INCOME TAX OFFICER, FARIDABAD vs. BHIKSHU PORTFOLIO PRIVATE LIMITED, FARIDABAD

Date of hearing 13.11.2025 Date of pronouncement 17.11.2025 ORDER PER BENCH:

, 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 These Revenue’s five appeals 4206, 4207, 4251 & 4252/Del/2025 along with assessee’s as many cross objections C.O. Nos. 214, 215, 216, 217 & 218/Del/2025 for assessment years 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18 arise against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s orders, all dated 25.03.2025 having DIN and order no. ITBA/NFAC/S/250/2024-25/1075016499(1), ITBA/NFAC/S/250 /2024-25/1075017580(1), ITBA/NFAC/S/250/2024-25/ 1075018616(1), ITBA/NFAC/S/250/2024-25/1075019490(1) and ITBA/NFAC/S/250/2024-25/1075021360(1), involving proceedings under section 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’); respectively. Heard both the parties. Case files perused.

3 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 (vi) Whether the impugned Order passed by the Ld. CIT(A) is correct on the facts and circumstances of the case that the transactions made through bank account declared as unsecured loans are just to camouflage the sham transaction/ bogus transaction between the assessee and the concern M/s. S.P. Solutions Pvt. Lid controlled and managed by Himanshu Verma. (vii) Whether the impugned Order passed by the Ld. CIT(A) is correct on the facts and circumstances of the case that during the assessment proceedings the assessee could not prove the creditworthiness of M/s. S.P. Solutions Pvt. Ltd the transactions made through bank account declared as unsecured loans are just to camouflage the sham transaction/ bogus transaction between the assessee and the concern Mis. S.P. Solutions Pvt. Ltd controlled and managed by Himanshu Verma. (viii) Whether the impugned Order passed by the Ld. CIT(A) is correct on the facts and circumstances of the case that the Ld. CIT(A) has held that creditworthiness of the M/s S.P. Solutions Pvt. Ltd is proved whereas the M/s. S.P. Solutions Pvt. Ltd has declared income at Rs.23,530/- only and assessee had declared to have taken unsecured loan of Rs.25,00,000/- from it.

, the written submissions enclosing various documents, evidences, extracts of books of accounts etc. filed in the form of detailed ‘paperbook’ as well as assessment order dated 31.03.2022 passed by National Faceless Assessment Centre (NFAC), New Delhi u/s 147 r.w.s. 144B. In such assessment order addition of Rs.35,00,000/- was made to the returned income of Rs.43,540/- and the total income of the appellant was determined at Rs.35,43,540/-. The present appeal is arising from such order. 5.2. Briefly stating the facts of the case, this appellant is a company stated to be ‘engaged in trading in shares and derivatives’. For the A.Y. 2013-14, it had originally filed its Return of Income (RoI) on 27.09.2013 for AY 2013-14 declaring Total Income of Rs.43,540/- 5.3. Subsequently, ITO (Inv.), Faridabad shared information with the AO that this appellant “is one of beneficiary who has obtained accommodation entries of Rs. 35,00,000/- from M/s. S.P. Solutions Pvt. Ltd managed and controlled by Sh. Himanshu Verma during the FY 2012-13 relevant to AY 2013-14 in the shape of share application money/entry loans/capital gain on shares". Such information was obtained during the course of search proceedings carried out at the premises of one Himanshu Verma group and others on 13.04.2017, who were said to be engaged in providing accommodation entries. 5.4. In view of such information the AO took recourse to notice u/s 148 dated 28.03.2021, in response to which the appellant filed its RoI on 17.04.2021 declaring the Total Income of Rs.43,540/-. Subsequently, notice u/s 142(1) etc. were issued on multiple occasions and in conclusion of the proceedings so carried out through ITBA system an order u/s 147 r.w.s. 144B was passed on 31.03.2022. In such order addition to the tune of Rs.35,00,000/- was made to the returned income “u/s 68 r.w.s. 115BBE” holding amount of Rs.25,00,000/- received and Rs.10,00,000/- paid by the appellant to one M/s S. P. Solutions during the year as “nothing but bogus in nature of purely accommodation entries”. 5.5. Impugning such order, the appellant has filed the present appeal on 27.04.2022. Meanwhile, the appellant had filed a rectification request protesting addition of payments made by it which 5 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 was debited amounts in the appellant’s bank, as addition u/s 68. The AO passed an order u/s 154 r.w.s. 147 on 19.05.2022, rejecting the appellant’s request. 5.6. In the present appeal, the ground no. 11 to 18 are with regard to addition of Rs.35,00,000/- made to the returned income of the appellant in the order u/s 147 r.w.s. 144B dated 31.03.2022. Since all these grounds of appeal revolve around sole issue of merit of addition of Rs.35,00,000/- impugned here, hence all such grounds of appeal are taken up together for consideration and disposal. 5.7.1. Before delving into the issue, it would be pertinent to mention that the assessment order records, inter alia, that the appellant had “furnished the confirmation, bank statement and copy of ITR of the entity/entities mentioned above with whom the assessee has done transactions of Rs.35,00,000/-”. 5.7.2. The appellant has explained that following documents were submitted during the assessment proceedings with regard to its transaction with M/s S. P. Solutions Pvt. Ltd. during the F.Y. 2012-13 relevant for A.Y. 2013-14: i) Confirmations of accounts, ii) Copy of ITR acknowledgement of S. P. Solutions Pvt. Ltd. for A.Y. 2013-14, iii) Copy of relevant extract of bank statement of S. P. Solutions Pvt. Ltd for F.Y. 2012-13, iv) Copy of relevant extract of bank statement of assessee company for F.Y. 2012-13, v) Copy of audited financial statements of M/s. S. P. Solutions Pvt. Ltd. for FY 2012-13, vi) The appellant also protested that, “disposal order appears to be in respect of another assessment year instead of relevant assessment year as ld. AO therein has alleged at para 2 & para 6 that assessee is beneficiary of entries amounting to Rs.1,42,50,989/- in contrast to alleged transaction of 35,00,000 for the year under consideration stated as per reasons recorded.” vii) The appellant also submits that option to seek video conference was not allowed. viii) The appellant submits that in response to show cause notice during the impugned proceedings, it’s audited financial statements were furnished showing that “no liability of loan/borrowing exists as on 31.03.2021.” 5.7.3. Subsequently, the appellant submitted following documents as additional evidences u/r 46A:- i) Copy of Memorandum of Understanding (MOU) between M/s. SP Solutions Pvt. Ltd. (lender) and assessee company in respect of loan availed by the assessee company. ii) Copy of confirmation letter from M/s. SP Solutions Pvt. Ltd. stating the fact of loan given to assessee company along with the explaining the source in its hands. 6 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 iii) Copy of master data of M/s S.P. Solutions Private Limited from MCA website. iv) Copy of relevant extract of bank statement of lender company showing repayment of Rs.15,00,000/- made by assessee company on 02.04.2013 i.e. FY 2013-14. v) Copy of statement of P&L of M/s. SP Solutions Pvt. Ltd. vi) Copy of transaction ledger of assessee company for F.Y. 2012- 13 in the books of broker M/s. Divya Portfolio Pvt. Ltd. vii) Copy of TDS certificate to M/s. SP Solution Pvt. Ltd. for F.Y. 2012- 13. viii) Copy of bank statement of assessee showing payment of TDS of Rs.37,556/-including TDS on loan transaction with M/s. SP Solutions Pvt. Ltd. on 30.04.2013 ix) Copy of TDS certificate to M/s. SP Solution Pvt. Ltd., for FY 2013- 14 x) Copy of bank statement of assessee showing payment of interest of Rs.39,501/-outstanding as on 31.03.2014 to M/s. SP Solutions Pvt. Ltd. 5.7.4. All such ‘additional evidences’ and submission of the appellant were forwarded to jurisdictional AO seeking his/her comments as well as a Remand Report on admissibility and bonafide of it vide this Appeal Unit’s communication dated 18.09.2024. In response, the AO submitted a reply dated 29.10.2024 requesting that he “has joined as ITO, Ward-1(1), Faridabad on 10.10.2024. Before this, date this ward was functioning without any officer for nearly 3 months. Due to this, the work has been piled up. As on date this office has total pendency of 56 remand reports. In order to submit proper remand report, the documents submitted by the assessee through your goodself are require to be examined and further enquiry/verification is to be done from the assessee and third parties. Therefore, your goodself is requested to kindly allow time till 31/12/2024 to submit the remand report.” 5.7.5. The request of the AO seeking time of more than three month’s period was taken cognizance of though the appeal was administratively considered as ‘priority’ case by the ITBA system. 5.7.6. In view of approaching date for submission of Remand Report as requested by the AO, a reminder communication was sent to the AO on 30.12.2024. In response the AO again made the following submission dtd. 07.01.2025 as under: “…the asseessee in this case has taken accommodation entry from entry providers which were running organized tax evasion syndicate. Therefore, the enquiry has been undertaken in respect of broker, agent and other middle persons who were involved in this practice which need much more time to come to the final conclusion. Further, time barring date is also approaching near in respect of assessment cases allotted to JAO and re-opening of cases u/s 148 of the Act. Furthermore, there is huge pendency of work has been 7 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 piled up in this office as this office was functioning without any officer for nearly 3 months. Therefore, your goodself is requested to kindly allow time till 31.03.2025 to submit the remand report.” 5.7.7. More than six month’s period has lapsed since the first communication was sent to the AO seeking the Remand Report in view of the appellant’s request for admission of additional evidences u/r 46A. Administratively, this appeal is categorized as ‘priority’ on the ITBA system and hence early disposal of the same is stipulated. The appellant has made pleas and explained facts and circumstances in which the impugned re-assessment order has been passed, as reproduced hereby;-

31. Your honour, during the course of assessment proceedings no specific requirement of details/documents in respect of alleged unexplained transaction of loan was raised by ld. AO and instead details/documents with regard to share application was required by ld. AO vide Point no. 4 of notice u/s 142(1) dated 16.02.2022, which is not the case in hand. Your honour, even vide show cause notice (draft assessment order) dated 29.03.2022 ld. AO has stated that "onus of assessee to prove the genuineness of this transaction and the assessee could not provide any documentary evidence in support of his claim, the purchase amounting to Rs. 35,00,000/- is hereby added u/s 69C of the IT Act to its total income" reflecting that l d. AO has, interalia, wrongly treated the transaction of loan as purchase even when explanation with documentary evidence was submitted before issue of SCN. Further, in the assessment order dated 31.03.2022, ld. AO at Para 7.2 has merely alleged that 'assessee could not provide proper documentary evidence in support of its claim' without clearly specifying detail/documents not submitted by assessee. Your honour, it is also submitted that assessee has sought opportunity of personal hearing via video conferencing numerous times before ld. AO, detail of which is given as under:- • Your honour, vide reply dated 08.03.2022, assessee requested for want of personal hearing/video conferencing before taking any adverse inference. • Your honour, assessee vide objection dated 12.03.2022 in response to notice dated 10.03.2022, has, interalia, also placed request to allow hearing in person or via video conferencing before taking any adverse inference. • Your honour, assessee company vide reply date 28.03.2022 further brought or record that option to seek video 8 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 conferencing was not allowed on portal as only 3 