AI Insights
The case involves multiple appeals by the Revenue against the orders of the CIT(A) which had deleted additions made by the Assessing Officer (A.O.) under Section 147 of the Income Tax Act, 1961. The A.O. had made these additions based on the premise that the loans received by Vedmutha Electricals India Private Limited from certain companies were bogus and merely served as accommodation entries. The CIT(A), however, found the loans to be genuine based on the documents provided by the assessee. The Tribunal, after reviewing the materials and the submissions, directed a fresh examination of the matter, emphasizing the need for a thorough verification of the lender companies' activities and the authenticity of the transactions.
Appeal Details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 705938 (ITAT-VISAKHAPATNAM)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-06-2025
Appeal Filed By
Department
Order Result
Allowed
Assessment Year
2016-2017
Judgement Text
"आयकर अपीलीय अधिकरण, विशाखापटणम पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL Visakhapatnam Bench श्री रवीश सूद, माननीय न्याययक सदस्य एिं श्री एस. बालक ृष्णन, माननीय लेखा सदस्य SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER AND SHRI BALAKRISHNAN. S, ACCOUNTANT MEMBER, आयकरअपीलसं./I.T.A.Nos.34 to 38/Viz/2025 (निर्धारण वर्ा/ Assessment Years : 2013-14, 2014-15, 2016-17, 2017-18 and 2017-18) The Assistant Commissioner of Income Tax, Circle – 1(1), Vijayawada. Vs. Vedmutha Electricals India Private Limited, Vijayawada. PAN : AACCV5041K. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : None राजस्व का प्रतततितित्व/ Department Represented by : Dr. Aparna Villuri, Sr.AR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 24.06.2025 घोर्णध की तधरीख/ Date of Pronouncement : 30.06.2025 O R D E R प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The captioned appeals filed by the Revenue are directed against the consolidated order passed by the Commissioner of 2 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 29.11.2024, which in turn arises from the respective orders passed by the Assessing Officer under Section 147 of the Income Tax Act, 1961 (for short “the Act”) dated 17.08.2021 for the A.Y 2017-18 (two orders), A.Y 2016-17, A.Y 2014-15 and A.Y 2013-14. As the issues involved in the present appeals are inextricably interlinked and interwoven, therefore, the same are taken up and disposed off by this consolidated order. 2. We shall first take up the appeals filed by the Revenue for A.Y. 2017-18 in ITA No.37/Viz/2025 and ITA No. 38/Viz/2025, wherein the impugned order has been assailed on the following common grounds of appeal before us: “1. The order of the Ld.CIT(A) is erroneous on facts and in circumstances of the case. 2. The Ld. CIT(A) erred in deleting the additions of Rs.1,00,00,000/-, Rs. 11,83,562/- and Rs. 54,000/- based on the contention of the assessee that the appellant has submitted all the related documents i.e. Copy of PAN, ITR, ledger accounts, confirmation of loan, bank statements showing transaction of loan taken and interest paid thereon through banking channel in connection with M/s Aneri Fincap Ltd., ignoring the fact that none of the directors of M/s Aneri Fincap Limited appeared before the Assessing Officer in response to summons u/s 131 issued during the course of assessment proceedings. 3. The Ld. CIT(A) erred in deleting the additions of Rs.1,00,00,000/- ignoring the fact that during the course of search operation, a statement on oath of Sri. Rajesh G. Mehta was recorded wherein he admitted that he was only providing bogus sales and purchase bill to 3 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. various entities, and there was no actual supply of goods. He further stated that M/s Aneri Fincap Limited was one of the Oneworld Group entities controlled and managed by one Shri. Rajesh G. Mehta. 4. The CIT(A) while passing impugned order ignored that a statement on oath of Shri Urvil A. Jani, one of the key persons of the Oneworld group of companies was also recorded on 08.02.2020, wherein he also admitted that various Oneworld group entities had made bogus purchase/bogus sale transactions with the various entities controlled and managed by Shri Rajesh G. Mehta. M/s Aneri Fincap Limited also one of the entity in Oneword group entities, from whom the assessee was alleged to have obtained loan of Rs.1,00,00,000/-, and alleged to have paid interest of Rs. 11,83,562 and commission of Rs.54,000. 5. The Ld. CIT(A) while allowing the appeal filed by the assessee ignored the fact that 'M/s Aneri Fincap Limited is a paper company, without doing any genuine business activity, cannot be considered as genuine. Further, this company was only engaged in providing bogus accommodation entries to various beneficiaries, as per the statement on oath given by Sri Rajesh G. Mehta who was the one of the key person who controls and manages M/s Aneri Fincap Limited. 6. The CIT(A) erred in allowing the appeal filed by the Assessing by ignoring the fact that the documentary evidences, on which the CIT(A) relied upon were submitted by the assessee itself on behalf of its alleged lender i.e. M/s Aneri Fincap Limited. M/s Aneri Fincap Limited had not submitted any documentary evidence directly to the CIT(A) with regard to payment of loan of Rs.1,00,00,000/-, Interest of Rs.11,83,562/- and commission of Rs.54,000/- to the assessee. 7. The Ld. CIT(A) while allowing the appeal filed by the assessee ignored the well known facts with regard to procedure followed by bogus entry providers that the entry providers collect the said amount in cash and make deposit into its bank account and later the same will be routed through banking channels to the entity for which it intends to provide bogus vouchers or accommodation entry for providing the alleged loan. 8. Further, this case falls in exceptional category as per Circular No.5/2024 dated 15.03.2024 issued by the CBDT in F.No. 279/Misc- 142/2007- ITJ(Pt.) vide para 3.1(h) viz., \"Cases involving organized tax evasion including cases of bogus capital gain/loss through penny stocks and cases of accommodation entries\" 9. Any other ground that may be urged at the time of appeal hearing.” 4 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 3. Succinctly stated, the assessee company which is a group entity of “Goldmedal group” is engaged in the business of trading in electrical goods had filed its return of income for A.Y. 2017-18 on 22.03.2018, declaring an income of Rs. 4,92,23,660/- 4. Subsequently, information was shared by JCIT(OSD), Central Circle-2, Mumbai with the A.O, wherein he was informed that the assessee company as per the information that had surfaced in the course of the search and seizure proceedings conducted in the case of Oneworld group of cases on 06.11.2019 was a beneficiary of bogus loan entries aggregating to Rs. 1 crore that it had received from M/s Aneri Fincap Limited, i.e a paper company which was not doing any genuine business activity but was only providing bogus accommodation entries to various beneficiaries. The A.O. was further informed that Shri. Urvil A. Jani, one of the key person of Oneworld group entities, had in his statement recorded on oath in the course of the post-search proceedings on 08.02.2020, admitted that the various Oneworld group entities had made bogus purchase/bogus sale transactions 5 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. with the various entities controlled and managed by one Shri. Rajesh G. Mehta. It was further brought to the notice of the A.O. that Shri. Rajesh G. Mehta, who managed and controlled the various entities with whom the Oneworld group entities had claimed to have made purchase and sale transactions was earlier arrested by the GST department for fraudulent business activities, and was also found to be involved in the bogus purchase and sale transactions, wherein only invoices were raised and there was no actual movement/delivery of goods. Also, the A.O. was informed that Shri. Rajesh G. Mehta (supra) in his statement recorded during the course of the search proceedings, had admitted that he was only providing bogus sales and purchase bills to various entities without any actual supply of goods. The A.O., based on the aforesaid information holding a bonafide belief that the income of the assessee of Rs. 1 crore that was chargeable to tax had escaped assessment, initiated proceedings under Section 147 of the Act. Notice under Section 148 of the Act, dated 29.06.2021 was issued to the assessee company. The assessee company in compliance to the notice u/s 148 of the Act, dated 29.06.2021, submitted its return of income on 04.10.2021, declaring an 6 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. income of Rs. 4,93,23,660/- i.e as was originally returned. Thereafter, the A.O. vide his order passed u/s 147 of the Act, dated 25.03.2022 assessed the income of the assessee company at Rs. 6,05,61,220/-. 5. Thereafter the A.O. in pursuance of the Hon’ble Supreme Court judgment in the case of UOI Vs. Ashish Agarwal (2022) 138 taxmann.com64 (SC) and CBDT instructions on the matter issued a fresh notice u/s 148A of the Act, dated 29.07.2022 after following the due procedure laid down in Section 148A of the Act. In response to notice u/s 148A of the Act, the assessee company filed its return of income on 03.09.2022, declaring its total income at Rs. 4,98,23,662/-. Thereafter, the A.O. vide his order passed u/s 147 of the Act, dated 23.03.2023 assessed the income of the assessee company at Rs. 6,05,61,220/-. 6. During the course of the assessment proceedings, the A.O based on the aforesaid information that was shared with him by the JCIT(OSD), Central Circle 7(2), Mumbai, called upon the assessee company to put forth an explanation as to why the impugned loan of Rs. 1 crore received from M/s Aneri Fincap 7 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. Limited (supra) may not be added to its total income as an unexplained cash credit under Section 68 of the Act. In reply, the assessee company tried to impress upon the A.O. that it had received a genuine loan of Rs. 1 crore from M/s Aneri Fincap Limited (supra). However, the claim of the assessee company did not find favour with the A.O for the reason, viz. (i). that Shri. Urvil A. Jani, a key person of Oneworld group entities in his statement recorded on oath in the course of the post-search proceedings on 08.02.2020, had admitted that the various Oneworld group entities had made bogus purchase/bogus sale transactions with the various entities controlled and managed by one Shri. Rajesh G. Mehta; (ii). Shri. Rajesh G. Mehta, who managed and controlled the various entities with whom the various Oneworld group entities had claimed to have made purchase and sale transactions was earlier arrested by the GST department for fraudulent business activities and was found to be involved in bogus purchase and sale transactions wherein only invoices were raised and there was no actual movement/delivery of goods; (iii). Shri. Rajesh G. Mehta (supra) in his statement recorded during the course of the search proceedings, had admitted that he was only 8 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. providing bogus sales and purchase bills to various entities without any actual supply of goods; (iv). Shri. Rajesh G. Mehta (supra) in his statement recorded on oath had provided the details of the bogus entities that were controlled and managed by him, and M/s Aneri Fincap Limited (lender of the assessee company) was one of the entities that was controlled and managed by him; (v). that during the course of the assessment proceedings in the case of M/s Aneri Fincap Limited (supra) summons were issued to its directors, viz. Ms. Shweta Manoj Sharma and Shari. Bhavesh Ramesh Vora, for their examination on oath, but neither of them had appeared, which fortified the fact that the said company was not doing any genuine business activity but was only engaged in providing accommodation entries to various beneficiaries; and (vi). that Shri. Rajesh G. Mehta (supra) in his statement recorded on 08.11.2019 in the course of the search proceedings conducted on Oneworld group entities on being queried about M/s Aneri Fincap Limited (supra), had stated that the said company alongwith the other group companies were not carrying out any business and only existed on paper and was used by several persons for generating bogus sales and bogus purchase. Also, it was stated by 9 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. him that he was getting a commission of 54 paisa per Rs. 100/- transaction for letting the said persons use the said paper companies. 7. The A.O, holding a firm conviction that the assessee company was a beneficiary of an accommodation entry of loan from M/s Aneri Fincap Limited, a paper company that was not carrying out any actual business, held the impugned loan of Rs. 1 crore claimed by the assessee company to have been received from M/s Aneri Fincap Limited (supra) as an unexplained cash credit under Section 68 of the Act. 8. As a consequence of treating the aforesaid loan transaction as bogus, the A.O disallowed the assessee’s claim for deduction of interest of Rs. 11,83,562/- that the assessee company had claimed to have paid on the same. 9. Also, the A.O. going by the admission of Shri. Rajesh G. Mehta (supra) in his statement recorded on oath that he was receiving a commission @0.54%, thus held a conviction that the assessee company would have paid the commission to the said extent for availing the services of the said accommodation entry 10 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. provider and made an addition of Rs. 54,000/- on the said count in its hands. 10. Accordingly, the A.O vide his order passed u/s 147 of the Act, dated 23.03.2023, determined the income of the assessee company at Rs. 6,05,61,220/-. 11. Aggrieved, the assessee company carried the matter in appeal before the CIT(A), who found favour with the contentions advanced by the assessee company and reiterated the view that was taken by him on merits while disposing off the assessee’s appeal against the earlier order u/s 147 of the Act, dated 25.03.2022. Accordingly, the CIT(A) held the loan of Rs. 1 crore raised by the assessee company from M/s Aneri Fincap Limited (supra) as genuine and vacated all the additions made by the A.O. It will be apposite to cull out the observations of the CIT(A), as under: 6. APPELLATE DECISION: 6.1 Decision on Ground No. 4, 5 and 6: In these grounds the appellant has urged that AO made addition of Rs. 1,00,00,000/-, Rs. 54,000/- and Rs. 11,83,562/- without any corroborative evidence, merely on the basis of suspicion and surmises that loan 11 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. taken from M/s. Aneri Fincap Ltd. is bogus in nature and accommodation entries. 6.2 I have gone through the facts of the case, the assessment order and submission made by the appellant. All the three grounds no. 4 to 6 are inter related to each other. For the year under consideration, it is found that in the assessment order the AO has mentioned that an information was received from office of the JCIT(OSD) CC-7(2), Mumbai wherein it is stated that a search and seizure action u/s. 132 of the Act was carried out in the case of Oneworld group of cases on 06.11.2019. During the course of search proceedings, a statement on oath of Shri Rajesh G. Mehta was recorded in which he admitted that he was only providing bogus sales and purchase bills to various entities and there was not actual supply of goods. He also mentioned that he controlled and managed the company M/s. Aneri Fincap Ltd. which is a paper company and not doing any genuine business activity and was only engaged in providing bogus accommodation entries to various beneficiaries. 6.3 The appellant during the year has taken loan amount of Rs. 1,00,00,000/- from M/s. Aneri Fincap Ltd. Accordingly, the case of appellant was reopened u/s. 147 of the Act and notice u/s. 148 of the Act dated 29.06.2021 was issued and duly served on the appellant. Against the said notice, the appellant filed its return of income on 04.10.2021 declaring total income of Rs. 4,93,23,660/- . 6.4 During assessment proceedings, the AO issue notice u/s. 143(2) the Act and notice u/s. 142(1) of the Act and asked appellant to explain as to why the said loan amount of Rs. 1,00,00,000/- should not be added to its total income as unexplained cash credit u/s. 68 of the Act. The appellant submitted its reply, however the AO did not accept the same and added the amount of Rs. 1,00,00,000/- in the total income of appellant. Also, interest amount paid of Rs. 11,83,562/- to M/s. Aneri Fincap Ltd. is disallowed by the AO. It is found that Shri Rajesh G. Mehta in his statement recorded has admitted that he has charged commission @0.54% for letting his companies used by such type of transactions. Accordingly, the AO also added amount of Rs. 54,000/- [@0.54% on Rs. 1,00,00,000/-] u/s. 69C of the Act being commission paid by the appellant. 12 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 6.5 During appellate proceedings as well as assessment proceedings, the appellant has duly provided the identity, genuineness and creditworthiness by submitting the PAN and copy of ITR of the M/s. Aneri Fincap Ltd. the appellant has submitted its and lenders bank statement reflecting the said transactions along with TDS certificates which shows that TDS had been deducted on the interest paid. From the bank statements, it is found that the appellant has got the loan amount of Rs. 1,00,00,000/- on 05.04.2016 from M/s. Aneri Fincap Ltd. and paid interest amount of Rs. 11,83,562/- on 31.03.2017. The same loan was repaid to lender by appellant through banking channel Rs. 50,00,000/- on 08.11.2017 and Rs. 50,00,000/-on 30.11.2017. It has also submitted the ledger accounts of the lender. Thus, the appellant has submitted all the related documents of M/s. Aneri Fincap Ltd. which proves that the amount of loan taken of Rs. 1,00,00,000/- and interest paid thereon are genuine in nature. 6.6 Further, it is also observed that the appellant is an entity of M/s. GM Modular Pvt. Ltd. and its group companies. Further, it is found from the order passed by my predecessor Ld. CIT(A) in group cases of GM Modular Pvt. Ltd. and its entities wherein in the case of M/s. G. M. Cables and Switches Pvt. Ltd. for A.Y. 2018-19 vide his order dated 21.06.2023, the relevant portion is reproduced as under: “5.2 From the submission of the appellant, it is observed that during the course of search assessment proceedings u/s.153A for AY. 2017-18, the AO had raised specific question about the genuineness of loan taken from M/s. Aneri Fincap Ltd., vide notice dated 30th June, 2021 as the loan of Rs. 50,00,000/- was taken during F.Y. 2016-17 relevant to AY. 2017-18. The appellant submitted reply to the AO on 30th July, 2021, where various documentary evidences pertaining to loan taken from M/s. Aneri Fincap Ltd., during the F.Y 2016-17, were submitted alongwith elaborate explanation as to why the said loan is genuine and taken during the regular course of business. It is observed that during the assessment proceedings for AY. 2017-18 [u/s 153A of the Act], the appellant furnished evidences viz., copies of PAN of M/s. Aneri Finacap Ltd., signed confirmation of accounts of the lender for A.Y. 2017-18 & 2018-19, IT. Acknowledgement for A.Y. 2017-18 & 2018-19, Audited 13 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. financial statements of the lenders for the two years, bank statements, details of interest paid, copy of form 16A viz., TDS certificates etc. According to the appellant, it has already discharged its onus. Moreover, loan was taken through regular banking channel and the amount was also repaid through regular banking channel including TDS deducted and paid. It is also contended during appellate proceedings that no copy of statement recorded or any other document was provided based on which M/s. Aneri Fincap Ltd. was found bogus. Also, no opportunity of cross examination was given. 5.3 In this regard, the appellant has provided sufficient material to establish that loans taken from Aneri Fincap Ltd. is not an accommodation entry. The AO has not rejected these documentary evidences; nor contradictory findings have been given. No independent enquiry has been carried out to ascertain truth behind the genuineness of the lender. It is further ascertained that similar addition was made in the case of same lender for A.Y 2017-18, wherein the principal amount of Rs. 50,00,000/-and interest therein was disallowed. The undersigned vide order dated 06.10.2022 has allowed the appeal of the appellant as the assessment framed u/s 153A of the Act was not based on any incriminating material. 5.4 Considering the totality of the facts & circumstances of the issue involved, the addition of Rs. 6,42,834/-, as interest expenditure, deserved to be deleted. Hence, the ground of appeal no. 9 is allowed.” From the above, the only conclusion that can be drawn is that vide para 5.3 of above, it is mentioned that M/s. Aneri Fincap Ltd. is not an accommodation entry and the loans taken are genuine in nature. 6.7 In view of above facts, the AO is directed to delete the additions made of Rs. 1,00,00,000/-, Rs. 54,000/- and Rs. 11,83,562/-. Accordingly, the grounds of appeal no. 4, 5 and 6 are allowed. 7. Decision on Ground Nos. 1, 2, 3, 7, 8 and 9: Since the impugned additions have already been deleted in the preceding 14 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. paragraphs, hence the ground nos. 1, 2, 3, 7, 8 and 9 become academic in the nature and need no adjudication. 8. Decision on ground nos. 10 and 11: These grounds are found to be general in nature. During the course of the appellate proceedings, the appellant had not added, altered or amended any of the grounds of appeal. Thus, there is no specific issue in this ground of appeal, which requires adjudication. Hence, the ground nos. 10 and 11 of the appeal are dismissed. 9. Accordingly, the appeal of appellant for A.Y. 2017-18 [U/s. 143(3) r.w.s. 147 dated 25.03.2022] is Partly Allowed.” 12. The revenue being aggrieved with the CIT(A) order has carried the matter in appeal before us. 13. As the assessee-respondent has neither put up an appearance; nor sought for an adjournment, therefore, considering the fact that the matter on the last five dates on which the same was posted for hearing (out of six dates) adjourned, either for the reason that the assessee appellant had not put up an appearance or had sought an adjournment, therefore, considering the record we are constrained to proceed with as per Rule 25 of the Appellate Tribunal Rules, 1963, and dispose off the appeal after hearing the revenue appellant and perusing the orders of the lower authorities/material available on record. 15 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 14. Before proceeding further, it will be apposite to observe that as the CIT(A) has vacated the additions made by the A.O vide his order passed u/s 147 of the Act, dated 23.03.2023, therefore, the CIT(A) for the said reason had refrained from adjudicating the specific grounds of appeal, i.e., Grounds of appeal No(s). 1 to 3, based on which the assessee company had assailed the validity of the jurisdiction that was assumed by the A.O. for framing the assessment without complying with the procedure laid down in Section 148A of the Act. 15. We have heard the Ld. Departmental Representative (D.R), perused the orders of the lower authorities and the material available on record. 16. Admittedly, it is a matter of fact borne from the record that the assessee company had claimed to have raised a loan of Rs. 1 crore from M/s Aneri Fincap Limited. As is discernible from the assessment order, the JCIT(OSD), Central Circle-2, Mumbai through CIRU of insight portal had shared with the A.O, that as per the information that had surfaced in the course of the search and seizure proceedings conducted in the case of Oneworld group 16 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. of case on 06.11.2019 the assessee company was a beneficiary of bogus loan entries of Rs. 1 crore received from M/s Aneri Fincap Limited, a paper company which was not doing any genuine business activity but was only providing bogus accommodation entries to various beneficiaries. Apart from that, the information received by the A.O. revealed that Shri. Urvil A. Jani, one of the key person of Oneworld group entities in his statement recorded on oath in the course of the post-search proceedings on 08.02.2020, had admitted that the various Oneworld group entities had made bogus purchase/bogus sale transactions with the various entities that were controlled and managed by one Shri. Rajesh G. Mehta. The A.O. further observed that Shri. Rajesh G. Mehta, who managed and controlled the various entities from/to whom the various Oneworld group entities had claimed to have made purchase and sale transactions was earlier arrested by the GST department for fraudulent business activities and was also found to be involved in bogus purchase and sale transactions, wherein only invoices were raised with no actual movement /delivery of goods. Further, the A.O. observed that Shri. Rajesh G. Mehta (supra) in his statement recorded during the course of the 17 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. search proceedings, had admitted that he was only providing bogus sales and purchase bills to various entities without any actual supply of goods. Also, the A.O. observed that Shri. Rajesh G. Mehta (supra) (supra) in his statement recorded on oath, had provided the details of the bogus entities that were controlled and managed by him. It was stated by him that M/s Aneri Fincap Limited (lender of the assessee company) was one of the entities that was controlled and managed by him. Further, the A.O. took cognizance of the fact that Shri. Rajesh G. Mehta (supra) in his statement recorded on oath in the course of the search proceedings conducted on Oneworld group entities on 08.11.2019, on being specifically queried about M/s Aneri Fincap Limited, i.e the lender of the assessee company, had stated that the said company and its other group companies were not carrying out any business and were paper companies which were being used by several persons for generating bogus sales and bogus purchase. Further, the A.O. observed that Shri Rajesh G. Mehta (supra) had admitted that he was getting a commission of 54 paisa per Rs. 100/- transaction for his services as an accommodation entry provider. Also, the A.O. while framing the assessment had taken 18 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. cognizance of the fact that during the course of the assessment proceedings in the case of the lender company, viz. M/s Aneri Fincap Limited (supra) summons were issued to its directors, viz. Ms. Shweta Manoj Sharma and Shari. Bhavesh Ramesh Vora, for their examination on oath, but neither of them had appeared, which thus, fortified the fact that the said company was not carrying out any actual business but was only existing on paper for providing accommodation entries to various beneficiaries. Accordingly, the A.O. based on his aforesaid deliberations held the impugned loan of Rs. 1 crore that the assessee company had claimed to have received from the aforesaid tainted party, viz. M/s Aneri Fincap Limited as an accommodation entry and brought the same to tax by treating it as an unexplained cash credit within the meaning of Section 68 of the Act. 17. Ostensibly, the CIT(A) had merely gone by the submissions filed by the assessee company before him and held the impugned loan received from M/s Aneri Fincap Limited (supra) as a genuine loan. We find that the CIT(A) was of the view that the assessee company had discharged the onus that was cast upon it for proving the identity and creditworthiness of the lender, viz. M/s 19 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. Aneri Fincap Limited (supra), and also the genuineness of the loan transaction, by filing in the course of the assessment proceedings and the appellate proceedings before him, viz. copy of the return of income and PAN of the lender, copy of the bank statement of the lender reflecting the subject loan transaction, and TDS certificates evidencing deduction of tax at source on the interest paid to the lender. Also, the CIT(A) took cognizance of the fact that the assessee company had repaid the subject loan in two tranches of Rs. 50 lac each on 08.11.2017 and 30.11.2017. Further, the fact that a loan that was raised by the assessee’s group entity, viz. M/s G.M Cables and Switches Pvt. Ltd. from the same lender company i.e M/s Anreri Fincap Ltd. (supra) was while disposing off the latter’s appeal for AY 2018-19 held as genuine by his predecessor, vide his order dated 21.06.2023, had also weighed in the mind of the CIT(A) for treating the subject loan transaction as genuine. 18. We have thoughtfully considered the CIT(A) order and are unable to persuade ourselves to concur with the view taken by him for more than one reason. Although the CIT(A), had observed, that the assessee company in the course of the assessment proceedings discharged the onus that was cast upon it to prove 20 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. the authenticity of the loan transaction by filing the requisite documents, viz. copy of the return of income and PAN of the lender, copy of the bank statement of the lender reflecting the loan transaction etc., but we are afraid that there is no whisper of the same in the assessment order. 19. Be that as it may, we are of the firm conviction that considering the concrete information that was shared by the JCIT(OSD), Central Circle-2, Mumbai through CIRU of insight portal with the A.O, it was irrefutably established that M/s Aneri Fincap Limited, i.e the assessee’s lender, was a paper company which was not doing any genuine business activity but was only providing bogus accommodation entries to various beneficiaries. Rather, the admission of Shri. Rajesh G. Mehta (supra) in his statement recorded on oath that M/s Aneri Fincap Limited (supra) was not carrying out any business and was a paper company, and with its other group companies was being used for generating bogus sales and bogus purchase transactions, raised serious doubts regarding the authenticity of the subject loan transaction in question. 21 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 20. Considering the totality of the facts involved in the present case before us, we are of the firm conviction that the CIT(A) ought not to have summarily accepted the claim of the assessee company that it had raised a genuine loan of Rs. 1 crore from M/s Aneri Finacap Limited (supra). We say so, primarily for the reason that the multi-facet aspects of the information shared by the JCIT(OSD), Central Circle-2, Mumbai with the A.O revealed that M/s Aneri Fincap Limited (supra) was merely a paper company that was not doing any genuine business but was only providing bogus accommodation entries to various beneficiaries. In our view, the CIT(A) in the backdrop of the fact that the lender company, viz. M/s Aneri Fincap Limited (supra) was as per the information available on record a tainted company, ought to have carried out further verification and sought for a “remand report” from the A.O. However, we find that the CIT(A) has summarily accepted what all submissions/documents that were filed with him by the assessee company, and had not only dispensed with the requirement of verifying their veracity, but had also brushed aside the record/material as was available before him, which revealed serious allegations regarding the activities of the lender company, 22 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. viz. M/s Aneri Fincap Limited (supra) i.e. it was a paper company existing only for providing accommodation entries to various beneficiaries. 