IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER I.T.A. No. 120/Ahd/2024 (Assessment Year: 2016-17)

Amee Govindbhai Patel, Vs. Income Tax Officer, 16, Utkarsh Society, Opp. Market Ward-1, Yard, Tal. Visnagar, Mehsana Dist. Mehsana, Gujarat-384315 [PAN No.CURPP4493D]

(Appellant) .. (Respondent Appellant by : Shri Dhinal Shah, AR Respondent by : Shri Abhijit, Sr. DR Date of Hearing 30.06.2025 Date of Pronouncement 18.09.2025 O R D E R PER: ANNAPURNA GUPTA - AM:

The present appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeal), (hereinafter referred to as “CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi dated 29.11.2023 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2016-17.

2. Grounds raised by the assessee are as under:

“1. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in confirming the reopening of assessment under section 147 of the Act in as much as there is no escapement of income and that the notice issued is bad in law and is not in conformity of the provisions of law.

2. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in confirming an addition amounting to INR 55,00,000 under section

69A of the Act treating the same as loans accepted from bogus sources.

3. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in confirming an addition in as much as all the loans from the parties are from genuine sources and that the loans have been accepted and repaid by account payee cheque.

4. Without prejudice to the above, the Hon'ble CIT(A) has erred in confirming an addition under section 69A of the Act without appreciating the fact that the credit entry in the books of accounts which are not proved to be genuine can be taxed under section 68 of the Act and not under section 69A of the Act being unaccounted investment and hence, addition is required to be deleted.

5. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in rejecting the argument of the Appellant to provide opportunity of cross examination in as much as the cross examination is a legal right of the Appellant and hence, the entire assessment order is liable to be quashed.

The Appellant craves leave to add, alter, amend or withdraw any of the above grounds at or before the hearing of the appeal.

All the grounds of appeal stated above are without prejudice to each other.”

3. The facts of the present case are that the addition was made to the income of the assessee on account of alleged accommodation entry received by the assessee by way of unsecured loans from various parties. The addition was made in re-assessment proceedings in order passed under Section 147 of the Act. The quantum of addition made amounted to Rs. 55,00,000/- on account of loans taken by the assessee from the following parties held to be alleged accommodation entries:

NAME AMOUNT (Rs.)

4. We have heard both the parties and also gone through the orders of the authorities below.

5. The information in the possession of the Assessing Officer (AO) which formed the basis of his belief of escapement of income of the assessee for assuming jurisdiction to reopen the case of the assessee is recorded in his reasons for reopening the case of the assessee u/s 147 of the Act, placed before us at Paper Book Page 5-6, as under:

“ANNEXURE – A Reasons for reopening of the assessment u/s. 147 of the Act.

Assessee is an individual and has filed the return for the year under consideration declaring total income of Rs.4,72,220/-.

2. In this case, information was received from ACIT Central-1, Surat vide letter No. SRT/ACIT/CC-I/AG/20I8-19 dated 08.03.2019. As per information during the course of commission enquiry u/s. I31(1)(3) of the A