JAYANTILAL RAJMAL SETH,MUMBAI vs. DCIT-CC-4(3), MUMBAI, MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against revisional order dated 30.03.2025 passed by the Ld. Principal Commissioner of Income-tax - 2, Mumbai [in short ‘the Ld. PCIT’] for assessment year 2018-19, raising following grounds:
1. On the facts and circumstances of the case and in law the order passed by the Ld. PCIT bring bad in law and that the same should be annulled set aside
2. On the facts and circumstances of the case and in law the Ld. PCIT has erred in not appreciating the faet that the ground on which the assessment was reopened u/s 148

itself f ground order a and as the sam
3. On the PCIT h order o counts that th
2. Briefly stated, originally filed his ret on 28.07.2018, whic declaring a total inco was received by the Commissioner of Inco the effect that the accommodation entry information, the Asse of the Act on 24.06.2
2.1 In response the 29.06.2021 declaring return filed earlier o
The reassessment wa no addition was ma entry from M/s Ane recorded a categoric availed by the assess failed assessment could not be done on d and hence the order of the Ld. PCIT t as erroneous and prejudicial to interest s such the order passed U/S 263 being me should be annulled/ set aside.
e facts and circumstances of the case and has erred in passing an order u/s 263
of the AO passed itself being bad in law the review of the order also being bad he same should be annulled/ set aside the facts of the case are th turn of income for the relevant a ch was subsequently revised ome of Rs. 4,24,550/-. Thereaf
Assessing Officer from the off ome-tax (O ), Central Circle-7
e assessee was a beneficiar y from M/s Aneri Fincap Ltd. Ac essing Officer issued notice un
021. ereto, the assessee filed return g the same income as disclosed n 03.06.2019 under section 13
as thereafter completed on 25.02
ade in respect of the alleged eri Fincap Ltd. The Assessing cal finding that no unsecured see from the said concern during
Jayantilal Rajmal Seth
2
n any other treating the t itself fails bad in law d in law Ld.
against the w on various in law and at the assessee assessment year on 03.06.2019, fter, information fice of the Joint
7(2), Mumbai, to ry of a bogus cting upon such nder section 148
n of income on d in the revised
39(5) of the Act.
2.2022, wherein accommodation
Officer, in fact, loan had been g the year under consideration and th effected.
2.2 Subsequently, t
Ashish Agarwal [Ci
04.05.2022], while co directed that all notic
Act be deemed to ha as amended, and fur of section 148A(b). I appears to have reg
25.02.2022 as hav proceeded to issue a on 25.05.2022. The said notice on 07.06
reproduced as under “In the notice received from received Loa
12,63,011/- solely on the the said state the company only paper co taken by me w
Madam, I re reopening. I d the year A 11,00,000/- w
26-05-2017. course of bus was taken in hat only repayment of an earlier the Hon’ble Supreme Court in U ivil Appeal No. 3005 of 202
onsidering the effect of the Fin ces issued under section 148 of ave been issued under section 1
rther be treated as show cause n
In consequence thereof, the A garded the earlier reassessme ving become infructuous an a fresh notice under section 14
assessee, in turn, filed his ob
6.2022. The relevant part of h
:
e your goodself has alleged that Infor m JCIT(O )- Central Circle-7(2), Mumbai an from M/s Aneri Fincap Ltd amoun which is non-genuine. The allegations basis of statement of one Shri Rajesh ement he claimed that he was controlling namely Mr. Aneri Fincap Ltd. and this co ompany. On the basis of these allegatio was held as non-genuine and my case wa eject all the allegations made in the do not know any Rajesh G Mehta, I taken
.Y. 2017-18 on 24-11-2016 amount which was repaid in the current year i.e.
The transaction of loan was done du siness through proper banking channel the earlier year i.e. in the AY 2017-18 a Jayantilal Rajmal Seth
3
r loan had been Union of India v.
2, order dated ance Act, 2021, the unamended
148A of the Act, notices in terms ssessing Officer ent order dated d, accordingly,
8A(b) of the Act bjections to the his objection is rmation was i that I have nting to Rs.
were made
G. Mehta. In the affairs of ompany was ons the loan as reopened.
reasons for n loan during ting to Rs.