21. We thus, in terms of our aforesaid observations are of a firm conviction that the matter in all fairness requires to be restored for fresh adjudication to the file of the CIT(A), who shall in the course of the set-aside proceedings call for a “remand report” from the A.O qua the various documents/submissions filed by the assessee company to substantiate the authenticity of the subject loan transaction. Needless to say, the CIT(A) shall afford a reasonable opportunity of being heard to the assessee company which shall remain at liberty to substantiate its claim based on fresh documentary evidence, if any. 22. That as in pursuance to the judgment of the Hon’ble Supreme Court in the case of UOI Vs. Ashish Agarwal (2022) 138 taxmann.com64 (SC) the reassessment proceedings initiated vide notice u/s 148 of the Act, dated 29.06.2021, had culminated into the assessment order passed by the A.O under Section 147 of the Act, dated 23.03.2023, therefore, it is the order passed by the 23 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. CIT(A), dated 29.11.2024 in Appeal No. CIT(A)-48, Mumbai /10553/2016-17 which alone for the subject year effectively survives and has been disposed off by us in terms of our aforesaid deliberations. Before parting, we may herein observe that as we have set-aside the matter to the file of the CIT(A) for fresh adjudication, therefore, he is also directed to adjudicate the specific grounds of appeal based on which the assessee company has assailed the validity of the jurisdiction that was assumed by the A.O for framing the impugned assessment vide his order passed under Section 147 of the Act, dated 23.03.2023. 23. Resultantly, the appeal filed by the Revenue in ITA No.37/Viz/2025 is dismissed as having been rendered as infructuous in terms our aforesaid observations, while for the appeal filed by the Revenue in ITA No. 38/Viz/2025 is allowed for statistical purposes in terms of our aforesaid observations. ITA Nos. 34/Viz/2025 AY: 2013-14 24. We shall now take up the appeal filed by the revenue against the order passed by the CIT(A), dated 29.11.2024, which in turn 24 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. arises from the order passed by the A.O under Section 147 of the Act, dated 17.08.2021 for AY 2013-14. The assessee company has assailed the impugned order on the following grounds of appeal before us: 1. The order of the Ld.CIT(A) is erroneous on facts and in circumstances of the case. 2. The Ld. CIT(A) erred in deleting the additions of Rs.4,46,125/- based on 'the contention of the assessee that the appellant has submitted all the related documents i.e. Copy of PAN, ITR, ledger accounts, confirmation of loan, bank statements showing transaction of loan taken and interest paid thereon through banking channel in connection to M/s. Essar India Ltd., ignoring the fact that the promoter of Gold medal Group had failed in producing the lenders for verification. 3. The Ld. CIT(A) erred in deleting the additions of Rs.4,46,125/- ignoring the fact that during the course of Survey operation, the entry operators and exit providers in their statements recorded during 133A operation had accepted that the scrip of Essar(India) Limited had been used for providing accommodation entries, the identity of the loan creditor, as well as creditworthiness of the transaction cannot be considered as genuine. 4. The CIT(A) erred in allowing the appeal filed by the Assessing by ignoring the fact that the documentary evidences, on which the CIT(A) relied upon were submitted by the assessee itself on behalf of it and the on behalf of its alleged lender i.e. M/s Essar (India) Limited had not submitted any documentary evidence directly to the CIT(A) with regard to payment of loan of Rs.4,46,125/- to the assessee. 5. The Ld. CIT(A) while allowing the appeal filed by the assessee ignored the well known facts with regard to procedure followed by bogus entry providers that the entry providers collect the said amount in cash and 6. make 25 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. deposit into its bank account and later the same will be routed through banking channels to the entity for which it intends to provide bogus vouchers or accommodation entry for providing the alleged loan. 6. Further, this case falls in exceptional category as per Circular No.5/2024 .dated 15.03.2024 issued by the CBDT in F.No. 279/Misc-142/2007- ITJ(Pt.) vide para 3.1(h) viz., \"Cases involving organized tax evasion including cases of bogus capital gain/loss through penny stocks and cases of accommodation entries\" 7. Any other ground that may be urged at the time of appeal hearing” 25. Succinctly stated, the assessee company had filed its return of income for A.Y. 2013-14 on 29.09.2013, declaring an income of Rs. 8,79,580/- 26. Subsequently, information was shared by DDIT(Inv) U-8(1), Mumbai with the A.O, wherein he was informed that the assessee company during the subject year was a beneficiary of an accommodation loan entry of Rs. 4,46,124/- that it had received from M/s Essar India Limited (ABYPC1969R). As per the report of the Principal DIT (Inv), Kolkata dated 27.04.2015 the company, viz. M/s Essar India Limited (supra) was involved in arranging LTCG from penny stock. It was informed that the said company, viz. M/s Essar India Limited (supra) was a penny scrip and was being used to provide accommodation entries to various 26 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. beneficiaries through rigging of shares. Further, the name of the said company had figured in the list of confirmed shell companies as circulated by FIU IND. Also, the entry operators and exit providers in their statements had admitted that the scrip of “Essar India Limited” was being used for providing accommodation entries. It was further observed by the A.O. that Shri. Kumarpal Banda, Director of a group entity of the assessee company, viz. M/s GM Modular Pvt. Ltd., had in his reply to Question No. 30 & 31 of his statement recorded u/s 132(4) of the Act on 14.11.2019, admitted that the loans raised from M/s Essar India Limited (supra) were not genuine. Further, the AO observed that though an opportunity was given to Mr. Jugraj Jain, Promoter of Goldmedal group on 27.11.2019 and Mr. Kapil Jain, Director of M/s Goldmedal Electricals Pvt. Ltd. on 11.01.2020 to produce the concerned lender, but, they had failed to discharge the onus that was cast upon them by doing the needful. 27. The AO, further observed that though the assessee company, vide its submissions dated 30.07.2021 had tried to explain the identity, genuineness and creditworthiness to prove the authenticity of the subject loan transaction, but, as the promoter 27 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. of the assessee group had failed to produce the concerned lender, therefore, the said claim of having raised a genuine loan from the said lender did not merit acceptance. Also, the AO taking support of the fact that the lenders had accepted in their statements that they were involved in providing accommodation entries, thus, held a conviction that the said fact proved that no genuine loan was received by the assessee company from the subject lender company. Also, the AO observed that the mere filing of the copies of the returns of income of the lender will not substantiate its creditworthiness. Accordingly, the A.O holding a firm conviction that the assessee company had failed to discharge the onus that was cast upon it for proving the authenticity of the subject loan transaction made an addition of the same to the returned income of the assessee company under Section 69C of the Act. 28. Aggrieved, the assessee company carried the matter in appeal before the CIT(A), who found favor with the contentions advanced by the assessee and held the loan of Rs. 4,46,125/- raised by the assessee company from M/s Essar India Limited (supra) as genuine and vacated the addition made by the A.O. It 28 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. will be apposite to cull out the observations of the CIT(A), as under: “11. In this appeal, it is found that the case of appellant was reopened u/s. 147 of the Act and the AO has passed assessment order on 17.08.2021 wherein he made similar addition of Rs. 4,46,125/- being loan taken from M/s. Essar India Ltd. treating same as bogus transactions. 12. During appellate proceedings, the appellant has made identical submissions as that made in Appeal No. CIT (A) 48, Mumbai/10537/2016-17 for A.Y. 2017-18, as reproduced above. Other facts and backgrounds of the case remain the same. Since all the grounds involved in Appeal No.CIT (A) 48, Mumbai/10081/2012-13 for A.Y. 2013-14 are identical to the one that is discussed above in No. CIT (A) 48, Mumbai/10537/2016-17, the undersigned findings for A.Y. 2017-18 with respect to these grounds would mutatis mutandis apply to this appeal for A.Y. 2013-14 as well. 13. As the appellant has submitted all the related documents ie Copy of PAN, ITR, ledger accounts, confirmation of loan amount, bank statements showing transaction of loan taken through banking channel from M/s. Essar India Limited which proves that loan taken is genuine in nature. Hence, relying on the decision as discussed above in AY 2017-18, the AO is directed to delete the addition made of Rs. 4,46,125/-. 14. Accordingly, the appeal of appellant for AY 2013-14 (u/s. 143(3) r.w.s. 147) is Partly Allowed.” 29. The revenue being aggrieved with the CIT(A) order has carried the matter in appeal before us. 29 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 30. We have heard the Ld. Departmental Representative (D.R), perused the orders of the lower authorities and the material available on record. 31. Admittedly, it is a matter of fact borne from the record that the assessee company had claimed to have raised a loan of Rs. 4,46,125/- from M/s Essar India Limited. As is discernible from the assessment order, the DDIT(Inv) U-8(1), Mumbai had shared with the A.O that the assessee company, i.e a group entity of M/s Goldmedal group was a beneficiary of an accommodation loan entry of Rs. 4,46,124/- that it had received from M/s Essar India Limited (ABYPC1969R). The A.O. observed that as per the report of the Principal DIT (Inv). Kolkata dated 27.04.2015 the lender company, viz. M/s Essar India Limited (supra) was a penny scrip and was being used to provide accommodation entries to various beneficiaries through the rigging of shares. Further, the name of the said company had figured in the list of confirmed shell companies as circulated by FIU IND. Also, the A.O. had observed that the entry operators and exit providers in their statements had admitted that the scrip of “Essar India Limited” was being used for providing accommodation entries. Also, the AO was of the view 30 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. that the fact that Shri. Kumarpal Banda, director of a group entity of the assessee company, viz. M/s GM Modular Pvt. Ltd., had in reply to Question No. 30 & 31 of his statement recorded u/s 132(4) of the Act on 14.11.2019, had admitted that the loans raised from M/s Essar India Limited (supra) were not genuine further fortified that the assessee company during the year had not raised any genuine loan from the subject lender. Further, the AO observed that though an opportunity was given to Mr. Jugraj Jain, Propmoter of Goldmedal group on 27.11.2019 and Mr. Kapil Jain, Director of M/s Goldmedal Electricals Pvt. Ltd. on 11.01.2020 to produce the concerned party, but, both of them had failed to discharge the onus and prove the genuineness of the subject loan transaction by doing the needful. We find that the A.O backed by his aforesaid deliberations held a conviction that the assessee company had failed to discharge the onus that was cast upon it for proving the authenticity of the subject loan that was claimed to have been raised from M/s Essar India Limited, i.e a tainted party, and thus, made an addition of the said amount to his returned income. 31 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 32. On a perusal of the CIT(A) order, we find that he had grossly erred in law and facts of the case in vacating the addition of Rs. 4,46,125/- based on a non-speaking order, i.e., without recording any cogent reason in the backdrop of the facts involved in the case of the assessee company for the subject year i.e AY 2013-14. We are unable to persuade ourselves to subscribe to the observation of the CIT(A) that as the facts and background of the case remain the same as was there in AY 2017-18, therefore, the reasons given by him for vacating the addition in AY 2017-18 will apply mutatis mutandis for vacating the impugned addition for the subject year. We say so, for the reason that as the lenders from whom the assessee company had received the respective loans during the subject year i.e AY 2013-14 and AY 2017-18 are different and not the same, therefore, it is incomprehensible how the observations of the CIT(A) forming the very basis for vacating the addition regarding the loan that was received by the assessee company from M/s Aneri Fincap Limited (supra) in AY 2017-18 can be read into and justify the vacating of the addition of the loan received by the assessee company during the subject year i.e AY 2013-14 from M/s Essar India Limited. As the authenticity of the respective loan 32 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. transactions have to be looked into in the backdrop of the independent facts pertaining to the said respective loan transactions, therefore, in the absence of any plausible reasoning, the order of the CIT(A) vacating the addition cannot be approved on our part. 33. Apart from that, we find that the CIT(A) has observed that the assessee company had furnished all the related documents, i.e copy of PAN, ITR, ledger accounts, confirmation of loan amount, bank statements showing transactions of loan taken through banking channel, but we are afraid that except for the mentioning of the return of income of the lender company, there is no whisper in the assessment order from where it be gathered that the remaining documents were filed by the assessee company with the A.O. Also, there is nothing available before us to dislodge our aforesaid observation and prove to the contrary. 34. Be that as it may, we are of the firm conviction that despite there being concrete information that was shared by the DDIT(Inv) U-8(1), Mumbai with the A.O, i.e. as per the report of the Principal DIT (Inv). Kolkata dated 27.04.2015 the lender company, viz. M/s 33 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. Essar India Limited (supra) was a penny scrip that was being used to provide accommodation entries to various beneficiaries through the rigging of shares, and its name had figured in the list of confirmed shell companies as circulated by FIU IND, the CIT(A) by brushing aside the said material aspect had most casually accepted the claim of the assessee company of having raised a genuine loan from the said lender company. We are of the firm conviction, that the CIT(A) had not only erred by summarily accepting the submissions/documents that were filed with him by the assessee company, but, had also grossly erred in brushing aside the record/material that was available before him, which revealed that there was a serious allegation regarding the activities of the lender company, viz. M/s Essar India Limited (supra) i.e. it was a confirmed shell company as per the information circulated by FIU IND. 35. We thus, in terms of our aforesaid observations are of a firm conviction that the matter in all fairness requires to be restored for fresh adjudication to the file of the CIT(A), who shall in the course of the set-aside proceedings call for a “remand report” from the A.O qua the various documents/submissions filed by the assessee 34 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. company to substantiate the authenticity of the subject loan transaction. Needless to say, the CIT(A) shall afford a reasonable opportunity of being heard to the assessee company which shall remain at liberty to substantiate its claim based on fresh documentary evidence, if any. 36. Resultantly, the appeal filed by the Revenue in ITA No.35/Viz/2025 is allowed for statistical purposes in terms of our aforesaid observations. ITA No. 35/Viz/2025 A.Y 2014-15 37. We shall now take up the appeal filed by the revenue against the order passed by the CIT(A), dated 29.11.2024, which in turn arises from the order passed by the A.O under Section 147 of the Act, dated 17.08.2021 for AY 2014-15. The assessee company has assailed the impugned order on the following grounds of appeal before us: “1. The order of the Ld.CIT(A) is erroneous on facts and in circumstances of 2. 3. 4. the case. 2. The Ld. CIT(A) erred in deleting the additions of Rs.1,39,53,000/-, Rs.9,59,424/- and Rs.34,882/- based on the contention of the assessee that the appellant has submitted all the related documents i.e. Copy of PAN, ITR, ledger accounts, 35 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. confirmation of loan, bank statements showing transaction of loan taken and interest paid thereon through banking channel in connection with M/s. Erudite Shares and Securities Pvt Ltd, ignoring the fact that Promoters of Gold Medal Group had failed in producing the lenders for verification. 3. The Ld. CIT(A) erred in deleting the addition of Rs. Rs.1,39,53,000/-, Rs.9,59,424/- and Rs.34,882/-, ignoring the fact that during the course of survey operation u/s 133A, a statement on oath of Shri Rupesh Kumar, Accountant of M/s Balar marketing Pvt Itd, which was merged with M/s Erudite shares and Securities pvt Ltd was recorded. In his statement, he stated that he was accountant looking after all the affairs of the office at 304, 3rd Floor, Parmesh Corporates Tower, Plot No. 13, Karkardooma Community Centr, Delhi-110092 (Which was Registered office of M/s Erudite Shares & Securities Pvt Itd). He further stated that he was unable to produce any financial documents of M/s Erudite Shares & Securities Pvt Ltd. 4. The Ld. CIT(A) while passing impugned order ignored that the lender parties were not available at their addresses. The financial credentials of the lenders also indicated that the lender had no creditworthiness to provide such huge amount of loan. Merely filing the return of income by the lender is not sufficient to prove the creditworthiness. 5. The CIT(A) erred in allowing the appeal filed by the assessee by ignoring the fact that the documentary evidences, on which the CIT(A) relied upon were submitted by the assessee itself on behalf of its alleged lender i.e. M/s Erudite Shares and Securities Pvt Ltd. However, M/s Erudite Shares and Securities Pvt Ltd had not submitted any documentary evidence directly to the CIT(A) with regard to payment of loan of Rs.1,39,53,000/-, Interest of Rs.9,59,424/- and commission of Rs.34,882/- to the assessee. 6. The Ld. CIT(A) while allowing the appeal filed by the assessee ignored the well-known facts with regard to procedure followed by bogus entry providers that the entry providers collect the said amount in cash and make deposit into its bank account and later the same will be routed through banking channels to the entity for which it intends to provide bogus vouchers or accommodation entry for providing the alleged loan. 36 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 7. Further, this case falls in exceptional category as per Circular No.5/2024 dated 15.03.2024 issued by the CBDT in F.No. 279/Misc-142/2007- ITJ(Pt.) vide para 3.1(h) viz., \"Cases involving organized tax evasion including cases of bogus capital gain/loss through penny stocks and cases of accommodation entries\" 8. Any other ground that may be urged at the time of appeal hearing. Vijayawada, Date: 08.01.2025 “ 38. Succinctly stated, the assessee company had filed its return of income for A.Y. 2014-15 declaring an income of Rs. 7,66,990/- 39. Subsequently, information was shared by DDIT(Inv) U-8(1), Mumbai with the A.O, wherein he was informed that the assessee company during the subject year was a beneficiary of an accommodation loan entry of Rs. 1,39,53,000/- that it had received from M/s Erudite Shares and Securities Pvt. Limited. The AO based on the aforesaid information initiated proceedings u/s 147 of the Act. Notice u/s 148 of the Act, dated 24.03.2021 was issued by the AO. 40. During the course of the assessment proceedings, the A.O. observed that the “Profit Before Taxes” (PBT) as per the financial statements of the assessee company was disclosed at Rs. 7 lac, which did not justify the huge loan of Rs. 1 crore advanced to the assessee company. Also, it was observed by him that the said 37 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. lender company had not even disclosed the interest on the said loan in its return of income. It was noticed by the AO that the office premises of the lender company, viz. M/s Erudite Shares and Securities Pvt. Limited, Registered Office 304, 3rd Floor, Parmesh Corporate Tower, Plot No. 13, Karkardooma Community Centre, Delhi-110092 was subjected to survey proceedings u/s 133A of the Act on 13.11.2019. The AO observed that during the course of the survey proceedings the statement of Shri. Rupesh Kumar, Accountant of M/s Balar Marketing Pvt. Ltd. (i.e the lender company that was earlier known as M/s Erudite Shares and Securities Pvt. Ltd.) was recorded on oath on 13.11.2019. Shri. Rupesh Kumar (supra) had stated that he was the accountant of the assessee company since the year 2009. Further, it was stated by him that since the year 2013 he was looking after all the affairs of the office, viz. 304, 3rd Floor, Parmesh Corporate Tower, Plot No. 13, Karkardooma Community Centre, Delhi- 110092. However, he expressed his ignorance as to why the “books of account” of the assessee company were not maintained in the said office premises, which was its registered office address. The A.O. based on the aforesaid facts held a firm conviction that 38 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. M/s Erudite Shares and Securities Pvt. Ltd. (presently known as “Balar Marketing Pvt. Ltd.”) was a bogus company. Also, the AO observed that although Shri. Jugraj Jain, Promoter of Goldmedal Group was on 27.11.2019 given an opportunity to produce the concerned person of the lender company but he failed to do the needful. 41. The AO, further observed that though the assessee company, vide its submissions dated 30.07.2021 had tried to explain the identity, genuineness and creditworthiness to prove the authenticity of the loan transaction, but, as the promoter of the assessee group had failed to produce the concerned lender, therefore, its claim of having raised a genuine loan did not merit acceptance. Also, the AO taking support from the fact that the lender had accepted in their statements that they were involved in providing accommodation entries, thus, held a conviction that the said fact in itself proved that the assessee company had not raised any genuine loan from the subject lender. Also, the AO observed that the mere filing of copies of the returns of income of the lender will not substantiate its creditworthiness. Accordingly, the A.O holding a firm conviction that the assessee company had failed to 39 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. discharge the onus that was cast upon it for proving the authenticity of the subject loan transaction, held the amount of the loan of Rs. 1,39,53,000/- as an unexplained cash credit u/s 68 of the Act. 42. As a consequence of treating the aforesaid loan transaction as bogus, the A.O. disallowed the claim for deduction of interest of Rs. 9,59,424/- that the assessee company had claimed to have paid on the same. 43. Also, the A.O. made an addition of a commission @ 0.25%, which he was of the view that the assessee company would have paid to the accommodation entry provider and made an addition of Rs. 34, 882/- on the said count in its hands. 44. Accordingly, the A.O vide his order passed u/s 147 of the Act, dated 17.08.2021, determined the income of the assessee company at Rs. 1,57,14,300/-. 45. Aggrieved, the assessee company carried the matter in appeal before the CIT(A), who found favour with the contentions advanced by the assessee company that it had raised a genuine loan from M/s Erudite Shares and Securities Pvt. Ltd. (supra) and 40 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. vacated all the additions made by the A.O. It will be apposite to cull out the observations of the CIT(A), as under: “16. In this appeal, it is found that the case of appellant was reopened u/s. 147 of the Act and the AO has passed assessment order on 17.08.2021 wherein he made similar addition of Rs. 1,39,53,000/- being loan taken from M/s. Erudite Shares and Securities Pvt. Ltd. treating same as bogus transactions. Addition of Rs. 9,59,424/- disallowing interest paid on loan and Addition of Rs. 34,882/- being commission paid @0.25/- on loan amount. 17. During appellate proceedings, the appellant has made identical submissions as that made in Appeal No. CIT (A) 48, Mumbai/10537/2016-17 for A.Y. 2017-18, as reproduced above. Other facts and backgrounds of the case remain the same. Since all the grounds involved in Appeal No.CIT (A) 48, Mumbai/10730/2013-14 for A.Y. 2014-15 are identical to the one that is discussed above in No. CIT (A) 48, Mumbai/10537/2016- 17, the undersigned findings for A.Y. 2017-18 with respect to these grounds would mutatis mutandis apply to this appeal for A.Y. 2014-15 as well. 18. As the appellant has submitted all the related documents ie Copy of PAN, ITR, ledger accounts, confirmation of loan, bank statements showing transaction of loan taken and interest paid thereon through banking channel in connection to M/s. Erudite Shares and Securities Pvt. Ltd. which proves that loan taken and interest paid thereon are genuine in nature. Hence, relying on the decision as discussed above in AY 2017-18, the AO is directed to delete the additions made of Rs. 1,39,53,000/-, 9,59,424/- and Rs. 34,882/-. 19. Accordingly, the appeal of appellant for AY 2014-15 (u/s. 143(3) r.w.s. 147) is Partly Allowed.” 46. The revenue being aggrieved with the CIT(A) order has carried the matter in appeal before us. 41 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 47. We have heard the Ld. Departmental Representative (D.R), perused the orders of the lower authorities and the material available on record. 48. Admittedly, it is a matter of fact borne from the record that the assessee company had claimed to have raised a loan of Rs. 1,39,53,000/- from M/s Erudite Shares and Securities Pvt. Ltd. (supra). As is discernible from the assessment order, the DDIT(Inv) U-8(1), Mumbai had shared with the A.O that the assessee company, i.e. a group entity of M/s Goldmedal group was a beneficiary of an accommodation loan entry of Rs. 1,39,53,000/- that it had received from M/s Erudite Shares and Securities Pvt. Ltd. As the financial statements of the lender company, viz. M/s Erudite Shares and Securities Pvt. Ltd revealed PBT of Rs. 7 lacs, therefore, the A.O. was of the view that it lacked the creditworthiness to advance to the assessee company a loan of Rs. 1.39 crores (approx.). Apart from that, the fact that the lender company had not disclosed the impugned interest received on the loan advanced to the assessee company in its return of income for the subject year, had weighed in the mind of the A.O to conclude that the lender company was a name sake company and not 42 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. carrying on any actual business. Also, the A.O. was of the view that as there was no explanation as to why the “books of accounts” of the lender company, viz. M/s Erudite Shares and Securities Pvt. Ltd. (presently known as M/s Balar Marketing Pvt. Ltd.) were not available at its registered office address, viz. 304, 3rd Floor, Parmesh Corporate Tower, Plot No. 13, Karkardooma Community Centre, Delhi-110092, it further proved that it was a bogus company. We find that the A.O based on the information shared with him by the by DDIT(Inv) U-8(1), Mumbai that M/s Erudite Shares and Securities Pvt. Ltd. (supra) was a bogus company that was involved in providing accommodation entries, coupled with the aforesaid facts, viz. (i). financial statement of the lender company did not establish its creditworthiness to advance a loan of Rs. 1 crore; and (ii). the promoter of the Goldmedal group i.e. the assessee group despite specific directions had failed to produce the lender for necessary verification before him; (iii). that neither the “books of account” of the lender company could be traced at its registered office address, viz. 304, 3rd Floor, Parmesh Corporate Tower, Plot No. 13, Karkardooma Community Centre, Delhi-110092; nor any explanation regarding its unavailability 43 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. was forthcoming; the A.O had held the impugned loan of 1,39,53,000/- claimed by the assessee company to have been received from M/s Erudite Shares and Securities Pvt. Ltd. (supra) as an accommodation entry. Also, as observed hereinabove, the AO had made an addition/disallowance towards, viz. (i). commission paid for facilitating the accommodation entry @0.25%: Rs. 34,883/-; and (ii). disallowance of interest paid on the bogus loan: Rs. 9,59,424/- 49. On a perusal of the CIT(A) order, we find that he had without giving any cogent reason held the impugned loan received by the assessee company from M/s Erudite Shares and Securities Pvt. Ltd. (supra) as a genuine loan. We say so, for the reason that the view taken by the CIT(A) is backed by a non-speaking order, i.e., without recording any cogent reason in the backdrop of the facts involved in the case of the assessee company for the subject year i.e AY 2013-14. We are unable to persuade ourselves to subscribe to the observation of the CIT(A) that as the facts and background of the case remain the same as was there in the assessee’s case for AY 2017-18, therefore, the reasons given by him for vacating the addition in AY 2017-18 will apply mutatis mutandis for 44 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. vacating the impugned addition for the subject year. We say so, for the reason that as the respective lenders from whom the assessee company had received the respective loans during the subject year i.e AY 2014-15 and AY 2017-18 are not the same and are different, therefore, it is incomprehensible that how the observations of the CIT(A) forming a basis for vacating the addition regarding the loan received by the assessee company from M/s Aneri Fincap Limited (supra) in AY 2017-18 can be read into and justify the vacating of the addition regarding the loan received by the assessee company from M/s Erudite Shares and Securities Pvt. Ltd. (supra) during the subject year i.e AY 2013-14. As the authenticity of the respective loan transactions have to be looked into in the backdrop of the independent facts pertaining to the said respective loan transactions, i.e identity and creditworthiness of the lender and the genuineness of the loan transaction, therefore, in the absence of any plausible reasoning the summarily treating of the loan received by the assessee company from M/s Erudite Shares and Securities Pvt. Ltd. (supra) as genuine by the CIT(A) cannot be approved on our part. Rather, we find that the A.O. in the present case had though categorically observed that 45 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. the financials of the lender company, viz. M/s Erudite Shares and Securities Pvt. Ltd. (supra) revealed a PBT of Rs. 7 lacs, which proved that it lacked the creditworthiness to advance the loan of Rs. 1 crore to the assessee company, but there is no whisper in the order of the CIT(A) on the said aspect. Also, the observation of the A.O. that the “books of account” of the lender company could neither be traced at the registered office of the lender company, viz. 304, 3rd Floor, Parmesh Corporate Tower, Plot No. 13, Karkardooma Community Centre, Delhi-110092; nor any plausible explanation regarding its absence had been given has also not been dislodged by the CIT(A). 50. Apart from that, we find that the CIT(A) has observed that the assessee company had furnished all the related documents, i.e copy of PAN, ITR, ledger accounts, confirmation of loan amount, bank statements showing transactions of loan taken through banking channel, but we are afraid that except for the mention of the return of income of the lender company there is no whisper in the assessment order from where it be gathered that the remaining documents were also filed with the A.O. Also, there is 46 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. nothing available before us that would prove to the contrary and dislodge our aforesaid observation. 51. Be that as it may, we are of the firm conviction that considering the concrete information that was shared by the DDIT(Inv) U-8(1), Mumbai with the A.O that M/s Erudite Shares and Securities Pvt. Ltd. (supra) was a bogus company involved in providing accommodation entries, the CIT(A) has grossly erred by most casually accepting the claim of the assessee company that it had raised a genuine loan from the said lender company. We find that the CIT(A) by summarily accepting the submissions /documents that were filed before him by the assessee company, had not only dispensed with the requirement of verifying their veracity, but, had also brushed aside the record/material as was available before him which revealed that the lender company was allegedly involved in providing accommodation entries. 52. We thus, in terms of our aforesaid observations, are of a firm conviction that the matter in all fairness requires to be restored for fresh adjudication to the file of the CIT(A), who shall in the course of the set-aside proceedings call for a “remand report” from the 47 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. A.O qua the various documents/submissions filed by the assessee company to substantiate the authenticity of the loan transaction. Needless to say, the CIT(A) shall afford a reasonable opportunity of being heard to the assessee company which shall remain at liberty to substantiate its claim based on fresh documentary evidence, if any. 53. Resultantly, the appeal filed by the Revenue in ITA No.35/Viz/2025 is allowed for statistical purposes in terms of our aforesaid observations. ITA No. 36/Viz/2025 AY 2016-17 54. We shall now take up the appeal filed by the revenue against the order passed by the CIT(A), dated 29.11.2024, which in turn arises from the order passed by the A.O under Section 147 of the Act, dated 17.08.2021 for AY 2016-17. The assessee company has assailed the impugned order on the following grounds of appeal before us: “1. The order of the Ld.CIT(A) is erroneous on facts and in circumstances of the case. 48 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 2. The Ld. CIT(A) erred in deleting the additions of Rs.50,00,000/-, Rs.1,09,308/- and Rs.12,500/- based on the contention of the assessee that the appellant has submitted all the related documents i.e. Copy of PAN, ITR, ledger accounts, confirmation of loan, bank statements showing transaction of loan taken and interest paid thereon through banking channel in connection with M/s. VRB Capital Services India Pvt Ltd, ignoring the fact that Promoters of Gold Medal Group had failed in producing the lenders for verification. 3. The Ld. CIT(A) erred in deleting the addition of Rs.50,00,000/-, .Rs.1,09,308 and Rs.12,500, ignoring the fact that during the course of survey operation u/s 133A, a statement on oath of Mr. Deepak Chauhan, one of the director in M/s VRB Capital Services India Pvt Ltd was recorded wherein he accepted that he was not aware about the functioning of the Company. 4. The Ld. CIT(A) while passing impugned order ignored that 'a statement on oath of Mr. Rupesh Nallareddy Naidu, another director of the company was also recorded on 14.11.2019, wherein he also accepted that he was also not aware about the functioning of the company from whom the assessee was alleged to have obtained loan of Rs.50,00,000/-,and alleged to have paid interest of Rs. 1,09,308/- and commission of Rs.12,500. 5. The Ld. CIT(A) while allowing the appeal filed by the assessee ignored the fact that 'VBR Capital Services India Pvt Ltd' is a paper company, without doing any genuine business activity and it cannot be considered as genuine. Further, the lender parties have already accepted in their statement that they were involved in providing accommodation entries. 6. The CIT(A) erred in allowing the appeal filed by the assessee by ignoring the fact that the documentary evidences, on which the CIT(A) relied upon were submitted by the assessee itself on behalf of its alleged lender i.e. M/s VBR Capital Services India Pvt Ltd. However, M/s VBR Capital Services India Pvt Ltd had not submitted any documentary evidence directly to the CIT(A) with regard to payment of loan of Rs.50,00,000/-, Interest of Rs. 1,09,308/- and commission of Rs. 12,500/- to the assessee. 7. The Ld. CIT(A) while allowing the appeal filed by the assessee ignored the well known facts with regard to procedure 49 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. followed by bogus entry providers that the entry providers collect the said amount in cash and make deposit into its bank account and later the same will be routed through banking channels to the entity for which it intends to provide bogus vouchers or accommodation entry for providing the alleged loan. 8. Further, this case falls in exceptional category as per Circular No.5/2024 dated 15.03.2024 issued by the CBDT in F.No. 279/Misc-142/2007- ITJ(Pt.) vide para 3.1(h) viz., \"Cases involving organized tax evasion including cases of bogus capital gain/loss through penny stocks and cases of accommodation entries\" 9. Any other ground that may be urged at the time of appeal hearing.” 55. Succinctly stated, the assessee company had filed its return of income for A.Y. 2016-17 declaring an income of Rs. 1,65,50,700/-. 56. Subsequently, the A.O based on information (source of information not discernible from the assessment order), observed that the assessee company during the subject year was a beneficiary of an accommodation loan entry of Rs. 50,00,000/- that it had received from M/s VRB Capital Services India Pvt. Ltd. The AO based on his said information initiated proceedings u/s 147 of the Act. Notice u/s 148 of the Act, dated 23.03.2021 was issued by the AO. 50 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 57. During the course of the assessment proceedings, the A.O observed that the “Profit Before Taxes” (PBT) as per the financial statements of the assessee company was disclosed at a loss of (Rs. 4.70 crore), which thus did not justify the huge loan advanced to the assessee company. Also, it was observed by him that the said lender company had not even disclosed the interest on the said loan in its return of income, which was a peculiar feature of an accommodation entry provider company. Also, the A.O. observed that the financial statement of the lender company, viz. M/s VRB Capital Services India Pvt. Ltd. revealed huge capital received from shell companies. Elaborating further on his observation, the AO observed that one of the shareholder of the lender company was M/s Indigo Techind Ltd. The A.O. observed that Shri. Rajesh Mehta, one of the shareholder of M/s Indigo Techind Ltd. (supra), had admitted that the said shareholder company was involved in providing accommodation bills to “Pittie Group”. Also, the A.O. observed that the address of M/s Indigo Techind Ltd. (supra) was the same as that of the lender company, viz. M/s VRB Capital Services India Pvt. Ltd. (supra). The A.O. based on his aforesaid observation was of the view that the conduct of the lender 51 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. company was dubious and doubtful regarding its financial transactions. 58. The A.O further observed that though survey action u/s 133A of the Act was conducted at the premises of the lender company, viz M/s VRB Capital Services India Pvt. Ltd., but the survey authorization could not be executed as the said company was no longer functioning from the said premises. The A.O., further observed that Shr. Deepak Chauhan, Director of M/s VRB Capital Services India Pvt. Ltd. (supra) had in his statement recorded u/s 131 of the Act on 14.11.2019 stated that he was a dummy director in the company and was not aware of the functioning of the company. Also, the A.O. based on the statement of another director of the said lender company, viz. Shri. Rupes Nallareddy Naidu recorded u/s 131 of the Act on 14.11.2019, wherein he had accepted that he was not aware of the function of the company, held a conviction that he too was a dummy director. The AO further observed that though Shri. Jugraj Jain, Promoter of Goldmedal Group was on 27.11.2019 given an opportunity to produce the concerned person of the lender company, but, he failed to do the needful. Accordingly, the A.O. held a firm 52 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. conviction that the assessee company had failed to discharge the onus that was cast upon it regarding proving the authenticity of the subject loan transaction. 59. The AO, further observed that though the assessee company, vide its submissions dated 30.07.2021 had tried to explain the identity, genuineness and creditworthiness to prove the authenticity of the loan transaction, but, as the promoter of the assessee group had failed to produce the concerned lender, therefore, its claim of having raised a genuine loan did not merit acceptance. Also, the AO taking support from the fact that the lender had accepted in their statements that they were involved in providing accommodation entries, thus, held a conviction that the said fact in itself proved that the assessee company had not raised any genuine loan from the subject lender. Also, the AO observed that the mere filing of copies of the returns of income of the lender will not substantiate its creditworthiness. Accordingly, the A.O holding a firm conviction that the assessee company had failed to discharge the onus that was cast upon it for proving the authenticity of the subject loan transaction made an addition of 53 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. the loan amount of Rs. 50,00,000/- by treating it as an unexplained cash credit u/s 68 of the Act. 60. As a consequence of treating the aforesaid loan transaction as bogus, the A.O. disallowed the assessee’s claim for deduction of interest of Rs. 1,09,308/- that it had claimed to have paid on the same. 61. Also, the A.O. made an addition of a commission @ 0.25%, which he was of the view that the assessee company would have paid to the accommodation entry provider and made an addition of Rs. 12,500/- in its hands. 62. Accordingly, the A.O vide his order passed u/s 147 of the Act, dated 17.08.2021, determined the income of the assessee company at Rs. 2,16,72,510/-. 63. Aggrieved, the assessee company carried the matter in appeal before the CIT(A), who found favor with the contentions advanced by the assessee company that it had raised a genuine loan from M/s VRB Capital Services India Pvt. Ltd. (supra) and vacated all the additions made by the A.O. It will be apposite to cull out the observations of the CIT(A), as under: 54 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. “21. In this appeal, it is found that the case of appellant was reopened u/s. 147 of the Act and the AO has passed assessment order on 17.08.2021 wherein he made similar addition of Rs. 50,00,000/- being loan taken from M/s. VRB Capital Services India Pvt. Ltd. treating same as bogus transactions. Addition of Rs. 1,09,308/- disallowing interest paid on loan and Addition of Rs. 12,500/- being commission paid @0.25/- on loan amount. 22. During appellate proceedings, the appellant has made identical submissions as that made in Appeal No. CIT (A) 48, Mumbai/10537/2016-17 for A.Y. 2017-18, as reproduced above. Other facts and backgrounds of the case remain the same. Since all the grounds involved in Appeal No. CIT (A) 48, Mumbai/11248/2015-16 for A.Y. 2016-17 are identical to the one that is discussed above in No. CIT (A) 48, Mumbai/10537/2016-17, the undersigned findings for A.Y. 2017-18 with respect to these grounds would mutatis mutandis apply to this appeal for A.Y. 2016-17 as well. 23. As the appellant has submitted all the related documents ie Copy of PAN, ITR, ledger accounts, confirmation of loan, bank statements showing transaction of loan taken and interest paid thereon through banking channel in connection to M/s. VRB Capital Services India Pvt. Ltd. which proves that loan taken and interest paid thereon are genuine in nature. Hence, relying on the decision as discussed above in AY 2017-18, the AO is directed to delete the additions made of Rs. 50,00,000/-, Rs. 1,09,308/- and Rs. 12,500/-. 24. Accordingly, the appeal of appellant for AY 2016-17 (u/s. 143(3) r.w.s. 147) is Partly Allowed.” 64. The revenue being aggrieved with the CIT(A) order has carried the matter in appeal before us. 65. We have heard the Ld. Departmental Representative (D.R), perused the orders of the lower authorities and the material available on record. 55 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 66. Admittedly, it is a matter of fact borne from the record that the assessee company had during the subject year claimed to have raised a loan of Rs. 50,00,000/- from M/s VRB Capital Services India Pvt. Ltd. (supra). As is discernible from the assessment order, the A.O. based on information (source of information is not discernible from the assessment order) that the assessee company had taken an accommodation entry of loan of Rs. 50 lac from M/s VRB Capital Services India Pvt. Ltd. (supra), initiated proceedings under Section 147 of the Act. 67. As the financials of the lender company, viz. M/s VRB Capital Services India Pvt. Ltd. (supra) revealed PBT at a loss of (Rs. 4.70 crore), therefore, the A.O. was of the view that it lacked the creditworthiness to advance a loan of Rs. 50 lac to the assessee company. Apart from that, the fact that the lender company had in its return of income for the subject year not disclosed the impugned interest received on the loan advanced to the assessee company, had weighed in the mind of the A.O to conclude that the lender company was a name-sake company. Further, the fact that the lender company was no more functioning from the address available with the department due to 56 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. which the survey authorization could not be executed had also weighed in his mind regarding the genuineness of the activities of the said company. Also, the fact that two directors of the lender company, viz. M/s VRB Capital Services India Pvt. Ltd. i.e. S/Shri. Deepak Chauhan and Rupesh Nallareddy Naidu in their respective statements recorded u/s 131 of the Act on 14.11.2019, being the dummy directors of the said company, had expressed their unawareness of the activities of the company, was one amongst many reasons for the A.O to conclude that the said lender company was a bogus company. Also, the AO had observed that although Shri. Jugraj Jain, Promoter of the assessee group, i.e. “Goldmedal Group” despite specific direction on 27.11.2019 to produce the concerned person of the lender company, had failed to do the needful, therefore, it had failed to discharge the onus that was cast upon it for proving the authenticity of the subject loan transaction. 68. We find that the A.O. based on his aforesaid deliberations, held a conviction that the assessee company had failed to discharge the onus that was cast upon it for proving the authenticity of the subject loan that it had claimed to have 57 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. received from, viz. M/s VRB Capital Services India Pvt. Ltd., and thus, held the same as an unexplained cash credit u/s 68 of the Act. Also, as observed hereinabove, the AO had made an addition/disallowance towards, viz. (i). commission that the assessee company would have paid for facilitating the accommodation entry i.e @ 0.25%: Rs. 12,500/-; and (ii). disallowance of the impugned interest paid on the bogus loan: Rs. 1,09,308/- 69. We find on a perusal of the CIT(A) order that he had without giving any cogent reason held the loan received by the assessee company from M/s VRB Capital Services India Pvt. Ltd (supra) as genuine. We say so, for the reason that the view taken by the CIT(A) is backed by a non-speaking order, i.e., without recording any cogent reason in the backdrop of the facts involved in the case of the assessee company for the subject year i.e AY 2016-17. We are unable to persuade ourselves to subscribe to the observation of the CIT(A) that as the facts and background of the case remain the same as was there in the assessee’s case for AY 2017-18, therefore, the reasons given by him for vacating the addition in AY 2017-18 will apply mutatis mutandis for vacating the impugned 58 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. addition for the subject year. We say so, for the reason that as the respective lenders from whom the assessee company had received the respective loans in the subject year i.e AY 2014-15 and AY 2017-18 are different and not the same, therefore, it is incomprehensible that how the observations of the CIT(A) forming a basis for vacating the addition regarding the loan received by the assessee company from M/s Aneri Fincap Limited (supra) in AY 2017-18 can be read into and justify the vacating of the addition of the loan received by the assessee company from M/s VRB Capital Services India Pvt. Ltd. (supra) during the subject year i.e AY 2016-17. As the authenticity of the respective loan transactions are to be looked into in the backdrop of the independent facts pertaining to the said respective loan transactions, i.e. identity and creditworthiness of the lender and the genuineness of the respective loan transactions, therefore, in the absence of any plausible reasoning the treating of the loan received by the assessee company from M/s VRB Capital Services India Pvt. Ltd. (supra) as genuine by the CIT(A) cannot be summarily approved on our part. Rather, we find that the A.O. in the present case had though specifically observed that the 59 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. financials of the lender company, viz. M/s VRB Capital Services India Pvt. Ltd.. (supra) revealed its PBT at a loss of (Rs. 4.70 crores), which proved that it lacked the creditworthiness to advance the subject loan of Rs. 50 lac to the assessee company, but there is no whisper in the order of the CIT(A) on the said aspect. Also, the observation of the A.O. that the two directors of the lender company, viz. M/s VRB Capital Services India Pvt. Ltd,. viz. S/shri. Deepak Chauhan and Rupesh Nallareddy Naidu in their respective statements recorded u/s 131 of the Act on 14.11.2019, being the dummy directors of the said company had expressed their unawareness of its activities had also not been dislodged by the CIT(A). 70. Apart from that, we find that the CIT(A) has observed that the assessee company had furnished all the related documents, i.e copy of PAN, ITR, ledger accounts, confirmation of loan amount, bank statements showing transactions of loan taken through banking channel, but we are afraid that except for the mention of the return of income of the lender company there is no whisper in the assessment order from where it can be gathered that the remaining documents were also filed with the A.O. Also, there is 60 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. nothing available before us that would prove to the contrary and dislodge our aforesaid observation. 71. Be that as it may, we are of the firm conviction, that the CIT(A) had grossly erred in discarding the material facts involved in the present case, viz. (i). the financials of the lender company clearly disproved its creditworthiness to advance a loan of Rs. 50 lac; (ii). the lender company was no more functioning from the address available with the department; (iii). S/Shri. Deepak Chauhan and Rupesh Nallareddy Naidu in their respective statements recorded u/s 131 of the Act on 14.11.2019, being the dummy directors of the said company had expressed their unawareness of the activities of the company; and (iv). there is no reference to any specific material/document based on which it can safely be concluded that the onus cast upon the assessee company to prove the authenticity of the subject loan transaction was proved beyond doubt, and thus, had most casually accepted the claim of the assessee company that it had raised a genuine loan from the subject lender company. 61 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. 72. We thus, in terms of our aforesaid observations are of a firm conviction, that the matter in all fairness requires to be restored for fresh adjudication to the file of the CIT(A), who shall in the course of the set-aside proceedings call for a “remand report” from the A.O qua the various documents/submissions filed by the assessee company to substantiate the authenticity of the loan transaction. Needless to say, the CIT(A) shall afford a reasonable opportunity of being heard to the assessee company which shall remain at liberty to substantiate its claim based on fresh documentary evidence, if any. 73. Resultantly, the appeal filed by the Revenue in ITA No.36/Viz/2025 is allowed for statistical purposes in terms of our aforesaid observations. 74. In the result, all the captioned appeals filed by the Revenue are allowed for statistical purposes. Order pronounced in the Open Court on 30th June, 2025. Sd/- (एस. बालक ृष्णन) (S. BALAKRISHNAN) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (रिीश सूद) (RAVISH SOOD) न्याययक सदस्य/JUDICIAL MEMBER 62 ITA Nos.34 to 38/Viz/2025 Vedumutha Electricals India Private Limited. Sd/- Hyderabad, dated 30.06.2025. *TYNM/sps आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Vedmutha Electricals India Private Limited, D.No.11- 25-384, Vinnakotavari Street, Main Bazar, Vijayawada – 5200001, Andhra Pradesh. 2. रधजस्व/ The Revenue : The Assistant Commissioner of Income Tax, Circle – (1), Vijayawada. 3. The Principal Commissioner of Income Tax, Visakhapatnam. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, विशाखापटणम / DR, ITAT, Visakhapatnam. 5. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "
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