THE DCIT, CENTRAL CIRCLE-2(4), AHMEDABAD V. SURYM INFRASTRUCTURE, AHMEDABAD

ITA 293/AHD/2021

AI Insights

The case involves the Deputy Commissioner of Income-tax, Central Circle 2(4), Ahmedabad as the appellant and Surym Infrastructure as the respondent. The dispute centered on the disallowance of interest expenses amounting to Rs.1,95,44,506/- claimed by Surym Infrastructure on unsecured loans. The Assessing Officer disallowed the interest, suspecting the genuineness of the loan providers based on various inquiries and materials, including statements and affidavits suggesting these entities were used to provide accommodation entries. Surym Infrastructure appealed this decision to the CIT(A), which resulted in the deletion of the addition. The Revenue then appealed to the Tribunal, which upheld the CIT(A)'s decision, emphasizing the lack of direct evidence linking the assessee to any fraudulent activities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789202 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 03-11-2021
• Other Referred Cases: Prarthna Construction Pvt. Ltd. vs. ACIT, Overtop Marketing Pvt Ltd vs. ACIT, Abijawala Developers (P.) Ltd. vs. ITO, Adamine Constructions (P.) Ltd. vs. PCIT, D.J. Stock Broking Pvt. Ltd. vs ITO, M/s Ami Industries (India) P.Ltd vs. PCIT, PCIT vs. Adamine Constructions (P.) Ltd., D.J. Stock Broking Pvt. Ltd. vs ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAMAL DEEP SINGH
• Assessee Lawyers: BIREN SHAH
• Keywords: Question of law; Corroborative evidences; Third party statement; TDS; Accommodation entries; Opportunity of cross examination; Bogus
• Section: 68; 131; 133(6); 37

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ITA No. 293/Ahd/2021 (Assessment Year: 2018-19) Deputy Commissioner of Income-tax, Central Circle 2(4), Ahmedabad Vs. Surym Infrastructure, Opp. Karnavati Mega Mall, Swaminarayan Char Rasta, Takhsshila School Road, Vastral, Ahmedabad-382418 [PAN : ABQFS 1006 H] (Appellant) .. (Respondent) Appellant by : Shri Kamal Deep Singh, Sr. DR Respondent by: Shri Biren Shah, AR Date of Hearing 04.09.2025 Date of Pronouncement 24.11.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the Revenue against the order passed by the Ld. Commissioner of Income-tax (Appeals)-12, Ahmedabad [hereinafter referred to as \"CIT(A)\" for short] dated 02.08.2021, under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as \"the Act\" for short], for Assessment Year (AY) 2018-19. 2. The sole ground raised by the Revenue is as follows:- “On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.1,95,44,506/- made by the Assessing Officer on account of disallowance of interest expenses.” 3. In this case, the assessee filed its return of income for the year under consideration on 26.09.2018, declaring total income of Rs.2,89,51,910/- after claiming deduction of Rs.25000/- under Chapter VI-A of the Act. Subsequently, the case was selected for scrutiny under CASS. During the course of assessment, the Assessing Officer noted that the assessee had paid interest of Rs.1,95,44,506/- to ten parties against unsecured loans. No fresh loan was raised during the year Printed from counselvise.com ITA No. 293/Ahd/2021 DCIT Vs. Surym Infrastructure Asst. Year : 2018-19 - 2– under consideration. However, the Assessing Officer doubted the genuineness of these parties and treated the interest as not allowable under section 37 of the Act. 4. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A), after detailed analysis of the facts and submissions, deleted the entire addition made by the Assessing Officer. The relevant portion of the order of the Ld. CIT(A) is reproduced hereunder :- “6. I have carefully considered the facts and submissions filed by the appellant. The brief facts of the case are that the assessee has paid interest on unsecured loan for Rs.1,95,44,506/- to ten parties. No fresh loan was taken during the year under consideration, the break-up of interest paid to such ten parties are as under: Sr. No. Name of the loan provider Interest (Rs.) 1 Shree Mukut Developers 2088129 2 Biraj Min Mpack Pvt. Ltd. 1130091 3 Boaston Tradlink Pvt. Ltd. 1202824 4 Divyank Cotton Textile Pvt. Ltd 663362 5 Hannah Enterprise Pvt. Ltd. 844262 6 SHK Corporation Pvt. Ltd. 230922 7 Vansh Glass Industries Pvt. Ltd. 705519 8 A B Tradewell Pvt. Ltd. 1210119 9 AP Buildspace Pvt. Ltd. 6300891 10 Shree Ashapuri Tradelink Pvt. Ltd. 5168387 Total 1,95,44,506 The Assessing Officer at page No. 5 to 8 of assessment order has referred to few questions and answers mentioned in statement of Jigar Rohitkumar Trivedi recorded under Section 131 of the Act on 10th December, 2019 and his affidavit dated 27th December, 2019 wherein he has stated that Biraj Manipax Pvt. Limited, Boaston Tradelink Pvt. Limited and Vansh Glass Industries Pvt. Limited are controlled by him and were used to provide accommodation entries. The AO at page No. 9 and 10 of assessment order has referred to reply dated 4th May, 2017 filed by HJM Fuels Pvt. Limited to Investigation Wing wherein he has explained the seized material recorded in Tally file with name (training module). The AO has also referred to cash payment to one Vikas, C/o Ajaybhai, CA, wherein cash payment of Rs 45,00,000 is mentioned and narration contains payment of Rs.5,00,000 to Vansh Glass Pvt. Limited, Rs. 14,00,000 to SHK Corporation Pvt. Limited, Rs. 14.55 lacs to TR and Rs. 1,45,000 to Boston Tradelink Pvt. Limited. The AO at page No. 11 and 12 has referred to fake billing scams in 2019 reported in newspaper and such scam pertains to AB Tradewell Pvt. Limited, AP Buildspace Pvt. Limited and Divyang Cotton Textile Pvt. Limited. Such companies were managed by Mr. Paresh Chauhan, who utilised these concerns for providing bogus bills and accommodation entries. On this basis AO has asked appellant to submit as to why cash credit from ten parties should not be treated as unexplained under Section 68 of the Act. Printed from counselvise.com ITA No. 293/Ahd/2021 DCIT Vs. Surym Infrastructure Asst. Year : 2018-19 - 3– 6.1 During the course of assessment proceedings, the appellant has filed its reply on 22nd February, 2021 which is reproduced by AO at para 4.3 of assessment order i.e. from page No. 13 to 23. The appellant has submitted confirmation, financial statement, income tax returns and other documents in paper book for loan taken from above referred ten parties and claimed that during the year, no fresh loan was taken and only interest payment was credited in depositors' accounts. Necessary TDS was also deducted on such interest payment. The appellant has also dealt with statement of Mr. Jigar Trivedi referred by AO and claimed that statement is general in nature, was recorded in case of a different person and not transaction specific. So far as letter submitted by HJM Fuels Pvt. Limited, it was stated that appellant has not made any transaction with such party nor there is any corroborative evidence to prove that transactions made with parties are non-genuine. So far as news report regarding fake billing scam referred by AO, it was claimed that same was regarding illegal claim of input tax credit and not related to any income tax matter relating to loan given to appellant. It was alternatively claimed before AO that list of ten parties referred by AO includes three parties whose names are not corroborated by statement of third party or other relevant evidences referred by AO. On this basis, appellant has argued that no addition should be made. 6.2 The contention raised by appellant was not accepted by AO mainly on the ground that transactions with ten parties are not genuine in view of statement of Director or other inquiry material referred by AO. It was contended by AO that such concerns were used to provide accommodation entries. The various loan providing companies have no significant business activity and very little income which establish the nature of concern being accommodation entry provider. The AO has stated that decision of V.C. Shukla referred by appellant cannot be made applicable. On this basis, Assessing Officer has disallowed entire interest expenditure of Rs.1,95,44,506 paid to ten parties referred supra. 6.3 During the course of appellate proceedings, appellant has contended that it has paid interest on unsecured loan taken by it and documentary evidences in support of such payment are already on record of AO. In entire assessment order the AO has not established any cash trail which can prove that appellant has taken accommodative entries from ten parties referred in assessment order. It was also stated that names of Shree Mukut Developer, Hannah Enterprise Pvt. Limited and AshapuriTradelink Pvt. Limited are not appearing in evidences referred by AO for proving transactions with those ten parties to be bogus and accommodative in nature hence disallowance of interest paid to three parties deserves to be deleted. So far as statement of Mr. Jigar Trivedi referred by AO, appellant has contended that such person has never admitted transactions with it to be bogus. The statement referred by AO were general statements, recorded in the case of different person and in another proceedings hence cannot be relied upon. It was also contended by appellant that addition cannot be made merely based upon statement of third party without referred to any corroborative evidence to prove that transactions made by appellant with such person are bogus. So far as letter submitted by HJM Fuels Pvt. Limited, appellant has claimed that it has not made any transactions with such party. Even letter referred by AO states that seized material in Tally file named \"Training Module\" belongs to Harish Mehta of New Saurashtra Brequitting Industrial Association but how such data is connected to appellant is not established. Even Tally data contains payment to Vikas, Co. Ajaybhai, CA, but how Printed from counselvise.com ITA No. 293/Ahd/2021 DCIT Vs. Surym Infrastructure Asst. Year : 2018-19 - 4– such payment is connected with appellant is not established. The appellant has argued that AO has not referred to any statement of Vikas or Ajaybhai or the person from whom appellant has taken loan nor referred to any incriminating evidences to establish that loan taken from such parties to be bogus hence interest payment to such parties cannot be subject matter of addition. So far as newspaper report in the context of investigation under GST Law in the case of Paresh Chauhan is concerned, appellant has contended that addition cannot be made based upon newspaper report and that too which was in connection with illegal claim of Input Credit under GST provisions and not connected with loan transactions with appellant. On this basis, appellant has contended that addition cannot be made only on the basis of statement of third party or material which do not have any reference to appellant's name. The appellant has relied various judicial pronouncements at para 3.5 and 3.6 of written submission herein above. The appellant has also argued that merely because depositor has shown lesser income does not mean that interest payment made to such party are bogus, for which appellant has relied upon various decisions at para 4.1 of written submission. The appellant has also contended that it has already discharges its onus and AO has not made any further enquiry with depositors hence addition cannot be made merely based upon evidences referred by AO, which does not establish that loan taken by appellant is bogus. Thus, appellant has contended that addition made by AO deserves to be deleted 6.4 On perusal of relevant facts on record it is observed that only dispute in the year under consideration is interest payment of Rs. 1,95,44,506 made to ten different depositors. During the course of assessment proceedings appellant has submitted ledger account of all the parties along with confirmation, return of income, Audited Annual Accounts, etc. The appellant has deducted TDS on such interest payment. In entire assessment order, AO has referred to statement of third party or other evidences like letter filed before ADIT by HJM Fuels Pvt. Limited and news report in the context of investigation under GST Law but no evidences were brought on record which can prove that appellant has taken accommodation entries from such ten parties. The AO has not even brought on record any cash trail which can establish that cash was exchanged against cheque in relation to transactions with above parties hence disallowance of interest expenditure on surmises and presumption cannot be sustained. 6.5 So far as statement of Mr. Jigar Trivedi recorded under Section 131 of the Act on 10th December, 2019 who has claimed that three entries being Biraj Manimpax Pvt. Limited, Boston Tradelink Pvt. Limited and Vansh Glass Industries Pvt. Limited were managed by him is concerned, it is found that such statement was general statement and does not refer to appellant. The AO has not even referred to any evidence which can establish that cash was exchanged against loan transactions with these parties and even during the year under consideration, only interest was credited in such ledger account. Thus, adverse inference cannot be drawn for disallowing interest expenditure when appellant has discharged its onus by submitting necessary evidences referred supra. Even AO has not allowed any cross-examination of such person hence addition cannot be made by merely ng on third party statement. Reliance is placed on following decision: (i) Ahmedabad Tribunal in the case of Prarthna Construction Pvt. Ltd. 70 TTJ 122 Printed from counselvise.com ITA No. 293/Ahd/2021 DCIT Vs. Surym Infrastructure Asst. Year : 2018-19 - 5– xxxxx (ii) Kolkata ITAT in the case of ACIT vs. Overtop Marketing Pvt Ltd in ITA No. 686/Kol/2019 dated 15.03.2021 xxxxx (iii) Kolkata Tribunal in the case of Mani Square Ltd Vs. ACIT [2020] 118 taxmann.com 452 xxxxx (iv) Mumbai ITAT in the case of Abijawala Developers (P.) Ltd. Vs. ITO [2021] 124 taxmann.com 72 xxxxx Considering these facts, AO was not justified in relying upon statement of Mr. Jigar Trivedi and treating interest paid by appellant as non-genuine. 6.6 So far as reliance placed by Assessing Officer on letter submitted by HJM Fuels Pvt. Ltd. to DDIT, Unit-1(3), Ahmedabad, is concerned, it is observed that said letter does not refer to any transactions made by appellant nor appellant has made any transactions with above company. Even such letter is dated 4thMay, 2017 whereas appellant has credited interest in ledger accounts of depositors at year-end. The AO has also referred to Tally ledger account in the name of Vikas, C/o Ajaybhai, CA, but has not established any connection of such person with appellant. Even AO has not referred to any statement of Vikas or Ajaybhai, CA, or HJM Fuels Pvt. Limited wherein they have admitted that transactions with appellant are accommodative in nature. The AO has also referred to accounting entry dated 21 November, 2014 that is not pertaining to current year wherein cash payment of Rs.45,00,000 is made to various persons like Vansh Glass Industries Pvt. Limited, TR, SHK and Boston Tradelink Pvt. Limited, but how such cash payment is related to appellant is not established. The payment seems to have been made by HJM Fuels Pvt. Limited with Vikas or Ajaybhai but has no connection with appellant. Merely because appellant has taken loan from Vansh Glass, SHK or Boaston Tradelink and their names are appearing in cash payment in Tally ledger of Training Module, interest payment made in current year to such parties cannot be held to be bogus when no direct cash trail is referred by AO. Even such Tally ledger, as referred by AO, contains cash payment to TR for Rs. 14,55,000 but appellant has not made any transaction with such company in year under consideration. As AO has failed to establish any live nexus between letter filed before DDIT or cash payment as appearing in Training Module with transactions made by appellant, AO was not justified in making disallowance of interest payment made to above parties on presumption. 6.7 So far as reliance placed by AO on news report in the context of investigation under GST Law in the case of PareshNathalal Chauhan at page No. 11 and 12 of assessment order, it is observed that merely because AB Buildspace Pvt. Limited, Printed from counselvise.com ITA No. 293/Ahd/2021 DCIT Vs. Surym Infrastructure Asst. Year : 2018-19 - 6– Divyank Cotton Textile Pvt. Limited and AB Tradewell Pvt. Limited are involved in alleged scam of GST, loan transactions with appellant cannot be held to be bogus merely on presumption. The AO has relied upon newspaper cutting and decision of Hon'ble Gujarat High Court in context of fake billing transactions made by such companies but same has no correlation with interest credited on loan taken from such parties. The AO has not referred to any statement recorded under any proceedings nor referred to any incriminating material which can prove that transactions made by appellant with such parties are bogus hence merely such parties involved in GST scam, transaction by appellant with such parties cannot be held to be bogus. Considering this fact, AO was not justified in relying upon such evidences while disallowing interest paid to above referred depositors. 6.8 It is also observed that AO has made interest disallowance with respect to ten parties. However, during the course of assessment proceedings appellant has explained that name of Shri Mukut Developer, Hannah Enterprise Pvt. Limited and Shri AshapuriTradelink Pvt. Limited did not find any mention in any allegation made by AO in assessment proceedings. Their names are not appearing in statement of Mr. Jigar Trivedi or DDIT letter or in GST fake bill scam hence in any case interest paid to such parties cannot be held to be bogus. 6.9 The AO has also observed that various loan provider companies have no significant business activity and very little income which establish the nature of concern being accommodative entry provider. Merely because depositors have shown less income or no activity does not mean that interest provided on loan given by them in year under consideration is non-genuine. The AO has not brought any evidences that such interest is not offered to tax by depositor. The appellant has submitted the confirmation, return of income, financial statement of such depositors and duly discharged its onus as cast under Section 68 of the Act for interest provided on loan taken by such depositors but AO has not made any further inquiry with such depositors to support his contention that various concerns are entry providers. The Hon'ble Delhi High Court in the case of PCIT Vs. Adamine Constructions (P.) Ltd. [2018] 99 taxmann.com 44 held as under: “2. We notice that the search in the premises of the Bhushan Steel Group, had led to survey in the premises of various other assessees including M/s Adamine Construction Pvt. Ltd., and in the end the additions made in that case too were deleted. The deletion again concurrently by the lower appellate authorities was upheld by this Court recently in respect of the same assessee for an earlier assessment. Here too, the Court has considered the materials. What is evident is that the AO went by only the report received and did not make the necessary further enquiries such as into the bank accounts or other particulars available with him but rather received the entire findings on the report, which cannot be considered as primary material. The assessee had discharged the onus initially cast upon it by providing the basic details which were not suitably enquired into by the AO. 3. No question of law arises; the appeal is consequently dismissed.\" Printed from counselvise.com ITA No. 293/Ahd/2021 DCIT Vs. Surym Infrastructure Asst. Year : 2018-19 - 7– The SLP filed by the Department was dismissed by the Hon'ble Supreme Court in [2018] 99 taxmann.com 45. Recently Hon'ble Jurisdictional Ahmedabad ITAT in the case of D.J. Stock Broking Pvt. Ltd. Vs ITO in ITA NO 313/Ahd/2017 dated 03/03/2020 has held as under: \"9. A perusal of the section would indicate that basically this section contemplates three conditions required to be fulfilled by an assessee. In other words, the assessee is required to give explanation which will exhibit nature of transaction and also explain the source of such credit. The explanation should be to the satisfaction of the AO. In order to give such type of explanation which could satisfy the AO, the assessee should fulfill three ingredients viz. (a) identity of the share applicants, (b) genuineness of the transaction, and (c) credit-worthiness of share applicants. As far as construction of section 68 and to understand its meaning is concerned, there is no much difficulty. Difficulty arises when we apply the conditions formulated in this section on the given facts and circumstances. In other words, it has been propounded in various decisions that section 68 contemplates that there should be a credit of amounts in the books of an assessee maintained by the assessee, (b) such amount has to be a sum received during the previous year, (c) the assessee offers no explanation about the nature and source of such credit found in the books, or (d) the explanation offered by the assessee is not, in the opinion of the Assessing Officer, satisfactory. The Hon'ble Delhi High Court in the case of CIT v. Novadaya Castles (P) Ltd. 367ITR 306 has considered a large number of decisions including the decision of Hon'ble Supreme Court in the case of CII Vs. Durga Prasad (1971) 82 ITR 540 (SC). According to the Hon'bleDelhi High Court basically there are two sets of judgments. In one set of case, the assessee produced necessary documents/evidence to show and establish identity of the share holder and bank account from which payment was made. The fact that payment was received through bank channels, filed necessary affidavit of the shareholders or confirmations of the directors of the shareholder company. But thereafter no further inquiry was made by the AO. The second set of cases are those where there was evidence and material to show that the shareholder company was only a paper company having no source ……………….. ……………………… ……………………… 23. Therefore, on a thorough consideration of the matter, we are of the view that the first appellate authority had returned a clear finding of fact that assessee had discharged its onus of proving identity of the creditors, genuineness of the transactions and credit-worthiness of the creditors which finding of fact stood affirmed by the Tribunal. There is, thus, concurrent findings of fact by the two lower appellate authorities, Appellant has not been able to show any perversity in the aforesaid findings of fact by the authorities below, 24. Under these circumstances, we find no error or infirmity in the view taken by the Tribunal. No question of law, much less any substantial Printed from counselvise.com ITA No. 293/Ahd/2021 DCIT Vs. Surym Infrastructure Asst. Year : 2018-19 - 8– question of law, arises from the order of the Tribunal. Consequently, the appeal is dismissed. However, there shall be no order as to cost. 16. Hon'ble Court was of the view that in the case of Pr. CIT Vs. NRA Iron & Steel P. Ltd. (supra) the AO has made investigation and detailed inquiry including survey of investor company. On the basis of field report, it revealed to him that shareholders were either non-existent or lacked credit- worthiness. In other words, on one hand cases where the AO has conducted an inquiry and disproved whatever submitted by the assessee, and in other case, the AO simply assumed existence of such facts. All Hon'ble High Courts are unanimous in their approach that where AO remained silent, did not conduct any inquiry, and merely on the basis of certain details submitted by the assessee draw an inference in such cases, he cannot simply doubt the stand of the assessee. 17. In the light of the above, let us examine the facts of the present case. The facts are being contained in the second remand report submitted by the AO vide letter dated 10.10.2016. This report has been reproduced by the Id. CIT(A) on page no. 18 and 19 of the impugned order. It reads as under. The document was submitted by the assessee in order to demonstrate that it has received money through account payee cheques. PAN details were submitted in order to demonstrate that this assessee is assessable to tax, and it proves its identity. That concern, responded to the notice received under section 133(6) of the Act. The AO, thereafter did not conduct any inquiry. We deem it appropriate to mention that investigation wing of the department is able to unearth details of various accommodation entry providers mainly Kolkata based companies, but the AO nowhere observed that these concerns were ever engaged in providing accommodation entries, and this fact came to notice of the Department through its investigation wing. Thus, if he has any doubt, he should have called for further information from the share applicants. He should have asked the assessee to produce directors of share applicant companies or Shri Anil Kumar who is brother of one of the directors. The AO could have issued summons under section 131 of the Income Tax Act. But instead of conducting any inquiry, he just draw certain inference for disbelieving the documents produced by the assessee or received by him in response to his notice under section 133(6) of the Act. it is also pertinent to observe that quantum of income mentioned in the return of income cannot be criteria to judge credit-worthiness of share applicants, In the case of M/s Ami Industries (India) P.Ltd (supra) Hon ble Bombay High Court has also considered this aspect. In that case also existence of share applicants was not in doubt. Only doubt raised by the AC was that they have declared very meager income in their returns of income. Therefore, he doubted their creditworthiness. This conclusion did not meet approval of the Id. CITYA), ITAT or the Hon'ble High Court. Therefore, in view of the above discussion, we are of the new that since the AO failed to conduct inquiry even on the Printed from counselvise.com ITA No. 293/Ahd/2021 DCIT Vs. Surym Infrastructure Asst. Year : 2018-19 - 9– second remand report called for by the Id.CITA), his conclusion are without any supporting evidence. In view of the above discussion, we allow this ground of appeal, and delete the impugned addition.\" 6.10 In view of above facts it is observed that AO has made addition on account of interest payment to depositors on the opening balances merely on surmises and presumptions. No action to take the deposits in the year in which the same have been taken appears to have the initiate in the appellant's case. So, without holding the deposits ingenuine in the year in which the same have been taken, interest disallowance in the subsequent year cannot be made as has been done by the AO in year under consideration. Further no corroborative evidences are brought on record to prove his stand that loan taken from depositors are accommodative in nature. The reliance placed on statement of Mr. Jigar Trivedi or letter to ADIT or fake billing GST by certain concerns has no relation with transactions made by appellant. Thus, entire addition of Rs. 1,95,44,506 is deleted.” 5. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before the Tribunal. 6. Before us, the Ld. DR reiterated the findings of the Assessing Officer and submitted that the parties providing the loans were engaged in accommodation entries and had negligible business operations; therefore, the interest paid was not genuine and should be disallowed. 7. The Ld. AR, on the other hand, relied upon the detailed findings of the CIT(A) and submitted that the assessee had discharged its burden u/s 68 by filing confirmations, PAN, financial statements, and proof of TDS. The Ld. AR argued that no inquiry was made by Assessing Officer with the lenders and the Assessing Officer merely relied on generalized statements and unrelated third-party materials. The Ld. AR also submitted that the Assessing Officer failed to establish any direct connection between the assessee and any accommodation entry or cash trail. The Ld. AR placed reliance on several judicial precedents such as Prarthna Construction Pvt. Ltd., Overtop Marketing Pvt. Ltd., Abijawala Developers Pvt. Ltd., Adamine Constructions Pvt. Ltd. (supra), where similar additions based on presumptions were deleted. Printed from counselvise.com ITA No. 293/Ahd/2021 DCIT Vs. Surym Infrastructure Asst. Year : 2018-19 - 10– 8. We have heard the rival contentions and perused the material available on record. The issue under consideration is disallowance of interest paid on unsecured loans amounting to Rs.1,95,44,506/-. It is not in dispute that (i) no new loans were raised in the year under consideration, (ii) interest was paid on existing loans, against which TDS was duly deducted and (iii) all lender details including PAN, confirmation, and ITRs were placed on record. 8.1 It is pertinent to note that the Assessing Officer has primarily relied upon third-party statements and unrelated materials to conclude that the loan transactions were accommodation entries. However, none of the materials relied upon establish any nexus between the assessee and the alleged accommodation entry providers. The Assessing Officer did not bring any direct or circumstantial evidence on record to show that any cash was returned by the assessee to the lenders or that the loans were not genuine. 8.2 Further, as rightly observed by the CIT(A), where the opening loan balances have not been held to be non-genuine in the year of acceptance, interest on such loans in subsequent years cannot be disallowed merely on presumptions. The Assessing Officer has not made any effort to examine the genuineness of the loans in the year of receipt or to disprove the documents submitted by the assessee. Therefore, in the absence of any independent enquiry or adverse material directly connecting the assessee to any accommodation entry or cash transaction, we find no infirmity in the order of the Ld. CIT(A). Reliance is being placed on the following judgments:- i) Ambe Tradecorp Pvt. Ltd., 145 taxmann.com 27 (Guj.), ii) PCIT Vs. Merrigold Gems (P.) Ltd, 164 taxmann.com 764 (Guj.), & iii) CIT Vs. Ayachi Chandrashekhar Narsangji, 42 taxmann.com 251 (Guj.), wherein the view has been taken that once loan repayment has been accepted by the department as genuine, then loan taken by the assessee cannot be treated as non-genuine. Printed from counselvise.com ITA No. 293/Ahd/2021 DCIT Vs. Surym Infrastructure Asst. Year : 2018-19 - 11– 8.3 As far as addition based on tally data found at the premises of HJM Fuels in respect of loans taken from Boston Tradelink Pvt Ltd, SRK Corporation Pvt. Ltd. and Vansh Glass Industries Pvt. Ltd. was concerned, no evidence was brought to establish that assessee has made any transactions with HJM Fuels. The Assessing Officer has also referred to Tally ledger account in the name of Vikas, C/o Ajaybhai, CA but has not established any connection of Vikas or Ajaybhai, CA or HJM Fuels Pvt Ltd, wherein they have admitted that transactions with the assessee are accommodative in nature. The Assessing Officer has also referred to accounting entry dated 21.11.2014, that is not pertaining to current year wherein cash payment of Rs.45,00,000/- is recorded. The findings of fact recorded by the CIT(A) remain uncontroverted by the Revenue with any cogent evidence. We, therefore, uphold the order of the Ld. CIT(A) deleting the disallowance of Rs.1,95,44,506/-. 9. In the result, the appeal of the Revenue is dismissed. The order is pronounced in the open Court on 24.11.2025. Sd/- Sd/- (SUCHITRA R. KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 24.11.2025 **btk आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, , , , अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "