BENCHMARK BUILDCON PRIVATE LIMITED,MUMBAI vs. ITO, WARD-4(1)(3), MUMBAI

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ITA 6718/MUM/2026Status: DisposedITAT Mumbai17 September 2026AY 2017-186 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings initiated under Section 147 were bad in law. The Tribunal found that the AO erred in invoking Section 148A and issuing notices without proper satisfaction and approval, especially when the information was related to a search conducted prior to April 1, 2021, and potentially covered by Section 153C.

What were the facts?

The Assessing Officer (AO) reopened the assessment of Benchmark Buildcon Pvt. Ltd. based on information that the assessee had taken an accommodation entry in the form of a loan from M/s. Aneri Fincap Ltd. This information stemmed from a search action on the "Oneworld Group" controlled by Shri Rajesh G. Mehta, who admitted to providing accommodation entries.

What were the issues?

The key issues were the validity of reassessment proceedings initiated under Section 147 when Section 153C might be applicable, and the AO's failure to follow mandatory procedures for issuing notices and obtaining approvals under Sections 148A and 151.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A,Section 153C,Section 148,Section 151A,Section 151,Section 68,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI SANJAY GARG & SHRI G.M. DOSS

आयकर अपीऱीय अधिकरण, म ुंबई पीठें, म ुंबई INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: B BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI G.M. DOSS, ACCOUNTANT MEMBER ITA No.6718/MUM/2026 (निर्धारणवर्ा/AssessmentYear:2017-18)

BENCHMARK BUILDCON ITO, WARD-4(1)(3) PRIVATE LIMITED AAYAKAR BHAWAN, MUMBAI 12 B 1ST FLOOR 609 SINGAPURI MUMBAI-400002, BUILDING, J.S.S. MARG, MARINE Vs. MAHARASHTRA LINES, KALBADEVI, MUMBAI- 400002, MAHARASHTRA अपीलधर्थीAppellant प्रत्यथी Respondent

Permanent Account Number of Assessee: AADCB3918N

अपीलधर्थीद्वारा/Appellant represented by: Shri Niraj Mangla (virtually present) प्रत्यथीद्वारा/Respondentrepresented by: Shri Shreekumar C., Sr.AR सुनवाईकीतारीख/Date of conclusion of hearing: 15-Sep-2026 घोषणाकीतारीख/Date of pronouncement: 17-Sep-2026 आदेश / ORDER Per Sanjay Garg, Judicial Member: The captioned appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi [in short, “Ld.CIT(A)] dated 24.03.2026 for the Assessment Year 2017-18.

2.

The Assessee has raised the following grounds of appeal:

1) That the order passed by Ld. AO u/s 148A(d) and u/s 147 of the Act as well as the appellate order passed by Ld. CIT(A) are bad in law and are passed in contravention of prevailing law as well as facts of the case, therefore liable to be annulled. 2) On the facts and circumstances of the case and in law, the reassessment proceedings undertaken by the Ld. AO u/s 147 of the Act is bad-in-law, disregarding that the jurisdiction of the impugned assessment was within the purview of section 153C of the Act, beginning with non- obstante clause and over-riding section 147 of the Act, as alleged information, which formed the basis of reopening the impugned assessment, relating to OR pertaining to the appellant was found and seized during the course of search on One World Group on 06.11.2019, which is prior to 01.04.2021. 3) That Ld. AO grossly erred in law and in facts of the case in invoking provisions of Sec. 148A of the Act in case of assessee as alleged information, which formed the basis of reopening the impugned assessment, relating to OR pertaining to the appellant was found and seized during the course of search on One World Group and thus, the case was to be covered by Clause (iv) of Explanation 2 to Sec. 148 of the Act and thus, Ld. AO should have recorded satisfaction note with prior approval of Ld. PCIT and no notice u/s 148A(b) of the Act could have been issued to assessee. 4) In the facts and circumstances of the case and in law, the Learned CIT(Appeals) has erred in upholding the action of Ld. Assessing Officer of issuing notice dated 31.03.2024 under section 148 in violation of provisions of section 151A of the Act as per law laid down by the Honble Bombay High Court in the case of Hexaware Technlogies Limited vs. ACIT in WP No. 1778/2023, order dated 03.05.2024 5) In the facts and circumstances of the case and in law, the Learned Assessing Officer has erred in not providing the sanction note u/s 151 of the Act, in violation of mandatory guidelines as per law laid down by the Honble Bombay High Court in the case of Mukesh J. Ruparel vs. ITO (2023) 153 taxmann.com 70 (Bombay) 6) That the Notice u/s 148A(b) of the Act dated 14.03.2024 issued by the Ld. AO and the resultant order under section 148A(d) of the Act dated 31.03.2024 passed in pursuant thereto, are both illegal, invalid, bad-in- law and without jurisdiction in as much as there were no material OR information to suggest that the income of appellant chargeable to tax has escaped assessment. 7) That the assessment order passed by Ld. AO making addition of Rs. 2,86,00,000/- to the income of assessee company is further illegal and not tenable under the law because of not allowing opportunity of cross examination of person whose statement was relied upon for challenging genuineness of transactions of assessee.

8) That the Ld. AO grossly erred in law and in facts of the case in extending specific statement of Sh. Rajesh Mehta to the case of assessee without having any evidences challenging the genuineness of transaction of assessee company. 9) That Ld. AO grossly erred in law and in facts of the case in assessing amount of Rs. 2,86,00,000/- as unexplained cash credits u/s 68 of the Act despite fact that the assessee has discharged the onus cast upon it to substantiate identity, creditworthiness, and genuineness of transactions. 10) That the Ld. AO grossly erred in law in computing tax liabilities on enhanced rate of taxes as per provisions of Sec. 115BBE of the Act despite the fact that said provisions of law were not applicable to the year under consideration. 11) That the appellant craves leave to add, alter, modify, OR delete any grounds of appeal during the course of appellate proceedings.

3.

The brief facts of the case are that the Assessing Officer (AO) received information on the insight portal that the assessee had taken an accommodation entry in the shape of loan of Rs.2,88,32,718/- from M/s. Aneri Fincap Ltd. The AO further noted that as per the information, a search action was carried out in the case of “Oneworld Group” entities and it was found that the said group was controlled by Shri Rajesh G. Mehta and the group companies were involved in providing accommodation entries to various parties against commission income. During the search action, statement of Shri Rajesh G. Mehta was recorded, in which, he admitted to have been involved in providing accommodation entries through his group entities. Since M/s. Aneri Fincap Ltd., was also one of the companies controlled by Shri Rajesh G. Mehta, so, it was assumed that the loan taken by the assessee from the said company of Rs.2.88 Crs. was also an accommodation entry. Therefore, the case of the assessee was reopened u/s.147 of the Income Tax Act, 1961 [in short, “the Act”] by way of issuing notice u/s.148 of the Act. During the course of assessment proceedings, the assessee furnished the evidences to prove the identity and creditworthiness of the creditor M/s. Aneri Fincap Ltd., and also relating to genuineness of the transaction. The assessee has placed reliance upon financial statement of the creditor and further submitted that the creditor was a registered company with the Registrar of Companies and was active in business and had shown an amount of Rs.19.52 Crs. as interest income during the year under consideration in its return of income. The assessee also relied upon the statement of confirmation of accounts, acknowledgement of ITR and audited financials of M/s. Aneri Fincap Ltd., etc. However, the AO rejected all the evidences furnished by the assessee stating that since Shri Rajesh G. Mehta in his statement had admitted that he was involved in providing accommodation entries, therefore, the loan taken by the assessee company from his group company was bogus accommodation entry and made the impugned addition. The Ld.CIT(A) confirmed the addition so made by the AO.

4.

We have heard the rival contentions of the both the Ld. Representatives of the parties and gone through the record. In the case in hand, the assessee had shown a loan of Rs.2.86 Crs. from M/s. Aneri Fincap Ltd. The assessee had furnished the evidences as noted above to prove the identity and creditworthiness of the creditor and genuineness of the transaction. However, both the lower authorities have relied upon solely on the statement of Shri Rajesh G. Mehta. It is pertinent to mention here that the assessee during the course of assessment proceedings, had requested for cross-examination of Shri Rajesh G. Mehta, which was declined by the AO. The case of the Revenue is solely based upon the statement of Shri Rajesh G. Mehta, no other evidence has been relied upon by the AO for the purpose of holding that the alleged loan transaction was bogus. When the entire case of the Revenue is dependent upon the statement of Shri Rajesh G. Mehta, then, under the circumstances, the AO was required to give opportunity of cross-examination of said Shri Rajesh G. Mehta to the assessee. Moreover, the assessee has furnished requisite details and documents to prove its case. It is noted from the records that creditor has offered an interest income of Rs.19.52 Crs. in its return of income. The Ld.CIT(A) has stated in his order that the loan was a circular transaction given and obtained from group companies which was given further to the various parties. May it be so, the question is whether such a person will offer a huge interest income of Rs.19.52 Crs. without gaining anything from group company. These peculiar facts and circumstances can’t be brushed aside, besides the other documents such as audited financial statements of the creditor showing its creditworthiness. The entire case of the Revenue is built up on assumptions & presumptions. On the other hand, the assessee has furnished the requisite documents to prove the identity and creditworthiness of the creditor and genuineness of the transaction, but, the same couldn’t be rebutted by the Revenue. The impugned addition, in our view, made by the AO and further confirmed by the Ld.CIT(A) is not justified and the same is accordingly ordered to be deleted. Before parting, it is pertinent to mention here that the assessee has also raised certain legal grounds, the same at this stage are not being adjudicated and are kept open to be taken up at the appropriate stage, if so required.

5.

In the result, appeal filed by the assessee is allowed.

Order pronounced in the open court on 17.09.2026.

Sd/- Sd/- (G.M. DOSS) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 17.09.2026 Copy to: BENCHMARK BUILDCON PRIVATE LIMITED, 12 B 1ST FLOOR 609 SINGAPURI BUILDING, 1 J.S.S. MARG, MARINE LINES, KALBADEVI, MUMBAI-400002, MAHARASHTRA ITO, WARD-4(1)(3), 2 AAYAKAR BHAWAN, MUMBAI, MUMBAI-400002, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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