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Facts
The assessee advanced a loan of Rs. 50,91,233/- to SKZ Realities. The Assessing Officer (AO) reopened the assessment under section 148, treating the loan as unexplained and non-genuine, despite the fact that the case had already been completed under section 143(3). The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal held that the AO erred in reopening the assessment under section 148 as the case had already been subjected to scrutiny assessment under section 143(3). The Tribunal further noted that the loan transaction was genuine and supported by bank details, being out of the sale proceeds of land already assessed.
Key Issues
1. Validity of reopening of assessment under section 148 when the case was already assessed under section 143(3). 2. Genuineness and validity of loan transaction treated as unexplained income.
Sections Cited
148, 69, 115BBE, 143(3), 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 19.08.2025 passed by the Commissioner of Income Tax (Appeals)National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2016-17. The assessee has raised the following grounds of appeal: 2.
1. The Ld.CIT(A) erred in law and on facts in upholding the validity of reopening under section 148 of the Act in upholding the validity of reopening under section 148 of the Act despite there being no escapement of income. The reopening is bad in law and liable to be quashed as the jurisdictional condition for assumption of reassessment proceedings has not been satisfied. Asst. Year : 2016-17 - 2–
2. The Ld.CIT(A) has erred in law and on facts in confirming addition amounting to Rs.50,91,233/- under section 69 read with section 115BBE of the Act by wrongly treating the loan given as unexplained and non-genuine. The addition so made and confirmed deserved to be deleted.
3. The Assessing Officer made an addition of Rs. 50,91,233/- to the income of the assessee by treating the loan given transaction as non- genuine under section 69 read with section 115BBE of the Income Tax Act, 1961. The A.O. observed that the assessee had not furnished the PAN, identity, genuineness, and creditworthiness of the lender, and therefore considered the loan transaction as unexplained and treated the amount as a credit received.
4. Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A), based on the material available on record, dismissed the appeal of the assessee.
Heard the argument of both the parties and perused the material available on record.
In the present case, the assessment under section 143(3) of the Act had already been completed on 26.12.2018. In that assessment, the income arising from the sale of agricultural land was treated as business income. The assessee extended a loan of Rs. 50,91,233/- to SKZ Realities. The Revenue reopened the assessment under section 148 of the Act on the ground that the return of income declared by the assessee was only Rs. 5,45,850/-, which according to the A.O. was not commensurate with the loan advanced. However, while issuing the notice under section 148, the Assessing Officer mentioned that the case had originally been processed under section 143(1) of the Act, whereas Asst. Year : 2016-17 - 3– the factual position is that the case had already been assessed under section 143(3) of the Act. This factual position has also been noted in the order of the learned CIT(A) dated 19.08.2025. Thus, while issuing notice under section 148, the Assessing Officer ignored the fact that the case had already been subjected to scrutiny assessment under section 143(3) of the Act.
On merits, the learned counsel for the assessee submitted that the amount of Rs. 50,91,233/- advanced as a loan to SKZ Realities was out of the sale proceeds of the land, which had already been assessed under section 143(3) of the Act. It was submitted that the loan transaction was genuine and duly supported by bank details as follows:
Sr.No. Date Amount Date Amount received in (Deposit) paid in Rs.) (Credit) Rs.) 1. 20.07.2015 8,00,000/- 21.08.2015 50,000/- 2. 27.06.2015 25,00,000/- 01.09.2025 25,00,000/- 3. 10.12.2015 50,00,000/- 16.12.2015 50,00,000/- Total 88,62,137/- 80,00,000/- Since the sources have been duly proved, no addition is warranted on this account. Hence, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.