AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 1777
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.... addition of Rs.64,17,000/- in respect of expenditure incurred for loading & supervision expenses paid to Dishman Carbogen Amics Ltd. by treating the same as unexplained expenditure u/s 69C of the I.T. Act without considering documents submitted during the re-assessment proceeding which were also provided during the original assessment. 2) The appellant craves to add, to alter, to substitute, to amend any ground/grounds of appeal at any time or at the time of hearing of the appeal if occasion arises." 3. The brief facts of the case are that the assessee filed its return of income for A.Y. 2013-14 declaring total income of Rs.1,78,67,070/- and the original assessment was completed under section 143(3) of the Act assessing the total income at Rs.1,79,89,153/-. Subsequently, a search under section 132 of the Act was conducted in the case of Dishman group of Ahmedabad, wherein it was found that the said group was engaged in providing accommodation entries in the form of bogus loans, purchases, sales, expenses and other entries including loading and supervision charges. Based on the dissemination note received from the ADIT (Investigation), the Assessing Officer observed tha....
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....t the reopening was based merely on information received from the Investigation Wing without any independent application of mind by the Assessing Officer and therefore the same was void ab initio. The assessee also raised a ground claiming violation of principles of natural justice on account of denial of opportunity to cross-examine the persons whose statements were relied upon. On merits, the assessee contended that the expenditure was genuine, it was supported by documentary evidence including bills, ledger accounts, bank payments and TDS compliance, and that the Assessing Officer had made the addition merely on presumptions without bringing any independent evidence on record. 6. The CIT(Appeals), after considering the submissions and examining the record, adjudicated the grounds raised by the assessee in detail. With regard to grounds relating to validity of reopening under section 147 of the Act, the CIT(A) held that the Assessing Officer had received specific and credible information from the Investigation Wing based on search proceedings, which constituted fresh tangible material for forming a belief that income had escaped assessment. The CIT(A) observed that the Assessi....
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.... CIT(Appeals) dismissing the appeal of the assessee. 10. We have heard the rival submissions and perused the material available on record. 11. The core issues arising for our consideration are the validity of reopening under section 147 of the Act and the addition of Rs.64,17,000/- made under section 69C of the Act. 12. On the issue of reopening, we are of the considered view that the reassessment proceedings have been initiated beyond a period of four years from the end of the relevant assessment year, while the original assessment was completed under section 143(3) of the Act. In such a situation, as per the proviso to section 147 of the Act, the sine qua non for assuming jurisdiction is failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. In the present case, it is an undisputed fact that the assessee had furnished complete details of loading and supervision charges during the original assessment proceedings and the same were duly examined by the Assessing Officer. No new failure on the part of the assessee has been brought on record in the reasons recorded. Therefore, the condition precedent for reopening beyond f....
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....has merely relied upon general statements recorded during search in the case of third party without conducting any independent inquiry or bringing any corroborative material on record to establish that the transactions of the assessee were bogus. No attempt has been made by the Assessing Officer to verify the transactions from the recipient party by issuing notices under sections 133(6) or 131 of the Act, nor has any cash trail been established. 16. It is a settled proposition of law that addition cannot be made merely on the basis of information received from the Investigation Wing without any independent verification or corroborative evidence. The Hon'ble Courts have consistently held that suspicion, however strong, cannot take the place of evidence. In the present case, the Assessing Officer has failed to discharge the onus that shifted upon him after the assessee had furnished primary evidences in support of the claim. 17. We also find that on identical facts in assessee's own case for A.Y. 2014-15, the Coordinate Bench of the Tribunal in ITA No. 523/Ahd/2024 has accepted the genuineness of similar transactions with the same party, which further supports the case of the a....
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....r making fishing and roving inquiries has been held impermissible in 03 Developers Pvt. Ltd. vs. ITO [2025] 174 taxmann.com 1028 (Guj.). 23. Even otherwise, on merits also, we find that the addition of Rs.38,61,500/- made under section 69C of the Act is unsustainable. Firstly, the reopening was made on the issue of alleged fictitious loan, whereas no addition has been made on that count and instead addition has been made on account of loading and supervision charges. It is a settled position of law that where no addition is made on the issue for which the case was reopened, no other addition can be sustained. In this regard, reliance is placed on the judgments of the Hon'ble Gujarat High Court in CIT vs. Mohmed Juned Dadani [2014] 355 ITR 172 (Guj.), the Hon'ble Bombay High Court in CIT vs. Jet Airways (I) Ltd. [2011] 331 ITR 236 (Bom.) and the Hon'ble Delhi High Court in Ranbaxy Laboratories Ltd. vs. CIT [2011] 336 ITR 136 (Del.). 24. On facts, the assessee has furnished complete documentary evidences including invoices, ledger accounts, bank statements, details of wagons handled and proof of deduction of tax at source to establish the genuineness of the transactions. The as....