INCOME TAX OFFICER WARD-1(1), JAIPUR V. KIRAN INFRA ISPAT LIMITED, JAIPUR

ITA 535/JPR/2025

AI Insights

The case involves Kiran Infra Ispat Limited, which faced reassessment by the Income Tax Officer, Ward-1(1), Jaipur, for the Assessment Year 2013-14. The reassessment was based on information from the DDIT (Inv.), Rohtak, suggesting that the company received unexplained cash credits from M/s Mamta Trading Company, a non-filer of income tax returns. The AO added Rs. 8,34,73,192 as unexplained cash credit under section 68 of the Income Tax Act. The CIT(A) later deleted this addition, leading to the revenue's appeal to the Tribunal. The Tribunal upheld the CIT(A)'s decision, finding the sales to be genuine and properly recorded, and criticized the AO for not providing a valid basis for the reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 776478 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2025
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 03-04-2025
• Laws Referred To: Income Tax Act 1961
• Court: TRIBUNAL
• Department Lawyers: RAJESH OJHA
• Assessee Lawyers: TARUN MITTAL; MAKING HUGE ADDITION
• Keywords: Business income; Difference of opinion; Change of opinion; Additional evidence; Reassessment proceedings; Business expenditure; Question of law; Unexplained cash credit; Income from undisclosed sources; Bogus purchase; Reopening of assessment; Capital expenditure; Principle of natural justice; Accommodation entries; Assessment record; Reason to believe; Opportunity of cross examination; Tangible material; Borrowed satisfaction; Bogus
• Section: 147; 148; 143(3); 142(1); 154; 68; 131; 133(6); 37(1)

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR MkWa- ,e- ,y- ehuk] ys[kk lnL; ,oa MkWa- ,l- lhrky{eh] U;kf;d lnL; ds le{k BEFORE: DR. M.L. MEENA, AM & DR. S. SEETHALAKSHMI, JM vk;dj vihy la-@ITA. No. 535/JPR/2025 fu/kZkj.k o\"kZ@Assessment Years : 2013-14 Income Tax Officer, Ward-1(1), Jaipur. cuke Vs. Kiran Infra Ispat Limited F-47 to 949, E-292, Road, No. 14 V.K.I. Area, Sikar Road, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAECK0903F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Tarun Mittal, C.A. jktLo dh vksj ls@ Revenue by : Shri. Rajesh Ojha, CIT-DR a lquokbZ dh rkjh[k@ Date of Hearing : 15/07/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 15/09/2025 vkns'k@ ORDER PER DR. S. SEETHALAKSHMI, J.M. The present appeal by revenue for Assessment Year 2013-14 arise out of the order of National Faceless Appeal Centre, Delhi [for short ‘CIT(A)’] dated 04.02.2025 in the matter of assessment order dated 23.05.2023 passed u/s147 r.w.s. 144B of the Income Tax Act 1961 [for short ‘Act’] by National Faceless Assessment Centre [for short ‘AO’] . 2. Vide this appeal, revenue has raised the following grounds:- “1. Whether on the fact and in the circumstances and in law, of the case the ld. CIT(A) was justified in deleting the addition of Rs. 8,34,73,192/- made by the Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 2 AO on account of unexplained cash credit u/s 68 of the Act as the identity, genuineness and creditworthiness of the transaction was not proved? 2. Whether on the fact and in the circumstances of the case and in law, the ld. CIT(A) was justified in deleting the addition of Rs. 8,34,73,192/- made by the AO on account of unexplained cash credit u/s 68 of the Act without waiting / receiving of remand report from JAO? 3. Whether on the fact and in the circumstances of the case and in law, the ld. CIT(A) was justified in deleting the addition of Rs. 8,34,73,192/- made by the AO on account of unexplained cash credit u/s 68 of the Act without verifying the veracity of transaction or creditworthiness of the transactions with Mamta Trading company while remand proceeding, the credit worthiness of the above party was not proved? 4. Whether on the fact and in the circumstances of the case and in law, the ld. CIT(A) was justified in deleting the addition of Rs. 8,34,73,192/- made by the AO on account of unexplained cash credit u/s 68 of the Act without properly considering the remand report and various facts finding during the assessment proceedings? 5. Whether on the fact and in the circumstances of the case and in law, the ld. CIT(A) was justified in deleting the addition of Rs. 8,34,73,192/- disallowed of bogus sale.” 3. Record reveals that in this case, the respondent assessee has raised legal grounds in terms of rule 27 of Income Tax (Appellate Tribunal) Rules, 1963 alongwith a request to admit the same. Legal ground raised is reproduced below:- “1. On facts and in the circumstances of the case ld. CIT (A) grossly erred in confirming the action of ld. AO in re-opening the assessment u/s 148 of the Act arbitrarily. 1.1 That, the ld. CIT (A) grossly erred in confirming the action of ld. AO in re- opening the assessment u/s 148 of the Act as reassessment proceedings is initiated vide notice u/s 148 dated 12/05/2021 and same is barred by limitation as the notice under old law could have been validly issued on or before 31/03/2020 (i.e. not beyond 6 years). It is thus prayed that reassessment proceedings completed on the basis of notice issued u/s 148 is beyond the time limit stipulated u/s 149, is not in accordance with law and consequent order passed deserves to be held void ab initio. Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 3 1.2 That, the ld. CIT(A) has further erred in holding the proceedings u/s 148 as valid when the notice issued is itself bad in law and suffers from various defects. Hence the order so passed deserves to be held bad in law.” 4. All the grounds of appeal taken by the revenue involve single issue of addition of Rs. 8,34,73,192/- so deleted by ld. CIT(A) and accordingly these are discussed together. 5. Brief facts of the case are that assessee is a Company incorporated on 15/09/2010 under The Companies Act, 1956 as closely held Public Limited Company with the Registrar of Companies Rajasthan, Jaipur. The main object of the Company is Manufacturing of Ingot & Billet and TMT Bars and Trading of Iron Wire. The regular books of accounts have been maintained. Return of Income for the year under consideration was filed by assessee on 26.09.2013 declaring total income at Rs. NIL (APB 01). Case of assessee was selected for scrutiny assessment, which was completed vide order dated 30.01.2016 passed u/s 143(3) of the Act. Subsequently, the case of assessee was reopened by issuing notice u/s 148 dated 12.05.2021 on the basis of some information received by ld. AO from DDIT (Inv.), Rohtak. Thereafter in view of the decision of Hon’ble Supreme Court in the case of UOI Vs. Ashish Agarwal dated 04/05/2022 notice u/s 148A(b) dated 29.05.2022 was issued by which it was claimed by the revenue that assessee has received total amount of Rs. Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 4 8,34,73,192/- from bank account of M/s Mamta Trading Company, Proprietor Shri Suresh Kumar who had not filed return of income and accordingly amount so received from him is unexplained. Submissions were filed by the ld. AR mentioning that assessee has made sales of iron bar to him and these payments so received are by way of sale proceeds and furnished various evidences to support this claim. However, ld. AO initiated proceedings u/s 147 by issue of notice u/s 148, after passing order u/s 148A(d) of I.T. Act. Afterwards the assessee submitted detailed explanation and evidence in support of its claim, but the ld. AO observed that heavy payments have been received from M/s Mamta Trading Company and its proprietor Shri Suresh Kumar has not filed the return of income and accordingly these credits are unexplained and thereby added the same in the hands of assessee vide order dated 23.05.2023. Aggrieved with the addition, the assessee filed appeal before ld. CIT(A), NFAC. It was submitted before ld. CIT(A) that the assessee company had made sales to M/s Mamta Trading Company during the regular course of business and amount received is by way of sale proceed through banking channels and which is duly accounted for as sales in the books of accounts. The assessee also produced copy of ledger account of Mamta Trading Company, copy of form C issued by Haryana Sales Tax Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 5 Department to M/s Mamta Trading Company which were given by the aforesaid purchaser to the assessee company, copy of stock register, copy of VAT-49 (e-way bill under VAT Act) before the AO and also before ld. CIT(A). It was also mentioned that amount received from M/s Mamta Trading Company is not loan but is sale proceeds which has already been included in the Profit & Loss Account and same cannot be added again u/s 68. The sales so made to the aforesaid purchaser are properly recorded in the stock register also and before making such sale, there have been sufficient stock with the assessee company. It was also submitted before ld. CIT(A) that AO has not disturbed the sales nor has disturbed the closing stock. Since sales has been accepted and amount so received from the M/s Mamta Trading Company is on account of sale proceed which is already included in the Profit & Loss account, there is no case for making any addition u/s 68 of I.T. Act. The ld. CIT(A) has supported his view by the decision of Hon’ble Delhi High Court in the case of Kailash Jewellery House (613 of 2010 dated 09.04.2010) and Hon’ble Gujarat High Court in the case of Vishal Export Overseas Ltd. (2471 of 2009 dated 03.07.2012). In view of these overall facts and circumstances supported by legal position, ld. CIT(A) deleted the addition. Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 6 6. Now, the revenue is in appeal before us. The ld. DR has strongly supported the order of ld. AO and facts mentioned therein. Apart from the above, it was also argued that ld. CIT(A) has erred in passing the order without waiting for the remand report from the AO. It was submitted by ld. DR that in view of the information received from DDIT (Inv.) Rohtak, it was noticed that assessee company has received heavy amount to the extent of Rs. 8,34,73,192/- from one M/s Mamta Trading Company Proprietor Shri Suresh Kumar from his bank account but Shri Suresh Kumar has not filed his return of income for A.Y. 2013-14. Thus, huge amount so received by assessee company from bank account of a non- filer is on account of bogus sale of TMT Bars to the said M/s Mamta Trading Company and accordingly the amount of credit is unexplained and ld. AO has rightly added the same. It was requested by ld. DR that order of ld. CIT(A) may be reversed and order of AO may be restored. 7. Per contra, the ld. AR of assessee has filed detailed written submission against the revenue’s ground of appeal No. 1 to 5 on this issue, which is as under: “Departmental Ground of Appeal No. 1 to 5: (Submission filed by assessee) In these grounds of appeal, department has challenged the action of ld. CIT(A) in deleting the addition of Rs. 8,34,73,192/- made by ld.AO u/s 68 of Income Tax Act by alleging the amount received from one customer Mamta Trading Co. on account of Sales as unexplained. Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 7 Brief facts pertaining to the grounds as stated above are that on the basis of information stated to have been received by ld.AO from the DDIT (Inv.) Rohtak through insight portal of the department, it was held that during the year under consideration assessee company has received an amount of Rs. 8,34,73,192/- from the M/s Mamta Trading Company, Prop. Shri Suresh Kumar (PAN: CLSPK-9222-P) through Bank Account No. 1025CBCA01000339 with Corporation Bank and since Shri Suresh Kumar (PAN: CLSPK-9222-P) has not filed his return of income for AY 2013-14, it was presumed that the transaction could not be verified in absence of filing of return and the income to the tune of Rs. 8,34,73,192/- has escaped the assessment in the hands of assessee company for AY 2013-14. During the course of re-assessment proceedings, various details and explanation as sought by ld.AO were furnished. However, ld.AO without pointing out any single discrepancy in such details proceeded to make addition of entire sale consideration of Rs.8,34,73,192/- u/s 68 of the Income Tax Act. In this regard, it is submitted that assessee company is regularly filling its return of income and maintains regular books of accounts, which are subject to audit by qualified chartered accountant. It is submitted that the alleged credit proceeds received from M/s Mamta Trading Company were on account of Sale of goods which are forming part of the total sale appearing in the Trading Account of the assessee company. It is submitted that the assessee has regularly made sales of goods to said party during the year under consideration. Such sales have been examined by the Assessing Officer during the course assessment proceedings u/s 143(3) also, and were accepted without raising any doubts. In support of this contention of sales made, following details as furnished before ld.AO are submitted for your goodself’s kind perusal and record: 1. The copy of the acknowledgement of income tax return filed u/s 139(1) along with copy of Audited Balance Sheet and P&L Account and the relevant schedules and annexures (APB 01-18) 2. Copy of Ledger Account of M/s Mamta Trading Company as appearing in the books of accounts of the Assessee Company (APB 112-131) 3. Copy of relevant extracts of the ledger account of sales as appearing in the books of accounts of the assessee company wherein the sales made to M/s Mamta Trading Co. is included in the total sales of the assessee for the year under consideration and is duly appearing (APB 132-210) 4. Copies of “C” Form issued by Haryana Sales Tax Department to M/s Mamta Trading Co. which in turn were issued by M/s Mamta Trading Co. to the assessee company in support of the claim of lower payment of CST since the transaction is inter-state transaction and as per prevailing CST Law, upon furnishing the C Forms by the purchaser Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 8 party, the CST would be charged at concessional rates. The said C Forms so received by the assessee company were submitted in original to the Rajasthan State Commercial Taxes Department who after making verification of the genuineness of the form has assessed the assessee company on such sale at concessional rate of tax. It is also relevant to state that C Form can be issued only by the trader or manufacturer who purchase the goods in furtherance of the business and cannot be issued by any other entity like a direct consumer of the goods (APB 104-111) 5. Copy of day to day stock register maintained by the assessee company wherein the outward entry of the goods sold to M/s Mamta Trading Co. is duly highlighted (APB 211-281) 6. Copy of the VAT 49 (e-way bill under old VAT Act) issued by Rajasthan Sales Tax Department containing complete details of the recipient of the goods i.e. Mamta Trading Co., details of invoice raised of the goods under transportation, details of transportation vehicle including vehicle number etc. It is also relevant to state that VAT 49 form was mandatory to be carried with the vehicle under transport and a copy of the same stood submitted by the buyer to the respective Government VAT authorities (APB 282-408) 7. Copy of Assessment order for AY 2013-14 passed u/s 143(3) of the Income Tax Act, 1961 wherein after verification of the books of accounts and other relevant bills and vouchers, the trading results declared were accepted (APB 58-59) 8. Copy of Bank Statements highlighting transactions with M/s Mamta Trading Company (APB 60-103) 9. Copies of the relevant extract of the RG-1 Register (stock register) maintained under the erstwhile Central Excise Act wherein the outward movement of the goods were recorded and duly verified by the authorities from time to time (APB 211-281) With the above details, it is very much evident that the assessee company has sold the goods manufactured by it to M/s Mamta Trading Co. in the regular course of business and had received the payments against such sale through banking channels in its bank account. Since the transaction of sales is duly backed by the necessary evidences such as invoices, e-way bill (VAT 49), availability of stock through stock register, declaration of sales in the financial statements, receipt of C form from the buyer and the assessment completed u/s 143(3) where such sale has been accepted meaning thereby the corresponding payments of such sale is also accepted. The necessary correspondence made during the course of assessment proceedings where on specific query the copy of the excise records were submitted before the assessing officer vide letter dated 30.12.2015 (APB 428-430). It may also be noted that the party had even Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 9 submitted C Form issued by State Government Authority of Haryana i.e Haryana Sales Tax Department for lower payment of GST and these forms in original were submitted to Rajasthan State Commercial Tax Department who after verification has accepted such sale on concessional rate of tax. Thus it is evident that two Government Authorities of two different States have found the transactions of sale to the party M/s Mamta Trading as not having any irregularity. It is submitted that ld. AO was totally unjustified in brushing aside these plethora of evidences without rebutting them or without bringing any contrary evidences on record and merely making addition of such huge amount only because that party has not filed return of income. If by any chance that party has failed to file his Income Tax Return and avoided paying due Income Tax, then appropriate action needs to be taken in his case, instead of penalizing assessee by making huge addition in its case. Accordingly addition so made deserves to be deleted. It is further submitted that ld.AO has made addition on account of credits in bank account u/s 68, which is not applicable in the present case as the sum is properly recorded in books of accounts and no adverse inference was drawn by ld.AO towards such entries in books of accounts either in assessment proceedings u/s 143(3) or re-assessment proceedings. It is further submitted that provisions of Section 68 are not applicable on the sale transactions recorded in the books of accounts as sales are already part of the income which is already credited in P&L account. Hence, there is no occasion to consider the same as income of the assessee by invoking the provisions of Section 68 of the Act. Furthermore, assessee has discharged its burden by substantiating the transaction through all the plausible evidences. Therefore, the same cannot be held as unexplained cash credit in any manner. Hon’ble Delhi bench of ITAT in the case of DCIT vs Subhash Gupta in ITA No.1548/Del/2022 has held that sales cannot be added u/s 68 unless they are proved as bogus on the basis of some reliable evidences. Hon’ble Hyderabad bench of ITAT in the case of NECX (P) Ltd. vs ITO vs [2022] 145 taxmann.com 232 (Hyderabad - Trib.) has held that: Section 68 of the Income-tax Act, 1961 - Cash credit (Bank deposits) - Assessment year 2013- 14 - During year, assessee had made cash deposits of certain amount in his bank account - Assessing Officer made additions on account of same on ground that source of same was not explained by assessee - It was noted that assessee furnished number of sales invoices to show from where said cash in question was received - Further, turnover of assessee was also not disputed by Assessing Officer - Whether since all these invoices were part of total sales, Commissioner (Appeals) was not justified in sustaining additions made by Assessing officer and thus, addition was to be deleted - Held, yes [Para 13] [In favour of assessee] Hon’ble Amritsar bench of ITAT in the case ofRajkumar vs ITO ITA No.195.Asr/2022 has observed that: Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 10 “12.1 We also considered that the amount deposited in the bank account was out of sale of various items which had been held by the assessee as stock in trade and since the deposits in the bank account were out of sale of stock therefore the stock of the assessee has depleted and the cash has come in respect of stock, such sales had been disclosed in the trading account against the purchase which had not been doubted, neither the opening and closing stock had been doubted. Therefore, nothing could have been doubted when the source of cash was well explained and was shown in the bank account. However the addition was made only on the basis of surmises without establishing any motive on the part of the assessee and without disturbing the closing stock as on 31/03/2017 which had been arrived at after reducing the sale in quantity of stock in trade.” Your kind attention is also invited to judicial pronouncements given with reference to the bank deposits made during demonetization wherein various Courts has held that once the sales has been admitted and accepted by the department, corresponding deposit in the bank account of the sale consideration cannot be held as bogus. Few cases are as under: (i) ACIT vs Shri Chandra Surana ITA No.166/JP/2022 (Jaipur ITAT) (ii) M/s Ramlal Jewellers vs ACIT ITA No. 1600/Mum/2023 (Mumbai ITAT) (iii) Shree Sanand Textiles Industries Ltd Vs The Dy.CIT (OSD), Circle-8, Ahmedabad (ITA 995/AHD/2014) dated 06/01/2020 (Ahmedabad ITAT) (iv) Abhishek PrakashchandChhajed vs ITO ITA No. 113/Ahd/2023 (Ahmedabad ITAT) (v) M/s Hirapanna Jewellers Vishakhapattnam ITA No. 253/Viz/2020 and CO No. 02/Viz/2021 (Vishakhapattnam ITAT) (vi) DCIt vs Bawa Jewellers Pvt. Ltd. ITAT No. 352/del/2021 (Delhi ITAT) It is further submitted that ld.AO has passed the re-assessment order solely on the basis of information received from DDIT (Inv.) Rohtak, which information was recorded by some other officials in some other case, behind the back of assessee without providing assessee of opportunity of cross examination of the purchasing party alleged to be a non-filer. Also, ld. AO did not provide complete information relied upon before making such a huge addition in the hands of the assessee company. Hon’ble Apex court in the case of CCE Vs. Andaman Timber Industries, (324) ELT 641 has held as under: “6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 11 Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above.” CIT vs Odeon Builders (P.) Ltd [2019] 110 taxmann.com 64 (SC) Hon’ble Supreme Court held that if the addition was based on third party information gathered by Investigation wing then addition cannot be made unless such information is provided to the assessee and opportunity of cross examination is provided more so when assessee placed on record all the evidences. The relevant findings are as under: Headnote: Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Bogus purchase) - Certain portion of purchases made by assessee was disallowed - Commissioner (Appeals) found that entire disallowance was based on third party information gathered by Investigation Wing of Department, which had not been independently subjected to further verification by Assessing Officer and he had not provided copy of such statements to appellant, thus, denying opportunity of cross examination to appellant, who on other hand, had prima facie discharged initial burden of substantiating purchases through various documentation including purchase bills, transportation bills, confirmed copy of accounts and fact of payment through cheques, VAT Registration of sellers and their Income-tax Return - He held that purchases made by appellant was acceptable and disallowance was to be deleted - Tribunal dismissed revenue's appeal - High Court affirmed judgments of Commissioner (Appeals) and Tribunal being concurrent factual Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 12 findings - Whether no substantial question of law arose from impugned order of Tribunal - Held, yes [Para 4] [In favour of assessee] (403 ITR 183)SunitaDhadda, order dt 28.03.2018 SLP (SC) The ratio laid down by Hon’ble Rajasthan High Court and also Hon’ble ITAT, Jaipur Bench as below was upheld: “Their Lordships ADARSH KUMAR GOEL and ROHINTON FALL NARIMAN Ji.