SHRI SADHIKRUPA POLYSACKS PRIVATE LIMITED,AHMEDABAD vs. THE ITO, WARD-4(1)(1), AHMEDABAD

ITA 343/AHD/2026Status: DisposedITAT Ahmedabad01 October 2026AY 2018-194 pages
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What did the Tribunal hold?

The Tribunal held that the additions made by the Assessing Officer could not be sustained. It observed that the additions were substantially based on statements or material from a third-party search. The assessee had disputed this and requested the underlying material and an opportunity for cross-examination. However, the assessment order did not demonstrate that the relied-upon material was duly furnished to the assessee or that an effective opportunity to rebut it was given. Since the adverse material forming the basis of the additions was not properly confronted to the assessee, the Tribunal restored the matter to the Assessing Officer for fresh adjudication. The Assessing Officer is directed to furnish the material relied upon, provide a reasonable opportunity to the assessee to rebut it, and decide the issues afresh in accordance with the law. The appeal of the assessee was allowed for statistical purposes.

What were the facts?

The assessee, Shri Sadhikrupa Polysacks Private Limited, filed its return of income for Assessment Year 2018-19 declaring Nil income. The assessment was reopened based on information from a search in the case of Shri Sanjay Govindram Agrawal @ Sanjay Tibrewal. The Assessing Officer (AO) made additions of Rs. 20,33,600/- under section 68 for unexplained unsecured loans and Rs. 16,269/- under section 69C for alleged commission. The assessee appealed to the Commissioner of Income Tax (Appeals) (CIT(A)), who confirmed the additions. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT). The ITAT noted the assessee's turnover from FY 2015-16 to FY 2021-22 and a depreciation chart.

What were the issues?

1. Whether the reassessment proceedings initiated under sections 147/148 of the Income Tax Act, 1961, are valid, considering the material relied upon was from a third-party search and not furnished to the assessee? (Question of law and fact). The assessee argued that the reassessment was based on material from a third party which was not provided, and that it had sought verification/cross-examination. The revenue contended that the search material established the transactions as accommodation entries. 2. Whether the additions of Rs. 20,33,600/- under section 68 and Rs. 16,269/- under section 69C are sustainable, given that the adverse material was not properly confronted to the assessee and an effective opportunity to rebut was not provided? (Question of law and fact). The assessee argued that it received loans through banking channels, recorded them, and requested cross-examination. The revenue supported the lower authorities' orders, stating the search material proved accommodation entries.

Which sections of the Income-tax Act were involved?

Section 250,Section 147,Section 148,Section 68,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-SHRI RAHUL CHAUDHARY

For Appellant: Shri Mehul Thakkar, AR
For Respondent: Shri Drop Singh Meena, Sr. DR
Hearing: 07.07.2026Pronounced: 01.10.2026

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

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This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals) (hereinafter referred to as “Ld. CIT(A)”), National Faceless Appeal Centre (NFAC), Delhi vide order dated 17.12.2025, under section 250 of the Income-Tax Act, 1961 (hereinafter referred to as “the Act”) for the Assessment Year 2018-19. 2. The assessee has raised several grounds challenging the validity of reassessment proceedings under sections 147/148 of the Act and, without prejudice, the additions of Rs.20,33,600/- u/s 68 of the Act and Rs.16,269/- u/s 69C of the Act.

The order continues below.

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