SHRI SHANKESHWARA PROPERTIES AND ASSOCIATES,MUMBAI vs. INCOME TAX OFFICER - WARD 31(2)(1), MUMBAI, MUMBAI

PDF · subscribers
ITA 683/MUM/2026Status: DisposedITAT Mumbai27 May 2026AY 2019-20206 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the addition made by the AO and confirmed by the CIT(A). The assessee failed to provide satisfactory evidence to prove the loan was genuine and outstanding from earlier years.

What were the facts?

The assessee's case was reopened based on information from a search operation on other individuals, which indicated the assessee received bogus accommodation entries. The Assessing Officer (AO) added ₹3,00,000 as unexplained money under Section 69A, treating it as repayment of a bogus loan.

What were the issues?

Whether the repayment of ₹3,00,000 constituted unexplained money under Section 69A, and whether the CIT(A) erred in confirming the addition without proper appreciation of facts and evidence.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “J (SMC

For Respondent: Shri Aditya Rai (SR. DR.)
Hearing: 30.04.2026Pronounced: 27.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “J (SMC)” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & HON’BLE SHRI BIJAYANANDA PURUSETH, ACCOUNTANT MEMBER ITA No. 683/Mum/2026 (Assessment Year: 2019-2020)

Shri Shankeshwara Income Tax Officer – Properties and Associates Ward 31(2) (1) Shop No. 5 Emerald Apt, Kautilya Bhavan, Parsi Panchayat Road, Vs. Mumbai - 400051 Andheri East, Mumbai - 400069 PAN/GIR No. AAFAS625M (Applicant) (Respondent) Assesseeby None Revenue by Shri Aditya Rai (SR. DR.) Date of Hearing 30.04.2026 Date of Pronouncement 27.05.2026 आदेश / ORDER PER SANDEEP GOSAIN, JM: The present appeal has been filed by the assessee challenging the impugned order dated passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2019-2020. The following grounds are reproduced below: “1. That the order passed by the Learned CIT(A) u/s 250 of the Income-tax Act, 1961 for Assessment Year 2019-20 is bad in law, arbitrary, perverse, and against the facts and circumstances of the case.

2 ITA No. 683/Mum/2026 2. That the Learned CIT(A) has erred in confirming the addition of ₹3,00,000 made u/s 69A without appreciating that the said amount represents outstanding balance of loan and not unexplained money. 3. That the Learned AO and the Learned CIT(A) have grossly erred in law in making and sustaining an addition u/s 69A in the year when neither the loạn has been taken nor it has been repaid, whereas no addition was made in the year of receipt of loan, which is legally untenable and contrary to settled judicial principles. 4. That the Learned AO failed to conduct any independent enquiry or verification in the case of the appellant and made the addition solely on the basis of search proceedings conducted in the case of other parties. 5. That the Learned CIT(A) erred in confirming the addition despite the fact that no incriminating material belonging to or relating to the appellant was found or brought on record. 6. That the impugned order violates the principles of natural justice, as the appellant was not confronted with the material relied upon, nor was any effective opportunity of rebuttal or cross-examination provided. 7. That the addition has been made merely on assumptions, presumptions, and borrowed satisfaction, without discharging the onus required under Section 69A of the Act. 8. That the order passed by the Learned CIT(A) is poorly drafted, highly ambiguous, and suffers from lack of proper reasoning and the findings recorded are vague and non-speaking in nature. 9. That the Learned CIT(A) failed to adjudicate the grounds of appeal judiciously and independently and merely upheld the assessment order without application of mind. 10. That the above grounds of appeal are without prejudice to one another. 11. That the appellant craves leave to add, amend, alter, or withdraw any of the above grounds of appeal at the time of hearing.”

2.

None appeared on behalf of the assessee when the case was called out, and no application seeking adjournment was filed. On the other hand, the Ld. DR was ready with the arguments. Therefore, in the absence of the assessee or his representative,

3 ITA No. 683/Mum/2026 and in view of the above, we have decided to proceed with the case ex parte.

3.

From the records, we noticed that additions under Section 69A of the Act were made by the AO and confirmed by the Ld. CIT(A). The same has now been challenged by the assessee. However, we noticed that the Ld. CIT(A) has dealt with these grounds in his order, the operative portion of which is contained in Para No. 4 and the same is reproduced herein below:

4.

Brief Facts of the case:-

4.1 As per the assessment order, the assessee, filed its original return of income u/s: 139(1) on 31.07.2019 declaring an income of Rs. 37,250. Subsequently, the case was flagged as a High-Risk CRIU/VRU case on the INSIGHT portal on the basis of information arising from a Search & Seizure operation conducted on 05.07.2022 in the cases of Shri Lokesh Kumar Khabya and Shri Saurabh Sethi. During the search, digital evidence, loose sheets, bills and WhatsApp chats were found indicating that the said individuals were engaged in providing accommodation entries of bogus sales, purchases, and unsecured loans through multiple entities, including M/s R.K. Exports. The assessee, M/s Shri Shankeshwara Properties & Associates, was identified as one of the beneficiaries who had received bogus accommodation entries.

4.2 Based on this response, the assessee submitted certain financial documents and acknowledged past transactions with M/s RK Exports but claimed that no loan was taken during FY 2018-19 and that the outstanding balance was from earlier years. However, the assessee failed to provide full-year bank statements, failed to show the date of receipt of the alleged loan, and did not furnish evidence of interest payment or repayment details. As the explanation was found unsatisfactory, an order u/s 148A(d) was passed on 24.04.2023 and notice u/s 148 was issued after obtaining approval from the PCIT.

4 ITA No. 683/Mum/2026 4.3 Following transfer of the case between the Faceless Unit and Jurisdictional AO, various notices u/s 142(1), 143(2), and 133(6) were issued. The AO also sought details from Shri Lokesh Kumar Khabya, who confirmed the presence of opening loan balances and interest income from the assessee. Despite this, the pattern matched the modus operandi of bogus loan entries uncovered during the search, wherein unsecured loans were routed through bank transactions, but equivalent cash was returned to the borrower after deducting commission.

4.4 The Assessing Officer, in the show-cause notice, highlighted that the assessee had repaid Rs.3,00,000 to M/s R.K. Exports during the year. Relying on the statements recorded under section 132(4) and the seized evidences, the AO concluded that this repayment formed part of a bogus accommodation entry. As per the established modus operandi of the group, such repayments were followed by the return of equivalent cash (after deducting commission) to the assessee, thereby treating the amount as unexplained money. In response, the assessee failed to provide concrete evidence such as bank statements proving that the loan was originally taken in earlier years. The AO therefore held that the amount of Rs.3,00,000, being repayment of a bogus loan entry, represented unexplained money u/s 69A, taxable u/s 115BBE of the Act. Finally, the total income of the assessee was assessed at Rs. 3,37,250 (returned income Rs. 37,250 plus addition of Rs.3,00,000 u/s 69A of the Act).

4.

Having considered the decision of the first appellate authority/Ld. CIT(A), we find that the assessment was reopened on the basis of information received by the AO pursuant to a search and seizure operation conducted in the case of Lokesh Kumar Khabya and Saurabh Sethi. During the search, digital evidence, loose sheets, bills, and WhatsApp chats were found indicating that the said individuals were engaged in providing accommodation entries of bogus sales/purchases and unsecured loans through multiple entities, including M/s RK Exports. The

5 ITA No. 683/Mum/2026 assessee was identified as one of the beneficiaries who had received bogus accommodation entries. Therefore, the Ld. CIT(A) passed a well-reasoned order rightly rejecting the claim of the assessee.

5.

Even otherwise, no new facts, circumstances, or documents have been placed on record in order to controvert or rebut the lawful findings recorded by the Ld. CIT(A). Therefore, we see no reason to interfere with or deviate from the findings so recorded by the Ld. CIT(A). Hence, we dismiss the grounds raised by the assessee and uphold the order of the Ld. CIT(A) in sustaining the additions.

6.

In the result, the appeal filed by the assessee is dismissed.

Order pronounced in the open court on 27.05.2026

Sd/- Sd/- (BIJAYANANDA PURUSETH) (SANDEEP GOSAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 27/05/2026 RY-Sr. PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलार्थी / The Appellant 1. प्रत्यर्थी / The Respondent. 2. संबंधित आयकर आयुक्त / The CIT(A) 3. आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधिधि, आयकर अपीलीय अधिकरण,मुम्बई/ DR, ITAT, Mumbai 5.

6 ITA No. 683/Mum/2026 6. गार्ड फाईल / Guard file. आदेशानुसार/BY ORDER, सत्याधपत प्रधत //True Copy//

उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →