ACIT, CIRCLE-4(1)(1), ALIGARH, ALIGARH V. MOHD. INTZAR, ALIGARH

ITA 318/AGR/2024

AI Insights

The case involves the Income Tax Department's appeal against Mohd. Intzar concerning the reassessment for the Assessment Year 2014-15. Initially, the assessee's income was accepted after a scrutiny assessment under section 143(3) of the Income Tax Act. However, following information from the investigation wing about unexplained purchases, the case was reopened under section 148. The Assessing Officer (AO) made additions to the assessee's income, which were contested and eventually deleted by the CIT(A). The Tribunal upheld the CIT(A)'s decision, agreeing that the reassessment was not justified and the additions were not substantiated.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25473 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Other Referred Cases: CIT vs. Kelvinator of India Ltd. (320 ITR 561)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KUMAR YADAV LD.
• Assessee Lawyers: DEEPAK SINGH LD
• Keywords: Reassessment proceedings; Tangible material
• Section: 147; 148; 143(3); 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं. / ITA No.318/Agr/2024 (िनधाŊरणवषŊ / Assessment Year: 2014-15) ACIT Circle 4(1)(1) Aligarh 202001 बनाम/ Vs. Mohd. Intzar 140, Sarai Mitan Delhi Gate, Aligarh ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AAGPI-7161-N (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Dr. Arun Kumar Yadav – Ld. CIT-DR ŮȑथŎकीओरसे/Respondent by : Shri Deepak Singh (Advocate) – Ld. AR सुनवाईकीतारीख/Date of Hearing : 19-02-2025 घोषणाकीतारीख /Date of Pronouncement : 28-03-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2014-15 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 28-06- 2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s. 144B of the Act on 28-03-2022. Both sides made vehement arguments. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 2. The returned income of Rs.9.28 Lacs was accepted in scrutiny assessment u/s 143(3). However, pursuant to receipt of certain information from investigation wing that the assessee made unexplained 2 purchases, the case was reopened and notice u/s 148 was issued on 30- 03-2021. The assessee objected to reopening which were rejected by Ld. AO on 18-02-2022. The assessee was required to supply various information and documents and the assessee furnished the same. It transpired that the assessee procured animals from farmers in cash and supplied them to slaughter houses. The Ld. AO doubted the purchases made by the assessee and noted that the total credit in ICICI Bank current account was for Rs.747.38 Lacs. It transpired that the account was credited with high volume transfers from an entity followed by immediate cash withdrawals through cheque. The assessee did not maintain any sale/ purchase bills or vouchers. The assessee reflected purchases of Rs.89.07 Crores which, according to Ld. AO, remained unverified. Accordingly, 12.5% of these purchases was disallowed and added as unexplained income u/s 69C. 3. The assessee challenged the validity of reassessment proceedings by placing reliance on various judicial decisions. The quantum additions on merits were also contested. The Ld. CIT(A), in para 4.3, noted that during scrutiny assessment u/s 143(3), the books of accounts were duly verified and Ld. AO made adhoc addition of Rs.1 Lacs for unverified vouchers / bills relating to expenses. In the reasons for reopening, Ld. AO simply changed his opinion qua purchases which is impermissible in law. The case was reopened merely by blindly relying upon the information received from investigation wing without conducting any independent enquiry that the income chargeable to tax had escaped assessment. Further, there were no new material facts before Ld. AO to hold that the purchases were not genuine. The purchases so made by the assessee were duly accounted for in the return of income which was 3 duly verified during scrutiny assessment proceedings. There was no tangible material to reopen the case of the assessee and accordingly, the reassessment proceedings were quashed and legal grounds as raised by the assessee were allowed. 4. The Ld. CIT(A) also rendered findings on merits and noted that the sales as offered by the assessee were not disturbed. The assessee had recorded all purchases and corresponding sales in the audited books of account which were made available to Ld. AO and sales figures were not disturbed. There was no material evidence to make adhoc disallowance of 12.5% and accordingly, the quantum addition was deleted on merits also. Further, the impugned disallowance could not be made by invoking deeming fiction of Sec. 69C since Ld. AO had not doubted the source of expenditure. Aggrieved, the revenue is in further appeal before us. 5. From the facts, it is quite clear that the returned income was subjected to scrutiny assessment proceedings u/s 143(3) wherein the books of accounts were duly verified and Ld. AO substantially accepted the return income. Subsequently, the case was reopened pursuant to receipt of certain information from investigation wing alleging that there was large debit and credit in the bank account. However, this account was disclosed account and no enquiries were conducted by Ld. AO to arrive at conclusion of escapement of income. The case was reopened at the behest of third party opinion which is impermissible. There was no new tangible material before Ld. AO to arrive at conclusion of escapement of income which would vitiate entire proceedings in terms of decision of Hon’ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd. (320 ITR 561). Further, the case was reopened beyond 4 years and there was no allegation that the income had escaped 4 assessment for failure on the part of the assessee to make and true disclosure of particulars of its income. Considering all these facts, the adjudication of legal grounds by Ld. CIT(A) need not be interfered with. On merits also, we concur with the aforesaid conclusion of Ld. CIT(A). There was no basis to make estimated addition of 12.5% without bringing on record any evidence to establish that the purchase were not genuine. Therefore, the impugned order does not require any interference on our part, in any manner. 6. The appeal stand dismissed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) Ɋाियक सद˟ /JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER Dated: 28-03-2025 आदेश की Ůितिलिप अŤेिषत / Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT AGRA "