days were left as on 28.03.2022 to complete the assessment. • Your Honors, vide point no. 3(c) on Pg no. 9 of said SCN dated 29.03.2022, an option was provided to assessee that in order to submit the oral submissions a request for personal hearing may be made and such request can only be made by clicking the seek video conferencing available against the SCN. • In response to said SCN dated 29.03.2022, the assessee company vide assessee vide request dated 30.03.2022 was successfully been able to apply for video conferencing on portal and said fact was also brought before ld. AO vide response dated 30.03.2022. • However, request for personal hearing was rejected by the Ld. AO by stating at Para 7.3 of assessment order that personal hearing was not provided "due to shortage of time, being the last day of time barring date" even when several requests were made vide reply dated 08.03.2022, letter dated 12.03.2022, reply dated 28.03.2022 and request made through portal on 30.03.2022 to seek personal hearing. The relevant extract of the order is reproduced as under for ready reference: ….. Your Honors, since no proper opportunity of being heard was granted by the ld. AO nor did he conveyed his dissatisfaction towards the submission of the assessee. The assessee was unable to understand the doubt in the mind of the ld. AO, if any. Accordingly, the assessee was prevented from sufficient cause to produce/furnish the relevant evidence before the ld. AO which are now being filed before your honour as additional evidences under Rule 46A.

32. In the light of above, assessee's case falls under clauses (c) and (d) of Rule 46A(1) as the assessee was also prevented by 'sufficient cause' from producing before the Ld. AO and it is relevant to mention here that the term 'Sufficient Cause' has not been defined under the Act. However, the courts have interpreted such term from time to time and held that the term 'sufficient cause' means a cause which is beyond the control of the party invoking the aid of the provisions of the law and whether the same could have been avoided by means of due care. The meaning and limit of the word would vary from facts to facts of different cases and the same will be at the discretion of the authorities. Further, it has been held that the term 'sufficient cause' should be liberally construed so as to advance substantial justice when no negligence, or any 9 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 inaction or want of bona fide is imputable to the party. In this regard, reliance is placed on the following binding judicial precedents. • Kvaerner Boving Construction Ltd v. DY. CIT, [1996] 54 TTJ (delhi -Trib.) 429 "The undefined words 'sufficient cause' means a cause which is beyond the control of the party invoking the aid of the provisions of law and any cause that prevents a person approaching the Court within time is sufficient, and in doing so it is the test of reasonable man in normal circumstances which has to be applied and the test whether or not a cause is sufficient is to see as to whether it could have been avoided by the party by the exercise of due care and attention; in other words, whether it is a bona fide. The words 'sufficient cause' should be liberally construed so as to advance a substantial justice when no negligence or any inaction or want of bona fide is imputable to the party, according to well settled propositions of law." • Encon Furnaces Private Ltd. Versus Assistant Commissioner., [1996] 56 ITD 14 (Delhi - Trib) "Sufficient cause is evidently something more than legally sufficient or sufficient according to the rules laid down in the section ". This is as held by the Madras High Court in the case of Kichchppa v. Ramanujam [1902] 25 ITR 166 (170,171) (DB) (sic). As commonly understood, it would mean which is beyond the control of the party invoking the provision of the section. The test to be applied is that of a reasonable man in normal circumstances. Sufficiency of reason would he in the test whether the same could have been avoided by exercise of due care and attention. Simply putting it there should be no negligence, no inaction or want of bona fides which could be imputable to the party. The good reason on the other hand is something which is akin to what is proper or right or sound. It is near synonymous to the sufficient reason. There could be no good reason which is not sufficient or conversely sufficient reason which is not a good one. Use of both the words would suggest that while considering the discretion by the appellate authorities, the object with which the provisions have been brought on the statute is to be kept in mind which in the case of the aforesaid provision is timely collection of the tax as per assessee's own returned income. The discretion is still with the authorities to admit or refuse to admit the appeal. The 10 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 general principle of law is that the discretion is to be exercised not in any arbitrary, vague or fanciful manner but on judicial principles. The discretion so exercised is to advance substantial justice. Each case has to be examined as to its own circumstances to see whether it falls within or without the terms of general rules or not. The common test whether a cause is sufficient or not is to say whether it could have been avoided by the party by the exercise of due care and attention. • J.K Chturvedi v. Asstt. CIT [2004] 3 SOT 456 (Ahd - Trib) • State of West Bengal v. Administrator, Howrah Municipality, AIR 1972 SC 749 • G.M Geri & Sons v. Fifth ITO [1998] 96 Taxman 19 (Mum. - Trib) • Rainbow Agro Industries Ltd V. ITAT [2003] 132 Taxman 752 (Bom.) 33. Your honour, considering severe gravity of the situation, it is prayed before your Honors to kindly consider the submissions of the assessee. Further, in this regard, all the documentary evidences with respect to impugned addition are produced before your Honors vide captioned application under Rule 46A of the Act.

34. Accordingly, in view of the above, it is prayed before yourself that additional evidences be admitted under Rule 46A, as they are integral to the process of judicious disposal of the impugned appeal.

35. Your honour, we may mention here that a perusal of these evidences will clearly establish the genuineness of the assessee's claim regarding the impugned addition made by the ld. AO as these evidences/documents go to the root of the issue and shall justify the facts of the case. In light of the same, it is prayed before yourself that additional evidences be admitted under Rule 46A.

36. Further, it is submitted before your honour that, the above additional evidences that are being submitted by the assessee to support his argument are sufficient to the best of his knowledge. However, if any further documentary evidence or explanation is required by the ld. AO in process of verification transaction entered into by the assessee, the assessee is ready and pleased to produce/submit the same as and when required.

37. In view of above, it is requested before your goodself to kindly admit the above-mentioned additional evidences and 11 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 forward the same to Ld. AO for examination as the assessee had reasonable cause for not being able to produce said evidences at the time of assessment proceedings.” 5.7.8. With regard to admissibility of above cited additional evidences, the fact of the matter is AO has last sent a communication on 07.01.2025 seeking more time and stating, inter alia, that the “asseessee in this case has taken accommodation entry from entry providers which were running organized tax evasion syndicate. Therefore, the enquiry has been undertaken in respect of broker, agent and other middle persons who were involved in this practice which need much more time to come to the final conclusion”. This tantamount to a generic remark even when no Remand Report is furnished with regard to specifics of the transactions and issues involved. Its fact that more than six months period has lapsed by now since ‘additional evidences’ and the appellant’s submission were forwarded. It would not be out place to observe that in this case the notice u/s 148 was issued on 28.03.2021 and in compliance the appellant had filed its RoI on 17.04.2021 and the assessment order impugned here was passed on 31.03.2022. The appellant has also pointed out that it’s request for allowing opportunity of being heard through video conference was not acceded to. The appellant pleaded that no specific documents was required from it during the impugned re-assessment proceedings. The appellant has made several pleas citing procedural deficiencies with regard to the re-assessment proceedings and relied on judicial pronouncements in his support as described in the appellant’s submission reproduced in para 5.7.7 above. The appellant has submitted the documents which are pertaining to the transactions under discussion and therefore allowing such documents would be in the interest of natural justice as well as help in deciding this appeal. 5.8.1. In this case, the undisputed fact is that addition of Rs.35,00,000/-has been made u/s 68 in view of receipt (credit entry in the appellant’s bank account) of Rs.25,00,000/- and payment (debit entry in the appellant’s bank account) of Rs.10,00,000/- during the F.Y. 2012-13. The source and destination of receipt and payments both, was M/s S. P. Solutions P. Ltd. 5.8.2. The appellant has explained, as discussed in subsequent paragraphs also, its business as trading in shares and derivatives. It is averred that loan amounts received from M/s S. P. Solutions Pvt. Ltd. was transferred to the appellant’s account with its broker M/s Divya Portfolio Pvt. Ltd. Similarly, the appellant claims that repayments have also been made out of the sum withdrawn from trading account with broker company M/s Divya Portfolio Pvt. Ltd. The appellant furnished copy of its submission dated 28.03.2022, made during the assessment proceedings which shows that amounts received have always been paid back as under: 12 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 Date Debit/Cr Comment/Explanaton offered by the edit appellant Amount (Rs.) 19.10.2012 (+)10,00,000/ Loan amount received in bank from M/s - S. P. Solutions Pvt. Ltd. 10.12.2012 (-)10,00,000/- The loan amount received on 19.12.2012 repaid to M/s S. P. Solutions Pvt. Ltd. 02.01.2013 (+)15,00,000/ Loan amount received in bank from M/s - S. P. Solutions Pvt. Ltd. 02.04.2013 (-)15,00,000/- The loan amount received on 02.01.2013 repaid to M/s S. P. Solutions Pvt. Ltd. 5.8.3. Tabulation of the appellant’s transactions with M/s S. P. Solutions Pvt. Ltd. in the foregoing paragraph was furnished during the assessment proceedings too. It shows that as by during the F.Y. 2012-23, the appellant had cumulatively received Rs.25,00,000/- and paid Rs.10,00,000/- to M/s S. P. Solutions Pvt. Ltd. 5.8.4. The appellant has claimed that “It is a settled law that ‘credit entries cannot be looked into isolation’ and when loan received from lender has been repaid back which shows that assessee was not beneficiary of loan received by it, then no addition can be made u/s 68 of the Act in the absence of any categorical finding as to how the amount of loan received can be said to accrue from the own coffers of assessee.” The appellant in this regard has cited following judgements where transactions have been held genuine based on factum of repayment of loan amounts during the year and/or in the subsequent period:- i) Hon'ble Punjab & Haryana High Court in the case of CIT v. Karaj Singh IT Appeal No. 161 of 2005. ii) Hon’ble Gujarat High Court in the case of DCIT v. Rohini Builders 256 ITR 360 Guj iii) Hon’ble Gujarat High Court in the case of PCIT v. Ambe Tradecorp (P.) Ltd. in Tax Appeal No. 306 of 2022 pronounced on 05th July 2022 iv) Hon’ble Gujarat High Court in the case of CIT v. Ayachi Chndrashekhar Narsangji in Tax Appeal No. 992 of 2013. v) Hon’ble ITAT Mumbai in the case of ITO v. M/s. Agripure Tradeware Private Limited in ITA No. 1690/Mum/2018. vi) Hon’ble ITAT Indore in the case of ITO v. Sh Pravin Kumar ITA No. 557/Ind/2017. vii) Hon’ble ITAT Delhi in the case of ACIT v. Sh. Harvansh P. Chawla to 5858/Del/2017. viii) Hon'ble ITAT, Kolkata in the case of Hillman Hosiery Mills Pvt. Ltd. v. CIT ITA 2634/Kol/2019. ix) Hon'ble ITAT, Mumbai In case of ITO v. Smt. Pratima Ashar [2019] 107 taxmnn.com 135 (Mumbai). 