Crystal Quinone Pvt. Ltd. Vs DCIT (ITAT Ahmedabad)
The appeal before the ITAT Ahmedabad was filed by the assessee against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi dated 23.05.2025 for Assessment Year 2009-10. The assessee challenged the confirmation of addition of Rs.4,50,000/- towards commission paid to Reynolds Petro Chem Ltd. and addition of Rs.90,00,000/- towards alleged inflated purchases. The assessee also raised additional grounds challenging the validity of reassessment proceedings under Section 147 of the Income-tax Act, 1961.
The assessee submitted that the additional grounds involved pure legal issues arising from facts already on record. The Tribunal admitted the additional grounds by relying on the Supreme Court decision in National Thermal Power Ltd. v. CIT.
The assessee, a private limited company engaged in manufacturing chemicals, had filed its return declaring income of Rs.1,58,94,385/- on total turnover of Rs.31,27,35,054/-. The books of account were audited under Section 44AB of the Act. The assessment was reopened under Section 147 based on information received from the Investigation Wing stating that Reynolds Petro Chem Ltd. was involved in accommodation entries and inflation of purchases.
During reassessment proceedings, the Assessing Officer made additions of Rs.4,50,000/- towards commission paid to Reynolds Petro Chem Ltd. and Rs.90,00,000/- towards alleged bogus or inflated purchases, resulting in total additions of Rs.94,50,000/-. The CIT(A) confirmed the additions and upheld the reassessment proceedings.
