BORA AGRO FOODS,PUNE vs. DCIT, CIR-5, PUNE, PUNE
आयकरअपीलीयअधिकरण ”ए” न्यायपीठपुणेमें।
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCHES “A” :: PUNE
BEFOREDR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER
AND SHRI VINAY BHAMORE, JUDICIAL MEMBER
आयकरअपऩलसं. / ITA Nos.2360, 2361 & 2362/PUN/2025
निर्धारणवषा / Assessment Years:2015-16, 2017-18 & 2016-17
Bora Agro Foods,
„Samarat House‟, 39-D 2/6,
ShankarshethRoad,Near Meera
Society, Pune – 411037. vs Dy.Commissioner of Income Tax, Circle-5,
Pune.
PAN:AABFB4517E
Appellant/ Assessee
Respondent /Revenue
Assessee by :
Shri Nikhil S Pathak
Revenue by :
Shri Amol Khairnar – CIT(DR)
Date of hearing
:
29/01/2026
Date of pronouncement
:
11/03/2026
आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
These three appeals filed by the Assessee against the separate orders of ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 for the A.Y.2015-16,
A.Y.2017-18 and A.Y.2016-17 dated 27.08.2025, 20.08.2025 and 20.08.2025 respectively. Assessee has filed identical grounds for all these years. Since the issue involved is common, all these appeals were heard together and decided by the common order. We treat
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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Appeal in ITA No.2361/PUN/2025 for A.Y.2017-18 as lead case.
The Assessee has raised the following grounds of appeal:
“1. The learned CIT(A) erred in confirming the validity of reopening u/s. 148 on the ground that there was reason to believe that the income of the assessee had escaped asst. and hence, the reopening u/s. 148 was valid and the re-asst. order passed u/s. 147 was justified in law.
(₹ 1,506,375/-)
2. The learned CIT(A) erred in not appreciating that the case of the Assessee was reopened on the basis of the document seized in the course of search on Kele Group and the provisions of section 148
could not be resorted to for making an addition on the basis of documents seized in the course of search on a third party and accordingly, the reopening u/s. 148 was invalid in law and the re- asst. order passed u/s. 147 ought to have been declared null and void.
(₹ 1,506,375/-)
The learned CIT(A) erred in confirming the addition of Rs. 19,50,000/- made by the learned A.O. on the ground that the Assessee firm had received interest of Rs. 19,50,000/- from M/s. Manasvi Enterprises which was not accounted in the books.
(₹ 15,06,375/-)
4. The learned CIT(A) erred in holding that Shri Abhay Kele had admitted in his statement that the transactions recorded in the ledger were correct and therefore, the learned A.O. had rightly made the addition of Rs.19,50,000/- in the hands of the Assessee.
(₹ 15,06,375/-)
5. The learned CIT(A) erred in not appreciating that the Assessee had not given any loan to Manasvi Enterprises and therefore, question of receipt of any interest income by the Assessee simply did not arise and accordingly, the addition made is not justified and the same may kindly be deleted.
(₹ 15,06,375/-)
6. The learned CIT(A) ought to have appreciated that no corroborative evidence was found in the course of search on Kele
Group that the Assessee firm had received any interest income of Rs.19,50,000/- and therefore, in the absence of any corroborative evidence, the addition made was not justified and the same ought to have been deleted.
(₹ 15,06,375/-)
7. The Id. CIT(A) failed to appreciate that Shri Abhay Kele had filed an affidavit confirming the fact that no loan was borrowed by him or any of his entities from the Assessee firm and hence, question of receipt of any interest in cash simply did not arise and therefore, the addition made ought to have been delete. (₹ 15,06,375/-)
8. The learned CIT(A) failed to appreciate that there was no evidence to indicate that the notings on the papers seized from Kele Group pertained to the assessee firm and hence, he ought to have deleted the said addition.
(₹ 15,06,375/-)
9. Without prejudice to the above grounds, the learned CIT(A) erred in confirming the addition made by the learned A.O. u/s 69A r.w.s.
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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115BВЕ without appreciating that the provisions of section 69A were not applicable and hence, the addition made u/s. 69A r.w.s.
115BBE ought to have been deleted.