13 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 5.8.5. While making the addition of the amount of receipt and payments from and to M/s S. P. Solutions Pvt. Ltd. during the A.Y. 2012-13, in the table in the body of the assessment order reason given is that immediately before RTGS to the assessee, same day there is credit in its bank account “which shows that transactions are not transparent and the bank account has been used only to provide accommodation entries. Genuineness and creditworthiness are not established and thus remained doubtful.” Such findings merely because of frequency of transactions are untenable. The arrangement or requirement of funds as per the circumstances; for the purpose of lending as well repaying cannot be ruled out, particularly when there is no corroborative or circumstantial evidence in the form of communication to obtain the accommodation entry, payment of commission to any accommodation entry provider or movement of cash etc. In this regard, reliance is being placed on Commissioner of Income-tax vs. Mark Hospitals (P.) Ltd., (2015) 58 taxman 226, whereby Madras High Court held that:- "6. Before us, learned standing counsel appearing for the Revenue tried to plead that the amount was credited on the previous day and cheques were issued on the next day. There appears to be no legal bar for such transaction. It is seen from the order of the Commissioner of Income-tax (Appeals) as well as from the order of the Tribunal that the assessee had given plausible explanation for having taken a loan for a sum of Rs. 37 lakhs, for which, the assessee had produced evidences to prove the creditworthiness and genuineness of the transaction. From the evidences produced it is clear the assessee had fulfilled the requirements undersection 68 of the Income-tax Act”. Also Hon'ble Delhi High Court in the case of M/s Mod Creations (P) Ltd. vs. ITO in has held that: “The authorities below found vis-a-vis the genuineness of the transactions and the creditworthiness of their creditors : (i) the fact that there was sufficient balance available with the creditors when cheques have been issued to the assessee company was established; (ii) it was also established that the funds available at the relevant point in time were not infused into the bank, accounts of the creditors by way of cash but were in fact credited to their account again by way of cheques largely on account of commissions received by them save and except two transactions of Rs. 1 lac each received by two creditors from verifiable donors; (Hi) the bank accounts as well as returns filed by the creditors who were assessable to tax along with their PANs were also available with the AO; (iv) the assessee in turn had received the monies by way of cheques in respect of which credits were made in their books of accounts; (v) the creditors had also placed on record receipts of commission as well as the gift deeds in respect of gifts made to the donors; (vi) the identity and addresses of sub creditors was also 14 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 available. With this material on record, as far as the assessee was concerned, it had discharged initial onus placed on it. In the event the Revenue still had a doubt with regard to the genuineness of the transactions in issue, or as regards the creditworthiness of the creditors, it would have had to discharge the onus which had shifted on to it. A bald assertion by the AO that the credits were a circular route adopted by the assessee to plough back its own undisclosed income into its accounts, can be of no avail. The Revenue was required to prove this allegation. An allegation by itself which is based on assumption will not pass muster in law. The Revenue would be required to bridge the gap between the suspicions and proof in order to bring home this allegation. The Tribunal, without adverting to the aforementioned principle laid stress on the fact that despite opportunities, the assessee and/or the creditors had not proved the genuineness of the transaction. Based on this the Tribunal construed the intentions of the assessee as being mala fide. Tribunal ought to have analyzed the material rather than be burdened by the fact that some of the creditors had chosen not to make a personal appearance before the AO. If the AO had any doubt about the material placed on record, which was largely bank statements of the creditors and their IT returns, it could gather the necessary information from the sources to which the said information was attributable to. No such exercise had been conducted by the AO. In any event what both the AO and the Tribunal lost track of was that it was dealing with the assessment of the company, i.e., the recipient of the loan and not that of its directors and shareholders or that of the sub-creditors. If it had any doubts with regard to their creditworthiness, the Revenue could always bring it to lax in the hands of the creditors and/or sub creditors -CIT vs. Divine Leasing and Finance Ld. (2007)207 CTR (Del) 38 : (2008) 299 ITR 268 (Del) and CIT vs. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195 : (2008) 6 DTR (SC) 308 relied on.” We may also recall that in the Case of CIT vs M/s Avant Grade Carpets Ltd Appeal no. 141 of 2014 dated 11.08.2014 the Honorable Allahabad High Court has held that; “On perusing the records, it appears that the finding that the assessee was rerouting its own funds was based on surmise. The CIT (A) had the benefit of considering the balance sheet of the lender as well as confirmatory certificates in respect of the advances which the lender in turn had received. There was no material to establish that the assessee was engaged in a transaction for routing its own funds. The view which has been taken by the Tribunal is a possible view to take and there is no material on the record for this Court to hold that the view of the Tribunal suffers from any perversity. Hence the appeal will not give rise to any substantial question of law.” 5.9.1. The point thereafter remains is of identity, creditworthiness and genuineness of the transactions from the prism of section 68 which has been relied upon while making the additions impugned

15 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 here. The appellant has consistently explained during the re- assessment proceedings as well as in the appeal that the transactions with M/s S. P. Solutions Pvt. Ltd. were in the nature of loan. To establish the identity, creditworthiness and genuineness of the transactions; it had furnished the following documents pertaining to of M/s S. P. Solutions Pvt. Ltd. i.e. the lender of the amount- i) Copy of audited financial statement relevant for A.Y. 2013-14. ii) Copy of acknowledgement of ITR filed for A.Y. 2013-14 iii) Copy of Bank statement relevant for A.Y. 2013-14 iv) ROC master data of M/s S. P. Solutions Pvt. Ltd. 5.9.2. Citing the material/document, the appellant has pleaded that M/s S. P. Solutions Pvt. Ltd. i.e. the lender of the amount; is a private company incorporated under the Companies Act, 1956 on 02.02.2011 having CIN: U72200DL2011PTC213318. The company is situated at 18190/135, First Floor, Shanti Nagar, Trinagar, Delhi – 110035. 5.9.3. Based on documents and explanation cited in para 5.9.1 and 5.9.2 of this order, the claim of the bonafide of the appellant company’s identity and existence during the period under discussion is irrefutable. 5.10.1. With regard to creditworthiness of M/s S. P. Solutions Pvt. Ltd. i.e. the lender of the amount; the appellant has submitted audited financial statements of the lender company. Based on such financial results, the appellant has pleaded that M/s S. P. Solutions Pvt. Ltd. is having own funds in the form of shareholders fund of Rs.8,00,96,562.66 as on 31.03.2013 and Rs.8,01,01,800 as on 31.03.2012. The appellant has assailed that the AO has erred in considering the creditworthiness of the parities to the transaction merely on the basis of net income reported in the ITR without looking at the balance sheet of the lender. In its support, the appellant has cited following pronouncements of different Hon’ble ITAT benches:- i) ITO, Ward 6(2) v Computer Home Information Plus Pvt. Ltd. (ITA No. 5680/Del/2016) ii) P. CIT (Centra1) Vs. M/s Goodview Trading Pvt. Ltd., ITA 377/2016, dated 21.11.2016 iii) CIT-9 Erstwhile CIT-VI Vs. Vrindavan Farms (P) Ltd. [ITA No. 71, 72 & 84/2015 dated 12-08-2015] 5.10.2. The appellant has explained that M/s S. P. Solutions Pvt. Ltd. i.e. the lender of the amount; had given loan to this appellant out of proceeds of sale of shares aggregating to Rs.25,00,029/- (Rs.10,00,029/- on 19.10.2012 and Rs.15,00,000/- on 02.01.2013) M/s S. P. Solutions Pvt. Ltd. i.e. the lender of the amount “had sold such shares to one M/s Interior Soft Solutions Pvt. Ltd.” In the support copy of the bank statement of the lender company has been furnished. 5.11.1. To establish the genuineness of the transactions, the appellant has submitted following documents:- 16 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 i) Copy of memorandum of understanding (MoU) entered into by the appellant with M/s S. P. Solutions Pvt. Ltd. i.e. the lender of the amount ii) Copy of confirmation letters for F.Y. 2012-13 and F.Y. 2013-14 from M/s S. P. Solutions Pvt. Ltd. i.e. the lender of the amount, besides explaining the source of its funds iii) The extracts of the bank statement of the appellant company underscoring receipt and payment of the loan amounts. iv) The extracts of the bank statements of M/s S. P. Solutions Pvt. Ltd. i.e. the lender of the amount to the appellant. 5.11.2. The appellant has submitted that it has paid interest to M/s S. P. Solutions Pvt. Ltd. on the amount of loans. It has also submitted that TDS has been deducted and deposited on such interest amount. In its support, the appellant has submitted confirmation of account of the relevant period, copy of TDS certificates besides pointing to interest amount payment in the bank statements of the relevant period. 5.11.3. The documents and facts and circumstances cited in foregoing paragraphs underscore the facts that the transactions have been carried out through genuine banking channels. The amounts had not been received as interest free loans. Source of the lender is also furnished by the appellant. The receipt and re-payment of the loans both have taken during the span of F.Y. 2012-13 and 2013-14 i.e. much before the search proceedings on the premises of Himanshu Verma group. 5.12. The appellant has explained that the loan amount received from M/s S. P. Solutions Pvt. Ltd. has been utilized for the purpose of its business of shares and derivatives. In this regard, it is explained that “Loan of Rs. 10,00,000/- received on 19.10.2012 was transferred to account with broker M/s. Divya Portfolio Pvt. Ltd. on 20.10.2012. Above transaction can be verified form bank statement of assessee showing RTGS of Rs. 12,00,000/- (refer PB Pg. no.- 144) and transaction ledger of assessee company for FY 2012-13 in the books of broker (refer relevant Addl. Evid. PB Pg. no.-199-211) showing receipt of sum of Rs.12,00,000/- on 19.10.2012 via RTGS. Loan of Rs. 15,00,000/- received on 02.01.2013 was transferred to account with broker M/s. Divya Portfolio Pvt. Ltd. on 03.01.2013.” The appellant also pointed out that subsequently, it had received the amounts from its broker M/s. Divya Portfolio Pvt. Ltd. in the course of its business and the same has been utilized towards repayment of loans also. 5.13.1. The appellant has also assailed the assessment order on the basis that in the reasons for reopening recorded in its case it has been mentioned that the appellant had obtained accommodation entries in the form of share application money from entities controlled by a Himanshu Verma; whereas no share application money has been 17 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 received by the appellant from entities enumerated as controlled by Himanshu Verma, instead it had received loan amount from M/s S. P. Solutions Pvt. Ltd. Picking from such factum appellant has stated that re-assessment proceedings have been initiated on wrong premise. The appellant has also claimed that during the assessment proceedings, vide notice u/s 142(1) dated 16.02.2022; the appellant was required to submit details/documents of share application money received. 5.13.2. The appellant has also cited that no independent enquiry has been conducted before or during the assessment proceedings in this case. No material has been brought on record, by way of any enquiry or evidences so as prove that money received as unsecured loan was emanating from the appellant itself. The appellant has cited several judgments in its favour claiming that such deficiencies in the assessment order makes it untenable. The judgements of different Hon'ble High Courts and ITATs cited by the appellant are as follows: i) CIT vs. Value Capital Services (P) Ltd. 307 ITR 334, Delhi High Court ii) CIT Vs. Metaphor Exports P Ltd. ITA 4/2015 dated 13.01.2015, Delhi High Court iii) CIT-II Vs. M/s. Multiplex Trading & Industrial Co. Ltd.378 ITR 351 dated 22.09.2015, Delhi High Court iv) CIT Vs M/s. Mark Hospitals (P) Ltd. 373 ITR 115 dated 03.12.2014 Madras High Court v) CIT vs. Apex Therm Packaging (P.) Ltd. 42 taxmann.com 473 dated 20.12.2013, High Court Of Gujarat vi) Roopchand Manoj Kumar vs. CIT (1999) 235 ITR 461 (Gau) Gauhati High Court vii) Addl. CIT vs. BAHRI BROTHERS (P) LTD. (1985) 154 ITR 244 (Pat.) Patna High Court Held viii) CIT Vs. Chanakya Developers Tax Appeal No. 691 of 2013, Dated: 05/08/2013 High Court of Gujarat ix) ITO vs. M.S. ADVANCE (P) LTD. (2005) 93 TTJ (Asr) 778 ITAT Amritsar (Bench) 5.13.3. The appellant has also cited that Hon'ble ITAT, Delhi in its decision in the case of RR Carwell Pvt. Ltd. vs. DCIT, Central Circile- 4, New Delhi (ITA No. 9153-9158/Del/2019 dated 11.02.2022) where issue involved was addition based on statement and transaction of alleged bogus loans from entities of Shri Himanshu Verma. Hon'ble ITAT has held that;- “8. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) and the paper book filed on behalf of the assessee. ……We find the Assessing Officer in the instant case made addition of n 10 lakhs being unsecured loan obtained by the assessee from M/s White Collar Management Services Pvt. Ltd. on the ground that the assessee could not produce the principal officer/director of M/s White Collar Management Services Pvt. Ltd. Further, shri Himanshu 18 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 Verma in his statement recorded u/s 132(4) in reply to question no.7 had mentioned that he is doing business with various companies of fabric turnover and providing bogus bills for sales and purchases of fabric. In question no.17, he has stated that accommodation entries are given in the form of loan/share capital for layering of the amount…..So far as the statement of Mr. Himanshu Verma is concerned, he has stated that accommodation entries given in the form of loan/share capital are only the layering of the amount.

9. We find some force in the above arguments of the ld. Counsel for the assessee……The assessee has filed copy of ITR, coy of bank statement of the said party reflecting the receipt and payment of loan and balance sheet as on 31.03.2011 and Form-16 for TDS deducted on interest. Not a single document furnished by the assessee has been proved to be false or untrue by the lower authorities. Under these circumstances and in view of the overwhelming evidences filed by the assessee during the course of assessment proceedings, which are not found to be false or untrue, we hold that the Ld. CIT(A) is not justified in sustaining the addition of n 10 lakh shown by the assessee as loan which has been repaid in the subsequent year and much before the date of search. Accordingly, the order of the Ld. CIT(A) is set-aside and ground of appeal 4, 5 and 6 are allowed.” 5.14.1. The appellant has assailed the impugned assessment order citing that the assessment has been broadly based on statement of Shri Himanshu Verma which is a statement recorded on oath at the back of the appellant, to which the appellant got no opportunity to cross examination. The appellant has cited several case laws in its favour. 5.14.2. Though, the cross examination of an entry operator by beneficiaries which may run into multiple numbers and may be spread across the places, is not practicable; least could have been done during the re-assessment proceedings is that the copy of the statement of Shri Himanshu Verma should have been provided. The appellant has cited minimum seven instances of requests to the AO seeking such statement which was not provided as per the appellant. In the assessment order also, the statement of the entry operator is not dealt with in a speaking manner. 5.15.1. The appellant has assailed the proceedings of reopening u/s 147 r.w.s. 148 on different technical grounds, particularly citing inconsistency in the ‘reasons recorded for reopening’. The appellant has cited that;- “..no categorical reference of alleged information found during the course of search conducted on Sh. Himanshu Verma is given by the ld. AO and only detail of alleged transactions is referred in the investigation report in the table form. Said list itself cannot lead to any inference against the assessee, placing reliance on judgement of Hon’ble Delhi High Court in the form of Signature Hotels (P.) Ltd. v. ITO 338 ITR 51 wherein it was held that ‘annexure is not a pointer and does not indicate escapement of income’.”

19 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 5.15.2. The appellant has also pointed out that there was inconsistency in the ‘reasons recorded’ for the purpose of reopening. It is pleaded by the appellant that; “At first Para of reasons recorded it was stated that "Bhikshu PortFolio Pvt. Ltd is one of beneficiary who has obtained accommodation entries Rs. 35,00,000/- from M/s S.P. Solutions Pvt. Ltd. managed and controlled by Himanshu Verma during the FY 2012-13 relevant to AY 2013-14 in the shape of share application money / entry loans / capital gain on share etc." Further, at second last para of reasons recorded it was stated that "keeping in view the statutory provisions, legal principles, and factual matrix that the nature of income declared does not reflect the true and actual income generated by the assessee on account of bogus accommodation entry in the shape of share application money" 5.15.3. It has also been pointed out that besides the facts that the complete statement of Shri Himanshu Verma was not provided to the appellant; it is also cited that Shri Narendra Kumar Baid, Director of appellant company in his statement recorded, in reply to question no. 10 had stated that he does not know Shri Himanshu Kumar Verma and that he has not admitted in his statement that the appellant had carried out transactions with bogus companies for capital formation. 5.16.1. In view of the foregoing discussion and in the facts and circumstances described therein, as well as following the ratio of Hon'ble judicial authorities cited in the foregoing paragraphs, I am inclined to hold that receipts as well as payments of amounts by the appellant in a year cannot be considered for addition u/s 68. The section 68 deals with ‘any sum found credited in the books’ to begin with; here the sums on both sides of the books, i.e. credited as well as debited amounts have been totaled, albeit wrongly, and added to the returned income of the appellant. 5.16.2. The section 68 is one of the foundational provisions in the Income Tax Statute and it is well settled that any addition u/s 68 is contingent upon failure of an assessee in offering a satisfactory explanation or no explanation is offered at all, about the nature and source of amounts credited in its books. The detailed discussion in the foregoing paragraphs amply demonstrates that in the present case, the appellant has discharged its onus of explaining identity, creditworthiness and genuineness of the transactions in its books as well as the parties, which has not been refuted. 5.16.3. The appellant has explained its business as trading in shares and derivatives and that it requires short term funds for paying the margin money as and when needed. Such short term loans are repaid when there is no requirement. The appellant has submitted explanation with reference to bank statement that destination as well as source of funds impugned here, was always its share broker M/s Divya Portfolio Pvt. Ltd. which means that the funds have been utilized in normal trading/business of the appellant and the funds in question were not in the nature of share capital or interest free loans 20 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 for long term. Funds have been received and paid back. Interest has been charged, TDS has been deducted. the transactions have been carried out through genuine banking channels. Source of the lender is also furnished by the appellant. The receipt and re-payment of the loans both have taken place during the span of F.Y. 2012-13 and 2013-14 i.e. much before the search proceedings on the premises of Himanshu Verma group. 5.16.4. As discussed in foregoing paragraphs of this order, the appellant has cited multiple judicial authorities from which ratio flows that ‘credit entries cannot be looked into isolation’ and when loan received from lender has been repaid back which shows that assessee was not beneficiary of loan received by it, then no addition can be made u/s 68 of the Act in the absence of any categorical finding as to how the amount of loan received can be said to accrue from the own coffers of assessee.” 5.16.5. As discussed already, reason given for the addition is that immediately before RTGS to the assessee, “same day there is credit in its bank account”. This is not a tenable ground for addition u/s 68 of both the payments as well as received amounts. The appellant had pleaded that funds were required for his business of trading in shares and derivatives. The appellant has submitted detail of its broker M/s. Divya Portfolio Pvt. Ltd. There is no corroborative or circumstantial evidence to in the form of communication to obtain the accommodation entry, payment of commission to any accommodation entry provider or movement of cash etc. In this regard, reliance has been placed on Commissioner of Income-tax vs. Mark Hospitals (P.) Ltd., (2015) 58 taxman 226, whereby Madras High Court held that:- "6. Before us, learned standing counsel appearing for the Revenue tried to plead that the amount was credited on the previous day and cheques were issued on the next day. There appears to be no legal bar for such transaction. It is seen from the order of the Commissioner of Income-tax (Appeals) as well as from the order of the Tribunal that the assessee had given plausible explanation for having taken a loan for a sum of Rs. 37 lakhs, for which, the assessee had produced evidences to prove the creditworthiness and genuineness of the transaction. From the evidences produced it is clear the assessee had fulfilled the requirements under section 68 of the Income-tax Act”. 5.16.6. Besides the decisions of the Hon'ble Delhi High Court in the case of M/s Mod Creations (P) Ltd. vs. ITO in and Hon'ble Allahabad High Court in the Case of CIT vs M/s Avant Grade Carpets Ltd Appeal no. 141 of 2014 dated 11.08.2014 5.16.7. There is credence in the appellant’s plea that no independent enquiry has been conducted before or during the assessment proceedings in this case. No material has been brought on record, by way of any enquiry or evidences so as prove that money received as unsecured loan was emanating from the appellant itself. At this 21 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025 juncture, it is also important to recall that period of about six month’s was allowed yet no Remand Report or refutation of admissibility of additional evidences is received. 5.16.8. As discussed in one of the foregoing paragraphs, the appellant has cited a decision of Hon'ble ITAT, Delhi in the case of RR Carwell Pvt. Ltd. vs. DCIT, Central Circile-4, New Delhi (ITA No. 9153- 9158/Del/2019 dated 11.02.2022) where relief has been allowed when issue involved was addition based on statement and transaction of alleged bogus loan from entities of Shri Himanshu Verma. In view of the detailed discussion in para 5.1 onwards and in the facts and circumstances of this case as well as following the ratio of Hon'ble judicial authorities cited in this order ground no. 11 to 18 of this appeal are allowed.”

23 | P a g e , 4206, 4207, 4251 & 4252/Del/2025 C.O. Nos. 214 to 218/Del/2025