DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, KOTA, KOTA vs. SHIV VEGPRO PRIVATE LIMITED, KOTA

This appeal by the Revenue is directed against the order of the learned Commissioner of Income Tax (Appeals) [hereinafter referred to as “the CIT(A)”] dated 31.08.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), for the Assessment Year 2016-17. The appeal before the CIT(A) arose out of the assessment order dated 26.05.2023 passed by the Assessing Officer (hereinafter referred to as "the AO") under section 147 of the Act.

The grounds of appeal raised by the Revenue before us in the memorandum of appeal in Form No. 36 read as under:

Briefly stated, the facts of the case are that, for the year under consideration, the AO completed the assessment under section 147 of the Act by making an addition of Rs 6,39,25,000 under section 68 of the Act, treating certain sale transactions of the assessee as non-genuine and in the nature of accommodation entries. Aggrieved, the assessee preferred an appeal before the CIT(A). In the meanwhile, the assessee had also assailed the reassessment proceedings by way of a writ petition before the Hon’ble Rajasthan High Court.

The Hon’ble Rajasthan High Court, vide its order dated 25.11.2024 in D.B. Civil Writ Petition No. 15350/2022, was pleased to allow the writ petition and quash the assessment order passed by the AO. Taking due note of the said judgment, the CIT(A) allowed the appeal of the assessee. It is against this order of the CIT(A) that the Revenue is in appeal before us.

The learned Departmental Representative (hereinafter referred to as “the DR”) submitted that the Revenue had preferred a Special Leave Petition (hereinafter referred to as “the SLP”) in Diary No. 44023/2025 on 07.08.2025 before the Hon’ble Supreme Court against the aforesaid judgment of the Hon’ble Rajasthan High Court, and that, therefore, the CIT(A) ought not to have decided the appeal following the said judgment. 6. The learned Authorised Representative (hereinafter referred to as “the AR”) for the assessee, on the other hand, submitted that the Hon’ble Supreme Court has since dismissed the SLP filed by the Revenue vide its Order dated 12.09.2025. The learned DR fairly admitted the dismissal of the SLP, but contended that the same was dismissed only on the ground of delay and not on merits.

We have heard the rival submissions and perused the material available on record.

The short question arising for our consideration is whether the order of the CIT(A), which followed the judgment of the Hon’ble Rajasthan High Court in the assessee’s own case quashing the reassessment, calls for any interference. It is not in dispute that the said judgment of the Hon’ble Rajasthan High Court squarely governs the present controversy and that the Revenue’s challenge thereto by way of the SLP has been dismissed by the Hon’ble Supreme Court. Once the SLP has been dismissed, the judgment of the Hon’ble Rajasthan High Court has attained finality and continues to hold the field. The contention of the learned DR that the SLP was dismissed only on the ground of delay does not advance the case of the Revenue. In these circumstances, the CIT(A) cannot be faulted for having followed a binding judgment of the jurisdictional High Court rendered in the assessee’s own case.

In view of the foregoing, and respectfully following the judgment of the Hon’ble Rajasthan High Court dated 25.11.2024 in the assessee’s own