residency and other Co. 74-82 were merged) (forming part of written submission)

A search action us/ 132 was carried out on ACE group of cases on 28.07.2021 and further on 04.01.2022. During the year assessee received loan of Rs. 26,74,00,000/- from a company M/s Hallow Securities Pvt. Ltd. which is a NBFC. The AO examined the genuineness of loan and after considering the financials of the lender company M/s Hallow Securities Pvt. Ltd., observed its financial position is not satisfactory to grant such a huge loan to the assessee.

The seized incriminating material have to pertain to the AY in question and have co-relation, document-wise, with the AY. This requirement u/s 153C is essential and becomes a jurisdictional fact. It is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in S.153A.

Standalone statements without corroborative evidence: “The above, discussion reveals that the statements of Sh. Vishal Kumar and Sh. Nishant Chaijar reproduced by the AO in the assessment order are without corroborative evidence. The statements of the Directors of the Hallow Securities Pvt. Ltd. and the ACE Group le. Sh. Prakash Kumar Jha and Sh. Pratap Singh Rathi which were contrary to the statements of Nishant Chajjar and Vishal Kumar have not been reproduced in the assessment order, It is important for the Assessing Authority to analyze all the evidences available before him. Moreover, the statement of Nishant Chajjar makes no reference of advancing of bogus loan to the appellant meaning thereby that, even if, Hallow Securities Pvt. Ltd. was engaged in providing & receiving bogus loans apart from the regular business of NBFC (being a company of mixed conduct as established by the AO), still documentary evidence needed to be there to prove that funds advanced to the appellant were ingenuine. Such documentary evidence is conspicuously absent in the assessment order despite the fact that both the assessee group and M/s. Hallow Securities Pvt. Ltd. were searched. It is pertinent to mention here that the standalone statement relied upon by the Assessing Officer cannot itself be considered as sufficient evidenceto reach the conclusion as drawn by the AO in the assessment order, moreso, for the reason that the said statements were equally rebutted by the other director of the appellant company. It is a well- settled principle of law that a statement unsupported by corroborative documentary evidence lacks evidentiary value. In the present case, the AO has made the addition solely based on the statement of Sh. Vishal Kumar without producing any documentary evidence to substantiate the claim that cash was exchanged against the loans raised whereas, the director of the company had refuted the said allegation. On the above issue, the Hon'ble Supreme Court of India in the case of Principal Commissioner of Income-tax (Central) vs. Dwarka Prasad Aggarwal reported at [2024] 161 taxmann.com 813 (SC) has held as under: "Section 68 of the Income-tax Act, 1961 - Cash credit (Illustrations) - High Court by impugned order held that where Page | 30 & Others Assessing Officer solely based on statements of Directors recorded during a search operation conducted under section 132 on assessee, made addition under section 68 without probing deeper into income-tax returns of creditor companies and without scrutinizing documents furnished by assessee to prove genuineness of such credits, impugned addition was to be set aside - Whether SLP filed by revenue against impugned order was to be dismissed - Held, yes [Para 1] [In favour of assessee]" Further, the judgment of Hon'ble High Court of Andhra Pradesh in the case of Commissioner of Income-tax-ll, Hyderabad vs. Naresh Kumar Agarwal reported at [2015] 53 taxmann.com 306 (Andhra Pradesh) has held as under: Where in absence of any incriminating material etc., found from premises of assessee during course of search, statement of assessee recorded under section 132(4) would not have any evidentiary value. Further, the judgment of Hon'ble High Court of Madras in the case of Commissioner of Income-tax, Tiruchirappalli reported at [2016] 74 taxmann. com 35 Madras) has held as under: Where addition of undisclosed income was made on basis of mere statement given by his son under section 132(4) which was not corroborated by any material evidence, neither such statement would be a conclusive evidence, nor any addition could be made. Further, the judgment of Hon'ble HIGH COURT OF GUJARAT in the case of Principal Commissioner of Income-tax (Central) vs. Naresh Nemchand Shah reported at 2023] 156 taxmann.com 346 (Gujarat) has held as under: "Where pursuant to a survey, unsecured loans taken by assessee from GCSL were deemed non-genuine by Assessing Officer on basis of statement of director of GCSL, since apart from said statement, there was no other evidence against assessee and moreover, assessee had filed evidence in form of confirmation from creditor, audited accounts of creditor and copies of banks accounts to prove genuineness and creditworthiness of creditor which was within parameters of section 68, impugned addition made in that respect to be deleted"

& Others Further, in the judgment of Hon'ble HIGH COURT OF CALCUTTA in the case of Principal Commissioner of Income-tax vs. Sreeleathers reported at [2022] 143 taxmann.com 435 (Calcutta) it has been held as under: It was noted that show-cause notice issued on assessee was only in respect of one lender company, namely, FGD - Assessee provided various documents in form of PAN card, income-tax acknowledgement, copy of bank statement, certification of incorporation, master data from register of companies, certificate of incorporation and annual account to prove FD's identity and creditworthiness and genuineness of transaction - However, Assessing Officer by relying on statement of one AKA, who was alleged operator of such bogus companies, brushed aside these documents on mere ground that they did not absolve assessee from his responsibility of proving nature of transaction -It was noted that statement of AKA was not recorded in presence of assessee nor an opportunity of cross-examination was provided to it - Whether where there was no evidence brought on record by Assessing Officer to connect statement of AKA with loan transaction of assessee, said statement was of little avail and could not be basis of allegations - Held, yes - Whether, further, since assessee had discharged its initial burden by providing documentary evidences and burden had now shifted to Assessing Officer, who failed to bring on record any reason in writing as to why these documents did not establish identity of lender or proved genuineness of transaction, impugned assessment order passed by casually brushing aside these evidences was utterly perverse and liable to be quashed - Held, yes [Paras 4 and 5] [Matter remanded] Further, the Hon'ble High Court of Kolkata in the case of Principal Commissioner of Income-tax vs. Golden Goenka Fincorp Ltd. reported at [2023] 148 taxmann. com 313 (Calcutta) has held as under: Where Assessing Officer solely based on statement of assessee's director recorded during search operation treated share application money received by assessee-company as undisclosed income and made additions under section 68, since said statement was retracted during search operation and there was no cash trail or any other corroborative evidence or investigation brought on record by AO, impugned additions were to be deleted.

& Others Further, the Hon'ble High Court of Gujarat in the case of Commissioner of Income-tax vs. Shardaben K. Modi reported at [2013] 35 taxmann.com 264 (Gujarat) has held as under: In absence of any independent material, statement of assessee's son recorder during survey would not form a valid basis for reopening assessment of assessee Further, the Hon'ble High Court of Mumbai in the case of Principal Commissioner of Income-tax vs. Bairagra Builders (P.) Ltd. reported at (2024) 164 taxmann.com 162 (Bombay) has held as under: Section 68 of the Income-tax Act, 1961 - Cash credit (Loans) - Assessment years 2007-08 and 2012-13 - Assessee-company took unsecured loans from two companies - On basis of statement of one PKJ recorded during search and seizure operation that he had provided accommodation entries to assessee, Assessing Officer treated said loans as fake - Whether since Assessee had submitted all evidence to substantiate loans in question, including confirmation from creditors and loans were taken and repaid through banking channels, Assessing Officer was not justified in treating said unsecured loan as fake and making addition of interest paid on said loan to assessee's income - Held, yes [Para 8] [In favor of assessee) As has already been discussed above, the AO has relied upon statement of Nishant Chajjar and Vishal Kumar in the assessment order whereas, the statements of Prakash Kumar Jha and complete statement of Pratap Singh Rathi have not been discussed in the assessment order. It is also seen that the Investigation on the basis of source to source has been applied only to the funds received from Teesta Retails Pvt. Ltd. and HFCL but no such source-to-source investigation has been conducted with respect to the funds other than those received from Teesta Retails Pvt. Ltd. On the issue of cherry picking of statements/evidences, the Hon'ble Supreme Court in the case of RELIANCE INDUSTRIES LIMITED VERSUS SECURITIES AND EXCHANGE BOARD OF INDIA & ORS. reported at 2022 (8) TMI 423 - SUPREME COURT has held as under: "SEBI's attempt to cherry-pick the documents it proposes to disclose - There is a dispute about the fact that certain excerpts of the opinion of Justice (Retd.) B. N Srikrishna, were disclosed to the appellant herein. It is the allegation of the appellant that while the parts which were disclosed, vaguely point to the culpability of the appellant, SEBI is refusing to divulge the & Others information which exonerate it. Such cherry-picking by SEBI only derogates the commitment to a fair trial. In the case at hand, SEBI could not have claimed privilege over certain parts of the documents and at the same time,agreeing to disclose some part. Such selective disclosure cannot be countenanced in law as it clearly amounts to cherry-picking. Appeal allowed." Further, in the judgment of Ld. ITAT Delhi Bench E in the case of M/s Lumax Industries Limited vs. DCIT, Central Circle-28, Delhi in vide its order dated 0d4.04.2024, it has been held as under: "24. In the case in hand, the Ld. AO grossly erred in not taking cognizance of all the material found during the course of the search and not making any observation/comments on the other seized material. The Ld. AO cannot just cherry pick a particular piece of information to put reliance while concluding the proceedings of incragainst the Assessee. The Ld. A.O. cannot blow hot and cold at the same time by accepting and making a particular piece of evidence found during the course of search as his sole basis of addition and ignore the other documents/material, more particularly relating to the impugned transaction, found during the course of same sealeh proceedings. Further, the Ld. ITAT Bangalore Bench in the case of Mohammed Ibrahim Mohideen, Kerala vs. Assistant Commissioner of Income- Tax, reported at to 466, 485 & 486/Bang/2024 on 8 July, 2024 has held as under: In our opinion, even the statement recorded to be considered as true, it has to be considered in its entirety and there shall not be any cherry picking and the AO cannot consider only the portion which is favorable to revenue. Further, the Ld. ITAT Bench of Delhi in the case of HCL SINGAPORE PTE. LTD. C/O HCL TECHNOLOGIES LTD. VERSUS ASST. CIT CIRCLE INTERNATIONAL TAXATION 2(1) (1), DELHI reported at 2024(1) TMI 309 - ITAT DELHI has held as under: From the perusal of the aforesaid statements of various employees which were recorded during the course of survey by the TDS officers, which were heavily relied upon by the Id. AO by cherry picking some of the questions and answers alone given & Others by them, we find that prima facie all the statements of employees actually support the contentions of the assessee herein. Further, the Ld. ITAT Bench of Bangalore in the case of M/S. HASSAN HAJEE & CO. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX, MANGALORE (VICE VERSA) reported at 2022(9) TMI 1480 - ITAT BANGALORE has held as under: The AO has taken notice of this statement. However, he intentionally ignored it as it was in favour of the assessee. The A.O. could not do cherry picking, if the Ld. AO considered the statement of Shri B. Kunhi where he has stated that payment of speed money was at Rs. 35 per M.T., there could be no addition on this count. In view of the above discussion and stated judicial pronouncements, it is apparent that the statements reproduced by the AO without any corroborative evidence cannot be a sole basis for making addition in the case of the assessee. This is all the more true because the AO has himself proceeded to enquire into the source of source of the loans and gave relief to the extent of approximately Rs. 140 crores(Rs. 9 crore in the present case) in the whole ACE Group from the total loans received from M/s. Hallow Securities Pvt. Ltd. by ascribing the same to be from genuine sources. Still, it shall be important to examine the other relevant issues in the case in consequence to which enquiry was initiated with M/s. Hallow Securities Pvt. Ltd.”

From the above press release, following conclusions can be drawn: a. The red flagged companies which had not filed returns for last 2 years were deregistered from the ROC. b. Directors of those companies which had not filed annual returns were disqualified. c. The struck-off companies were restricted from using their bank accounts. d. Genuine corporates were given benefit of condonation of delay scheme for filing the returns. In view of the above, it was felt necessary to make enquiries both with Hallow Securities Pvt. Ltd. and SFIO (the Nodal Authority maintaining the database) to know, if any, proceedings were pending with respect to Hallow Securities Pyt Ltd. with SFIO and whether M/s. Hallow Securities Pvt. Ltd. had been regular in its compliances with ROC and RB etc. The exact correspondences with M/s. Hallow Securities Pvt. Ltd. and SEIO have already been reproduced above in the body of the order. M/s. Hallow Securities Pt. Ltd. in response to enquiry from this office provided the following information: a. Details of the annual returns filed with the ROC from AY 2018-19 till AY 2024-25. b. Details of the annual returns filed with the RBl from AY 2018-19 till AY 2024-25. c. No show cause has been received by the above company from the ROC since Financial Year 2017-18 (i.e. even after a period of seven years of the press release quoted by the AO). Enquiry letter was also issued to SFIO to know, if any, proceedings were pending with the Nodal Authority against M/s. Hallow Securities Pvt. Ltd. The response of SFIO authorities has already been reproduced in the body of the order above. The Nodal Authority (SFIO) has clearly reported that no proceedings are pending against M/s. Hallow Securities Pvt. Ltd. with their office Page | 42 & Others 35. Further from the perusal of observations at page 79 onwards of the order of ld. CIT(A) we find that CIT(A) has provided numerous opportunities to the AO for rebuttal/objections however, the AO has not availed any of the opportunity therefore, the ld. CIT(A) has made the enquiries in terms of the power conferred upon it in section 250(4) of the Act. The relevant observations of ld. CIT(A) are as under:

Reply of AO “During the course of appellate proceedings, various reminders were issued to the Ayide this office emails dated 15.02.2025, 08.02.2025, 01.02.2025, 25.01.2025, 24.01.2025, 18.01.2025, 15.01.2025, 14.01.2025 & 08.01.2025 on various issues including enquiries conducted with Hallow Securities Pvt. Ltd., SFIO Report, Additional Grounds of Appeal etc. But no objections have been received from the AO till the date of finalization of appeal. It is pertinent to point out that it was only during the course of enquiry done by this office that the assessee/third parties furnished the relevant evidences. The said evidences were called for under the powers of enquiry with the office of Commissioner Appeal). Hence, the assessee/third parties have not produced any additional evidence but have only furnished evidences as called tor during enquiry made by this office. In case, the AO is not able to collect complete material and take the issue to logical end, the evidence collected by the appellate authority from the assessee/third parties in continuation of the same trail initiated by the AO would be clarificatory evidence. The clarificatory evidence would only remove the doubts arising in the mind of the appellate authorities from the documents on record so that the issue under consideration is taken to a logical conclusion by making the argument more explicit so that the real income can be arrived at. On the said issue, the Hon'ble High Court of Delhi in the case of Commissioner of Income-tax, Central-l vs. Manish Build Well (P.) Ltd. reported at [2011) 16 taxmann.com27 (Delhi) has held as under: "Whether a distinction should be recognized and maintained between a case where assessee invokes rule 46A to adduce additional evidence before Commissioner (Appeals) and a case where Commissioner (Appeals), without being prompted by assessee, while dealing with appeal, considers it fit to cause or make a further enquiry by virtue of powers vested in him under Page | 43 & Others subsection (4) of section 250 and it is only when he exercises his statutory suo moto power under above sub-section, that requirements of rule 46A need not be followed - Held, yes" Further, the Hon'ble High Court of Karnataka in the case of Shankar Khandasari Sugar Mills v. CIT reported at 59 taxman 405 has observed as under: "The appellate authority should have accepted the material produced by the assessee as clarificatory in nature and considered the same to test the fairness and propriety of the estimate of income made by the Income-tax Officer. Though it was belated production of very relevant material, no prejudice (in its legal sense) would have resulted to the Revenue by considering the material produced by the assessee... In the absence of any prejudice to the Revenue, and the basis of the tax under the Act being to levy tax, as far as possible, on the real income, the approach should be liberal in applying the procedural provisions of the Act. An appeal is but a continuation of the original proceeding and what the Income-tax Officer could have done, the appellate authority also could do." [Emphasis supplied] (p. 673) Further, the Hon'ble High Court of Allahabad in the case of Smt. Mishingar Kaur vs. Central Government reported at (1976) 104 ITR 120 (ALL.) has held as under: "The AAC could while disposing of an appeal, make such inquiry as he thought fit. He could permit a fresh or new ground to be raised in the appeal.No part of rule 46A whittles down or impairs the power to make further inquiry conferred upon the AAC by section 250. Similarly, sub-section (5) of the said section confers a power on the AAC to permit the appellant to raise a fresh point. This power has not been even touched by rule 46A." Further, the Hon'ble High Court of Bombay in the case of Smt. Prabhavati S. Shah vs. Commissioner of Income-tax reported at [1998) 100 TAXMAN 404 (BOM.) has held as under: It is, thus, clear that the powers of the AAC are much wider than the powers of an ordinary court of appeal. The scope of his powers is coterminous with that of the ITO. He can do what the ITO can do. He can also direct the ITO to do what he failed to do. The power conferred on the AAC under the said subsection being quasi-judicial power, it is incumbent on him to exercise the same if the facts and circumstances justify. If the AAC fails to exercise & Others his discretion judicially and arbitrarily refuses to make enquiry in a case where the facts and circumstances so demand, his action would be open for correction by a higher authority. On a conjoint reading of section 250 and rule 46A, it is clear that the restrictions placed on the appellant to produce evidence do not affect the powers of the AAC under sub-section (4) of section 250. The purpose of rule 46A appears to be to ensure that evidence is primarily led before the ITO. ………….. The AAC should have considered this evidence in exercise of his powers under sub-sections (4) and (5) of section 250 which he failed to do. Thus, it was a fit case where the AAC should have exercised the powers conferred upon him and taken on record the zerox copies of the cheque, the certificate from the bank and the copy of the account of the assessee with the said bank and considered the same for deciding the genuineness of the loan." Further, the Ld. ITAT Bench Calcutta in the case of INCOME-TAX OFFICER VS. BAJORIA FOUNDATION reported at [2001] 117 TAXMAN 126 (CAL.) (MAG.) has held as under: "Whether a harmonious interpretation of section 250, even if read with rule 46A, means that if facts of case warrant further enquiries, it is within powers of Commissioner (Appeals) to do so - Held, yes - Whether if prima facie an information is necessary to examine claim of assessee, Commissioner (Appeals) should consider necessary evidence in exercise of his powers under sub- sections (4) and (5) of section 250 - Held, yes" Further, the Ld. ITAT Ahmedabad Bench 'C' in the case of Deputy Commissioner of Income-tax vs. J.A. Infracon (P.) Ltd reported at [2025] 171 taxmann.com 228 (Ahmedabad - Trib.) has held as under: Commissioner (Appeals) called for a remand report from Assessing Officer and issued notice under section 133(6) to aforesaid investor companies and in response to same, parties namely 'ATPL' and 'ALPL' confirmed transactions With assessee company with necessary documents and evidences - These Confirmations were not controverted by Assessing Officer by way of bringing anything adverse on record - Further in spite of availability of all documents transaction with share applicant companies who had made share application on record, nothing had been brought on record by Assessing Officer to doubt in assessee company - Whether, on facts, Commissioner (Appeals)

