The present appeals were filed by Main Land Finance Pvt. Ltd. for the Assessment Years 2014-15, 2017-18, and 2018-19, challenging separate appellate orders passed by the Commissioner of Income Tax (Appeals). The assessee is a Non-Banking Financial Company engaged in share trading, investment activities, and providing short-term and long-term loans and advances, earning interest income therefrom.

The assessments were reopened under section 147 of the Income-tax Act, 1961. The Assessing Officer completed the reassessment proceedings and made various additions, including additions on account of undisclosed interest income and commission income arising from alleged accommodation entries. Aggrieved by the assessment orders, the assessee preferred appeals before the learned CIT(A), which were dismissed.

The learned CIT(A) observed that the assessee had claimed credit of tax deducted at source without fully disclosing the corresponding interest income in the returns. It was further noted that the assessee had advanced substantial unsecured loans and short-term advances to certain entities without charging interest and without furnishing confirmations or satisfactory explanations regarding the nature and purpose of such advances. Considering the past history of the case and surrounding circumstances, the Assessing Officer treated the credit balances as accommodation entries and added a percentage thereof as commission income.

During appellate proceedings before the Income Tax Appellate Tribunal, there was no representation on behalf of the assessee despite multiple opportunities granted over a prolonged period. In the absence of any assistance from the assessee’s side, the learned Departmental Representative relied upon the orders of the lower authorities.

Upon careful perusal of the impugned appellate orders and the material available on record, the Tribunal found no infirmity in the findings recorded by the learned CIT(A). The Tribunal observed that the Assessing Officer had taken a lenient view by restricting additions to a percentage of the amounts treated as accommodation entries. In the absence of any documentary evidence or substantive submissions from the assessee to rebut the findings of the authorities below, no justification was found for interference.

Accordingly, the Tribunal upheld the impugned orders of the learned CIT(A) and dismissed all the appeals filed by the assessee.


Source Link:
https://itat.gov.in/public/files/upload/1767607718-psw9ER-1-TO.pdf