ACIT, CIRCLE-4(1)(1), ALIGARH, ALIGARH vs. MOHD. INTZAR, ALIGARH

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)

purchases, the case was reopened and notice u/s 148 was issued on 30- 03-2021. The assessee objected to reopening which were rejected by Ld. AO on 18-02-2022. The assessee was required to supply various information and documents and the assessee furnished the same. It transpired that the assessee procured animals from farmers in cash and supplied them to slaughter houses. The Ld. AO doubted the purchases made by the assessee and noted that the total credit in ICICI Bank current account was for Rs.747.38 Lacs. It transpired that the account was credited with high volume transfers from an entity followed by immediate cash withdrawals through cheque. The assessee did not maintain any sale/ purchase bills or vouchers. The assessee reflected purchases of Rs.89.07 Crores which, according to Ld. AO, remained unverified. Accordingly, 12.5% of these purchases was disallowed and added as unexplained income u/s 69C. 3. The assessee challenged the validity of reassessment proceedings by placing reliance on various judicial decisions. The quantum additions on merits were also contested. The Ld. CIT(A), in para 4.3, noted that during scrutiny assessment u/s 143(3), the books of accounts were duly verified and Ld. AO made adhoc addition of Rs.1 Lacs for unverified vouchers / bills relating to expenses. In the reasons for reopening, Ld. AO simply changed his opinion qua purchases which is impermissible in law. The case was reopened merely by blindly relying upon the information received from investigation wing without conducting any independent enquiry that the income chargeable to tax had escaped assessment. Further, there were no new material facts before Ld. AO to hold that the purchases were not genuine. The purchases so made by the assessee were duly accounted for in the return of income which was

duly verified during scrutiny assessment proceedings. There was no tangible material to reopen the case of the assessee and accordingly, the reassessment proceedings were quashed and legal grounds as raised by the assessee were allowed. 4. The Ld. CIT(A) also rendered findings on merits and noted that the sales as offered by the assessee were not disturbed. The assessee had recorded all purchases and corresponding sales in the audited books of account which were made available to Ld. AO and sales figures were not disturbed. There was no material evidence to make adhoc disallowance of 12.5% and accordingly, the quantum addition was deleted on merits also. Further, the impugned disallowance could not be made by invoking deeming fiction of Sec. 69C since Ld. AO had not doubted the source of expenditure. Aggrieved, the revenue is in further appeal before us. 5. From the facts, it is quite clear that the returned income was subjected to scrutiny assessment proceedings u/s 143(3) wherein the books of accounts were duly verified and Ld. AO substantially accepted the return income. Subsequently, the case was reopened pursuant to receipt of certain information from investigation wing alleging that there was large debit and credit in the bank account. However, this account was disclosed account and no enquiries were conducted by Ld. AO to arrive at conclusion of escapement of income. The case was reopened at the behest of third party opinion which is impermissible. There was no new tangible material before Ld. AO to arrive at conclusion of escapement of income which would vitiate entire proceedings in terms of decision of Hon’ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd. (320 ITR 561). Further, the case was reopened beyond 4 years and there was no allegation that the income had escaped

assessment for failure on the part of the assessee to make and true disclosure of particulars of its income. Considering all these facts, the adjudication of legal grounds by Ld. CIT(A) need not be interfered with. On merits also, we concur with the aforesaid conclusion of Ld. CIT(A). There was no basis to make estimated addition of 12.5% without bringing on record any evidence to establish that the purchase were not genuine. Therefore, the impugned order does not require any interference on our part, in any manner. 6. The appeal stand dismissed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.

Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) �ाियक सद� /JUDICIAL MEMBER लेखा सद� / ACCOUNTANT MEMBER Dated: 28-03-2025 आदेश की �ितिलिप अ�ेिषत / Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR

ITAT AGRA