& Others rightly deleted addition made by Assessing Officer - Held, yes [Paras 7, 8 and 11] [in favour of assessee]" Further, the Hon'ble Supreme Court in the case of CIT vs. Kanpur Coals Syndicate [1964] 53 ITR 225 has held that "the appellate Commissioner has plenary powers in disposing of an appeal. The Hon'ble Court further held that the scope of the power of CIT(A) is coterminous with the AO." Further, the Hon'ble High Court of Karnataka in the case of CIT vs. K. S. Dattatreya [2011] 197 taxman 151 has held that "as a revisional authority commissioner appeal can revise not only the ultimate computation arrived at but every process which lead to the ultimate computation or assessment". Further, the Hon'ble Kerala High Court in the case of V. SubramoniaAiyr vS. CIT 1978] 113 ITR 685 held that "the power conferred on Appellate Authority by Section 246 which is exercised in accordance with procedure with Section 250 indicate and amplitude and width which is no less wide than that of an ITO and the Appellate Authority could substitute the order of the ITO by one of his own."

& Others Conclusion “Accordingly, in view of the above discussion, following conclusions can be drawn:

1.

2. The fund flow statement of M/s. Hallow Securities Pvt. Ltd. from AY 2017-18 to AY 2022-23 reveals that there were sufficient funds available with Hallow Securities Pvt. Ltd. out of additions made by AO which were advanced to findings and discussion, it is observed that the bank credits in the hands of various concerns including the appellant. Without prejudice to the above M/s. Hallow Securities Pvt. Ltd. have already been added by the AO in the assessment orders of M/s. Hallow Securities Pvt. Ltd. for AY 2017-18 to Ar 2022-23, the adding the same money emanating from the said accounts in the hands of the assessee company would amount to double taxation of the same.

3. The AO in the assessment proceedings of Hallow Securities Pt. Ltd. has excluded the funds advanced to ACE Group from the total credits added in the hands of Hallow Securities Pvt. Ltd. The exclusion of the funds advanced to the ACE Group from the total credits added by the AO in the hands of Hallow Securities Pvt. Ltd. is immaterial as when the total addition made in the hands of Hallow Securities Pvt. Ltd. is compared with the increase in the application of funds in its balance sheets over the years, a net surplus persists, clearly demonstrating that same funds have been subjected to multiple and duplicate additions.

4. It is further evident that the exclusion of funds advanced to ACE Group from the current year's credits in the hands of Hallow Securities Pvt. Ltd. is also inconsequential for the reason that the corresponding credits in earlier years have & Others already been added to the income in the case of Hallow Securities Pvt. Ltd. Hence, once the original advances and credits forming the substratum of these transactions have been added to the income of Hallow Securities Pvt. Ltd., any subsequent reduction from the credits in accounts of Hallow Securities Pvt. Ltd. of the advances given to the ACE Group does not materially impact the overall transactions which need to be brought to tax.

8. The AO has applied the source of source theory in ACE Group while giving relief with respect to the funds received from Hallow Securities Put. Ltd. via Teesta Retails Pvt. Ltd. Applying the same theory as applied by the AO to the other funds received by the appellant reveals that the said money majorly emanated out of the coffers of Hallow Securities Pvt. Ltd. during earlier years which were advanced to various entities and returned back. In view of the discussion on various issues carried out above, the addition made by the AO is not found to be sustainable and accordingly these grounds of appeal are allowed.

40. In view of the above discussion and further looking to the fact that when all the relevant details and documentary evidences produced by the assessee to establish the identity, creditworthiness and genuineness of the transactions, the said evidences cannot be rejected based on the statements of third party without any contrary documentary evidence. It is seen that transactions have been done through banking channels and on the date of making of loans, there was sufficient balance available in the bank account of the lender Page | 53 & Others company, which proves the creditworthiness and genuineness of the transactions. It is also relevant that out total amount of loans of 27.27 crores received, the AO has despite of doubting the creditworthiness, had made the addition of INR. 17.74 crores only meaning thereby the creditworthiness for the remaining amount is not doubted though the facts and the circumstances while granting these loans remained the same. This creates serious doubts about the mode and manner of the additions made by the AO. Once it is accepted that the lender has creditworthiness for part of the amount, the remaining amount cannot be held as unexplained. There is no case of any cash deposited in the account of any of the lender company at the time of issuing cheques/RTGS in favour of the Assessee. Therefore, Appellant has duly discharged the burden casted upon it u/s 68 of the Act.

45. From the perusal of the assessment order, it is seen that an addition of INR 10,26,00,000/- was made by holding the same as Page | 55 & Others accommodation entries u/s 68 of the Act received during the year from M/s Hallow Securities Pvt. Ltd. The facts and circumstances existed in the year under appeal and the observations and allegations made by the AO while making the additions/disallowance are the same, as were made in the assessment order passed for AY 2020-21 which fact is also admitted by both the parties during the course of hearing before us where arguments were made by taking Ay 2020-21 in as lead case.

(Revenue Appeal) (AY 2021-22) In the case of M/s Allure Developers Pvt. Ltd.

50. From the perusal of the assessment order, it is seen that an addition of INR 3,53,04,903/- was made by holding the same as accommodation entries u/s 68 of the Act received during the year from M/s Hallow Securities Pvt. Ltd. The facts and circumstances as existed in the year under appeal and the observations and allegations made by the AO while making the additions/disallowance are the same, as were made in the assessment order passed for AY 2020-21 which fact is also admitted by both the parties during the course of hearing before us where arguments were made by taking Ay 2020-21 in as lead case. Further the ld. CIT(A) has deleted the additions solely following the appellate orders for AY 2020-21 in assessee’s own case.

& Others 53. Now we take up the appeal filed by the revenue in the case of Ajay Realcon Pvt. Ltd. in for AY 2020-21.

(Revenue’s Appeal) for AY 2020-21 In the case of DCIT CC-1 Vs. Ajay Realcon Pvt. Ltd. 54. This appeal is filed by the revenue against the order of ld. CIT(A) dt. 22.03.2025 in appeal No. CIT (Appeal), Kanpur-4/10017/2019-20 for AY 2020-21.

56. From the perusal of the assessment order, it is seen that an addition of INR 8,25,00,000/- was made by holding the same as accommodation entries u/s 68 of the Act received during the year from M/s Hallow Securities Pvt. Ltd. The AO further observed that the assessee had paid interest of INR 10,25,031/- on the entire loan amount which was also disallowed. The facts and circumstances and & Others the observations and allegations made by the AO as existed in the present case are the same as were made in the assessment order passed making the additions/disallowance in the case of M/s Allure Developers Pvt. Ltd. for AY 2020-21.

taken by the revenue in present appeal are dismissed. Page | 59 & Others

60. In the result, appeal of the Revenue in in the case of M/s Ajay Realcon Pvt. Ltd. for AY 2020-21 is dismissed.

(Revenue Appeal) for AY 2021-22 In the case of DCIT CC-1 Vs. Ace Residency Pvt. Ltd. 62. This appeal is filed by the revenue against the order of ld. CIT(A) dt. 22.03.2025 in appeal No. CIT (Appeal), Noida-3/10139/2020-21 for AY 2021-22.

64. From the perusal of the assessment order, it is seen that an addition of INR 12,30,00,000/- was made by holding the same as accommodation entries u/s 68 of the Act received during the year from Page | 60 & Others M/s Hallow Securities Pvt. Ltd. The AO further observed that the assessee had paid interest of INR 38,75,590/- on the entire loan amount which was also disallowed. The facts and circumstances and the observations and allegations made by the AO as existed in the present case are the same as were made in the assessment order passed making the additions/disallowance in the case of M/s Allure Developers Pvt. Ltd. for AY 2020-21.

taken by the revenue in present appeal are dismissed. Page | 61 & Others

67. In the result, appeal of the Revenue in is dismissed.

69. This appeal is filed by the revenue against the order of ld. CIT(A) dt. 15.04.2025 in appeal No. CIT (Appeal) 3, Noida/10033/2019-20 for AY 2020-21.

71. From the perusal of the assessment and appellate order, it is seen that on the issue of loan from M/s Hallow Securities Pvt. Ltd., all the observations and allegations made by AO are same as were made in the case of M/s Allure Developers Pvt. Ltd. for Assessment Year 2020-21 in except for the amount of addition which is Rs. 64,00,00,000/- in the instant case as against Rs. 17,74,00,000/- in the case of M/s Allure Developers Pvt. Ltd. in AY & Others 2020-21. Besides this the revenue has further challenged the deletion of interest of Rs. 2,83,12,326/- paid on such loan taken from M/s Hallow Securities Pvt. Ltd.

78. From the perusal of the assessment and appellate order, it is seen that on the issue of loan from M/s Hallow Securities Pvt. Ltd., all the observations and allegations made by AO are same as were made in the case of M/s Allure Developers Pvt. Ltd. for Assessment Year 2020-21 in except for the amount of addition which is Rs. 24,00,00,000/- in the instant case as against Rs. 17,74,00,000/- in the case of M/s Allure Developers Pvt. Ltd. in AY 2020-21.

S. No. Appeal No. AY Name of Assessee 1. 3558/Del/2025 2019-20 M/s. Allure Developers Pvt. Ltd. 2. 3559/Del/2025 2020-21 -do- 3. 4108/Del/2025 2021-22 -do- 4. 3560/Del/2025 2020-21 M/s. Ajay Realcon Pvt. Ltd. 5. 4116/Del/2025 2020-21 Star Landcraft Pvt. Ltd. 6. 4117/Del/2025 2022-23 -do- 7. 3493/Del/2025 2021-22 M/s. Ace Residency Pvt. Ltd. Order pronounced in the open Court on 26.11.2025.