ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-25, DELHI, DELHI vs. HARSH HOUSE PRIVATE LIMITED, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’: NEW DELHI BEFORE SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No.2399/DEL/2026 (Assessment Year: 2018-19) ACIT, Central Circle 25, vs. Harsh House Private Limited, A-293, 1st Floor, Delhi. Vikas Puri, New Delhi – 110 018. (PAN :AACCH1818A) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Sandeep Goel, Advocate Shri Vishwa Mohan Sharma, Advocate REVENUE BY : Shri Vikram Singh Sharma, CIT DR Date of Hearing : 01.07.2026 Date of Pronouncement : 24.08.2026 O R D E R PER S.RIFAURRAHMAN,AM: 1. This appeal is filed by the Revenue against the order passed by the ld. Commissioner of Income-tax (Appeals)-29, New Deli dated 28.11.2025 for the Assessment Year 2018-1 raising following grounds of appeal :-

“a. The Ld. CIT(A) has not appreciated the fact that the subject Sh. Himanshu Verma is habitual entry provider and will fully involved in the syndicate for organized accommodation entries through there and M/s Awasthi Medi associated entities including M/s Shobhagya Enterprises Pvt. Ltd. Equipments Pvt. Ltd. since long ago despite of many search proceedings conducted on him.

2 ITA No.2399/Del/2026

b. The Ld. CIT(A) has not appreciated the fact that the Non- descript entities M/s Shobhagya Enterprises Pvt. Ltd. and M/s Awasthi Medi Equipments Pvt. Ltd. involved with Sh. Himanshu Verma give non genuine transaction, on account of accommodation entries in the form of bogus loan/purchase/sales, which were given/taken in so a sophisticated manner with taking care of each step to give the image of legal transaction by utilizing web of bank accounts in different banks as well as books of accounts in respective entities. c. The Ld. CIT(A) has not appreciated the fact that the existence of these entities as well as genuine business activities at the address could not be established. d. The ld. CIT(A) erred in ignoring the substantive evidence collected by the Department and in holding that absence of AO's independent enquiry invalidated the addition. Departmental information, corroborated by Sworn statements is credible material and cannot be brushed aside. e. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. f. The grounds of appeal are without prejudice to each other.”

3 ITA No.2399/Del/2026 delay in filing the appeal. Therefore, we condone the delay in filing the appeal before the Tribunal. 3. At the time of hearing, ld. AR of the assessee submitted that assessee has moved application under Rule 27 of the ITAT Rules for the reason that assessee has raised jurisdictional issue before ld. CIT (A). In this regard, he brought to our notice page 2 of the first appellate order wherein assessee has raised Ground No.3 which reads as under :- “3. That on the facts and circumstances of the case, assessment proceedings initiated u/s 147 by the Ld. AO, Central Circle 25, Delhi is invalid, bad in law and without jurisdiction and liable to be quashed as the proceeding has been initiated without obtaining proper approval from the Ld. CIT as required as per Explanation 2(iv) of section1 48 that information in accordance with the risk management strategy formulated in this regard suggesting that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act or pertain to, or any information contained therein, relate to, the appellant.”

4 ITA No.2399/Del/2026 6. After considering the submissions of both the parties, in our considered view, the assessee has a point that ld. CIT (A) had failed to adjudicate the jurisdictional issue. Therefore, we allow the assessee to raise the aforesaid ground by invoking Rule 27 and accordingly, we proceed to adjudicate the same. 7. At the time of hearing, ld. AR brought to our notice page 33 of the paper book which is the reasons/satisfaction recorded by the AO for reopening of the assessment and he also brought to our notice findings of the AO in the assessment order and also findings of the ld. CIT (A) at pages 44 to 46 of the first appellate order and submitted that assessee has only repaid the loan during the year under consideration and ld. CIT (A) has given categorical findings that assessee has not received any fresh loan during the year under consideration. Therefore, based on the satisfaction recorded by the Assessing Officer and invoking the provisions of section 68 of the Act is unwarranted. He submitted that the issue involved under consideration is squarely covered by various decisions and he specifically relied on the decision of ITAT, Delhi in the case of ITO vs. Aggarwal Earthmovers Pvt. Ltd. in ITA No.6084/Del/2025 dated 08.04.2026. He also relied on the following decisions :-  ITAT, Delhi in the case of Khec (India) Pvt. Ltd. vs. ITO in ITA No.3064/Del/2024 order dated 29.05.2025

5 ITA No.2399/Del/2026  ITAT Delhi Trishul Realcon Pvt Ltd vs ACIT CC 31 Delhi in ITA No.5544/Del/2025 order dated 29.04.2026  ITAT Delhi in case of Real Innerspring Technologies Pvt. Ltd. Vs. ACIT in ITA no. 647/Del/2023 (AY 2016-17) vide order dated 27.3.2025  ITAT, Delhi in case of Rise Projects Pvt Ltd vs ACIT CC-32 Delhi in ITA No.5750-5752 - Del/2025 order dated 18.03.2026  ITAT Delhi in case of DCIT vs ICMC projects Pvt Ltd in ITA NO.9210/Del/2025 order dated 19.02.2026  Honorable jurisdictional high court in recent case of PCIT- 4 vs KRBL Infrastructure Ltd in ITA No.494/2024 order dated 13.11.2025  ITAT Indore decision in case of Nakoda realities vs ACIT Central Circle -1 in ITA No.533-535/Ind/2023 order dated 22.04.2024  Hon'ble Delhi High Court in the case of CIT Vs. Anoop Jain 424 ITR 115 (Delhi)  Hon'ble Allahabad High Court in the case of Smt. Sadhana Jain Vs. CIT ITA 617 of 1999 date of judgment July 19, 2005.

6 ITA No.2399/Del/2026 relied on the report from Investigation Wing and he objected to the submissions of the ld. DR of the Revenue. 10. Considered the rival submissions and material placed on record. We observed that the case of the assessee was reopened on the basis of information received from Investigation Wing out of search conducted in the case of Galaxy group on 17.11.2021 wherein it was observed that Himanshu Verma is involved and all these entities are involved in providing accommodation entries. By recording the above reasons for reopening, the AO has found that there are several transactions carried on by the assessee with Sobhagya Enterprises Pvt. Ltd. and Awasthi Medi Equipments Private Ltd.. Based on that, assessment was reopened. Aggrieved, assessee filed appeal before the ld. CIT (A) and ld. CIT (A) observed that AO has observed that during the year under consideration, assessee has repaid the loan to the extent of Rs.2,81,49,000/- which is nothing but assessee has repaid the outstanding loan taken by the assessee in the earlier assessment years. After considering the detailed findings of the ld. CIT (A), we observed that in order to invoke the provisions of section 68 of the Act, the assessee should have received fresh loan during the year under consideration and there should be fresh credit during the year, however, on careful verification of the ledger account and bank statement submitted by the assessee, we observed that assessee has only repaid the loan, therefore, invoking the provisions of section 68 of the

7 ITA No.2399/Del/2026 Act is unwarranted in the year under consideration. Accordingly, we allow the issue raised by the assessee in the application filed under Rule 27. Therefore, we do not see any reason to disturb the findings of the ld. CIT (A) and also dismiss the grounds raised by the Revenue. 11. In the result, the appeal filed by the Revenue is dismissed.

Order pronounced in the open court on this 24th day of August, 2026 Sd/- sd/- (SUNIL KUMAR SINGH) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:24.08.2026 TS Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI