M/S. SHAKAMBHARI ISPAT & POWER LTD., ,KOLKATA vs. DCIT, CENTRAL CIRCLE 3(3), , KOLKATA

ITA 1197/KOL/2025Status: DisposedITAT Kolkata02 January 2026AY 2020-202171 pages
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What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to delete the addition of Rs. 48,85,00,000/- on account of alleged cash loans and the consequential addition of Rs. 3,41,95,000/- as interest. The Tribunal found that the CIT(A) had rightly held that the documents seized from Mr. Kasera's premises were inadmissible as evidence because they did not suggest the appellant had taken any cash loans. Furthermore, Mr. Kasera had never named the assessee and had denied any transactions with them in remand proceedings. The Tribunal agreed that the AO had acted on presumptions and surmises without conducting proper inquiries or corroborating evidence. The AO's failure to conduct inquiries from persons who received stated amounts from the assessee rendered the document unreliable. Consequently, the Tribunal upheld the CIT(A)'s order in this regard and dismissed the revenue's grounds related to this issue. The Tribunal also noted that grounds 4, 5, 6, and 7 of the revenue's appeal were consequential to ground 3, which was decided against the revenue, rendering them infructuous. The appeals of the revenue were dismissed.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) heard cross-appeals filed by M/s Shakambhari Ispat & Power Limited (the assessee) and the Deputy Commissioner of Income Tax (DCIT) for assessment years 2016-17 to 2021-22. The appeals arose from orders passed by the CIT(A) concerning reassessment proceedings initiated under Section 147 read with Section 148 of the Income Tax Act, 1961. The assessee was engaged in manufacturing and trading of iron and steel products. A search operation on the 'Agarwal Group' on September 17, 2021, and subsequent dates led to the reassessment. The primary dispute revolved around the validity of the reassessment notices and the subsequent additions made by the Assessing Officer (AO) based on alleged undisclosed purchases and cash loans.

What were the issues?

1. Whether the notice issued under Section 148 dated September 6, 2022, and the consequent reassessment proceedings under Section 147 were valid and in accordance with law, considering the grounds raised by the assessee regarding vagueness, lack of incriminating material from searches on 'Agarwal Group', and the applicability of amended Section 147/148 to searches conducted prior to April 1, 2021. 2. Whether the addition of Rs. 29,93,22,967/- on account of alleged undisclosed purchases of coal, with a Gross Profit (GP) rate of 8.01%, was justified, considering the assessee's contentions that there was no evidence of such purchases, no examination of third parties, no rejection of books of accounts, and no allowance for cross-examination. 3. Whether the addition of Rs. 8,52,00,000/- was wrongly made without independent examination and pertained to the appellant. 4. Whether the addition of Rs. 1,20,95,958/- treating purchases from Reeja Trading Private Ltd. as bogus was justified, based solely on a CGST Department report without independent inquiry, especially when the vendor had filed statutory returns and payments were made through banking channels. 5. Whether the addition of Rs. 48,85,00,000/- on account of alleged cash loans and consequential addition of Rs. 3,41,95,000/- as interest were sustainable, considering the CIT(A)'s findings that the evidence was unreliable, the statement of Praveen Kasera did not name the appellant, and the AO acted on presumptions. Assessee's Contentions: The assessee argued that the reassessment notices were invalid, vague, and not based on proper material. They contended that the amended provisions of Section 147/148 were wrongly applied. Regarding additions, they argued that the alleged undisclosed purchases and bogus purchases lacked evidence, and the AO relied on conjectures and surmises. They also claimed that certain additions were unrelated to the appellant. The assessee relied on various judgments and principles of natural justice, including the right to cross-examination. Revenue's Contentions: The revenue, through the CIT-DR, supported the actions of the AO and the CIT(A) in confirming the reassessment proceedings and the additions made. Specific arguments for the revenue are not detailed in the provided text, but their appeals indicate disagreement with the CIT(A)'s deletions.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 132,Section 139(1),Section 143(1),Section 115JB,Section 69C,Section 69D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

Before: SHRI RAJESH KUMARAND

For Respondent: Shri Sanat Kumar Raha, CIT-DR
Hearing: 29/10/2025Pronounced: 02/01/2026

Per Bench.

These are the cross appeals filed by the assessee and revenue

against the separate orders passed by the CIT(A), Kolkata-21, 28.02.2025

& 13.03.2025, f

The order continues below.

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