SHAIRUL IMPEX,MUMBAI vs. ASSESSMENT UNIT INCOME TAX DEPARTMENT (INCOME TAX OFFICER WARD 19(3)(1)), MUMBAI

ITA 6613/MUM/2025Status: DisposedITAT Mumbai06 March 2026AY 2014-1514 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings were bad in law. The case fell under the pre-amended section 149(1)(b) effective from 01.04.2021. This section requires that for reopening beyond three years, the escaped income must be represented in the form of an 'asset', and the quantum should be Rs. 50,00,000/- or more. The Tribunal found that the allegation of bogus purchases is a revenue item and cannot be treated as an asset unless it creates a specific asset reflected in the balance sheet. Since no such allegation was made by the revenue, the prerequisite conditions of section 149(1)(b) were not complied with. Following the ratio in IDFC Ltd. and Hexaware Technologies Ltd., the Tribunal concluded that the notice under section 148 was invalid, rendering the consequential assessment bad in law. Therefore, the addition made was deleted. Other contentions were rendered academic.

What were the facts?

The assessee, Shairul Impex, is challenging an order by the NFAC, Delhi, which upheld reassessment proceedings for AY 2014-15. The reassessment was initiated under section 147 read with section 144 of the Income Tax Act, 1961. The Assessing Officer (AO) alleged that the assessee obtained accommodation entries for bogus purchases amounting to Rs. 3,02,93,611/- from M/s Narayan Gems and M/s Nazar Impex Pvt. Ltd., based on information from a search on the Rajendra Jain Group. A notice under section 148 was issued on 19.04.2021, followed by a notice dated 27.03.2022 after the amended regime. The AO added the entire amount of alleged bogus purchases to the assessee's income. The CIT(A) confirmed this addition. The assessee appealed to the ITAT.

What were the issues?

1. Whether the reassessment proceedings are bad in law, specifically if the notice under section 148 of the Act was issued in violation of section 149(1)(b) of the Act, considering the alleged escaped income was not in the form of an asset. The assessee argued that the alleged bogus purchases are revenue in nature and do not constitute an 'asset' as required by section 149(1)(b) for reopening beyond three years. They relied on the decisions in IDFC Ltd. vs. DCIT and Hexaware Technologies Ltd. The revenue contended that the AO and CIT(A) rightly adjudicated the issues based on credible information and the assessee failed to prove the genuineness of purchases.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 151A,Section 148A,Section 149,Section 149(1)(b),Section 80JJAA,Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Before: HON’BLE JUSTICE (RETD.) C V BHADANG & SHRI ARUN KHODPIA, AM

For Appellant: Shri Shashi Bekal, Advocate
For Respondent: Shri Swapnil Choudhary, Sr. DR
Hearing: 04.02.2026Pronounced: 06.03.2026

Per Arun Khodpia, AM:

This appeal is preferred by the assessee to challenge the order of Commissioner of Income Tax (Appeals), NFAC, Delhi [in short “Ld. CIT(A)”], dated 22.08.2025 for the Assessment Year (AY) 2014-15, which in turn arises from the assessment order passed u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (in short “The Act’) dated 11.05.2023. The grounds of appeal raised by the assessee are as under: Shairul Impex

“I, Reassessment is bad in law.

1.1.

That on the facts and circumstances of the case and in law the Ld. National Faceless

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 147

All 49,210 judgments and leading authorities on Section 147 →

Latest GST High Court judgments

Search GST case law →