INCOME TAX OFFICER WARD-4(1)(1), AHMEDABAD, AHMEDABAD V. SURYANANDAN TEXTURIZER LIMITED, AHMEDABAD

ITA 1901/AHD/2025

AI Insights

The case involves appeals by the Income Tax Officer against Suryanandan Texturizer Limited concerning two assessment years, 2015-16 and 2016-17. The appeals were related to additions made to the assessee's income on account of unexplained expenditures linked to imports and the duties paid thereon. The primary contention was whether these expenditures were recorded under the correct PAN in the Income Tax Department's records. The Commissioner of Income Tax (Appeals) found that the assessee had indeed recorded these transactions under the correct PAN, despite initial proceedings being incorrectly initiated under an old PAN. The Tribunal agreed with the CIT(A)'s findings and dismissed the Revenue's appeals.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 834117 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 07-10-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: SURESH GANDHI
• Keywords: Additional evidence; Unexplained expenditure
• Section: 271(1)(c); 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. Nos. 1900 to 1903/Ahd/2025 (िनधा[रण वष[ / Assessment Years : 2015-16 & 2016-17) Income Tax Officer Ward-4(1)(1), Ahmedabad बनाम / Vs. Suryanandan Texturizer Limited 26, Drive In Cinema Road, Saurabh Society, Navrangpura, Ahmedabad, Gujarat - 380015 èथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAECS3484M (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Rignesh Das, CIT.DR Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Suresh Gandhi, AR Date of Hearing 28/01/2026 Date of Pronouncement 03/02/2026 O R D E R PER ANNAPURNA GUPTA, AM: The present appeals of the Department pertain to the same assessee for two assessment years i.e. 2015-16 and 2016-17 and are against separate orders passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”) ,passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) .The appeals pertain to orders passed in appeal by the Ld.CIT(A) against orders of the assessing Officer in quantum proceedings and in penalty Printed from counselvise.com ITA Nos.1900 to 1903/Ahd/2025 [ITO vs. Suryanandan Texturizer Limited] - 2 – proceedings u/s. 271(1)(c) of the Act for both the assessment years impugned before us. 2. It was common ground that the issue arising in the quantum proceedings was identical in both the years and penalty was levied on the identical addition/disallowance made in both the years before us. Therefore, all the appeals were taken up together for hearing. 3. All the appeals have been noted to be delayed for filing by 7 days which has been sufficiently explained by the AO as on account of being preoccupied with time barring cases. The AO has stated the aforesaid on oath by way of filing an affidavit before us. Considering the smallness of the delay and t sufficient cause being adduced by the Revenue for the same, the delay of 7 days in the filing of all the four appeals is condoned. 4. Taking up the quantum appeals for hearing first in ITA No.1900 & 1902/Ahd/2025, Ld. Counsel for the assessee stated that the issue pertained to addition made to the income of the assessee on account of purchases made by it by way of import and the duty paid thereon, on account of the source of the said expenses remaining unexplained. Ld. Counsel for the assessee pointed out that the Assessing Officer observed, on the basis of IEC data that the assessee had made imports of Rs.9,79,50,475/- and duty paid thereon of 1,75,05,593/- in A.Y 2015-16. However, no return was filed by the assessee. Accordingly, the impugned amounts were added to the income of the assessee as investments, the source of which unexplained. In A.Y. 2016-17, the assessee Printed from counselvise.com ITA Nos.1900 to 1903/Ahd/2025 [ITO vs. Suryanandan Texturizer Limited] - 3 – was identically noted to have made purchases of Rs.14,21,14,129/- and duty paid thereon Rs.3,71,74,683/-, and no return of income filed. The impugned amounts were, therefore, added to the income of the assessee. Ld. Counsel for the assessee, thereafter, pointed out that in appellate proceedings before the Ld. CIT(A), the assessee had clarified that the IEC data with the AO was in relation to the old PAN Number of the assessee, which the assessee had since changed, and the impugned transaction had been reflected in its books of accounts and return filed by the assessee in the new PAN number. The assessee’s submissions were forwarded to the AO for his remand report, who, Ld. Counsel for the assessee pointed out agreed with the contentions of the assessee, though he stated that the addition needed to be upheld, since the assessee had not proved why the imports were reflected in the incorrect PAN Number of the assessee in the IEC data. He, thereafter, pointed that the Ld. CIT(A) taking note of the verification conducted by the AO in the remand proceedings found the assessee’s contention of the impugned purchases to have been duly reflected in its books of accounts to be correct and accordingly deleted the addition made to the income of the assessee in both the years. 5. Our attention was drawn to the finding of the Ld. CIT(A) in this regard at para 11 of the order as under: “11. Ground No. 2: The appellant contests the addition of Rs. 11,54,56,068/-— comprising the assessable value of imports Rs. 9,79,50,475/- and corresponding duty paid Rs. 1,75,05,593/- —treated as unexplained expenditure u/s 69C of the Act. 11.1 The appellant submits that non-compliance during assessment arose because proceedings were erroneously initiated under PAN AAECS3484M, a Printed from counselvise.com ITA Nos.1900 to 1903/Ahd/2025 [ITO vs. Suryanandan Texturizer Limited] - 4 – PAN the company has never used for filing its returns. Consequently, the notices issued under this incorrect PAN did not come to the appellant’s knowledge. Documentary evidence now furnished establishes that every import transaction, together with the related duty payments, was duly recorded in the audited books under the correct PAN AAGCS3444M, and the return of income for the year was also filed under this PAN. Thus, no income has escaped assessment in respect of the impugned imports. Although the Assessing Officer (AO) has objected to admission of these additional evidences—asserting that adequate opportunity had already been afforded—I have examined the assessment order, the appellant’s submissions in appeal, and the remand report. Being satisfied that the circumstances warrant admission of the additional evidences, I proceed to decide the issue on merits. 11.2 The record shows the appellant did not respond to notices during assessment. The stated reason is the initiation of proceedings under the wrong PAN AAECS3484M , of which the appellant was wholly unaware. The mistake arose because the customs -house agent inadvertently quoted this incorrect PAN in import documents, causing the import data to be mapped to the wrong PAN in the departmental system. 11.3 Upon learning of the resultant demand in July 2024, the appellant promptly produced comprehensive documentation demonstrating that all imports and corresponding duties were duly reflected in its audited accounts under PAN AAGCS3444M. The return of income filed under this PAN offered to tax the sales linked to these imports. The evidence adduced shows the purchases were properly accounted for and discloses no intent to conceal income or evade tax. 11.4 In the Remand Report dated 23-06-2025, the AO has verified and affirmed that the impugned import transactions and duty payments are correctly recorded in the appellant’s books under PAN AAGCS3444M. The issue, therefore, stems solely from a PAN mismatch in import filings and not from any income escaping assessment. In view of the material on record and the AO’s verification, it is held that no income has escaped taxation; all import purchases and duties stand duly accounted for. 11.5 Accordingly, the addition of Rs. 11,54,56,068/- comprising the assessable value of imports Rs. 9,79,50,475/- and corresponding duty paid Rs. 1,75,05,593/- treated as unexplained expenditure u/s 69C of the Act is deleted. The ground of appeal succeeds.” 6. Ld. Counsel for the assessee therefore, contended that in view of the factual finding of the Ld. CIT(A) that the import purchases were duly reflected in the books of assessee, the Revenue had no case for treating the same as expenditure from unexplained sources as done by the AO. Printed from counselvise.com ITA Nos.1900 to 1903/Ahd/2025 [ITO vs. Suryanandan Texturizer Limited] - 5 – 7. Ld. D.R before us though was unable to controvert the factual findings of the Ld. CIT(A), however, he argued that the assessee had given no reason for furnishing incorrect PAN Number in IEC, and therefore, the addition needed to be confirmed. 8. Having heard both the parties and on going through the orders of the authorities below, we find no merit in the appeal of the Revenue for both the years. The addition admittedly, in the present case was made on account of import purchases and duty paid thereon, the source of payment of which was found to be unexplained. It is a fact on record that the AO in remand proceedings admitted that the purchases were duly accounted for in the books of the assessee, and the source was duly explained. The AO having accepted so we fail to understand, what grievance now remains with the AO to have come up in appeal against the order of the Ld. CIT(A), who we hold rightly deleted the addition. The matter of the assessee having furnished a wrong PAN No. to the IEC has no impact nor does it in any way take away the fact that the impugned purchases were duly reflected in the books of accounts of the assessee. 9. In the light of the same, we find no infirmity in the order of the Ld. CIT(A) for both the years before us, deleting the addition made to the income of the assessee on account of purchases and duty paid thereon, source of which remained unexplained. Printed from counselvise.com ITA Nos.1900 to 1903/Ahd/2025 [ITO vs. Suryanandan Texturizer Limited] - 6 – 10. Both the appeals filed by the revenue for A.Y 2015-16 and A.Y 2016-17 in ITA No.1900/Ahd/25 & ITA No.1902/Ahd/25 respectively are accordingly dismissed. 11. Since, we have dismissed the department’s appeal in quantum proceedings for both the years before us, upholding the Ld.CIT(A)’s orders deleting the additions made in the hands of the assessee, we find no case with the Revenue for challenging the Ld. CIT(A)’s order deleting the levy of penalty, admittedly, on the very same additions in the said years. 12. The appeals filed by the Revenue in penalty proceedings in ITA No.1901/Ahd/25 & ITA No.1903/Ahd/25 also stand dismissed. 13. In effect, all four appeals of the Revenue are dismissed. This Order pronounced on 03/02/2026 Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 03/02/2026 N. K., Sr.PS True Copy आदेश कȧ Ĥितिलǒप अĒेǒषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंिधत आयकर आयुƠ / Concerned CIT 4. आयकर आयुƠ(अपील) / The CIT(A)- 5. ǒवभागीय Ĥितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "