DARSHITA SURESHKUMAR CHAUHAN,BORIVALI WEST vs. WARD 42(1)(2), MUMBAI, KAUTILYA BHAVAN, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL“J(SMC)” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER ITA No. 6116/MUM/2026 (AY: 2019-20) (Physicalhearing) Darshita Sureshkumar Chauhan ITO, Ward – 42(1)(2), Mumbai A-12 Sahyadri Apt. L T Road, vs Kautilya Bhavan, Borivali West,Mumbai– 400092. Mumbai – 400051. [PAN: ARTPC6384R] Appellant / Assessee Respondent / Revenue Assessee by Shri S.D. Chheda, CA Revenue by Ms. Jayshree Thakur, Sr. DR Dale of institution of appeal 21.05.2026 Date of hearing 17.08.2026 Date of pronouncement 17.08.2026 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of ld. CIT(A)dated 04.04.2026 for Assessment Year (AY) 2019-20. The assessee has raised following grounds of appeal: A. REOPENING 1. The learned Commissioner of Income Tax (Appeals) ["CIT(A)"] erred in confirming the reassessment order passed u/s 147 r.w.s. 144 of the Income-tax Act, 1961, which is bad in law, without jurisdiction, void ab initio and liable to be quashed. 2. The learned CIT(A) erred in upholding the validity of notice issued u/s 148 and order passed u/s 148A(d) despite the fact that the reopening was based on incorrect facts, borrowed satisfaction and complete non- application of mind. 3. The learned CIT(A) erred in not appreciating that the Assessing Officer merely relied upon information uploaded on the Insight Portal / RMS information and Investigation Wing report without carrying out any independent enquiry or verification as specifically required in the dissemination note. 4. The learned CIT(A) erred in confirming the reopening despite the fact that no material whatsoever was supplied along with notice u/s 148A(b), including alleged incriminating statements, seized material, WhatsApp chats or other documents relied upon by the department, thereby violating principles of natural justice. 5. The learned CIT(A) erred in confirming the reopening despite the fact that AO has relied upon statements of churasia group when the appellant did not have any connection with the same group 6. The learned CIT(A) erred in confirming the reopening despite the fact that The Learned AO erred in issuing notice under section 148 without any "reason to believe," as evident from the arbitrary figure of Rs. 20,11,178/-alleged as escaped income without any working, computation, or explanation as to how such amount was derived from the alleged seized Tally data. 7. The learned CIT(A) erred in holding that the Assessing Officer had valid "reason to believe" that income had escaped assessment, despite absence of any live nexus or tangible material connecting the appellant with any alleged accommodation entry.

B. APPROVAL U/S 151 8. The learned CIT(A) failed to appreciate that approval granted u/s 151 proceeded on the erroneous assumption that escapement of income was Rs.20,11,178/-, whereas the actual loan transaction was only Rs. 10,00,000/- and the final addition was also restricted to Rs. 10,00,000/-, thereby rendering the entire reopening proceedings invalid. 9. The learned CIT(A) failed to appreciate that the reassessment proceedings are invalid as the approval granted by the specified authority u/s 151 was mechanical, without independent application of mind and granted on incorrect facts and figures.

C. ADDITTION OF RS.10,00,000/- U/S 68 ON MERITS 10. The learned CIT(A) erred in confirming the addition of Rs. 10,00,000/- u/s 68 of the Act by treating unsecured loan received from M/s Consultshah Financial Services Pvt. Ltd. as unexplained cash credit. 11. The learned CIT(A) failed to appreciate that the appellant had duly discharged the initial onus cast u/s 68 by furnishing complete documentary evidences including confirmation, PAN, bank statements, ledger accounts and financial statements of the lender and there is no adverse findings against the assessee.

D. REPAYMNET DONE 17. The learned CIT(A) erred in confirming the addition despite the fact that the loan was received and repaid through proper banking channels and interest thereon was also paid and allowed. 18. The Appellant submits that the issue is covered by the decision in the case of Bhavana Suresh Chauhan (ITA No. 7290/MUM/2025), wherein under identical facts:

 Loans repaid through banking channels were held to be genuine,

 No addition under section 68 was sustained,

 No adverse material was brought on record,

 Retracted statement of third party was not relied upon.

E. ORDER U/S 144 19. The learned CIT(A) erred in confirming the action of the Assessing Officer in passing assessment order u/s 144 of the Act despite the fact that the appellant had participated in reassessment proceedings and had furnished replies, confirmations, bank statements, ledger accounts and other documentary evidences from time to time.

F. NATURAL JUSTICE 20. The learned CIT(A) erred in confirming the addition despite the fact that no opportunity of cross-examination of Shri Sanjay Shah or any other person whose statements were relied upon was ever provided to the appellant and non-supply of relied material.

G. ADDITTIONAL EVIDENCES 22. The learned CIT(A) failed to appreciate that the reassessment order itself records that replies, confirmations, bank statements and ledger accounts were furnished during assessment proceedings and therefore the finding that evidences were not filed before the Assessing Officer is factually incorrect. 23. The learned CIT(A) erred in law and on facts in not admitting the additional evidences filed by the appellant despite a specific application made under Rule 46A of the Income-tax Rules, 1962 and despite the fact that the evidences were crucial for adjudication of the issues involved and went to the root of the matter and were necessary for proper adjudication of the appeal and therefore refusal to admit the same is arbitrary, unjustified and contrary to law. H. AMENDED GROUNDS 24. The learned CIT(A) erred in law and on facts in failing to adjudicate and decide the amended grounds of appeal specifically raised by the appellant vide separate written application/letter filed during the course of appellate proceedings. 25. The learned CIT(A) failed to appreciate that the amended grounds raised pure questions of law going to the root of jurisdiction and validity of reassessment proceedings and therefore the same were required to be specifically adjudicated by passing reasoned findings.

I. GENERAL 26. The appellant craves leave to add, amend, alter, modify or withdraw any of the above grounds at or before the time of hearing.” 2. Rival submissions of both the parties have been heard and the record perused. The learned Authorised Representative (ld. AR) of the assessee submits that the assessee had availed an unsecured loan purely as a commercial transaction for an urgent need. The assessee availed a loan of Rs. 10,00,000/- from Consultshah Financial Services Private Limited on 09.01.2019. The loan was repaid on 12.02.2019 along with interest, thus 4 the assessee repaid Rs. 11,17,800/-. Such facts were brought to the notice of the Assessing Officer during the assessment proceedings. The Assessing Officer, despite recording such facts, disregarded the same and added the credit as well as debit entries of Consultshah Financial Services Private Limited. The learned AR of the assessee submits that, on a similar set of facts, the SMC Bench of this Tribunal, in the assessee's relative's case in Bhavana Suresh Chauhan, deleted a similar addition. The learned AR further submits that once the loan has been repaid, no addition is warranted on account of the loan transaction in the same assessment year. 3. On the other hand, the learned Senior Departmental Representative (ld. DR) for the Revenue supported the order of the lower authorities. The learned Senior DR for the Revenue submits that the reopening was based on the information that Sanjay Shah, CA, was indulging in providing accommodation entries from dummy entities. The assessee is one of the beneficiaries of such entries. 4. We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities carefully. We find that the case of the assessee was reopened on the basis of information that the assessee was one of the beneficiaries of accommodation entries availed through Sanjay Shah. The Assessing Officer, after recording the reasons, proceeded with the reassessment. We find that, in response to the show cause notice issued by the Assessing Officer, the assessee, in its reply dated 07.04.2023, contended that the loan taken by the assessee has been repaid in the same financial year. The assessee also furnished a copy of the ledger account and confirmation of the lender. The Assessing Officer, instead of appreciating or making any comment on the reply of the assessee, made an addition under section 68 of Rs. 20,11,178/-, being the credit entry as well as the debit entry. 5. We find that, on a similar set of facts, in the case of the assessee's family member, a similar addition was deleted by the SMC Bench of the Mumbai Tribunal in Bhavana Suresh Chauhan vs. ITO in ITA No. 7290/Mum/2025 dated 29.01.2026. Thus, following the principle of consistency and keeping in view the fact that the assessee has already repaid the entire loan amount, no addition was warranted. 6. In the result, appeal filed by assessee is allowed. Order was pronounced in open court on 17/08/2026 Sd/- Sd/- JAGADISH PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, Dated:17/08/2026 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order

Assistant Registrar ITAT, Mumbai