KHOSLA ENTERPRISES,SANGRUR vs. INCOME TAX OFFICER, WARD- SANGRUR, SANGRUR

ITA 28/CHANDI/2025Status: DisposedITAT Chandigarh05 October 2026AY 2017-183 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the impugned order and directed the AO to frame a fresh assessment. The reasoning was that the bank account apparently belonged to a proprietorship concern and was reflected in the ITR of the proprietor, Shri Nitin Khosla. Crucially, none of the replies or documents filed by the assessee had been considered by the AO. The Tribunal found that these submissions and documents would have a material bearing on the assessment of the partnership firm. The assessee was directed to plead and prove its case before the AO. The appeal was allowed for statistical purposes. No specific issue was left undecided, but the entire assessment was to be redone.

What were the facts?

The assessee, Khosla Enterprises (a partnership firm), is in appeal against the order of the NFAC [CIT(A)] dated 17.12.2024. This order confirmed an assessment framed by the AO on 21.03.2022 under section 147 r.w.s. 144B of the Income Tax Act, 1961, on a best judgment basis. The AO made an addition of Rs. 3,87,58,280/- under section 69A, representing bank credits in the assessee-firm's bank account. The assessee failed to make an effective representation during the assessment proceedings. The CIT(A) confirmed the assessment for the same reasons. The assessment year in question is 2017-18.

What were the issues?

1. Whether the addition of Rs. 3,87,58,280/- made by the AO under section 69A of the Income Tax Act, 1961, is sustainable, considering the assessee's claim that the business activities of the partnership firm ceased on 30.11.2014 and was converted into a proprietorship concern, with bank account transactions being incorporated in the proprietorship's books and cash deposits made from available cash in hand. Assessee's Contention: The AR argued that the partnership firm closed its business on 30.11.2014 and was converted into a proprietorship concern. The PAN in the bank account was not updated. All business activities, including deposits and withdrawals, were incorporated in the proprietorship's books, and cash deposits were made from available cash in hand. Documents filed on 04.03.2022 and 20.03.2022, which were not considered by the AO, could verify these claims. Revenue's Contention: The Ld. Sr. DR pleaded for the dismissal of the appeal.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: HYBRID MODE BEFORE: SHRI MANOJ KUMAR AGGARWAL, AM & SH. RAJESH DAMODARLAL SHARMA, JM आयकरअपीलसं./ITA No. 28/Chd/2025 "नधा"रण वष" / Assessment Year : 2017-18 Khosla Enterprises बनाम ITO Main Bazar, Bhawanigarh, Ward-Sangrur Sangrur 148026 "ायीलेखासं./PAN NO: AALFK-8171-F अपीलाथ"/Appellant ""थ"/Respondent िनधा"रतीकीओरसे/Assessee by : Sh. Parikshit Aggarwal, CA – Ld. AR राज"कीओरसे/ Revenue by : Smt. Jaishree Sharma, Ld. CIT-DR (Virtual) सुनवाईकीतारीख/Date of Hearing : 30.09.2026 उदघोषणाकीतारीख/Date of Pronouncement : 05.10.2026

आदेश/Order PER RAJESH DAMODARLAL SHARMA, J.M:

Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 17.12.2024 in the matter an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s 147 r.w.s. 144B of the Income Tax Act, 1961 on 21.03.2022 making addition Rs.3,87,58,280/- u/s 69A of the Income Tax Act,1961. The same represents bank credits in the bank account held in the name of the assessee-firm. The assessee failed to make any effective representation

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →