SAUMYAAFINCAP,AHMEDABAD vs. ASST. UNIT. INCOME TAX DEPT. (PRESENT JURI.ITO, WARD 1(1)(3), AHEMEDABAD), VIJALPUR,AHMEDABAD

ITA 957/AHD/2026Status: DisposedITAT Chandigarh23 September 2026AY 2015-167 pages
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What did the Tribunal hold?

The Tribunal held that the reopening of the case was justified. It found that the investigation report, based on the statement of Darshan P. Sadhani, established a nexus between Sadhani brothers and the three persons from whom the assessee had taken loans. Sadhani brothers admitted to maintaining IT files and managing bank accounts for beneficiaries to provide accommodation entries, including taking possession of passbooks and signed cheque books. Therefore, the grounds challenging the reopening were dismissed. Regarding the addition of Rs. 17,17,000/-, the Tribunal noted that the loans from the three creditors were repaid in the next financial year. Citing the Gujarat High Court's decision in PCIT Vs. Ojas Tarmaek (P.) Ltd., the Tribunal held that if a loan amount is repaid during the year or in the subsequent year and all transactions are through banking channels, it cannot be treated as an accommodation entry. Consequently, the addition of Rs. 17,00,000/- and the consequential addition of Rs. 17,000/- were deleted. The grounds related to the merit of the addition were allowed.

What were the facts?

The assessee, Saumyaa Fincap, filed its return for AY 2015-16 declaring an income of Rs. 42,53,750/-. The Assessing Officer (AO) reopened the case under Section 147, suspecting accommodation entries of Rs. 17,00,000/- in the form of bogus loans from three entities. The AO was not satisfied with the identity, creditworthiness, and genuineness of these loan transactions. Consequently, the loan amount of Rs. 17,00,000/- was added as unexplained cash credit, and an additional Rs. 17,000/- was added for unexplained expenditure. The assessment was completed under Section 147 r.w.s. 144B at a total income of Rs. 59,70,750/-. The assessee's appeal to the CIT(A) was dismissed. The assessee is now in appeal before the ITAT.

What were the issues?

1. Whether the reopening of the assessee's case under Section 147 of the Income Tax Act, 1961, was legally valid and justified, given the alleged lack of nexus between the loan creditors and the information obtained from Sadhani brothers. - Assessee's contention: The reopening was based on incorrect facts as the assessee had not taken loans from Sadhani brothers, and there was no established connection between the actual loan creditors and Sadhani brothers. The reopening is bad in law and void-ab-initio. - Revenue's contention: The Sadhani brothers admitted to providing accommodation entries in the names of 873 persons whose IT files and bank accounts they managed, establishing a clear nexus for reopening. 2. Whether the addition of Rs. 17,17,000/- on account of alleged accommodation entry transactions was justified. - Assessee's contention: The loans taken from Champaklal Shah, Ramesh Shah, and Meha Shah were genuine, transacted through banking channels, and their identity, genuineness, and creditworthiness were established. The loans were also repaid. The addition is illegal and unjustifiable. - Revenue's contention: The lower authorities' orders are supported.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 143(1),Section 148,Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Sulabh Padshah, AR
For Respondent: Shri Amit Pratap Singh, SR-DR
Hearing: 15.07.2026Pronounced: 23.09.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the Assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 30.01.2026 for the Assessment Years (A.Y.) 2015-16 in the proceeding u/s 147 r.w.s 144B of the Income Tax Act [hereinafter referred as “the Act”].

2.

The brief facts of the case are that the assessee had filed its return of income for AY 2015-16 on 21.09.2015 declaring total income of Rs.42,53,750/-, which was processed u/s. 143(1) of the Act. Subsequently, the AO had reopened the case on the basis of information Saumyaafincap V

The order continues below.

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