SHRI RAKESH ARORA,DELHI V. ITO WARD-30(8), DELHI

ITA 2159/DEL/2025

AI Insights

The case involves an appeal by Sh. Rakesh Arora against the order of the CIT(A) sustaining various additions made by the Assessing Officer (AO) under section 69A of the Income Tax Act. The AO had reopened the assessment for the assessment year 2012-13 based on information that the assessee had obtained accommodation entries amounting to Rs.3,14,16,000 from Shreyas International during the financial year 2011-12. However, the CIT(A) later deleted the addition related to these entries, leading to the assessee's argument that the reopening of the assessment was bad in law. The Tribunal, referencing a similar case (Mahesh Kumar Vs. ITO), agreed with the assessee and quashed the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 788842 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 01-04-2025
• Other Referred Cases: Mahesh Kumar Vs. ITO, Principal Commissioner of Income-tax v. Bairagra Builders (P.) Ltd., Jet Airways (1) Ltd. vs. CIT, ATS Infrastructure Ltd. vs. ACIT, Ranbaxy Laboratories Ltd. vs. CIT, B.P. Poddar Foundation for Education vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE; AJAY KUMAR ARORA
• Assessee Lawyers: LALIT MOHAN
• Keywords: Difference of opinion; Reassessment proceedings; Question of law; Unexplained cash credit; Unexplained expenditure; Salary income; Reopening of assessment; Capital Gains; Search and seizure; Accommodation entries; Reason to believe; Bogus
• Section: 147; 148; 143(3); 68; 69; 2; 15

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘A’: NEW DELHI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER & SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No.2159/Del/2025 [Assessment Year: 2012-13] Sh. Rakesh Arora C-4, 4123 Vasant Kunj, Delhi-110070 Pan No.AAEPA727P Vs ITO Ward- 30 (8) Delhi Appellant Respondent Appellant by Sh. Lalit Mohan, CA Respondent by Sh. Ajay Kumar Arora, Sr. DR Date of Hearing 23.09.2025 Date of Pronouncement 28.11.2025 ORDER PER C.N. PRASAD, JM, This appeal filed by the assessee is directed against the order of Ld.CIT(A), Delhi-110025 dated 06.02.2025 for the assessment year 2012-13 in sustaining various additions made by the AO u/s. 69A of the Act. 2. The learned counsel for the assessee at the outset submitted that the reason for which the assessment was reopened by the AO i.e. assessee had obtained accommodation entries of Rs.3,14,16,000/- from Shreyas International during the F.Y. 2011-12 relevant to A.Y. 2012-13 which was assessed Printed from counselvise.com Page | 2 as income u/s. 69 of the Act while passing the assessment order was deleted by the learned CIT(A). Therefore, since the basis and addition on which assessment was reopened was deleted, the reopening of assessment itself is bad in law. The learned Counsel for the assessee placed reliance on the decision of the Third member of Delhi Bench in the case of Mahesh Kumar Vs. ITO in ITA No. 2650/Del/2024 order dated 06.08.2025. 3. On the other hand the learned DR supported the orders of the authorities below. 4. Heard the rival contentions and perused the orders of the authorities below. In this case notice u/s. 148 was issued for reopening of assessment and the reasons for reopening of assessment was given as under :- REASONS FOR RE-OPENING OF CASE U/S 147 OF THE IT, ACT 1961 In this case, an information has been received from the DDIT(Inv.)-1, Ludhiana through e-mail on 29.03.2019 vide latter DDIT(Inv.)-1/Lodhi/18-19/2117-2139 dated 29.03.2019 for the F.Y. 2011-12 relevant to the A.Y. 2012-13. The information received from the DDIT(Inv.)-1. Ludhiana is reproduced as under : While monitoring of transactions, we had Identified the account in the name of M/s Shreyans International (910020008476787), wherein Mr. Rajeev Mehan is the proprietor. (ii) A trend of credits in the form of RTGS inward, foreign inward remittance and transfer followed by debits by way of transfer, cash withdrawal and mainly inward clearing was observed in the account. It was observed that the credits in the account of Shreyans International were transferred to various accounts and the funds Printed from counselvise.com Page | 3 were then withdrawn in cash from most of these accounts. (iii) An amount aggregating to Rs 1.70.58.580/- was transferred from the account of Mr. Shreyans International to the account of Sifat Knitwears (911020038749697) wherein Mr. Sunil Kumar is the proprietor. (iv). On perusing the transactions in the account of Sifal Knitwears (91.1020038749697), we observed a trend of high value credit from Shreyans International subsequently followed by further transfer to the account of Pink Pearl Garments (911020040541050) of most of the occasions from where the funds were then withdrawn in cash (v) As declared, the client is an exporter of readymade garments. (vi) The account turnover in a spot of last one year is Rs. 154 crores. The volume and value of transactions executed through this proprietary concern account prepared to be unusual in nurture and hence promise suspicion. (vii) Apart from the aforesaid account, M/s. Shreyans International maintains one more account with s (911020018776919). The total turnover in this account as well is high (viii) Mr. Rajeev Mehan is also proprietor of Mis Chetanya Export and maintains saving bank accounts. A search of FIU-IND's CTR accounts that may be related to the subject: \"Account No. 06051011000804 (SHREYANS INTERNATIONAL-PAN Match AIQPA10048) in Oriental Bank of Commerce. GT Road, Ludhiana. *Account No. 9100200084\"448\" (RAJEEV MEHAN-PAN March ATOPN0098.1 in Axis Bank Limited Mata Rank Tork, Ludhiana (PB). Account No. 911020015887996 (Rajiv Mehan (HUF)- PAN Match AIQPM0098J) in Axis Bank Limited Mata Rani Chowk, Ludhiana (PB). Printed from counselvise.com Page | 4 1. As per information being provided, during the course of enquiry proceedings, it is learned that Sh. Rajiv Mehan has maintained following bank accounts in different banks. The details of all the bank accounts alongwith details of total credit/debit turnover of these bank accounts during the F.Y. 2011-12 are as under- 2 Subsequently, Sh. Rajiv Mehan was asked to explain the source/nature of credit/debit entries appeared in the above mentioned bank accounts alongwith documentary evidence. Sh. Rajiv Mehan has neither provided the details of business activities carried out by him during the period 01.04.2011 10 31.03.2012 nor produced/submitted requisite documents/information/ books of accounts despite ample opportunities and thereby unable to explain the source/nature of transactions appeared in the above mentioned breik accounts. 3: Subsequently, summans u/s 131(A) of 11. Act, 1961 was also issued to Sh. Sunil Kumar, Prop. M/s Siful Knitwears and Sh. Parumjit Singli, Prop. Mis Pink Pearl Garments for furnishing of confirmed copy of account of M/s Shreyas International und M/s Sifat Knitwears respectively for the FY. 2011-12 alongwith other supporting documentary evidence. In response thereto, Sh. Paramjit Singh Prop Mis Pink Garments appeared and his statement recorded on oath w/s 131(14) of 1.T. Act, 1961. During the course of recording of his statement, he has stated that one Sunil Kumar Sharma Prop. M/s Sifat Knitwears got the bank account opened from him fraudulently and got blank cheques-signed an both sides. He further stated that he had not done any business with Sh. Sunil Kumar Sharina Prop. M/s Sifat Knitwears and no sale purchase have been made by him with M/s Sifat Knitwears. He had also stated that all the banking transactions made in bank account Printed from counselvise.com Page | 5 bearing no. 911020040341050 had been made by Sh. Sunil Kumar Sharma about which he do not have any knowledge. Sh. Sunil Kumar Sharina Prop. M/s Sifat Knitwears has neither appeared personally nor submitted any written reply despite ample opportunities. Perusal of hunk accounts of M/s Shreyas International. Mis Sifat Knitwears and Ms Pink Pearl Garments mentioned in the information available with the office of the undersigned, it is learned that funds has been firstly transferred from Mis Shreyas International to Mis Pink Pearl Garments on the same day. Further, on the same day, same amount of funds have been withdrawn in cash from the bank account of M/s Pink Pearl Garments. 5 It is hereby submitted that transactions made by Sh. Rajeev Mehan Prop Shreyas International during the F.Y. 2011-12 cannot be treated as genuine. Further, M/s Shreyas international has not produced its books of account for verification and other requisite documents as called for during the enquiry proceedings. In view of the facts mentioned above, it appears that M/s Sifat Knitwears and M/s Pink Pearl Garments are merely act an entry provider for M/s Shreyas international and M/s Shreyas international is acting as entry provider for other concerns. The details of which are as under :- 6 In view of above, during the year under consideration Sh. Rakesh Arora has got accommodation entry amounting to Rs. 3,14,16,000/- for F.Y. 2011-12 is require to be explained their genuineness. On perusal of ITD System Data, it is seen that the assessee has filed his FTR for A.Y. 2012-13 on 28.03.2013 declaring total income of Rs.18,90,860/-. As per the information, the assessee has received an amount of Rs.3,14,16,000/-through accommodation entries from concern M/s Shreyas international during the F.Y. 2011-12 relevant to A.Y. 2012-13. Therefore, I have reason to believe that an amount of Printed from counselvise.com Page | 6 Rs.3,14,16,000/- has escaped assessment in the A.Y. 2012-13. Hence, it is a fit case to reopen u/s 147 of IT. Act to assess/re-assessee the correct income of the assessee. If approved notice u/s 148 of the 1.T. Act, 1961 for A.Y 2012-13 may be issued. Submitted for your kind perusal and approval u/s 151 of the Income Tax Act, 1961 for issuance of notice u's 148 of the IT Act for A.Y. 2012-13. ITO, Ward-33(3), New Delhi. JCIT, Range 33, New Delhi 1 As per fa-384,04,298/- (3,82,60,00 + 1,44,201) 2 AS par books/CITC(A) → 3,82,60,000/- 5. Based on the reasons the assessment was reopened and the reassessment was completed on 31.12.2019 u/s. 143(3) r.w.s. 147 of the Act making various additions including the addition for which the assessment was reopened i.e. alleged receipt of accommodation entry from M/s. Shreyas International during the F.Y. 2011-12 relevant to assessment year under consideration i.e. 2012-13 for an amount of Rs.3,14,16000/-. We observed that though in the reasons the AO stated that the assessee has taken accommodation entry for an amount of Rs.3,14,16000/-, however, while completing the assessment an addition of Rs.3,84,04,298/- was made. On perusal of the assessment order we observed that the AO not only made addition of Rs.3,84,04,298/- in respect of the transaction i.e. alleged accommodation entries received from Rajiv Mehen ( M/s. Shreyas International) also made other additions in respect of loans obtained by the assessee from Printed from counselvise.com Page | 7 D.K. Jain and in respect of various other loans from various persons as tabulated in the assessment order at para 7.3. 6. When the assessee carried the matter before the CIT(A) the learned CIT(A) deleted the addition made in respect of the transaction alleged receipt of accommodation entry of Rs.3,84,04,298/-from Rajiv Mehen (Shreyas International) observing as under :- 12.2 The Assessing Officer made the addition of the sums received from M/s Shreyas International on the ground that in the AY 2011-12, the appellant-assessee had no capacity to provide advance to M/s Shreyas International. It has further been stated that assessment of M/s Shreyas International was also completed for the AY 2012-13 wherein addition u/s 68 of the Act has been made in respect of the cash credits. It has thus been held that the entire friendly loan given by the appellant and received back from Shri Rajeev Mehan are a colourable device to bring in the appellant's own money into the bank from different channels under the garb of friendly loans. 12.3 I have considered the facts of the present case and material on record. It is not in dispute that M/s Shreyas International (Prop. Shri Rajiv Mehan) is an assessee and duly assessed to tax. Further it is also not in dispute that the appellant has advanced sums to M/s Shreyas International (Prop. Shri Rajiv Mehan) in the preceding assessment year i.e. in AY 2011-12 and the sum advanced by the assessee to M/s Shreyas International has been accepted without scrutinizing the same. It is further seen that receipt of the sum by the appellant during the year was merely return of the sum already advanced to M/s Shreyas International and was not any fresh loan or advance received by the appellant from M/s Shreyas International. The finding of the Assessing Officer that the entire friendly loan given and received back from Sh. Rajeev Mehan are a colourable device to bring in assessee's own money into bank from different channels under the garb of friendly loans' is illogical and legally unsustainable. The assumption of the Assessing Officer that the appellant Printed from counselvise.com Page | 8 would firstly give advance to a person from his bank account and receive accommodation entry in respect of the same in the form of return of advance is unthinkable. In fact, there is no basis for such an assumption. It is not a case, wherein the appellant has given cash, which has been received by him in his bank account in the form of loan or advance. On the contrary, it is a case, where the appellant, in the preceding assessment year, had given advance to M/s Shreyas International, and during the year has advanced further sums, and M/s Shreyas International has returned such sums to the appellant during the year and in succeeding assessment year. All the aforesaid transactions have been undertaken through the respective bank accounts. In such circumstances, return of loan by Mis Shreyas International to the appellant during the year cannot be termed as unexplained money u/s 69A of the Act. 12.4 It is further relevant to note that though the return of advance of Rs.3,84,04,298/-in this assessment year i.e. AY 2012-13 has been disputed by the Assessing Officer, however return of advance of remaining balance of Rs. 3,64,82,259/-in the succeeding assessment year, AY 2013-14, has been accepted. This fact further strengthens the conclusion that sums received by the appellant during the year from M/s Shreyas International was nothing but the return of advance by from M/s Shreyas International, and hence the same is outside the purview of section 69A of the Act. In the case of Principal Commissioner of Income-tax v. Bairagra Builders (P.) Ltd. [2024] 299 Taxman 460 (Bombay) wherein assessee-company took unsecured loans from two companies, on the basis of statement of one PKJ recorded during search and seizure operation that he had provided accommodation entries to the assessee, the Assessing Officer treated the said loans as fake. However, the CIT (Appeals) deleted the addition based on the evidences, which has been upheld by the Hon'ble Tribunal and Hon'ble High Court. The relevant finding of the Hon'ble High Court is reproduced hereunder. 6. The CIT-Appeals, upon a review of the documentary evidence on the record, which included supporting bank statements, the identities of the directors of the two companies, the tax returns filed by those companies and the confirmation of loans given by the Respondent concluded that the disallowance of the loan as being fake ought to be reversed. Printed from counselvise.com Page | 9 7. The ITAT too agreed with the CIT-Appeals. Distinguishing the case law cited by the Department, the ITAT agreed with the CIT-Appeals and held that the Respondent has discharged the onus of explaining the transactions. The ITAT has also examined another decision of the ITAT in respect of another assessee, which also had a valid loan from Javda India Impex Ltd. The ITAT agreed with the findings in that case to hold that the addition to the income had been raised merely on conjecture and surmise. 8. Having heard the Learned Counsels for the parties and having reviewed the record, we do not find this to be a fit case for an appeal, that raises any substantial question of law-a prerequisite for this Appeal to be entertained. This is not a case of accounting entries masquerading as purchase of goods or services. The evidence on record, has led to the questions of fact being answered concurrently in two rounds of review, in favour of the Respondent. Therefore, no substantial question of law arises in the matter, and therefore, the Appeal is dismissed.\" 12.5 Accordingly, the addition made by the Assessing Officer u/s.69A of the Act ofRs.3,84,04,298/- is deleted.” 7. The contention of the assessee was that when on the basis and addition for reopening of assessment was deleted by the learned CIT(A), the reopening of the assessment is bad in law and the other additions cannot survive. 8. We observed that an identical issue came up for consideration before the Hon’ble Third Member in the case of Mahesh Kumar Vs. ITO in ITA No. 2650/Del/2024 dated 06.08.2025 wherein Ld. Third Member agreeing with the view of the learned Judicial Member, held as under :- This reference under section 255(4) of the Income-Tax Act, 1961 (‘Act for short) arises on account of difference of opinion between two learned Members of the formulated for being decided by the Third Member : Printed from counselvise.com Page | 10 \"Whether, in the given facts and circumstances of the case, the reopening under Section 147 read with Section 148 of the Act is valid or not where the Assessing Officer made addition independently of other income which does not form the subject matter of reopening and where addition made by the Assessing Officer on the basis of reasons recorded for reopening were deleted by the CIT(A) and no addition of that income on the basis of reasons recorded survives which has reason to believe had escaped assessment and which formed the basis of reopening.\" 2. The brief facts are that the assessee was an employee with the Municipal Corporation of Delhi and, inter olio, had salary income. The assessee filed his Return of Income (Rol) for assessment year 2012-13 on 18.06.2012 declaring an income of Rs.2,07,380/-, which was processed under Section 143(1) of the Act. There was no regular assessment under Section 143(3) of the Act made in this case. It appears that the assessment was reopened by the Assessing Officer vide notice dated 28.03.2019 under Section 148 of the Act. The assessment was reopened presumably on account of Information received from the Investigation Wing about the assessee having received accommodation entries amounting to Rs.9,60,000/- in financial year relevant to assessment year 2012-13. The Assessing Officer found that the assessee had claimed exemption under Section 10(38) of the Act on the Long Term Capital Gains (LTCG). It was found that the assessee was one of the beneficiaries of the accommodation entries received through an entry operator who was involved in the manipulation of prices of various scrips. The Assessing Officer found that the assessee had concealed the particulars of income. The Assessing Officer completed the assessment on 25.11.2019 and made the following additions: i) Rs.9,60,000/- under Section 68 of the Act on account of bogus LTCG; ii) Rs.15,48,000/- (Rs.1,48,000/- cash deposit and Rs.14,00,000/- received by cheque) as unexplained cash credit under Section 68 of the Act; and, iii) Rs.20,62,375/-under Section 69 of the Act being unexplained expenditure as assessee was found to have purchased property for the said sum. Printed from counselvise.com Page | 11 It appears that during the assessment proceedings, the Assessing Officer had called upon the assessee to produce the copy of intimation/prior intimation about the purchase of property given by him to the employer, which was not produced. 3 Be that as it may, the assessee, feeling aggrieved, challenged the same before the learned CIT(A). The learned CIT(A) by an order dated 30.03.2024 has partly allowed the appeal to the extent of deleting the addition towards alleged bogus share, transaction. The rest of the additions have been confirmed. It is this order which is the subject matter of challenge in the appeal. 4. In this appeal, the assessee had raised additional Ground no. 3 as under: “3. That the reassessment order passed u/s 147 of the Act is further not tenable under the low because the additions made on the basis of reasons recorded for reopening were deleted by Ld. CIT(A) and thus, no additions on the basis of reasons recorded for reopening survives in case of assessee.\" The difference of opinion between the learned Members has arisen in the context of the aforesaid ground. 5. The learned Vice President (Judicial Member) placing reliance on the decision of Bombay High Court in CIT vs Jet Airways (1) Ltd., 331 ITR 236 (Bom) and jurisdictional Delhi High Court decision in ATS Infrastructure Ltd. vs ACIT, 473 ITR 595 (Delhi) has found that once the addition made on account of original reasons recorded (in this case, the addition on account of alleged bogus LTCG is deleted, the other two additions, which were not part of original reasons recorded, cannot be sustained. The learned Accountant Member, by his dissenting order, has found that the decision in Jet Airways (1) Ltd. (supra) and ATS Infrastructure Ltd. (supra) are distinguishable on facts and cannot be called into aid to delete the balance additions. 6. It is submitted by the learned counsel for assessee that once the addition made by the Assessing Officer relying on the reasons recorded is deleted, no other addition can be sustained as held by the Bombay High Printed from counselvise.com Page | 12 Court in Jet Airways (1) Ltd. (supra) and Delhi High Court in ATS Infrastructure Ltd. (supra) and Ranbaxy Laboratories Ltd. vs CIT, 336 ITR 136 (Delhi). It is submitted that the Kolkata Bench of the Tribunal has also taken a similar view in B.P. Poddar Foundation for Education vs ACIT (ITA No. 1863/Kol/2019 decided on 13.11.2019) which has been confirmed by the Calcutta High Court by order dated 13.09.2022 reported in 448 ITR 695 (Calcutta). It is submitted that the learned Accountant Member was not justified in distinguishing these decisions on the ground that in these cases the Assessing Officer had accepted the explanation and had not made any addition. It is submitted that a situation where the Assessing Officer does not make any addition on the basis of the reasons recorded and a situation where such addition is made alongwith some others and the addition made on the basis of the reasons recorded is deleted by the learned CIT(A) cannot be distinguished as the net result is the same. 7. The learned DR has submitted that the learned Accountant Member has considered the factual situation obtaining in each of the cases which have been relied upon by the assessee as also the learned Judicial Member and then has rightly come to the conclusion that the present case is distinguishable inasmuch as in the present case the Assessing Officer had made an addition under Section 68 of the Act of Rs.9,60,000/-, which has been subsequently deleted by the Id. CIT(A). It is submitted that, in such a case, the assumption of jurisdiction by the Assessing Officer in the reopening of assessment cannot be said to be illegal. 8. I have carefully considered the rival circumstances and the submissions made and I am inclined to agree with the findings recorded by the learned Judicial Member that the reassessment deservers to be quashed and consequently, the appeal is required to be allowed. Here are the reasons. 9. The facts, apart from being matters of record, are not in dispute. In this case, there was no regular assessment under Section 143(3) of the Act. The assessment was sought to be reopened by notice dated 28.03.2019 only on the ground of escapement of income pertaining to exemption of LTCG under Section 10(38) of the Act. In the course of assessment proceedings, the Assessing Officer made two other additions Printed from counselvise.com Page | 13 Rs.15,40,000/- under Section 68 of the Act on account of deposit of cash/cheques which went unexplained and Rs.20,62,375/- being unexplained expenditure on purchase of property under Section 69 of the Act. The learned CIT(A) has deleted the addition on account of the alleged bogus LTCG which was the original basis of the reopening. However, the learned CIT(A) has sustained the other two additions. The question is whether the reassessment can be sustained in such circumstances. 10. I have carefully gone through the differing orders passed by the learned Members of the Bench. While the learned Judicial Member has placed reliance on the decision, viz. ATS Infrastructure Ltd. (supra), B.P. Poddar Foundation for Education (supra) and Jet Airways (1) Ltd. (supra), the learned Accountant Member has found that the decisions in the case of ATS Infrastructure Ltd. (supra) and Jet Airways (1) Ltd. (supra) are distinguishable on the ground that in those cases the Assessing Officer himself had not made any addition on the basis of the reasons recorded for reopening. In other words, the learned Accountant Member has made a distinction between the cases where the Assessing Officer did not make any addition on the basis of original reasons recorded, but made certain other additions and a case where the Assessing Officer indeed makes addition on the basis of original reasons recorded alongwith other additions and the addition made on the basis of the original reasons recorded is deleted by the learned CIT(A). I am of the considered view that such a distinction could not have been made for the reason that the appellate proceedings before the CIT(A) are a continuation of the original assessment proceedings. Thus, no distinction as sought to be carved out by the learned Accountant Member can be accepted. 11. In Jet Airways (1) Ltd. (supra), following was the substantial question of law posed before the Bombay High Court :- \"Where upon the issuance of a notice under section 148 of the Income-tax Act, 1961 read with section 147, the Assessing Officer does not assess or, as the case may be reassess the income which he has reason to believe had escaped assessment and which formed the basis of a notice under section 148, is it open to the Assessing Printed from counselvise.com Page | 14 Officer to assess or reassess independently any other income, which does not form the subject-matter of the notice?\" 12. The Bombay High Court in the context of Explanation 3 to Section 147 of the Act added by the Finance (No. 2) Act, 2009 held as under :- \"Explanation 3 does not and cannot override the necessity of fulfilling the conditions set out in the substantive part of section 147. An Explanation to a statutory provision is intended to explain its contents and cannot be construed to override it or render the substance or core nugatory. Section 147 has this effect that the Assessing Officer has to assess or reassess the income (\"such income\") which escaped assessment and which was the basis of the formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which comes to his notice during the course of the proceedings. However, if after issuing a notice under section 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, ofresh notice under section 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee.\" 13. Thus, the distinction sought to be made out by the learned Accountant Member, in my considered opinion, cannot be accepted, 14. The learned Accountant Member in para 3.4 of his order has found that the case of B.P. Poddar Foundation for Education (supra) decided by the Kolkata Bench involves identical facts. Incidentally, the decision in the said case has been confirmed by the Calcutta High Court. This aspect has been considered by the learned Accountant Member in para 5 onwards of his order. Before the Calcutta High Court, the Revenue had raised the following substantial question of law :- (i) Whether on the facts and circumstances as well as in law the Income-tax Appellate Tribunal was correct in law in holding that the other additions made in the Printed from counselvise.com Page | 15 order under section 147/143(3) of the Income-tax act, 1961, which were not part of the reasons recorded for reopening the assessment were not sustainable in the eyes of law even after insertion of Explanation 3 to section 147 of the Act by Finance Act, 2009 when addition was made by the Assessing Officer on the ground of reopening? (ii) Whether on the facts and circumstances of the case the Learned Income-tax Appellate Tribunal correctly interpret the decision reported in the case of Jet Airways (1) Limited reported 331 ITR 236 (Bom) and Ranbaxy Laboratories Ltd. reported in 336 ITR 136 (Del) on facts in the instant case?\" 15. The Calcutta High Court, inter alia, relying upon the decision of Bombay High Court in the case of Jet Airways (1) Ltd. (supra) and that of Delhi High Court in Ranbaxy Laboratories Ltd. (supra) had found that the Tribunal was justified in finding that the reopening was bad in law. However, here again, the learned Accountant Member in para 5.8 of the order has found that the reliance placed by the Kolkata Tribunal on the decision of Bombay High Court in Jet Airways (1) Ltd. (supro) and the Delhi High Court in Ranbaxy Laboratories Ltd. (supro) \"is not acceptable\" because no such proposition was laid down in these decisions. The following observations in para 5.8 of his order are relevant :- \"5.8 However, as discussed above, in the present case, the AG had made addition in respect of the issue on which the assessment was reopened and also in respect of two other issues which come to his notice during the assessment proceedings on the basis of materials available on record. In the present case, it is not the case that the AO did not make the addition on the issue on which the assessment was reopened u/s 148 of the Act but the said addition was deleted by the Ld. CIT(A). Therefore, the reliance placed by the Kolkata Tribunal on the decisions of Hon'ble Bombay High Court in the case of CIT vs Jet Airways (1) Ltd. (supra) and of Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs CIT (supra) to hold that if the addition on the basis of which the reassessment was made was deleted in appeal, then the AO could not make addition in respect of other issues which come to his notice during the reassessment proceedings, unless Printed from counselvise.com Page | 16 the AO has issued a separate notice u/s 148 of the Act to assess each of the said new issue coming to the notice of the AO during the reassessment proceedings is not acceptable because no such proposition was laid down in the decisions of Hon'ble Bombay High Court in the case of CIT vs Jet Airways (1) Ltd. (supra) and of Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs CIT (supra).\" 16. In my considered view, once the learned Accountant Member had found that the facts in the case of B.P. Poddar Foundation for Education (supra) were identical, it was not open to express any contrary view. That being an order of the co-ordinate Bench was binding. 17. The learned Accountant Member has also reproduced in para 3.2 of the order the observations of learned CIT(A) while deleting the addition in respect to bogus LTCG. The learned Accountant Member found that the findings are \"a little abrupt\". Although the reasons given by the learned CIT(A) could have been more specific and clear, the said aspect cannot be gone into for the reason that ultimately the learned CIT(A) has partly allowed the appeal and deleted the addition and that order has not been challenged by the Revenue and has thus attained finality. 18. In the result, Ground no. 3 as raised by the assessee deserves to be allowed and the impugned addition cannot be sustained. The question as referred to is answered accordingly, holding that the reopening u/s 147 r.w.s 148 of the Act, in this case, is not valid. The appeal, therefore, deserves to be allowed as proposed by the learned Vice President (Judicial Member). PER MAHAVIR SINGH, VP: This appeal was fixed for giving effect to the order of the Ld. Third Member in which the Ld. Third Member concurred with the view of Ld. Vice President (Judicial Member) with regard to the following question framed :- \"Whether, in the given facts and circumstances of the case, the reopening under Section 147 read with Section 148 of the Act is valid or not where the Assessing Printed from counselvise.com Page | 17 Officer made addition independently of other income which does not form the subject matter of reopening and where addition made by the Assessing Officer on the basis of reasons recorded for reopening were deleted by the CIT(A) and no addition of that income on the basis of reasons recorded survives which has reason to believe had escaped assessment and which formed the basis of reopening.\" 2. The Ld. Third Member has answered the above question vide para no. 18 of his order dated 22.07.2025, which reads as under: - \"18. In the result, Ground no. 3 as raised by the assessee deserves to be allowed and the impugned addition cannot be sustained. The question as referred to is answered accordingly, holding that the reopening u/s 147 r.w.s 148 of the Act, in this case, is not valid. The appeal, therefore, deserves to be allowed as proposed by the learned Vice President (Judicial Member).\" 3. Since, the Ld. Third Member concurred with the view of Ld. Vice President (Judicial Member) by holding that reopening u/s. 147 r.w.s. 148 of the Act, in this case, is not valid. Accordingly, consequent to the opinion of Ld. Third Member, appeal of the Assessee stands allowed. 9. Applying the ratio of the above decision of the Hon’ble Third Member to the facts of the assessee’s own case we hold that since the addition on the basis for reopening of assessment was deleted by the learned CIT(A), the reopening of assessment u/s.147 r.w.s. 148 is bad in law and accordingly we quash the reassessment order dated 31.12.2019 passed u/s. 143(3)/147 of the Act for A.Y. 2012-13. We allow the legal ground raised by the assessee and all other grounds on merits are left open. Printed from counselvise.com Page | 18 10. In the result, the appeal of the assessee is partly allowed as indicated above. Order pronounced in the open court on 28.11.2025 Sd/-/- Sd/- [M. BALAGANESH] [C.N. PRASAD] ACCOUTNANT MEMBER JUDICIAL MEMBER Dated:28.11.2025 NEHA , Sr.P.S.* Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "