DCIT, NEW DELHI vs. SAG REALTECH PRIVATE LIMITED, NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHIBENCH, ‘C’:NEW DELHI BEFORE: S RIFAUR RAHMAN, ACCOUNTANT MEMBER SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 2430/Del/2026 Assessment Year: 2020-21 DCIT, Central Cirlce-27, Room Vs. SAG Realtech Pvt Ltd, No. 323, Income Tax Office, 65 Shrestha Vihar, ARA Centre, Jhandewalan, New Delhi-110092 New Delhi-110055 PAN: AASCS3051N (Appellant) (Respondent) C.O. No. 204/Del/2026 Assessment Year: 2020-21 SAG Realtech Pvt Ltd, Vs. DCIT, Central Cirlce-27, 65 Shrestha Vihar, Room No. 323, Income Tax New Delhi-110092 Office, ARA Centre, Jhandewalan, New Delhi- 110055 (Appellant) (Respondent) Assessee by Sh. Ved Jain, Adv. &Sh. Ayush Garg, CA Department by Sh. Vikram Singh Sharma, CIT (DR) Date of hearing 02.07.2026 Date of pronouncement 18.08.2026 ORDER PER:SUNIL KUMAR SINGH, JUDICIAL MEMBER

The facts and issues involved in the revenue appeal and assessee’s cross objections are identical, hence, for the sake of convenience and brevity, both the matters are being decided by this

ITA No.2430/Del/2026& CO 204/Del/2026 common order. The facts of revenue’s appeal ITA No. 2430/Del/2026 are only being narrated as under. The delay if any, stands condoned. ITA No. 2430/Del/2026 2. This appeal is directed against the impugned order dated 07.11.2025 passed in appeal No CIT(A), Delhi- 29/10846/2019- 20 by the ld. Commissioner of Income Tax(Appeals),Delhi (hereinafter referred to as the “CIT(A) u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2020-21, wherein ld CIT(A) has allowed assessee’s first appeal and deleted all the three additions made by the assessing officer. 3.(i) The brief facts of the case are that the assessee e-filed its return of income for A.Y. 2020-21 on 16.12.2020, declaring total income at Rs. 33,840/-. A search action u/s 132 of the Act was conducted at Galaxy Group, Shri Pradeep Indra Prasad Agrawal and Shri Deepak Agarwal and Shri Himanshu Verma, who were involved in providing various types of accommodation entries to large number of beneficiaries through various paper companies managed and controlled by them in lieu of commission. The accommodation entries were being provided by them in the form of unsecured loans, share capital, share premium, purchase and sales etc. Assessee was found one of the beneficiaries of the accommodation entries from the non- descript entities. Documents seized during the search contained 2 | P a g e

ITA No.2430/Del/2026& CO 204/Del/2026 information showing that the assessee has obtained accommodation entry amounting to Rs. 2,65,00,000/- from one of such entity M/s LVS Financial Services Pvt Ltd. controlled and managed by Shri Himanshu Verma. (ii). After obtaining approval from the competent authority, notice u/s 148 of the Act was issued on 26.03.2024. Assessee requested his return dated 16.12.2020 be treated as return filed u/s 148 of the Act. Statutory notices u/s 143(2) and 142(1) of the Act were issued and served upon the assessee, asking details of aforesaid transaction. Assessee submitted that he had taken unsecured loan of Rs. 2,65,00,000/- from M/s LVS Financial Services Pvt Ltd. (iii). On the basis of the report of the investigation wing, assessing officer found that 158 non descript companies were managed and controlled by Shri Deepak Agarwal and 162 non descript companies (inclusive of above entity) were found to be controlled and managed by Shri Himanshu Verma and thus added Rs. 2,65,00,000/- in the total income of the assessee u/s 68 r.w.s 115BBE of the Act. The amount of Rs. 7,95,000/- (3% of 2,65,00,000/-) was added as commission on the above said sum u/s 69C r.w.s 115BBE of the Act. Interest expenses of Rs. 11,75,273/- was added by disallowing the claim of interest on the above said sum by treating the same as bogus loan u/s 69C of the Act,

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ITA No.2430/Del/2026& CO 204/Del/2026 vide assessment order dated 03.03.2025 passed u/s 147/143(3) of the Act. 4. Aggrieved, assessee preferred an appeal before ld CIT(A) against the additions made by the assessing officer. Ld CIT(A), after appreciating the entire documentary evidence on record, deleted all the three additions made by the assessing officer. 5. Aggrieved, revenue has preferred this second appeal on the following grounds: “1. Whether Ld. CIT erred in deleting the addition u/s 68 of the IT Act being accommodation entry in form of loan to the tune of Rs.2,65,00,000/- in lieu of cash and three percent commission of Rs.7,95,000/- and interest paid in cash on loan amount of Rs. 11,75,273/-. 2. The Ld. CIT failed to appreciate that Shri Himanshu Verma and Shri Deepak Agarwal are known entry operators and have been actively engaged in providing organized accommodation entries through their associated entities for a long period, despite multiple search and investigation proceedings conducted against them. These entities have consistently participated in such activities without any regard to the law 3. The Ld. CIT did not consider the fact that the non-descript entities connected with Shri Himanshu Verina are merely conduits for nongenuine transactions in the nature of accommodation entries such as bogus loans/purchases/sales. These transactions were executed in a sophisticated manner by using a network of bank accounts and manipulated books of accounts to give a color of genuineness 4. The Ld. CIT failed to appreciate that the existence of such entities at the stated addresses could not be verified, indicating their sham and non- functional nature 5. The Ld. CIT as well as the Hon'ble ITAT have already confirmed that these entities are accommodation entry providers, which clearly establishes their dubious and non-genuine nature 6. The order passed by the Ld. CIT is perverse, erroneous, and unsustainable both on facts and in law.” 6. Perused the records. Heard ld CIT (DR) for the appellant revenue and ld authorized representatives for the respondent assessee.

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ITA No.2430/Del/2026& CO 204/Del/2026 7. On the basis of the grounds raised hereinabove, the main point for determination under appeal is as to whether ld CIT(Appeals) has erred in deleting the amount of Rs. 2,65,00,000/- as unexplained loan added u./s 68 r.w.s. 115BBE of the Act, Rs. 7,95,000/- as 3% commission of Rs. 2,65,00,000/-, added u/s 69Cr.w.s. 115BBE of the Act and Rs. 11,75,000/- as interest expenses added u/s 69C of the Act, determining the total income of the assessee at Rs. 2,85,04,110/-. 8. Ld CIT (DR) for the appellant revenue has submitted that Mr. Himanshu Verma is a habitual accommodation entry provider and heavily involved in the syndicate for organized accommodation entries through various entities including M/s LVS Financial Services Pvt Ltd. since long, from whom the said bogus loan was transacted. The genuineness and credit worthiness of this entity was not established. Ld DR, thus, supports the assessment order, praying to set aside the impugned order and allow revenue’s appeal. 9. Ld representative for the respondent assessee has submitted that all the transactions in dispute were supported with the cogent documentary evidence. Ld assessing officer has based the entire findings merely on the observation of the investigation report that assessee’s lender entity was controlled by the said accommodation entry provider Mr. Himanshu Verma. The report of investigation wing could only be used to trigger the reassessment u/s 147 of the Act, 5 | P a g e

ITA No.2430/Del/2026& CO 204/Del/2026 however, ld assessing officer has made the entire additions merely on the basis of the investigation report, which was merely indicative, thus, ignored the entire evidence produced by the assessee, which proved the each transaction in dispute. Ld AR submits that ld CIT(A) has rightly appreciated the cogent evidence submitted on behalf of the assessee and prays to confirm the impugned order and dismiss revenue’s appeal. 10. After having gone through the entire record at our disposal, we find that the assessing officer has made three additions in the total income of the assessee on different counts. At first, we shall deal with the deletion of Rs. 2,65,00,000/- added by the assessing officer as unexplained loan u/s 68 r.w.s 115BBE of the Act. This sum was said to be received from M/s LVS Financial Services Pvt Ltd. (LVS). It is pertinent to mention that assessee has filed paper book in two volumes containing entire documentary evidences, which were produced before the assessing officer and ld CIT(A) as well. Volume-1 of assessee’s paper book contains 186 pages and Volume-2 contains 317 pages, all in support of identity, genuineness and credit worthiness of entire transactions during the year under consideration. 11. It is true that according to the department’s investigation report, Shri Himanshu Verma and Shri Deepak Agarwal were found to be providing accommodation entries to various entities in lieu of 6 | P a g e

ITA No.2430/Del/2026& CO 204/Del/2026 commission. However, in the case in hand, the assessee submitted, RBI registration details of lending company working as NBFC, the audited financials of lending company, copy of ITR, bank statements of appellant company and lender, confirmation of accounts, registration of lender with MCA showing active status, MCA master data for lending company i.e. M/s LVS showing active status, RBI registration certificate of the M/s LVS for working as NBFC, copy of ITR of lending company , extracts of bank statements of the appellant highlighting the amount received in respect of unsecured loan taken, details of lenders for working as NBFCs and copy of relevant loan sanction letter issued by HDFC Bank for an amount of Rs. 75,00,0000/- which was used as a source for repayment of said loan along with the interest to lending company. The assessing officer does not seem to have taken any pain to discuss any of these documents on merit independently. 12. After appreciating the financials of the lending company, ld CIT(A) has observed that it is easily ascertainable that this company is NBFC regulated by RBI and is declaring sufficient profits in the relevant assessment year. The company has also paid taxes. This NBFC has accumulated capital and reserves carried over from previous years. The said loan was interest bearing and was duly paid subsequently by banking channels by the appellant. Ld CIT(A) has rightly observed that the assessee has satisfied the test of identity, credit worthiness and 7 | P a g e

ITA No.2430/Del/2026& CO 204/Del/2026 genuineness of the loan of Rs. 2,65,00,000/- availed from the aforesaid entity which is NBFC and the said loan has been repaid through recognised banking channels subsequently. Ld CIT(A) has thus rightly deleted the aforesaid addition of Rs. 2,65,00,000/- by impugned order. 13. The second addition of Rs. 7,95,000/- made on account of 3% commission on the said sum of Rs. 2,65,00,000/- and the third addition of interest of Rs. 11,75,273/- paid to the lender on account of aforesaid loan, was merely consequential to the addition of aforesaid sum. Ld CIT(A) has thus rightly deleted these consequential additions. 14. The aforesaid discussion goes to show that ld CIT(A) has left no stone unturned in arriving at its conclusion after evaluating the evidence on record independently without being affected by the investigation wing’s generalized report. The impugned order is further supported with the well established principles of law. The impugned order is thus sustained. The aforesaid point is accordingly determined in negative against the appellant revenue and in favour of the respondent assessee. The appeal is liable to be dismissed. C.O. 204/Del/2026 15. The cross objections relate to aforesaid ITA No. 2430/Del/2026 pertaining to A.Y. 2020-21. The respondent assessee has raised as many as 22 various grounds, mainly with respect to the jurisdictional/ legal defects vitiating the impugned assessment order. As we have 8 | P a g e

ITA No.2430/Del/2026& CO 204/Del/2026 upheld the impugned order passed by ld CIT(A), deleting all the additions made by the assessing officer, the jurisdictional/ legal grounds raised by the assessee remain academic in nature, thus, not being adjudicated and are left open. The assessee’s cross objections are, thus, liable to be dismissed as infructuous. 16. In the result, the revenue’s appeal ITA No. 2430/Del/2026 is dismissed. Assessee’s cross objections CO No. 204/Del/2026 is also dismissed as infructuous.

Order pronounced in the Open Court on- 18.08.2026

Sd/- Sd/- (S RIFAUR RAHMAN) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated:18.08.2026 *Aamir, PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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