DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I NOIDA, NOIDA vs. ELDECO INFRASTRUCTURE & PROPERTIES PVT. LTD, , DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI Before Sh. Yogesh Kumar US, Judicial Member & Smt. Renu Jauhri, Accountant Member ITA No. 5960/Del/2025 : Asstt. Year : 2016-17 DCIT, Vs M/s ELDECO Infrastructure & Central Circle-1, Properties Pvt. Ltd., Spendour Noida-201301 Forum, Jasola District Centre, New Friends Colony, SO Fakir Nagar, South East Delhi, New Delhi-110025 (APPELLANT) (RESPONDENT) PAN No. AAACE8177D ITA No. 5735/Del/2025 : Asstt. Year : 2016-17 M/s ELDECO Infrastructure & Vs DCIT, Properties Pvt. Ltd., 201-212, Central Circle-1, Spendour Forum, Jasola District Noida-201301 Centre, Jasola, New Delhi-110025 (APPELLANT) (RESPONDENT) PAN No. AAACE8177D Assessee by : Sh. Rohit Jain, Adv. Sh. Jitendra Bhati, CA & Sh. Saksham Singhal, Adv. Revenue by : Sh. Mahesh Kumar, CIT-DR Date of Hearing: 30.04.2026 Date of Pronouncement: 15.05.2026 ORDER Per Renu Jauhri, Accountant Member: The above captioned cross appeals are preferred by the Revenue and the assessee against the order dated 23.07.2025, passed by CIT(A)-3, Noida u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Y. 2016-17.

2 ITA Nos. 5735 & 5960/Del/2025 ELDECO Infrastructure & Properties Ltd. 2. In ITA No. 5735/Del/2025, the assessee has raised following grounds of appeal: “Re: Validity of reassessment proceedings 1. That the Commissioner of Income Tax (Appeals) [‘CIT(A)’] erred on facts and in law in not holding that the re-assessment order dated 31.05.2023 passed by the assessing officer (‘AO’) under section 143(3) r.w.s. 147 of the Income-tax Act, 1961 (the Act’) is without jurisdiction, non-est, illegal, bad in law and liable to be quashed. 1.1 That on the facts and circumstances of the case and in law, the notice dated 30.07.2022 is barred by limitation having been issued beyond the surviving period as laid down in the case of Union of India vs. Rajeev Bansal 469 ITR 46 (SC) and hence bad in law. 1.2 That on the facts and circumstances of the case and in law, the reassessment proceedings, having been initiated beyond a period of three years without the alleged income escaping assessment being represented in this form of “asset” as specified in section 149(l)(b) of the Act, are barred by limitation and hence illegal and bad-in-law. 1.3 Without prejudice, that on the facts and circumstances of the case and in law, the reassessment proceedings having been initiated beyond a period of 4 years without satisfying the grandfathered conditions of first proviso to pre-amended section 147 of the Act, are, in any case, barred by limitation and hence illegal and bad-in-law. 1.4 That on the facts and circumstances of the case and in law, the reassessment proceedings under section 147 of the Act, having been initiated merely on reappraisal of existing facts and on mere ‘change of opinion’, is illegal and bad in law. 1.5 That on the facts and circumstances of the case and in law, the reassessment proceedings under section 147 of the Act, having been initiated on basis of internal audit objection, without independent application of mind by the AO and without establishing any escapement of income, is illegal and bad in law. 1.6 That on the facts and circumstances of the case and in law, the impugned order is bad in law and void-ab-initio since sanction(s) under section 151 of the Act for issuance of (i) notice dated 30.06.2021 issued under erstwhile law and (ii) subsequent notice dated 30.07.2022 under amended section 148, have been obtained from wrong authority, thereby vitiating the entire proceedings. 1.7 That the AO erred in initiating the reassessment proceedings without providing copy of mandatory sanction

3 ITA Nos. 5735 & 5960/Del/2025 ELDECO Infrastructure & Properties Ltd. obtained under section 151 before initiating proceedings under section 148/148A of the Act. 1.8 That on the facts and circumstances of the case and in law, jurisdictional notice dated 30.07.2022 issued by assessing officer under section 148 of the Act manually and without quoting mandatory DIN thereon is illegal and bad. 1.9 That on the facts and circumstances of the case and in law, the order under section 148A(d) dated 30.07.2022 and notice under section 148 of even date, having been issued without following the procedure laid down as prescribed under section 151 of the Act is void-ab-into and impugned order is illegal and bad-in-law. Re: Addition under section 56(2)(viia) of the Act 2. That the CIT(A) erred on facts and in law in affirming addition of Rs.17,98,26,025 under section 56(2)(viia) of the Act, holding that the transaction of purchase of shares of M/s Eldeco Jalandhar Properties Pvt. Ltd. (‘Eldeco Jalandhar’) from existing shareholders is undertaken at a consideration less than the fair market value (FMV) of such shares. 2.1 That the CIT(A) erred on facts and in law in holding that the purchase price of Rs.2857.75/share certified by Chartered Accountant by adopting Discounted Cash Flow method (‘DCF Method’) prescribed under Rule 11UA (2) of the Income Tax Rules, 1962 (“the Rules”) does not reflect FMV of shares, without providing any reason therefor. 2.2 That the CIT(A) erred on facts and in law in holding that FMV of share purchased from existing shareholders was Rs.3880/share being the issue price of shares of Eldeco Jalandhar allotted to the appellant through fresh issue, without appreciating that the said transaction is an altogether different transaction.” 3. In ITA No. 5960/Del/2025, the Revenue has raised following grounds of appeal: “1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)- 3. Noida has erred in deleting the addition of Rs. 8,94,33,185/- u/s 2(22)(c) of the IT Act, without appreciating the finding of Assessing Officer that the assessee being a substantial shareholder in both the lending and borrowing companies, the advance was squarely covered by the deeming provisions of section 2(22)(e). 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-3. Noida has erred in holding that the advance given by Eldeco Jalandhar Properties Pvt. Ltd. to Eldeco Sohna Projects Ltd. was in the nature of a commercial transaction/trade advance, without appreciating that part of,

4 ITA Nos. 5735 & 5960/Del/2025 ELDECO Infrastructure & Properties Ltd. the advance was used for repayment of earlier liabilities and therefore could not be termed as business advance. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in deleting the addition of Rs.6,61,96,440/- made by the Assessing Officer on account of disallowance of interest expenditure, without appreciating the finding of Assessing Officer that the assessce had failed to establish commercial expediency for advancing huge interest-free funds to subsidiaries, as required under section 37(1) of the I.T. Act and as laid down by the Hon’ble Supreme Court in the case of S.A. Builders Ltd. v. CIT (288 ITR 1). 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-3. Noida was justified in holding that net interest income of the assessee was higher than net interest expenditure, without appreciating that allowability of expenditure has to be determined with reference to the purpose of business and not with reference to net results. 5. That the order of Ld. CIT(A)-3, Noida being erroneous in law and facts be set aside and order of the A.O. be restored.” 4. At the outset, ld. AR submitted that the case of the assessee is squarely covered by the decision of the Hon’ble Apex Court in Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC).

4.1 Although several legal grounds have been raised by the assessee in his appeal, ld. AR first argued on the validity of proceedings. It was specifically argued that the notice u/s 148 issued on 30.07.2022 for A.Y. 2016-17 was bad in law as the same was issued after approval of PCIT(Central), Kanpur as against the requirement of approval by PCCIT/CCIT u/s 151 of the Act. He has placed on record a copy of the said notice wherein it is clearly mentioned that approval of PCIT(Central), Kanpur was taken for the same.

5 ITA Nos. 5735 & 5960/Del/2025 ELDECO Infrastructure & Properties Ltd. 4.2 On the other hand, ld. DR has relied on the orders of the lower authorities.

6 ITA Nos. 5735 & 5960/Del/2025 ELDECO Infrastructure & Properties Ltd. Commissioner or Commissioner Section 151(i)of Three years or less Principal the new regime than three years Commissioner or from the end of the Principal Director or relevant assessment Commissioner or year Director Section 151(ii)of More than three Principal Chief the new regime years have elapsed Commissioner or from the end of the Principal Director relevant assessment General or Chief year Commissioner or Director General

7 ITA Nos. 5735 & 5960/Del/2025 ELDECO Infrastructure & Properties Ltd. Director or Commissioner or Director; and (b) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General.” In view of above, we hold that the notice u/s 148 dated 30.07.2022 was invalid as the same was issued without the approval of prescribed authority i.e. PCCIT/CCIT as mandated u/s 151(ii) of the Act. Accordingly, the notice u/s 148 and the re-assessment order are hereby quashed.