ASSURITY REAL ESTATE LLP,CHANDIGARH vs. WARD 19(1)(1), MUMBAI, MAHARASHTRA

PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of ld. CIT(A) / NFAC

dated 24.12.2025 for Assessment Year (AY) 2016-17. The assessee has raised

following grounds of appeal:

“1. That the order dated 24.12.2025 passed u/s 250 of the Income-tax Act, 1961(the "Act") by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Ld. Assessing Officer, Assessment Unit, Income Tax Department in assessing the total | income of the Appellant Firm at Rs. 3,00,00,000/- u/s 68 r.w.s. 115BBE of the Act.

income for A.Y. 2016-17 on 02.08.2016 declaring Nil income. The return of

income was accepted under section 143(1) on 17.09.2016. Subsequently, case

of assessee was reopened on the basis of information in insight portal

forwarded by DDIT (Investigation) – 3(4), Mumbai that a search and seizure

operation was carried out in case of Himanshu Verma and other entry

providers on 13.04.2017. In the search, it was found that Himanshu Verma

was maintaining around 300 shell companies / concerns for providing accommodation entries in lieu of commission by way of share premium and

unsecured loans. The statement of Himanshu Verma was recorded on

13.04.2017 wherein he has admitted himself as bogus entry provider. The

Assessing Officer (AO) further noted that assessee is one of the beneficiary of

accommodation entry of bogus loan / advance from Assurity Real Estate LLP

of Rs. 13,45,00,000/- through bogus entity of Himanshu Verma, Sarvottam

Securities Private Ltd. The AO recorded reasons that as per information

assessee is beneficiary of accommodation entry by way of share application

money. The AO after recording reasons of reopening issued notice under

section 148 dated 23.04.2021.

High Courts across the country challenging the validity of reopening made

subsequent to amendment in section 148 with effect from 01.04.2021. The

Hon’ble Supreme Court in Union of India vs Ashish Agarwal in Civil Appeal No.

3005/2022 held that notice issued between 01.04.2021 to 30.06.2021 shall be

deemed to have been issued notice under section 148A as mandated by

Finance Act, 2021 which shall be treated as show cause notice as per section

148A(b). As per direction of Hon’ble Supreme Court, the AO provided

opportunity to the assessee. The assessee filed its reply on 11.06.2022. The

reply of assessee was considered and all objections were settled / disposed of

any order dated 30.07.2022 under section 148A(d). The AO issued fresh

notice under section 148 dated 30.07.2022 with approval of PCIT – 19,

Mumbai.

accommodation entry of Rs. 13,45,00,000/- through bogus entity of

Himanshu Verma namely Sarvottam Securities Pvt. Ltd. In response to notice

under section 148, the assessee filed return of income on 24.08.2022

declaring Nil income. The AO after issuing notice under section 143(2)

proceeded for reassessment.

search and seizure action in case of Samtel Group of company was conducted

on 18.01.2018 wherein it was found that 4 Non-Banking Finance Companies

(NBFCs) were involved in providing accommodation entries in the form of

bogus unsecured loans. The AO recorded the names of all four NBFCs at page

No. 6 of his order viz; SW Consultants Private Limited, CEA Consultants

Private Limited, Tish Consultant Private Limited and Lenient Consultant Private

Limited, which were involved in providing accommodation entry. The AO

noted that statement of Shailendra and Anil Agarwal was recorded in post

search investigation wherein they admitted about providing accommodation

entry through these four NBFCs and also furnished the list of 119

beneficiaries. On examination of list of beneficiaries, it was revealed that

Assurity Real Estate LLP (assessee-company) also availed entry of bogus loan

advances of Rs. 3.11 Crore from Tish Consultants Private Limited. On show

cause notice the assessee furnished break up of loan of Rs. 12.95 Crore from

Sarvottam Securities Private Limited and loan of Rs. 3.00 Crore from Tish

Consultant Private Limited. The AO after receipt of reply of assessee accepted that the reply of assessee with Sarvottam Securities Private Limited

of Rs. 12.95 Crore by taking a view that transaction appears to be in order.

However, in respect of loan from Tish Consultants, the AO recorded that on

show cause notice, the assessee furnished break up of unsecured loan along

with rate of interest, TDS made and the closing balance available. The AO

held that that except furnishing break up of unsecured loan and auditor’s

report showing the balance of lenders, the assessee has not furnished any

documentary evidence like confirmation of ledger account, ITR of lenders to

establish the genuineness of loan. The AO treated such unsecured loan of Rs.

3.00 Crore as unexplained. The AO also disallowed interest expenses against

loan of three companies of Rs. 12,85,928/-.

before ld. CIT(A) wherein the validity of initiation of proceedings under

section 147/148 and addition of unsecured loan and disallowance of interest

expenses were confirmed. Further, aggrieved the assessee has filed the

present appeal before Tribunal.

through the orders of lower authorities carefully. The learned authorised

representative (ld AR) of the assessee submits that that assessee filed its return of income for relevant assessment year on 2nd August 2016. Initially,

the return was accepted under section 143(1) of the Act. Subsequently, the

AO issued notice under section 148 on 23 April 2021. The AO obtained the

approval of reasons recorded on 23 April 2021. The reasons recorded were provided to the assessee, copy of which is filed at page number 10 to 12 of

the paper book. As per reasons recorded, the AO was having information

through inside application of department, which was forwarded by DDIT

(Investigation) Mumbai to AO that search action was carried out on 13 April

2017 in case of Himanshu Verma and other persons who were allegedly

providing accommodation entry. As per reasons recorded, statement of

Himanshu Verma was recorded wherein he admitted about providing bogus

accommodation entry of loans and capital to various persons. Further, list of

beneficiary was examined, wherein the assessee was one of the beneficiaries

who have taken accommodation entry in the form of share application money

from Sarvottam Securities Private Limited of Rs. 13.45 crore, which was

managed by Himanshu Verma. The case of assessee was thus reopened to

verify share application money. The assessee filed its objection before AO vide

objection dated 13 August 2021, copy of objections are also placed on record.

After the decision of Supreme Court in UOI Vs Ashish Agarwal (2022) SCC

Online SC 543), fresh show cause notice was issued to the assessee under

section 148A(b) on 27.05.2022. the assessee again filed its reply on

06.06.2022. The AO after considering the objection/ reply of assessee passed order under section 148A(d) on 30th July 2022, copy of which is also placed on record. The AO issued fresh notice under section 148 on 30th July 2022,

copy of which is also placed on record. Admittedly, the case of assessee was

reopened to verify the share application money received from Sarvottam

Securities Private Limited. However, during the assessment, the AO accepted the transaction of share application money from Sarvottam Securities Private

Limited. No other or fresh reasons were recorded by the AO nor was any

fresh notice under section 148 served on the assessee. The AO made

different addition, which was not basis of the reasons recorded. The AO made

addition of unsecured loan of ₹ 3.00 crore, received from Tish Consultant

Private Limited. The AO also disallowed interest expenses of Rs. 12.95 lakhs.

The assessee has not claimed any such interest expenses, rather interest

expenses was capitalised as the unsecured loan was availed for capital

purpose. The AO made addition which was not the basis of reopening. The

AO is not entitled to make such additions. The learned AR of the assessee

submits that Hon’ble jurisdictional High Court in CIT Versus Jet Airways (I) Ltd

(2010) 331 ITR 236(Bombay) held that where AO recorded reasons on basis

of which reassessment was initiated, but did not make any addition in

reassessment proceedings, in such case primary reason to believe that

income had escaped assessment would fail and reassessment could not be

treated as a valid order. Similarly was taken by jurisdictional High Court in

subsequent decision in Pr CIT versus Lark Chemicals Private Limited reported

viz; (2018) 99 taxmann.com 331(Bombay) wherein the High Court reiterating

its earlier decision in Jet Airways (I) Limited (supra), wherein it was held that

Explanation 3 to section 147 of the Act empowers the AO to necessarily

assess /reassess the income which escaped assessment on the basis of

formation of reasonable belief for opening the assessment. It is only on the

assessing /reassessing such income which has escaped assessment in the reasons recorded, would it be open to assessing officer to assess or reassess

any other income, which came to his notice during reassessment proceeding.

However, in absence of reassessing income which escaped assessment and

which was the basis for formation of belief in the issuing of notice, the order

passed on reassessment is bad in law. Such decision has been upheld by

Hon’ble Apex Court while dismissing the Special Leave Petition vide order dated 5th October 2018. Even no merit, the learned AR of the assessee

submits that during re-assessment the assessee furnished complete details to

substantiate the unsecured loan of ₹ 3.00 crore from Tish Consultant Private

Limited. The AO made addition solely on the basis of information allegedly

available with him without making any independent investigation of fact. Once

the assessee discharged his primary onus, the onus was shifted on the AO to

bring adverse material against the evidences furnished by assessee. The

learned AR of the assessee submits that he has good case on validity of

addition in the reassessment proceeding as well as on merit. To support his

various contentions, the learned AR of the assessee relied upon the following

case laws. � Pr. CIT Versus Lark Chemicals Ltd (2018) 99 taxmann.com 312 (SC), � Pr CIT Versus Lark Chemicals Ltd (2018) 99 taxmann.com 311 (Bom), � CIT versus Mohmed Juned Dadani (2013) 30 taxmann.com 1 (Guj), � CIT Versus Atlas Cycles industries (1989) 180 ITR 319 (P&H), � CIT Versus Jet Airways(I) Ltd (2010) 195 taxmann.com 117(Bombay), � Ranbaxy Laboratories Ltd versus CIT (2011) 12 taxmann.com 74 (Delhi). 8. On the other hand, the learned authorised senior departmental representative

( Sr DR) for the revenue supported the order of lower authorities. The learned senior DR for the revenue submits that no such objection was raised before

the lower authorities. Such objection should not be entertained at this stage.

On merit, the learned senior DR for the revenue submits that mere furnishing

submission is not sufficient to explain the identity creditworthiness and

genuineness of transaction, unless the AO is not satisfied on such transaction.

through the orders of lower authorities carefully. We have also deliberated on

various documentary evidences furnished by the assessee to show the

contents of reasons recorded and the objection furnished by assessee before

AO. On careful perusal of reasons recorded, we find that AO reopened the

case of assessee to verify the transaction of share application money of ₹

13.45 crore received from Sarvottam Securities Private Limited. We find that

transaction of share application money from Sarvottam Securities Private

Limited was accepted by AO during reassessment proceeding. Thereby, no

addition was made on the basis of reasons recorded by him.

information that a search and seizure action was carried out on 18.01.2028

in case of Samtel Group of company, wherein it was found that 4 Non-

Banking Finance Companies (NBFCs) were involved in providing

accommodation entries in the form of bogus unsecured loans. The AO

recorded the names of all four NBFCs viz; SW Consultants Private Limited,

CEA Consultants Private Limited, Tish Consultant Private Limited and Lenient

Consultant Private Limited, which were involved in providing accommodation entry. The AO also recorded that statement of Shailendra and Anil Agarwal

was recorded in post search investigation wherein they admitted about

providing accommodation entry through these four NBFCs and also furnished

the list of 119 beneficiaries. On examination of list of beneficiaries, it was

revealed that Assurity Real Estate LLP (assessee-company) also availed entry

of bogus loan advances of Rs. 3.11 Crore from Tish Consultants Private

Limited. Thus, the AO made addition on the basis of other information, which

was not linked with the reasons recorded by him. The AO made addition other

than the reasons recorded, without making addition which was basis for

reopening. Before us, the learned AR of the assessee vehemently argued that

addition made in the reassessment proceeding is beyond the scope of section

147 and relied on various case laws.

held that the Bombay High Court held that when no addition was made

on the basis of reasons recorded for reopening of the assessment, it

was not open for the AO to bring some other income to tax in the

course of assessment proceedings. It was also held if after issuing

notice under section 148, the AO accepts contention of assessee and holds

that income, for which he had initially formed a reason to believe that it had

escaped assessment, has, as a matter of fact, not escaped assessment, it is

not open to him to independently assess some other income; if he intends to

do so, a fresh notice under section 148 would be necessary, legality of which

would be tested in event of a challenge by assessee.

[2022] 135 taxmann.com 335 (Mumbai – Trib.), also held that where AO

recorded reasons on basis of which reassessment was initiated, but did not

make any addition in reassessment proceedings, in such case primary reason

to believe that income had escaped assessment would fail and reassessment

could not be treated as a valid order. Similar view was taken by Delhi High

Court in Ranbaxy Laboratory Ltd. Vs CIT (supra). Thus, in view of, aforesaid

factual and legal submission the assessee succeeded on primary submission.

Considering the fact that assessee succeeded on legal issue, therefore

adjudication of issue on merit as well as other grounds of appeal, have

become academic.

Order was pronounced in open Court on 29/06/2026.

Sd/- Sd/- GIRISH AGRAWAL PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, Dated: 29/06/2026 Biswajit / self Copy of the order forwarded to:

(1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); By order (4) The DR, ITAT, Mumbai; and (5) Guard file. Assistant Registrar/DDO ITAT, Mumbai