DEVKRUPA INTERNATIONAL,BHAVNAGAR vs. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE -1 BHAVNAGAR, BHAVNAGAR

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ITA 820/AHD/2025Status: DisposedITAT Ahmedabad03 February 2026AY 2017-18Bench: the Ld. CIT(A), who dismissed the assessee's appeal and upheld both the reopening and the addition.5 pages
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What did the Tribunal hold?

The Tribunal held that the reopening of assessment u/s 147 was invalid as it was based on "borrowed satisfaction" and mechanical application without independent verification or tangible material by the Assessing Officer. The reasons recorded were found to be contrary to the facts (that amounts were loan repayments), making the reassessment void ab initio. Consequently, the addition made u/s 68 was deemed not to survive.

What were the facts?

The assessee, Devkrupa International, a partnership firm, filed its ITR for A.Y. 2017-18. Assessment was reopened u/s 148 based on Insight Portal information alleging accommodation entries of Rs. 71,42,500 from M/s. Kasturi Commodities Pvt. Ltd., leading to an addition u/s 68. The assessee contended these were short-term loans repaid with interest, supported by documentary evidence, and that the reopening lacked independent application of mind.

What were the issues?

1. Whether the reopening of assessment under Section 147 was valid given the lack of independent application of mind and tangible material by the Assessing Officer. 2. Whether the addition of Rs. 71,42,500/- as unexplained cash credit under Section 68 was justified when the assessee claimed it as repayment of short-term loans.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(1),Section 148,Section 68,Section 147,Section 144B,Section 151,Section 143(3),Section 2(40)

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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

For Appellant: Shri Tushar Hemani, Sr. Advocate
For Respondent: Shri Abhijit, Sr. DR
Hearing: 27.11.2025Pronounced: 03.02.2026

आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to :

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