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Facts
The AO received information that the assessee had taken accommodation entries amounting to Rs. 95,48,153/- through bogus purchase bills managed by one Rajesh Mittal. The AO initiated reassessment proceedings and added the entire purchases as unexplained expenditure u/s 69C, along with Rs. 1,57,968/- on account of LIC maturity.
Held
The Tribunal held that the Revenue had not challenged the Ld. CIT(A)'s finding that the reassessment proceedings were non-maintainable, as the alleged transactions were carried out by a partnership firm in which the assessee was a partner, not by the assessee in his individual capacity.
Key Issues
Whether the reassessment proceedings initiated against the assessee in his individual capacity were maintainable when the transactions were conducted by a partnership firm of which the assessee was a partner.
Sections Cited
147, 144, 69C, 148
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Income Tax Appellate Tribunal, DELHI BENCH ‘G’: NEW DELHI
O R D E R
PER MANISH AGARWAL, AM,
This appeal is filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC), Delhi [CIT(A), in short] in Appeal No. NFAC/2017-18/10236779 dated 05.08.2024 arising out of the order passed u/s 147 r.w.s 144 of the Act dated 23.03.2023 for Assessment Year 2018-19.
Brief facts of the case are that assessee is an individual and filed his return of income on 27.09.2018 declaring total income at Rs.5,00,460/-. Subsequently, AO received information that assessee has taken accommodation entries managed by one Sh. Rajesh Mittal in the shape of bogus bills of purchase from three different parties managed and run by Shri Rajesh Mittal amounting to Rs.95,48,153/-. Based on such information, AO initiated reassessment proceedings after taking approval from competent authority and notice u/s 148 vs. Suresh Malhotra was issued on 29.03.2022. Thereafter, various notices were issued from time to time and finally assessment was completed where the AO had treated the entire purchases from these three parties of Rs.95,48,153/- as unexplained expenditure u/s 69C of the Act and further added sum of Rs.1,57,968/- on account of amount received on LIC maturity, thus, total income of the assessee was assessed of Rs.1,02,06,581/-.
Against this order, an appeal was preferred by the assessee before the Ld. CIT(A) who vide impugned order dated 05.08.2024 allowed the appeal of the assessee on the ground of reopening. Against the said order, the Revenue is in appeal before us by taking following grounds of appeal:
1. Whether on the facts and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs. 95,48,153/- made on account of bogus purchases u/s 69C ignoring the fact that the assessee has filed GSTR-I in his own name in which bogus purchases made from 3 parties were duly reflected therein.
2. The appellant craves to add, amend or modify the grounds of appeal subsequently, before the appeal is disposed of.”
4. Heard both the parties and perused the materials available on record. From the perusal of the ground taken by the Revenue, it is seen that Revenue has taken only one effective ground wherein the Revenue has challenged the action of the Ld. CIT(A) in deleting the addition of Rs.95,48,153/- made on account of bogus purchases u/s 69C on merits. However, from perusal of para 5 of the order of Ld. CIT(A), it is seen that in para 5.1 to 5.4, the Ld. CIT(A) has discussed the issues taken for reopening of the assessment wherein it is observed by ld. CIT(A) that addition was made in the hands of the assessee in individual capacity, however, as per the assessee, the alleged transactions were actually carried out by the partnership firm M/s Shrinath Industries wherein assessee is one of the partner. Ld. CIT(A) after considering these facts held the reopening of the assessment in the hands of the assessee was not maintainable. vs. Suresh Malhotra 5. As it is evident from the grounds of appeal taken and as observed above by us also, the Revenue has not challenged the action of the Ld. CIT(A) who hold the reassessment proceedings as non-maintainable and had not decided other issues taken by the assessee on merits, however the Revenue has taken no any ground against such observations of the Ld. CIT(A) towards the initiation of reassessment proceedings. In view of these facts, we find no merit in the appeal of the Revenue wherein the Revenue has not challenged the initiation of the proceedings u/s 147 of the Act. Accordingly, we confirmed the order of Ld. CIT(A) and accordingly, the ground taken by the Revenue is dismissed.
In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 28.08.2025.