MUKESH COMMOTRADE PRIVATE LIMITED,SURENDRANAGAR vs. ASSESSING OFFICER, AHMEDABAD

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ITA 473/AHD/2026Status: DisposedITAT Ahmedabad23 April 2026AY 2014-156 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A)'s premise that the assessment was made under Section 144 was factually incorrect, as the assessee had participated and provided substantial details. Therefore, the CIT(A)'s order was not sustainable.

What were the facts?

The assessee company, engaged in share trading, was reassessed under Section 147. The Assessing Officer made additions based on investigation reports, treating transactions as bogus accommodation entries. The CIT(A) set aside the assessment order, believing it was passed under Section 144 as a best judgment assessment.

What were the issues?

Whether the CIT(A) erred in setting aside the assessment order based on an incorrect assumption that it was passed under Section 144, without adjudicating the merits of the additions.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 69,Section 68,Section 69C,Section 251

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Mitul Ruparayl, AR
For Respondent: Shri Abhijit, Sr. DR
Hearing: 22.04.2026Pronounced: 23.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. Nos.429&473/Ahd/2026 (Assessment Years: 2013-14 & 2014-15) Mukesh Commotrade Pvt. Ltd., Vs. Deputy Commissioner of Amisha Developers Ltd., Tanki Income Tax, Chowk, Opp. Cloth Market Circle-4(1)(1), Surendranagar, Gujarat-363001 Ahmedabad [PAN No.AADCA8408J] (Appellant) .. (Respondent) Appellant by : Shri Mitul Ruparayl, AR Respondent by: Shri Abhijit, Sr. DR Date of Hearing 22.04.2026 Date of Pronouncement 23.04.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: These are appeals filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide orders dated 22.12.2025 passed for A.Ys. 2013-14 and 2014-15. Since common facts and issues for consideration are involved for both the years under consideration, both the appeals are being taken up together.

We shall first take up assessee’s appeal for A.Y. 2013-14 in ITA No. 429/Ahd/2026

2.

The assessee has raised the following grounds of appeal:

“The Commissioner of Income Tax (Appeals) has remanded back the case to the assessing officer by stating that, “It is found that the assessment order has been passed under Section 144 as the best judgment assessment. But in fact, the assessment has been carried out under Section147 and not under Section 144 of the Act using the best judgment assessment.”

ITA Nos. 429&473/Ahd/2026 Mukesh Commotrade Pvt. Ltd. vs. DCIT Asst.Years –2013-14 & 2014-15 - 2– 3. The brief facts of the case are that the assessee, Mukesh Commotrade Private Limited, a company engaged in share trading, filed its return of income for Assessment Year 2013–14 declaring total income of ₹1,11,551/-. The case was assessed under section 143(3) of the Income- tax Act, 1961 ("the Act"). Subsequently, based on information received through the INSIGHT portal and investigation findings in the case of Jignesh Shah and his associate Sanjay Shah, the Assessing Officer initiated proceedings under section 147 of the Act. The information received by the Assessing Officer suggested that the assessee had allegedly provided unsecured loans amounting to ₹2,07,97,096/- to the said entry operator and had also routed accommodation entries of ₹1,08,000/- through ANS Pvt. Ltd. and ₹13,68,000/- through Gee Bee Securities Pvt. Ltd., purportedly for generating bogus long-term capital gains through illiquid stock options.

4.

During the reassessment proceedings, notices under sections 143(2) and 142(1) of the Act were issued and the assessee furnished various details viz financial statements, demat statements, contract notes, and bank statements. The assessee submitted that that the amount of ₹2,07,97,096/- did not represent any loan but was the aggregate value of purchase and sale transactions in shares of Dhvanil Chemicals Ltd., and that the derivative transactions were genuine trades executed through registered brokers on recognized stock exchanges. The assessee further submitted that all transactions were carried out through banking channels and duly recorded in the books of account.

5.

However, the Assessing Officer was not satisfied with the explanation. Relying heavily on investigation reports, statements of alleged entry operators, and the theory of preponderance of probabilities,

ITA Nos. 429&473/Ahd/2026 Mukesh Commotrade Pvt. Ltd. vs. DCIT Asst.Years –2013-14 & 2014-15 - 3– the Assessing Officer held that the assessee had failed to establish the genuineness of the transactions. He further held that the assessee had availed accommodation entries in the guise of unsecured loans and had generated bogus profits through trading in illiquid stock options. Accordingly, the Assessing Officer made an addition of ₹2,07,97,096/- under section 69 of the Act as unexplained investment, ₹14,76,000/- under section 68 of the Act as unexplained cash credit, and ₹29,520/- under section 69C of the Act as unexplained expenditure, and the total income was assessed at ₹2,24,74,386/-.

6.

Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), challenging the additions on both legal and factual grounds. The assessee contended that the Assessing Officer had erred in invoking sections 69, 68, and 69C of the Act without properly appreciating the evidences furnished, and that the transactions were genuine and duly supported by documentary records. The assessee also submitted written submissions along with supporting documents during appellate proceedings.

7.

The CIT(Appeals), however, proceeded on the premise that the assessment order had been passed under section 144 of the Act as a best judgment assessment due to alleged non-compliance by the assessee. Relying on the amended provisions of section 251 of the Act introduced by the Finance Act, 2024, the CIT(A) observed that in cases of assessment under section 144, the matter could be set aside to the Assessing Officer. Accordingly, without adjudicating the merits of the additions or examining the evidences furnished by the assessee, the CIT(A) set aside the entire assessment order to the file of the Assessing Officer for fresh adjudication, directing the Assessing Officer to provide adequate

ITA Nos. 429&473/Ahd/2026 Mukesh Commotrade Pvt. Ltd. vs. DCIT Asst.Years –2013-14 & 2014-15 - 4– opportunity and pass a speaking order. Thus, the appeal was disposed of for statistical purposes without rendering any finding on merits.

8.

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.

9.

We have carefully considered the rival submissions and perused the material available on record. The limited controversy before us is whether the action of the CIT(Appeals) in treating the assessment as having been framed under section 144 of the Act and consequently setting aside the same is sustainable in law.

10.

On a careful perusal of the assessment order, we find that though reference has been made to non-compliance at certain stages, the record clearly demonstrates that the assessee had, in fact, participated in the assessment proceedings and furnished substantial details including financial statements, bank statements, contract notes, and explanations during the course of hearing, including participation through video conferencing. Thus, the factual premise adopted by the CIT(Appeals) that the assessment was framed ex parte under section 144 of the Act is not borne out from the record and is factually incorrect. It is seen that CIT(Appeals) in his order has noted as under:

“5.2 It is found that the assessment order has been passed u/s 144 as a best judgement assessment order. The assessment order states that many opportunities were provided to the assessee to furnish replies & written submissions. The details of such opportunities are also mentioned in the body of the assessment order. It is further stated that the assessee failed to avail the opportunities provided which in fact led to passing of an ex-parte best judgement assessment order.” 11. However, on a perusal of assessment order, evidently these observations by CIT(Appeals) are factually incorrect and CIT(Appeals)

ITA Nos. 429&473/Ahd/2026 Mukesh Commotrade Pvt. Ltd. vs. DCIT Asst.Years –2013-14 & 2014-15 - 5– has passed the order restoring the matter to the file of the Assessing Officer on an incorrect factual premise.

12.

It is a settled principle of law that an appellate authority must adjudicate the issues on correct appreciation of facts and material on record. We are of the considered view that such restoration of the matter by CIT(Appeals), founded on an incorrect understanding of facts, cannot be sustained.

13.

Therefore, since the very basis adopted by the CIT(Appeals), namely that the assessment was ex parte under section 144 of the Act, is factually erroneous, the order passed by the CIT(Appeals) cannot be sustained. In the interest of justice, we deem it appropriate to set aside the impugned order and restore the matter to the file of the CIT(Appeals) for de novo adjudication. The CIT(Appeals) shall consider all the submissions and evidences filed by the assessee and pass a reasoned and speaking order in accordance with law after providing adequate opportunity of being heard.

14.

Accordingly, the appeal of the assessee is allowed for statistical purposes.

Now we come to the assessee’s appeal for A.Y. 2014-15 in ITA No. 473/Ahd/2026

15.

The assessee has raised the following grounds of appeal:

“The Commissioner of Income Tax (Appeals) has remanded back the case back to the assessing officer for fresh assessment by stating that, “It is found that the assessment order has been passed under Section 144 as a best judgment assessment”.

ITA Nos. 429&473/Ahd/2026 Mukesh Commotrade Pvt. Ltd. vs. DCIT Asst.Years –2013-14 & 2014-15 - 6–

The learned Commissioner has committed an error by invoking the provisions of Section 251 of the Act. The assessment is done under Section147 of the Act.”

16.

Since the facts and issues for consideration are same for both the years, the matter is hereby restored to the file of CIT(A) for A.Y. 2014-15 as well, for de-novo consideration.

17.

In the combined result, both the appeals filed by the assessee are allowed for statistical purposes. This Order pronounced in Open Court on 23/04/2026

Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 23/04/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT आयकर आयु�(अपील) / The CIT(A)- 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

1.

Date of dictation 23.04.2026 (Dictated over dragon software) 2. Date on which the typed draft is placed before the Dictating Member 23.04.2026 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S .04.2026 5. Date on which the fair order is placed before the Dictating Member for pronouncement 24.04.2026 6. Date on which the fair order comes back to the Sr.P.S./P.S 24.04.2026 7. Date on which the file goes to the Bench Clerk 24.04.2026 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order……………………………………

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