M/S SPAR GEO INFRA PVT LTD, DELHI,PITAMPURA vs. CIRCLE-22(2), DELHI, DELHI

PDF · subscribers
ITA 7304/DEL/2025Status: DisposedITAT Delhi15 May 2026AY 2019-207 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition under Section 69A was not sustainable as the reasons for reopening the assessment were for bogus loans, not for repayment of loans. The Tribunal relied on jurisdictional High Court decisions stating that reassessment proceedings are confined to the issues forming the basis of reopening.

What were the facts?

The Assessing Officer (AO) reopened the assessment based on information that the assessee took accommodation entries of bogus unsecured loans. The AO made additions under Section 69A for repayment of Rs. 70,00,000/- and under Section 68 for Rs. 1,73,97,501/-. The CIT(A) deleted the addition under Section 68 but sustained the addition under Section 69A.

What were the issues?

Whether an addition can be made under Section 69A for repayment of a loan when the assessment was reopened on grounds of bogus unsecured loans? Whether reassessment proceedings can go beyond the specific reasons recorded for reopening?

Which sections of the Income-tax Act were involved?

Section 69A,Section 68,Section 148A,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

For Appellant: Adv (Through VC)
Hearing: 19/03/2026Pronounced: 15/05/2026

1 ITA No. 7304/Del/2025 M/s Spar Geo Infra Pvt.Ltd.

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘C’ NEW DELHI) BEFORE YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 7304/DEL/2025 (A.Y. 2019-20) M/s Spar Geo Infra Pvt. Ltd. Vs Circle-2(2) FF 20 & 22, First Floor, Pearl Delhi Omaxe Tower, Netaji Subhash Place, Pitmpura, New Delhi, PAN: AAMCS6730J Appellant Respondent Assessee by Sh. Rajendra Jain, Adv (Through VC) Revenue by Sh. Om Prakash, Sr. DR Date of Hearing 19/03/2026 Date of Pronouncement 15/05/2026

ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of Ld.

Commissioner of Income Tax (Appeals) (‘Ld. CIT(A)’ for short), New Delhi

dated 08/10/2025 for the Assessment Year 2019-20.

2.

Brief facts of the case are that, the Assessee filed revised return of

income at Rs. 4,19,00,740/-. Based on the information received from

inside portal by DDIT/ADIT (Inv), it came to light that the Assessee

company has taken accommodation entries of bogus unsecured loan of

Rs. 1,19,68,090/- from dummy entity M/s Odisha Finlease Pvt. Ltd.

during Financial Year 2018-19 relevant to Assessment Year 2019-20,

accordingly the case of the Assessee was reopened by issuing notice u/s

2 ITA No. 7304/Del/2025 M/s Spar Geo Infra Pvt. Ltd.

148 of the Act. An assessment order came to be passed on 22/03/2024

by making an addition of Rs. 70,00,000/- under Section 69A of the Act

and also made addition u/s 68 of the Act to the tune of Rs.

1,73,97,501/-. Aggrieved by the assessment order dated 22/03/2024,

Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide

order dated 08/10/2025, deleted the addition of Rs. 1,73,97,501/- made

by the A.O. u/s 68 of the Act. However, sustained the addition of Rs.

70,00,000/- made u/s 69A of the Act. Aggrieved by the order of the Ld.

CIT(A) dated 08/10/2025, Assessee preferred the captioned Appeal.

3.

The Ld. Counsel for the Assessee vehemently submitted that the

reasons recorded by the A.O. as mentioned in the notice issued u/s

148A(d) of the Act was on the ground that the ‘Assessee Company has

taken accommodation entries of bogus unsecured loan of Rs.

1,19,68,090/- from dummy entity M/s Odisha Finlease Pvt. Ltd. during

the F.Y 2018-19 relevant to Assessment Year 2019-20’, however, no

addition has been made by the A.O./sustained by the Ld. CIT(A), on the

contrary the addition has been made by the A.O. u/s 69A of the Act to

the tune of Rs. 70,00,000/- which was sustained by the Ld. CIT(A). The

Ld. Counsel further submitted that the Assessee has not availed any loan

for the year under consideration, on the other hand, the Assessee made

repayment of the loan, therefore, the assessment order and the order of

3 ITA No. 7304/Del/2025 M/s Spar Geo Infra Pvt. Ltd.

the Ld. CIT(A) deserves to be set aside. The Ld. Counsel relied on

plethora of judicial precedents and submitted that, if the reasons

recorded are entirely different than the addition made by the A.O., such

addition cannot be sustainable in the eyes of law. Thus, sought for

allowing the Appeal.

4.

Per contra, the Ld. Departmental Representative submitted that the

addition has been made on its merit. The Assessee company has repaid

an amount of Rs. 70,00,000/- to Orissa Finlease Pvt. Ltd. and on issuing

notice u/s 133(6) of the Act, no response was received by the party and

as per the verification, it is found that the address given by the Assessee

either incomplete or the said entity is dummy one. The addition has

been madeu/s 69A of the Act by treating the same as unexplained

money, which has been upheld by the Ld. CIT(A) and the same requires

no interference at the hands of the Tribunal.

5.

We have heard both the parties and perused the material available

on record. The case of the Assessee was reopened and the notice u/s

148A(d) of the Act was issued for taking accommodation entries of bogus

unsecured loan. For the sake of ready reference, the reasons as

mentioned in the notice dated 27/02/2023 issued u/s 148A(d) of the Act

is reproduced as under:-

4 ITA No. 7304/Del/2025 M/s Spar Geo Infra Pvt. Ltd.

“Whereas I have information which suggests that income chargeable to tax for the A.Y. 2019-20 has escaped assessmet within the meaning of sec. 147 of the Income-tax Act, 1961. As per information in possession of the undersigned, the assessee company M/s Spar Geo Infra P. Ltd. has taken accommodation entries of bogus unsecured loan of Rs. 1,19,68,090/- from dummy entity M/s Odisha Finlease Pvt. Ltd., during the F.Y. 2018-19 relevant to the A.Y. 2019-20. The details of the information / enquiry conducted on which reliance is being placed, alongwith supporting documents, are enclosed with this notice.”

6.

However, the addition has been made by the A.O. u/s 69A of the

Act for repayment of the unsecured loan by treating the same as

unexplained money u/s 69A of the Act. Admittedly no addition has been

made by the A.O. for taking accommodation entries of bogus loan of Rs.

1,19,68,090/-. It is also not in dispute that the Assessee has not taken

any loan for the year under consideration.

7.

The Hon'ble High Court of Delhi in the case of Sunlight Tour and

Travel Pvt. Ltd. (supra), while dealing with the identical issue decided in

favour of the Assessee in following manners:-

17.

The said view has also been consistently followed by this Court including recent decisions in The Principal Commissioner of Income Tax-1v. Naveen Infradevelopers& Engineers Pvt. Ltd. (supra) and PCIT v. Jaguar BuildconPvt. Limited (supra). We concur with the aforesaid view. It is well established that Section 147 of the Act enables the reopening of concluded assessments only in exceptional cases, where there the AO has reason to believe that Assessee’s income for the relevant period has escapedassessment. It is trite law that concluded assessment should not be lightlyinterfered with. If the ground on which the concluded assessment is soughtto be re-opened, cannot be sustained, there would be little rationale

5 ITA No. 7304/Del/2025 M/s Spar Geo Infra Pvt. Ltd.

forexpanding the reassessment proceedings. In our view, it would not beapposite to accept an expansive interpretation to the provision of Section147 of the Act. Given that the nature of the proceedings is to unsettle concluded assessment, a strict interpretation of the plain language of Section147 of the Act, is warranted. We respectfully concur the view of this courtas articulated in Ranbaxy Laboratories Limited v. CIT; ATS InfrastructureLtd. v. ACIT; and PCIT v. Jaguar BuildconPvt. Limited (supra).

18.

It is also relevant to note that various courts had taken a view that the reassessment proceedings were confined under Section 147 of the Act only to the issues (reasons to believe) on the basis of which the assessments werereopened. Thus, there was no scope for making any addition other thanthose which were circumscribed by the reasons to believe as recorded by theAO prior to the issuing a notice under Section 148 of the Act. However, thiscontroversy was set at rest by introduction of Explanation 3 by virtue of theFinance Act, 2009 with retrospective effect from 01.04.1989. Explanation 3to Section 147 as applicable at the material time reads as under:

“Explanation 3. – For the purpose of assessment or reassessmentITA 222/2022 Page 14 of 15under this section, the Assessing Officer may assess or reassess theincome in respect of any issue, which has escaped assessment, andsuch issue comes to his notice subsequently in the course of theproceedings under this section, notwithstanding that the reasons forsuch issue have not been included in the reasons recorded under sub section (2) of section 148.”

19.

It is apparent from the above that the said explanation merely clarified that the AO would assess or reassess the income in respect of the issue which had escaped assessment and such other issue, which came to the notice subsequently. However, the said explanation does not control the import of the plain language of Section 147 of the Act. Explanation 3 to Section 147 of the Act, merely clarifies that the jurisdiction of the AO was not confined to assessing or reassessing of the income of an Assessee only inrespect of the issue, which formed a part of the reasons recorded for reopening the assessment. The said explanation cannot be interpreted to mean that the AO could assess other incomes of the Assessee even in cases where no addition is made on account of the reasons for which reassessmentwas initiated.”

6 ITA No. 7304/Del/2025 M/s Spar Geo Infra Pvt. Ltd.

8.

Identical ratio has also been laid down in the case of Jaguar

Buildcon (P) Ltd. (supra) by the Jurisdictional High Court.

9.

It is also observed that the genuineness of the unsecured loan has

not been doubted by the Department in the earlier Assessment Years in

which the said loan has been obtained, thus, in our opinion, without

doubting the receipt of the loan, the Department cannot doubt the

repayment of the loan.

9.

In view of the above discussion and by respectfully following the

above ratio down by the Hon’ble Jurisdictional High Court in the case of

Sunlight Tour and Travel Pvt. Ltd. (supra),we are of the considered

opinion that, the Ld. CIT(A) committed error in sustaining the addition of

Rs. 70,00,000/- made u/s 69A of the Act. Accordingly, we allow the

Grounds of Appeal of the Assessee and delete the addition made by the

A.O. which has been confirmed by the Ld. CIT(A).

10.

In the result, Appeal of the Assessee is allowed.

Order pronounced in the open court on 15th May, 2026

Sd/- Sd/- (MANISH AGARWAL) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 15.05.2026 Reshma Naheed, Sr.P.S

7 ITA No. 7304/Del/2025 M/s Spar Geo Infra Pvt. Ltd.

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →