RUSHINA VIKRAM DESAI,AHMEDABAD vs. THE ITO, WARD-3(3)(2), AHMEDABAD

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 juri ictional condition for assumption of reassessment proceedings has not been satisfied. Asst. Year : 2016-17 - 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.

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.

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:

In the result, the appeal of the assessee is allowed.

""थ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned CIT 4. आयकर आयु"(अपील) / The CIT(A)- 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड" फाईल / Guard file.