ROY REX CORNELLO,MUMBAI vs. ASSESSING OFFICER WARD 24(3)(1), MUMBAI

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM I.T.A. No.1614/Mum/2026 (Assessment Year: 2016-17) Roy Rex Cornello ITO Ward 24(3)(1) 201, Amen Apt, Church Road, Piramal Chamber, Dr SS Rao Marg, Opp. Dr. Sambhari Marol, Vs. Parel, Mumbai-400012 Andheri East, J.B. Nagar, Mumbai-400059 PAN: AQOPC2169E Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Shri Manuj Mahimkar : Shri Sandeep Jumale - Sr. DR Revenueby : 29.04.2026 Date of Hearing : 11.06.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: The captioned appeal is preferred by the assessee, directed against the order of the Commissioner of Income Tax Appeals, National Faceless Appeal Centre (NFAC), Delhi [in short, “the Ld. CIT(A)”], dated 15.12.2025 for the Assessment Year (AY)2016-17, arises from the assessment order under section 147 r.w.s 144B of the Income Tax Act, 1961 [in short, “the Act”] dated 03.05.2023, passed by Assessment Unit, Income Tax Department [in short, “the Ld.AO”]. The grounds of appeal raised by the assessee are as under:

ITA No. 1614/Mum/2026 Roy Rex Cornello “1. The Learned Commissioner of Income Tax (Appeals), Delhi ["the Ld. CIT(A)"], on the fact and in the circumstances of the case and in the law, erred by considering the sum of Rs. 5,95,554/- (i.e., Labour sales Rs. 4,95,000/- plus cash Receipt Rs. 1,00,554/- ) as unexplained credit under section 68 of The Income Tax Act, 1961 ("the Act"). 2. The Ld. CIT(A) has erred on the facts and in the circumstance of the case and in the law erred by rejecting the reasonable explanations offered by the Appellant without providing cogent reasoning. 3. The Ld. CIT(A), in the circumstances of the case and the law, erred in disregarding the fact the transaction of Labour sales is subject to double taxation.”

ITA No. 1614/Mum/2026 Roy Rex Cornello discrepancies found in the return and submissions of the assessee, the total receipts declared by the assessee for Rs.6,01,750/- as labour charges and sales are rejected and alleged contract received, admitted in the ITR is taken as NIL. The Ld. AO thereafter made an addition of Rs.5,95,554/- u/s 68 of the Act, as unexplained cash credit and interest income of Rs.16,721/-. 5. The assessee, being dissatisfied with the aforesaid findings of Ld. AO had preferred an appeal before the Ld. CIT(A). However, the Ld. CIT(A) not being convinced with the contentions raised by the assesee had sustained the additions made by the Ld. AO. 6. Being aggrieved with the aforesaid decision of Ld. CIT(A), the assessee is in appeal before us. 7. At the outset, Ld. AR of the assessee submitted that in the case of M/s. Afita Constructions Pvt Ltd., the proceedings were carried before the Income-tax Settlement Commission, wherein the issue regarding the payments to sub- contractors has been discussed in para 6.1 of the order u/s 245D, wherein the Hon’ble Income-tax Settlement Commission, on the issue of transactions with sub-contractors, had observed as under: “6.1 Sub Contract payments Referring to the reports of the Pr CIT under Rule 9 and 245D(3)he submitted that the applicant had made payments totaling Rs 22.09 crores to nine sub-contractors. He submitted that the subcontractors, had made withdrawal in cash totaling Rs. 14.34 crores from their bankaccounts. All the nine subcontractors were summoned under section 131 and attended the verification in person. However, some of the sub- contractors did not furnish bank statements for certain period. They stated that they had made payments towards overtime to workers out of the withdrawn cash through site inchrge/supervisor of the Applicant. However, none of the sub-contractors had kept any records in this regard. Further, they could not link the cash withdrawn from the 3

ITA No. 1614/Mum/2026 Roy Rex Cornello bank accounts with the overtime payment. The DR submitted that during the search a pen drive was seized which showed that a total of Rs 2.25 crores had come back to the applicant which was claimed to have been paid as over time allowance to the workers. He, therefore, submitted that based on the preponderance of probability it can be safely concluded that the payments made to the sub contractors to the extent of cash of Rs.14,34,42,715 withdrawn from their bank accounts had been returned/paid back to the applicant which has not been offered to tax in the settlement application. The DR contended that entire cash withdrawn of Rs. 14,34,42,715 should as the undisclosed income. On query from the Bench the DR fairly submitted that no evidence was found during the search and in post search inquiry to supportthat the entire cash withdrawn from the bank accounts of the sub contractors had come back to the applicant was found except to the extent of Rs.2.25 crores as aforesaid in the pen drive seized during the search. On further query, the DR fairly submitted that all the nine sub contractors were income tax assesses; had filed the returns of income of the relevant years and disclosed the sub-contract payments received by them in those returns.”

ITA No. 1614/Mum/2026 Roy Rex Cornello 8.2 The applicant is directed to pay the tax and interest on the income determined by this order within 35 days from the date of this order.”

ITA No. 1614/Mum/2026 Roy Rex Cornello twice. It is pertinent to note that the part of the purchase so admitted by the Director of M/s. Afita Constructions Pvt Ltd are sales of the assessee and that since the said part of purchase so admitted were disallowed in the books of M/s. Afita Constructions Pvt Ltd, then the sales affected by assessee to M/s. Afita Constructions Pvt Ltd needs to be disallowed and attempt to tax the same in the hands of assessee would amount to double taxation which is against the principle of nature justice. Ld. AR of the assessee has also placed his reliance on the decision of ITAT Mumbai in the case of DCIT (OSD), Range 10, New Delhi vs. M/s. Gulshan Polyols Limited in ITA No.5551/Del/2024 & CO No.47/Del/2025 for AY 2019-20 dated 28.01.2026.

ITA No. 1614/Mum/2026 Roy Rex Cornello accounts. It was the plea of assessee that once M/s. Afita Constructions Pvt Ltd. has paid taxes on such transactions and it is proved that the entries are accommodation entries only, the same amount should not be taxed in the hands of assessee so that the same shall not be taxed twice and the principle of natural justice has not been violated. 12. On this aspect, on perusal of the decision of Ld. CIT(A), we find that such contention of the assessee has been rejected by the Ld. CIT(A) observing that the taxability in the hands of payer and the respondent is governed by separate charging provisions of the Act. There is no bar under the Act against such additions when the conditions of section 68 are fulfilled. On this aspect, while going through the order of Settlement Commission, we find that they have referred to transactions with sub-contractors by M/s. Afita Constructions Pvt Ltd to the tune of Rs.22.09 crores, whereas the disclosure was for Rs. 11.89 Crore under different head including Bogus purchases to the tune of Rs. 3,27,56,568/- ,but, the names of such sub-contractors are not mentioned in the said order. Therefore, it cannot be verified that whether the amount of accommodation entries given by the assessee are covered by the order of Settlement Commission or not. 13. Further, since the entries under dispute are already held as accommodation entries, which are accepted by the assessee too, the case laws relied upon by the assessee do not factually support the case of the assessee. Regarding entries provided by the assessee, the Ld. AO has rightly noted that the assessee has given 7

ITA No. 1614/Mum/2026 Roy Rex Cornello accommodation entries to help someone to reduce the tax liability and has also created bogus bills and claimed fraudulent refund in the Income Tax Department. Such action of assessee is completely an offence under the Income Tax Act, 1961. Therefore, the entire amount and particulars furnished by the assessee in return of income are bogus in nature and cannot be accepted. 14. We thus, do not find any force in the contentions raised by the Ld. AR, whereas, we find substancein the findings of Ld. CIT(A) in the impugned order. We are, thus of the considered view that the impugned order of Ld. CIT(A), in the facts and circumstances of the present case, merits to be concurred with. We, thus, upheld the same, with no interference. Consequently, we reject the grounds of appeal raised by the assessee and accordingly dismiss the appeal of assessee. 15. In result, the appeal of assessee stands dismissed in above terms. Order pronounced in the open court on 11-06-2026.

Sd/- Sd/- (BEENA PILLAI) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated : 11-06-2026. Ankit K., Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

ITA No. 1614/Mum/2026 Roy Rex Cornello

(Dy./Asstt. Registrar) ITAT, Mumbai