BORA AGRO FOODS,PUNE vs. DCIT, CIR-5, PUNE, PUNE

ITA 2362/PUN/2025Status: DisposedITAT Pune11 March 2026AY 2016-1722 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed Ground No. 1, finding that the reopening under Section 148 was invalid. The AO had not applied his mind to the information received from the DDIT (Investigation) and had not independently established that the 'Bora' or 'Bora Agro' mentioned in the impounded documents referred to the assessee. Furthermore, Shri Abhay Kele, in his statement, had not identified 'Bora' or 'Bora Agro' as Bora Agro Foods, despite identifying other individuals. The Tribunal noted that the AO's reasons did not indicate a rational connection to the belief that income had escaped assessment, nor did they specify the amount of escaped income, suggesting a fishing inquiry. The reopening was based on borrowed satisfaction, breaching settled legal principles. The Tribunal held that the AO's reasons lacked a live link between the material and the formation of the belief regarding escapement of income. Consequently, the notice under Section 148 was deemed bad in law. Ground No. 2 was dismissed as academic. The appeals were partly allowed.

What were the facts?

The assessee, Bora Agro Foods, filed three appeals (ITA Nos. 2360, 2361 & 2362/PUN/2025) against orders of the CIT(A) for Assessment Years 2015-16, 2017-18, and 2016-17. These orders confirmed the validity of reopening under Section 148 and additions made under Section 147. The reopening was based on documents seized during a search on the Kele Group, which allegedly indicated that Shri Abhay Kele and his entity, Manasvi Enterprises, had taken a term loan from Bora Agro Foods and paid interest in cash. The amount in dispute for the reopening challenge is ₹1,506,375. The addition confirmed by the CIT(A) was ₹19,50,000, representing alleged unaccounted interest received by the assessee from M/s. Manasvi Enterprises. The appeals were heard together as the issues were common.

What were the issues?

1. Whether the reopening of assessment under Section 148 of the Income Tax Act, 1961, was valid, considering the reasons were based on documents seized during a search on a third party (Kele Group), and whether the Assessing Officer (AO) had jurisdiction to issue the notice under Section 148 for making an addition on this basis, or if Section 153C should have been invoked. - Assessee's contention: The AO lacked jurisdiction to reopen under Section 148 based on third-party search evidence; Section 153C should have been used. Relied on Bombay High Court in *Sejal Jewellery* and ITAT Pune in *Vijayakumar Chordiya*. - Revenue's contention: Not recorded. 2. Whether the addition of ₹19,50,000 as interest income received by the assessee from M/s. Manasvi Enterprises was justified, considering the assessee's claim that no loan was given and therefore no interest income could arise, and in the absence of corroborative evidence from the search on Kele Group, and whether Shri Abhay Kele's affidavit confirmed no loan was borrowed from the assessee. - Assessee's contention: No loan was given to Manasvi Enterprises, so interest income did not arise. No corroborative evidence was found during the Kele Group search. Shri Abhay Kele filed an affidavit confirming no loan was borrowed from the assessee. Relied on the principle that reasons to believe must have a rational connection to the escapement of income and that reopening cannot be based on borrowed satisfaction. - Revenue's contention: Not recorded. 3. Whether the addition made under Section 69A read with Section 115BBE was applicable and justified. - Assessee's contention: Provisions of Section 69A were not applicable. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 153C,Section 69A,Section 115BBE,Section 250,Section 143(3)

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Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE

Before: DR. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Appellant: Shri Nikhil S Pathak
For Respondent: Shri Amol Khairnar – CIT(DR)
Hearing: 29/01/2026Pronounced: 11/03/2026

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 Appeal in ITA No.2361/PUN/2025 for A.Y.2017-18 as lead case.

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