ANUREET KAUR JOLLY,ANKLESHWAR vs. ACIT, CIRCLE-2, BHARUCH

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ITA 1348/SRT/2025Status: DisposedITAT Surat10 July 2026AY 2013-147 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that reopening the assessment beyond four years without failure on the part of the assessee to disclose material facts and without tangible material is not permissible. Therefore, the reassessment order was quashed.

What were the facts?

The assessee had received an unsecured loan which was repaid with interest and TDS during the original assessment. The assessment was later reopened beyond four years based on information from a third-party search.

What were the issues?

Whether reopening of assessment beyond four years is valid when the original assessment was complete and no material facts were suppressed by the assessee.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: Shri T.R. Sentil Kumar & Shri Ratnesh Nandan Sahay

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (PHYSICAL HEARING) Before: Shri T.R. Sentil Kumar, Judicial Member And Shri Ratnesh Nandan Sahay, Accountant Member

ITA No: 1348/SRT/2025 Assessment Year: 2013-14

Anureet Kaur Jolly The ACIT Prop. Yushika Export Circle-2, 104, Kohinoor Complex Vs Bharuch Satyam Apartment, GIDC Estate, Ankleshwar-393002 Gujarat PAN: AEAPJ6658R (Appellant) (Respondent) Assessee Represented: Shri Kunal Sanghavi, CA Revenue Represented: Ms. Neerja Sharma, Sr. D.R. Date of hearing : 05-05-2026 Date of pronouncement : 10-07-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the assessee as against the appellate order dated 21.10.2025 passed by the Additional/Joint Commissioner of Income Tax (Appeals)-1, Visakhapatnam arising out of the reassessment order passed u/s. 143 r.w.s 147 of the Income Tax Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2013-14.

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2.

Brief facts of the case are, the assessee is an individual and Prop. of M/s Yushika Export. For the A.Y. 2013-14, the assessee filed her original return of income on 02.07.2019, declaring total income of Rs. 44,14,700/-. The return was taken for scrutiny assessment and regular assessment order passed u/s 143(3) on 04.03.2016 after calling various details documents and assessed the returned income without making any addition. It is thereafter information received from Central Circle. The assessee is one of the beneficiary of bogus accommodation entries from M/s. Aayurshi Infraprojects Pvt. Ltd. Therefore, the assessment was reopened by issuing a notice u/s 148 of the Act on 30.03.2017. In response, the assessee e-filed her return of income on 02.07.2019 admitting the same income. The assessee also objected to the reopening the assessment. The same was overruled by the Assessing Officer and made bogus loan addition u/s 68 of the Act of Rs. 30,53,620/- and demand tax thereon.

3.

Aggrieved against the re-assessment order, the assessee filed appeal before ld. Addl./JCIT(A) who has confirmed the above addition and dismissed the appeal both on jurisdictional and merits of the case.

4.

Aggrieved against the appellate order, the assessee is in appeal before us, raising the following grounds of appeal as under:-

“[1] The Ld. AddI/JCIT (A) -1 was grievously erred in invoking the provisions of Section 147 and passing reassessment order u/s. 147 r.w.s. 144 of the Act beyond the expiry of four years despite the fact that there is no failure on the part of the appellant to disclose fully and truly all the material information during the course of appellate proceedings as well as original assessment proceedings and hence the order passed by the Ld. A.O. is liable to be quashed.

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[2.1] The Ld. AddI/JCIT (A) -1 was grievously erred in law and on facts in considering the addition of Rs. 30,53,620/- made by the Ld. A.O. of genuine loan obtained by the appellant by treating the same as bogus loan and making addition of the same u/s. 68 of the Act and the loan taken is repaid in 3 month with the ineterst. [2.2] The Ld. AddI/JCIT (A) -1 was grievously erred in law and on facts in appreciating the fact that the sole basis for making addition u/s. 68 is the general statement of third party which is not binding to the appellant and since all the ingredients for complying with section 68 are fulfilled no addition u/s. 68 can be made and the same be deleted. [3] The Ld. Addl/JCIT (A) -1 was grievously erred in law and on facts in considering that no material information provided with the notice u/s. 148 of the Act. [4.1] The Ld. Addl JCIT (A) -1 was grievously erred in law and on facts in considering that no independent verification and mere relying on information received from search investigation team - No Reopening u/s. 147 based on borrowed satisfaction and lack of independent investigation by Income Tax Authorities. [4.2] The Ld. Addl/JCIT (A) -1 was grievously erred in law and on facts in considering that No statement recorded of third party has been brought on record. [4.3] The Ld. AddI/JCIT (A) -1 was grievously erred in law and on facts in considering that the presumption u/s. 132(4A) is available only in respect of the person from whom the paper seized. [5] The appellant therefore requests your Honour to kindly delete the addition of Rs. 30,53,620/- made by the Ld. A.O. looking to the merits of the case. [6] The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.”

5.

Ld. Counsel appearing for the assessee filed before us, a paper book running 120 pages. He drawn our attention to the replies dated 11.01.2016 filed before the Assessing Officer, during the original assessment proceedings before Assessing Officer as follows:-

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“…2. Copy of confirmation of ledger account, copy of bank statement & copy of return of Income filed of below mentioned parties are attached herewith; (Annexure II)  Kalgi Marketing Private Limited  Purvanil Trade & Commerce Private Limited  Monisha Infrastructure Private Limited  Aayurshi Infraprojects Private Limited …………… “……1. I hereby confirm that I have not entered any purchase / sales transaction with Aayurshi Infraprojects Private Limited during the year under consideration, I have taken loan for business purpose of Rs. 30.00 Lacs in the month of August 2012 and the same has been repaid in the month of November 2012 with interest @ 9% p.a. after deducting Tax at source, copy of ledger account confirmation along with copy of Income tax return filed by Aayurshi Infraprojects Private Limited is already submitted in our earlier submission.

5.1 Thus, ld. Counsel submitted that during the original assessment proceedings, unsecured loan were fully verified by the Assessing Officer. The assessee taken loan for business purpose of Rs. 30.00 lacs in the month of August 2012 and the same has been repaid in the month of November, 2012 with interest @ 9% p.a after deducting TDS. The assessee also produced ledger account confirmation along with copy of ITR filed by M/s. Aayurshi Infraprojects Pvt. Ltd.

5.2 Further, ld. Counsel pleaded for the very same unsecured loan, the assessment was reopened beyond four years period which is not permissible as per law and jurisdictional High Court judgment in the case of M/s. Jivraj Tea Ltd vs. ACIT, reported in [2020] 116 taxmann.com 27 (Gujarat) and the Hon’ble Supreme Court of India in the case of ITO vs. Dhirajlal Gandalal Mehta reported in [2024] 160 taxmann.com 314 (SC). Thus, ld. Counsel pleaded that the entire reassessment is liable to be quashed.

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6.

Per contra, ld. Sr. DR appearing for the Revenue supported the orders passed by the lower authorities and requested to confirm the same.

7.

We have given our thoughtful consideration and perused the materials available on record, including the paper book filed by the assessee, it is undisputed fact that during the original assessment proceedings, the AO asked for the details of unsecured loans availed by the assessee from various creditors. In response, the assessee filed all the details including confirmation, ITRs filed by the creditors and the loan amount was also repaid in month of November, 2012 with interest @ 9% p.a. and appropriate TDS to M/s. Aayurshi Infraprojects Pvt. Ltd, for the very same transactions after a period of 4 years. Further, the assessment was reopened only on the basis of the search carried out in the third party premises, which is not permissible within the provisions of section 147 of the Act. The Hon’ble jurisdictional High Court in the case of M/s. Jivraj Tea Ltd vs. ACIT, reported in [2020] 116 taxmann.com 27 (Gujarat) held that when there is no failure on the part of the assessee to disclose truly and fully all material facts and also there was no tangible material available to the department reopening the assessment beyond four years period is not maintainable by observing as follows:- “Income Tax: where Assessing Officer completed assessment of assessee under section 143(3) and later reopened same for reason that income during year had escaped assessment and issued notice under section 148 beyond period of four years, since in facts of case there was hardly anything on record to indicate that there was failure on part of assessee to disclose truly and fully all material facts and also there was no tangible material available for purpose of issuing notice for reopening beyond period of four years, impugned notice under section 148 required to be quashed.”

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7.1 Similarly, the Hon’ble Supreme Court of India in the case of ITO vs. Dhirajlal Gandalal Mehta reported in [2024] 160 taxmann.com 314 (SC) held as follows:- “SLP dismissed against order of High Court that where assessee had received certain amount from a firm as partner's capital and he had utilised said amount for repayment of loan, since account reflected that there was an element of income in transaction, question of escapement of income chargeable to tax did not arise and thus, reassessment proceedings initiated against assessee beyond four years on ground that said amount was unexplained was to be set aside.” 8. Respectively, following above judicial precedents, we hold that the reassessment made in assessee’s case beyond four year period on the various same materials available on record, is against the provisions of law and therefore, the entire reassessment is liable to be quashed. Thus, the Grounds raised by the assessee are hereby allowed.

9.

In the result, the appeal filed by the assessee is allowed.

Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 10-07-2026

Sd/- Sd/- (RATNESH NANDAN SAHAY) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat: Dated 10/07/2026 *Ganesh Kumar, Sr. PS आदेश क� �ितिलिप अ�ेिषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A)

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5.

DR, ITAT, Surat 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत

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