ASSISTANT COMMISSIONER INCOME TAX, CENTRAL CIRCLE -4(1),KOLKATA, KOLKATA vs. VICTOR TRADELINK PRIVATE LIMITED, KOLKATA

Per Pradip Kumar Choubey, Judicial Member:

This appeal filed by the revenue is directed against the order dated
09.07.2024 of the Commissioner of Income Tax (Appeals)-27, Kolkata
[‘CIT(A)’] passed under Section 250 of the Income-tax Act, 1961
(hereinafter referred to as “the Act”) for the assessment year 2013–14. 2. The appeal has been filed by the revenue with a delay of 62 days.
The revenue has filed a petition for condonation of the delay. After considering the reasons cited in the petition for condonation of delay, we find that the reasons are valid and consequently, the delay in filing the appeal is hereby condoned and we proceed to dispose of the appeal on merits.
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3. Brief facts of the case are that the assessee filed its return of income u/s 139 of the Act on 12.11.2023 declaring total income at Rs.1,75,152/- and the same was duly processed u/s 143(1) of the Act.
Thereafter, the Assessing Officer got information from the Investigation wing that the assessee had received accommodation entry of Rs.4,46,00,000/- from 4 entities viz. M/s Swastik Vinimay Pvt. Ltd.
(Rs.2,51,00,000/-), M/s Saksham Goods Pvt. Ltd. (Rs.1,30,00,000/-),
M/s Azzasr Trading Pvt. Ltd. (Rs.40,00,000/-) & M/s Rajni Commosales
Pvt. Ltd. (Rs.25,00,000/-). Thereafter, a notice u/s 148 of the Act was issued and in response to the same, the assessee had filed the return of income same as earlier i.e., at Rs.1,75,152/- on 05.03.2021. Subsequently, the AO had issued statutory notices u/s 143(2) & 142(1) of the Act and in response, the assessee furnished written submission.
Finally, the Assessing Officer passed the assessment order u/s 147 of the Act on 27.03.2022 determining a total Income of Rs.4,36,25,150/-, adding unexplained cash credit u/s 68 of the Act
4. Aggrieved by the said order, the assessee filed an appeal before the CIT(A) wherein the assessee has been allowed on the reasoning that the proceedings u/s 147 of the Act were not appropriate in the assessee’s case and the same were set aside.
5. Being dissatisfied, the revenue is in appeal before us raising the following grounds of appeal:
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His submission is that the provisions u/s.153C are automatically triggered when the books of account, documents and assets belonging to any other person found in the course of search of the party against whom the warrant is issued and therefore, the Assessing Officer would have initiated the assessment proceedings against assessee as 'Other
Person' and accordingly would have issued a notice u/s.153C after recording separate satisfaction note. He further submits that there is no specific bar in the statute against issuance of notice u/s. 148 to the other person and hence, when a case is covered by the provisions of section 153C, juri iction u/s. 147 is ousted by legislative mandate and section 153C of the Act supersedes the applicability of provisions of section 148 of the Act. He argued that if any documents received from the AO of the searched person and such documents pertains to or any information contained therein relates to the assessee, then proceedings could be initiated u/s 153C and not u/s 148 and in such a situation, any proceedings u/s 148 would be invalid and any notice issued u/s 148
and proceedings u/s 147 would be void ab-initio. In this context, he relied on the following decisions:
 Hon'ble Karnataka High Court in the case of Sri Dinakara Suvarna
V Dy. Commissioner of Income Tax (2022) 143 taxmann.com 362
(Karnataka)
 G. Koteswara Rao V. Deputy Commissioner of Income Tax, Central
Circle.
1,
Vishakhapatnam
(2015)
64
Taxmann.com
159
(Visakhapatnam Trib)
 The Hon'ble High Court of Rajasthan in the case of Shyam Sunder
Khandelwal v. ACIT [2024] 161 taxmann.com 255 (Rajasthan)
6.1
The ld. AR also submits that M/s Victor Tradelink Pvt Ltd was shareholder of M/s Pushkar Tradelink Pvt Ltd during AY 2013-14 as Victor Tradelink Pvt. Ltd

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claimed by the Assessing Officer is factually incorrect as the assessee was not the shareholder of M/s Pushkar Tradelink Pvt Ltd. as was evident from records of shareholder of M/s Pushkar Tradelink Pvt Ltd are as declared by them in the return of income and the shareholder of M/s Pushkar Tradelink Pvt Ltd are M/s Equate Distributors Pvt Ltd and M/s Mankind Dealcom Pvt Ltd having 50% holding each. His submission is that the Assessing Officer made wrong allegation that the assessee made transaction with M/s Pushkar Tradelink Pvt Ltd for amounting
Rs.1,86,000,000/- i.e. within a span of one month during the A.Y 2013-
14 as the assessee has provided loan amounting Rs. 2,45,00,000/- and interest was charged of Rs.5,36,367/-. The ld. AR further submits that notice issued u/s 148 after the expiry of four years from the end of the relevant assessment year by the Assessing Officer merely acted mechanically without applying his own mind on the information supplied by the investigation wing of the Department about the alleged accommodation entries provided. The ld. AR in this respect has relied the following decisions:
 PCIT vs. G. Pharma India Limited 384 ITR 147 (Del.)
 CIT Us. Meenakshi Overseas Put Ltd 395 ITR 67 (Del.)
 Panchanan Hati vs CIT 115 ITR 336 (Cal)
 Calcutta Discount Company Limited vs. Income Tax Officer 41 ITR
191 (SC)
6.2
The ld. AR further submits that in the decision in the case of “RMJ
Polyvinyl Limited", 396 ITR 5 (Del), it has been held by the Hon'ble Delhi
High Court, that the information received from the Investigation Wing of the Department cannot be considered to be any tangible material per se, when there is no further enquiry having been undertaken thereon by the Assessing Officer and there is no live link between the tangible material
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and the Assessing Officer's reasons recorded for the formation of reason belief of escapement of income chargeable to income tax. The ld. AR also submits that there is no irregularity in the impugned order of the ld.
CIT(A) and the ld. CIT(A) has discussed everything in details in his impugned order and allowed the appeal of the assessee after various judicial pronouncements and the order of the ld. CIT(A) may be upheld.
7. Upon hearing submission of the counsels of the respective parties and on perusal of the material available on record, we find that the incriminating information received by the AO is the aftermath of a search
& seizure operation conducted in the case of ‘Sagar Group’. We have gone through the section 153C which deals with the procedure of assessment of income of ‘any other person’ other than the person in whose name the warrant is issued and who is covered u/s. 153A of the Act and assessment u/s. 143(3) r.w.s. 153A was completed in the case of Assessee of Sagar Group, therefore, the main person in whose name the warrant is served is assessee of Sagar Group and the present appellant is a company where no warrant has been issued nor searched and only certain documents found which led to the information that there are certain transactions pertaining to the assessee were found and that too in the premises of Sagar Group. We further find that in this case, the Assessing Officer had mistakenly reopened the assessment u/s.147 of the Act and the notice is clearly infructuous because section 153C is a special provision to deal with the case of ‘other person’ arising out of search and when a case is covered by the provisions of section 153C of the Act, therefore, juri iction u/s 147 of the Act in this case is not applicable. We find that the ld. CIT(A) in his order has elaborately discussed the issue, the relevant portion of the same is essential to reproduce as under:
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“5.2.6. Hence, in view of the above judicial pronouncement and the discussion held above, it can be inferred that as in the present case the incriminating material found from the consequence of a search & seizure operation in the group case of ‘Sagar Group’, the assessee should be treated as ‘Other person’ and the same incriminating details or documents whatever found in the same case against the assessee, should be used to conduct an assessment u/s 153C of the Act not U/s 147 of the Act.
5.2.7. Further, it is also noticed that the reasons recorded against the said reopening proceedings is different from the additions made by the AO in his assessment order. The reasons which were the basis for the reopening of assessment proceedings u/s 147 of the Act were totally ignored. The AO has made additions on other issues which were not part of the reasons. In the reasons recorded that the assessee “Victor Tradelink
Pvt. Ltd.” was found to be one of the shareholders of M/s Pushkar
Tradelink Pvt Ltd (PTPL) through which PTPL had made many sham transactions. In the post search period, through detailed and indepth investigation revealed that “Victor Tradelink Pvt Ltd.” had received huge amount of Rs.1,86,000,000/- within a span of one month during the A.Y
2013-14. However, the fact is eventually incorrect as the appellant was not the shareholder of M/s Pushkar Tradelink Pvt Ltd. As per records, it can be seen that the shareholder of M/s Pushkar Tradelink Pvt Ltd are M/s Equate Distributors Pvt Ltd and M/s Mankind Dealcom Pvt Ltd having
50% holding each. Further it was alleged that the assessee had made transaction with M/s Pushkar Tradelink Pvt Ltd for amounting Rs.
18,60,00,000/- i.e. Rupees Eighteen Crore Sixty Lacs within a span of AY
2013-14 whereas from the submitted ledger copies, it is evident that the appellant has provided loan amounting Rs. 2,45,00,000/- and charged interest amounting Rs.5,36,367/- on the same. Additionally, the AO had relied on some trail where allegation has been made that some Cash was deposited in the layering of the transaction and eventually part of the cash deposit travel to the appellant company. While going through the said trail it can be seen that there is no cash deposit found. Hence, the information is factually incorrect. Hence, the reasons framed by the AO are not considered for the additions made in the assessment orders.
5.2.8. In view of the aforesaid two reasons, and judicial pronouncements, the proceedings u/s 147 of the Act were not appropriate in the assessee’s case. The provisions of u/s 153C of the Act should have been invoked in the said case which are suitable provisions as per the Act. Therefore, the proceedings u/s 147 of the Act is set-aside. Consequently, these grounds raised by the assessee are allowed.”

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not find any infirmity in the order of the ld. CIT(A) and the same is upheld. Accordingly, the appeal of the revenue is dismissed.
8. In the result, the appeal of the revenue is dismissed.
Kolkata, the 19th November, 2025. [Rajesh Kumar]

[Pradip Kumar Choubey]
Accountant Member

Judicial Member

Dated: 19.11.2025. RS

Copy of the order forwarded to:
1. Appellant -
2. Respondent -
3. CIT(A)-
4. CIT- ,

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By order