LATA HOLDINGS PVT. LTD.,MUMBAI vs. INCOME TAX OFFICER, WARD 12(3)(3), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH; MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SMT. DEBJANI MITRANEOGY, JUDICIAL MEMBER ITA No. 3531/Mum/2026 (Assessment Year: 2012-13)

Lata Holdings Pvt. Ltd. Income Tax Officer, Ward 203, 2nd Floor, Corporate 12(3)(3) Avenue, Sonawala X Road, vs. Aayakar Bhavan, Maharishi Goregaon (East), Mumbai, Karve Road, Mumbai, Maharashtra, 400063. Maharashtra, 400020

PAN: AAACL2526K (Appellant) (Respondent) For Assessee : Shri K Gopal a/w Shri Om Kandalkar For Revenue : Shri Surendra Mohan, Sr.DR Date of Hearing : 04.08.2026 Date of Pronouncement : 31.08.2026 O R D E R PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [‘Ld.CIT(A)’], dated 19.01.2026, pertaining to Assessment Year (AY) 2012-13.

ITA No. 3531/Mum/2026; A.Y. 2012-13 Lata Holdings Pvt. Ltd. accommodation entry amounting to Rs. 50,00,112/-, the Assessing Officer recorded reasons that the income has escaped assessment within the meaning of Section 147 on account of failure on the part of the assessee to disclose fully and truly all material facts and notice under section 148 was issued dated 23.03.2019. In response, the assessee submitted that the return filed earlier on 09.04.2019 may be treated as a return filed under section 148 of the Act. The objections filed by the assessee were disposed off and thereafter, notices were issued and after calling for information/explanation and issuance of show cause, an amount of Rs. 50 lakhs was brought to tax under section 68 read with 115BBE of the Act.

ITA No. 3531/Mum/2026; A.Y. 2012-13 Lata Holdings Pvt. Ltd. was sought to be reopened on the ground that income had escaped assessment on a certain issue, the Assessing Officer could not make an assessment or reassessment on another issue which came to his notice during the proceedings. This interpretation will no longer hold the field after the insertion of Explanation 3 by the Finance Act (No. 2) of 2009. However, Explanation 3 does not and cannot override the necessity of fulfilling the conditions set out in the substantive part of section 147. An Explanation to a statutory provision is intended to explain its contents and cannot be construed to override it or render the substance and core nugatory. Section 147 has this effect that the Assessing Officer has to assess or reassess the income ("such income") which escaped assessment and which was the basis of the formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which, comes to his notice during the course of the proceedings. However, if after issuing a notice under section 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a fresh notice under section 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee.” 5. Per contra, the ld. DR, referring to the reasons so recorded by the Assessing Officer, submitted that it is a clear case of accommodation entry obtained by the assessee from the Jamakharcha companies based out of Kolkata and, therefore, the Assessing Officer had tangible information in his possession based on which the case of the assessee was reopened. It was submitted that the Assessing officer has clearly brought on record the chain of transactions and movement of funds from one entity to another entity and how the funds have reached in the hands of the assessee entity. It was submitted that it is the same transaction which has been referred to in the reasons and which has been finally been brought to tax by the Assessing officer and therefore, the contention of the ld AR that a different transaction, which has not formed the basis of reopening, has been brought to tax is not correct and cannot be accepted.

ITA No. 3531/Mum/2026; A.Y. 2012-13 Lata Holdings Pvt. Ltd. u/s 147 has to satisfy the condition as so laid down in Section 147 and explanation 3 doesn’t and cannot override the fulfillment of the conditions so laid down. It has held that the Assessing Officer has to assess or reassess the income ("such income") which escaped assessment and which was the basis of the formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which, comes to his notice during the course of the proceedings. However, if after issuing a notice under section 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a fresh notice under section 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee.

“The assessee company filed its return of income for the A.Y. 2012-13 on 15.09.2012 declaring a total Income of Rs. 17,764/. The return was processed u/s. 143(1) of the I.T. Act'1961. The assessment was completed u/s. 143(3) r.w.s 147 dated 11.12.2018 on Assessed Income of Rs. 74,17,760/-. 2. In this case, information has been received from the office of the D.I.T(Inv.), Kolkata, vide letter dated 22.02.2019 regarding transfer of cash/RTGS/transfer

ITA No. 3531/Mum/2026; A.Y. 2012-13 Lata Holdings Pvt. Ltd. deposits credits in the bank account during the period. The cash is deposited in the current account no. 106505500133 with ICICI Bank, Syambazar branch, Kolkata of M/s. Arihant Enterprises followed by fund transfer by RTGS/transfer deposits on the same day to another company like M/s. Vista Dealcomm. P Ltd, M/s. Scope Vyapaar P Ltd, M/s. Flaxo tie-up P Ltd., M/s. Chankalash Vanijys P Ltd., M/s.Lavender Vincom P Ltd etc. Further from this company it has been transferred to the beneficiary company and M/s. Lata Holdings P Ltd is one of the beneficiary to the tune of Rs. 50,00,112/-. 3. The bank statement shows cash was deposited at one point followed by transfer of funds to desired destination through banking channel. This is the common practice of Jama Kharchi companies in Kolkata. These operator drive this transaction which resulted into entry received by the beneficiary companies in the books. The beneficiary provides cash to operator which was deposited in the dummy proprietorship accounts followed by transfer to different concerns. 4. From the above, it can be inferred that the assessee company took entries from the above companies which do not have any real business and was operated only to bring unaccounted money in the books. In this process the beneficiary company M/s Lata Holding Pvt. Ltd. gradually brought their unaccounted money back in the books without paying any tax. 5. Under the above facts and circumstances of the case, it is clearly emerged that the assessee company has no real business activities with above companies and was operated only to bring unaccounted money in the books. This is a fresh information received by this office. Hence, amounts involved in these transactions have escaped assessment and requires to be looked into in the light of the provisions of the J.T. Act, 1961. 6. In view of the above, I have reason to believe that the assessee had taken bogus accommodation entry amounting, to Rs.50,00,112/ has escaped assessment which is required to be taxed for the A.Y. 2012-13 within the meaning of Section 147 of the Act 1961 on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for the A.Y. 2012- 13. Hence, it is a fit case for issue of notice u/s 148 of the Act. 7. In view of the above, I have reason to believe that income of Rs.50,00,112/- chargeable to tax has escaped assessment for A.Y. 2012-13 within the meaning of section 147 of the Income-Tax Act, 1961. Hence, the case of the assessee is reopened by issue of notice u/s 148 of the I.T. Act.” 9. On perusal of the reasons so recorded, we find that the Assessing officer has described the chain of transactions starting from deposit of cash in the current account no. 106505500133 with ICICI Bank, Syambazar branch, Kolkata of M/s. Arihant Enterprises followed by fund transfer by RTGS/transfer deposits on the same day to another company like M/s. Vista Dealcomm. P Ltd, M/s. Scope Vyapaar P Ltd, M/s. Flaxo tie-up P Ltd., M/s. Chankalash Vanijys P Ltd., M/s.Lavender Vincom P Ltd, etc. and finally, transfer of funds to the tune of Rs 50,00,112/- in

ITA No. 3531/Mum/2026; A.Y. 2012-13 Lata Holdings Pvt. Ltd. the bank account of the assessee company. The assessee company has also submitted during the reassessment proceedings that it has received Rs 50,00,000/- from M/s Newera Vinimay Pvt Ltd through RTGS on 11/11/2011 from UCO Bank account no. 1900211113046. We therefore find that there is clearly transfer and receipts of funds of Rs 50,00,000/- in the bank account of the assessee which the assessee is also not disputing. Only missing link which needs to be examined is the involvement of M/s Newera Vinimay Pvt in the whole chain of transactions and from whom the assessee has received the funds of Rs 50,00,000/- given that the Assessing officer has not spelt out the name of the same entity and at the same time, stated to be covered in other entities while recording the reasons. The said fact can be verified from the information received from the office of DIT (Investigation), Kolkata and in possession of the Assessing officer at the time of recording of the reasons and which has formed the basis for recording the reasons for reopening the assessment. Where the said information discloses the name of M/s Newera Vinimay Pvt and movement of funds from said entity to the assessee, it will show that it is the same transaction in terms of receipt of funds from M/s Newera Vinimay Pvt to the tune of Rs 50,00,000/- which has formed the basis for reopening and which has ultimately been brought to tax by the Assessing officer. Where however, the said information don’t discloses the name of M/s Newera Vinimay Pvt and movement of funds from said entity to the assessee, it will show that it is a different transaction other than the transaction which has formed the basis for reopening and which has subsequently been received by the Assessing officer and which has ultimately been brought to tax in the hands of the assessee company. During the course of hearing, we didn’t have the benefit of going through the said information and neither the assessee nor the Revenue has produced the same for our examination, therefore, we deem it appropriate to set-aside the matter to the file of the ld CIT(A) for the limited purposes of examination of the said factual aspect

ITA No. 3531/Mum/2026; A.Y. 2012-13 Lata Holdings Pvt. Ltd. and decide the matter in light of aforesaid discussion and proposition laid down by the Hon’ble Bombay High Court in Jet Airways.

Order pronounced in the Open Court on 31.08.2026

Sd/- Sd/- DEBJANI MITRANEOGY VIKRAM SINGH YADAV (JUDICIAL MEMBER) (ACCOUNTANT MEMBER)

Mumbai, Dated: 31.08.2026 Karishma J. Pawar, SR. PS

Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file

By Order

Dy./Asst. Registrar I.T.A.T, Mumbai