GOLFGREEN INFRA PVT. LTD.,NEW DELHI vs. ASSTT. COMMISSIONER OF INCOME TAX, JHANDEWALAN, NEW DELHI

Learned departmental representative submits at the outset that the CIT(A) has rightly upheld the Assessing Officer’s action disallowing the assessee’s interest expenditure as under:- “6. Ground no. 2: This ground of appeal has been raised against the assessment order passed by the AO u/s 143(3) of the Act, wherein addition of Rs. 20,60,536/- u/s 69C of the Act by the AO on account of interest paid to M/s. Mekaster Finlease Ltd. as unexplained expenditure. The appellant submitted that the AO on the basis of documents impounded during Survey proceedings and relying upon third party investigation report and field enquiries, held that the loan as taken by the appellant company from M/s. Mekaster Finlease Ltd during previous financial year AY 2019-20 is bogus and made addition in respect of interest paid by the assessee to M/s. Mekaster Finlease Ltd amounting to Rs 20,60,5361- is treated as unexplained expenditure u/s 69C of the Act and tax has to be computed as per the provisions of section 115BBE of the Act. 6.1 The appellant submitted that the transaction between the impugned party and the assessee company are genuine business transactions. On perusal of confirmation of the party as filed along with letter dated 04.11.2023, your honour will appreciate that the assessee company has not taken any fresh loan during the year under review and interest Rs.20,60,536/- (wrongly mentioned as Rs. 22,66,590 in the SCN) has been credited to the creditors account on the opening balance of loan as taken during previous year after deduction of TDS as per law. 6.2 I have considered the facts of the case and submissions filed by the appellant. During course of Survey operation carried out u/s 133A of the Acton 11.08.2020 on M/s. Nexgen Infracon Private Limited at A-19, Sector-63, Noida, Uttar Pradesh- 201301 and at 33/1, 3rd Floor, Tower B, Corenthum Tower, Sector-62, Noida, Uttar Pradesh, certain crucial incriminating evidence has been found and impounded from the premise of M/s. NexgenInfracon, which proves that the loans received from M/s. Mekaster Finlease Limited are bogus. The AO has held that it has been found that the appellant has not filed any justification regarding the bogus unsecured loan taken from entity i.e. M/s. Mekaster Finlease Ltd. further, the appellant has filed account confirmation of the lender. Merely filing of account confirmation of party doesn't discharge the onus of the appellant company. Further, it cannot be believed that lender 3 | P a g e lend their crores of rupees in a non-listed company without any due diligence. No security existed for them for their amount invested. Further, identity, creditworthiness of lender is not proved since the source of funds with these purported lender remains unexplained. During the course of Survey proceedings, a local enquiry was made at the address of the entity. On enquiry, it was found that the said address had a board bearing names of many different companies viz. M/s. Stellar Investments Limited, M/s. Utsav Securities Pvt. Ltd., M/s. Sital Leasing and Finance Ltd etc. and it was gathered that the building namely "Jain Bhawan" was an abandoned building and on local enquiry in neighbourhood, it was gathered that the building namely "Jain Bhawan" rarely opened and even no office staff/employee were found at the said Jain Bhawan. The address 16/121-122, Jain Bhawan, Faiz Road, Near Lal Maszid, Karol Bagh, New Delhi-110005 was just used for collecting and delivering correspondences for the company M/s. Mekaster Finlease Limited and this company was not having any real business. On perusal of the agreement between M/s. Mekaster Finlease Limited, it is noted that M/s. Mekaster Finlease is showing itself as an NBFC. During the course of Survey proceedings, Shri Virender Jain, Director of the company was asked to submit the evidence for incorporation of the company as NBFC. However, no submission was furnished to prove incorporation as NBFC. Further, as per the GST Rules and GST Act, an NBFC is required to obtain GST registration in India in every state in which it has a branch. But it is gathered from the GST website that M/s. Mekaster Finlease Limited was not registered under GST regime. 6.3 Further, it was also found that M/s. Mekaster Finlease Ltd. figures among the list of entities categorised by Financial Intelligence Unit-India (FIUIND) as high Risk NBFCs on account of non-compliance with Prevention of Money Laundering Act and Rules. It is found that M/s. Mekaster has failed to register details of Principal Officer (PO) for the purposes of PMLA.The findings of FIU-IND also make it evidently clear that M/s. Mekaster Finlease is a bogus entity and the unsecured loans received by the appellant company from M/s. Mekaster Finlease in preceding years are nothing, but the appellant's own unaccounted money routed through bank accounts to colour the transactions and to make them look legitimate. Thereafter, the AO had made addition of Rs. 20,60,536/- u/s 69C of the Act on account of unexplained expenditure. 4 | P a g e

4 Now, during the appellate proceedings appellant failed to substantiate its claim with any documentary evidence, therefore,in view of the above facts, and in absence of any explanation, I find no reason to interfere with the additions of Rs. 20,60,536/- on account of unexplained expenditure u/s 69C r.w.s. 115BBE of the Act.Therefore, considering the facts of the case, the additions of Rs. 20,60,536/- made by the AO is upheld and the ground taken by the appellant is dismissed.” 3. This is what leaves the assessee aggrieved. 4. I have given my thoughtful consideration to the assessee’s pleadings all along and the Revenue’s foregoing arguments. Suffice to say, it has come on record that the assessee has raised the impugned loan(s) from M/s Mekaster Finlease Ltd., way back in assessment year 2019-20 which has not been treated as a non- genuine one all along. That being the case, the impugned interest expenditure incurred in AY 2022-23 therefore does not deserves to be disallowed on mere assumption and presumption adopted by the lower authorities. The same stands deleted in very terms therefore. 5. The assessee’s appeal is allowed. Order pronounced in the open court on 26th November, 2025. (SATBEER SINGH GODARA) JUDICIAL MEMBER