DCIT, CENTRAL CIRCLE-32, NEW DELHI, DELHI vs. M/S SANRAJ HOSPITALITY PVT. LTD., DELHI

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ITA 37/DEL/2026Status: DisposedITAT Delhi09 February 2026AY 2019-203 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found no merit in the vehement stands of either party. While the Revenue argued that the assessee was a shell entity routing accommodation entries, the assessee failed to plead and prove the genuineness of the impugned transactions. Consequently, the Tribunal held that once it is prima facie established that the assessee is engaged in the accommodation entry business, only a profit element of 3% in the given facts is deemed just and proper. This profit element is to be assessed on the impugned alleged accommodation entry amount of Rs. 31,36,000/-. The Tribunal directed the Assessing Officer to assess the assessee at this rate, with a rider that this shall not be treated as a precedent. No other ground or argument was pressed.

What were the facts?

The Revenue (DCIT, Central Circle-32, New Delhi) has filed an appeal against the order of the CIT(A)-30, New Delhi, for Assessment Year 2019-20. The appeal challenges the deletion of an addition of Rs. 31,36,009 made by the Assessing Officer under section 69A of the Income-tax Act, 1961. The addition was made in assessment proceedings under section 147/143(3). The Revenue's appeal was filed with a delay of 2 days, which was condoned. The ITAT heard both parties and perused the case file.

What were the issues?

1. Whether the addition of Rs. 31,36,009 made by the Assessing Officer under section 69A of the Income-tax Act, 1961, was justified, considering the assessee's alleged status as a shell entity routing accommodation entries from M/s. Himanshu Verma group. Contentions: Assessee: The judgment does not record any specific arguments made by the assessee. Revenue: The assessee is a shell entity routing accommodation entries from M/s. Himanshu Verma group, and therefore, the addition under section 69A was rightly made in its hands.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Appellant: Ms. Monalisa Maitey, Adv
Hearing: 09.02.2026Pronounced: 09.02.2026

Date of hearing 09.02.2026 Date of pronouncement 09.02.2026 ORDER This Revenue’s appeal for assessment year 2019-20, arises against the Commissioner of Income Tax (Appeals)-30 [in short, the “CIT(A)”], New Delhi’s DIN and order no. ITBA/APL/M/250/2025-26/1080708559(1), dated 15.09.2025, involving proceedings under section 147/143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

2.

Delay of 2 days in filing the Revenue’s instant appeal is condoned in the larger interest of justice and in light of Collector, Land & Acquisition vs. Mst. Katiji& Others (1987) 167 ITR 471 (SC).

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