INCOME TAX OFFICER WARD-4(1)(1), AHMEDABAD, AHMEDABAD vs. SURYANANDAN TEXTURIZER LIMITED, AHMEDABAD

Taking up the quantum appeals for hearing first in & 1902/Ahd/2025, Ld. Counsel for the assessee stated that the issue pertained to addition made to the income of the assessee on account of purchases made by it by way of import and the duty paid thereon, on account of the source of the said expenses remaining unexplained. Ld. Counsel for the assessee pointed out that the Assessing Officer observed, on the basis of IEC data that the assessee had made imports of Rs.9,79,50,475/- and duty paid thereon of 1,75,05,593/- in A.Y 2015-16. However, no return was filed by the assessee. Accordingly, the impugned amounts were added to the income of the assessee as investments, the source of which unexplained. In A.Y. 2016-17, the assessee to 1903/Ahd/2025 [ITO vs. Suryanandan Texturizer Limited] - 3 – was identically noted to have made purchases of Rs.14,21,14,129/- and duty paid thereon Rs.3,71,74,683/-, and no return of income filed. The impugned amounts were, therefore, added to the income of the assessee. Ld. Counsel for the assessee, thereafter, pointed out that in appellate proceedings before the Ld. CIT(A), the assessee had clarified that the IEC data with the AO was in relation to the old PAN Number of the assessee, which the assessee had since changed, and the impugned transaction had been reflected in its books of accounts and return filed by the assessee in the new PAN number. The assessee’s submissions were forwarded to the AO for his remand report, who, Ld. Counsel for the assessee pointed out agreed with the contentions of the assessee, though he stated that the addition needed to be upheld, since the assessee had not proved why the imports were reflected in the incorrect PAN Number of the assessee in the IEC data. He, thereafter, pointed that the Ld. CIT(A) taking note of the verification conducted by the AO in the remand proceedings found the assessee’s contention of the impugned purchases to have been duly reflected in its books of accounts to be correct and accordingly deleted the addition made to the income of the assessee in both the years.

“11. Ground No. 2: The appellant contests the addition of Rs. 11,54,56,068/-— comprising the assessable value of imports Rs. 9,79,50,475/- and corresponding duty paid Rs. 1,75,05,593/- —treated as unexplained expenditure u/s 69C of the Act. 11.1 The appellant submits that non-compliance during assessment arose because proceedings were erroneously initiated under PAN AAECS3484M, a to 1903/Ahd/2025 [ITO vs. Suryanandan Texturizer Limited] - 4 – PAN the company has never used for filing its returns. Consequently, the notices issued under this incorrect PAN did not come to the appellant’s knowledge. Documentary evidence now furnished establishes that every import transaction, together with the related duty payments, was duly recorded in the audited books under the correct PAN AAGCS3444M, and the return of income for the year was also filed under this PAN. Thus, no income has escaped assessment in respect of the impugned imports. Although the Assessing Officer (AO) has objected to admission of these additional evidences—asserting that adequate opportunity had already been afforded—I have examined the assessment order, the appellant’s submissions in appeal, and the remand report. Being satisfied that the circumstances warrant admission of the additional evidences, I proceed to decide the issue on merits. 11.2 The record shows the appellant did not respond to notices during assessment. The stated reason is the initiation of proceedings under the wrong PAN AAECS3484M , of which the appellant was wholly unaware. The mistake arose because the customs -house agent inadvertently quoted this incorrect PAN in import documents, causing the import data to be mapped to the wrong PAN in the departmental system. 11.3 Upon learning of the resultant demand in July 2024, the appellant promptly produced comprehensive documentation demonstrating that all imports and corresponding duties were duly reflected in its audited accounts under PAN AAGCS3444M. The return of income filed under this PAN offered to tax the sales linked to these imports. The evidence adduced shows the purchases were properly accounted for and discloses no intent to conceal income or evade tax. 11.4 In the Remand Report dated 23-06-2025, the AO has verified and affirmed that the impugned import transactions and duty payments are correctly recorded in the appellant’s books under PAN AAGCS3444M. The issue, therefore, stems solely from a PAN mismatch in import filings and not from any income escaping assessment. In view of the material on record and the AO’s verification, it is held that no income has escaped taxation; all import purchases and duties stand duly accounted for. 11.5 Accordingly, the addition of Rs. 11,54,56,068/- comprising the assessable value of imports Rs. 9,79,50,475/- and corresponding duty paid Rs. 1,75,05,593/- treated as unexplained expenditure u/s 69C of the Act is deleted. The ground of appeal succeeds.”

6. Ld. Counsel for the assessee therefore, contended that in view of the factual finding of the Ld. CIT(A) that the import purchases were duly reflected in the books of assessee, the Revenue had no case for treating the same as expenditure from unexplained sources as done by the AO. to 1903/Ahd/2025 [ITO vs. Suryanandan Texturizer Limited] - 5 – 7. Ld. D.R before us though was unable to controvert the factual findings of the Ld. CIT(A), however, he argued that the assessee had given no reason for furnishing incorrect PAN Number in IEC, and therefore, the addition needed to be confirmed.

8. Having heard both the parties and on going through the orders of the authorities below, we find no merit in the appeal of the Revenue for both the years. The addition admittedly, in the present case was made on account of import purchases and duty paid thereon, the source of payment of which was found to be unexplained. It is a fact on record that the AO in remand proceedings admitted that the purchases were duly accounted for in the books of the assessee, and the source was duly explained. The AO having accepted so we fail to understand, what grievance now remains with the AO to have come up in appeal against the order of the Ld. CIT(A), who we hold rightly deleted the addition. The matter of the assessee having furnished a wrong PAN No. to the IEC has no impact nor does it in any way take away the fact that the impugned purchases were duly reflected in the books of accounts of the assessee.

9. In the light of the same, we find no infirmity in the order of the Ld. CIT(A) for both the years before us, deleting the addition made to the income of the assessee on account of purchases and duty paid thereon, source of which remained unexplained. to 1903/Ahd/2025 [ITO vs. Suryanandan Texturizer Limited] - 6 – 10. Both the appeals filed by the revenue for A.Y 2015-16 and A.Y 2016-17 in & respectively are accordingly dismissed.

11. Since, we have dismissed the department’s appeal in quantum proceedings for both the years before us, upholding the Ld.CIT(A)’s orders deleting the additions made in the hands of the assessee, we find no case with the Revenue for challenging the Ld. CIT(A)’s order deleting the levy of penalty, admittedly, on the very same additions in the said years.

12. The appeals filed by the Revenue in penalty proceedings in & also stand dismissed.

This Order pronounced on 03/02/2026 Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 03/02/2026 N. K., Sr.PS True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant ��यथ� / The Respondent. 2. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,