DCIT Vs ACE Infracity Developers Pvt. Ltd. (ITAT Delhi)
The case involves cross appeals filed by both the assessee and the Revenue against orders of the Commissioner of Income Tax (Appeals) concerning multiple assessment years. The assessments arose following search and seizure operations conducted under Section 132 on 28.07.2021 and 04.01.2022 on the assessee group. During the assessments, the Assessing Officer (AO) examined unsecured loans received from various entities and, being unsatisfied with the explanations, treated several of them as accommodation entries, making additions under Sections 68 and 69C. The CIT(A) partly confirmed and partly deleted these additions, leading to appeals by both sides.
The Tribunal examined each lender individually. In respect of loans from Sundram Consultants Pvt. Ltd., the AO had alleged that the company was a shell entity with dummy directors and questionable email credentials, and that complete bank statements were not furnished. However, the Tribunal noted that the lender was a Non-Banking Financial Company (NBFC), engaged in lending as part of its regular business, with substantial financial strength including share capital and reserves exceeding ₹17 crore and significant revenue. It also noted that similar transactions had been accepted as genuine in other cases. The Tribunal held that the assessee had established identity, creditworthiness, and genuineness of the transaction, and that no incriminating material was found during search. Accordingly, additions relating to this lender and associated interest were deleted.
