OMEGA COLORS PRIVATE LIMITED,MAHARASHTRA vs. CIRCLE 3(2)(1), MUMBAI, MUMBAI

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JM & SHRI ARUN KHODPIA, AM I.T.A. No.3012 & 3013/Mum/2026 (Assessment Years: 2018-19 & 2019-20) Omega Colors Private Limited Circle 3(2)(1), Mumbai D-21/2/3, MIDC, Tarapur, Vs. Boisar, Thane-401506, Maharashtra, India PAN: AAACO5300J Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Shri Apurva Gandhi Revenueby : Shri Ajay Soneji, Sr. DR : 25.06.2026 Date of Hearing : 14.07.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: The captioned appeals are filed by the assessee against the separate order of Commissioner of Income Tax, NFAC, Delhi [in short, “Ld. CIT(A)”] dated 16.02.2026 for the Assessment Years (AYs) 2018-19 and 2019-20, arises out of assessment orders u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (in short, “the Act”) passed by Assessment Unit, Income Tax Department (in short, “Ld. AO”) dated 14.03.2023and 22.03.2025.The grounds of appeal for both the years are as under:

ITA No. 3012 & 3013/Mum/2025 Omega Colors Private Limited “Assessment Year 2018-19 Ground No.1 On the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in reopening the assessment under section 147 by issuing notice under section 148 dated 29.03.2022, which is bad in law being beyond the time limit prescribed under section 149 and based merely on change of opinion without any new tangible material, and is therefore liable to be quashed. Ground No. 2: On the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in completing the assessment under section 144 of the Act without providing adequate and reasonable opportunity of being heard and further erred in alleging that the appellant had entered into accommodation loan transactions with M/s Aneri Fincap Limited, controlled by Shri Rajesh G. Mehta, without bringing any cogent material or evidence on record to substantiate such allegation, Ground No.3: On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) [CIT(A)] erred in confirming the addition of 55,55,011 made by the learned Assessing Officer as unexplained cash credits under section 68 of the Income-tax Act, 1961, without properly appreciating the facts and evidences placed on record and without considering that the said amount has already been assessed/added in Assessment Year 2017-18, thereby resulting in double addition of the same income, which is impermissible in law. Ground No.4: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of 55,55,011 under section 68 of the Act merely on the basis of information received by the Assessing Officer, without there being any tangible Incriminating material or corroborative evidence on record and thereby again resulting in double taxation of the same income already assessed in AY 2017-18. Ground No.5: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of 55,55,011 under section 68 of the Act without providing the appellant with the material relied upon by the Assessing Officer, thereby violating the principles of natural justice. Ground No.6: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of 55,55,011 under section 68 of the Act without providing the appellant an opportunity to cross-examine the third party, on whose alleged statements the addition was made, which is against the principles of natural justice. Ground No.7: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the action of the Assessing Officer in initiating penalty proceedings under section 271AAA of the Act, which is unjustified and liable to be deleted.”

ITA No. 3012 & 3013/Mum/2025 Omega Colors Private Limited Assessment Year 2019-20 Ground No.1 On the facts and in the circumstances of the case and in law, the reassessment proceedings initiated under section 147 pursuant to notice under section 148 received on 13.04.2023 are bad in law and liable to be quashed, the same has been Initiated without jurisdiction, without any valid tangible material, and merely on the basis of borrowed satisfaction and change of opinion. Ground No.2 On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) [CIT[A]] erred in confirming the addition made by the learned Assessing Officer of 10% of purchases amounting to 1,52,32,310 as unexplained expenditure under section 69C of the Income-tax Act, 1961, without properly appreciating the facts and evidences placed on record. Ground No.3: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition made by the learned Assessing Officer of 10% of employee benefit expenses amounting to 19,58,968 as unexplained expenditure under section 69C of the Act, without considering the merits of the case and the evidences furnished by the appellant. Ground No.4: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition made by the learned Assessing Officer of 10% of interest on unsecured loans amounting to 24,27,165 as unexplained expenditure under section 69C of the Act, without properly appreciating the facts of the case. Ground No.5: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition made by the learned Assessing Officer of 10% of other expenses amounting to 168,65,987 as unexplained expenditure under section 69C of the Act, without considering the merits of the case. Ground No.6: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition made by the learned Assessing Officer of 10% of unsecured loans availed amounting to 94,29,447 as unexplained cash credits under section 68 of the Act, without properly appreciating the facts and evidences placed on record. Ground No.7: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of 49,24,214 made by the learned Assessing Officer as unexplained cash credits under section 68 of the Act, treating the same as fictitious loans solely based on Information received, without any tangible incriminating material or corroborative evidence. Further, the addition has been made without providing the appellant with the material relied upon and without granting an opportunity to cross-examine the third party whose alleged statements were relied upon, which is in violation of the principles of natural justice. Ground No.8: 3

ITA No. 3012 & 3013/Mum/2025 Omega Colors Private Limited On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of 21,52,766 made by the learned Assessing Officer as unexplained cash credits under section 68 of the Act, treating the same as accommodation entries without explaining the nature of such alleged accommodation entries or identifying the entity from whom such entries were received. The addition is mechanical and without proper application of mind and is made solely on the basis of information received, without any tangible incriminating material or corroborative evidence. Further, the appellant was neither provided the material relied upon nor given an opportunity to cross-examine the third party, which is against the principles of natural justice. All the above grounds are independent and without prejudice to each other. The appellant craves leave to add, alter, amend, or delete any ground(s) of appeal before or during the course of hearing.”

AY 2018-19 2. Brief Facts: The assessee filed its return of income on 21.09.2018, declaring Total Income at 78,95,180/-.The case was selected under manual scrutiny. As per information available on records and order u/s 148A(d), the assessee was found to be beneficiary of accommodation entries from M/s Aneri Fincap Ltd. for Rs. 55,55,011/- (principal + interest). The assessee had been provided with 2 opportunities u/s 142(1), one u/s 144 and finally a show-cause dated 22/02/2023 was issued but it remains non-compliant. In absence of any response by the assessee,the ld. AO completed the assessment by adding the aforesaid amount of unsecured loan received during the year as unexplained case credit under Section 68 of the Act. AY 2019-20 3. Brief Facts: The assessee filed its return of income on 21.10.2019, declaring Total Income at 97,93,800/-.The ITR was processed under Section 143(1) of the IT Act. Subsequently, the case was reopened on account of information available regarding fictitious loan and availing of accommodation 4

ITA No. 3012 & 3013/Mum/2025 Omega Colors Private Limited entries by the assessee. Such loan was for Rs. 1,35,600 from M/s VRB Capital Services India Pvt. Ltd. The AO also observed that the assessee has entered into a bogus transaction with One Word Group companies for a transaction value of Rs 21,52,766/-. Statutory notices were issued to the assessee. But the assessee remains non responsive. Accordingly, AO proposed and made the following disallowances: “1. On verification of the profit and loss account, it is found that the assessee has total purchase of Rs. 15,23,23,102/-. During the course of assessment proceedings, the assessee did not furnish any details regarding the purchases. Therefore, 10% of the purchases totaling of Rs. 1,52,32,310/- is disallowed and added to the total income u/s 69C of the Act as unexplained expenditure. 2. In the profit and loss account of the assessee total employees benefit expense was claimed totaling of Rs. 1,95,89,688/-. As the assessee did not furnish any details in this regard. So, 10% of the same expenses totaling of Rs. 19,58,968/- is disallowed and added to the total income as unexplained expenditure under section 696 of the Act. 3. In the profit and loss account the assessee has incurred Rs. 42,71,656/- as interest onunsecured loan. In this regard, the assessee did not furnish any details during the course of assessment proceedings. So, 10% of the same expenses which is worked out to Rs. 4,27,165/-is disallowed and added to the total income u/s 69C of the Act as unexplained expenditure. 4. In the profit and loss account, the assessee has claimed other expenses of Rs. 6,86,59,879/-. Regarding this, the assessee could not furnish any details to substantiate the said expenses. Therefore, 10% of the said expenses which is worked out to Rs. 68,65,987/- is disallowed u/s 69C of the act as unexplained expenditure and added to the total income. 5. In the subject case, there is information of fictitious loan taken from M/s. Ancri Fincap Ltd. and VRB Capital Services India Pvt. Ltd. totaling of Rs. 49,24,214/- which were controlled by Shri Rajesh Ji Mehta. As it is already proved during the course of search and post investigation proceedings that the subject transactions are fictitious transactions. Therefore, the same is added to the total income of the assessee as unexplained credit u/s 68 of the Act. 6. In the subject there is information of accommodation entry taken from M/s. One World Group of Companies totaling of Rs. 21,52,700/-. During the course of search and post search proceedings, it is already established the subject transaction is an accommodation entry Therefore, the same is added to the total income as unexplained credit u/s 68 of the Act.

ITA No. 3012 & 3013/Mum/2025 Omega Colors Private Limited 7 On perusal financial it was found that the assessee has availed unsecured loan from inter corporate and related parties totaling of Rs. 9,42,94,471/-. During the course of assessment proceedings, the assessee did not furnish any details for the same. Therefore, 10% of the same totaling of Rs. 94,29,447/- is added to the total income of the assessee under section 68 of the Act as unexplained credit For the all above discussed additions, penalty under section 271AAC of the Act is initiated separately. The subject to the above remark, the total income of the assessee as under: The total income as per ROI dated 15.05.2023 Rs.97,93,800/- Addition: Unexplained Credit u/s 68 of the Act as per discussed Rs. 1,65,06,427/- above Unexplained expenditure u/s 69C of the Act as per Rs. 2,44,84,430/- discussed above The total assessed income Rs.5,07,84,6571-

ITA No. 3012 & 3013/Mum/2025 Omega Colors Private Limited each year under consideration, so the addition of amount which was already added in earlier AY 2017-18, the same cannot be added again. On this aspect, we find substance in the submission of the assessee that the addition u/s 68 can be made only in the year in which the transaction was executed, the carry forward of the same in future years as opening balance cannot be subjected to addition again, so the addition for amount which was received in earlier year cannot be added again in the years under consideration, which will tantamount to double deduction. Similar, submissions were made for unsecured loan received from M/s VRB Capital, where the alleged loan was availed in AY 2016-17, therefore the addition in AY 2019-20 for opening balance of loan was uncalled for. The AO, therefore, is directed to delete such prima facie double additions apparent on records, after factual verifications. 6. The assessee submitted relevant documents to substantiate, its ground of appeals challenging the other aspects to assail the impugned orders, but we are not expressing our view on such grounds, since the evidence placed before us were not furnished before the revenue authorities, there decisions without such material on record, in absence of any assistance by the assessee cannot be faulted with, however in the interest of justice, to take the issues to their logical end, the matters needs verification, analysis, examination and adjudication afresh in light of facts / evidence placed before us by the assessee.

ITA No. 3012 & 3013/Mum/2025 Omega Colors Private Limited 7. The Ld. DR vehemently supported the orders of revenue authorities, however not objected the request of assessee, if the matter is restored for fresh adjudication after verification of relevant documents, which the assessee has undertaken to produce, without fail.

ITA No. 3012 & 3013/Mum/2025 Omega Colors Private Limited 3: Fresh appointment of consultants Subsequent to the above events, there were many proceedings remaining unattended for the appellant. A fresh consultant - Apurv Gandhi and Associates LLP were appointed in December 2025 to revive the matters and file the appropriate responses.”

Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated: 14-07-2026. Ankit K., Sr. PS

ITA No. 3012 & 3013/Mum/2025 Omega Colors Private Limited

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai