Income Tax Appellate Tribunal - Delhi
Ansal Properties & Infrastructure ... vs Acit, Central Circle-2, New Delhi on 25 March, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH, 'A': NEW DELHI
BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER
AND
SHRI AMITABH SHUKLA, ACCOUNTNAT MEMBER
ITA Nos.8742 & 8744/DEL/2025
[Assessment Years: 2010-11 & 2017-18]
Ansal Properties & Infrastructure ACIT, Central Circle,
Limited, ARA Centre, Jhandewalan
115, Ansal Bhawan, K.G. Marg, Vs Extension, New Delhi-110055
New Delhi-110001
PAN-AAACA0006D
Appellant Respondent
Appellant/Assessee by Shri Amarjit Singh, CA
Respondent/Revenue by Shri Nitin Kumar Jaiman, Sr. DR
Date of Hearing 12.03.2026
Date of Pronouncement 25.03.2026
ORDER
PER AMITABH SHUKLA, AM,
These two appeals by the assessee are directed against the separate orders of Ld. Commissioner of Income Tax(Appeals)-24, New Delhi, [hereinafter referred to as 'ld. CIT(A)] both dated 24.10.2025 arising out of assessment order dated 31.12.2017 passed under section 143(3) r.w.s. 147 and penalty order dated 30.03.2025 passed under section 271C of the Income Tax Act, 1961, for the Assessment Years 2010-11 and 2017-18. The word 'Act' herein this order would mean Income Tax Act, 1961. Since, the two appeals pertain to the same ITA No.8742 and 8744/Del/2025 assessee, they were heard together and are being adjudicated by this common order.
ITA No.8742/Del/2026
2. The assessee has raised following grounds of appeal in ITA No.8742/Del/2026:-
1. That on the facts and circumstances of the case, the Learned CIT (Appeals) has erred in not considering that the purported information/ details, based on which the notices u/s 148/148A have been issued, merely contained unreliable/ unauthentic/ incredible third-party information, which cannot be the basis of escapement of income.
2. That on the facts and circumstances of the case, the Learned CIT (Appeals) has erred in law and facts while confirming the addition of Rs.1,53,07,590/- on account of accommodation entry in respect of Bogus and non-genuine transaction with M/s. Sawera Housing & Constructions Limited and treated the same as unaccounted cash profit. Additionally, the CIT (Appeals) erred in upholding the addition u/s 69A of the Act.
2.1. The Ld. CIT(A) did not consider that the amount paid/spent by the assessee cannot be a bogus and non-genuine accommodation entry and cannot be treated as income of the appellant.
3. That on the facts and circumstances of the case, the Learned CIT (Appeals) has erred in law and facts while confirming an addition of Rs.3,83,000/- as commission paid allegedly on the above accommodation entry and further erred in invoking the provisions of section 69C of the Act.
3. A perusal of the above alludes that the assessee is assailing the order of the ld. CIT(A) both on legal grounds i.e. jurisdictional insufficiency to invoke proceedings under section 148 as well as on the merits of the additions made by the ld. AO.
Page 2 of 22
ITA No.8742 and 8744/Del/2025
4. We have heard rival submissions in the light of material available on records. The ld. Counsel for the assessee invited our attention to the brief factual matrix of the case. It was submitted that the appellant is in the business of real estate. It is engaged in the business of development and construction of multi-storied housing projects, commercial complexes and buildings. For the previous year ended on 31.3.2010, relevant to the assessment year 2010-11, a return declaring income of Rs 34,45,17,466/- was filed on 26.11.2013, and the assessment was originally made under section 143(3) of the Act at the income of Rs.75,30,19,546/-. Thereafter, post giving effect to the order of CIT(A), the income was determined at Rs.74,40,21,644/-. The AO further initiated action under section 147/148 and passed order dated 31.12.2017 determining income of the assessee at Rs.75,97,12,230/-, after making additions of Rs.1,56,90,590/- on account of transaction with Savera Housing and Construction Company Ltd. The Ld. CIT(A) confirmed the addition made by the ld. AO through his order dated 24.10.2025, currently contested by the assessee. Before the ld. First Appellate Authority, the assessee had challenged the ld. AO's order both upon ground of jurisdictional insufficiency as well as inadequate merits of the addition. The ld. CIT(A) dismissed the argument of the assessee on both the counts and confirmed the ld. AO's order.
5. As the jurisdictional ground raised by the assessee strikes at the very foundation of the assessment order, we would like to consider the same first. Grounds of appeal no.1 raised by the assessee challenged the invocation of Page 3 of 22 ITA No.8742 and 8744/Del/2025 proceedings under section 148. It has been contested that the reopening has been done on the basis of third party information/borrowed satisfaction and which cannot be basis for invocation of reassessment proceedings. We have noted from the order of the ld. AO that he has recorded the following reasons before reopening the proceedings:-
"2.1 Information received from the Investigation Wing An information was received from the Assistant Director of Income Tax (Investigation). Unit-2(1), New Delhi vide letter F.No.ADIT(Inv)/Unit 2(1)/PKJ/2016-17 dated 20.03.2017 whereby it was informed that search & seizure operation under the Income Tax Act 1961 was conducted on 18/11/2015 on entry provider Shri Pradeep Kumar Jindal, resident of H-1/1A, Model Town, New Delhi who was involved in providing various types of accommodation entries in lieu of cash to a large number of beneficiaries through front/non-descript companies managed and controlled by him with the help of dummy directors.
Shri Pradeep Kumar Jindal is managing and controlling a web of front/ nondescript companies through dummy directors and has provided accommodation entries of share capital & premium and unsecured loans to a number of beneficiaries. The front companies of Shri Pradeep Kumar Jindal have no creditworthiness to invest such huge amounts in share capital/premium or to issue loans & advances. The enquiries had revealed that the investing companies were shell companies. The so called directors of the shell companies had been evading income tax summons/letters issued to them from time to time. During the course of search and post search investigation, the statement of various dummy directors of front and non-descript companies was recorded u/s 132 and 131(1A) of the I.T. Act, wherein all of them stated that Shri Pradeep Kumar Jindal is involved in providing accommodation entries of various nature to a large number of beneficiaries in lieu of cash. Some of them have accepted that besides being the dummy Directors they were also cash handlers of Sh. Pradeep Kumar Jindal and explained their role in this capacity.
Surveys were carried out on 01/02/2016 in the case of Sh. Pradeep Kumar Jindal at its another addresses, where record and data related to accommodation entries of various nature was found maintained in sift form majorly. Large number of physical documents and soft data majorly Page 4 of 22 ITA No.8742 and 8744/Del/2025 Tally data of the front companies of Shri Pradeep Kumar Jindal was impounded during the survey operation on 25.05.2016. All the above findings has established beyond doubt individuals by accepting cash from them.
2.2 I have verified the information received from the Investigation Wing, the name of the Assessee Company M/s Ansal Properties & Infrastructures Limited appears in the list of beneficiaries who have been taken accommodation entry from Sh. Pradeep Kumar Jindal. The details analysis of data and annexures seized/impounded revealed that Shri Pradeep Kumar Jindal has provided accommodation entries of Share capital/Premium, Share Forfeiture, exempt Long Term Capital Gain/Loss Short Term Capital Gain/Loss, Advance Against Property, Unsecured Loans, Transfer of Company, Bogus Purchase etc. These dummy entries are not carrying any actual business activities activity other than the activity of providing the accommodation entry in the some ostensible business transaction.
2.3 As per the details received its was revealed that the entry has been provided as accommodation entries to the Assessee Company by the following below mentioned bogus and dummy companies of Sh. Pradeep Kumar Jindal. The details chart containing date, name of the company from which entry was taken, name of the assessee company, amount are as under
Such nature of transactions undertaken by the assessee company has come to light only after the detailed investigation carried out by the Investigation wing. The transaction is involving Rs. 1,53,07,590/- mentioned in the manner above, constitutes fresh information in respect of the assessee as a beneficiary of bogus accommodation entries received by it and represents the undisclosed income/income form other sources of the assessee company, which has not been offered to tax by the assessee in its return filed.
2.4 The ITR of Assessee Company has been downloaded from the ITD/e-
fling system and the same was examined in the light of information Page 5 of 22 ITA No.8742 and 8744/Del/2025 received from Wing. On comparative examination of the return of income of the assessee company for A.Y. 2009-10 and 2010-11, the following has been observed with regard to the share capital and share premium of the assessee company.
2.5 From the above it is evident that Assessee Company has increased its authorized Share capital paid up capital, Securities Premium Account and Unsecured Loan from others. Thus, the information received from the wing is corroborated by the assessee company in its return of income. 2.6 The above facts, clearly establish that the assessee company M/s Ansal Properties& Infrastructures Limited has taken accommodation entries from the entry-providing companies being controlled by Pradeep Kumar Jindal. As per information available on record i.e. ITR filed for the A. Y. 2010-11 the full and true disclosure with regard the above transactions nave not been made by the assessee company as the fact that the share capital share premium nad unsecured loan is being introduced through these dummy companies is nowhere disclosed by the assessee company. In view of clause c of explanation 2 to the proviso of section 147 of the Income Tax Act, 1961, where an assessment has been made, but income chargeable to tax has been under-assessed. Keeping in view of clause c of explanation 2 to the proviso of section 147 of the Income Tax Act, 1961, where an assessment has been made, but income chargeable to tax has been under-assessed. Keeping in view of the above, / have reason to believe that an amount of at least of Rs. 1,53,07,590/- has escaped assessment in the case of M/s. Ansal Properties & Infrastructures Limited for the A. Y. 2010-11 Within the meaning of section 147 of the Income Tax Act, 1961.
2.7The total of the above accommodation entries taken by the assessee company comes to Rs. 1,53,07,590/- It has been reported that the rate of commission paid for providing accommodation entries stands at 2.5%. As such company has also paid the said amount of commission of Rs.3,83,000/- (being 2.5% of the entry taken) to the entry provider out of undisclosed sources, which is a failure on the part of the assessee company to disclose the facts in the ITR. Having perused the details and considered the Page 6 of 22 ITA No.8742 and 8744/Del/2025 information received from the Investigation Wing, New Delhi and on the basis of this new information, I have reason to believe that the total income of Rs. 1,56,90,590/- Rs.1,53,07,590/- + Rs.3,83,000/-) has escaped assessment on this issue as defined by section 147 of the Income tax Act, 1961. "
6. We have further noted that the reassessment proceedings under section 148 were contested before the ld. First Appellate Authority who has dismissed the appellant's arguments noting as under:-
5.2.2 I have considered the facts of the case.
5.2.3 Grounds No. 1 to 1.4 relate to validity of reopening proceedings. As far as reopening under section 148 of the Income Tax Act, 1961 is concerned; the "requirement" is availability of reasons to believe and tangible material for the same.
5.2.4 As observed by Hon'ble Supreme Court, in the case of Asstt. CIT v. Rajesh Jhaveri Stockbrokers (P.) Ltd. [2007| 161 Taxman 316/291 ITR 500 (SC), "At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief".
5.2.5 There are numerous decisions of Hon'ble Supreme Court, the High Court of Delhi, as well as, other High Courts wherein it has been unequivocally held that it is only sufficient on the part of assessing officer to demonstrate the existence of tangible material which form the basis of formation of a belief by the AO that the income had escaped assessment. In the instant case, this tangible material was in the form of a comprehensive "Investigation report" of the DDIT (Inv.), Delhi which has explicitly been examined, analysed, and discussed in the reasons for re- opening the assessment. Thus, in this case, the existence if "Tangible material and "application of mind by the AO" are clearly emanating from examination of reasons recorded for re-opening of the case. 5.2.6 Further, a contextual examination of the existent jurisprudence in the given factual matrix, as discussed below, firmly re-enforces that AO had rightly opened the case u/s 148 of the IT Act, 1961. At this juncture, I am seized of the fact that Hon'ble Courts have consistently held in unequivocal terms that at the stage of re-opening, only the existence of tangible material was sufficient, the adequacy or sufficiency of the material based on which the belief was formed by the AO for re-opening Page 7 of 22 ITA No.8742 and 8744/Del/2025 of the assessment is not required to be enquired into at this stage. The same are elaborated below for guidance and support:
5.2.7 Guidance is drawn from the decision of Hon'ble Apex Court in case of DCIT vs MR Shah Logistics P Ltd (arising out of Special Leave to Appeal (C) No.22921/2019 dated 28.03.2022):
"21. In Phool Chand Bajrang Lal & Ors. vs. Income Tax Officer & Ors after reviewing the previous case law, and concluding that a valid reopening is one, preceded by specific, reliable and relevant information, and that the sufficiency of such reasons is not subject to judicial review - the only caveat being that the court can examine the record, if such material existed.
23. It is therefore, clear that the basis for a valid re-opening of assessment should be availability of tangible material, which can lead the AO to scrutinize the returs for the previous assessment year in question, to determine, whether a notice under Section 147 is called for.
29. Another aspect which should not be lost sight of is that the information or "tangible material" which the assessing officer comes by enabling re-opening of an assessment, means that the entire assessment(for the concerned year) is at large; the revenue would then get to examine the returns for the previous year, on a clean slate - as it were. Therefore, to hold- as the High Court did, in this case, that since the assessee may have a reasonable explanation, is not a ground for quashing a notice under Section
147. As long as there is objective tangible material (in the form of documents, relevant to the issue) the sufficiency of that material cannot dictate the validity of the notice."
5.2.8 The same view has found resonance in the decisions of Delbi High Court in the case of AGR Investment Ltd. vs. Additional Commissioner of Income Tax and anr (supra). where a Division Bench of Delhi High Court considered the validity of reopening of assessment where the notice was based on information received from Directorate of investigation that the assessee was beneficiary of bogus accommodation entries. The Court while upholding the validity of reopening observed that sufficiency of reason cannot be considered in a writ petition. It was observed as under:
"23 The present factual canvas has to be scrutinised on the touchstone of the aforesaid enunciation of law. It is worth noting that the learned counsel for the petitioner has submitted with immense vehemence that the petitioner had entered into Page 8 of 22 ITA No.8742 and 8744/Del/2025 correspondence to have the documents but the assessing officer treated them as objections and made a communication. However, on a scrutiny of the order, it is perceivable that the authority has passed the order dealing with the objections in a very careful and studied manner. He has taken note of the fact that transactions involving Rs.27 lakhs mentioned in the table in Annexure P-2 constitute fresh information in respect of the assessee as a beneficiary of bogus accommodation entries provided to it and represents the undisclosed income. The assessing officer he referred to the subsequent information and adverted to the concept of true and full disclosure of facts. It is also noticeable that there was specific information received from the office of the DIT (INV- V) as regards the transactions entered into by the assessee company with number of concerns which had made accommodation entries and they were not genuine transactions. As we perceive, it is neither a change of opinion nor does it convey a particular interpretation of a specific provision which was done in a particular manner in the original assessment and sought to be done in a different manner in the proceeding under Section 147 of the Act. The reason to believe has been appropriately understood by the assessing officer and there is material on the basis of which the notice was issued. As has been held in Phool Chand Bajrang Lal (supra), Bombay Pharma Products (supra) and Anant Kumar Saharia (supra), the Court, in exercise of jurisdiction under Article 226 of the Constitution of India pertaining to sufficiency of reasons for formation of the belief, cannot interfere. The same is not to be judged at that stage. "
5.2.9 The similar view has been taken by Hon'ble Delhi High Court in AG Holding v. Income Tax Officer (2013) 352 ITR 364 (Del). 5.2.10 Guidance is also taken from the case of PCIT v. Paramount Communication P. Ltd. (2017) 392 ITR 444, (Delhi) (HC), wherein the Hon'ble High Court confirmed reopening based on material outside the record. The relevant paragraph is reproduced below for consideration:
"8. As far as AY 2004-05 is concerned, this Court is of the opinion that in the reference to the bogus purchase made by the assessee from M/s. Kashish Impex Pvt. Ltd. and the information received for the period 17.09.2002 to 20.05.2005 and the amount of bogus purchase for the period under consideration amounted to Rs. 1.64 crores was entirely based upon the information received from the Directorate of Revenue Intelligence (DRI) Regional Unit at Jaipur. This in turn was based upon information given by the Central Excise Department. While it is true that the court is conscious that Page 9 of 22 ITA No.8742 and 8744/Del/2025 the reassessment notice should not have been routinely issued, at the same time, the nature of power is wide enough that when there an escapement of income and the Revenue has information ruling that this escapement is also relatable to suppression of material facts (which could include false claims), the power to reopen concluded assessment can validly be exercised. The consideration which ought to weigh with the Revenue and are considered valid are the existence of tangible material or information."
5.2.11 I further solicit guidance from the Hon'ble Bombay High Court in 411 ITR 321, Avirat Star Homes Venture (P.) Ltd vs ITO, (Bom HC, where Hon'ble High Court held as under in para 10:
"In our opinion, the information supplied by the investigation wing to the Assessing Officer, thus, formed a prima facie basis to enable Assessing Officer to form a belief of income chargeable to tax having escaped assessment. Therefore, it cannot be stated that the Assessing Officer did not have reason to believe that income chargeable to tax had escaped assessment."
5.2.12 Further, in the case of Spicy Sangria Hotels (P.) Ltd. v. Income- tax Officer, Ward 10(1)(4) 2019I11 taxmann.com 491 (Bombay), the Hon'ble High Court of Bombay has held that where Assessing Officer received information from DDIT (Investigation) regarding tax evasion by clients/members of NMCE Exchange by misusing this platform, and one such record found was related to assessee, same would be sustainable reason to conclude that taxable income had escaped assessment. The Hon'ble High Court of Bombay has held as under:
"The requirement at the stage of issuing reopening notice is only with a prima facie view that income chargeable to tax has escaped assessment. This is not a final view and is subject to further consideration during the assessment proceedings. In the instant case it is found that though in one paragraph the reasons recorded in support of the impugned notice for reopening of the assessment is vague in as much as the Assessing Officer is not even certain whether the assessee made profits or loss or even the entities/persons dealt with, would make the reasons bad in law. However, the reasons cited in above paragraph is not the only reason in support of the impugned notice. The other reason in support of the impugned notice is recorded in other paragraphs of the notice viz. that income of Rs. 33.59 lakhs chargeable to tax has escaped assessment on the basis of the tangible material and information received from the DDIT (Investigation) by misuse of NMCE platform. This is the very income chargeable to tax which Page 10 of 22 ITA No.8742 and 8744/Del/2025 has escaped assessment at Rs. 33.59 lakhs. This is as mentioned in the reasons with regard to the assessee purchasing and selling shares through Star Commodities, i.e., Broker during the previous year relevant to the assessment year by misusing the NMCE platform. Thus, even if paragraph relating to reasons of profit/loss is ignored, the reasons to support the impugned reopening notice can be sustained on the above reasons. [Para 6].
Accordingly, the petition is dismissed."
5.2.13 In the similar context, I am also seized of Hon'ble Gujarat High court's decision dated 29/06/2016 in the case of PCIT Vs Gokul Ceramics (Gujarat High Court) wherein the High Court has upheld the validity of reassessment notices issued by the Income Tax Department in the case of Gokul Ceramics and a group of related appeals, ruling that the reopening initiated under Section 147 of the Income Tax Act, 1961, on the basis of information from DGEI indicating sales suppression by the appellant, was legally sound.
5.2.14 In the similar context, I am also seized of Hon'ble Gujarat High court's decision dated 11/08/2021 in the case of Sanjay Baulal Surana vs The Assistant Commissioner of Income Tax wherein the High Court has upheld the validity of reassessment notices issued by the Income Tax Department based on investigation from Investigation Wing, ruling as under:
"6.9 In the case on hand also, the Assessing Officer has reason to believe that the petitioner is a beneficiary of accommodation entry and basis for formation of such belief is several inquiries and the investigation by the Investigation Wing, Kolkata and report thereof. The reasons for the formation of the belief by the Assessing Officer in the instant case, appear to have a rational connection with or relevant bearing on the formation of belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. Accordingly, no interference is called for at the hands of this Court in this petition under Article 226 of the Constitution of India.
6.10 We may reiterate the observation made by the Apex Court in Raymond Woollen Mills Ltd. (supra) that, "at the time of recording the reason for satisfaction of AO, there should be prima facie some material on the basis of which, the department could reopen the case. The sufficiency or Page 11 of 22 ITA No.8742 and 8744/Del/2025 correctness of the material is C/SCA/20501/2019 CAV JUDGMENT DATED: 11/08/2021 not a thing to be considered at this stage. It will be open to the assessee to prove that the assumption of fact made in the notice was erroneous at the time of assessment proceedings".
6.11 Further, in the case of ESS Kay Engineering Co. (P) Ltd. v. Commissioner of Income Tax, 247 ITR 818(SC), also it has been observed that the Assessing Officer is not precluded from reopening the assessment of an earlier year on the basis of fresh material discovered subsequently during the course of assessment of next assessment year.
7. In the backdrop as aforesaid, present petition fails and is dismissed accordingly. "
5.2.15 I also solicit guidance from the Hon'ble Madras High Court in case of Sterlite Industries (India) Ltd. vs. Assistant Commissioner of Income Tax reported in [2008] 302 ITR 275 (Mad), which has upheld the notice for reopening based on information from enforcement directorate showing possible inflation of purchases made by the assessee. 5.2.16 In the context of ongoing deliberation, I also solicit guidance and support from Gujarat High Court decision in the case of Akshat Pramod Kumar Chaudhary Vs DC (Gujarat High Court wherein the High Court held that in case reopening of assessment based on material which satisfied to harbour reasons to believe that there was escapement of income, then, such reopening of assessment is justifiable. 5.2.17 Further, in the case of MP Ferrous and Non-Ferrous India Pvt. Ltd. Vs DCIT (ITAT Mumbai),(2023)106 ITR 66 theHon'ble ITAT Mumbai upheld the re-opening based on information from Investigation Wing.
5.2.18 In DCIT Vs. M/s. Erawat Infotech Pvt. Ltd. (ITAT Delhi), the Hon'ble ITAT, Delhi, 2019 upheld re-opening on the basis of information from Investigation Wing holding that in the instant case, the information is specific having detail of value of the amount of accommodation entry taken, the instrument and date through which entry was taken, name and account number, and the information could not be held to be vague. 5.2.19 Another contention of the appellant is that the AO has mechanically issued the notice and it was based on vague reasons and mere "suspicion" However, the copy of reasons recorded does show that the AO has correlated the information and formed his own opinion/satisfaction. It is particularly noteworthy that all the objections Page 12 of 22 ITA No.8742 and 8744/Del/2025 related to recording of reasons for re-opening raised by the appellant were promptly redressed by the assessing officer vide a speaking order and the same was duly communicated to the appellant. Thus, it is very clear from examination of records that the mandate given by the Hon ble Supreme Court vide G KN Drivenshafts [259 ITR 019 SC] has been duly honoured by the assessing officer while invoking his jurisdiction over the case under the provisions of Section 148 of the Income tax Act, 1961. 5.2.20 Hence, all the arguments of the appellant on the subject stand rejected. In view of the above discussion, case laws quoted by the appellant do not apply to the factual matrix of the instant case, and, hence cannot be relied upon. I notice that all the procedural requirements of law for invocation of Section 148 of the IT Act,1961 have duly been adhered to in this case, and appellant has not been able to put forth any real evidence of procedural or legal infirmity except making baseless allegations....."
7. Upon consideration of the order of ld. Assessing Officer as well as of the ld. CIT(A), we have noted that the arguments raised by the appellant assessee are bereft of any meritorious consideration. We have noted from the reasons recorded by the ld. AO that he has initiated u/s 148 r.w.s. 147 proceedings after making due enquiries upon the information received from the Investigation Wing. Due application of mind of the ld. AO is abundantly evident in the reassessment order. We have further noted that the ld. CIT(A) has extensively analysed the issue in the light of its peculiar facts as well as judicial precedent covering the matter before concluding that there was nothing wrong in invocation of proceedings u/s 148 r.w.s. 147 by the ld. AO. Thus, we are of the considered view that there is no case for any intervention in the order of the ld. CIT(A) at this stage. The order of ld. First Appellate Authority and the ground of appeal no.1, raised by the appellant is dismissed. Page 13 of 22
ITA No.8742 and 8744/Del/2025
8. The next issue raised by the ld. Counsel for the assessee through its grounds of appeal no.2 and 3 are regarding the addition of Rs.1,53,07,590/- qua transactions held with Savera Housing and Construction Ltd. u/s 69A and of Rs.3,83,00,000/- u/s 69C of the Act. The brief factual matrix recorded by the ld. AO in his impugned order are that pursuant to the above reasons for reopening, the ld. AO initiated enquiries into affairs of the company with reference to transactions undertaken with Savera Housing and Construction Ltd. (in short 'SHCL'). Before the ld. AO, the assessee has submitted that SHCL had rendered it services on account of land cleaning, filling and levelling at village Sadarvan and Jaunpura, Agra in respect of land area measuring 51.023 acres @3 lakhs per acre including taxes. The assessee had submitted that the impugned amount was not claimed as an expenditure in its account but debited to the account of land/aggregator/collaborator and joint venture party as the same having been incurred for on behalf of them and in respect of land belonging to/contributed by Indian Realty Limited (in short 'IRL') as governed by the MOU between assessee and IRL. The ld. AO has recorded his observations on pages 4 to 6 of his order extracted hereunder:-
".....7. The submissions of the assessee dated 03.11.2017, 05.12.17 and 21.12.2017 have been carefully seen and duly considered in the light of queries made and inquiry carried out u/s 133(6) of the IT Act. The assessee's contentions are enumerated mainly in their letter dated 03.11.17. The main argument of the assessee includes that there is no increase in authorized share capital, the increase in share capital of Rs.4.81 crore and increase in share premium account have nothing to do with M/s Sawera Housing and Construction Ltd. as alleged by the AO in reasons recorded for re-opening.Page 14 of 22
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8. Then, as regards the issue of escapement of income by Rs.1,53,07,590/- by way of entry provided by M/s Sawera Housing, the assessee has given its response in paras 12 to 15 of their letter dated 03.11.17. It is contended here that such payment was made by the assessee company on behalf of M/s India Reality Ltd. - a party with whom the assessee company was having an MOU dated 11.11.2005 and subsequent amended versions of the same. It is stated that such payment to M/s Sawera Housing was on account of land clearing, filling and levelling done by the said party and the bill raised by them for the said amount. It is further contended that since payment was made on their behalf, the assessee company had transferred the entire payment of Rs.1,53,07,590/- to the account of M/s India Reality Ltd. on 30.06.2009. It is also argued that the assessee company has not claimed this amount of Rs.1,53,07,590/- as its expenditure during the year but has only debited it to the account of land corroborator. This sums up all the contentions and arguments raised by the assessee company.
9. During the course of assessment proceedings, enquiry under section 133(6) was made by the AO for locating and verifying the genuineness of this transaction with the concerned party viz. M/s Sawera Housing Ltd to whom entire payment has been made by the assessee. Such an enquiry was absolutely necessary as bill of this amount was raised by M/s Sawera Housing in the name of assessee company only. The said enquiry revealed that no company by this name was existing at the given address. This fact was recorded on the ordersheet on 19.12.17 and show cause given to the AR. Subsequently, the AR has filed another letter on 22.12.17 during the course of assessment proceedings whereby he has given another address of M/s Sawera Housing Ltd. However, due to constraint of time and this being a time-barring assessment, it was not possible to make the entire enquiry afresh for verifying the genuineness of the said party. The suggestion of the assessee to make further enquiries by issuing summons at this stage of the proceedings would not have been fair and appropriate.
10. Notwithstanding the above, it may also be observed here that what the assessee company has done by way of payment on behalf of M/s India Reality is not at all justified - firstly, because the bill itself itself was raised by M/s Sawera Housing in the name of the assessee company and not in the name of M/s India Reality. It would not be so if work was done by Sawera Housing for India Reality.
11. The submission given by the assessee regarding the MOU with India Reality for development of projects in Agra is not really relevant here as the said MOU/ amended MOU does not mention anywhere any Page 15 of 22 ITA No.8742 and 8744/Del/2025 such responsibility/obligation of the assessee company on behalf of M/s India reality.
12. Finally, since the assessee has not been able to substantiate that any services were rendered by Sawera Housing Ltd., the assessee company had no reason/ justification for payment of a huge amount of Rs.1,53,07,590/- to them. As such, the allegation raised in the reasons recorded u/s 148 that the assessee has taken accommodation entry to the tune of Rs.1,53,07,590/-and has paid a commission of Rs.3,83,000/- (being 2.5% of the entry taken) is considered to be correct and therefore, an amount of Rs.1,56,90,590/- is hereby added to the total income of the assessee. Thus, I am satisfied that the assessee has furnished inaccurate particulars of its income and that this is a fit case for initiation of penalty under section 271(1)(c) of the Income Tax Act, 1961. Accordingly, penalty proceedings for furnishing inaccurate particulars of income u/s 271(1) (c) are initiated separately..."
9. We have heard rival submission in the light of material placed on record. The ld. Counsel for the assessee has vehemently argued that the addition is impermissible as the addition was made in contradiction to reasons recorded by the ld. AO. It has also been fiercely contested that the impugned amount of Rs.1,53,07,590/- was given by the assessee in compliance to JV agreement between the assessee and the IRL. The ld. Counsel has unequivocally admitted that the impugned amount paid to SHCL was not routed through its books and its P & L account to be precise. We have noted from the reasons (supra) that the Revenue was in receipt of information indicating that the assessee was one of the beneficiaries of accommodation entry from one Shri Pradeep Kumar Jindal. It was noted that the said Shri Jindal through his shell company SHCL had given the assessee an accommodation entry of Rs.1,53,07,590/-, which was not accounted for in the tax returns. We have also noted that the ld. AO has on his part attempted to enquire and investigate the matter by issuing notices u/s Page 16 of 22 ITA No.8742 and 8744/Del/2025 133(6) which remained unanswered. In fact, the postal authorities, as evident from para-5 of AOs order had returned the communication stating that there was 'no such firm' on the given address. No blame of any inaction can therefore be placed on AOs shoulder.
10. The argument of the assessee regarding the alleged contradiction between reasons recorded and the addition made have been examined. It has been noted that the AO had receipt information of assessee obtaining bogus accommodation entries from Pradeep Kumar Jindal through SHCL which were not disclosed in returns by the parties. The ld AO has made all efforts to enquire into affairs of SHCL which were not enquired. We have also noted that no additional evidence were given by the assessee during the First Appellate Proceedings qua further verification of transactions with SHCL. The appellant had merely reiterated his arguments taken before the ld. AO.
11. We have noted from the material before us that the assessee's transactions qua SHCL were not clean and tax complaint. We have noted that the JV agreement between the assessee and IRL do not have any mention of SHCL and or authority to debit any expenses qua SHCL to the JV account. We have noted with concern the admission of the appellant assessee that the amount of Rs.1,53,07,590/- paid to SHCL has not been debited to its books of accounts. The issue at large is that the assessee is an established credible, corporate entity whose accounts are duly audited for submission before the tax authorities. The Page 17 of 22 ITA No.8742 and 8744/Del/2025 question that thus arises is, if the amount of Rs.1,53,07,590/- paid to SHCL was not debited to the assessee's books of accounts then what was the source of payment and how were the entry routed by the assessee. Any transaction undertaken by a tax payer is to be routed either through the profit & loss account or through the balance sheet. In the instant case, the appellant assessee has admitted that it has not been routed in the books. This goes on to prove the hypothesis of the Revenue that the assessee was indulging in out of books transactions and/or bogus accommodation entry.
12. Upon consideration of the matter, we are of the considered view then there is no merit in the arguments taken by the appellant assessee through the grounds of appeal no. 2 & 3 (supra) qua addition of Rs.1,53,07,590/- and of Rs.3,83,000/- being commission @2.5% estimated by the ld. AO for taking the accommodation entry. Accordingly, we are of the considered view that there is no case for intervention to the order of the ld. CIT(A) at this stage, we therefore confirm the same. The addition made by the ld. AO is sustained and the grounds of appeal no. 2 & 3 raised by the assessee are dismissed.
13. In the result, appeal of the assessee in ITA No.8742/Del/2025 is dismissed.
ITA No.8744/Del/2026
14. The assessee has raised following grounds of appeal in ITA No.8744/Del/2026:-
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ITA No.8742 and 8744/Del/2025 "1.That on the facts and circumstances of the case, and in law, the Ld. CIT (Appeals) has erred while confirming a Penalty of Rs.1,57,70,946/- under section 271C on the ground that the assessee is liable for deduction of tax at source at the rate of 2 per cent on EDC/IDC charges of Rs. 78,85,47,252/- paid to HUDA. 1.1 The Ld. CIT (Appeals) further did not consider that there was a reasonable cause and belief that the TDS is not deductible on payment to Government Departments, and the assessee was made liable to deduct TDS after the Order of the Delhi High Court. 1.2 The Ld. CIT (Appeals) further did not consider that the alleged TDS liability was itself a debatable issue and became subject matter of legal interpretation only after the decision of the Honorable Delhi High Court."
15. We have heard rival submissions in the light of material available on records. The only issue emanating from the appeal of the assessee is regarding the imposition of penalty under section 271C imposed by the ld. AO vide his order dated 30.03.2025 and its confirmation by the ld. CIT(A) vide his order dated 24.10.2025. The assessee is contesting the appellate order qua confirmation of imposition of penalty. The issue in short is that the ld. AO had initiated proceedings under section 201/201A against the assessee for non- deduction of TDS on External Development Charges (in short 'EDC') paid by the assessee to the Haryana Urban Development Authority (in short HUDA). The assessee contested before the ld. CIT(A), who confirm the action of the AO. The matter travelled before this Tribunal, which in its order in ITA No.5645 to 5648/Del/2024 dated 30.07.2025 confirmed the order of ld. First Appellate Authority. While doing so the Hon'ble Co-ordinate Bench relied upon the order of the Hon'ble jurisdictional High Court in the case of Puri Page 19 of 22 ITA No.8742 and 8744/Del/2025 Construction as at 159 taxmann.com 444 holding that EDC charges are liable for TDS deductions.
16. Before us, the ld. Counsel reiterated that EDC charges are not exigible to TDS and that consequently the penalty under section 271C is incorrect. The ld. Counsel vehemently argued that there was a element of reasonable cause and belief with the assessee for not deducting payments made to government departments and that it was made liable only after the order of Hon'ble High Court. It was further contended that the issue was a debatable issue subjected to legal interpretation at that therefore not liable for any penalty.
17. The ld. Sr. DR, Shri Nitin Kumar Jaiman, vehemently argued in favour of the penalty. It was stated that the assessee has already lost before this Tribunal qua its challenge made to order under section 201/201A (supra) and that therefore penalty as rightly levied. The ld. Sr. DR argued that there was not reasonable cause available in this case.
18. Upon consideration of the matter, we have noted that the issue of TDS deduction on EDC charges is covered by the decision of Hon'ble Delhi High Court in Puri Construction (supra). We have also noted that there is no element of reasonable cause in this case as the issue of TDS deduction on EDC charges was always there on the statute and that therefore the same did not fall in the category of a debatable issue. The Hon'ble Delhi High Court in their decision in Puri Construction (supra) had reiterated and clarified the above position. We Page 20 of 22 ITA No.8742 and 8744/Del/2025 have also noted that the assessee company is a large corporate entity serviced by a battery of legal luminaries and to expect that they could not advice the assessee on the correct interpretation of TDS provisions qua EDC charges would not be a sound assumption. Accordingly, we are of the considered view that there is no case for intervention to the order of the ld. CIT(A) at this stage, we therefore confirm the same. The penalty under section 271C of Rs.78,85,47,252/- levied by the AO is therefore confirmed. The grounds of appeal raised by the assessee are therefore dismissed.
19. In the result, the appeal of the assessee in ITA No.8744/Del/2025 is dismissed.
20. Finally, both the appeals of the assessee are dismissed.
Order pronounced in the open court on 25th March, 2026.
Sd/- Sd/- Sd/-
[MADHUMITA ROY] [AMITABH SHUKLA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 25.03.2026
Shekhar
Copy forwarded to:
1. Appellant
2. Respondent
3. PCIT
4. CIT(A)
5. DR
Asst. Registrar,
ITAT, New Delhi,
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