SWETAL VIJAYBHAI SHAH,AHMEDABAD V. PCIT, AHMEDABAD-1, AHMEDABAD

ITA 1269/AHD/2025

AI Insights

The case involves an appeal by Swetal Vijaybhai Shah against the order of the PCIT, Ahmedabad-1, which was passed under Section 263 of the Income Tax Act, 1961. The PCIT had found the assessment order passed under Section 147 of the Act to be erroneous and prejudicial to the Revenue as it did not include any addition regarding a bogus accommodation entry of Rs. 33,94,991 received from M/s. Prerna Infrabuild Ltd. The PCIT's order was based on the premise that the AO had not adequately examined the fictitious loan received by the assessee from an entity controlled by an alleged accommodation entry operator, Jignesh Shah. However, the tribunal found that the PCIT's order did not provide a concrete basis for this conclusion, leading to the allowance of the assessee's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782534 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 31-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALPESH PARMAR
• Assessee Lawyers: VIVEK CHAVDA
• Keywords: Set aside; Bogus
• Section: 263

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 1269/Ahd/2025 (िनधा\u0005रण िनधा\u0005रण िनधा\u0005रण िनधा\u0005रण वष\u0005 वष\u0005 वष\u0005 वष\u0005 / Assessment Year : 2018-19) Swetal Vijaybhai Shah 104, Prerna Tirth-2, Nr. Prerna Tirth, Derasar, Satellite, Ahmedabad – 380015 बनाम बनाम बनाम बनाम/ Vs. PCIT Ahmedabad-1 Room No.209, Aaykar Bhavan (Vejalpur), Nr. Sachin Tower, Anandnagar-Prahladnagar Road, Ahmedabad \u0001थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AEOPP0943F (Appellant) .. (Respondent) अपीलाथ ओर से /Appellant by : Shri Vivek Chavda, Advocate यथ क ओर से/Respondent by : Shri Alpesh Parmar, CIT.DR Date of Hearing 14/10/2025 Date of Pronouncement 29/10/2025 (आदेश आदेश आदेश आदेश)/ORDER PER ANNAPURNA GUPTA, AM: The present appeal has been filed by the assessee against the order of the Ld. Principal Commissioner of Income Tax, PCIT, Ahmedabad-1, (hereinafter referred to as “PCIT”), dated 26.03.2025 passed under Section 263 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2018-19. Printed from counselvise.com ITA No. 1269/Ahd/2025 [Swetal Vijaybhai Shah vs.PCIT] A.Y. 2018-19 - 2 – 2. The order of the Ld. PCIT reveals that he found the assessment order passed in the case of the assessee u/s.147 of the Act erroneous and causing prejudice to the Revenue for not having made any addition on account of bogus accommodation entry received by the assessee of Rs.33,94,991/- from M/s. Prerna Infrabuild Ltd. The Ld. PCIT noted that reopening in the case of the assessee was resorted to for the said purpose only i.e. because of information in the possession of the AO of the asssessee having received fictitious loan of Rs.33,94,991/- from M/s. Prerna Infrabuild Ltd., which was controlled and managed by one Shri Jignesh Shah an alleged accommodation Entry Operator. The Ld.PCIT noted that the AO completed assessment accepting the income returned by the assessee without making any addition of the alleged fictitious loan received by him. Therefore, he found the assessment order erroneous and prejudicial to the interest of the Revenue. The Ld. PCIT confronted the error so noted by him in the assessment order, to the assessee and after considering the reply filed by the assessee he held that the AO having not verified the assessee’s fictitious loan received from M/s. Prerna Infrabuild Ltd. the order passed was erroneous . That since the AO had passed the order without making proper examination of the issue for which it was reopened the same had resulted in loss to the Revenue. The Ld.PCIT set aside the assessment order passed u/s.147 of the Act directing the AO to pass fresh assessment order in accordance with law after duly examining the facts of the case to the extent of issues discussed in his order. Printed from counselvise.com ITA No. 1269/Ahd/2025 [Swetal Vijaybhai Shah vs.PCIT] A.Y. 2018-19 - 3 – 3. On going through the order of the Ld. PCIT we find that there is no basis in the order for arriving at finding of error in the assessment order passed by the AO as noted above. The PCIT held that the AO failed to make necessary enquiries with respect to the issue for which reopening was resorted i.e. bogus accommodation entry of loan taken by the assessee from one M/s. Prerna Infrabuild Ltd., which was controlled and operated by one Mr. Jignesh Shah an alleged accommodation Entry Operator, but the entire order of the Ld. PCIT does not reveal as to how the AO failed to make necessary enquiries on the issue. There is no mention in the Ld.PCIT’s order of the inquiry actually made by the AO and how it was inadequate . The entire order only contains the information in the possession of the Department regarding Shri Jignesh Shah being subjected to search action revealing him to be an Accommodation Entry Operator. This entire discussion is mentioned in page nos.2 to 3 of the PCIT’s order. The PCIT notes that there was information that the assessee had also taken accommodation entry from an entity controlled by Mr. Jignesh Shah and same had not been offered to tax by the assessee. From there, the Ld. PCIT straight jumps to the finding that the AO has not considered this vital aspect and, therefore, his order is erroneous. As pointed out above, he has not given any basis for his finding that the AO has not considered the information in his possession. There is no discussion in the order of the queries raised by the AO and the reply filed by the assessee during assessment and as to how therefore, the AO failed to make inquiry in relation to vital and specific information that he had in Printed from counselvise.com ITA No. 1269/Ahd/2025 [Swetal Vijaybhai Shah vs.PCIT] A.Y. 2018-19 - 4 – his possession. Thereafter, pages nos. 4 to 16 of the order deal only with the judicial interpretation of the provisions of Section 263 of the Act and the Ld. PCIT thereafter concludes by holding that the assessment order passed in the present case is erroneous causing prejudice to the Revenue. Undoubtedly, we find no basis for this finding of the Ld. PCIT in the entire order. This fact was confronted to the ld. DR during the course of hearing before us who also failed to point out where the Ld.PCIT had discussed as to how the AO had not made proper enquiries on the issue before him. We have no hesitation, therefore, in holding that there is no finding of error by the Ld.PCIT in the order of the AO and, therefore, the order passed by the PCIT u/s.263 of the Act is not sustainable in law. 4. In the result, appeal filed by the assessee is allowed. This Order pronounced on 29 /10/2025 Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 29/10/2025 S. K. SINHA/vk Printed from counselvise.com "