ASHOK PALOD,BHOPAL vs. ACIT/DCIT 1(1), HOSHANGABAD ROAD

Per Paresh M Joshi, J.M.:

This is an appeal filed by the assessee Under Section 253 of

the Income Tax Act, 1961 (hereinafter referred to as the Act for

the sake of brevity) before this Tribunal as and by way of a

second appeal. The assessee is aggrieved by the order bearing

Number: - ITBA/NFAC/S/250/2025-26/1084463718(1) dated

06.01.2026 passed by the Ld. CIT(A) u/s 250 of the Act which is

hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2013-14 and the corresponding previous year

period is from 01.04.2012 to 31.03.2013.

That as and by way of an assessment order made u/s 147 2.1

r.w.s. 144B of the Act, the total income of the assessee was

computed and assessed at Rs.1,87,74,760/-. The income as per

the return of the Income was at Rs. 26, 74,760/-. The addition

of Rs. 1, 62, 00, 000/- u/s 68 of the Act was made. That the

aforesaid assessment order bears number:-

ITBA/AST/S/147/2021-22/1041745450(1) and that the same is

dated 27.03.2022 which is hereinafter referred to as the

“Impugned Assessment Order”.

2.2 That the Assessee is an individual. As per the information

on e-filing portal of ITBA, the assessee had filed return of income

for the Assessment Year 2013-14 on 29.09.2013 declaring total

income of Rs. 25,74,760/-.

2.3 That the Income Tax Department was in the possession of

certain credible information as per which the assessee had bogus

credit entry of Rs. 1,62,00,000/- in the form of accommodation entry from Jayant Securities Pvt. Ltd. which was found to be

bogus company/ dummy company of Sharad Darak.

2.4 That it was found that the assessee had received

accommodation entry during the year under consideration

amounting to Rs. 1, 62, 00,000/- from Jayant Securities Pvt. Ltd.

Thus unaccounted money of the assessee was rotated in the form

of accommodation entry through Jayant Securities Pvt. Ltd.

which was controlled by Shri Sharad Darak group of companies.

2.5 That after recording the reasons for the reopening and after

obtaining the prior approval from the competent authority, the

case of the assessee was reopened u/s 147 of the Act.

Accordingly, a notice u/s 148 of the Act was issued to the

assessee on 30.03.2021 and served through ITBA on the e-mail

of the assessee.

2.6 That subsequently notice u/s 142(1) & 143(2) of the Act was

also issued. That during the course of the reassessment

proceedings, the assessee had submitted the details as was called

for.

2.7 That the Ld. A.O on internal pages 3 to 20 of the Impugned

Assessment Order has explained the modus operandi and has

reproduced the statement of Sharad Darak too.

2.8 That the Ld. A.O in view of the observations (supra) keeping

in mind the legal position with reference to the “accommodation

entry/credit entries” shown by the assessee as income from the

aforesaid company added 1,62,00,000/- u/s 68 of the act, read

with 143(3)/147, 144B of the act too.

2.9 That it is also recorded in the aforesaid assessment order as

under:-

“Further a show-cause notice vide DIN: ITBA/AST/F/147 (SCN)/2021- 22/1041250579(1) dated 22.03.2022 issued to the assessee to show cause why proposed variation should not be made and the assessment should not be completed accordingly and submit response through registered e-filing account at www.incometax.gov.in by 26/03/2022. In response the assessee has submitted reply on 26-03-2022. The assessee has submitted that his name is not appearing anywhere in the statements of Mr. Sharad Darak. However, the fact is, statements are not recorded for all the impounded material but a sample of material is shown to know the larger modus operandi, which is applicable to all other impounded materials. The assessee is, one such beneficiary, whose records were impounded during the search operations at Jayant Securities Pvt. Ltd. Therefore, the reply of the assessee examined and not found acceptable as already discussed in the preceding paras.”

2.10 That the assessee being aggrieved by the “Impugned

Assessment Order” prefers the first appeal u/s 246A of the Act before Ld. CIT (A) who by the “Impugned Order” has dismissed

the appeal of the assessee on the grounds/reasons stated therein.

2.11 That the assessee being aggrieved by the “Impugned

Order” has preferred the instant second appeal before this

Tribunal and has raised following grounds of appeal in Form

No.36 against the “Impugned Order” which are as under:-

“1.That the learned Commissioner of Income Tax Appeals has erred in law and on facts in confirming the additions made by learned Assessing Officer in absence of corroborative evidences on the record. Therefore, the appellant denies his liability to be assessed at total income of Rs.1,62,00,000 and accordingly denies his liability to pay tax and interest demand under section 156 at Rs. 1,05,12,913. 2.That having regards to the facts and circumstances of the case the learned CIT Appeal not considered the fact that Assessing 2 Officer has erred in law in not providing sufficient reasonable opportunity to contest inference drawn in assessment order by not observing the Principles of Natural Justice. 3.That the learned Commissioner of Income Tax Appeals has erred in law and on facts in confirming the additions made by learned Assessing Officer of Rs. 1,62,00,000 on account of unexplained credit under section 68 on the basis of statement recorded on the back of the assessee and opportunity of cross examination not provided. 4.That the learned Commissioner of Income Tax Appeals has erred in law and on facts in confirming the additions made by 4 learned Assessing Officer in invoking tax at special rate of 30 percent at Rs 48,60,000 and surcharge thereon on account of disputed income addition of Rs 1,62,00,000. 5.That the learned Commissioner of Income Tax Appeals has erred in law and on facts in confirming the additions made by 5 learned Assessing Officer in initiating penalty under section 271(1)(c) on account of income under dispute at Rs 1,62,00,000 and it is consequential in nature. 6.That the learned Commissioner of Income Tax Appeals has erred in law and on facts in confirming the additions made by 6 learned Assessing Officer in levying interest under section 234, 234B, 234C and 234D amounting to 55,33,619 and it is consequential in nature.

7.The appellant craves leave to add OR amend OR adduce OR alter 7 OR DLEETE OR modify any of all grounds of appeal as mentioned here in above at OR before the time of hearing.”

3.1 The hearing in the matter took place before this Tribunal on

22.04.2026 when the Ld. AR for and on behalf of the Assessee

appeared before us and interalia brought to our notice that the

instant appeal is a covered matter and that there are numbers

of orders of this tribunal wherein it has been held that broad

issue with regard to M/s Jayant Securities Pvt. Ltd. being

paper company and other companies of Sharad Darak Group

including M/s Jay-Jyoti (India) Pvt. Ltd. has not been

accepted. The Ld. AR has placed on the record of this tribunal a

brief synopsis of 3 pages which is reproduced by us as below:-

Per contra the Ld. DR for and on behalf of the Revenue has

placed reliance on the Impugned Assessment Order and the Impugned Order but he has maintained studded silence on the

issue that the matter is covered one indeed as pleaded by the Ld.

AR.

4.1 We now have to decide the legality, validity and the

proprietery of the “impugned order” basis records of the case

and rival contentions canvassed before us.

4.2 We have carefully perused the records of the case.

4.3 We basis records of the case and so also after hearing and

upon examining the contentions are of the considered opinion

that credit loan entry shown by the assessee of Rs.1,62,00,000/-

(supra) cannot be added u/s 68 of the Act. Hence addition

aggregating to Rs.1, 62, 00,000/- (supra) is deleted which was

added to the Return of Income. We refer to the following cases:-

Sanjay Shukla V/s ACIT Central Circle-2, Indore. ITA (i) No.333&49/Ind/2020 order dated 15.03.2022 M/s Hi Link City Homes Pvt. Ltd V/s ITO 21), Indore. (ii) ITA No.2/Ind/2021 order dated 19.09.2022. ACIT, Central-2, Indore V/s Shri Sanjay Shukla. ITA (iii) No.333/Ind/2020 order dated 15.03.2022. ACIT, Central-1, Indore V/s Shri Krishna Devcon Ltd. (iv) ITA No. 8 to 10/Ind/2022, IT(SS)A No.11&3/Ind/2022, C.O. No.03/Ind/2022 order dated 21.08.2023.

Joint CIT (OSD)-CC-7(4) V/s M/s. Shalimar Housing & (v) Finance Ltd. ITA No.4079/Mum/2019 order dated 01.06.2021. ACIT,3(1), Indore V/s Shri Pramod Kumar Sethi. ITA (vi) No.382 & 383/Ind/2014 order dated 06.11.2018. Sanjeev Kumar Agrawal V/s ACIT(Cntral)-2, Bhopal ITA (vii) No.899/Ind/2024 order dated 24.06.2025 Globus Housing V/s Assessment Unit, NFAC, Delhi ITA (viii) No.872/Ind/2024 order dated 10.10.2025 Wherein this Tribunal has held that Jayant Securities Pvt.

Ltd and other companies of Sharad Darak group including M/s

Jay-Jyoti (India) Pvt. Ltd are neither a paper company nor a shell

company. Hence we too respectfully following above decisions

(supra) concur with the view of Ld. AR that the issue in appeal is

covered one. Consequently we set aside the “Impugned Order”

and allow the appeal of the Assessee.

5.1 The appeal of the assessee is allowed and the “Impugned

Order” is set aside.

5.2 In result, appeal of the assessee is allowed.

Order pronounced in open court on 30.04.2026.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore िदनांक/ Dated : 30/04/2026 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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