M/S. SWISS PARK VANIYA PVT. LTD.,MUMBAI vs. DCIT, CC-1(1), CHENNAI

ITA 4102/CHNY/2025Status: DisposedITAT Chennai23 September 2026AY 2011-1226 pages
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What did the Tribunal hold?

The Tribunal held that the reopening of assessment under Section 147/148 was valid. The reasons for reopening were based on a statement recorded under oath during a search, which constituted specific and tangible material, not borrowed satisfaction. The Tribunal found that the AO had substantially addressed the assessee's objections in a subsequent notice, and this manner of disposal, while not a separate speaking order, did not vitiate the reassessment. Therefore, the legal ground challenging the reopening was dismissed. Regarding the addition under Section 68, the Tribunal noted that the AO's assessment order treated the entire Rs. 24 crores as a single addition without engaging with the component of Rs. 4 crores. Consequently, the issue of addition amounting to Rs. 4 crores was restored to the AO for examination, with a direction to consider the bearing of Shri A.K. Khemka's admission regarding receipt of funds in cash and cheque. The assessee was to be given an opportunity of being heard. The appeal of the revenue was dismissed, and the appeal of the assessee was partly allowed for statistical purposes.

What were the facts?

The assessee, M/s. Swiss Park Vanijya Pvt. Ltd., filed its return for Assessment Year 2011-12 declaring an income of Rs. 1,08,584/-. A search operation on a group concern led to the reopening of the assessee's assessment. The Assessing Officer (AO) noted that the assessee received Rs. 24,00,00,000/- as share capital and premium from various entities and Shri Arvind Gupta. The AO treated this amount as unexplained cash credit under Section 68 of the Income Tax Act, 1961, on a protective basis, making an addition of Rs. 24,01,08,584/-. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the reopening but accepted the explanation for Rs. 16 crores due to an IDS declaration by Arvind Gupta (HUF) and Rs. 1 crore invested by Shri Arvind Gupta. The CIT(A) directed the AO to examine the remaining Rs. 7 crores.

What were the issues?

1. Whether the reopening of assessment under Section 147/148 of the Income Tax Act, 1961, was valid, considering the assessee's contention of borrowed satisfaction and improper disposal of objections. - Assessee's argument: The AO acted on information from the Investigation Wing without independent application of mind, leading to borrowed satisfaction. Objections to reopening were not disposed of by a separate speaking order as per GKN Driveshafts (India) Ltd. v. ITO & Ors. - Revenue's argument: The AO had specific information from search proceedings and statements, providing tangible material for a prima facie belief of escapement of income. The CIT(A) rightly upheld the reopening. 2. Whether the addition of Rs. 24,00,00,000/- as unexplained cash credit under Section 68 of the Act was justified, considering the partial acceptance of explanations by the CIT(A) and the remaining disputed amount. - Assessee's argument: The addition is unjustified as funds were received through banking channels, investors were identified, and the assessee is not obligated to prove the source of funds in the investors' hands. A similar addition was made in the case of Shri Arvind Gupta. - Revenue's argument: The AO's assessment order treated the entire sum as an undifferentiated addition. The CIT(A) upheld the validity of reopening.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 68,Section 142(1),Section 153A,Section 132,Section 250

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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & MS PADMAVATHY S

For Respondent: Ms. Nayani Swapna, CIT, Shri B. Ramakrishnan, FCA
Hearing: 01.09.2026Pronounced: 23.09.2026

Heard together (2 matters)

ITA No.413/CHNY/2026
ITA 4102/CHNY/2025

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