M/S. SHROFF TRADELINK PVT. LTD.,KOLKATA V. I.T.O., WARD - 1(1), KOLKATA

ITA 483/KOL/2025

AI Insights

M/s Shroff Tradelink Pvt. Ltd. appealed against the order of the National Faceless Appeal Centre, Delhi, which upheld the reassessment proceedings initiated by the Income Tax Officer for the Assessment Year 2011-12. The reassessment was based on undisclosed receipts treated as unexplained cash credits. The Tribunal noted that the case was initially assessed and settled, including entries in the bank account, which were part of the reassessment. The Tribunal held that reopening the case on the same grounds, which had been previously settled, was not permissible under the law, leading to the quashing of the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708391 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.B. CHAKRABORTHY
• Assessee Lawyers: ABHISHAK BANSAL
• Keywords: Reassessment proceedings; Unexplained cash credit; Income from undisclosed sources; Reopening of assessment; Accommodation entries
• Section: 147; 148; 143(3); 133A; 5(2)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 483/KOL/2025 (Assessment Year: 2011-12) M/s Shroff Tradelink Pvt. Ltd. Block-B, 2nd Floor, Flat No.2E, Ideal Height, 302, APC Road, Raja Ram Mohan Sarani, Kolkata-700009, West Bengal Vs. The Income Tax Officer, Ward 1(1), Kolkata, Aaykar Bhawan, P-7, Chowringhee Square, Kolkata-700069, West Bengal (Appellant) (Respondent) PAN No. AALCS0490A Assessee by : Shri Abhishak Bansal, AR Revenue by : Shri S.B. Chakraborthy, DR Date of hearing: 19.05.2025 Date of pronouncement: 18.07.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 14.11.2024 for the AY 2011-12. 02. At the outset, we note that the appeal of the assessee is barred by limitation by 35 days, for which condonation petition along with affidavit of the assessee was filed. 03. After hearing the rival contentions and perusing the materials available on record, we find that the assessee could not access the e-portal of the department and hence, the delay in fling the appeal. In our opinion, Page | 2 ITA No. 483/KOL/2025 M/s Shroff Tradelink Pvt. Ltd.; 2011-12 the delay is for bonafide and genuine reasons, hence, we condone the delay and admit the appeal for adjudication. 04. The assessee has challenged the validity of reassessment proceedings, which has been upheld by the ld. CIT (A). 05. The facts in brief are that the assessee filed the return of income on 22.02.2013, declaring the total income at ₹ Nil. The case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 21.03.2018, which was not complied with by the assessee. Finally, the assessment was completed ex-parte by making the addition on account of undisclosed receipt of ₹75,50,000/-, which was treated as unexplained cash credit vide order dated 05.12.2018 passed u/s 144/ 147 of the Income-tax Act, 1961 (the Act). 06. The ld. CIT (A) in the appellate proceedings, dismissed the appeal of the assessee by affirming the order of the ld. Assessing Officer. 07. The ld. AR vehemently submitted before us that the reopening of assessment has been invalidly initiated by the ld. AO and therefore, the assessment framed is also invalid. The ld. AR submitted that the assessment in this case was framed originally u/s 147/ 143(3) of the Act vide order dated 22.12.2017, a copy of which is available at page no. 11 to 13 of the Paper Book. The ld. AR stated that the assessee filed the return of income on 22.02.2013, declaring total loss of ₹6275/-. Thereafter, the survey was conducted u/s 133 of the Act in the business premises of the assessee by DDIT (Investigation) Unit-3(4), Kolkata on 01.11.2012 and during the course of survey certain incriminating materials were found. During the course of survey, it was found that assessee company was engaged in providing accommodation entries on commission basis which was admitted by the Director Shri Manish Page | 3 ITA No. 483/KOL/2025 M/s Shroff Tradelink Pvt. Ltd.; 2011-12 Madhukar, in the statement recorded. Thereafter the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act. The assessee did not comply with the said notice and thereafter the ld. AO estimated the income from undisclosed sources at the rate of 0.5% thereby making addition of ₹3,25,753/-. The ld. AR submitted that during the original assessment proceedings, the income was estimated based upon the entries in the bank account of the assessee. Thereafter the assessee went into VSVS Scheme for the impugned year and settled the dispute there. The ld. AR submitted that the same case was again reopened u/s 147 of the Act on the ground that assessee has received accommodation entry of ₹75,50,000/- based on the report from the investigation wing. The ld. AR stated that once the income has been assessed on estimated basis based on all the credit entries in the bank account and therefore any subsequent reopening on the basis of same, material is incorrect and may be quashed. The ld. AR also filed before the Bench the form no. 5 under rule 7, which is an order for full and final settlement of tax arrears u/s 5(2) under direct tax Vivad Se Vishwas Scheme. The ld. AR therefore prayed that the reopening of assessment may kindly be quashed. 08. The ld. DR on the other hand submitted that the case was reopened based on the substantive information received from the investigation wing that the assessee is a beneficiary of accommodation entry. Therefore, the contention of the assessee is devoid of any merit and may be dismissed. 09. After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessment was framed in the first round of reopening vide order dated 22.12.2017, passed u/s 147/143(3) of the Act. In the said order the income was estimated at Page | 4 ITA No. 483/KOL/2025 M/s Shroff Tradelink Pvt. Ltd.; 2011-12 the rate of 5% on the deposits found in the bank account of the assessee. The said reopening was made following survey u/s 133A of the Act on the business premises of the assessee, wherein it was found that the assessee was engaged in providing accommodation entries. Now, the reopening of the assessment on the basis of investigation wing that assessee is a beneficiary of accommodation entry to the tune of ₹70,50,000/- which was credited in the same bank account which has been subject matter of the scrutiny in the first reassessment proceedings. In our opinion, once the income has been estimated on the basis of bank statement and added to the income of the assessee which was finally settled in the VSVS scheme as is apparent from form no.5 dated 16.10.2024 filed before us, then no re-opening could be made on the same income. Therefore, we are inclined to quash the reopening of assessment being based on the same material as it is not open to the AO to reopen the case on the basis of same material which were available at the time of original assessment and which was finally settled in VSVS Scheme. Accordingly, the assessment order passed by the ld. AO is hereby quashed. 010. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 18.07.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 18.07.2025 Sudip Sarkar, Sr.PS Page | 5 ITA No. 483/KOL/2025 M/s Shroff Tradelink Pvt. Ltd.; 2011-12 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "