IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “C” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA No. A.Y. Appellant Respondent IIFL Securities Ltd., 737/Mum/2025 2016-17 ACIT-4(2)(1), 8^th Floor, Hubtown Solaris, Room No. 669, Near Andheri East West Aayakar Bhavan, 722/Mum/2025 2016-17 Flyover, Mumbai -400020.

Mumbai-400069 [PAN: AAACI7397D]

Assessee by : Shri Pritesh Mehta Revenue by : Shri Chetan M. Kacha Date of Hearing : 23-04-2025 Date of Pronouncement : 29-04-2025

O R D E R

PER VIKRAM SINGH YADAV, A.M :

These are two appeals filed by the Revenue against the order of the Ld.

Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 02-12-2024, pertaining to Assessment Year (AY) 2016-17.

2. At the outset, the Ld.DR submitted that the Revenue has inadvertently filed two appeals against the impugned order pertaining to AY. 2016-17 and, therefore, the appeal in ITA No. 737/Mum/2025 may be taken up for adjudication and the other appeal in ITA No.722/Mum/2025 may be considered as „withdrawn‟. The Ld.AR did not object to the same, hence, the appeal of the Revenue in ITA No. ITA No.722/Mum/2025 is dismissed as withdrawn.

3. In ITA No. 737/Mum/2025, the Revenue has taken the following grounds of appeal:

“1.Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is right in deleting the addition of Rs.6,78,65,920/- made by the AO?

2. Whether on the facts and circumstances of the case and in law, the CIT(A) is right in holding that the Assessing Officer's findings regarding unexplained cash credits under Section 68 of the Income Tax Act, 1961, were substantiate?

3. Whether on the facts and circumstances of the case and in law, the CIT(A) erred in disregarding the substantive evidence of tax evasion and procedural compliance provided by the AO?

4. The appellant craves leaue to add, amend, alter, and/or vary any of the grounds of appeal before or at the time of hearing.”

4. Briefly the facts of the case are that the assessee had originally filed its return of income on 26-11-2016 which was selected for scrutiny and the order was passed by the AO u/s. 143(3) of the Act on 12-12-2018. Subsequently, the case of the assessee was reopened u/s. 147 of the Act, after recording reasons and notice u/s. 148 of the Act was issued and served on the assessee on 31-03-2021. In response to the notice, the assessee filed its return of income on 13-04-2021. Thereafter, notices issued u/s. 143(2) and 142(1) of the Act were issued and the assessment proceedings were completed u/s. 147 r.w.s. 144B of the Act vide order dt. 25-03-2022. As per the AO, the assessee was served with the draft assessment order vide show cause dt. 19-03-2022 wherein the assessee was asked to submit its response by 24-03-2022. However, the assessee did not make any compliance and thereafter, the impugned order was passed on 25-03-2022. As per the AO, the assessee has been found to be a beneficiary of accommodation entries from shell entities, namely, Lavender Promoters Pvt. Ltd., and Swar Vincom Pvt. Ltd., amounting to Rs. 6,27,34,000/- and given the fact that the assessee failed to establish the identity, creditworthiness and genuineness of the transactions, the amount was treated as „un-explained cash credit‟ u/s. 68 of the Act and same was brought to tax in the hands of the assessee. Further as per the AO, the assessee has shown a loan of Rs. 51,24,000/- to Jignesh Shah and it has been found during the course of search and survey proceedings that the said Jignesh Shah provided accommodation entry in the guise of bogus Long Term Capital Gain [LTCG], unsecured loan, synchronized trading of shares of various listed companies and the assessee was asked to furnish its reply and also to furnish requisite documentary evidences to substantiate its claim. However, the assessee denied to have any such transaction and hence, the loan amounting to Rs. 51,24,000/- remain un