(8,31,519/-)
10. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”
Submission of ld.AR :
Ld.Authorised Representative (Ld.AR) for the Assessee filed paper book. The Ld.AR also filed written submissions. Relevant Paragraphs of the written submissions are reproduced as under :
“3] Ground Nos. 1-3: Validity of notice issued u/s 148:-
1] As stated above, the original assessment u/s 143(3) was completed and thereafter, the learned A.O. reopened the case of the assessee on the ground that during the course of search on Kele Group, evidence was found that Mr. Kele had paid interest in cash to Bora Agro. The copy of the reasons recorded for reopening the case are enclosed herewith as Annexure A. In the said reasons, the learned A.O. has stated that in the course of search on Prithvi Edifice Pvt. Ltd., Prithvi Builders and Developers and Abhay Kele Group on 03.02.2021 certain incriminating documents were seized He further holds that as per the documents seized in the course of search, it was revealed that Shri Abhay Kele and his entity Manasvi Enterprises had taken term loan from Bora Agro Foods and had paid interest in cash on the term loans. He has held that this year, an amount of Rs. 19,50,000/- was paid in cash as interest. Accordingly, on the basis of the above information, the learned A.O. has reopened the case of the assessee.
2] The assessee submits that the learned A.O. has no juri iction to issue notice u/s 148 for making an addition in case of the assessee on the basis of evidence found in the course of search on a third party. As clarified above, the learned A.O. has clearly mentioned in the reasons given that the evidence was found and seized in the course of search on Kele Group from which it was revealed that they had paid interest in cash to the assessee. It is submitted that the foundation of reopening in the present case is 'the incriminatingevidence' seized in the course of search on Kele Group. Accordingly. it is submitted that the learned A.O. ought to have taken recourse to the provisions of section 153C for making any addition in the case of the assessee. Thus, Assessee submits that the ld AO has assumed the juri iction u/s 148 incorrectly and unjustifiably.
In this context, reliance is placed on the decision of Hon'ble Bombay
High Court in the case of Sejal Jewelery [171 taxmann.com 846]
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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wherein Hon'ble Bombay High Court has held that the reopening u/s 148 cannot be assumed by the A.O. for making any addition on the basis of the evidence seized in the course of search on a third party. The relevant head notes are as under –
"Section 153C, read with sections 147, 148 and 153A, of the Income tax
Act, 1961 Search and seizure Assessment of any other person
(Unsecured loan) Assessment year 2012-13 A search and seizure operation was conducted at premises of 'SJP' and its associate concerns as well as key individuals of group - During search, incriminating evidences in form of various loose papers and data back-ups of various electronic devices were found and seized It was revealed that assessee had accepted accommodation entries towards huge unsecured loans from a shell/paper company/entity On basis of same, Assessing Officer reopened assessee's case under section 147 - Assessee contended that since entire basis of reopening was search action, assessment could be made only under section 153A and not under sections 147 and 148
Whether since foundation of present case was certainly a search action which was undertaken by revenue against 'SJP' and in such search and seizure action, materials were seized and such materials were further explored and enquired, provisions of section 153C read with section 153A would be applicable Held, yes Whether, therefore, impugned notice under section 147 and all actions consequent thereto were required to be held to be without juri iction and bad in law - Held, yes
(Paras 22 and 23) [In favour of assessee)"
3.3] Similar view has been taken by ITAT Pune in the case of Vijaykumar Chordiya [ITA No.1075/PN/24] wherein notice u/s 148 was issued for making an addition on the basis of evidence seized in the course of search on a third party. Hon'ble ITAT has held that the learned A.O. has no juri iction to issue notice u/s 148 for making any addition in the case of the assessee on the basis of the search conducted on a third party. A copy of the said decision is enclosed herewith as Annexure B. Accordingly, in view of the above decision of Hon'ble
Bombay High Court and Hon'ble ITAT, Pune, it is submitted that the notice issued u/s 148 by the learned A.O. is invalid in law and hence, reasst. order passed u/s 147 be declared null and void.
4] Ground Nos. 4-8: Addition of Rs. 19,50,000/-
1] Without prejudice to the above, the assessee submits that even on merits, the addition made of Rs. 19,50,000/- is not justified at all According to A.O., as per the documents seized from Kele Group, the assessee had given a loan to Manasvi Enterprises or to Shri Abhay Kele. In the course of asst. proceedings, the assessee had denied the above allegation of the learned A.O. and had stated that it had not given any such loan to Manasvi Enterprises or to Shri Abhay Kele. In fact, Assessee has never ever entered into any transactions with Mr. Kele or with his group entities
2] The learned A.O. has not accepted the contention of the assessee. According to him, as per the documents seized from Shri Abhay Kele, it ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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is evident that the assessee had received an interest of Rs. 19,50,000/- in cash. He has also stated that the statement of Shri Abhay Kele was recorded at the time of search, and he had accepted the transactions recorded in the ledger impounded from his premises. Accordingly, the learned A.O has held that the assessee has received Rs. 19,50,000/- as an interest in cash and therefore, has made the addition u/s 69A of the Act.
3] The assessee submits that on following grounds, the addition is not justified at all.
First of all, from the seized record, your Honour would observe that there is no mention of Assessee Firm "Bora Agro Foods" in any documents. The name appearing in the seized records is 'Bora Agro'
only (copy of the ledger account seized from Kele Group are enclosed as Annexure C) which is erroneously Interpreted by ld A.O. as Bora
Agro Foods'. This action appears to be mere assumption or just a guess on his part as there was no mention of either complete name or names of Partners, contact details, address, PAN no. or any other relevant information indicating its link with the assessee Bora Agro Foods Here, it should be understood that there can be synonymous entities by the name Bora Agro with whom these transactions might have been done.
The Assessee as well as Mr. Kele has clearly denied any sort of loan transactions with each other.
4] Factually, Assessee has not entered into any transaction and has never given any loan to Mr. Abhay Kele or his Group Entities. Hence, payment of any interest by the said party to the Assessee does not of Principal Loan transaction were never found. The Ld. AO has ill- logically relied upon only the alleged transactions of payment of interest to 'Bora Agro' while making the addition despite the fact that, there was no evidence of any principal loan transaction, on which interest was allegedly paid. Thus, it substantiates our contention that the name mentioned in the seized documents as 'Bora' or 'Bora Agro' is not that of Assessee firm Bora Agro Foods.
In fact, in the course of asst. proceedings, we had submitted the affidavit of Shri Abhay Kele wherein he had confirmed on oath that neither he nor any of his group entity / related entities had taken any loan from the assessee firm. He has also affirmed that no interest in cash has been paid by him or any of his entities to the assessee. The copy of the affidavit of Shri Kele is enclosed herewith as Annexure D.
From the above facts, it is evident that the alleged transactions are not made with the assessee firm.
5] The learned A.O. has rejected the said affidavit on the ground that Shri Abhay Kele had himself owned these papers and therefore, denying the said transactions is only an afterthought act. Whereas the assessee submits that Shri Abhay Kele in his affidavit has clearly mentioned that no loan was taken either by him or his entities from the assessee firm. He has also affirmed that no interest in cash has been paid to the assessee. Since the alleged transactions are denied by both the Parties,
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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question of making any addition in the hands of the assessee simply does not arise based on certain assumptions.
Accordingly, Assessee would like to reiterate the following important points:
a. Identification of the Assessee is not established from the seized documents.
b. The Id. AO has only assumed that the transaction pertained to the Assessee.
c. The Principal Loan transaction was never entered into by & between the Parties and no such traces were at all found during the search.
Without any principal loan transaction, there cannot be any payment of interest. So, it is illogical on the part of the Id. AO to make the said addition d. The affidavit of Shri Abhay Kele cannot be ignored, which states on oath that, no interest was paid by him or any of his related entities to Bora Agro Foods and thereby denying the alleged transactions.
In view of the above, the addition made by the A.O. is not justified.
6] Despite a very clear fact that Mr. Abhay Kele in his statement has not accepted any transactions of either loan or payment of interest to the assessee, the ld. A.O. has strangely/surprisingly has relied upon the said statement of Shri Kele while making an addition.
a. It is also appreciated that no addition can be made in the hands of the assessee on the basis of certain documents found with the third party. It is further noted that in the absence of any corroborative evidence brought on record by the learned A.O. no addition can be made in the hands of the assessee on the basis of the information seized from third party. In this context, reliance is placed on the following decisions, wherein the courts have held that no addition can be made in the hands of the assessee on the basis of information seized from a third party-Pradeep Runwal [149 ITD 548 (Pune)]
b. Regency Mahavır Properties [89 Taxmann.com 444(Mum)]
c. Vineet Ranawat [88 Taxmann.com 428 (Pune)
7] In view of the above decisions, the assessee submits that the addition made is not justified at all. Further, as clarified above, the learned A.O. has not brought on record any corroborative evidence in support of his case He is simply making the addition without referring to any evidence whatsoever. It is also to be appreciated that Shri Kele has filed an affidavit wherein he has denied any payment of interest in cash to the assessee firm. Thus, considering the said affidavit and in absence of any corroborative evidence brought on record, it is submitted that the addition of Rs. 19,50,000/- is not justified and the same may kindly be deleted.
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
In case, any further clarification is required, the same would be submitted on hearing from Your Honour.”
Submission of ld.DR :
Ld.Departmental Representative(ld.DR) for the Revenue filed written submissions, the relevant paragraphs of the written submissions are reproduced as under : “8.7 In conclusion, it is to submit that the non obstante clause in Section 153C cannot be read to completely exclude the provisions of Sections 143 or 147, in cases where the assessee's income is sought to be assessed on the basis of information found during search proceedings
However, it is to clarify that it will not be open for the AO to take recourse to Section 147, where the AO has taken steps under Section 153C of the Act or vice versa.
Thus, if the conditions for exercise of juri iction under Section 153C of the Act are satisfied and the AO issues a notice as required under Section 153C of the Act, any reassessment under Section 147 of the Act would become impermissible
The assumption that provisions of Section 153C of the Act precludes any proceeding under Section 147 of the Act by virtue of the non obstante clause. is unpersuasive. The scheme of Sections 153C of the Act indicates that the said provision was enacted to simplify the procedure, while maintaining the necessary safeguards, for assessment/reassessment in cases where assets belonging to the assessee or books of account or documents, which contain information pertaining to the assessee are found pursuant to a search conducted under Section 132 of the Act or requisition made under Section 132A of the Act, in respect of a person other than the assessee"
Accordingly, it is to submit that, in the instant case, the AO had not assumed juri iction under Section 153C of the Act and therefore the re-assessment proceedings initiated under Section 147 cannot be faulted.
The following judicial pronouncements support the above view:
SN
Name and Citation
Remarks/Relevant paragraphs
1. Pr.CIT-7, New Delhi vs Naveen
Kumar
Gupta
[Dealh]
ITA
No.401/2222 dtd 20-11-2024 [168
taxmann.com
574(Del)(20-11-
Paras 43,44,47,48,57,58,59,60,61 and 65. Follows para 39 – Pr.CIT vs
Abhisar Buildwell (P) Ltd. (2023) 454
ITR 212 (SC).
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
8
2024)]
(2022) 444 ITR 97 9 (Guj) dtd 31-
01-2022
Paras 46,47,48,49,52,53,55,76 & 84. Even assessments completed u/s 153A were reopened u/s 147/148 holding therefore that the non obstante clause in section 153A did not exclude the applicability of section 147/148. 3. CIT vs Anil Kumar Bhatia 24
taxmann.com 98 (Delhi) (2012)
Para 18,19,21 & 22. 4. Sejal Jewellery&Anr vs UoI : WP
No.3057 of 2019 along with 12
WPs
Para 4 on page 4 indicates that the petitioner was searched along with its associate concerns as well as the key individuals of the group.
The Bombay High Court decision in Sejal Jewellery vs Union of India & Ors WP No. 3297 of 2019 is the oft repeated decision that is quoted to be in favour of the proposition that if a search and seizure operation has taken place or there is information available from a search and seizure, then the only resort available to the AO is to invoke the provisions of section 153A/153C and not section 147/148. In this connection, it is to mention that firstly the decision is pertaining to a writ petition filed by the assessees therein, which came to be collectively disposed of by the Hon'ble Bombay High Court and accordingly there is no ratio decidendi that follows from the said decision. In the decisions of the Hon'ble Delhi High Court, the Hon'ble Court was asked to decide the question regarding the precluding of sections 153A/153C on one hand to sections 147/148 on the other i.e. the interplay between sections 153A/153C and sections 147/148 There were 13 Writ Petitions that were clubbed and decided by the Hon'bleBombay High Court taking writ petition No 3057 of 2019 i.e. Sejal Jewellery vs Union of India & Ors as the lead writ petition
The facts of the case very clearly indicate that the petitioner was searched (para 4 on page 4 of the said decision) along with its associate concerns as well as the key individuals of the group. It is in these facts and circumstances that the Hon'ble Bombay High Court concluded that the provisions of section 153A/153C should be resorted to by the AO instead of invoking the provisions of section 147/148
However, it is to submit that, there has been no search and seizure in the case of the assessee Appellant and therefore, the material factual matrix being different, the decision of the Bombay High Court in Sejal
Jewellery (supra) cannot come to the rescue of the assessee. In any case, The principal issue Delhi High Court was asked to address was the interplay between the provisions of Section 153C of the Act and Section 147 of the Act. It was the Assessee's case (in Naveen Kumar
Gupta (supra)) that recourse to Section 147 of the Act would be unavailable in cases where the AO is empowered to proceed under Section 153C of the Act. This was the substantial question of law that the Hon'ble Delhi High Court was asked to decide and accordingly what flows from the decision is the ratio decidendi and the said issue,
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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unlike the writ petition before the Hon'ble Bombay High Court.
Accordingly, the decision in Naveen Kumar Gupta (supra) would hold the field.
In view of the above it is humbly prayed, that the order of the AO and the CIT(A) be upheld. It is prayed accordingly.”
Findings and Analysis :
We have heard both the parties and perused the records. 4.1) For AY 2017-18, the assessee firm has filed Return of Income declaring Total Income at Rs.13,01,25,920/-. The Assessing Officer (AO) received information from Dy.Director Income Tax (Inv.) Pune (DDIT) regarding search and Survey conducted in the case of Prithvi Edifice Pvt Ltd, Prithvi Builders & Developers, Mr.Abhay Kele Group entities on 03/02/2021. It was mentioned in the information submitted by DDIT (Inv.) that Mr.Abhay Kele, CMD of Prithvi Edifice Pvt. Ltd maintained parallel books of account in the name of Manasvi Enterprises wherein Mr.Kele recorded transactions of the company made through a mode other than Banking Channel. It is further mentioned that Bundle 10 revealed Interest Payments made by Manasvi Enterprises to various entities by Cash allegedly one of the entities was Bora Agro. 4.2) Based on the information received from DDIT(inv), the Assessing Officer issued Notice u/s 148 for AY 2017-18 on 31/03/2021. The Assessee filed Return of Income in response to Notice u/s 148 declaring the same income as declared in the return of Income filed u/s 139 of the Act. The AO then issued notices u/s ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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143(2) and 142(1), show cause notice on various dates. The Assessee filed reply.
4.3)
During the Assessment Proceedings, Assessee denied any such Transaction with either Abay Kele or with Manasvi
Enterprises. The Assessee specifically submitted that Assessee has not given any Loan and had not received any Interest in cash.
Assessee also filed Affidavit of Mr.Abhay Kele wherein he has denied having any transaction with the Assessee either in his personal capacity or by any of his group entities.
4.4) However, the AO made addition of Rs. 19,50,000/- u/s 69A of the Act. The relevant Paragraph of the Assessment Order is reproduced here as under :
Quote, “The assessee filed reply on various dates. Vide reply dated
27/01/22 the assessee denied that they knew Manaswi enterprises at all and asked for the documents impounded during search / survey operation at Kele group. These documents were provided to assessee on 18/2/22. Vide reply dated 11/3/22 the assessee stated that the name appearing in the documents of the Kele group as named "Bora agro should be some other person and it is not the assessee and any resemblance is coincidental. The assessee failed to recognize the transactions appearing in the papers found and seized / impounded from the premises of the assessee.
During the course of statement Shri Abhay Kele had himself owned these papers from his premise. Therefore denying the transactions at later stage is only thought after process.
The assessee initially denied knowing the Mansawi enterprises (Kele group) and now on 21/3/22 submitted affidavit from Shri abhay keke that he has not transacted with him.
The submissions of the assessee are itself contradictory. First he states that the name Bora agro appearing in the books of Kele group might be some other entity and now furnishes affidavit from Shri Abhay keke.
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This itself indicates that the stand taken by both the parties are very thought after process.
The transactions appearing in the books of Kele groups done with the assessee are conclusive evidence that the assessee has indeed undertaken transaction with Kele group.
Considering the fact of the above, I hereby reject the submissions made by the assessee and add Rs. 19,50,000/- in the total income of the hands of the assessee under the provisions of section 69A of the IT Act.
Penalty proceedings 271AAC is also initiated for under reporting as well as mis-reporting of income.
Provisions of section 115BBE of the IT Act is also applicable for levying the tax at the rate of 60%+ surcharge 25% of such tax”
unquote.
5) Aggrieved by the Assessment Order, Assessee filed Appeal before the Commissioner of Income Tax (Appeals). The CIT(A) confirmed the addition, the relevant paragraph is as under :
Quote, “These grounds challenge the merits of the addition. The impounded ledgers explicitly record cash interest payments to "Bora
Agro" totaling Rs. 19,50,000/- on specific dates. The name closely matches the assessee's ("Bora Agro Foods"), and Shri Abhay Kele admitted in his survey statement that the transactions in the ledger were true and undertaken with the named parties. This admission provides corroboration to the documentary evidence. The assessee's denial of loans or transactions lacks substantiation. The affidavit from Shri
Abhay Kele, submitted later, contradicts his contemporaneous admission and appears as an afterthought, rightly rejected by the AO, as belated retractions or affidavits are often viewed as lacking efficacy without strong evidence. Absence of principal loan evidence does not negate the interest receipt, as the ledger entries and admission stand independently. The assessee's submissions are contradictory-initial denial of knowledge, followed by an affidavit from Kele, indicating possible collusion. The addition is justified u/s 69A of the Act as unexplained. Grounds 4-7 are dismissed” Unquote.
6) Aggrieved by the Order of the Ld.CIT(A), Assessee has filed appeal before this Tribunal. 5) In this case, on 03/02/2021 there was Search u/s 132 of the Income Tax Act in various Abhay Kele group entities.
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Simultaneously there were Survey u/s 133A in some entities of Abhay Kele Group. Ld.DR had filed copy of the Letter dated
10/03/2021 of Dy.Director Income Tax (investigation) Unit-1 (2)
Pune wherein it is mentioned that in the course of search & seizure action in Kele Group, a survey was conducted in Prithvi Edifice Pvt.
Ltd, Prithvi Builders & developers. The DDIT (Inv.) has tabulated the information pertaining to various persons in a table, the part of the table is reproduced as under which have name “Bora Agro”
Bora Agro
2015-16
28/02/2015
12,00,000/-
2016-17
28/05/2015
12,00,000/-
01/09/2015
12,00,000/-
12/12/2015
12,00,000/-
27/02/2016
12,00,000/-
2017-18
28/05/2016
12,00,000/-
29/12/2016
5,00,000/-
06/03/2017
2,50,000/-
1) In this case entire addition is based on some pages of Bundle No.10. In the Assessment Order for AY 2017-18 the Assessing Officer has not specifically mentioned whether the impugned Bundle No.10 was impounded during a Survey or Seized during Search u/s 132 of the Act. 5.2) We have perused the copies of the impounded documents filed by the Departmental Representative. The relevant part is scanned and reproduced here under:
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
Thus, it is observed from the impounded documents that at some places the name mentioned is “Bora”, at some places the name mentioned is “Bora Agro”. Thus, nowhere the complete name of the Assessee Bora Agro Foods is mentioned in the impounded documents.
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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5.3) Statement of Mr.Abhay Kele was recorded during Survey. The DDIT (Inv.) vide his letter dated 10/03/2021 has merely forwarded few questions and answers. The DDIT has not forwarded complete statement of Mr.Abhay Kele to the AO. The relevant question
Number 51 and its answer is reproduced here as under :
Q.51 Please go through entry dated 26.04.2017 in ledgers mentioned above ipages 11 to 21), it is seen that cheque received of Rs.
4,00,000 in Prithvi Edifice Pvt Ltd is being paid back in cash which is also corroborated with the ledger of 'B204,205,206
MrKanhyala& Co. (Bora)" in the regular Books of Prithvi Edifice
Pvt Ltd (ledger attached as Annexure 1 of this statement). It establishes that cash payment made by yourself to Bora is being entered in the tally of 'Manasvi Enterprises'. Hence, 'Manasvi
Enterprises' is nothing but parallel books of accounts of Prithvi
Group. Please oller your comment.
Ans
I confirm that cheque of Rs. 4,00,000 has been received from MrKanhyala& Co. (Bora) in the Prithvi Edifice Pvt Ltd.
Regarding payment made in cash, I will have to verify and I will submit the details in few days time.
Thus, it can be observed that the question pertains to some
“Kanhyala & Co (Bora)”. In the answer Mr.Abhay Kele has confirmed about cheque payment of Rs.4,00,000/- to Kanhyala &
Co(bora). Thus, Mr.Abhay Kele in his statement recorded during the survey has never stated that there was any transaction with Bora
Agro Foods which is the assessee in appeal before us. Mr.Abhay
Kele has admitted cheque payment to Kanhyala & Co., which is not same as Bora Agro Foods. Mr.Abhay Kele has explained that there was cheque payment of Rs.4,00,000/- to Kanhyala& Co, but the Assessing Officer has not bothered to trace the cheques from the ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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bank statement to arrive at the exact person. Apparently Kanhyala&
Co seems to be a different person. Be it as it may be the fact remains that even during the Statement recorded during Survey Mr.Abahy
Kele has never uttered the name of the Assessee „BoraAgro Foods”.
4) Mr.Abhay Kele in the Affidavit filed during Assessment Proceedings has categorically denied having any transaction. The Affidavit is reproduced here under : Quote,
“1. A search action u/s. 132 of the Income Tax Act was conducted at my home on me and my wife Mrs Archana Kele by the Income
Tax Authorities. So also, survey was conducted at my office under section 133 of Income tax act on Prithvi Edifice Pvt. Ltd. and other entities of my group, wherein I am either a Director or a Partner.
2. I hereby state that, I in my individual capacity or Prithvi Edifice
Pvt. Ltd. or any of our group entity/ related entity, has not availed any loan, either in Cash or by Cheque particularly from M/s. Bora Agro Foods bearing PAN-AABFB4517E.
3. I further affirm that, no amount on account of any interest has been paid to M/s. Bora Agro Foods either in Cash or by Cheque, by me or by Prithvi Edifice Pvt. Ltd. or by any of our group entities.
I affirm that, whatever is stated above, is true and correct to the best of my knowledge and belief ” Unquote.
The said affidavit is duly Notarized.
5.5) The Assessing Officer has merely rejected the Affidavit of Mr.Abhay Kele stating that Mr.Kele had accepted that the impugned papers were found in his premises. However, the question is not whether the impugned papers were found in the premises of Abhay
Kele! The fact is that Mr.Abhay Kele has never stated in his initial statement recorded during Survey about any Loan from Bora Agro
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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Foods. In the initial statement Mr.Abhay Kele has never admitted any cash payments to Bora Agro foods. Similarly in the subsequent
Affidavit ,Mr.Abhay Kele stated that No cash has been paid to Bora
Agro Foods either by him or any of his group entity.
5.6) On analysis of the impounded documents referred by the AO, it is absolutely clear that Assessee‟s name Bora Agro foods nowhere appears in the impounded documents referred by the AO. Mr.Abhay
Kele has submitted that neither Abhay Kele nor his any entity has paid any cash to Bora Agro Foods. Assessee has also denied any cash receipt. It has been alleged by AO that Interest on Loan was paid in Cash to Assessee but No where the AO has mentioned amount of Loan, date of Loan, whether paid through banking
Channel or in cash.
7) In the facts and circumstances of the case, based on our analysis in all preceding paragraphs, we are of the considered opinion that there is no cash receipt by the assessee during the year, hence, we direct the AO to delete the addition of Rs. 19,50,000/-.
8) Accordingly ground numbers 3-8 for AY 2017-18 are allowed.
Ground Number 1:
Assessee has challenged notice u/s 148. The Assessee has filed copy of Reasons recorded for Reopening. The relevant part of the ITA Nos.2360, 2361 & 2362/PUN/2025[A]
17
Reasons Recorded for Reopening is scanned and reproduced as under :
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
18
6.1 Thus, it can be observed that Assessment in the case of the Assessee has been reopened based on the information received from DDIT(inv) 1(2) Pune vide letter dated 10/03/2021. Copy of the said
Letter was filed by Ld.DR. We have studied the letter dated
10/03/2021. We have already reproduced the chart given in the said letter and we have also reproduced the so called entries referring to “Bora Agro”. The letter of the DDIT dated 10/03/2021 also had some part of statement of Abhay Kele recorded during the action.
The figures mentioned in the “Reasons Recorded” do not match with Impounded Documents. This shows that there is no application of mind. We have reproduced correct figures in Paragraph 5 of this order.
6.2 On reading the Answers of Mr.Abhay Kele it is observed that No where Mr.Abahy Kele has stated that he or any of his entity had paid any interest in cash to Bora Agro Foods. In answer to one question he has referred to Kanhyala & Co (Bora), however, he has not stated that Kanhyalal& Co is same as Bora Agro Foods.
Therefore, on reading statement of Mr. Abhay Kele , prima facia there is no material to presume that any cash has been paid to assessee during the year.
6.3 We have also studied the impounded documents enclosed with the letter dated 10/03/2021, no where in the documents name of the ITA Nos.2360, 2361 & 2362/PUN/2025[A]
19
Assessee, Bora Agro Foods appears. Thus, prima facia there was no evidence in the possession of the AO to allege cash receipts by Assessee Bora Agro Foods, leading to escapement of income.
6.4 Hon‟ble Bombay High Court in the case of PCIT vs Shodiman
Investments (P.) Ltd. [2020] 422 ITR 337 (Bombay) [16-04-2018]
has observed as under :
Quote, “11. Further, a reading of the entire decision, it is clear that the reasonable belief on the basis of tangible material could be, prima facie, formed to conclude that income chargeable to tax has escaped assessment. Mr.Mohanty, learned Counsel is ignoring the fact that the words 'whatever reasons' is qualified by the words' having reasons to believe that income has escaped assessment'. The words whatever reasons only means any tangible material which would on application to the facts on record lead to reasonable belief that income chargeable to tax has escaped assessment. This material which forms the basis, is not restricted, but the material must lead to the formation of reason to believe that income chargeable to tax has escapedAssessment. Mere obtaining of material by itself does not result in reason to believe that income has escapedassessment. In fact, this would be evident from the fact that in para 16 of the decision in Rajesh Jhaveri Stock Brokers (P.)
Ltd.'s, case (supra), it is observed that the word 'reason' in the ….
'reason to believe' would mean cause or justification. Therefore, it can only be the basis of forming the belief However, the belief must beindependently formed in the context of the material obtained that there is an escapement of income.Otherwise, no meaning is being given to the words 'to believe' as found in Section 147 of the Act. Therefore, the words 'whatever reasons' in Rajesh Jhaveri Stock Brokers (P.) Ltd.'s, case (supra), only means whatever the material, the reasons recorded must indicate the reasons to believe that income has escaped assessment.
This is so as reasons as recorded alone give the Assessing Officer power to re-open an assessment, if it reveals /indicate, reasons to believe that income chargeable to tax has escaped assessment.
The re-opening of an Assessment is an exercise of extra-ordinary power on the part of the Assessing Officer, as it leads to unsettling the settled issue/assessments. Therefore, the reasons to believe have to be necessarily recorded in terms of Section 148 of the Act, before re- opening notice, is issued. These reasons, must indicate the material (whatever reasons) which form the basis of re-opening Assessment and its reasons which would evidence the linkage/nexus to the conclusion that income chargeable to tax has escaped Assessment. This is a settled position as observed by the Supreme Court in S. Narayanappa v. CIT
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
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[1967] 63ITR 219, that it is open to examine whether the reason to believe has rational connection with the formation of the belief. To the same effect, the Apex Court in ITO v. Lakhmani Merwal Das [1976] 103
ITR 437 had laid down that the reasons to believe must have rational connection with or relevant bearing on the formation of belief i.e. there must be a live link between material coming the notice of the Assessing
Officer and the formation of belief regarding escapement of income. If the aforesaid requirement are not met, the Assessee is entitled to challenge the very act of re-opening of Assessment and assuming juri iction on the part of the Assessing Officer.
In this case, the reasons as made available to the Respondent- Assessee as produced before the Tribunal merely indicates information received from the DIT (Investigation) about a particular entity, entering into suspicious transactions. However, that material is not further linked by any reason to come to the conclusion that the Respondent-Assessee has indulged in any activity which could give rise to reason to believe on the part of the Assessing Officer that income chargeable to tax has escaped Assessment. It is for this reason that the recorded reasons even does not indicate the amount which according to the Assessing Officer, has escaped Assessment. This is an evidence of a fishing enquiry and not a reasonable belief that income chargeable to taxhas escaped assessment.
Further, the reasons clearly shows that the Assessing Officer has not applied his mind to the informationreceived by him from the DDIT (Inv.). The Assessing Officer has merely issued a re-opening notice on thebasis of intimation regarding re-opening notice from the DDIT (Inv.) This is clearly in breach of the settledposition in law that re- opening notice has to be issued by the Assessing Office on his own satisfaction and noton borrowed satisfaction.
Therefore, in the above facts, the view taken by the impugned order of the Tribunal cannot be found faultwith. This view of the Tribunal is in accordance with the settled position in law.
Therefore, the question as framed does not give rise to any substantial” Unquote.
5 In the case of the Assessee Bora Agro Foods on reading the Reasons recorded by the AO it is clear that AO has not applied his mind to the information received from DDIT. The AO has independently not tried to establish that the word „Bora‟ or „Bora Agro‟ mentioned in the impounded documents refers to Bora Agro
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
21
Foods. We have already discussed that during the survey in the statement Mr.AbahyKele has also not stated that any cash was paid to Bora Agro Foods, neither Mr.Abahy Kele has identified the words
„Bora‟ or „Bora Agro‟ as Bora Agro Foods. It is important to understand here that in answer to question number 46,47 Mr.Abhay
Kele has specifically identified person as P K Satalkar, similarly in answer to question number 50 Mr.Abhay Kele has identified the person as Vijay Raundal. However, in the context of the words
„Bora‟ or „Bora Agro‟ Mr.Abhay Kele has not identified it as Bora
Agro Foods. It means Mr.Abhay Kele has identified the persons mentioned in the impounded documents but he has not mentioned
Bora Agro Foods.
6.6 In these facts primafacia there was no material with the AO to arrive at reason to believe escapement of Income in the case of Bora
Agro Foods .Accordingly the Notice u/s 148 is bad in law.
Therefore, in the facts and circumstances of the case the Ground No.
1 raised by the Assessee is allowed.
7. The ground number 2 becomes academic in nature hence dismissed as unadjudicated.
8. In the Result the Appeal of the Assessee is partly allowed.
ITA Nos. 2360 & 2362/PUN/2025
ITA Nos.2360, 2361 & 2362/PUN/2025[A]
22
9. We have decided ITA No. 2361/PUN/2025 as above. The facts of ITA Nos.2360 & 2362/PUN/2025 are same. Therefore, our decision in ITA NO. 2361/PUN/2025 shall apply mutatis mutandis to ITA Nos.2360 & 2362/PUN/2025
In the result, all the appeals filed by the Assessee are partly allowed.
Order pronounced in the open Court on 11th March, 2026. VINAY BHAMORE
DIPAK P. RIPOTE
JUDICIAL MEMBER
ACCOUNTANT MEMBER
पपणे / Pune; ददिधंक / Dated : 11th March, 2025/ SGR
आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to :
1. अपऩलधर्थी / The Appellant.
2. प्रत्यर्थी / The Respondent.
3. The CIT(A), concerned.
4. The Pr. CIT, concerned.
5. नवभधगऩयप्रनिनिनर्, आयकरअपऩलऩयअनर्करण, “ए” बेंच, पपणे / DR,
ITAT, “A” Bench, Pune.
गधर्ाफ़धइल / Guard File. आदेशधिपसधर / BY ORDER,
/ // /
सहधयक रनिस्ट्रधर /