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Judgment
PER S.RIFAURRAHMAN,AM:
This appeal is filed by the Revenue against the order passed by the ld. Commissioner of Income-tax (Appeals)-29, New Deli dated 28.11.2025 for the Assessment Year 2018-1 raising following grounds of appeal :-
“a. The Ld. CIT(A) has not appreciated the fact that the subject Sh. Himanshu Verma is habitual entry provider and will fully involved in the syndicate for organized accommodation entries through there and M/s Awasthi Medi associated entities including M/s Shobhagya Enterprises Pvt. Ltd. Equipments Pvt. Ltd. since long ago despite of many search proceedings conducted on him.
b. The Ld. CIT(A) has not appreciated the fact that the Non-descript entities M/s Shobhagya Enterprises Pvt. Ltd. and M/s Awasthi Medi Equipments Pvt. Ltd. involved with Sh. Himanshu Verma give non genuine transaction, on account of accommodation entries in the form of bogus loan/purchase/sales, which were given/taken in so a sophisticated manner with taking care of each step to give the image of legal transaction by utilizing web of bank accounts in different banks as well as books of accounts in respective entities.
c. The Ld. CIT(A) has not appreciated the fact that the existence of these entities as well as genuine business activities at the address could not be established.
d. The ld. CIT(A) erred in ignoring the substantive evidence collected by the Department and in holding that absence of AO's independent enquiry invalidated the addition. Departmental information, corroborated by Sworn statements is credible material and cannot be brushed aside.
e. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law.
f. The grounds of appeal are without prejudice to each other.”
At the time of hearing, the Registry has pointed out a defect that the appeal is time barred by 6 days. In response thereof, the ld. DR for the Revenue submitted that there was a reasonable cause for the delay in filing the appeal. Accordingly, he prayed that the delay in filing the appeal be condoned. Ld. AR of the assessee did not have any objection to this. We have heard both the counsels on the issue of condonation of delay. In our considered opinion, there was a reasonable cause for the delay in filing the appeal. Therefore, we condone the delay in filing the appeal before the Tribunal.
At the time of hearing, ld. AR of the assessee submitted that assessee has moved application under Rule 27 of the ITAT Rules for the reason that assessee has raised jurisdictional issue before ld. CIT (A). In this regard, he brought to our notice page 2 of the first appellate order wherein assessee has raised Ground No.3 which reads as under :-
“3.That on the facts and circumstances of the case, assessment proceedings initiated u/s 147 by the Ld. AO, Central Circle 25, Delhi is invalid, bad in law and without jurisdiction and liable to be quashed as the proceeding has been initiated without obtaining proper approval from the Ld. CIT as required as per Explanation 2(iv) of section1 48 that information in accordance with the risk management strategy formulated in this regard suggesting that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act or pertain to, or any information contained therein, relate to, the appellant.”
Further he brought to our notice page 44 of the first appellate order and brought to our notice that ld. CIT (A) has not adjudicated the above said ground no.3. Therefore, he prayed that Rule 27 application may be accepted and adjudicated.
On the other hand, ld. DR of the Revenue objected to the same and submitted that the issue involved in this case is relating to Himanshu Verma search cases and ITAT clearly held that he is an entry operator, in this regard, he brought to our notice that AO heavily relied upon the said decision in the assessment order.
After considering the submissions of both the parties, in our considered view, the assessee has a point that ld. CIT (A) had failed to adjudicate the jurisdictional issue. Therefore, we allow the assessee to raise the aforesaid ground by invoking Rule 27 and accordingly, we proceed to adjudicate the same.
At the time of hearing, ld. AR brought to our notice page 33 of the paper book which is the reasons/satisfaction recorded by the AO for reopening of the assessment and he also brought to our notice findings of the AO in the assessment order and also findings of the ld. CIT (A) at pages 44 to 46 of the first appellate order and submitted that assessee has only repaid the loan during the year under consideration and ld. CIT (A) has given categorical findings that assessee has not received any fresh loan during the year under consideration. Therefore, based on the satisfaction recorded by the Assessing Officer and invoking the provisions of section 68 of the Act is unwarranted. He submitted that the issue involved under consideration is squarely covered by various decisions and he specifically relied on the decision of ITAT, Delhi in the case of ITO vs. Aggarwal Earthmovers Pvt. Ltd. in ITA No.6084/Del/2025 dated 08.04.2026. He also relied on the following decisions :-
ITAT, Delhi in the case of Khec (India) Pvt. Ltd. vs. ITO in ITA No.3064/Del/2024 order dated 29.05.2025 ITAT Delhi Trishul Realcon Pvt Ltd vs ACIT CC 31 Delhi in ITA No.5544/Del/2025 order dated 29.04.2026 ITAT Delhi in case of Real Innerspring Technologies Pvt.
Ltd. Vs. ACIT in ITA no. 647/Del/2023 (AY 2016-17) vide order dated 27.3.2025 ITAT, Delhi in case of Rise Projects Pvt Ltd vs ACIT CC-32 Delhi in ITA No.5750-5752 - Del/2025 order dated 18.03.2026 ITAT Delhi in case of DCIT vs ICMC projects Pvt Ltd in ITA NO.9210/Del/2025 order dated 19.02.2026 Honorable jurisdictional high court in recent case of PCIT-4 vs KRBL Infrastructure Ltd in ITA No.494/2024 order dated 13.11.2025 ITAT Indore decision in case of Nakoda realities vs ACIT Central Circle -1 in ITA No.533-535/Ind/2023 order dated 22.04.2024 Hon'ble Delhi High Court in the case of CIT Vs.
Anoop Jain 424 ITR 115 (Delhi)
Hon'ble Allahabad High Court in the case of Smt.
Sadhana Jain Vs. CIT ITA 617 of 1999 date of judgment July 19, 2005.
On the other hand, ld. DR submitted that the company involved in this case is Shobhagya Enterprises Pvt. Ltd. and Awasthi Medi Equipments Pvt. Ltd. are nothing but dummy companies and all these transactions are sham transactions.
In reply to the same, ld. AR submitted that the AO has not made further investigation by issue of notice u/s 133 (6) of the Act and he merely relied on the report from Investigation Wing and he objected to the submissions of the ld. DR of the Revenue.
Considered the rival submissions and material placed on record. We observed that the case of the assessee was reopened on the basis of information received from Investigation Wing out of search conducted in the case of Galaxy group on 17.11.2021 wherein it was observed that Himanshu Verma is involved and all these entities are involved in providing accommodation entries. By recording the above reasons for reopening, the AO has found that there are several transactions carried on by the assessee with Sobhagya Enterprises Pvt. Ltd. and Awasthi Medi Equipments Private Ltd.. Based on that, assessment was reopened. Aggrieved, assessee filed appeal before the ld. CIT (A) and ld. CIT (A) observed that AO has observed that during the year under consideration, assessee has repaid the loan to the extent of Rs.2,81,49,000/- which is nothing but assessee has repaid the outstanding loan taken by the assessee in the earlier assessment years. After considering the detailed findings of the ld. CIT (A), we observed that in order to invoke the provisions of section 68 of the Act, the assessee should have received fresh loan during the year under consideration and there should be fresh credit during the year, however, on careful verification of the ledger account and bank statement submitted by the assessee, we observed that assessee has only repaid the loan, therefore, invoking the provisions of section 68 of the Act is unwarranted in the year under consideration. Accordingly, we allow the issue raised by the assessee in the application filed under Rule 27. Therefore, we do not see any reason to disturb the findings of the ld. CIT (A) and also dismiss the grounds raised by the Revenue.
In the result, the appeal filed by the Revenue is dismissed.