- dismissed the Department's special leave petition against judgment dated July 31, 2017, of the Jaipur Bench of the Rajasthan High Court in DB ITA No. 197 of 2012 whereby the High Court held that the Tribunal was justified in deleting the addition of Rs. 4,07,00,000 of \"on money\" said to have been received with respect to subject land of the assessee holding that the question what was the price of the land at the relevant time, was a pure question of fact and that unless it was established on record by the Department, that as a matter of fact, the consideration did pass to the seller from the purchaser, the Department had no right to make any additions, especially since none of the witnesses were examined before the Assessing Officer, and the assessee did not have any opportunity to cross-examine them” [Emphasis Supplied] Hon’ble Jaipur Bench of Tribunal in the case of Sh. Pramod Jain vs. DCIT in has relied upon the view taken by Hon’ble Apex Court in Andaman Timbers and held that the statements of witness cannot be made sole basis of making assessment without giving an opportunity of cross examination and consequently it is a serious flaw which renders the order a nullity. Hon’ble Ahmedabad bench of ITAT also in the case of Smt. Sunita Jain vs ITO quashed the assessment order by placing reliance on Apex Court judgment in the case of Andaman Timber (cited supra) as entire assessment was based upon the statements of Sh. MukeshChoksi, which were neither supplied to assessee nor was opportunity of cross examination was provided. In view of above, it is submitted that addition made by ld. AO without providing opportunity of cross examination is against the principle of natural justice and order so passed deserves to be quashed and addition so made be deleted. Ld. AO has further alleged that notice u/s 133(6) was issued on 26.4.2023 to Sh. Suresh Kumar Prop. M/s Mamta Trading Co., which was to be complied with on or before 29.4.2023. However, as the response was not received from the said party, ld. AO took the adverse view and concluded that sum of Rs. 8,34,73,192/- received by assessee from M/s Mamta Trading Co. is unexplained. In this regard, it is submitted that first of all, notice u/s 133(6) was issued at the feg-end of the re-assessment proceedings and further a time of merely 3 days was allowed to the said other party to furnish documents related to transactions which took place around 10 years back. Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 13 Hon’ble Delhi bench of ITAT in the case of Phool Singh Vs. ACIT (ITAT Delhi) in ITA No. 2901/Del/2014, has held that: “Merely because 133(6) notices issued to the party returned un-served though it was the same address, which was supplied by supplier while filing its income tax return, no fault can be put on the shoulder of assessee.” Hon’ble Delhi bench of ITAT in the case of M/s Kesha Appliances Pvt. Ltd. vs ITO in ITA No. 2715/Del/2016 has held as under: “It is undisputed facts that the distinctive nos. for the sale of shares in respect of three companies were not provided by the assessee but the same cannot be basis for treating the same as unexplained cash credit under section 68 of the Act after disregarding the other evidences submitted by the assessee during the course of proceedings before the AO & ld. CIT-A. We also observe that the assessee has furnished all the necessary details of the aforesaid six companies along with PAN but none of the lower authorities have confirmed the same from the AO having jurisdiction over the six aforesaid companies. Thus the assessee cannot be penalized merely on the ground that the six companies as discussed above failed to reply to the notices issued to them under section 133(6) of the Act. The assessee has duly explained the source of money received on the sale of shares/ investment and the assessee is not answerable for the source of money in the hands of aforesaid six companies. It is undisputed fact that the necessary details as the confirmation and contract notes were duly filed by the assessee in respect of the aforesaid parties and no defect of whatsoever was pointed out by the lower authorities. After considering the facts and totality of the case as discussed above, we are inclined to reverse the order of authorities below hence the ground of appeal of assessee is allowed.” Hon’ble Calcutta Bench of ITAT reported in 56 ITD 561 in the case of Sagar Bose Vs. ITO would throw light on settled legal proposition. Head notes reads as under: Section 143(3) of the Income Tax Act, 1961 – Assessment – Additions to – Assessment year 1990-91 – During assessment proceedings Assessing Officer conducted certain enquiries through Inspector about purchases of goods from different concerns and it was found by him that seven parties were non- existent and not traceable at addresses given by assessee – In four cases summons sent by Assessing Officer were returned by postal authorities with remarks ‘not known’ – Assessee’s suggestion to issue summons to parties under section 131 for production of account books was rejected by AO – Assessee explained that purchases were backed by account payee cheques and sales tax registration numbers were printed on their bills, that all purchased material was consumed and thereafter respective sales had been made and that Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 14 he had produced all documentary evidence about sales and consumption of those purchases – Assessing Officer rejected all explanations and treated those purchases as bogus and also opined that these could represent concealed stock or inflated expenses and made addition – Commissioner (Appeals) confirmed addition – Whether since AO neither made any enquiry from bank authorities to find out final destination of money nor enquired from sales tax department about persons to whom relevant sales tax registration number was allotted, and also did not find any defect and irregularity in statements, books of account and bills, etc., produced by assessee he was unjustified in treating purchase as bogus and making addition – Held, yes – Whether, therefore, order of Commissioner (Appeals) confirming addition was to be quashed and addition was to be deleted – Held, yes. With regards to allegation of ld. AO that assessee was informed about notice issued to Mamta Trading Co, u/s 133(6) and that assessee was responsible to communicate with the party and ensure compliance, it is submitted that: firstly, assessee was intimated about this only vide show cause notice dated 02.05.2023, i.e. merely 20 days prior to completion of assessment and secondly, assessee entered into transactions of sale with that party 10 years back and in such long span of time, changes in the address/ contact no. cannot be ruled out. As regards observation of ld. AO of huge sale to this party is concerned, it is submitted that total revenue from operations (sales) excluding other income of assessee during the year under consideration is Rs. 189.84 Crore and the sale to M/s Mamta Trading Co. is just about 4.39% only and not the majority of sales as has been alleged by the ld. AO. In view of above, it is submitted that adverse view taken for the reason that notice u/s 133(6) could not be complied with by the party that too after long span of 9-10 years, is not in accordance with law and deserves to be deleted. It is further submitted that Ld. CIT(A) after duly considering the submission made and evidence adduced by the assessee company deleted the addition by acknowledging that receipts from M/s Mamta Trading Co. in the bank account of the assessee company represent the Sale which is duly recorded in the books of accounts and profits on such sales is duly offered for taxation. It is further submitted that ld. DR before the Hon’ble Bench challenged the action of ld. CIT(A) in deleting the addition without waiting for the remand report. In this regard, it is submitted that ld. CIT(A) has provided ample of opportunity to ld. AO furnished the remand report and same is also evident from the para 5.1 of the ld. CIT(A) order which is reproduced as under for ready reference— “5.1 In this case remand report was sought from the AO through ITBA portal on 27.05.2024. Thereafter, 6 reminders were issued to the AO on 04.07.2024, 02.08.2024, 22.08.2024, 19.11.2024, 20.12.2024 and 17.01.2025. However, inspite of several reminders, the AO did not submit the remand report. This being a priority case, it was decided to Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 15 dispose off the appeal without remand report on the basis of the submissions made by the appellant.” At this juncture, it is also relevant to state that assessee company during the course of appellate proceedings has not filed any additional evidence u/r 46A of Income Tax Rules, 1962. All the evidences that assessee has filed were submitted before ld. AAO during the course of assessment proceedings. It is further submitted that ld. AO sought comment from assessee company many times during the course of remand proceedings, to which assessee duly filed the replies along with the submission and paper booked filed before the ld. CIT(A) and same is tabulated below for ready reference: Date of notice issued by ld. AO in remand proceedings Date of Reply filed by assessee company APB 27.06.2024 08.07.2024 466 – 469 05.11.2024 06.11.2024 & 15.11.2024 470 – 477 Thus looking into facts of the case it is evident that it is not the case where ld. CIT(A) passed the order without waiting for the remand report as alleged by the ld. DR in the grounds of appeal. Instead, despite being having all the information, ld. AO choses to not to provide the remand report to ld. CIT(A), even though ample of time was provided by ld. CIT(A). Thus ld. CIT(A) rightly passed the order after providing nearly 8 months to ld. AO to provide the remand report and therefore consequential deletion of addition made by ld. AO by ld. CIT(A) after considering the facts and circumstances of the case of assessee company deserves to be upheld. In view of the facts and circumstances of the case, it is reiterated that the assessee company has genuinely carried out the transaction of sales of goods with M/s Mamta Trading Co. and also submitted all the plausible evidences in support of the same and merely for the reason that the buyer of the goods has not filed his return of income cannot be a basis to treat the genuine transaction of sales as unexplained. Also, ld. CIT(A) after going through all the evidences adduced before it held that there is no room for suspecting the genuine trading transaction carried out by assessee, merely on the basis of some information received from some other investigating authority, without bringing on record any supporting material for alleging that assessee has escaped the income to this extent and moreover deleted the addition of Rs. 8,34,73,192/- made by ld. AO on account of credits received in bank account by considering it as receipts out of sales made by assessee company.” 8. To support the contentions so raised by the ld. AR in the written submission, reliance was placed on the following evidences / records:- Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 16 S.No PARTICULARS PAGE NO. 1. Copy of Acknowledgement of Return of Income filed u/s 139(1) on 26.09.2013. 1 2. Copy of audited financial statements for the period ending 31.03.2013. 2-18 3. Copy of show cause notice issued u/s 148A (b) of The Income Tax Act, 1961 dated 29.05.2022. 19-20 4. Copy of reply dated 14.06.2022 filed in response to above show cause notice u/s 148A (b). 21-32 5. Copy of order issued u/s 148A (d) of The Income Tax Act, 1961 dated 29.07.2022. 33-43 6. Copy of notice issued u/s 148 of The Income Tax Act, 1961 dated 29.07.2022. 44-45 7. Copy of Acknowledgement of Return of Income filed u/s 148 on 11.11.2022. 46 8. Copy of reply dated 06.02.2023 filed during assessment proceedings alongwith: 47-57 a. Copy of Assessment order passed u/s 143(3) dated 30.01.2016 for A.Y.2013-14 58-59 b. Copy of Bank Statements highlighting transactions with Mamta Trading Company 60- 103 c. Copy of Form of Declaration (Form-C). 104- 111 d. Copy of Ledger account of Mamta Trading Co. for AY 2013-14. 112- 131 e. Copy of Sales Ledger. 132- 210 f. Copy of Stock Register. 211- 281 g. Copy of Form VAT-49 282- 408 9. Copy of reply dated 06.05.2023 filed during the course of assessment proceedings. 409-419 a. Copy of Ledger account of Mamta Trading Co. for AY 2014-15. 420- 422 b. Copy of Notice dated 01.12.2015 issued u/s 142(1) of the Act during the course of assessment proceedings u/s 143(3) 423- 424 c. Copy of reply dated 02.12.2015 filed during the course of assessment proceedings, whereby stock statements was submitted by assesse and justification on trading results was also submitted 425- 427 d. Copy of reply dated 30.12.2015 filed during the course of assessment proceedings, whereby: -stock detail of raw material as well as finished goods and - Details of top 10 parties to whom sales was made by assesse was furnished. 428- 430 9. Copy of Written Submission dated 24.02.2024 filed before ld. CIT(A), NFAC 431-435 10. Copy of Written Submission dated 07.03.2024 filed before Ld. CIT, NFAC 436-465 11. Copy of reply filed before ld. AO in remand report proceedings on 08.07.2024, 06.11.2024 & 15.11.2024 466-477 Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 17 S.No PARTICULARS PAGE NO. 12 Copy of Invoices to M/s Mamta Trading Co. [some invoices being attached being voluminous, however complete invoices are submitted before ld. AO & ld. CIT(A)] 478-505 9. We have heard the rival contentions and perused the material placed on record. Before discussing the merits of the addition, it will be appropriate to discuss the argument of ld. DR and also the issue taken in the grounds of appeal of the revenue that ld. CIT(A) has passed the order without waiting for the remand report from the ld. AO / JAO. On perusal of order of ld. CIT(A) mainly para 5.1 it is seen that ld. CIT(A) has provided many opportunity to the ld. AO to furnish the remand report but it is evident that same could not be furnished by the ld. AO for the reasons best known to him. For the sake of clarity, para 5.1 of the order of ld. CIT(A) is reproduced below: “5.1 In this case remand report was sought from the AO through ITBA portal on 27.05.2024. Thereafter, 6 reminders were issued to the AO on 04.07.2024, 02.08.2024, 22.08.2024, 19.11.2024, 20.12.2024 and 17.01.2025. However, inspite of several reminders, the AO did not submit the remand report. This being a priority case, it was decided to dispose off the appeal without remand report on the basis of the submissions made by the appellant.” Apart from above, ld. AR has further argued that no any additional evidence u/r 46A of I.T. Rules, 1962 were filed by the assessee company before the ld. CIT(A). Thus we see that it is not a case where the ld. CIT(A) has accepted some additional evidences of assessee company and Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 18 relied upon them for giving his decision without waiting for the comments from the ld. AO. It has also been submitted by ld. AR that ld. AO sought details and comments from the assessee company few times during the course of remand proceedings and assessee company duly filed replies alongwith the submission and paper book filed before ld. CIT(A). The ld. AR has specifically mentioned that in response to notice for remand proceedings dated 27.06.2024 by the AO, reply was filed on 08.07.2024[APB 466- 467] and similarly for notice dated 05.11.2024, replies were filed vide dated 06.11.2024 [APB 470-473]and 15.11.2024 before the AO. Accordingly, as per the ld. AR, despite having information, ld. AO chose not to furnish his remand report to the ld. CIT(A), even though sufficient time was allowed to him by ld. CIT(A). We have perused the relevant details and considering the overall facts and more particularly the fact that ld. CIT(A) has not admitted any additional evidence of the assessee and consequently has not taken support from any additional evidence of assessee, and also considering that sufficient time and opportunity was allowed by ld. CIT(A) to the ld. AO for furnishing remand report, we do not find any merit in the argument and ground to this effect taken by the revenue is rejected. Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 19 10. Now coming to the merits of the addition, it is seen that assessee company has received an amount of Rs. 8,34,73,192/- through banking channel from M/s Mamta Trading Company during the year as sale proceeds of Iron / TMT Bar sold to him and same has been included in the turnover and consequently in the Profit & Loss Account by the assessee company. It is seen that ld. AO has received information from DDIT (Inv.), Rohtak that said party has not filed income tax return. Accordingly, ld. AO observed that the amount received from said party M/s Mamta Trading Company by the assessee company is unexplained as the same is on account of bogus sale and therefore, same was added. The ld. AR of the assessee has furnished various evidences and details in support of its claim of sale made to the said party and payment being received by way of banking channels against the sale proceeds which are as under:- i. Return filed by Assessee Company with copy of Audited Balance Sheet and P&L Account [APB 01-18]. ii. Ledger Account of M/s Mamta Trading Company in the books of accounts of the Assessee Company[APB 112-131]. iii. Relevant extracts of ledger account of sales in the books of accounts of the assessee company wherein the sales made to M/s Mamta Trading Co. is included in the total sales [APB 132-210]. iv. Copies of “C” Form issued by Haryana Sales Tax Department to M/s Mamta Trading Co. which in turn were issued by M/s Mamta Trading Co. to the assessee company[APB 104-111]. Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 20 v. Day to day stock register maintained by the assessee company wherein the outward entry of the goods sold to M/s Mamta Trading Co. is mentioned [APB 211-281]. vi. Copy of the VAT 49 (e-way bill under old VAT Act) issued by Rajasthan Sales Tax Department containing complete details of the recipient of the goods i.e. Mamta Trading Co., details of invoice raised of the goods under transportation, details of transportation vehicle including vehicle number etc. [APB 282-408] vii. Copies of the relevant extract of the RG-1 Register (stock register) maintained under the erstwhile Central Excise Act wherein the outward movement of the goods were recorded and duly verified by the authorities from time to time. 11. It has been submitted that assessee company has sold goods to M/s Mamta Trading Company in the regular course of business and amount received is against the sale proceeds. The amount has been credited in the regular books of accounts and is forming part of profit & loss account. The sales so made is found recorded in the stock register of the assessee company. It is seen that there have been sufficient stock with the assessee company before effecting impugned sale to the aforesaid party. The sale so made is backed by Excise invoice and also e-way bill under old VAT Act. It was further submitted that copy of ‘C’ form issued by Haryana Sales Tax Department to M/s Mamta Trading Company which was in turn issued by this party to the assessee company in support of claim of lower payment of CST since the transaction was inter-state transaction, was also submitted by the assessee company, after receiving the same from the said party, in original to Rajasthan State Commercial Tax Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 21 Department and this department after verification of genuineness of such form has assessed the assessee company on such sale at concessional rate of tax. Thus it was submitted by the ld. AR that such sale has been considered to be correctly made by Commercial Tax Department of two different states namely Haryana and Rajasthan and they did not find any infirmity in the sale made to the said party. It was also brought to our notice that C form can be issued only by trader or manufacturer who purchase the goods in furtherance of the business and cannot be issued by direct consumer of the goods. Accordingly the said party would most likely be trader or may be manufacturer. It was further submitted that form VAT-49 which was mandatory to be carried with the vehicle contained complete details of recipient of the goods, details of invoice raised and details of vehicle number etc., which stood submitted by the buyer to the respective government VAT authorities. 12. It was further argued that these plethora of evidences cannot be brushed aside without rebutting them or without bringing any contrary evidence on record and merely making addition of such huge amount only because that party has not filed any return of income is not justified. If by any chance that party has failed to file his income tax return and Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 22 avoided paid due income tax, then appropriate action needs to be taken in his case instead of penalizing the assessee by making huge addition. 13. As regards observation of AO that huge sale has been made to the said party, it has been submitted that total revenue from operations (sales) of the assessee excluding other income, during the year under consideration is Rs. 189.84 crores and sale to M/s Mamta Trading Company is just about 4.39% and thus in overall scenario it cannot be said to be the huge sale to the said party. 14. We have noticed that the ld. AO has doubted the transaction of receipt of amount by the assessee company being the sale proceeds from the said party, only on the main basis that the said party has not filed the return and also that the said party has not replied to the notice u/s 133(6) of I.T. Act. As regards sale made by the assessee to the concerned party is concerned, we have seen that assessee has filed various evidences in support of sale made to the said party which includes C forms issued to the said party by Haryana Sales Tax Department and given by the said party to assessee company and thereafter submitted by assessee company before the Rajasthan Commercial Tax Department in support of claim of lower payment of CST. Thus it is evident that two government authorities of two different states have found the transaction of sale to the party M/s Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 23 Mamta Trading Company as not having any irregularity. The ld. AO / Revenue has not been able to rebut these various evidences. Moreover, ld. AO has not brought any contrary evidence on record so as to disprove the sale shown by the assessee company to this party. 15. Moreover, this sale so made to the M/s Mamta Trading Company is properly reflected in the books of accounts of the assessee company. Same is duly reflected in the stock by way of outward entry. The company had sufficient stock before effecting the impugned sale. The transportation details etc. were also finding place in the copy of VAT 49 form furnished by the assessee company before the AO and also to us. These sales have been included in the total turnover and has thus formed part of profit & loss account. 16. Thus going by the financial statements and audited account details furnished by the assessee company and also various other evidences as mentioned in earlier paras, we see no reason to support the findings of the ld. AO of these sales being bogus, more particularly when aforesaid various evidences filed by assessee company in support of the sale has not been controverted by ld. AO and moreover there is no contrary evidence brought on record by the ld. AO. Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 24 17. Since sales so made by the assessee company to the said party is found to be genuine, the sale proceeds has to be received by the assessee company from the said party. The said party has sent the amount through banking channels, which is not in dispute. Now the only point remains that said party has not filed his income tax return. But this issue cannot be considered to be fatal in the case of assessee company wherein the assessee company has made commercial transaction of sale to him. The Hon’ble Courts have held that when sales have been established to be made by a concern, then amount received by way of such trading transaction cannot be added u/s 68, as contra-distinct from loan transaction which would naturally be added u/s 68 if found unexplained. 18. Delhi Bench of ITAT in the case of DCIT vs Subhash Gupta in ITA No.1548/Del/2022has held that sales cannot be added u/s 68 unless they are proved as bogus on the basis of some reliable evidences. Further Hyderabad bench of ITAT in the case of NECX (P) Ltd. vs ITO vs [2022] 145 taxmann.com 232 (Hyderabad - Trib.) has held that:Section 68 of the Income-tax Act, 1961 - Cash credit (Bank deposits) - Assessment year 2013- 14 - During year, assessee had made cash deposits of certain amount in his bank account - Assessing Officer made additions on account of same on ground that source of same was not explained by Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 25 assessee - It was noted that assessee furnished number of sales invoices to show from where said cash in question was received - Further, turnover of assessee was also not disputed by Assessing Officer - Whether since all these invoices were part of total sales, Commissioner (Appeals) was not justified in sustaining additions made by Assessing officer and thus, addition was to be deleted - Held, yes [Para 13] [In favour of assessee]. Amritsar bench of ITAT in the case of Rajkumar vs ITO ITA No.195/Asr/2022 has observed that:- “12.1 We also considered that the amount deposited in the bank account was out of sale of various items which had been held by the assessee as stock in trade and since the deposits in the bank account were out of sale of stock therefore the stock of the assessee has depleted and the cash has come in respect of stock, such sales had been disclosed in the trading account against the purchase which had not been doubted, neither the opening and closing stock had been doubted. Therefore, nothing could have been doubted when the source of cash was well explained and was shown in the bank account. However the addition was made only on the basis of surmises without establishing any motive on the part of the assessee and without disturbing the closing stock as on 31/03/2017 which had been arrived at after reducing the sale in quantity of stock in trade.” 19. Also in the case of Principal Commissioner of Income tax v. Tripati Proteins (P.) Ltd. reported in [2024] 165 taxmann.com 175 (Gujarat), following law point were inter-alia referred before the Hon’ble Gujarat High Court:- “Where amount in question was directly received by assessee in its bank account against sale and it was credited in sales account offering as income, said amount could not be treated as unexplained cash credit. Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 26 Where Assessing Officer made addition of certain amount to assessee's income on account of cash credit and Tribunal deleted addition holding that said amount actually represented sale proceeds realized by assessee, no question of law arose from order of Tribunal. The Hon’ble Court observation are as under: Section 68, read with section 260A, of the Income-tax Act, 1961 - Cash credit (Question of law) - Assessment year 2011-12 - Assessing Officer made addition of certain amount to income of assessee on account of unexplained credit under section 68 - Tribunal deleted addition by arriving at a finding of fact that amount in question was received by assessee in its bank account against sale made by it and it was credited in sales account offering as income - Whether no question of law arose from order of Tribunal - Held, yes [Paras 10, 12and 15] [In favour of assessee] Section 68, read with section 260A, of the Income-tax Act, 1961 - Cash credit (Question of law) - Assessment year 2011-12 - Assessing Officer made addition of certain amount to income of assessee on account of cash credit - Tribunal deleted addition holding that said amount actually represented sale proceeds realised by assessee - Whether no question of law arose from order of Tribunal - Held, yes [Para 18] [In favour of assessee]” 20. Also in the case of Principal Commissioner of Income-taxv. N.K. Industries Ltd. reported in [2025] 176 taxmann.com 131 (SC), Hon’ble Supreme Court has dismissed the SLP filed by the department against the order of Hon’ble Gujarat High Court inter-alia on the issue of invocation of section 68 in relation to sale proceeds received by assessee as credit entries which was not upheld by the Hon’ble Court. 21. As regards, not responding to the notice issued by AO u/s 133(6), the ld. AR has pointed out that notice was issued on 26.04.2023 to Shri Suresh Kumar Proprietor M/s Mamta Trading Company and same was to be complied on or before 29.04.2023. Thus, there was very short time of Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 27 three days for compliance by the said party. As regards intimation by the AO to the assessee company of party not complying with the notice u/s 133(6), it is rightly submitted by the ld. AR of the assessee that since the information related to the transaction that took place around 10 years back, not responding to the notice of AO by the said party should not adversely effect the assesse so harshly so as to add the entire sale proceed without making further specific enquiries, may be from DDIT (Inv.) Rohtak. Moreover, various courts have held that same cannot be made a basis for making addition. We have seen that Hon’bleDelhi bench of ITAT in the case of Phool Singh Vs. ACIT (ITAT Delhi) in ITA No. 2901/Del/2014, has held that “Merely because 133(6) notices issued to the party returned un-served though it was the same address, which was supplied by supplier while filing its income tax return, no fault can be put on the shoulder of assessee.” Further Delhi bench of ITAT in the case of M/s Kesha Appliances Pvt. Ltd. vs ITO in ITA No. 2715/Del/2016 has held as under: “It is undisputed facts that the distinctive nos. for the sale of shares in respect of three companies were not provided by the assessee but the same cannot be basis for treating the same as unexplained cash credit under section 68 of the Act after disregarding the other evidences submitted by the assessee during the course of proceedings before the AO & ld. CIT-A. We also observe that the assessee has furnished all the necessary details of the aforesaid six companies along with PAN but none of the lower authorities have confirmed the same from the AO having jurisdiction over the six aforesaid companies. Thus the assessee cannot be penalized merely on the Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 28 ground that the six companies as discussed above failed to reply to the notices issued to them under section 133(6) of the Act. The assessee has duly explained the source of money received on the sale of shares/ investment and the assessee is not answerable for the source of money in the hands of aforesaid six companies. It is undisputed fact that the necessary details as the confirmation and contract notes were duly filed by the assessee in respect of the aforesaid parties and no defect of whatsoever was pointed out by the lower authorities. After considering the facts and totality of the case as discussed above, we are inclined to reverse the order of authorities below hence the ground of appeal of assessee is allowed.” 22. In the instant case, it is not the case of revenue that the said party is untraceable. In fact, the DDIT (Inv.) Rohtak did make some enquiries from the said party and only then he would have received the details of bank account etc. which was later on passed to ld. AO of assessee company. 23. It was also rightly submitted by ld. AR that once amount received from the said party has been included in the turnover and has thus formed part of the Profit & Loss Account and consequently the income, then adding the entire sale proceeds tantamount to double addition and on this reason also, the action of AO is not justified. 24. We have gone through the records, we see no reason to accept the finding of AO of this transaction of sale being bogus and accordingly sale proceeds cannot be considered as bogus and added to the income of the assessee company. Therefore we do not find any infirmity in the finding so recorded by the ld. CIT(A) on this issue while deleting the addition of Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 29 Rs. 8,34,73,192/-. Based on that set of facts and discussed above grounds No. 1 to 5 taken by the revenue are dismissed. 25. Ld.AR of the assessee raised legal ground in terms of rule 27 of Income Tax (Appellate Tribunal) Rules, 1963 with a request to adjudicate the same. It was submitted that these grounds (as reproduced earlier in the present order) are purely legal in nature, accordingly these may be allowed to be raised as per rule 27 of Income Tax (Appellate Tribunal) Rules, 1963.Rule 27 of the aforesaid rules is reproduced as under: Rule 27: Respondent may support order on grounds decided against him. The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him. 26. We have perused the ground so taken by the ld. AR. On going through them, it is seen that these are purely legal grounds. Accordingly, considering rule 27 of Income Tax (Appellate Tribunal) Rules, 1963, these grounds taken by the ld. AR are allowed to be admitted. 27. The ld. AR has furnished detailed written submission in respect of these grounds which is reproduced below:- “Ground of Appeal No. 1 to 1.2: In these grounds of appeal, assessee has challenged the action of ld.AO in reopening of assessment primarily on two grounds, i.e.: (i) Mamta Trading Co. from whom assessee has received money as against sales made, has not filed Return of Income and; Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 30 (ii) Reopening solely on the basis of information received from some other officials without recording his own subjective satisfaction and thus same is based on borrowed satisfaction. In this regard, at the outset, information as shared by ld.AO vide notice u/s 148A(b) and on the basis of which case was reopened is reproduced hereunder for ready reference (APB 19-20): “1. In your case, information was received from the DDIT(Inv.), Rohtak through Insight. As per specific information available with the department, during the year under consideration you have received an amount of Rs.8,34,73,192/- from the account of M/s Mamta Trading Company, Prop. Shri Suresh Kumar (PAN: CLSPK9222P) having Account No. 1025CBCA01000339 with Corporation Bank. Shri Suresh Kumar (PAN: CLSPK9222P) has not filed his return of income for the A.Y. 2013-14. Thus, the huge credit in your account from an account of a non-filer is without any business rationale & source of these credits in account of the assessee remains unexplained. You have filed return of income for A.Y. 2013-14 on 26.09.2013 declaring total loss of Rs.5,60,705/-. 