HUBTOWN LIMITED,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(4), MUMBAI

आदेश / O R D E R PER AMIT SHUKLA (J.M): These two appeals have been preferred by the assessee against the separate orders, both dated 12.12.2025, passed by the learned Commissioner of Income Tax (Appeals), NFAC, Delhi under section 250 of the Income Tax Act, 1961, arising

2 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. out of the reassessment orders passed under section 147 read with section 143(3) of the Act for Assessment Years 2019-20 and 2020-21. Since, the controversy involved, the factual matrix, the nature of the additions, the material relied upon by the Assessing Officer, the findings recorded by the learned CIT(A), as well as the arguments advanced before us are substantially identical in both the appeals, they were heard together and are being disposed of by this consolidated order. For the sake of convenience, the facts relating to Assessment Year 2019-20 are taken as the lead case and the decision rendered therein shall apply mutatis mutandis to Assessment Year 2020-21, except for the variation in the amount involved. 2. Briefly stated, the assessee had originally filed its return of income for Assessment Year 2019-20 declaring a total income of ₹4,75,11,720/-. Pursuant to the search conducted in the case of Hubtown Group on 30.07.2019, assessment was completed under section 153A read with section 143(3), which was subsequently modified pursuant to the order passed under section 254 read with section 153A read with section 143(3), determining the total income at ₹6,48,11,720/-. Thereafter, based upon information received from the Investigation Wing emanating from a search and seizure action conducted under section 132 on 08.12.2021 in the case of Omkara/Areion Group and its related entities, namely ACAIPL Investment and Financial Services Pvt. Ltd.

3 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. and Areion Fincap Pvt. Ltd., the Assessing Officer initiated proceedings under section 148A by issuing notice under section 148A(b), followed by an order under section 148A(d), and thereafter reopened the assessment by issuing notice under section 148 of the Act. After considering the replies furnished by the assessee during the reassessment proceedings, the Assessing Officer completed the assessment under section 147 read with section 143(3) making an addition of ₹1,64,50,751/- under section 69A of the Act. Similar reassessment proceedings were undertaken in Assessment Year 2020-21 on the basis of identical material and reasoning. 3. The foundation of the reassessment proceedings, as borne out from the assessment order, is the search conducted in the case of Omkara/Areion Group, during which various digital and physical evidences, including WhatsApp chats, loose papers, handwritten chits and a parallel Tally database maintained under the nomenclature “Personal Tally”, were found and seized from Shri Ram Lal Nath. The Assessing Officer has recorded that Shri Ram Lal Nath, in his statement recorded under section 132(4), admitted that the said “Personal Tally” represented a parallel set of books of account maintained under the directions of Shri Manish Motilal Lalwani, promoter of Omkara/Areion Group, for recording transactions which were either not reflected or not genuinely reflected in the regular books of account. According to the

4 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. Assessing Officer, the seized material, read with the statements recorded during the course of search, disclosed the modus operandi adopted by the Omkara/Areion Group in providing accommodation entries through banking channels while simultaneously recording corresponding cash movements in the parallel books of account. 4. The Assessing Officer has observed that analysis of the seized “Personal Tally” revealed ledger accounts relating to ACAIPL Investment and Financial Services Pvt. Ltd. as well as the present assessee. According to the Assessing Officer, the repayment of ₹1,64,50,751/- received by the assessee from ACAIPL Investment and Financial Services Pvt. Ltd., though recorded in the regular books of account and routed through banking channels, was simultaneously reflected in the “Personal Tally” with corresponding cash entries. The Assessing Officer, therefore, inferred that the repayment was merely an accommodation entry backed by unaccounted cash and that the banking channel had been employed only to give an appearance of genuineness to the transaction. Referring extensively to the seized material, the statements recorded under section 132(4), and the alleged modus operandi unearthed during the search, the Assessing Officer concluded that the impugned receipt represented unexplained money within the meaning of section 69A of the Act and consequently added the amount of ₹1,64,50,751/- to the total

5 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. income of the assessee. Penalty proceedings under section 271AAC were also initiated separately. 5. Aggrieved, the assessee carried the matter in appeal before the learned CIT(A). Before the first appellate authority, the assessee challenged both the validity of the reassessment proceedings as well as the addition on merits. It was contended that the reopening was based merely upon borrowed satisfaction without any independent application of mind by the Assessing Officer; that the objections raised by the assessee had not been disposed of in accordance with law; and that adequate opportunity, including the right to cross examine the persons whose statements had been relied upon, was not afforded, thereby vitiating the reassessment proceedings. On merits, it was submitted that the impugned amount represented repayment of advances made by the assessee to ACAIPL in earlier years through normal banking channels and duly reflected in the regular books of account. It was further contended that the transaction neither represented receipt of any unexplained money nor attracted the provisions of section 69A, especially when the source as well as the movement of funds stood duly recorded in the books maintained by the assessee. 6. The learned CIT(A), however, did not find merit in the contentions advanced on behalf of the assessee. The learned CIT(A) upheld the validity of the reopening by observing that the Assessing Officer had acted upon tangible and specific

6 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. incriminating material unearthed during the search in the case of Omkara/Areion Group, which directly referred to the assessee and, therefore, the reopening could not be said to be based on borrowed satisfaction. On merits also, the learned CIT(A) concurred with the findings of the Assessing Officer that the seized “Personal Tally”, read together with the statements recorded under section 132(4), established that the impugned banking transactions were accommodation entries supported by corresponding cash movements. According to the learned CIT(A), the banking channel merely masked the true nature of the transaction, and therefore the Assessing Officer was justified in invoking section 69A. The plea regarding violation of principles of natural justice on account of denial of cross examination was also rejected by observing that the primary evidence consisted of the seized digital records, while the statements merely corroborated the documentary evidence already available on record. Accordingly, the learned CIT(A) confirmed both the validity of the reassessment proceedings and the addition made under section 69A for both the assessment years. 7. Before us, the learned counsel for the assessee submitted that the controversy involved in the present appeals is no longer res integra and stands squarely covered in favour of the assessee by the decision of the Coordinate Bench of the Tribunal in the case of Joynest Premises Pvt. Ltd. in ITA No. 37/Mum/2026, which also arose out of the

7 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. very same search conducted in the case of Omkara/Areion Group. It was submitted that the search, the seized “Personal Tally”, the statements recorded under section 132(4), the alleged modus operandi, the provisions invoked by the Assessing Officer and even the reasoning adopted in the assessment order as well as by the learned CIT(A) are identical in both the cases. Inviting our attention to the comparative chart placed on record, the learned counsel demonstrated that the factual matrix in the present appeals is indistinguishable from that considered by the Coordinate Bench. It was further submitted that the Tribunal, after an elaborate examination of the scope of section 69A and the nature of the transactions, has already held that the provisions of section 69A are not attracted to such transactions which are admittedly recorded in the books of account and has consequently deleted the addition. Therefore, it was urged that following the said binding precedent, the impugned additions deserve to be deleted in the present appeals as well. 8. Per contra, the learned Departmental Representative strongly relied upon the orders of the Assessing Officer as well as the learned CIT(A). It was submitted that the reassessment proceedings had been initiated on the basis of tangible incriminating material unearthed during the course of search conducted in the case of Omkara/Areion Group and not on mere suspicion or borrowed satisfaction. The seized “Personal

8 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. Tally”, according to the Revenue, was a contemporaneous record of unaccounted transactions maintained by Shri Ram Lal Nath, who had categorically admitted in his statement recorded under section 132(4) that the said Tally data contained accommodation entries and transactions not reflected in the regular books of account. It was further submitted that the impugned transaction pertaining to the assessee specifically figured in the seized digital records and, therefore, constituted sufficient material for forming the belief that income chargeable to tax had escaped assessment. 9. On merits, the learned Departmental Representative reiterated that the addition had not been made merely because the transaction had passed through banking channels, but on account of the incriminating evidence demonstrating that the apparent banking transaction was supported by corresponding cash movements reflected in the “Personal Tally”. According to the Revenue, the seized material established the modus operandi adopted by the Omkara/Areion Group whereby accommodation entries were routed through banking channels while the corresponding cash component was separately recorded in the parallel books of account. Therefore, merely because the transaction was recorded in the regular books of account of the assessee, the same could not be regarded as conclusive evidence of its genuineness. It was accordingly submitted that both the Assessing Officer as well as the learned CIT(A) had rightly

9 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. invoked the provisions of section 69A and the addition deserved to be sustained. 10. We have carefully considered the rival submissions and perused the orders of the authorities below. We have also examined the material relied upon by the Assessing Officer, the findings recorded by the learned CIT(A) and the judicial precedents cited at the Bar. On a careful appraisal of the entire material placed before us, we find that the controversy arising in the present appeals is no longer res integra. The issue stands squarely concluded by the decision of the Coordinate Bench of the Tribunal in the case of Joynest Premises Pvt. Ltd. rendered in the backdrop of the very same search proceedings conducted in the case of Omkara/Areion Group. We further find that the factual foundation, the seized digital material in the form of “Personal Tally”, the statements recorded under section 132(4), the alleged modus operandi, the statutory provision invoked by the Assessing Officer, namely section 69A, and even the reasoning adopted by the Assessing Officer as well as affirmed by the learned CIT(A), are materially identical to those which fell for consideration before the Coordinate Bench. Learned Departmental Representative also could not point out any distinguishing factual or legal feature warranting a departure from the view already taken by the Coordinate Bench. Since the controversy is fully covered by the aforesaid decision, it would be

10 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. appropriate to reproduce the relevant findings of the Coordinate Bench, which read as under: “15. Section 69A of the Act reads as under: 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income 51 of the assessee for such financial year" On perusal of Section 69A of the Act it is apparent that the same is attracted in a case where in any financial year the Assessee is found to be the owner of any money, bullion, jewellery or other valuable article that not recorded in the books of account maintained by him for any source of income. In our view, the aforesaid condition is not satisfied in the facts and circumstances of the present case. Admittedly, the transaction of giving unsecured loan aggregating to INR.1,12,50,000/- and repayment thereof has been recorded in the books of accounts. As regards the entries found in 'Personal Tally' is concerned, even of the contention of the Revenue is accepted that the same are not recorded in the books of accounts of the Assessee, we are of the view that the Assessee has not been found to owner of any money not recorded in books of accounts. The source of cash loan was the money in the form of unsecured loan given by the Assessee to Areion Fincap Pvt. Ltd. which has been recorded in the books of accounts of the Assessee. 16. In view of the above, we hold that the provisions of Section 69A of the Act are not attracted in the facts and circumstances of the present case. Accordingly, we delete the addition of INR. 1,12,50,000/- made by the Assessing Officer invoking provisions of Section 69A of the Act. Thus, Ground No. 4 raised by the Assessee is allowed. 17. Since we have deleted the addition on merits, the grounds challenging the validity of the re-assessment proceedings are dismissed as having been rendered academic in nature. Accordingly, Ground No. 1, 2, 3, 5 and 6 raised by the Assessee are dismissed.”

11 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. agreement with the reasoning adopted therein. The Coordinate Bench has, after an elaborate analysis of the statutory provisions, the nature of the seized material and the factual backdrop in which the additions were made, categorically held that where the impugned transaction is admittedly routed through regular banking channels and duly reflected in the books of account maintained by the assessee, the same cannot be brought within the sweep of section 69A merely on the basis of entries appearing in a third party’s parallel records. The Coordinate Bench has further held that section 69A contemplates a situation where money or valuable assets are found to be owned by the assessee but are not recorded in the books of account, and therefore the very jurisdictional requirement for invoking the said provision would fail where the transaction itself stands duly accounted for in the regular books. We respectfully concur with the aforesaid exposition of law. 12. Applying the aforesaid ratio to the facts of the present case, we find that the addition made by the Assessing Officer has also arisen from the very same search conducted in the case of Omkara/Areion Group and is founded upon the identical “Personal Tally”, the same statements recorded under section 132(4), the same alleged modus operandi and the identical allegation that the repayment received by the assessee through banking channels was backed by corresponding cash movements reflected in the parallel

12 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. books. It is also not in dispute that the impugned receipt from ACAIPL Investment and Financial Services Pvt. Ltd. has been duly recorded in the regular books of account of the assessee and the transaction has admittedly taken place through normal banking channels. Thus, the entire factual substratum as well as the legal basis on which the impugned addition has been made is indistinguishable from the controversy already adjudicated by the Coordinate Bench. 13. Respectfully, following the aforesaid decision of the Coordinate Bench, we hold that the addition made by the Assessing Officer under section 69A of the Act and sustained by the learned CIT(A) cannot be legally sustained. Accordingly, the addition made in Assessment Year 2019-20 is directed to be deleted. Since it is an admitted position that the facts and circumstances obtaining in Assessment Year 2020-21 are identical and arise out of the same search proceedings, the same seized material and the same line of reasoning adopted by the Revenue authorities, our aforesaid findings shall apply mutatis mutandis to Assessment Year 2020-21 also. Consequently, the corresponding addition made for that assessment year is also directed to be deleted. 14. Since, we have allowed both the appeals on merits by following the binding decision of the Coordinate Bench, the grounds challenging the validity of the reassessment proceedings under sections 147, 148 and 148A of the Act are left open and are not being adjudicated, as any adjudication

13 ITA No. 28 & 29/Mum/2026 Hubtown Ltd. thereon would be merely academic in the facts and circumstances of the present case. 15. In the result, both the appeals filed by the assessee for Assessment Years 2019-20 and 2020-21 are allowed.

Order pronounced on 07th July, 2026.

Sd/- Sd/- (GIRISH AGRAWAL) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai; Dated 07/07/2026 Kunal Kr., P.S. Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy//

BY ORDER,

(Asstt. Registrar) ITAT, Mumbai

14 ITA No. 28 & 29/Mum/2026 Hubtown Ltd.

Initial Date 1. Draft dictated on Sr.PS 2. Draft placed before author Sr.PS