RAHUL KUMAR BANSAL,ROURKELA vs. ASSESSING OFFICER, INCOME TAX DEPARTMENT, DHANBAD

ITA 366/RAN/2025Status: DisposedITAT Surat25 September 2026AY 2018-1917 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the CIT(A) on both the legal and factual grounds. Regarding the legal issue (Ground No. 1), the Tribunal found no infirmity in the CIT(A)'s categorical findings that the legal grounds raised by the assessee were not sustainable. The Tribunal found no reason to interfere with the CIT(A)'s order concerning the legal grounds. On the factual aspect (Ground No. 4), the Tribunal noted that the AO made the addition based on a 25% gross profit rate on purchases from the alleged fictitious entity, M/s Iskon Steel Traders, following the decision in Vijay Proteins Ltd. Vs. ACIT. The Tribunal referred to the Supreme Court's decision in the same case, which confirmed the principle of disallowing 25% of the purchase price when goods were not received from the stated parties but from a different source known only to the assessee, and the assessee had inflated expenditure through fictitious invoices. Since the CIT(A) followed this precedent, the Tribunal found no reason to interfere. The appeal was dismissed.

What were the facts?

The assessee, Rahul Kumar Bansal, is in appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2018-19. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 of the Income Tax Act, 1961, based on information from the INSIGHT portal indicating purchases of ₹46,94,644 from M/s Iskon Steel Traders, alleged to be a fictitious entity. The AO added ₹11,73,661 to the assessee's income, representing 25% of the alleged bogus purchases, citing the cancellation of the supplier's GST registration and its nature as an accommodation entry provider. The CIT(A) confirmed the AO's action. The assessee's appeal before the ITAT challenges the reassessment proceedings and the addition made.

What were the issues?

1. Whether the reassessment proceedings under Section 147/148/148A of the Income Tax Act, 1961, were validly initiated based on 'borrowed satisfaction' from CBDT risk management strategy, INSIGHT module, and ADIT (Inv.) information, without independent application of mind by the AO as mandated by Section 148A(a)? - Assessee's contention: Proceedings were based on borrowed satisfaction and no independent inquiry, citing Supreme Court in CIT Vs. Odeon Builders Pvt. Ltd. and Calcutta High Court in Girdhar Gopal Dalmia Vs. UOI. - Revenue's contention: Relied on the orders of the lower authorities. 2. Whether the addition of ₹11,73,661 on account of alleged bogus purchases from M/s Iskon Steel Traders, calculated at 25% of total purchases, is illegal, arbitrary, and contrary to law? - Assessee's contention: Addition is illegal and arbitrary; alternatively, only profit embedded in purchases can be added. Relied on various grounds challenging the findings as perverse and based on no legal evidence. - Revenue's contention: Relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 151,Section 144B,Section 250,Section 143(3),Section 234B,Section 234C,Section 234D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI

Before: SHRI RATNESH NANDAN SAHAY & SMT. RAJANI GUDURI

For Appellant: Ms. Ritika, Advocate and Shri Shubham Choudhary, Advocate
For Respondent: Shri Sandipan Khan, Sr.DR
Hearing: 10/09/2026Pronounced: 25/09/2026

PER: BENCH

1.

This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [in short, the ld. CIT(A)] dated 12/08/2025 for the Assessment Year (AY) 2018-19, wherein the assessee has raised following grounds of appeal: "GROUND NO.1 The proceedings under Section 147 ibid have been initiated on the basis of "borrowed satisfaction" based on risk management strategy of CBDT, INSIGHT module and information of ADIT (Inv.)-3(2), Kolkata without independent application of mind. Further, the said information per se is bas

The order continues below.

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