BHUPESH GUPTA, NALAGARH,HIMACHAL PRADESH vs. ACIT (CENTRAL CIRCLE ), SHIMLA, HIMACHAL PRADESH

आयकर अपील�य अ�धकरण,च�डीगढ़ �यायपीठ, च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ & 442/CHD/2025 �नधा�रण वष� / Assessment Year: 2017-18 & 2018-19 Shri Bhupesh Gupta, Vs The ACIT, Aakash Hospital & Central Circle, Diagnostic, Nalagarh, Shimla. Solan. �थायी लेखा सं./PAN NO: AARPG5916A अपीलाथ�/Appellant ��यथ�/Respondent Assessee by : Shri Sudhir Sehgal, Advocate Revenue by : Shri Vivek Vardhan, JCIT Sr.DR Date of Hearing : 01.09.2025 Date of Pronouncement : 08.09.2025 VIRTUAL HEARING O R D E R PER RAJ PAL YADAV, VP

The present two appeals are directed at the instance of the assessee against the common order of the ld. Commissioner of Income Tax [in short ‘the CIT] dated 27.01.2025 passed for assessment year 2017-18 and 2018-19.

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5. While challenging the assessment orders, ld. counsel for the assessee took us through copy of the reasons available on page No. 12-14 and 19-21 of the Paper Book wherein reasons for re-opening in assessment year 2017-18 and 2018-19 are available. A perusal of the reasons would indicate that a survey was conducted on the hospital namely, Aakash Hospital & Diagnostic which is a proprietary concern of his wife Smt. Neelam Gupta. During the survey, it revealed that assessee was being paid salary of Rs.50,000/- per month and also a sum of Rs.3500/- was deposited in a Recurring Deposit Scheme with Parwanoo Urban Co-operative Bank. The AO harboured a belief that income of Rs.6 lacs has not been disclosed by the assessee. The conclusion of the AO in paragraph No. 5 of the reasons read as under : “5. In view of the facts narrated above, I hove reasons to believe that the amount of at least Rs, 6 lakh represent the income of the assessee which has escaped assessment for F.Y. 2016-17 relevant to A.Y. 2017- 18 within the meaning of clause (b) of Explanation 2 of section 147 of the l.T. Act in addition to any other undisclosed income on the basis of impounded material which may come to the notice subsequently during reassessment proceedings.” 5.1 However, while passing the assessment order, he did not make any addition of Rs.6 lacs, rather he made additions on account of unexplained investment in making recurring & 442/CHD/2025 A.Y.2017-18 & 2018-19 4 deposit in the bank. The ld. counsel for the assessee submitted that since AO did not make addition of Rs.6 lacs in each assessment year, therefore, he is denuded from his powers to make any other additions. For buttressing his contention, he relied upon the order of the ITAT in the case of Shri Rajesh Kumar Bansal V ITO & others. In this appeal, the Tribunal considered all the judgements including the submissions of ld. DR on the strength of judgement of Hon'ble Punjab & Haryana High Court in the case of PCIT Vs Lark Chemicals reported in 99 taxman.com 311.

6. The ld. DR on the other hand, relied upon the judgement of Hon'ble Punjab & Haryana High Court in the case of Lark Chemicals. He also emphasized that during the course of survey, wife of the assessee has disclosed payment of Rs.3500/- per month in the recurring deposit. Thus, AO has considered this aspect also while re-opening the assessment.

7. A perusal of the record would indicate that AO has not made the additions for which assessment was reopened. The perusal of the reasons would indicate that assessment was reopened on the ground that assessee has unexplained sales but no addition was made on account of unexplained sales, rather additions on account of sundry creditors have been made which is beyond the scope of re-assessment proceedings because on escapement of these sundry creditors, AO ought to have been recorded fresh reasons and reopen it again.

8. In view of the above discussion, we allow all the three appeals of the assessee and delete the additions made by the AO which has been confirmed by the ld. CIT(A).

7.1 The issue is squarely covered by the above proposition of law. As far as the argument of ld. DR is concerned, we have perused the reasons. The AO has nowhere formulated his opinion that income in the shape of investment in the bank has escaped assessment. He might be having 100 of informations in his possession but which information persuaded him to believe that income has escaped assessment is the only relevant requirement to be taken into consideration. The ld. Sr.DR cannot improve the reasons by making reference to the original material/information possessed by the AO which can empower the AO to record reasons qua escapement of income on the basis of that & 442/CHD/2025 A.Y.2017-18 & 2018-19 7 information. Therefore, we are of the view that AO has no power to make additions of the alleged investment in Recurring Deposit Scheme, once he has not made any addition on the escaped salary income. In the light of the judgement of Hon'ble Bombay High Court, Hon'ble Delhi High Court and Hon'ble Gujrat High Court, we allow the appeal of the assessee and delete the additions.

Order pronounced on 08.09.2025.