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2022 (5) TMI 812 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- It is evident that the Income Tax Authority in a search action under section 132 of the Income Tax Act on Banka Group had come to a conclusion that the accounts of the Banka Group reflects an accommodation entry of worth Rs.25,00,000/- to the Corporate Debtor from the A/C no. 01900210012390 maintained with the UCO Bank by the Financial Creditor, one of the group companies of the Banka Group. As per the Assessment Order dated 30 March, 2022 (para 5) the Income Tax Authority has categorically stated that the transaction received from the Financial Creditor is nothing but the Corporate Debtors own fund which was routed through the account of the lender i.e., the Financial Creditor. Further, the Corporate Debtor also failed to establish the business utility of unsecured loan and even failed to establish the genuineness of the credit worthiness of the Financial Creditor. On the other hand, the Authority noticed from the post search enquiries that the Financial Creditor is engaged in providing accommodation entries by way of bogus unsecured loan entries and is a shell company. A company petition under section 7 of the Code cannot be maintained and deserves to be dismissed.
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