. 2018-19 on uring regular ls. The Loan and repaid in current year the current ye year. This cle and reopenin dropped imm basis of stat
Director nor S be made on t not authorize statement doe the entire stat accommodatio the statemen that the perso answers. I a statement an statement. Th any supportin entire reopen has not said e the nature of my transactio repayment of Purchase/Sal
RBI authorize been authoriz business. Thi
It is therefore due to chang goodself to kin
Madam, I hav return of inco facts/details mentioned in was entered b
From the abo based on ass to be quashed drawn by oth
As per the p conduct an in that income c inquiry shall of the specifie does not sug i.e. AY 2018-19. Since the loan was no ear therefore there is no question of reop early shows that the information is vagu ng in this year is totally wrong therefore mediately. Further, the allegations were m tement of one Shri Rajesh G Mehta wh
Shareholder of the company. The allega the basis of statement of unrelated third ed to give statement on behalf of the co es not hold any value and cannot be relie tement he hasn't specify as to how he use on entries. The modus-operandi wasn't t. From reading of the statement it clea on who has taken statement has put his am not aware as to how Mr. Mehta ha nd under what circumstances he ha he allegations are baseless which were m ng evidences and made arbitrarily. This ning proceedings void-ab-initio. In the s even once that he has given accommodati f "Loan". Madam, your goodself shall app on with M/s Aneri Fincap Ltd. is in th f Unsecured Loan this year and not in t le/Capital Gain. Further, M/s Aneri Fi ed Non Banking Financial Company (NBF zed by the Reserve Bank of India to is strengthen my claim of genuineness of e submitted that, the reopening in this ca ge of opinion and illegal. I therefore r ndly drop the reopening proceedings and ve disclosed all details of my books of acc me filed for the year under consideration remains undisclosed.
Further the the notice is factually wrong and no such by the assessee during the year under co ove it is clear that the reopening in my ca sumptions and presumptions hence inval d. Your goodself has simply relied on the her officer, which is totally wrong.
provision of Sec. 148A(a), the AO is m nquiry with respect to the information w chargeable to tax has escaped assessme be conducted only after obtaining the pr ed authority. The impugned notice issued ggest of any inquiries conducted by you
Jayantilal Rajmal Seth
4
ot received in pening in this ue and faulty e, should be made on the ho is neither ations cannot party. He is ompany. His ed. Further in ed to provide explained in arly appears words in the as made this as given his made without s makes the statement he ion entries in preciate that he nature of the nature of ncap Ltd. is FC) who has o do lending f transaction.
ase is purely request your oblige.
counts in the n. None of the transaction h transaction onsideration.
ase is totally id and liable e assumption mandated to which suggest ent and such rior approval d u/s 148A(b) ur office and that too after prescribed u/
u/s.148A ca information re such informa assessee and issued, if such the income ch words "if requ mean that th clearly sugges verify the info tax has escap the prior appr cause notice sec.148A(b) legislation. A disclose of impugned not The assessee been issued
JCIT(O )- C any materia chargeable to the general in would not con the escapeme information is relied. This p manner and c
The assessee of Loan with preceeding w
Show Cause made, which of mind, as t misconceived.
Sir, the alleg misleading an the notice ar mentioned tha
Further in the mentioned the obtaining the prior approval of the specif
/s.151 of the Act. It is a trite law tha annot be issued merely relying on eceived from the investigation departmen ation must necessarily be linked to d only thereafter, the notice u/s.148A h inquiry, with respect to the information hargeable to tax has escaped the asse uired" incorporated under section 148A(a he AO would not conduct any inquiry, st that the AO shall necessarily conduct formation that suggest that the income c ped assessment. The non-conducting of roval of specified authority prior to issua u/s.148A(b) would make the specified redundant and such is not the inten
As the show cause notice u/s.148A(b any inquiry conducted by your offic tice u/s.148A(b) is not tenable in law.
e submits that the impugned notice u/s.
merely relying on the information receiv
Central Circle-7(2), Mumbai and there do al/ evidence which could suggest o tax having escaped assessment. The me nformation not supported with any mater nstitute as a reliable information which c ent of income. Further the transaction rep s factually wrong, therefore the informatio proves that the allegations were made cannot be relied.
e had entered into bonafide and genuine h M/s Aneri Fincap Ltd. (a registere which was repaid in the current year, H
Notice alleges that the accommodation is completely incorrect and without prope the basis for issuance of the Show Cau
.
gations made in the notice are factu nd incorrect. The nature of transactions m re purchase/sale/sharecapital/LTCG an at loan provided by the said concern are e said statement, Mr. Rajesh G Mehta h e name of the assessee specifically. This Jayantilal Rajmal Seth
5
fied authority at the notice the general nt. However, the case of (b) could be suggest that essment. The (a) would not , however it an inquiry to chargeable to inquiry with ance of show provision of ntion of the b) does not ce, thus the 148A(b) had ved from the oes not exist the income ere receipt of rial/evidence could lead to ported in the on cannot be in prejudice transactions ed NBFC) in However the entries were er application use Notice is ually wrong, mentioned in nd no where non-genuine.
has nowhere s proves that the allegation and informati
The assessee
Aneri Fincap enclosed) as u a) Name, add b) Confirmatio c) Bank state receipt and su d) NOC from p e) NBFC cert
Bank of India f) Affidavit by Aneri Fincap L
The assessee discharges its which has be Cause Notice which proves information r material/evid constitute as escapement of The assessee assessee can information re which is alle authority had of general st assessee. Ass the statement any sort of a The assessee as per its w genuine, the entire. The a opportunity of basis of whos ns made by your goodself are wrong and ion received by your goodself cannot be re e to substantiate the genuineness of Lo p Ltd., relies on understated docum under :- dress and PAN of loan party.
on of account; ements of party and assessee evidenc ubsequent repayment by A/c payee chequ party that loan taken in preceeding year w tificate of Aneri Fincap Ltd. issued by a.
y assessee with regard to his transactio
Ltd.
e on furnishing the above stated docum s onus to prove the genuineness of the di een alleged to be accommodation entries
. There is no falsity in the above stated s the genuineness of the transaction received by your office not supported dence and contrary to the actual fact, s a reliable information which could of income.
e submits that the bonafide loan transa nnot be held as non-genuine solely rel eceived from JCIT(O )- Central Circle- 7
ged to be accommodation entries. The I d provided the incorrect information only tatements of 3rd parties recorded at sessee also demand to provide details a ts of 3rd parties specify the name of the assessee's involvement in non-genuine t e submits that the department cannot pick whims and fancies, when one set of tr other cannot be alleged to be mere acc assessee hereby makes a prayer to of cross examination of Mr. Rajesh G M se statement notice issued to the assessee
Jayantilal Rajmal Seth
6
d misleading elied.
an repaid to ents (copies cing the loan ues/RTGS; was repaid.
the Reserve on with M/s ments hereby isputed loan, in the Show d documents ns and thus d with any t, would not lead to the action of the lying on the 7(2), Mumbai,
Investigating on the basis back of the as to whether e assessee or transactions?
k and choose ransaction is commodation provide the Mehta on the e.

The Hon'ble A of Andaman
(Bom-HC), Su decided that unless an op aggrieved p no.286/2/20
authorities no statements re the presumpt whose custod are found in not covered u is a rebuttabl contrary docu as the notice the basis of have escaped
The assessee channel by A name of the s enclosed) of enclosed) of th assessee and loan and sub source of una genuine loan assessing au to prove the credible docu assessee can information o presumed to h
As regards th does not disc which income assessment.
annexure atta authority to conducting an and nexus of escaped asse

Apex Court and Juri ictional High Court
Timber Industries v. Comm. of Central
288/2006), H.R Mehta v. ACIT (Bom), Ki
. CIT (125 ITR 713 (SC), CIT vs. JMD Com
ITR 17(St) (SC), R.W. Promotions Pvt L unil Aggarwal 64 taxmann.com 107 (D the statements of other parties cann pportunity of cross examination is prov party.
Further,
CBDT vide circula
03 dated 10/3/2003 had directed th ot to make the additions merely relying ecorded during search/survey actions. I tion u/s 292C applies to the case of th dy the alleged books of accounts and/o his possession and does not apply to o u/s 132(1) or u/s 133A of the Act. Furthe le presumption. However, in instant case uments found in custody of the assessee is silent on that issue. Therefore, the inf which the income chargeable to tax is p d assessment is totally incorrect.
e had received/repaid the loan throu
A/c payee cheques/RTGS from the said same is duly reflected in the bank statem the assessee. Also, the bank statem he said party discloses the payment of a d such fact proves that the assessee had bsequently repaid. The assessee does n accounted funds, thus the possibility of n would not arise. The heavy onus is thority to justify, with cogent documenta allegation made by them. In absence mentary evidence, accordingly the Loan nnot be held as non-genuine and th n the basis of which the income chargea have escaped assessment in erroneous.
he transactions the show cause notice close the manner and the amounts on e chargeable to tax of the assessee h
The mere general remarks stated in diffe ached to notice u/s.148A(b) would not e issue the notices u/s.148 and that ny enquiries and without establishing information with the income chargeable t essment.
Del-HC) had not be relied vided to the ar no-
F.
he assessing only on the In any case, he person in or documents ther persons er, Sec. 292C e, there is no or anywhere nformation on presumed to ugh banking d party. The ments (copies ments (copies amount to the received the not have any f taking non- cast on the ary evidence, e of contrary taken by the herefore, the able to tax is u/s 148A(b) the basis of has escaped erent Para of empower the too without the live link to tax having

The several H highest degre filed on record v. ACIT (73 IT evidence avai assessee als examination o of natural jus
Prayer
A humble and reply of the a u/s.148 for w oblige. The a Fincap Ltd. d taken in prece the informatio the above fa purposes of interest of ju
2.3 However, the sa the Assessing Officer
148A(d) of the Act. T reproduced as under “9.1 The asse
148A(b) does u/s.148A(b) i court in Civil A has directed t one-time meas
9.2 The asses had been iss the JCIT(O submitted tha to believe tha to conclusive issuance of n law that at Assessing Of High Courts and ITATs have decided that ee cannot partake the direct documentar d. {P.K. Noorjahan 237 ITR 570 (SC) and TD 205 Mum-ITAT)). There is no contrary d ilable on record to disprove the loan trans so request to provide an opportunit of Shri Rajesh G Mehta having regard to tice.
d respectful prayer is made to positively assessee and drop the proposed issuan which the assessee shall ever remain assessee has not taken any new loan during the year. There was only repaym eding year and no fresh loan was taken on. The assessee requests that a persona acts and circumstances will be expedi f effective adjudication of the issu ustice.”
aid objection for the assessee r by way of order dated 29.07.2
The relevant finding of the Asse
:
essee has submitted that the show caus not disclose of any inquiry, thus the imp is not tenable in law. In this regard, Hon
Appeal No. 3005/2022, vide order dated to dispensed with enquiry u/s 148A(a) of sure (para 8 of Hon'ble Supreme Court or ssee submits that the impugned notice u ued merely relying on the information r
D)- Central Circle-7(2), Mumbai. In this at reassessment is valid if there is prima t income has escaped assessment. AO is ely prove escapement of income at th notice under section 148. It is not the re the stage of the reopening the asse fficer must have conclusive evidence
Jayantilal Rajmal Seth
8
t suspicion of ry evidences d Pooja Bhatt documentary sactions. The ty of cross the principal consider the nce of notice grateful and n from Aneri ment of loan as alleged in al hearing in ient, for the ues, in the was rejected by 022 passed u/s essing Officer is e notice u/s.
pugned notice
'ble Supreme
04.05.2022, f the Act as a rder).
u/s. 148A(b) received from regard, it is facie reason not required he stage of equirement of essment, the to establish escapement of belief that in reopening the aspect. In the and reasons assessment w
Assessing Off to the conclus did not suffe
Rajesh Jhave
Hon'ble Supre
......... If the A suppose that have reason
The expressio should have conclusion. Th the statute w idea of fairne in Central Pro
662, for initia stood at the r in that regard proceeding is what is requir of escapemen question is w reasonable pe the materials concern at tha the Assessin satisfactionIT
ITR 597 (SC);
(SC).
What essenti cause or justif assessment.
justification,
Hon'ble Supre
((1961) 41 ITR
Assessing Of reasonably dr drawn." It is what inferenc question, ther of income. A bonafide reasonable belief fo ncome has escaped assessment is good e assessment, and the law is well set e instant case, information was received were recorded that there was escap was reopened on the basis of reasons rec fficer, which constituted reasonable basi sion that income has escaped assessmen er from any legal infirmity. In the case eri Stock Brokers Pvt Ltd [(2007) 291 IT eme Court has, inter alia, observed as foll
Assessing Officer has cause or justificatio income had escaped assessment, it ca to believe that an income had escaped on cannot be read to mean that the Asse finally ascertained the fact by legal
The function of the Assessing Officer is t with solicitude for the public exchequer wi ess to taxpayers. As observed by the Su ovinces Manganese Ore Co. Ltd. v. ITO [19
ation of action under section 147(a) (as t relevant time) fulfilment of the two requisi d is essential. At that stage, the final ou not relevant. In other words, at the init red is "reason to believe", but not the esta nt of income. At the stage of issue of not whether there was relevant material erson could have formed a requisite bel would conclusively prove the escapeme at stage. This is so because the formation ng
Officer is within the realm of TO v. Selected Dalurband Coal Co. (P.) Ltd
Raymond Woollen Mills Ltd. v. ITO [1999
ially follows is that the Assessing Office fication to "know or suppose that income
As long as the Assessing Officer he is legally permitted to reopen the eme Court in the case of Calcutta Disco
TR 191 (SC)] has observed that "It is for fficer) to decide what inferences of fa rawn and what legal inferences have ulti not for somebody else to tell the assessi ces, whether of facts or law, should be refore, that is required to be examined wh
Jayantilal Rajmal Seth
9
or holding the d enough for ttled on that d by the AO pement. The corded by the is for coming nt, and that it of ACIT Vs
TR 500 (SC)], lows:
n to know or an be said to assessment.
essing Officer evidence or to administer ith an inbuilt upreme Court
991] 191 ITR the provision ite conditions utcome of the tiation stage, ablished fact tice, the only on which a lief. Whether ent is not the n of belief by f subjective d. [1996] 217
9] 236 ITR 34
er easonable has escaped r has that assessment.
ount Co. Ltd.
him (i.e. the facts can be imately to be ing authority drawn. The hether on the basis of mate opinion that in would come to 9.3 The asse
Fincap Ltd. i
(NBFC). Howe
Oneworld gro recorded on have made various entitie
Shri Rajesh G the entities company- M/
andmanaged that the comp not doing any providing bog
9.4 Further, t during the ye was repaid in assessee has the assessee
1,63,011/- (1
has escaped opening of c assessment b indicates tha escaped asse income has a conclusion of submissions assessee reas
10. In view of issuing the no 2.4 Thereafter, the Act on 30.07.2022. In on 18.08.2022. Ther along with query le responded by the a erial available at the time of forming, or ap ncome has escaped assessment, a reason o that conclusion.
essee in its submission has stated tha is RBI authorized Non Banking Financi ever, Shri Urvil A. Jani, one of the key pe oup of companies has admitted in hi
08.02.2020, that various Oneworld gr bogus purchase/bogus sale transactio es controlled and managed by Shri Rajes
G. Mehta, in his statement has provided t controlled and managed by him and s. Aneri Fincap Ltd was one of the entiti by Shri Rajesh G. Mehta.lt is evident fro pany - M/s. AneriFincap Ltd. is a paper c y genuine business activity, and is only gus accommodation entries to various ben the assessee has submitted that the loan ear A.Y. 2017-18 amounting to Rs. 11,00, n the current year i.e. A.Y.2018- 19.In this s not explained the source of such repaym has not commented on the differential am
12,63,011- 11,00,000). Hence, income to assessment. It may be mentioned h cases is only the initiation of proceed based on the information available/colle at the assessee's income for the releva essment. However, the decision on wh actually escaped assessment will be take re-assessment proceedings after duly co made by the assessee and after af sonable opportunity of being heard.
of the above, the case is fit for further pr otice u/s 148 of the Act.”
Assessing Officer issued notice n response, the assessee filed r reafter, statutory notice u/s 14
etter was issued on 10.01.20
assessee by way of reply dat
Jayantilal Rajmal Seth
10
pproving, the nable person at M/s Aneri ial Company ersons of the is statement roup entities ns with the sh G. Mehta.
the details of d the lender ies controlled om the above company and y engaged in neficiaries.
n was taken
,000/- which s regard, the ment. Further, mount i.e. Rs.
o that extent here that re- dings for re- ected, which ant year has hether or not n only at the onsidering all affording the roceeding by e u/s 148 of the return of income
42(1) of the Act
023 which was ted 11.01.2023. Regarding, the accom the assessee replied a “11. Madam, reopened for Rs. 12,63,01
same, at the regarding this have not rece loan during th
11,00,000/- w
26-05-2017. course of bus was taken in current year the current ye assessment.
cum indemnit from M/s Ane also submit N your goodself
2.5 Again on 17.01. in response to which under:
“12. Copy of alongwith cop
Non Banking
Certificate is e
13. In the not loan taken by Ferry
Indus genuine/unex made the alle
Mehta who st providing bog same at the o and state tha into any purc further submi mmodation entry from M/s An as under:
, my case for the year under consid the allegation that I have taken Loan a 1/- from M/s Anerifincap Ltd. In resp e outset I oppose the allegation of yo s loan. Madam, during the year under co eived any loan from M/s Anei Fincap Ltd.
he year A.Y. 2017-18 on 24-11-2016 amo which was repaid in the current year i.e.
The transaction of loan was done du siness through proper banking channel the earlier year i.e. in the AY 2017-18 a i.e. AY 2018-19. Since the loan was no ear therefore there is no question of reop
In support of my claim I am submitting ty bond which affirms that I have not tak eri Fincap Ltd. during the year under con
No- Dues Certificate from M/s Aneri Fin f's kind perusal and record.”
.2023 a fresh notice u/s 142(1) h, the reply of the assessee is confirmation of Loan repaid to M/s Aner py of bank statement. I also submit tha g Financial Company (NBFC), Copy of enclosed for your goodself's kind perusal tice your goodself has asked to explain a y me from M/s Aneri Fincap Ltd. (Former stries
Ltd.) should not be treated xplained and added to my total income. Y egation on the basis of statement of one S tated that this company is engaged in the gus purchases and sales bills. In resp outset I deny all the allegation made by y at loan taken by me is genuine and I have chase/sale transaction with M/s Aneri F it as under:
Jayantilal Rajmal Seth
11
neri Fincap Ltd., deration was amounting to ponse to the our goodself onsideration I
. I had taken ounting to Rs.
. 2018-19 on uring regular ls. The Loan and repaid in ot received in pening of this an affidavit ken any loan nsideration. I ncap Ltd. for was issued and s reproduced as ri Fincap Ltd.
at lender is a f the NBFC and record.
as to how the rly known as d as non-
Your goodself
Shri Rajesh G e business of ponse to the your goodself e not entered
Fincap Ltd. I

Madam, my c for the alleg
12,63,011/- f the outset I o loan. Madam received any during the ye
11,00,000/- w
26-05-2017. course of bus was taken in current year the current ye assessment.
cum indemnit from M/s Ane also submit N your goodself received durin any addition
2.6 After consideri reassessment order u
Officer on 09.03.202
assessee and no add made. The relevant fi under:
“(a). In supp
Affidavit whe loan was take consideration the preceding in that year.
Aneri Fincap year under co
(b). The reply form Aneri F verification a correct. The Aneri Fincap case for the year under consideration w gation that I have taken Loan amoun from M/s Anerifincap Ltd. In response to oppose the allegation of your goodself re m, during the year under consideration loan from M/s Anei Fincap Ltd. I had ear A.Y. 2017-18 on 24-11-2016 amou which was repaid in the current year i.e.
The transaction of loan was done du siness through proper banking channel the earlier year i.e. in the AY 2017-18 a i.e. AY 2018-19. Since the loan was no ear therefore there is no question of reop
In support of my claim I am submitting ty bond which affirms that I have not tak eri Fincap Ltd. during the year under con
No- Dues Certificate from M/s Aneri Fin f's kind perusal and record. Since ther ng the year under consideration, questio in this regard does not arise at all.”
ing the submission of the u/s 147 of the Act was passed b
23, wherein he accepted the co dition in respect of M/s Aneri F inding of the Assessing Officer i ort of the submission assessee also s erein he has affirmed that during the y en from M/s Aneri Fincap Ltd. During the n, assessee only repaid the loan, which w g year i.e. AY. 2017-18, for which additio
Assessee also submitted No Dues Cer
Ltd. and also submitted his bank statem onsideration.
y of the assessee alongwith Affidavit an Fincap Ltd. was carefully considered and assessee's submission/contention assessee has not taken any unsecure p Ltd. during the year under conside
Jayantilal Rajmal Seth
12
was reopened nting to Rs.
the same, at egarding this n I have not d taken loan unting to Rs.
. 2018-19 on uring regular ls. The Loan and repaid in ot received in pening of this an affidavit ken any loan nsideration. I ncap Ltd. for re is no loan on of making assessee, the by the Assessing ontention of the Fincap Ltd. was s reproduced as submitted an ear no fresh e year under was taken in on was made rtificate from ments for the nd Certificate d and after was found ed loan from eration. Only repayment of Expenses we submitted by no new loan t
8.In view of th not taken any consideration
2.7 Subsequent to Principal Commissio examined the record formed the view th
Commissioner of Inc clearly indicated tha accommodation ent according to him, th requisite inquiry into Aneri Fincap Ltd. In p received a sum of Rs an amount of Rs. 11
Assessing Officer, h account nor verified and subsequently ap
2.8 The Ld. PCIT, t omitted to carry o warranted in the circ clause (a) of Explana f loan was made during the year. Also ere claimed on the said loan. All th assessee was carefully examined and taken was accepted.
he above discussion, it is clear that the a y loan from Aneri Fincap Ltd. during the n, therefore no addition is warranted in t the framing of the assessment oner of Income-tax (PCIT) c ds of the assessee. Upon such e hat the information received come-tax (O ), Central Circle at the assessee was a benefici ry from M/s Aneri Fincap he Assessing Officer had failed o the source of repayment of loa particular, it was noticed that th s. 31 lakhs from M/s Earth Sta
1 lakhs was paid to M/s Aneri however, neither examined the the source from which the fund plied.
therefore, held that the Assess out inquiries and verification cumstances of the case. He acco ation 2 to section 263 of the A Jayantilal Rajmal Seth
13
o no Interest he evidences his claim of assessee has e year under this year.”
t order, the Ld.
called for and examination, he from the Joint e–7(2), Mumbai, iary of a bogus
Ltd. However, to conduct the an made to M/s he assessee had ar, out of which Fincap Ltd. The e relevant bank ds were received sing Officer had ns which were ordingly invoked
Act, wherein an assessment order is interests of the Rev inquiries or verificatio
2.9 The assessee’s fresh unsecured loan and that only repay occasion for the Asse rejected by the Ld. PC from the vice of err
Revenue. Consequen direction to the Asse affording due oppor considering such su record.
3. Aggrieved, the grounds raised as rep
4. Before us, the Ground No. 1 of th
Officer had carried dispute of repaymen therefore, the Ld. PC order was erroneous
Revenue.

deemed to be erroneous and p venue if it has been passed w ons which should have been ma contention that during the re n had been taken from M/s An yment was made, and hence essing Officer to make any furth
CIT. He held that the assessmen ror, being prejudicial to the i ntly, he set aside the assessme ssing Officer to frame a fresh a rtunity of hearing to the asse bmissions and evidence as ma assessee is in appeal before produced above.
Ld. counsel for the assessee he appeal and submitted that out all the inquiries in resp nt of the loan to M/s Aneri F
CIT is not correct in holding t s in so far as prejudicial to the Jayantilal Rajmal Seth
14
rejudicial to the without making ade.
elevant year no neri Fincap Ltd.
e there was no her inquiry, was nt order suffered interests of the ent order with a assessment after essee and after ay be placed on us by way of referred to the t the Assessing ect of issue in Fincap Ltd. and that assessment e interest of the 5. The Ld. Departm submitted that no particularly on the is and hence, the Ld.
Explanation 2 to sect
5.1 Before us, the following decisions:
i.
CIT v taxma ii.
PCIT taxma iii.
Incorp
4864/M
6. We have careful material placed on re the Assessing Officer
Commissioner of Inc that the assessee w routed through M/
controlled by one Sh search proceedings confessed that the sa of providing accommo
6.1 It is an undisp proceedings, the As mental Representative (DR) on inquiry was made by the As ssue that sources of the repaym
PCIT is justified in invoking tion 263 of the Act.
Ld. counsel for the assessee v. Usha Martin Ventures Ltd. [20
ann.com 491 (Calcutta) v. Naga Dhunseri Group Ltd. [20
ann.com 424 (Calcutta) p Advisory Services Pvt. Ltd. v. Pr. CIT
/Mum/2024 for assessment year 2020- lly heard the rival submissions a ecord. The admitted factual bac r received credible information come-tax (O ), Central Circle was a beneficiary of accomm
/s Aneri Fincap Ltd., an en hri Rajesh G. Mehta, who, durin conducted by the Income-ta aid concern was being utilised odation entries to various entitie puted position that during th sessing Officer issued notices
Jayantilal Rajmal Seth
15
the other hand ssessing Officer ment of the loan g clause (a) of e relied on the 023] 150
023] 146
T (ITA No.
-21) and perused the ckground is that from the Joint e–7(2), Mumbai, modation entries ntity admittedly ng the course of ax Department, for the purpose es.
he reassessment s under section 142(1) of the Act on responded to by the the Assessing Officer of loan to M/s Aneri to the crucial questi while disposing of Assessing Officer h satisfactorily explaine
Fincap Ltd. In such c bound to conduct fur such repayment, whi upon by the assessee
6.2 In view of the assessment order su which went to the ro revisional juri ictio
Explanation 2 to Accordingly, ground N
7. In Ground Nos.
its Ld. Counsel, has c proceedings undertak that if the reassessm proceedings initiated urged that the reas

148A. As regards the contentio
022 was passed under the old uld not have continued proceed s, we are unable to accept declared in Ashish Agarwal (su ctuous, and the Assessing O uing and completing proceedi
, culminating in the reassessm ng reasons, we find no substa roceedings are invalid in law. Co umption of juri iction under sec plea, must also fail. According e assessee are dismissed.
PCIT passed u/s 263 of the Ac assessee is accordingly dismisse ced in the open Court on 22/0
/-
CHAUHAN)
(OM PRAK
MEMBER
ACCOUNTA
Jayantilal Rajmal Seth
21
on that once an provisions, the dings under the the same. By upra), the earlier fficer was fully ngs under the ment order dated ance in the plea onsequently, the ction 263, being gly, Ground Nos.
ct is accordingly ed.
09/2025. KASH KANT)
ANT MEMBER

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

ded to :

BY ORDER

(Assistant Re

ITAT, Mu

Jayantilal Rajmal Seth
22
R, gistrar) umbai