ANAND DISTRIBUTORS PVT. LTD., ,KOLKATA vs. ITO, WARD 7(1), , KOLKATA

आयकर अपीलीय अधिकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A”BENCH KOLKATA Before Shri Rajesh Kumar, AccountantMember and Shri Pradip Kumar Choubey, JudicialMember ITA No.993/Kol/2025 Assessment Year: 2014-15 Anand Distributors Pvt. Ltd..………...………..............................……….……Appellant 37A, Bentinck Street, 3rd Floor, Room No.314, Kol-69. [PAN: AAHCA7260L] vs. ITO, Ward-7(1), Kolkata……..……..….……………………...……...…..…..Respondent Appearances by: ShriMiraj D Shah, A.R, appeared on behalf of the appellant. Shri Pradeep Dung Dung, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing :April 28th, 2026 Date of pronouncing the order : April 28th,2026 ORDER Per Rajesh Kumar, Accountant Member: This is an appeal preferred by the assessee against the order of the NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 10.03.2025 passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’) for the A.Y 2014-15. 2. The only issue raised by the assessee is against the action of the ld. CIT(A) in upholding the reopening of assessment u/s 147 r.w.s 148 of the Act which is invalid and nullity in the eyes of law. 3. The facts in brief are that the assessee company filed its return of income for A.Y. 2014-15 on 30.09.2014 declaring total income at Rs. 6,480/-. Thereafter, on the basis of information received, the case was re-opened under section 147 of the Act by issuing notice under section 148 on 20.03.2020. The assessee in response to the notice issued under section 148 has filed its ITR on 16.03.2021 declaring the same income

ITA No.993/Kol/2025 i.e. Rs. 6,480/-. The Assessing Officer found that the assessee was involved in huge transactions in its bank account in the form of loans/investments/entries of accommodation of fund or suspicious transactions which did not commensurate with its regular activities of income reflecting in the accounts. The Assessing Officer further found that an amount of Rs.1,00,00,000/- was credited in the bank account of the assessee through transactions with M/s Coral Environments Pvt. Ltd. on 12.4.2013. Thereafter, notice under section 143(2) of the Act, 1961 was issued to the Assessee Company on 30.06.2021. Further, notices under section 142(1) of the Act were issued to the Assessee Company calling for the detail and information on the issue of selection from time to time and the assessee replied to the said notices. However, the Assessing Officer concluded that the assessee has not explained the entire amount of Rs.1,00,00,000/- and thereafter added the said Rs.1,00,00,000/- u/s 68 of the Act. 4. In the appellate proceedings, the ld. CIT(A) dismissed the appeal of the assessee by upholding the order of the Assessing Officer. 5. After hearing the rival submissions and perusing the records including the reasons recorded by the AO u/s 148(2) of the Act , we find that the case of the assessee has been reopened u/s 147 of the Act . The reasons for reopening are extracted as under for the sake of ready reference: "As per information available with the department the assessee was involved in huge transaction in its bank account in the form of loan/investment/entry operating accommodation of fund/suspicious transaction etc. which does not commensurate with its regular activities of income reflecting in the accounts." The amount of Rs. 1,00,00,000/- has been credited in the bank account of the assessee through transaction with M/s Coral environments Pvt. Ltd. (A/c по. 003405009896) on 12.4.2013.” 6. A perusal of the above reasons recorded states that the Assessing Officer has only extracted the information received mentioning therein 2

ITA No.993/Kol/2025 that there was huge transaction in its bank account in the form of loan/investment/entry operating accommodation of fund/suspicious transaction etc. which does not commensurate with its regular activities of income reflecting in the accounts of the assessee. We note that the Assessing Officer has not applied his mind to the information received. In our view, the Assessing Officer reopened the assessment only on borrowed satisfaction without applying his mind and there being no live nexus with the so called escaped income. The Assessing Officer in the reasons recorded noted that the said transaction is in the form of loan/investment/entry and thus Assessing Officer himself was not clear as to what income was received as there is no definite findings by the AO. In our view, it is well-settled principle that reasons recorded by the Assessing Officer must be based on specific material which prima facie reveals that the income has escaped assessment and based upon the said information the AO must record objective satisfaction in the form of reasons for re-opening. In this case, the reasons recorded are vague, scanty and there is no direct and live link. Therefore, the reopening based on borrowed satisfaction is not permissible. The case of the assessee finds support from the decision in the case PCIT Vs Meenakshi Overseas Pvt Ltd (2017) 82 taxmann.com 300 (Del). In the said decision, Hon'ble Delhi High Court has held that where the reasons to believe contain not the reasons but the conclusions of the AO one after the other and there was no independent application of mind by the AO to the tangible material which forms the basis of the reasons to believe that income has escaped assessment. The Hon'ble High Court has held that the conclusions of the AO are at best a reproduction of the conclusion in the investigation report. Indeed it is a borrowed satisfaction. Besides the case of the assessee is squarely covered by the decisions of CIT vs. SFIL Stock Broking Ltd. in [2010] 325 ITR 285 (Del) ,GRD Commodities Ltd Vs PCIT (2023) 149 taxmann.com 223(Cal), PCIT Vs Shodiman Investment Pvt Ltd (2018)

ITA No.993/Kol/2025 93 taxmann.com 153 (Bom) and Sarthak Securities Co Pvt Ltd. Vs ITO (2010) 329ITR 110(Del).

Kolkata, the 28th April, 2026.

Sd/- Sd/- [Pradip Kumar Choubey] [Rajesh Kumar] JudicialMember Accountant Member

Dated: 28.04.2026. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar, Kolkata Benches