ACIT , NEW DELHI vs. RAJIV SHARMA, DELHI

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ITA 379/DEL/2026Status: DisposedITAT Delhi24 August 20266 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the loan was taken in AY 2018-19 and repaid in the current AY through banking channels, with interest paid. The AO's conclusion that the loan was fictitious was not supported by material evidence, and the reopening of the assessment was therefore without jurisdiction.

What were the facts?

The Revenue appealed against the deletion of an addition made on account of unexplained money. The addition was based on the alleged modus operandi of providing bogus accommodation entries and suspicious bank transactions in the assessee's father's account. The assessee contended that a loan was taken in an earlier year and repaid in the current year.

What were the issues?

Whether the addition on account of unexplained money is justified when the loan was taken in an earlier year and repaid through banking channels? Whether the AO had jurisdiction to reopen the assessment based on the facts presented?

Which sections of the Income-tax Act were involved?

Section 69A,Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI

For Appellant: Shri Piyush Kaushik, Advocate
For Respondent: Shri G.P. Singh, Sr. DR
Hearing: 02.07.2026Pronounced: 24.08.2026

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.379/DEL/2026 (Assessment Year: 2019-20) ACIT, vs. Rajiv Sharma, New Delhi. Sharma Farm, V.P.O. Kapashera, Delhi - 110 037. (PAN : AAVPS6979H) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Piyush Kaushik, Advocate REVENUE BY : Shri G.P. Singh, Sr. DR Date of Hearing : 02.07.2026 Date of Pronouncement : 24.08.2026 O R D E R PER S.RIFAUR RAHMAN,AM:

1.

This appeal is filed by the Revenue against the order passed by the ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [for short ‘ld. CIT (A)] dated 19.11.2025for the Assessment Years 2019-20 raising following grounds of appeal :- 1. On the facts and circumstances of the case, the Ld.CIT(A) has erred in deleting the addition amounting to Rs.1,55,91,879/- made on account of unexplained money u/s69A of the Act by ignoring the fact that this was a search related case and main person Shri Lokesh Kumar Khabya and Shri Sourabh Sethi in their

2 ITA No.379/Del/2026 statement recorded u/s 132(4) of the Income Tax Act, 1961 has admitted the modus operandi of their working of providing the bogus accommodation entries to various entities through various bank accounts. M/s Aarohi creations LLP is one of the beneficiary entities of the same, which was provided accommodation entry through the assessee. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in ignoring the fact that assessee has not provided complete bank statement of his father and in this part statement certain suspicious transactions were noted. For instance, as on 17.05.2018 the available balance was Rs.5,23,759/- and after this on 31.07.2018 the available balance was Rs.1,02,43,567/- which was very high increase from the previous balance. Same, as on 03.08.2018, the available balance was Rs.71,76,459/- and on 3l.09.2018 the available balance was Rs.33,47,286/-. Further, as on 10.10.20218, the available balance wasRs.2,18,506/- and on 05.11.2018 the available balance was Rs.43,55,877/-, which indicates that assessee has provided the accommodation entries to 447s. Aarohi Creations LLP sourced from unexplained credits.

2.

At the time of hearing, Ld DR submitted that Ld CIT(A) had given relief to the assessee without appreciating the detailed findings of AO. He submitted that the addition was made on the basis of modus operandi of Shri Lokesh Kumar Khabya and Shri Sourabh Sethi and their working of providing bogus accommodation entries to various entities through various bank accounts. M/s Aarohi creations LLP is one of the beneficiary entities of the same, which was provided accommodation entry through the assessee. Therefore, he relied on the detailed findings in the assessment order.

3 ITA No.379/Del/2026 3. On the other hand, ld. AR of the assessee submitted that AO has reopened assessment on the basis of fresh loan taken by the assessee in the year under consideration whereas the loan was outstanding during the year under consideration and the loan was taken in the earlier years. In this regard, he brought to our notice detailed findings of the ld. CIT (A) at page 8 of the appellate order and he heavily relied on the above detailed findings.

4.

In the rejoinder, ld. DR objected to the above submissions made by the ld. AR and submitted that the issue under consideration may be remitted back to the AO to appreciate the facts on record. In this regard he relied on the decision of Aarohi Creations LLP, Surat vs. DCIT order dated 19.11.2025.

5.

Considered the rival submissions and material placed on record. We observed that the assessee received loan from Aarohi Creations LLP of Rs.1,50,00,000/- not during the year under consideration. But the above loan was received during the A.Y 2018-19 but not in the current A.Y. under consideration and the assessee also filed details of repayment of the above loan during the current A.Y. Therefore, we observed that the facts stated by the AO are not supported by proper material, hence, the AO lacks jurisdiction to reopen the case. In this regard, we observed that ld. CIT (A) relied on the decision of Hon’ble Supreme Court in the case of

4 ITA No.379/Del/2026 Kelvinator India VS CIT(320 ITR 569) wherein it is held that “tangible material should be needed which should have live link with the facts of the case to establish that there was escapement of income”

6.

Further we observed from the findings of the ld. CIT (A) that the assessee had taken loan during A.Y 2018-19 from Aarohi Creations LLP and the same was repaid during the current A.Y as under:

Date Deposit

03.05.2018 48,00,000/-

17.08.2018 32,00,000/-

05.10.2018 15,00,000/-

06.10.2018 5,00,000/-

14.11.2018 5,00,000/-

14.11.2018 15,00,000/-

28.01.2019 15,00,000/- 28.01.2019 5,00,000/- 11.03.2019 10,00,000/-

7.

We observed that these repayments were made through the assessee’s bank account held with Standard Chartered Bank, Ac No. 52610808539. Thus, as per the assessee’s submissions the loan was taken during the

5 ITA No.379/Del/2026 A.Y 2018-19 and repaid during the current A.Y. We further observed that the assessee had paid interest rate @ 9% p.a on the above loan and last interest also paid of Rs.5,91,679/- on 29.06.2019. Thus, from the facts and circumstances of the case, it is seen that the AO misdirected himself in coming to a conclusion that the above loan is a fictitious loan whereas facts and circumstances clearly indicate that the above loan was taken from banking channels and the same was repaid through the banking channels. Further, we observed that all these transactions were routed through banking channels and reflected in the assessee’s books/returns. Therefore, treating the same as unexplained money is incorrect. We also observed that the AO also did not bring any corroborative material to substantiate the addition. In view of the above, we are inclined not to disturb the findings of the ld. CIT (A) and upheld the same and dismissed the grounds raised by the Revenue.

8.

In the result, the appeal of 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

6 ITA No.379/Del/2026 Copy forwarded to: 1. assessee 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

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