RED RAY LABORATORIES,NAGPUR vs. ITO WARD 3(4), NAGPUR
Facts
Reassessment proceedings were initiated against Red Ray Laboratories based on third-party 'parallel tally data' seized during a search on M/s. Special Blasts Ltd. group, alleging bogus purchases of Rs. 36,29,200 from M/s. SBL Energy Ltd. The assessee denied these purchases, asserting only sales transactions with the said party, but the Assessing Officer and CIT(A) confirmed the addition.
Held
The Tribunal held that the addition was based solely on uncorroborated third-party data without independent investigation or evidence of payment. It also found a serious violation of natural justice due to the denial of cross-examination opportunity to the assessee. Therefore, the addition for bogus/unaccounted purchases was deleted.
Key Issues
The key legal issues were the validity of reassessment based on unverified third-party data, the denial of cross-examination opportunity, and the confirmation of bogus purchase addition under Section 69C without corroborative evidence.
Sections Cited
Section 250, Section 147, Section 143(3), Section 132, Section 69C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR SMC BENCH, NAGPUR
Before: SHRI MANISH BORAD
This appeal by the assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi (for short, “CIT(A)”) dated 25.11.2025 passed u/sec. 250 of the Income Tax Act, 1961 (for short, “Act”) which is arising out of assessment order dated 29.03.2025 passed u/sec. 147 of the Act by the ITO, Ward-3(4), Nagpur for the Assessment Year (A.Y.) 2020-21. 2. The assessee has raised the following grounds of appeal:- “1. Illegal Reassessment Proceeding: That on the facts and in the circumstances of the case and in law, the learned CIT(A) failed to appreciate that the reopening of assessment u/s 147 is bad in law, void ab initio and liable to be quashed as it is based solely on unverified third-party "parallel tally data" seized from the premises of another assesse
The order continues below.
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