Devkrupa International Vs ACIT (ITAT Ahmedabad)
The ITAT, Ahmedabad Bench held that re-opening based solely on Insight Portal inputs, without independent application of mind, is invalid in law. In this case (AY 2017-18), the AO issued s.148 notice dated 29.03.2021 alleging accommodation entries of ₹71.42 lakh from M/s Kasturi Commodities Pvt. Ltd., and completed reassessment u/s 147 r.w.s. 144B, making addition u/s 68.
The Tribunal found the reasons recorded to be mechanical and generic—they merely reproduced portal information, did not disclose the source or nature of material, recorded no enquiry, and even asserted that the assessee had done “no real business” contrary to the record. Such borrowed satisfaction, without tangible material or verification, fails the “reason to believe” test.
Further, on facts, the credits represented repayment of short-term advances made by the assessee, supported by ledger, confirmations, ITR acknowledgements & bank statements, making the portal allegation factually incorrect.
Relying on binding precedents (including Sabh Infrastructure, Surani Steel Tubes, Harikishan Sundarlal Virmani and 03 Developers), the Bench held the re-opening void ab initio. Consequently, the s.68 addition became purely academic and was deleted. The assessee’s appeal was allowed in full
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the assessee against the order dated 24.02.2025 passed by the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (‘Ld. CIT(A)’ in short), under Section 250 of the Income-tax Act, 1961 (‘the Act’ in short), relating to the Assessment Year 2017-18.
