KIRAN GUPTA,INDORE V. ITO, MANDSAUR

ITA 403/IND/2024

AI Insights

The case involves Kiran Gupta, the assessee, who appealed against the re-assessment order for the Assessment Year 2011-12, which was initially passed by the ITO, Mandsaur, and upheld by the CIT(A). The re-assessment was based on information from a search operation on Chetak Group of Nimbahera, which allegedly indicated that Gupta had provided a bogus loan. The AO made additions to Gupta's income based on this information. Gupta contested the validity of the re-assessment and the merits of the additions in the first appeal but did not succeed. The Tribunal, after reviewing the submissions and evidence, found the re-assessment order to be based on incorrect reasons and thus quashed it.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 34621 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-10-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 29-04-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH PORWAL
• Assessee Lawyers: ANKUR AGARWAL; G.B. AGARWAL
• Keywords: Bogus
• Section: 147; 148; 132

Judgement Text

"Page 1 of 5 आयकर अपीलीय अिधकरण, इंदौर Ɋायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No. 403/Ind/2024 Assessment Year: 2011-12 Kiran Gupta C/o, G.B. Agarwal & Co. Chartered Accountants, 252, Vikram Tower, First Floor, Sapna Sangeeta Road, Indore बनाम/ Vs. ITO, Mandsaur (Assessee/Appellant) (Revenue/Respondent) PAN: ARCPG6416B Assessee by Shri Ankur Agarwal & G.B. Agarwal, CAs & AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 07.10.2024 Date of Pronouncement 07.10.2024 आदेश / O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by appeal-order dated 12.03.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 26.11.2018 passed by learned ITO, Mandsaur [“AO”] u/s 143(3)/147 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2011-12, the assessee has filed this appeal on the grounds as mentioned in Form No. 36. Kiran Gupta Vs. ITO ITA No. 403/Ind/2024 – AY 2011-12 Page 2 of 5 2. The background facts leading to present appeal are such that the assessee-individual filed original return of AY 2011-12 declaring a total income of Rs. 2,97,470/- on 30.03.2012. Subsequently, the AO, on the basis of information received from ADIT(Inv)-I, Udaipur collected from a search u/s 132 upon Chetak Group of Nimbahera, re-opened assessee’s assessment u/s 147 vide notice dated 28.03.2018 u/s 148 and called assessee to file return. In response, the assessee requested the AO to treat the original return as having been filed in response to notice u/s 148. The AO accepted assessee’s request. Thereafter, the AO issued notices u/s 143(2)/142(1) to scrutinize assessee’s case. Ultimately, the AO completed re- opened assessment vide order dated 26.11.2018 u/s 143(3)/147 after making two additions, namely (i) addition of Rs. 25,61,500/- on account of unsecured loan given to M/s U.B. Investment (prop. Shri Vikram Anjana), and (ii) addition of Rs. 1,00,000/- on account of unsecured loan given to M/s Uday Bheru Lal Anjana (proprietor Shri Manohar Lal Anjana). Aggrieved, the assessee carried matter in first-appeal and raised objections against validity of proceeding done by AO as well as merits of the additions but did not get any relief. Now, the assessee has come in next appeal before us assailing the orders of lower authorities. 3. Ld. AR for assessee made a vehement submission attacking the legality of proceeding done by AO as well as the merits of additions made by AO. Per contra, Ld. DR relied upon orders of lower-authorities. Kiran Gupta Vs. ITO ITA No. 403/Ind/2024 – AY 2011-12 Page 3 of 5 4. Having heard learned Representatives of both sides and after perusing case record, we find that the AO re-opened assessment of assessee after recording following reasons: Kiran Gupta Vs. ITO ITA No. 403/Ind/2024 – AY 2011-12 Page 4 of 5 5. Thus, the basis of re-opening adopted by AO was an information received from ADIT(Inv.)-1, Udaipur that the assessee has provided a bogus loan of Rs. 4,00,000/- during the financial year 2010-11 to Shri Vikram prop. of M/s U.B. Investment. Ld. AR for assessee submitted that the assessee has not given any loan during the financial year 2010-11 and the allegation made by AO is factually wrong. Ld. AR carried us to the assessment-order passed by AO to demonstrate that since there was no loan of Rs. 4,00,000/- given by assessee, the AO was unable to make any addition qua the alleged loan transaction of Rs. 4,00,000/-. The AO, however, made addition of loan of Rs. 25,61,500/- given to M/s U.B. Investment and loan of Rs. 1,00,000/- given to Shri Manohar Lal Anjana proprietor of M/s Uday Bheru Lal Anjana even those loans were also given in earlier year which is evident from the A/c Confirmations filed to AO and also placed in Paper-Book. The department is not able to file any evidence to show that a loan of Rs. 4,00,000/- as alleged in the reasons was given by assessee during financial year 2010-11. In that view of matter, the reason recorded by AO is incorrect and consequently, the re-assessment proceedings taken by AO based on such incorrect reason is not sustainable. Hence, we quash the order of re-assessment passed by AO. The assessee succeeds in this appeal. Kiran Gupta Vs. ITO ITA No. 403/Ind/2024 – AY 2011-12 Page 5 of 5 6. Resultantly, this appeal is allowed. Order pronounced in open court on 07.10.2024. Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक /Dated : 07.10.2024. CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore "