DCIT Vs Sanjay Aggarwal (ITAT Delhi)
Borrowed Satisfaction Cannot Replace an AO’s Investigation: Addition Based Solely on Investigation-Wing Report Fails u/s 131 & 133(6)
Background
The Revenue filed an appeal against the order dated 30 December 2025 passed by the NFAC u/s 250, whereby the CIT(A) had granted substantial relief to the assessee, including deletion of an addition of ₹2.82 crore alleged to represent bogus purchases.
There was a delay of 20 days in filing the Revenue’s appeal. The Department explained that the delay occurred due to a gap in inter-office communication. Considering the explanation, the Tribunal condoned the delay & admitted the appeal for adjudication.
Reassessment & Addition
The AO issued notice u/s 148 on 30 March 2019. The reassessment proceedings were initiated on the basis of information relating to cash deposits of ₹30,44,500 in the assessee’s bank account, purchase of a motor vehicle worth ₹22,03,833 & another transaction of ₹2.82 crore involving the assessee.
During reassessment, the assessee furnished copies of bills in support of the ₹2.82-crore transaction. The AO, however, considered the documents insufficient & treated the entire amount as bogus purchases.
Significantly, the AO did not explain what defect existed in the bills, which particular document was unreliable or what further evidence was necessary. There was no independent verification of the transaction. Nevertheless, the addition of ₹2.82 crore was made merely on the basis of information received from the Investigation Wing.
