RAJESH MANGILAL PUROHIT,AHMEDABAD V. ITO WARD 4(1)(1) AHMEDABAD, AHMEDABAD

ITA 1674/AHD/2025

AI Insights

The case involves an appeal by Rajesh Mangilal Purohit against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which upheld the addition of Rs.1,84,04,100 made by the Assessing Officer for the Assessment Year 2015-16. The additions were based on alleged bogus transactions and unexplained financial transactions. The assessee contended that all transactions were conducted through registered brokers in the open market with proper documentary evidence. The Tribunal found that the assessee was not given a fair opportunity to present additional evidence and that the Assessing Officer had not independently verified the documentary evidence provided by the assessee. Consequently, the Tribunal decided to set aside the CIT(A)'s order and remand the case back to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779380 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 30-08-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UDAY KISHANRAO KAKNE
• Assessee Lawyers: VIVEK CHAVDA
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Corroborative evidences; Principle of natural justice; Penny stocks; Bogus
• Section: 147; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No.1674/Ahd/2025 (Assessment Year: 2015-16) Rajesh Mangilal Purohit, 53, Girish Society, Near Jain Temple, DI Cabin, Ahmedabad-380019. [PAN :CPMPP8279 P] Vs. The Income Tax Officer, Ward-4(1)(1), Ahmedabad. (Appellant) .. (Respondent) Appellant by : Shri Vivek Chavda, AR Respondent by: Shri Uday Kishanrao Kakne, Sr. DR Date of Hearing 07.10.2025 Date of Pronouncement 14.10.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, vide order dated 11.07.2025 relevant to the Assessment Year 2015-16. 2. The assessee has raised the following grounds of appeal: 1.1 The order passed u/s. 250 on 11.07.2025 for A.Y. 2015-16 by CIT(A)- NFAC, Delhi upholding the addition of Rs.1,84,04,100made by AO is wholly illegal, unlawful and against the principles of natural justice. Printed from counselvise.com ITA No. 1674/Ahd/2025 Asst. Year : 2015-16 - 2– 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the eccentric facts and evidence available with regard to the impugned additions. 1.3 The Ld. CIT(A) has grievously erred in law and on facts in not carrying out any inquiry with regard to the applicability of the provisions of Income tax Act and thereby violated the principle of natural justice. Therefore, the appellant shall be granted opportunity to produce additional evidences. 2.1 The Ld. CIT(A) has grievously erred in law and or on facts in upholding the reopening the case under section 147. 2.2 That in the facts and circumstances of the case and in law, the reopening upheld by the CIT(A) was wholly illegal, unlawful and against the principle of natural justice which deserves to be quashed as it is out of jurisdiction. 2.3 The Ld. CIT(A) has erred in law and/or on facts in not considering the legal position that the reopening cannot be initiated for rowing and fishing inquiry. It is a well settled position of law that provisions of Section 147 cannot be used merely to inquire a transaction. 2.4 That in the facts and circumstances of the case, the Ld. CIT(A) has erred in upholding the invocation of the provisions of Section 147 merely because the AO received information from investigation wing. The AO has acted mechanically on the information which is against the principle of law. 3.1 The Ld. CIT(A) has grievously erred in law and or on facts in upholding the following additions totalling to Rs.1,84,04,100 made without any credible evidence: (i)Fictitious loan transactions from Jignesh Shah Rs.10,98,352 (ii) Financial transactions from Naresh Jain Rs.52,74,896 (iii) Benefit from the script Goenka Business and Finance Limited of Rs.1,19,03,387 (iv) Estimate of Commission @ 2% from Jignesh Shah and Naresh Jain Rs.1,27,465 3.2 The Ld. CIT(A) ought not to have upheld addition of Rs. 1,84,04,100 when the AO himself recorded that after examining voluminous documents submitted by the assessee, no suspicious transaction was found, yet proceeded to make additions in a contradictory and mechanical manner. Printed from counselvise.com ITA No. 1674/Ahd/2025 Asst. Year : 2015-16 - 3– 3.3 The Ld. CIT(A) has failed to appreciate that the appellant has not given or taken any accommodation entry and all transactions were conducted through registered brokers in open market through recognized stock exchanges with proper documentary evidence. 3.4 The Ld. CIT(A) ought to have considered that the AO failed to procure details from the impugned broker as well as the concerned banker. The AO neither issued notice u/s 133(6) nor conducted any inquiry to procure the data from any third party, thereby making additions in cursory manner without any independent verification. 4.1 The Ld. CIT(A) has grievously erred in law and / or on facts in upholding the invocation of the provisions of Section 115BBE. 4.2 That in the law and/or on facts, the Ld. CIT(A) ought not to have upheld the invocation of the provisions of Section 115BBE without passing a speaking order and / or granting opportunity of being heard on the invocation of the specific provision. 5.1 The Ld.CIT(A) has grievously erred in law and or facts in not granting opportunity of being hearing through video conferencing. 5.2 That in the facts and/in the law, the Ld.CIT(A) has failed to appreciate that granting opportunity of video conferencing is mandatory in the newly faceless appeal proceedings. It is therefore rayed that the additions of Rs.1,84,04,100 made by the AO and upheld by the Ld.CIT(A) should be deleted in the interest of natural justice considering the eccentric of the case. 3. On perusal of the records, it is observed that the assessee was afforded three opportunities of hearing to furnish the requisite details, clarifications, and explanations in support of the claim pertaining to financial transactions and the sale and purchase of shares in penny stocks. However, despite being granted multiple opportunities, the assessee failed to furnish the requisite details or explanations before the Ld. CIT(A). Consequently, the Ld. CIT(A), based on the material available on record, upheld the action of the Assessing Officer and Printed from counselvise.com ITA No. 1674/Ahd/2025 Asst. Year : 2015-16 - 4– dismissed the appeal ex parte. We further note that, based on the information received from the Investigation Wing, the Assessing Officer alleged that the assessee had entered into transactions relating to the sale of shares, which were treated as bogus transactions. The assessee, however, contended that documentary evidence substantiating the genuineness of the share transaction had been furnished, but the same was not independently verified by the Assessing Officer. Therefore, the Ld. Counsel for the assessee submitted that, given an opportunity, the assessee would produce all necessary details, clarifications, and documentary evidence before the Revenue authorities in support of her claim. In view of the above and in the interest of natural justice, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the Assessing Officer for a de novo assessment, with a direction to verify the documentary evidence to be furnished by the assessee. The assessee shall submit all relevant bank statements, documents, and supporting evidence, and to cooperate fully with the Revenue authorities without seeking unnecessary adjournments. 4. In the result, the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open Court on 14.10.2025. Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 14.10.2025 MV Printed from counselvise.com ITA No. 1674/Ahd/2025 Asst. Year : 2015-16 - 5– आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "