CARE STOCK BROKING SERVICES,AHMEDABAD vs. THE ITO, WARD-1(3)(1), AHMEDABAD

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ITA 1472/AHD/2024Status: DisposedITAT Ahmedabad30 April 2026AY 2016-1716 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings were initiated without specific evidence linking the assessee to accommodation entries. The reasons recorded were general and lacked prima facie evidence, failing to satisfy the 'reason to believe' requirement under Section 147.

What were the facts?

The assessee, a sub-broker, had its assessment completed under Section 143(3). Subsequently, reassessment proceedings were initiated under Section 147 based on information alleging accommodation entries from certain individuals. The Assessing Officer made an addition of Rs. 89,28,079/- under Section 68, which was confirmed by the CIT(A).

What were the issues?

Whether the reassessment proceedings initiated under Section 147 were based on valid reasons and sufficient evidence. Whether the CIT(A) erred in confirming the addition without proper appreciation of evidence and adherence to principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144B,Section 68,Section 151A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-SHRI TR SENTHIL KUMAR

For Appellant: Shri Mehul K Patel, AR
For Respondent: Shri Kamal Deep Singh, Sr. DR
Hearing: 24.02.2026Pronounced: 30.04.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-

This appeal by the assessee is directed against the order dated 25.07.2024 passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the CIT(A)”] under section 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2016–17.

2.

The assessee has raised the following grounds of appeal: “I. Violation of Principle of natural justice and equity. 1. The learned CIT(A) has grievously erred in law and on facts in not adjudicating the ground raised by the appellant firm for violation of the cardinal principles of natural justice and equity on part of the AO by not providing another opportunity of personal hearing through video conferencing after the same could not be held due to technical glitches. Thus, the AO having not followed the fundamental aspect of the assessment process, ensuring a fair and reasoned conclusion contrary to the provisions of Section 144B(9) of the Act, the learned CIT(A) ought to

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have quashed the impugned order as held by various courts of law including the Hon'ble Gujarat High Court.

2.

The learned CIT(A) further erred in not appreciating the fact that the AO had also grievously erred in not furnishing the copy of statements of Sanjay Shah/Jignesh Shah along with an opportunity of their cross examination as asked for as well as by not furnishing the material/evidences found/seized from their possession relevant to the appellant firm before making the alleged addition. The Impugned order thus deserves to be quashed as void-ab-initio.

II. Assessment u/s 147 of the Act. 1. The learned CIT(A) has grievously erred in law and on facts in not adjudicating the grounds raised by the appellant firm challenging the assessment u/s 147 of the Act vide notice issued u/s 148 of the Act.

2.

The learned CIT(A) has grievously erred in law and on facts in not appreciating the fact that no transactions have been carried out by the appellant firm as alleged and mentioned in the reasons recorded. Hence, notice issued u/s. 148 of the Act and the assessment order passed by the AO pursuant to such notice, both are bad in law and requires to be quashed.

3.

The learned CIT(A) has grievously erred in law and on facts in not appreciating the fact that the proceedings u/s 147 of the Act Initiated by the AO is merely on borrowed satisfaction, without carrying out independent enquiry and applying his own mind on such information independently and thus the amended provisions of Section 148 of the Act have not been properly followed by the AO.

4.

The learned CIT(A) has grievously erred in law and on facts in failing to consider the fact that original assessment for the year in question has been completed u/s. 143(3) of the Act and therefore the re-assessment proceedings initiated by the AO is nothing but re-verification and re- examination of the details already available on record and is thus based on change of opinion which is not permissible and valid as per the settled legal principles and therefore deserves to be quashed.

5.

The appellant states that as per Section 151A, only Faceless Assessing Officers have the authority to issue notices u/s.148 of the Act. That since in the instant case, the notice u/s.148 having been issued by Jurisdictional Assessing Officer, the said notice and subsequent assessment order requires to be quashed since JAO is not empowered to Issue such notice under the Faceless Regime as per Section 151A of the

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Income Tax Act, 1961 as held by various courts of law. The Impugned notice and reassessment order thus requires to be held as null & vold.

In view of the above, the notice issued u/s 148 of the Act and assessment completed u/s. 147 of the Act pursuant to such notice both deserves to be quashed. III. Addition on account of alleged bogus accommodation entry against cash -Rs. 89,28,079/- 1. The learned CIT(A) has grievously erred in law and on facts in confirming the addition made by AO of the NFAC on account of alleged bogus accommodation entry against cash on the basis of the observations/findings given in the appellate order and without proper consideration and appreciation of the facts of the case. 2. The learned CIT(A) has grievously erred in law and on facts in confirming the addition of Rs. 89,28,079/- However, in view of the facts and explanations and evidences filed during the course of assessment and appellate proceedings, the impugned addition of Rs.89,28,079/- made by AO and confirmed by the learned CIT(A) is wholly unjustified and bad in law and thus requires to be deleted. 3. The learned CIT(A) has grievously erred in law and on facts in confirming the addition on the observations that the submission of the appellant is only in the nature of narration and no supporting documents and corroborative evidences have been filed. The said observation is grossly contradictory to the material/evidences placed on record by the appellant firm in the form of Annual Accounts, Bank Book, Bank statements, Demat A/c and other documents etc. which cannot be termed as submission in the nature of narration as alleged but are in the nature of supporting documents and termed as cogent material/evidences which clearly shows that no such accommodation entry has been taken by the appellant firm. Thus, the learned CIT(A) has grievously erred in law and on facts in failing to evaluate the material/evidences in fair and judicious manner and thereby confirming the impugned addition. 4. The learned CIT(A) has grievously erred in law and on facts in failing to consider the fact that the appellant firm has neither earned any LTCG nor taken any loan from Jignesh Shah during the year as evident from the submissions filed during the re-assessment proceedings and in the Paper Book filed before him and since there is no accommodation entry as alleged by AO against cash transactions, the addition made by the AO and confirmed by the learned CIT(A) does not stand on the facts of the case and thus deserves to be deleted.

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5.

The learned CIT(A) has grievously erred in law and on facts in falling to consider the fact that the AO has violated the principle of natural justice and equity by failing to provide necessary material/evidences, statements of Jignesh Shah and Sanjay Shah recorded by the department and their cross examination for rebuttal before making the impugned addition. 6. The learned CIT(A) has grievously erred in law and on facts in not appreciating the fact that the AO has neither invoked the deeming provisions of the Act nor rejected the books of accounts of the appellant firm under the law before making the impugned addition. Hence the same deserves to be deleted. In view of the above, the impugned addition of Rs.89,29,079/- on account of alleged accommodation entry against the cash transactions is required to be deleted.”

3.

The assessee is a partnership firm engaged as a SEBI-registered sub- broker in equity/derivatives and other financial products. The return of income was originally filed on 29.07.2016 declaring total income of Rs. 2,10,850/-. The assessment was completed u/s 143(3) on 22.12.2018 accepting the returned income. Subsequently, notice u/s 148 dated 30.03.2021 was issued. The reassessment proceedings were initiated on the basis of information alleging that the assessee had obtained accommodation entries amounting to Rs. 89,28,079/- from certain entry operators, namely Sanjay Shah and Jignesh Shah. The assessee objected to the reopening primarily on the grounds of lack of proper reasons, absence of sanction u/s 151 of the Act and non-application of mind. The objections were rejected by the Assessing Officer and he thereafter completed the assessment u/s 147 r.w.s. 144B on 30.03.2022 determining total income at Rs. 91,38,929/- by making addition of Rs. 89,28,079/- u/s 68 of the Act.

4.

Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal of the assessee and confirmed the addition, holding that the assessee failed to discharge the onus

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and did not furnish corroborative evidence. The relevant observations of the Ld. CIT(A) are as under :-

“…5.1 I have considered the facts of the case and material on record. The issue is being examined on merit. All the grounds are being dealt together.

5.2 Various notices u/s 143(2) and 142(1) were issued d 142(1) were issued by the AO during the course of assessment. The assessee has made its submission on 9.10.2021, assessment. The assessee has made its submission d 07.02.2022 and 08.02.2022 which has been considered and examined by this office. The summation of the of the replies of the assessee is that the assessee is in denial mode with respect to bogus accommodation entries taken by it to the tune of Rs. 89,28,079/- from Jignesh Shah and Sanjay Shah of Ahmedabad.

Therefore, the AO issued show-cause notice dated 26.03.2022 the assessee was asked to show cause as to why assessment should not be completed as per proposed addition of Rs. 89,28,079/- the assessee was requested to file his replies to the proposed variations by 28.03.2022. The assessee was also intimated that if he desires he can request for personal hearing to make oral submission through Video Conferencing button.

In response to show-cause issued by the AO, the assessee replied on 28.03.2022 which is considered and found not acceptable in view of the facts mentioned above and in view of the above, it is clear that the assessee company has taken bogus accommodation entries against cash transactions to the tune of Rs 89,28,079/- from Jignesh Shah and Sanjay Shah of Ahmedabad during A.Y. 2016-17 The AO Considered the submission of the appellant but not accepted it due to non-submission of documentary evidence by the appellant. The appellant only narrated facts, but not furnished any evidence to prove the same. Therefore, the AO added the amount of Rs.89,28,079/- u/s 68 of the I.T. Act, 1961.

I have perused the assessment order of the AO and reasoned explanation given by him for adding the amount of Rs.89,28,079/- in the total income of the appellant. It is clear that there is not enough evidence submitted by the appellant to discharge the onus. Coming to the substantive part of addition, it is seen that appellant has not furnished any corroborative evidence to discharge its claim and there are glaring gaps in the meagre submissions. The AO has done considerable due diligence to establish his claim.

5.3 The AO during the course of appellate proceeding stated that it was found during investigation that both (Jignesh Shah and Sanjay Shah) are managing and controlling multiple companies and concerns, which are not

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carrying out any genuine business activity. These concerns are involved into activity of providing accommodation entries of various kinds such as unsecured loans, share premium, bogus gains, contrived losses etc Various concerns were found to be non existent at their addresses and the directors of companies/persons in whose names the said concerns are registered, admitted by way of filling affidavits that the companies/concerns are not carrying out genuine business activities and are engaged into providing accommodation entries through Jignesh S Shah. The duo admitted of being involved in providing accommodation entries of LTCG, Loss, Unsecured Loans etc. Data analysis coupled with circumstantial evidences led to discovery that 15 BSE listed scrips have been used for generating bogus LTCG and contrived losses. During investigation, sample trail of funds was also established wherein the infrastructure of shroffs and angadiyas was used by the duo for routing unaccounted funds of beneficiaries. The duo also admitted being involved in providing accommodation entries including bogus LTCG and contrived losses. Beneficiaries have been identified by analysis of data found during investigation. Perusal of such data revealed that the instant assessee i.e. CARE STOCK BROKING SERVICES is one such beneficiary of accommodation entry. The total Income escaping assessment in the instant case is Rs. 89,28,079/-,

6.

I have considered the submission of the appellant made during the course of appellate proceeding and find no evidentiary value in the submission. Firstly, the submission made by the appellant are only in the nature of narration and no supporting documents has been filed. Even if the appellant's contention is to be accepted, then also it has to file corroborative evidence to support its claim. However, no evidence has been filed by the appellant. A mere narration cannot be taken as proof of the factual position. The appellant has not been able to give any convincing or cogent explanations about the addition made.

6.1 In view of these facts, I am of the opinion that no interference is called for in the AO’s order and therefore, the addition made by the AO amounting to Rs.89,28,079/- is sustained and the grounds of appeal are dismissed.

7.

In the result the appeal is dismissed.”

5.

Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

6.

Before us, the Ld. AR submitted that the reopening is invalid in law since the original assessment was completed u/s 143(3) and there was no failure on

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the part of the assessee to disclose fully and truly all material facts. It was contended that the reasons recorded are vague and based merely on borrowed satisfaction from information on the Insight Portal without any independent application of mind by the Assessing Officer, and there exists no tangible material or live nexus with alleged escapement of income. The Ld. AR further submitted that the reasons supplied were unsigned and undated, approval u/s 151 was not furnished and the reopening amounts to a mere change of opinion. It was also argued that the notice u/s 148 issued by the Jurisdictional Assessing Officer is invalid under the faceless regime prescribed under section 151A, and therefore, the reassessment deserves to be quashed.

7.

Per contra, the Ld. DR supported the orders of the authorities below and submitted that the reopening is based on credible information received from the Investigation Wing indicating that the assessee was a beneficiary of accommodation entries, which constitutes tangible material for forming a belief of escapement of income.

8.

We have heard the rival submissions and perused the material available on record. The primary issue for adjudication is the validity of reassessment proceedings initiated u/s 147 of the Act.

For the sake of clarity, we reproduce hereunder the notice dated 02.07.2021 as under:-

“Notice under section 143(2) read with section 147 of the Income-tax Act, 1961 (Act)

Reasons for reopening of the assessment in case of CARE STOCK BROKING SERVICES for AY…. u/s 147 of the Act.

2.

Brief details of Information collected / received by the AO

In this case information received in category of High Risk Transaction CRIU/VRU Information on Insight Portal of the department. As per the information uploaded by the department it is noticed that the assessee has

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entered into significant financial transactions as mentioned hereunder in Para 5. 3. Analysis of information collected / received On perusal and analysis of information available on record, it is noticed that the assessee has entered into financial transactions exceeding the taxable limits. The assessee has undertaken transactions as per the details given in the following chart; however despite making these financial transactions the assessee has not truly and correctly disclosed the quantum of transactions done during the year under consideration 4. Enquiries made by the AO as sequel to information collected / received Necessary verification was made from the entire details available on records and database of ITBA and Insight portal thereby, I have sufficient form of 'Reason to believe to frame my opinion. The information available with this office has been analyzed and I have framed my opinion after due application of all the facts and mind. 5. Finding of the AO

During the year under consideration, assessee had under transactions: undertaken following financial

Based on information from reliable sources; search u/s 132 was launched on 11.09.2018 in the case of Jignesh Shah and Sanjay Shah of Ahmedabad (JSSS hereinafter). The search resulted into seizure of unaccounted cash of 19.37 Crores (related to accommodation entries and commission earned thereon) along with incriminating digital as well as documentary evidences. Clandestine record of unaccounted cash, synchronized trading, proving bogus LTCG in various BSE listed scrips and transport of such cash through angadiyas was found to be maintained in secret Tally Data file with company name "123", which was impounded during survey proceedings u/s 133A from business premises of Sanjay Shah. In this secret and coded file, delivery (recd) and movement (through angadiya etc.) of cash is recorded against transactions of shares on BSE platform. Furthermore, the

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receipt of commission in form of cash is also recorded under the head "LTCG COMMISSION" The evidences manifest that this is the record of accommodation entries of LTCG against receipt of cash. The evidences demonstrate that accommodation entry provider duo has resorted to synchronized trading in shares of various listed companies, because it is only through synchronized trading that the sellers are ensured accommodation entry of bogus LTCG against cash and the buyers are ensured delivery of cash against such pre- determined purchase of shares. It was found during investigation that both (Jignesh S Shah and Sanjay Shah) are managing and controlling multiple companies and concerns, which are not carrying out any genuine business activity. These concerns are involved into activity of providing accommodation entries of various kinds such as unsecured loans, share premium, bogus gains, contrived losses etc. Various concerns were found to be non-existent at their addresses and the directors of companies/persons in whose names the said concerns are registered, admitted by way of filing affidavits that the companies/ concerns are not carrying out genuine business activities and are engaged into providing accommodation entries through Jignesh S Shah. The duo admitted of being involved in providing accommodation entries of LTCG, Loss, Unsecured Loans etc. Data analysis coupled with circumstantial evidences led to discovery that 15 BSE listed scrips have been used for generating bogus LTCG and contrived losses. During investigation, sample trail of funds was also established wherein the infrastructure of shroffs and angadiyas was used by the duo for routing unaccounted funds of beneficiaries. The duo also admitted being involved in providing accommodation entries including bogus LTCG and contrived losses. Beneficiaries have been identified by analysis of data found during investigation. Perusal of such data revealed that the instant assessee i.e. CARE STOCK BROKING SERVICES is one such beneficiary of accommodation entry. The total income escaping assessment Rs. 89,28,079/-

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Thus, on perusal of the details available on record, it is noticed that during the previous year relevant to the assessment year under consideration, the assessee has undertaken financial transactions much beyond the taxable limit. However, the source of entering such huge transactions is not conclusively proved from the details and data collected during the course of inquiry conducted by Investigation Wing/Central Circle/I&CL I have verified all the details available on record and I am conclusively satisfied that the assessee has not disclosed truly and correctly all the relevant particulars of the above transactions and therefore the income to the above extent has escaped assessment. 6. Basis of forming reason to believe and details of escapement of income In light of the details available on records and the above facts and findings, I have reasons to believe that income chargeable to tax quantified as above has escaped the assessment.

……” 9. Against the aforesaid notice u/s 143(2) r.w.s. 147 of the Act and the reassessment, assessee has raised objections vide letter dated 9th October 2021, which is reproduced hereunder for ready reference:-

“Respected Sir/Madam, This is in reference to your notice u/s 148 and 143(2) dated 8/7/2021 stating therein "issues as per reasons recorded for reopening for the issue of the notice and wherein the undated and unsinged; reasons for the reassessment are also stated and it also too without sanction under section 151 of the Act and in this regard we strongly object the said reopening as the same is factually misconceived and legally unsustainable and is without jurisdiction because of the under mentioned reasons:

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1.

It is also submitted that alleged unsinged and undated reasons for the reassessment, which has been stated in the notice under section 143(2) dated 8/7/2021, cannot be relied upon and in view of the same, we object the said supply of the Reasons for the reassessment. That copy of the duly signed and dated "Reasons for the Reassessment" and sanction under section 151 of the Act is to be provided to us or otherwise the proceeding is to be dropped by your good office.

Without prejudice to above submission in para 1, presuming that the said are reasons for the reassessment, than our objections against the same are, as under:

2.

That the reassessment is for the assessment year under consideration as such can be reopened only if there is an omission or failure on the part of the Assessee to disclose fully & materially all the facts necessary for the Assessment. In this regard, we most respectfully submit that in the present case there is no such failure on the part of the Assessee Company to disclose fully & materially all the facts during assessment proceedings under section 143(3) of the Act. The said assessment was under complete scrutiny,

3.

To render legality to the assumption of jurisdiction by the Assessing Authority under section 148/147 of the act, the formation of reason to believe by the Assessing Authority that any income of the Assessee has escaped Assessment is a sine qua non. Further, it is also necessary that the Assessing Authority must himself form such reasons to believe and must himself satisfied about escapement of Income. It is well settled legal position that reopening solely based on some borrowed information and some borrowed satisfaction without conducting any independent enquiry by the Assessing officer himself, is a complete nullity in the eyes of the laws and is void ab initio.

4.

It is not a case of escapement of income or utmost in any case there can be change of the opinion in respect of law or facts of the record and case or it may be on account of some audit issue or incorrect/misleading/unverifiable information from any agency or the department and accordingly there is no direct live link with.

5.

That the basis/relevance/applicability, for our case, of the High-Risk Transaction CRIU/VRU Information on the ITBA and Insight Portal, is not evident in the reasons for the reassessment

6.

That the reasons for the reassessment supplied (which seems to be recorded) by your good office are not in accordance with the SOP issued by the Hon'ble CBDT as

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(a) No detail of assessment/reassessment has been stated

(b) No enquiry has been conducted as sequel to information received and only some verification of the Information available with his office has been made.

(c) in the reasons for the reassessment, in para 3, it has been stated as "following chart", however there is no such chart in the entire reasons for the reassessment.

(d) In para 5 of the reasons for the reassessment,

(A) Nature of financial transactions with us has not been stated and which may be provided to us

(B) Further the basis of the amount stated in the reasons for the reassessment not stated.

(C) No material or data or cash transactions or statement or affidavit, related to our any transactions has been pointed/stated

(D) No basis for determining us Beneficiary of the transactions has been stated and only general statement has been made.

(e) That the details/applicability of the approval under section 151 of the Act, as required as per SOP prescribed by the Hon'ble Board, has not been stated.

Accordingly, from the perusal of the impugned reasons for the reassessment, it seems that the reasons for the reassessment have been recorded without proper application of mind or facts of the case.

That your good office has not taken approval under section 151 of the Act and the said fact is evident in para 7 of the reasons for the reassessment. The approval under section 151(2) of the Act, is required as in our case the impugned notice under section 148 of the Act has been issued by the Officer of Income Tax Officer and not joint/Addl. Commissioner of Income Tax

8.

With most respect and humbly, it is humbly submitted, that the notification dated 24/6/2020, issued by the Hon'ble Board in pursuance to the TAXATION AND OTHER LAWS (RELAXATION OF CERTAIN PROVISIONS) ORDINANCE, 2020 NO. 2 OF 2020 dated 31st March 2020, on account COVID-2019; for the extending the date of issue of notice under section 148 of the Act, is against the scheme of the Act and therefore the notice issued under section 148 is bad in law and requires to dropped.

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9.

That in view of the aforesaid facts and circumstances of the case of validity of the notice issued by your good office is bad in law and we have preliminary objection against the said notice and therefore we request your good office to drop the proceedings and intimate to us at the earliest and oblige. …..”

Thereafter, the Assessing Officer issued notice u/s 142(1) of the Act on 31.12.2021, which reads as under:-

“Notice under sub-section (1) of Section 142 of the Income Tax Act, 1961

Kindly refer to ongoing assessment proceedings in your case for AY. 2016- 17 under Faceless Assessment Scheme, 2019.

2.

We appreciate the anxiety and uncertainty that is facing all of us in the times of Cowid-19. This one uncertainly, which is pending e-Assessment in your case for the communication is to assist you in ME Assessment Year 2016-17

……

ANNEXURE

In connection with the assessment proceedings for A.Y. 2016-17, You are requested to furnish the following details.

1.

Give a detailed note on the business activates carried out during the previous year.

……… 10. Kindly furnish details of bank accounts and bank account statements along with payment schedules for the F.Y. through which purchase and sale were made in security markers. 11. As per information available with the department it is seen that assessee company has taken accommodation entries of bogus LTCG against cash against transactions of shares on BSE platform to the tune of Rs.89,28,079/- from Jignesh Shah and Sanjay Shah of Ahmadabad and furthermore, the receipt of commission in form of

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cash is also recorded under the head "LTCG Commission". You are requested to furnish the following details i)amount of investment ii)source of investment iii) mode of payment to made to Broker with documentary evidence iv) contract note for purchase of shares/investment made and sale of investment/shares v) Bank Statement reflecting payment and receipt of sale of investment. vi) Demat statement to prove inward and delivery of shares, vii) ledger copy of share broker account; viii) copy of ledger account of source of investment ix) Details of investment made in shares for 3 years and regularity of investing in shares

The assessee has submitted a detailed reply to the aforesaid notice on 07.02.2022 along with documentary evidences regarding a/c. of brokerage income with its summary, acknowledgement of ITR filed, computation of total income annual accounts, bank book and bank statements etc….

10.

From the material available on record, as noted above, it is evident that the reopening is based on general information received from the Insight Portal categorized as “High Risk Transactions” and the reassessment has been initiated on the basis of information received from the Investigation Wing / Insight Portal arising out of search proceedings in the case of certain entry operators namely Sanjay Shah and Jignesh Shah. It is noted that the search material indicates that the said persons were engaged in providing accommodation entries and that certain beneficiaries were identified based on data analysis. However, on a perusal of the reasons recorded, we find that no specific transaction, no specific entry, and no direct documentary linkage has been brought on record by the Assessing Officer to establish that the assessee had in fact obtained

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accommodation entries of Rs. 89,28,079/- during the year under consideration. The reasons recorded merely proceed on a general premise that the assessee is “one of the beneficiaries” without demonstrating how and what is the alleged accommodation entry was routed to the assessee. At the stage of reopening, there must exist at least some prima facie evidence between the material relied upon and the formation of belief of escapement of income. Mere reference to third- party search findings, without independent examination of its applicability to the assessee’s specific transactions, does not satisfy the statutory requirement of “reason to believe” u/s 147 of the Act.

11.

Thus, on going through the reasons recorded, we find no nowhere as to,

i. What are the accommodation entries received by the assessee? ii. What is the information available with the Assessing Officer? iii. Whether it is payment or receipt by the assessee? iv. What are the entities through which the assessee received the amount or the accommodation entries? v. What is the bank statement from which the amounts/entries have been issued to the assessee? vi. What is the bank statement to which the amounts/entries have been received/deposited by the assessee? vii. Did the Revenue prove primarily the custody of the amount in the accounted or unaccounted books or disclosed or undisclosed bank accounts of the assessee?

When we go through the entire gamut of the information received by the Assessing Officer, analysis of such information, order of the Assessing Officer, we find that the Revenue Authorities miserably failed to bring even the primary evidences on record. The findings of the search conducted at the premises of Mr. Jignesh Shah and Mr. Sanjay Shah could not be rightly processed by the Assessment Division, which led to make loose superstructure devoid of any

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basement by the Assessing Officer. The Assessing Officer held that the evidences demonstrate that accommodation entry providers have resorted to synchronized trading in shares of various listed companies and ensured to provide accommodation entry of bogus LTCG against cash. Against these allegations, there was no evidence as to what are the companies which were involved in synchronized trading in shares, what are the stocks, date of operation or manipulation of stocks, date of purchase & date of sale of stocks. In the absence of any iota of tangible, perceptible evidence, the lower authorities went on creating a facade to make an addition which cannot be sustained.

12.

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

The order is pronounced in the open Court on 30.04.2026.

Sd/- Sd/-

(TR SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 30.04.2026 *btk

आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to :

अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, , अहमदाबाद / ITAT, Ahmedabad , ,

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