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Facts
These are cross appeals filed by the revenue and the appellant emanating from an order passed by the CIT(A) for the assessment year 2018-19. The revenue's appeal (ITA No. 6028/MUM/2025) concerns the deletion of additions made under section 68 of the Act, which the revenue alleges were accommodation entries. The assessee's cross-objection (CO No. 305/MUM/2025) challenges the CIT(A)'s confirmation of the Assessing Officer's jurisdiction and notice issuance under section 147/148 of the Act.
Held
The revenue argues that the CIT(A) erred in deleting additions related to unsecured loans, which were allegedly accommodation entries from entities managed by Shri Himanshu Verma. The revenue contends that banking transactions do not prove genuineness and the onus is on the assessee. The assessee, conversely, argues that the CIT(A) erred in confirming the Assessing Officer's assumption of jurisdiction and issuance of notice under section 147/148, citing issues with the satisfaction recorded and DIN generation.
Key Issues
Whether the CIT(A) correctly deleted additions made under section 68, concerning alleged accommodation entries, and whether the Assessing Officer validly assumed jurisdiction and issued notice under section 147/148 of the Income-tax Act.
Sections Cited
68, 147, 148, 250
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Before: SHRI SANDEEP GOSAIN & SHRI BIJAYANANDA PRUSETH
O R D E R PER BIJYANANDA PRUSETH, AM:
These cross appeals filed by the revenue and the appellant emanate from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the CIT(A), dated 16.10.2025 for the assessment year (AY)2018-19.
“A. On the facts and in the circumstances of the case and in law, the Id. CIT(A), has erred in deleting the addition made of Rs. 1,00,00,000/-u/s. 68 of the Act. ignoring the fact that the assessee company has taken accommodation entries in the form of unsecured loans from non-descript entities managed and controlled by Shri Himanshu Verma, a provider of accommodation entries in lieu of commission which was established during the search action u/s. 132 of the Act. B. "On the facts and in the circumstances of the case and in law, the Hon'ble ITAT has erred in deleting the addition made of Rs.50,00,000/-u/s. 68 of the Act, ignoring the fact that the assessee company has taken accommodation entries in the form of unsecured loans from non-descript entities managed and controlled by Shri Himanshu Verma, a provider of accommodation entries in lieu of commission which was established during the search action u/s. 132 of the Act. C. Whether, on the facts and in the circumstances of the case and in law, the ITAT is correct in deleting the additions made, ignoring the facts that transactions made through banking channel does not prove the genuineness of the transactions. D. On the facts and in the circumstances of the case and in law, the ITAT failed to appreciate the fact that the onus is on the assessee to explain and substantiate the genuineness and true nature of the transaction."
The grounds of appeal raised by the assessee in CO No. 305/Mum/2025 (AY:2018-19) are as under:
1. On the facts and in the circumstance of the case as well as law on the subject, the learned CIT(A) has erred in confirming action of Assessing Officer in assuming jurisdiction uis. 147 by issuing notice u/s. 148 of the Act on the basis of the search action conducted in the case of Galaxy Group, Shri Pradeep Indra Agarwalla, Himanshu Verma.
2. On the facts and in the circumstance of the case as well as law on the subject, the learned CIT(A) has erred in confirming action of Assessing Officer in recording the satisfaction by taking mechanical approval from the Principal Commissioner of Income Tax which is not supported by the generation of DIN.
3. On the facts and in the circumstance of the case as well as law on the subject, the learned CIT(A) has erred in confirming action of Assessing Officer in issuing the notice u/s. 148 of the Act after taking 2