Agrasen Polytex Private Limited Vs PCIT (ITAT Jaipur)
Paperwork Is Not Enquiry: ITAT Upholds Revision of ₹1.19 Crore Loan Assessment
Documents Accepted, Adverse Information Ignored
The Jaipur Tribunal upheld revision under Section 263 where the Assessing Officer accepted an unsecured loan as genuine on the strength of documents, without examining specific adverse investigation material already available with him.
The disputed loan of ₹1,19,50,000 had been received from Innovative Commercial Private Limited (ICPL). The assessment had been reopened because of information suggesting that the loan represented an accommodation entry. Nevertheless, the AO completed reassessment without making an addition, accepting the assessee’s documentary explanation.
The Tribunal held that collecting documents and raising routine queries did not constitute the enquiry required by these facts. The AO had to investigate the transaction against the adverse material, confront the assessee with that material and evaluate its response before reaching a conclusion.
Reopening Ended Without Examination of Its Foundation
The assessee’s case was reopened under Section 147 on information that it had obtained accommodation entries from ICPL in the form of unsecured loans. During reassessment, the company furnished documents to establish the lender’s identity, creditworthiness and the transaction’s genuineness.
The AO accepted the explanation and made no addition concerning the loan.
