SUMANGAL SHARES & SECURITIES PRIVATE LIMITED,MUMBAI vs. INCOME TAX OFFICER, MUMBAI

आदेश / ORDER PER SANDEEP GOSAIN, JM: The present appeals have been filed by the assessee challenging the impugned order dated 08.10.2025 & 09.10.2025 respectively passed u/s 250 of the Income Tax Act, 1961 ('the Act'), by the Office of the Commissioner of Income-tax (Appeals), Addl/JCIT (A)-1, Delhi for the assessment years 2011-12 and 2012-13. The following grounds raised by the assessee are reproduced below:

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“1. The learned CIT(A) has erred both in law as well as in facts in sustaining addition of Rs. 20,50,000/- by treating the repayment of loan received back by the appellant during the AY 2011-12, which were given as loan by the appellant company in earlier years as unexplained cash credit u/s. 68 of the Act without appreciating the fact that the appellant Company has entered into genuine business transactions with Shyam Alcohol and Chemicals Ltd. and Santoshima Trade Links Ltd. 2. The appellant craves leave to add, amend, alter or delete any of the above grounds of appeal.” 2. At the very outset, we notice that assessee has filed an application for filing of additional grounds of appeal and the contents which are hereinbelow: “1. The learned CIT(A) has failed to appreciate that reopening is bad in law as reopening was done by the AO on the basis of borrowed satisfaction and without any independent application of mind and thus there did not exist any reason to believe that income has escaped assessment. 2. The learned CIT(A) has failed to appreciate that reopening is bad in law as reopening was done on the basis of third party statement which was already retracted prior to reopening and thus there could not have been any reason to believe that income has escaped assessment. 3. The learned CIT(A) has failed to appreciate that reopening is bad in law as AO did not supply copy of actual reasons recorded but supplied only extract/gist of the reasons recorded which is not in accordance with law. 4. The Appellant craves leave to add, amend, alter or delete any or all the above grounds of appeal.”

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adjudicating the controversy between the parties. Therefore, while applying the principal laid down by Hon’ble Supreme Court in the case of Jute Cooperation of India Ltd. v. CIT (199) 187 ITR 688(SC) and also National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383(SC). I allow the present application for raising additional grounds and admit the same to be heard on merits. 5. Ground No. 1 pressed by the assessee relates to challenging the order of Ld. CIT(Appeal) and sustaining the additions of Rs. 20,50,000/- in this regard. 6. I have heard the counsels for both the parties, perused the material placed on record, judgment cited before me and also the orders passed by the Revenue Authorities. From the record, I noticed that addition in this case was made by the A.O. on account of fact that a search & seizure action was carried out in the case of Vipul Vidur Bhat and other related entities of Vipul Vidur Bhat on 05.02.2016. The said search action resulted into collection of evidences and other findings which proved that the said person through a bogus entities run and operated by him was engaged in providing accommodation entries of various natures. During the search action, statement of Vipul Vidur Bhat was recorded on 09.02.2016 u/s 132(4) of the Income-tax Act, wherein he had accepted that he is an entry operator and the entities M/s Santoshima Trade Link Ltd. and M/s Shyam Alcohol & Chemicals Ltd. are bogus companies. Therefore, based on these facts A.O. concluded that the assessee had entered into loan

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transaction in the guise of accommodation entries with M/s Santoshima Trade Link Ltd of Rs.10,50,000/- and M/s Shyam Alcohol & Chemicals Ltd of Rs. 10,00,000/- and thus made addition of Rs. 20,50,000/- treating the loan transaction with the said two entities as bogus. Whereas on the contrary it was pleaded by the assessee that no loan was taken by the assessee from these two entities rather assessee had lended loan of Rs. 10,50,000/- and Rs. 10,00,000/- respectively to M/s Santoshima Trade Link Ltd and M/s Shyam Alcohol & Chemicals Ltd in the earlier years and during the year under consideration the said loan was repaid by both the entities to the assessee. Therefore, the entire premise of the Assessing Officer to make the additions are wrong. I also noticed that in order to prove the genuineness of transactions with the said two entities, the assessee had placed on record copy of acknowledgment of return of income, computation of income, audited accounts, copy of retraction statement of Vipul Vidur Bhat, copy of ledger confirmation, bank statements, ITR filed acknowledgment, balance sheet and also reply to notice u/s 133(6) of the Act in the case of Santoshima Trade Link Ltd. Apart from this assessee has also placed on record copy of ledger information, bank statements, ITR filed acknowledgment, balance sheets and reply to notice u/s 133(6) of the Act in the case of Shyam Alcohol & Chemicals Ltd. It is important to note that none of the documents being relied upon by the assessee were found to be false by the revenue department and even the A.O. could not point out any defect in the

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documentary evidences placed on record and relied upon by the assessee. It is also important to mention here that lending of the loan by the assessee to these two entities earlier had not been refuted or contested by the revenue. Moreover, in the present case both these two entities have only refunded back the loan already taken from the assessee. Thus, the entire premise of making addition u/s 68 of the Income-tax Act is without any basis of foundations. The revenue could not explain as to how the documents which have been independently proved on record are faulty. More particularly, when the entire transactions had taken place through banking channel therefore merely on the basis of examinations and only relying upon the statement made by Vipul Vidur Bhat addition could not have been made. Even otherwise, the said Vipul Vidur Bhat is a third party and assessee had sought cross-examination of the said Vipul Vidur Bhat but the same was not accorded to by the A.O. We also noticed that the statement made by the Vipul Vidur Bhat u/s 132(4) of the Income-tax Act has already stands retracted and the said retracted statement was scrutinized by different Co-ordinate Benches of ITAT and thus had deleted the additions in the respective cases. We have also gone through the decisions relied upon by the assessee, in the cases of; 1. Principal Commissioner of Income-tax-6 v. Meenakshi Overseas (P.) Ltd. [2017] 82 taxmann.com 300 (Delhi) – 26.05.2017

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7272/Mum/2026 and therefore our decision shall apply Mutatis Mutandis. Order pronounced in the open court on 30.06.2026.

Sd/- (SANDEEP GOSAIN) JUDICIAL MEMBER

Mumbai, Dated 30/06/2026 KK, PS आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. 2. ��थ� / The Respondent. संबंिधत आयकर आयु� / The CIT(A) 3. 4. आयकर आयु�(अपील) / Concerned CIT िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण,मु�बई/ DR, ITAT, Mumbai 5. गाड� फाईल / Guard file. 6. आदेशानुसार/BY ORDER, स�ािपत �ित //True Copy//

उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु�बई / ITAT, Mumbai