2. On going through return of income filed by you for AY 2013-14, it is noticed that income from above transaction is not included in your ITR. Therefore, it is established that same is not offered for tax and due tax has not been paid. 3. As stated in preceding paras, the income of Rs.8,34,73,192/- chargeable to tax in your case has escaped the assessment within the meaning of provision of section 147 of the IT Act, 1961 for the assessment year 2013-14.” From perusal of above, it is evident that ld.AO has reopened the assessment already completed u/s 143(3), solely on the basis of information received from Investigation Wing and on further observation that purchasing party, from whom assessee has received payment, has not filed Return of Income. It is further observed that the said income is not reflected in the income tax return filed by the assessee. In this regard, it is submitted that the sales declared by the assessee in its financial statements was duly accepted during original assessment proceedings completed u/s 143(3) after examination of books of accounts and bills and vouchers produced for verification during the assessment proceedings so conducted by the then Ld. AO. Further VAT returns were also filed where such sales were forming part of total sales and had also been accepted by the Sales Tax authorities. Apart from this, the balances of the various parties as on Balance Sheet date, be it debtors or creditors were also accepted by the then Assessing Officer. Therefore re- opening of the case of the assessee company merely for the reason that one of the buyer had not filed his return of income is not justified in the case of the assessee. Moreover it tantamounts the reconsideration of fact already accepted by ld.AO in the grab of the provisions of section 148, which is not permitted in Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 31 the law. In fact, if the department had any doubt about the creditworthiness of the payer of sale proceeds, then the necessary action should have been taken in case of non-filer of return instead of assessee company in whose case the assessment proceedings were already completed and the order u/s 143(3) was passed after thorough verification of information submitted by the assessee. It is also a matter of fact that credits in the bank account are through banking channels and on account of sale consideration and it is not the cash credits i.e. loan taken by assessee company, which require creditworthiness of the lender party to be proved by assessee company. The transactions of sales of goods were carried out in the normal course of business for which all the plausible and necessary evidences to establish the sale transactions as genuine, were submitted by the assessee. In view of this, it is submitted that there is no escapement of income in the hands of assessee company. As stated above, all the facts related to the amount received in the bank account alleged as unexplained were duly disclosed in the Return of Income as part of the sales consideration and were verified by Assessing Officer during assessment proceedings u/s 143(3). At this juncture, it is submitted that during the course of hearing, during original assessment proceedings, details regarding Sales made to top 10 parties were sought. In response to such notice, assessee, furnished details vide letter dated 30.12.2015 (APB 428-430) which inter alia included details of sales made to M/s Mamta Trading Co. These details were verified and nothing adverse was commented by ld. AO in his order u/s 143(3). Your goodself would appreciate that in these circumstances, reopening of assessment by doubting the consideration received against the sales made by the assessee company to M/s Mamta Trading Co. is nothing more than mere Change of Opinion. Even under the new reassessment provisions, the Assessing Officer has the power to reassess only when the income chargeable to tax has ‘escaped assessment’. When the Assessing Officer after considering the details furnished by assessee and after due application of mind, forms a view in relation to a fact and completes assessment, the resultant income is “Assessed income” and it cannot be said that still some income has ‘escaped assessment’ on the basis of same facts. If subsequently, assessing officer reopens the assessment, it is simply Review of already completed assessment. Further, the concept of “Change of Opinion” is a check against the abuse of power by the Assessing Officer and it has never been the intention of the Legislature to permit the Assessing Officer to reopen an assessment on the basis of change of opinion. The Scheme of Income-tax Act, 1961 has not expressly conferred upon the Ld. Assessing Officer a power of review. It can only rectify apparent mistakes by way or rectification under section 154 of the Act. In the present case also, assessment was completed u/s 143(3), where sales made to Mamta Trading Co. (alleged as now doubtful in reopening Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 32 proceedings) has been accepted meaning thereby the corresponding payments of such sale was also accepted. Also, as the claim of the assessee, that the amount credited in the bank account as received from M/s Mamta Trading Co. is on account of Sales was already intimated to the department during the assessment proceedings carried out in the year 2016, the re-assessment proceedings is merely on account of Change of Opinion. It is a settled position in law that no authority has the power to review its own order. Therefore, the concept of “Change of Opinion” continues to hold good in the new reassessment regime as well. Therefore, where, the initial assessment was done under section 143(3) of the Act, and a question on the said “information” was put to the Assessee, the Assessee responded to the same, irrespective of the fact that the observations of the Ld. Assessing Officer pertaining to the issue is contained in the Order under section 143(3) of the Act or not; Reassessment on the same issue would amount to “change of opinion” i.e., a review of its own order, which is not permissible. It is settled law that merely on suspicion, completed proceedings cannot be disturbed. Hon’ble Bombay High Court in the case of Siemens Financial Services (P.) Ltd. v. Dy. CIT [2023] 154 taxmann.com 159 (Bombay) has decided this issue. Gist of the decision reproduced Section 37(1), read with sections 147 and 148, of the Income-tax Act, 1961 – Business expenditure - Allowability of (Reassessment) - Assessment year 2016-17 - Assessee-NBFC claimed expenditure on software consumables - During scrutiny, assessee submitted transaction wise summary on expenditure on software consumables and Assessing Officer after considering said submission passed assessment order without making any adjustments - Thereafter, Assessing Officer issued reopening notice on ground that expenses on software consumables were capital expenditure which would not be allowable under section 37(1) - Whether since expenses on account of software consumables were debited in profit and loss account and a detailed break-up of said expenses were submitted before Assessing Officer during course of assessment proceedings, Assessing Officer would not have any power to review his own assessment when during original assessment assessee provided all relevant information which was considered by him before passing assessment order - Held, yes - Whether thus, reopening of assessment was a mere change of opinion and thus invalid - Held, yes [Paras 37 and 41] [In favour of assessee] Hon’ble Madras High Court in the case of Dr. Mathew Cherian v. Assistant Commissioner of Income-tax [2023] 151 taxmann.com 154 (Madras) has inter alia observed that “Whether under the old or new regimes of reassessment, it is a settled position that issues decided categorically by judicial precedent should not be revisited in the guise of reassessment”. Hon’bleGujarat High Court in case of Gujarat Power Corpn. Ltd. v. Asstt. CIT (2013) 350 ITR 266 (Guj), held that once the assessing officer examines certain claim during the assessment proceedings in the order of assessment, Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 33 but gives no reasons for not disturbing the claim of the assessee, would not permit the assessing officer to reopen the assessment on such ground. Also the Hon’ble Bombay High Court in the case of State Bank of India Vs. ACIT dated 15.06.2018 followed the decision of the Hon’ble Apex Court in the case of ITO V/s. Techspan India Private Limited and Another, reported in [2018] 404 ITR 10(SC) and observed that, “The computation of income is the basic document for making the s. 143(3) assessment. If there is a disclosure in the computation, it leads to the prima facie necessary inference that there is application of mind by the AO. The fact that the AO did not raise specific queries & is silent in the assessment order does not mean there is no application of mind” Reliance is also placed on the following:  CIT V/s. Kelvinator of India Ltd. [2010] 320 ITR 561(SC) Reassessment – Reason to believe – Change of opinion – After 1st April, 1989, power to reopen is much wider – However, mere “change of opinion” cannot per se be reason to reopen – AO has power to reassess but no power to review – If the concept of “change of opinion” is removed, as contended on behalf of the Department review would take place in the grab of reopening of assessment – Concept of “change of opinion” is an in-built test to check abuse of power by the AO – Hence, after 1st April, 1989 AO has power to reopen the assessment under section 147 provided there is tangible material to come to the conclusion that there is escapement of income from assessment reasons must have a live link with the formation of the belief.  Golden Tobacco ltd. vs DCIT,ITAT Mumbai, held that,“the case of the assessee is that there was no fresh tangible material in the possession of AO at the time of recording of impugned reasons. A perusal of the ‘Reasons’ recorded by the AO in this case reveals that at the time of recording of these ‘Reasons’ the AO had examined original assessment records only and no fresh material had come in the possession of the AO. In response to our specific query also, Ld DR could not point out any fresh material available with the AO at the time of reopening of the case of the assessee. Thus, assertion of the assessee that there was no fresh material with AO for reopening of this case, remained uncontroverted.” It is also submitted that “information” available with AO must suggest that income chargeable to tax has escaped assessment, whereas in the instant case information is that assessee has received credit in bank account from account of a non filer, which in itself does not suggest any escapement. Moreover, in response to notice issued by ld.AO u/s 148A(b), assessee furnished all the Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 34 necessary evidences in support of genuineness of the transaction is respect of which information was available, however ld.AO without rebutting any single document and without bringing any other contrary material on record, simply proceeded on the basis of information as that person being non filer, which is definitely not the intention of legislature. Remarks of ld.AO as per order passed u/s 148A(d) dated 29.07.2022 itself show that ld.AO has proceeded solely on the basis of “borrowed satisfaction as the objections filed by the assessee along with documents/ material given in support of the objections were not considered on merits and simply rejected by stating that – “The written submissions and documentary evidence furnished by the assessee has been perused carefully. The assessee in its reply stated that the assessee has regularly made sales of goods to said party during the year under consideration. The assessee company has furnished copies of sale register, copy of 'C- form' (issued by Haryana Sales Tax Department) and ledger copy of M/s Mamta Trading Company as appearing in the books of assessee company against sale of those goods the sale consideration was received by the assessee company in its bank account. Further for movement of goods, the assessee company has furnished copy of Stock Register and copy of VAT 49 wherein all the details related to movement of goods was mentioned and same was issued by Rajasthan Sales Tax Department. The reply of the assessee considered but not found tenable as the information was received from the DDIT(Inv.), Rohtak in which mentioned that bank account of Kiran Infra Ispat Limited got credited by huge amount of Rs.8,34,73,192/- during the F.Y. 2012-13 from the account of M/s Mamta Trading Company Prop. Shri Suresh Kumar (PAN-CLSPK9222P) having bank account No.1025CBCA01000339 with Corporation bank. Shri Suresh Kumar Prop. M/s Mamta Trading Company had not filed his return of income for AY 2013-14, the huge credits in account of assessee i.e. Kiran Infra Ispat Limited from account of non-filer is without any business rational & source of these credits in account of assessee remains unexplained. From the perusal of the above observation, it is evident that Ld. AO, himself accepted that amount credited in the assessee bank account’s related to sales and that assessee has submitted that all the information related to the transaction. However, the case was only reopened solely on the basis of the information received from DDIT(Inv.), Rohtak that the said party has not filed Income Tax Return and documents produced for verification were simply brushed aside. In this regard, as submitted above, assessee has made the commercial transaction of sale of goods to M/s Mamta Trading Co. and had received the payments against such supplies which is duly recorded in the books of accounts of the assessee company who has not only complied with all the statutory requirements of getting its accounts audited and filing the income tax return within the stipulated time permitted under the law but also complied with the other relevant laws such as VAT, Central Excise, etc. where the taxes on such sales were duly collected and paid and the respective authorities have assessed the same without any doubts.  Sarthak Securities Co. Pvt. Ltd. Vs. ITO 329 ITR 110 (Delhi) Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 35 Reassessment – Notice – Condition precedent – Formation of belief that income escaped assessment – Assessing Officer treating share application money as bogus accommodation entries – Payments through banking channel and companies investing money genuine – No independent application of mind by Assessing Officer but acting under information from investigation wing – Notice to be quashed – Income Tax Act, 1961, ss. 147, 148.  ITO Vs ChampaklalMathurbhai Mehta (ITAT Mumbai) ITA No. 2253/Mum/2022  DCIT Vs R.S. Associates Commerz (ITAT Mumbai) ITA Nos. 1290 & 1349/Mum/2020 It is further submitted that Ld. CIT(A) arbitrarily dismiss this legal ground of assessee company by simply observing that information in question was received after conclusion of regular original assessment and hence, was the basis for issue of notice u/s 148A(d) of the Act. It is submitted that assessee company had made sales to M/s Mamta Trading Company and after duly considering the trading result of assessee company than ld. AO concluded the assessment proceeding u/s 143(3) of the Act. In alternate ld. CIT(A) further erred in holding the proceedings u/s 148 as valid despite the fact that proceedings u/s 148 of the suffered from various defects as under—  Hon’ble Supreme Court in the case of UOI vs. Ashish Agarwal dated 04.05.2022 has given direction to provide complete information on the basis of which reassessment was opened. However, ld. AO in the case of assessee company has failed to provide complete information on the basis of it is alleged that income has escape assessment.  Further during the course of assessment, vide show cause notice dated 02.05.2023, ld. AO proposed to made addition u/s 69A of the Act, however while concluding the assessment addition were made u/s 68 of the Act, which is bad in law.” 28. Brief facts of the case relevant to the aforesaid issue are that the scrutiny assessment u/s 143(3) was completed in the case of assessee vide order dated 30/01/2016. Afterwards notice u/s 148 dated 12/05/2021 (under the erstwhile scheme of reassessment, prevailing prior to the date when Finance Act, 2021 came into effect) was issued in the case of assessee on the basis of some information received from DDIT(Inv.), Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 36 Rohtak. Thereafter, consequent upon the decision of Hon’ble Supreme Court in the case of UOI vs. Ashish Agarwal dated 04/05/2022, proceedings initiated vide notice dated 12/05/2021 were dropped and fresh notice was issued u/s 148A(b) on 29/05/2022 in accordance with new law on re-opening as applicable w.e.f. 01/04/2021. As per notice issued u/s 148A(b), case was reopened for the sole reason that assessee had received amount of Rs.8,34,73,192/- from the bank account of M/s Mamta Trading Company Prop. Suresh Kumar, who had not filed Return of Income. Assessee vide reply dated 14/06/2022 (APB 21-32) filed in response to notice u/s 148A (b), challenged the validity of reopening of assessment. Moreover, detailed submission on merits was furnished alongwith documentary evidences, in support of genuineness of the transaction and stated that the said amount was received as a consideration towards the sale of goods to the said party. However the same were not appreciated and the order was passed u/s 148A(d) of the Act and accordingly notice u/s 148 was issued. Thereafter reassessment order was passed adding the entire sale amount of Rs. 8,34,73,192/- received from the said party, alleging it to be unexplained. 29. The ld. AR of the assessee objected that re-assessment proceedings were initiated beyond six years and accordingly beyond the time Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 37 stipulated u/s 149 and are therefore, barred by limitation. It was submitted by the ld. AR that reopening so done by issue of notice u/s 148 dated 12/05/2021 is barred by limitation, as notice under the old law could have been validly issued on or before 31.03.2020 for A.Y. 2013-14. 30. We have gone through the records and submissions advanced by both the parties. The Hon’ble Supreme Court of India in the case of UOI Vs. Ashish Agarwal reported in 138 taxmann.com 64 (2022) (SC) and subsequently in the case of UOI Vs. Rajeev Bansal reported in 167 taxmann.com 70 (SC) (2024), has discussed this issue of notices / proceedings becoming barred by limitation alongwith applicability of Taxation and Other Laws (Relaxation & Amendment of certain provisions) Act, 2020 [in short referred as “TOLA”]. The head-note related to the issue is reproduced below: “Time limit of issuance of notice (TOLA 2020) – A.Y. 2013-14 to 2017-18 – Whether Taxation and Other Laws (Relaxation & Amendment of certain provisions) Act, 2020 [TOLA] overrides Income Tax Act to the extent of relaxing time limit for issuance of a reassessment notice which fell for completion from 20.03.2020 to 31.03.2021, till 30.06.2021 – Held – Yes. At para 113, the Hon’ble Supreme Court in the case of Rajeev Bansal has observed as follows: 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017- 2018. To assume jurisdiction to issue notices under section 148 with respect to Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 38 the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income-tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time-barred.” 31. Following the decisions of Hon’ble Supreme Court as mentioned above, we reject the argument taken by the ld. AR of reassessment proceedings taken in the instant case of A.Y. 2013-14 getting barred by limitation. 32. Now coming to the issue of reassessment proceedings being bad in law, it has been submitted by ld. AR that in the notice u/s 148A(b)and also order u/s 148A(d) dated 29/07/2022, reason for reopening was that the assessee has received an amount of Rs. 8,34,73,192/- from bank account of M/s Mamta Trading Company and its proprietor Shri Suresh Kumar has not filed his return of income for A.Y. 2013-14. Thus the huge credit received from an account of a non-filer remains unexplained. It has been further mentioned in the notice u/s 148A(b) that on going through the return of income, it is noticed that income from above transaction is not included by the assessee company in its ITR. It was submitted before the AO that assessee company has received the amount against the sale proceeds. Moreover, the said receipt on account of sale has been declared Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 39 by the assessee in his financial statement and these have been duly accepted in the original assessment proceedings. In fact the details of sales of ten parties were asked for by the then AO and details so submitted by the assessee company included the details of sale made to aforesaid party namely M/s Mamta Trading Company. Accordingly the sales made to aforesaid party has been verified in the original assessment proceedings and those very sales has been tried to be treated as unverifiable, is nothing but the change of opinion. Moreover, VAT returns were also filed where such sales were forming part of total sales and which has been accepted by sales tax authorities. 33. It was further submitted that in the reasons recorded as supplied by notice u/s 148A(b) [APB 20]read with order u/s 148A(d) fact mentioned that the assessee company has not included the transaction made with M/s Mamta Trading Companyis totally incorrect on facts and the records so submitted before the AO as the sales made to aforesaid party has already been included in the total turnover. Only other point mentioned in the notice u/s 148A(b) is that the aforesaid party has not filed its return and accordingly the amount received from the said party is unexplained. It has been submitted that it is a case of sale made to the aforesaid party and sales have been supported by various evidences, accordingly payment Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 40 received against the sale proceeds cannot be treated as unexplained and this cannot be considered to be the reasons for forming the belief that ‘income has escaped assessment’. It was further submitted that if the aforesaid party has not filed the return of income then necessary action should have been taken in the case of that party against evasion of tax done by him, instead of any action against the assessee company that too by way of reopening the assessment u/s 147 / 148. 34. The ld. DR supported the order of AO. It was also argued by him that the ld. CIT(A) has also concurred with the view of ld. AO and reassessment proceedings as well as consequent reassessment order so passed is valid. 35. We have heard the rival contentions and perused the material placed on record.It is admitted fact that the case of the assessee was scrutinized u/s 143(3) of the Act and order was passed dated 30/01/2016, obviously after due verification of books of accounts including purchases, sales, etc. As mentioned by the ld. AR, details of sales made to ten parties were asked during the course of original assessment proceedings and these were submitted which included sale made to the aforesaid party namely M/s Mamta Trading Company. No any adverse inference was drawn by the then ld. AO and assessment was completed u/s 143(3). It is Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 41 seen that subsequently the information was received by ld. AO from DDIT(Inv.), Rohtak and on the basis of same, ld. AO issued notice u/s 148 dated 12.05.2021. Afterwards in view of the decision of UOI Vs. Ashish Agarwal, new notices by way of show cause to the assessee was required to be issued u/s 148A(b). The Hon’ble Supreme Court in the case of UOI Vs. Ashish Agarwal has very categorically said that u/s 148A(b), the Assessing Officer has to comply with two requirements: (i) issuance of a show cause notice; and (ii) supply of all the relevant information which forms the basis of the show cause notice. The supply of the relevant material and information allows the assessee to respond to the show causenotice.The deemed notices were effectively incomplete because the other requirement of supplying the relevant material or information to the assessee was not fulfilled. The second requirement could only have been fulfilled by the revenue by an actual supply of the relevant material or information that formed the basis of the deemed notice. In compliance to the aforesaid requirement, a notice u/s 148A(b) dated 29.05.2022 was issued to the assessee for the purpose of supplying relevant material or information, giving reasons for proposed reopening of the assessment. The content of this show cause notice is as below:- “1. In your case, information was received from the DDIT(Inv.), Rohtak through Insight. As per specific information available with the department, during the year under consideration you have received an amount of Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 42 Rs.8,34,73,192/- from the account of M/s Mamta Trading Company, Prop. Shri Suresh Kumar (PAN: CLSPK9222P) having Account No. 1025CBCA01000339 with Corporation Bank. Shri Suresh Kumar (PAN: CLSPK9222P) has not filed his return of income for the A.Y. 2013-14. Thus, the huge credit in your account from an account of a non-filer is without any business rationale & source of these credits in account of the assessee remains unexplained. You have filed return of income for A.Y. 2013-14 on 26.09.2013 declaring total loss of Rs.5,60,705/-. 2. On going through return of income filed by you for AY 2013-14, it is noticed that income from above transaction is not included in your ITR. Therefore, it is established that same is not offered for tax and due tax has not been paid. 3. As stated in preceding paras, the income of Rs.8,34,73,192/- chargeable to tax in your case has escaped the assessment within the meaning of provision of section 147 of the IT Act, 1961 for the assessment year 2013- 14.” On perusal of aforesaid content, we have noticed that the ld. AO has recorded the finding that the income / receipt by way of above transaction is not included in the ITR of the assessee company. On the other hand it is seen that the ld. AR of the assessee has responded to this letter mentioning therein that the assessee company has made sale to the aforesaid party and amount has been received as sale proceed through banking channel from the said party and same has been included in the turnover of the assessee company and thereby in the Profit & Loss Account. Thus it is clear that this finding of the ld. AO of the aforesaid transactions from the said party not included in the income of the assessee company is incorrect and contrary to the facts and records. 36. It is noticed by us that the other finding of ld. AO was that the amount has been received from the bank account of M/s Mamta Trading Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 43 Company by the assessee company and therefore these huge credit so received from account of a non-filer is without any business rationale and source of these credit remains unexplained. The ld. AR has submitted before the ld. AO that this amount has been received as sale proceeds and undisputedly has been received through banking channel. Sales so declared to the party by the assessee company is verifiable and supported by various evidences. Accordingly, the information of said party not filing the return of income cannot be considered in the case of assessee company reason for forming the belief that ‘income has escaped assessment’ in the case of assessee company. In fact, the said information of not filing of the return by the said party should have been considered as “reason to believe” of income escaping assessment in the case of M/s Mamta Trading Company and it can be a ‘reason to suspect’ but not ‘reason to believe’ in the present case. However it is seen that sale to the aforesaid party M/s Mamta Trading Company has been made by the assessee company and the amount received has been shown by the assessee company as sale proceeds. These transactions by way of sale proceeds have been properly recorded in the books of accounts and have been included in the total turnover of the assessee company and are also forming part of Profit & Loss Account. Accordingly, we find that point No. 2 mentioned in the show cause notice u/s 148A(b) issued for Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 44 reopening of the assessment that ‘income from the above transaction has not been included in the ITR’ suffers from the factual infirmities in as much as that as seen from the records, the sale proceeds by way of these transactions have been included by the assessee company in its turnover and consequently in the Profit & Loss Account and thus content mentioned at point No. 2 of show cause notice u/s 148A(b) read with order u/s 148A(d) is contrary to the facts on record and is incorrect. 37. Now coming to the point No. 1 mentioned in the show cause notice u/s 148A(b), it is seen that the assessee company has itself stated that it has received amount of Rs. 8,34,73,192/- from the said party M/s Mamta Trading Company through banking channels. The assessee company has claimed since the start of reopening proceedings that this amount is by way of sale proceeds from the said party. The assessee company has furnished details related to sale made to this party alongwith financial statement reflecting sale, receipt of payment, copy of stock register reflecting outgo of goods to this party, availability of sufficient stock before effecting the sale to said party, copy of original C form submitted by said party (which were issued to the said party by Haryana Sales Tax Department) to the assessee company and assessee company in turn submitting the same to the Rajasthan Sales Tax Department for Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 45 supporting the claim made for reduced rate of CST, transport details including vehicle no., etc. 38. This issue has been discussed by us while discussing the earlier grounds of appeal so filed by revenue. We have held that in view of the evidences so furnished by the assessee company which has not been rebutted by the ld. AO and also in absence of any contrary evidence brought on record by the ld. AO, we see no reason to disbelieve the sale so made by the assessee company to the said party. Since the sale has been made to the said party and amount has been received through banking channels from the said party by way of recovery of sale proceeds, the amount cannot be said to the receipt ‘without any business rationale’ as observed by the then ld. AO in show cause notice u/s 148A(b). 39. Further Hon’ble Courts have held that non filing of the income tax return by a person with whom any assessee has entered into commercial transaction of purchase and sale will be a ‘good reason to suspect’ that something is not correct but only because the other party to whom sale has been made by the assessee company, has not filed the return of income, then treating the entire sale proceeds received from the said party as the unaccounted income of the assessee company is not justified, when Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 46 particularly the sales have been held to be genuine. Without prejudice to above, non-filing of return by the party having transaction with the assessee company cannot be considered to be the reason for ‘formation of belief’ in the case of assessee company that income of the assessee company has escaped assessment. The AR has also submitted that in the original assessment u/s 143(3), the details of sales to ten parties were asked for which were submitted by the assessee and these included details of sale made to the aforesaid party namely M/s Mamta Trading Company. The then ld. AO has perused and scrutinized the details alongwith other details submitted before him and after being satisfied had passed order u/s 143(3). Now reassessment proceedings so taken up on the same issue of sale made to the aforesaid party would tantamount to ‘change of opinion’. Hon’ble Bombay High Court in the case of Siemens Financial Services (P.) Ltd. v. Dy. CIT [2023] 154 taxmann.com 159 (Bombay) has the occasion to decide the issue of change of opinion. Gist of the decision reproduced as below: “Section 37(1), read with sections 147 and 148, of the Income-tax Act, 1961 – Business expenditure - Allowability of (Reassessment) - Assessment year 2016-17 - Assessee-NBFC claimed expenditure on software consumables - During scrutiny, assessee submitted transaction wise summary on expenditure on software consumables and Assessing Officer after considering said submission passed assessment order without making any adjustments - Thereafter, Assessing Officer issued reopening notice on ground that expenses on software consumables were capital expenditure which would not be allowable under section 37(1) - Whether since expenses on account of software consumables were debited in profit and loss account and a detailed Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 47 break-up of said expenses were submitted before Assessing Officer during course of assessment proceedings, Assessing Officer would not have any power to review his own assessment when during original assessment assessee provided all relevant information which was considered by him before passing assessment order - Held, yes - Whether thus, reopening of assessment was a mere change of opinion and thus invalid - Held, yes [Paras 37 and 41] [In favour of assessee]” 40. Also Hon’ble Madras High Court in the case of Dr. Mathew Cherian v. Assistant Commissioner of Income-tax [2023] 151 taxmann.com 154 (Madras) has inter alia observed that “Whether under the old or new regimes of reassessment, it is a settled position that issues decided categorically by judicial precedent should not be revisited in the guise of reassessment”.Hon’bleGujarat High Court in case of Gujarat Power Corpn. Ltd. v. Asstt. CIT (2013) 350 ITR 266 (Guj), held that ‘once the assessing officer examines certain claim during the assessment proceedings in the order of assessment, but gives no reasons for not disturbing the claim of the assessee, would not permit the assessing officer to reopen the assessment on such ground’.Also the Hon’ble Bombay High Court in the case of State Bank of India Vs. ACIT dated 15/06/2018 followed the decision of the Hon’ble Apex Court in the case of ITO V/s. Techspan India Private Limited and Another, reported in [2018] 404 ITR 10(SC) and observed that, “The computation of income is the basic document for making the s.143(3) assessment. If there is a disclosure in the computation, it leads to the prima facie necessary Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 48 inference that there is application of mind by the AO. The fact that the AO did not raise specific queries & is silent in the assessment order does not mean there is no application of mind”. 41. It is also argued by the ld. AR that the addition made u/s 68 in re- assessment order is bad in law due to the fact that in the show cause notice dated 02/05/2023, the ld. AO proposed to make the addition u/s 69A of the Act whereas in the final order, the addition has been made u/s 68 of the Act. Therefore considering the legal position on the issue in hand and as discussed in detail above, we are of the firm opinion that re- opening proceedings and the consequent re-assessment order suffers from the infirmities as mentioned above and is thus bad in law and therefore it is quashed. Therefore ground No. 1 raised by the assessee stands allowed. In the result, the appeal of the revenue is dismissed and the ground No. 1 of the assessee is allowed. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- ¼ MkWa- ,e- ,y- ehuk ½ ¼MkWa- ,l-lhrky{eh½ (Dr. M.L. Meena ) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 15/09/2025 Printed from counselvise.com ITA No. 535/JPR/2025 Kiran Infra Ispat Ltd., jaipur. 49 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- ITO, Ward-1(1), Jaipur. 2. izR;FkhZ@ The Respondent- Kiran Infra Ispat Ltd., Jaipur. 2. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File { ITA No. 535/JPR/2025 } vkns'kkuqlkj@ By order lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "