MANAV DEVELOPERS,MUMBAI vs. INCOME TAX OFFICER -WARD-42(1)(3), MUMBAI, MUMBAI

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ITA 4964/MUM/2026Status: DisposedITAT Mumbai13 August 2026AY 2015-169 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings were validly initiated as there was a live nexus between the information received and the belief of escaped income. The assessee failed to discharge the onus under Section 68 by not satisfactorily establishing the creditworthiness of the lender and the genuineness of the transaction.

What were the facts?

The assessee, Manav Developers, appealed reassessment orders for AYs 2012-13 to 2015-16. The Assessing Officer made additions for unsecured loans from Bright Diamonds Pvt. Ltd., citing accommodation entry information and lack of substantiation from the lender. The CIT(A) upheld these additions.

What were the issues?

Whether the reassessment proceedings were validly initiated and whether the assessee discharged its onus under Section 68 for unexplained cash credits.

Which sections of the Income-tax Act were involved?

Section 68,Section 147,Section 148,Section 151,Section 69C,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI ANIKESH BANERJEE

For Appellant: Shri Mahesh Londhe – SR DR
Hearing: 07/08/2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI ANIKESH BANERJEE (JUDICIAL MEMBER)

ITA No. 4961, 4962, 4963 and 4964/MUM/2026 Assessment Year: 2012-13, 2013-14, 2014-15 and 2015-16

Manav Developers, 1, Bharat Income Tax Officer – Ward Villa, Bhogilal Fadia Road, 42(1)(3), Kautiya Bhavan, C-41 to Kandivalli (West), Mumbai - Vs. C-43, G Block, bandra Kurla 400067. Complex, Bandra (East), Mumbai – 400051. PAN NO. AATFS 0520 Q Appellant Respondent

Assessee by : None : Shri Mahesh Londhe – SR DR. Revenue by

Date of Hearing : 07/08/2026 : 13/08/2026 Date of pronouncement

ORDER PER OM PRAKASH KANT, AM

These appeals by the assessee are directed against separate orders passed by the learned Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre, Delhi [in short "the Ld. CIT(A)"] for Assessment Years 2012-13, 2013-14, 2014-15 and 2015-16 respectively. As common issues in dispute are involved in these appeals, they were heard together and disposed of by way of this consolidated order for sake of convenience.

Manav Developers 2 ITA No. 4961, 4962, 4963 and 4964/MUM/2026

2.

At the outset, despite notifying, neither anyone attended on behalf of the assessee nor was any application for adjournment filed on behalf of the assessee. Therefore, we were of the opinion that the assessee was not interested in prosecuting the appeal; hence, the appeals were heard ex-parte qua the assessee after hearing the arguments of the learned Departmental Representative.

3.

Firstly, we take up the appeal of the assessee for Y 2012-13 for adjudication, finding of which shall be followed mutasis mutandis in other assessment year. The grounds raised by the assessee for AY 2012-13 are reproduced as under:

“1. That the order passed by the CIT(A) is bad in law and contrary to the facts of the case, principles of natural justice, and settled judicial precedents, and therefore deserves to be quashed.

2.

That on the facts and in the circumstances of the case and in law, the ld. CIT(A) failed to appreciate that the Ld. Assessing Officer has erroneously assumed jurisdiction u/s.148 by i) reopening the assessment in mechanical manner based on the information from ADIT(Inv.) Unit-4(1) without independent verification and inquiry ii) reopening the Assessment based on borrowed satisfaction without application of mind and presuming the information from Investigation wing is correct iii) not providing the copies of information/material relied upon, to the Appellant, iv) not providing copy of sanction accorded by PCIT- 33, Mumbai u/s.151(1) of the I.T.Act, 1961. v) without establishing live nexus between information and formation of belief for alleged escapement of income.

3.

That on the facts and circumstances of the case and in law, the Learned CIT(A) erred in confirming the additions of Rs.1,00,00,000, in respect of unsecured loan taken from Bright Diamonds under Section 68 of the Act for failure to prove the genuineness of the transaction and creditworthiness of the loan party in respect of the said loan, and in confirming the disallowance of interest of Rs.28,356/- paid to the said party, under Section 69C of the Act, despite furnishing all the documentary evidences to prove the same.

4.

That on the facts and circumstances of the case and in law, the Learned CIT (A) erred in passing non-speaking and cryptic order without considering or

Manav Developers 3 ITA No. 4961, 4962, 4963 and 4964/MUM/2026

adjudicating the specific contentions and grounds. factual matrix and without appreciating various evidences furnished by the Appellant thereby violating the principles of natural justice.

5.

That the Learned CIT (A) erred in not considering the contention of the Appellant that the loan has been taken and have been repaid through the banking channel and the interest has also been paid after deduction of TDS and also issued TDS Certificate, thereby the Appellant proved genuineness of the loan.

6.

The Id. CIT(A) failed to appreciate that loan were repaid before initiation of reassessment proceedings and hence, no additions are warranted. The Id. CIT(A) failed to consider the decisions of various courts in this regard.

7.

The Id. CIT(A) erred in not appreciating the fact that the lender had received the notice under Section 133(6) of the Act issued by the Learned Assessing Officer for confirmation of the aforesaid loan transaction and the Assessing Authority ought to have enforced attendance of the lender.

8.

a) The Id. CIT(Appeals) erred in upholding the validity of Assessment made by AO without providing copies of information received from ADIT, Investigation unit 4(1), statements of directors/proprietors of concerns of Gautam Jain Group and other source documents/material referred to and relied upon for reopening the Assessment, to the Appellant, and also not granting opportunity to cross examine the deponents, resulting in violation of principles of natural justice.

b) The Id. CIT(A) erred in holding that no opportunity of cross examination was required to be granted as the addition was not solely based on the statement of third party.

9.

That the Learned CIT (A) erred in not considering the availability of the business loss for F.Y.2011-12 and brought forward losses of earlier Assessment years stating that said losses were neither the subject matter of reasons recorded nor examined by the Learned Assessing Officer during the re-assessment proceedings and holding that the Appellant has failed to place on record any material to demonstrate that the losses claimed were determined in accordance with law.

10.

The Id. CIT(A) failed to consider the judicial precedents relied upon by the Appellant in support of its case thereby rendering the impugned order sustainable in law.”

4.

The Assessing Officer noted that, pursuant to information received from the Investigation Wing, the lender, M/s Bright

Manav Developers 4 ITA No. 4961, 4962, 4963 and 4964/MUM/2026

Diamonds Pvt. Ltd., was stated to be one of the entities allegedly involved in providing accommodation entries. The assessee had shown receipt of an unsecured loan of ₹1,00,00,000/- from the said entity during the relevant previous year. During the reassessment proceedings, the assessee furnished certain documents, including loan confirmation and financial particulars. The Assessing Officer, however, observed that the lender did not respond to the notice issued under section 133(6) and that the assessee did not produce the lender for examination despite being called upon to do so. He further referred to the investigation findings concerning the financial profile and business activities of the lender and observed that the lender's capacity to advance the substantial amount remained unsubstantiated. On an overall consideration of the material, the Assessing Officer held that the assessee had not satisfactorily established the identity, creditworthiness of the creditor and genuineness of the transaction, as required under section 68 of the Act. He accordingly treated the loan of ₹1,00,00,000/- as unexplained cash credit under section 68. The consequential interest expenditure of ₹28,356/- was also disallowed.

5.

The learned CIT(A) considered the reassessment proceedings and upheld the action of the Assessing Officer. He noted that the reassessment was initiated on the basis of specific information received from the Investigation Wing regarding the alleged

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accommodation-entry activities of the lender, M/s Bright Diamonds Pvt. Ltd.

5.1 On merits, the learned CIT(A) observed that although the assessee had furnished confirmation and bank statements, the lender did not respond to the notice issued under section 133(6), and the assessee failed to produce the lender for examination. According to the learned CIT(A), the material placed on record did not satisfactorily establish the creditworthiness of the lender or the genuineness of the loan transaction.

5.2 The learned CIT(A) further held that, in the facts of the case, mere confirmation, PAN particulars and routing of funds through banking channels were not sufficient to discharge the onus under section 68. He accordingly confirmed the addition of ₹1,00,00,000/- under section 68 and the consequential disallowance of interest of ₹28,356/-.

5.3 As regards the additional claim of current-year and brought- forward business losses, the learned CIT(A) observed that the same had neither formed part of the reasons recorded for reopening nor been examined during the reassessment proceedings. In the absence of supporting material establishing fulfilment of the statutory conditions for determination and carry-forward of such losses, he declined to entertain the claim and dismissed the additional ground.

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6.

We have heard the submissions of ld Department Representative (DR) and carefully perused the material available on record. The principal controversy before us concerns the addition of ₹1,00,00,000/- made under section 68 of the Income-tax Act, 1961, in respect of the unsecured loan stated to have been received from M/s Bright Diamonds Pvt. Ltd.

6.1 At the outset, we shall deal with the assessee's challenge to the validity of the reassessment proceedings. The reassessment was initiated on the basis of specific information received from the Investigation Wing regarding the assessee's receipt of an unsecured loan of ₹1,00,00,000/- from M/s Bright Diamonds Pvt. Ltd., stated in the information to be one of the entities involved in providing accommodation entries. On the basis of such information, the Assessing Officer recorded reasons and issued notice under section 148 of the Act after obtaining the requisite approval. The learned CIT(A), upon examination of the reasons recorded and the material referred to therein, upheld the validity of the reassessment.

6.2 We find that the information available with the Assessing Officer was specific to the assessee and related directly to the alleged escapement of income arising from the unsecured loan of ₹1,00,00,000/-. At the stage of recording reasons, the Assessing Officer was required to form a prima facie belief on the basis of the material available with him and was not required to conclusively

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establish the escapement of income. The reasons recorded, as emerging from the material before us, disclose a live nexus between the information received and the formation of belief that income chargeable to tax had escaped assessment. We, therefore, find no infirmity in the assumption of jurisdiction under section 147 of the Act. The grounds challenging the validity of the reassessment are accordingly dismissed.

6.3 Coming to the merits, the assessee claimed to have received an unsecured loan of ₹1,00,00,000/- from M/s Bright Diamonds Pvt. Ltd. Although certain documents, including confirmation and banking details, were furnished, the lender did not respond to the notice issued under section 133(6), nor was it produced for examination. The Assessing Officer, relying upon the investigation material and the surrounding circumstances, held that the assessee had failed to satisfactorily establish the identity, creditworthiness of the creditor and genuineness of the transaction. The learned CIT(A) concurred with the said finding.

6.4 Having considered the material on record, we find no reason to take a different view. The assessee has failed to discharge the primary onus cast upon it under section 68 of the Act. Mere routing of the amount through banking channels and furnishing of confirmation, without satisfactorily establishing the creditworthiness of the creditor and genuineness of the transaction

Manav Developers 8 ITA No. 4961, 4962, 4963 and 4964/MUM/2026

in the face of the adverse material brought on record, cannot by itself discharge the statutory burden. We, therefore, uphold the addition of ₹1,00,00,000/- made under section 68 of the Act.

6.5 Consequent upon the aforesaid finding, the disallowance of interest expenditure of ₹28,356/- claimed in respect of the impugned loan also calls for no interference.

6.6 As regards the ground relating to current-year business loss of ₹88,177/- and brought-forward losses, the assessee has not placed before us sufficient material to establish that the statutory requirements governing determination and carry-forward of such losses stood duly satisfied. The learned CIT(A) has, therefore, rightly declined to entertain the claim in the absence of the necessary factual foundation. The said ground is accordingly dismissed.

6.7. In view of the foregoing discussion, we find no infirmity in the impugned order of the learned CIT(A). The grounds challenging the validity of reassessment as well as the grounds raised on merits are dismissed.

7.

As identical grounds have been raised in the remaining assessment years also, therefore following our finding in Assessment Year 2012-13, the grounds raised in other appeals are decided mutatis mutandis.

8.

In the result, all the four appeals of the assessee are dismissed

Manav Developers 9 ITA No. 4961, 4962, 4963 and 4964/MUM/2026

Order pronounced in the open Court on 13/08/2026.

Sd/- Sd/- (ANIKESH BANERJEE) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 13/08/2026 M. Ranganath Vittal , Sr. P.S.

Copy of the Order forwarded to :

1.

The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai

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