BIPINKUMAR RAMBHAI PATEL,AHMEDABAD V. THE PR. CIT-1, AHMEDABAD

ITA 992/AHD/2024

AI Insights

The case involves an appeal by Bipinkumar Rambhai Patel against the order of the Principal Commissioner of Income Tax (PCIT), which was based on revenue audit objections concerning alleged unsecured loans received from Dishman Pharmaceutical and Chemical Ltd. The PCIT had revised the assessment order, claiming it was erroneous and prejudicial to the revenue as it accepted the returned income without making any additions based on the scrutiny notice. The Tribunal found that the PCIT's revision was based on a misunderstanding, as the transactions in question had already been assessed in another individual's case, and thus, the reassessment in Patel's case was unwarranted.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791994 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 10-05-2024
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. P. RASTOGI
• Assessee Lawyers: MEHUL K. PATEL
• Keywords: Set aside; Reassessment proceedings; Income from undisclosed sources; Accommodation entries; Audit objection
• Section: 148; 263

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT And SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No. 992/Ahd/2024 (Assessment Year: 2014-15) Bipinkumar Rambhai Patel B/25, Ranchod Colony, Maninagar, Ahmedabad-380008 [PAN: AQAPP5046M] Vs. The Principal Commissioner of Income Tax, -1 Ahmedabad (Appellant) .. (Respondent) Appellant by: Shri Mehul K. Patel, Advocate Respondent by: Shri R.P. Rastogi, CIT-DR Date of Hearing 26.11.2025 Date of Pronouncement 09.12.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT: - This appeal is filed by the Assessee against the appellate order dated 16.03.2024 passed by the Principal Commissioner of Income Tax, Ahmedabad, relating to the Assessment Year 2014-15. 2. The assessee has raised the following grounds of appeal: 1. “The learned PCIT has erred in law and on facts in passing the order u/s.263 of the Act while considering the assessment order u/s.147 r.w.s 144B of the Act passed by the FAO on 24/03/2022 for the year in question as erroneous and prejudicial to the revenue inasmuch as he had accepted the retuned income as assessed income while Printed from counselvise.com ITA No.992/Ahd/2024 Asst. Year: 2014-15 2 not making any additions as per the SCN issued ad reason recorded for reopening of the assessment. 2. The learned PCIT has erred I law and on facts for not considering/appreciating the submission of the appellant filed before him in right perspective before passing of the impugned order u/s.263 of the Act. 3. The learned PCIT has erred in law ad on facts in passing the revision order on the basis of revenue audit objections and without assessment of facts of the appellants’ case independently. The said order is thus bad in law and requires to be quashed. 4. The learned PCIT has erred in law and on facts in failing to consider the fact that the appellant having furnished the details/evidences in support of the SCN issued by the FAO and after considering such details/evidences, the FAO had come to a definite conclusion ad a particular view was taken, the mere fact that the learned PCIT was of a different view which is also based on revenue audit objections, it cannot be a basis for action for revision of the assessment order. The impugned order of revision u/s.263 of the Act is thus wholly unjustified ad bad in law. 5. The learned PCIT has erred I law and on facts I failing to consider the fact that the FAO had exercised quasi-judicial power vested I him in accordance with the law and arrived at a particular conclusion o the facts as well as on law and merely such conclusion has not been elaborately discussed/mentioned in the assessment order, the said order could not be termed as erroneous and prejudicial to the interest of revenue as per the settled law. The section does not visualize case of substitution of the judgment of the PICT for that of the FAO. 6. The learned PCIT has erred in giving the direction to set aside the assessment order passed by the FAO and to pass fresh assessment after verification of the facts of the case. Since the FAO has accepted the returned income as an assessed income and not made any addition after verification of facts of the case, the direction given by the learned PCIT to verify the same facts again is bad in law and consequentially order u/s.263 of the ACT requires to be quashed”. 3. The Assessing Officer issued notice under section 148 of the Income-tax Act on 29.03.2021, after obtaining due approval under section 151 from the Principal Commissioner of Income Tax, Ahmedabad–1, for alleged escapement of income amounting to Rs. 1,37,80,069/-. According to the reasons recorded, the assessee had allegedly received unsecured loans of Rs. 1.37 crores from M/s Dishman Pharmaceutical and Chemical Ltd. during the relevant financial year. During reassessment proceedings, the Assessing Officer sought details regarding such loans vide notice dated 16.02.2022. The assessee, in response dated 01.03.2022, Printed from counselvise.com ITA No.992/Ahd/2024 Asst. Year: 2014-15 3 categorically denied having received any unsecured loans from Dishman Pharmaceutical and Chemical Ltd.The assessee further submitted that all transactions relating to its bank account and share/stock dealings had already been examined and assessed in the case of Shri Sanjay Shah, who had admitted before the Investigation Wing, vide letter dated 16.11.2018, that he was operating several bank accounts including the assessee’s bank account. As per the information, Shri Sanjay Shah operated 38 bank accounts, including Central Bank of India Account No. 3254958224 standing in the name of Shri Bipin R. Patel, at Serial No. 36 of the departmental list. Shri Sanjay Shah admitted before the Investigation Wing that all such bank accounts were controlled and operated by him, and that profits arising therefrom were offered to tax in his own hands. In the Assessment Order of Shri Sanjay Shah, at Page 117, it is recorded that he controlled the demat and bank accounts of 47 persons, including the assessee (listed at Serial No. 6), for the purpose of share trading and computation of unaccounted income. On examination of Central Bank Account No. 325498234 (in the name of the assessee) shows a total of Rs. 1,37,80,069/-, which exactly matches the amount mentioned in the reasons for reopening. These transactions have been already assessed in the hands of Shri Sanjay Shah by the Revenue. Therefore, it is an accepted and undisputed fact that although the bank account stands in the name of Shri Bipin Patel, it was operated and controlled solely by Shri Sanjay R. Shah, and all related transactions have already been offered to tax by him and assessed by the Department. The Ld. PCIT, however, held that the Assessing Officer erred in not verifying the income arising from transactions operated by the entry operator, Shri Sanjay Shah, and that the error resulted in loss of Revenue. He further observed (Page 17, Para 7) that the Assessing Officer did not confine his enquiry to the reasons recorded for reopening and failed to verify the issue of accommodation entries from Shri Sanjay Shah. Printed from counselvise.com ITA No.992/Ahd/2024 Asst. Year: 2014-15 4 4. We find that the Ld. PCIT intended to state that the Assessing Officer erred by confining himself to the reasons for reopening, whereas according to the PCIT, the AO was required to further examine accommodation entries. However, the reasons recorded for reopening specifically pertained to alleged receipt of unsecured loans of Rs. 1.37 crores from Dishman Pharmaceutical and Chemical Ltd. The assessee strongly denied such receipt. The Revenue has not produced any evidence to establish that the assessee received unsecured loans from Dishman Pharmaceutical and Chemical Ltd. At the same time, the same amount of Rs. 1.37 crores appears exactly as the total of transactions in the assessee’s bank account operated by Shri Sanjay Shah, which has already been assessed in the hands of Shri Sanjay Shah.Thus, it is evident that the transaction recorded in the bank account of Shri Bipin Patel, operated by Shri Sanjay Shah, was incorrectly treated as unsecured loans from Dishman Pharmaceutical and Chemical Ltd. in the reasons for reopening. Since these amounts have already been fully considered and assessed in the case of Shri Sanjay Shah, the assessment order in the case of the present assessee cannot be regarded as erroneous and prejudicial to the interests of the Revenue for A.Y. 2014–15, even on merits. Accordingly, the order passed under section 263 of the Act by the Ld. PCIT is hereby quashed. 5. In the result, the appeal of the assessee is allowed. The order is pronounced in the open Court on 09.12.2025. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 09.12.2025 Printed from counselvise.com ITA No.992/Ahd/2024 Asst. Year: 2014-15 5 आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "