DHANANJAY TRADELINK PVT. LTD.,AHMEDABAD V. THE ITO, WARD-1(1)(3), AHMEDABAD

ITA 582/AHD/2025

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Dhananjay Tradelink Pvt. Ltd. appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which upheld the addition of Rs. 25,00,059 made by the Assessing Officer (AO) towards purchases from Kirit D. Patel, deemed as bogus. The case originated from a scrutiny assessment and a subsequent reassessment under Section 148A(b) of the Income Tax Act, 1961, based on information that transactions with Shri Kirit Dahyabhai Patel involved accommodation entries. The Tribunal found that the reassessment was initiated on mere suspicion without tangible material linking the transactions to the assessee's books, and that the issue had been previously examined during the original assessment proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792065 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 19-03-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: S.N. DIVETIA
• Keywords: Difference of opinion; Change of opinion; Principle of natural justice; Accommodation entries; Tangible material; Bogus
• Section: 147; 148; 143(3); 68; 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ITA No. 582/Ahd/2025 (Assessment Year: 2018-19) Dhananjay Tradelink Pvt. Ltd., 505, Padshani Pole, Kalupur, Ahmedabad-380001 [PAN : AADCD 8007 A] Vs. Income-Tax Officer, Ward-1(1)(3), Ahmedabad (Appellant) .. (Respondent) Appellant by : Shri S.N. Divetia, AR Respondent by: Shri Rignesh Das, CIT-DR Date of Hearing 08.10.2025 Date of Pronouncement 10.12.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the Assessee against the order dated 20.01.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (‘the Act’ in short) for Assessment Year 2018-19. 2. The assessee has raised following grounds of appeal:- “1.1 The order passed by U/s 250 passed on 20.01.2025 for AY 2018-19 by NFAC [CIT(A)], Delhi (for short “CIT(A)”) upholding the addition of Rs 25,00,059/- made by A.O. towards purchases from Kirit D. Patel, as bogus is wholly illegal, unlawful and against the principles of natural justice. 2.1 The ld. CIT(A), has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant. The CIT(A) has passed a non-speaking order, relying upon the findings of AO which is illegal and unlawful. 3.1 The ld. CIT(A) has grievously erred in law and or on facts in upholding the addition of Rs 25,00,059/- made by A.O. towards purchases from Kirit D. Patel, as bogus. Printed from counselvise.com ITA No. 582/Ahd/2025 Dhananjay Tradelink Pvt Ltd Vs. ITO Asst. Year : 2018-19 - 2– 3.2 That the in the facts and circumstances of the Id. CIT(A) ought not to have upheld the addition of Rs 25,00,059/- made by AO towards purchases from Kirit D. Patel, as bogus.” 3. The brief facts of the case are that the assessee is a closely held company engaged in the business of trading in Fabric Cotton, Grain, Chemicals, etc. It filed its return of income for the year under consideration on 07.10.2018 declaring total income of Rs.2,34,770/-. The case was selected for scrutiny, and an assessment u/s 143(3) of the Act was completed on 30.12.2019 determining total income at Rs.14,42,32,822/-, inter alia making additions under section 68 of the Act. Subsequently, a notice under section 148A(b) was issued on 21.03.2022 on the basis of information that the assessee had transactions with Shri Kirit Dahyabhai Patel, who has been allegedly to be engaged in providing accommodation entries. The Assessing Officer thereafter completed the reassessment u/s 147 r.w.s. 144B on 24.03.2023, making an addition of Rs.25,00,059/- u/s 69C r.w.s. 115BBE of the Act. 4. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Ld. CIT(A), who upheld the addition made by the Assessing Officer. 5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 6. Before us, the Ld. AR submitted that the reassessment was initiated merely on the basis of suspicion, without any tangible material linking the alleged bogus nature of transaction with Shri Kirit D. Patel to the assessee’s books of accounts. The Ld. AR submitted that the assessee had disclosed the transaction in its books of accounts and reported it in audited financials. The Ld. AR further submitted that the transaction with Bhavani Enterprise, i.e. proprietorship concern of Shri Kirit D. Patel, was for sale of goods, duly recorded in sales register, and all payments were received through banking channels. Relevant documents such as Printed from counselvise.com ITA No. 582/Ahd/2025 Dhananjay Tradelink Pvt Ltd Vs. ITO Asst. Year : 2018-19 - 3– invoices, delivery challans, stock records, and bank statements were furnished. On legal grounds, it was argued that there was no \"information suggesting escapement of income\" as required under Section 148 of the Act and mere inclusion of Shri Kirit Patel's name in the STR does not constitute sufficient basis for reopening. The Ld. AR invited our attention to the relevant portion of the show-cause notice issued u/s. 148A(b) of the Act dated 21.03.2022 which reads as under:- “1. In this connection, it is stated that this office is in possession of information from reliable source that you have entered into a high value transaction during the financial year 20178-18 relevant to AY 2018-19. 2. Further, in your case, information has been received from reliable source and it is found that you have carried out transaction in your bank account from Shri Kirit Dayalal Patel which is found non-genuine. Shri Kirit Dayalal Patel's account included in Suspicion Transaction Report is verified and is found adverse. It is established that account of the aforementioned entity/persons have been used for providing bogus entries. 3. Therefore, transaction carried out by you of Rs.25,00,059/- through Kirit Dayalal Patel is non genuine transaction which requires to be taxed in your hands. Therefore, sum of Rs.25,00,059/- has escaped assessment. 4. Above mentioned information has been flagged on insight portal in accordance with the risk management strategy formulated by the Board. Above mentioned information falls under the definition of Explanation (1)(i) of Section 148 of the Act which became effective from 01.04.2021. On going through the various information received from Insight Portal (High Risk CRIU/VRU cases dissemination of cases with priority mark as P1 category) and soft copy data downloaded by this office, inquiries conducted on said transaction, it appears that the transaction carried out by you has escaped assessment for AY 2018-19 within the meaning of section 147 of the IT Act.” The Ld. AR also submitted that the issue in question had already been verified during the original assessment proceedings, and thus, the reopening amounted to a mere change of opinion, which is not permissible under law. Printed from counselvise.com ITA No. 582/Ahd/2025 Dhananjay Tradelink Pvt Ltd Vs. ITO Asst. Year : 2018-19 - 4– 7. The Ld. DR, on the other hand, supported the orders of the authorities below. 8. We have heard the rival contentions and perused the material available on record. From the facts on record, it is evident that the Assessing Officer has proceeded on the basis of general information regarding Shri Kirit Dahyabhai Patel being an alleged accommodation-entry provider, without bringing any specific cogent material to demonstrate that the transactions recorded by the assessee were bogus. The assessee has placed on record copies of invoices, stock registers, delivery challans, bank statements evidencing receipt of sale proceeds and the same have not been rebutted by the Revenue with any contrary evidence. Further, the reopening was based merely on suspicion and not on any tangible material indicating escapement of income in the hands of the assessee. Once the transactions were fully examined in the original assessment proceedings, reopening on the same issue without fresh material amounts to a mere change of opinion, which is impermissible in law. 8.1 In view of the above facts and in the absence of any independent enquiry by the Assessing Officer to contradict the documents provided by the assessee, the reopening made u/s 148 as well as the addition made u/s 69C read with Section 115BBE of the Act cannot be upheld. Therefore, the addition of Rs.25,00,059/- is directed to be deleted. 9. In the result, appeal of the assessee is allowed. The order is pronounced in the open Court on 10.12.2025. Sd/- Sd/- (SUCHITRA R. KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 10.12.2025 **btk Printed from counselvise.com ITA No. 582/Ahd/2025 Dhananjay Tradelink Pvt Ltd Vs. ITO Asst. Year : 2018-19 - 5– आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, , , , अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation … Words processed by Hon’ble VP on his PC on ..08.12.2025 2. Date on which the typed draft is placed before the Dictating Member …..09.12.2025 3. Other Member …..09.12.2025 4. Date on which the approved draft comes to the Sr.P.S./P.S …..09.12.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement ….10.12..2025 6. Date on which the fair order comes back to the Sr.P.S./P.S …..10.12.2025 7. Date on which the file goes to the Bench Clerk …..10.12.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "