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Judgment
Per Renu Jauhri, Accountant Member:
This appeal by the assessee is directed against the order dated 28.11.2025 of the Commissioner of Income Tax, Appeal, Delhi-26, [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Order dated 27.03.2025 passed under section 147 r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the DCIT, Central Circle-16, New Delhi (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2017-18.
The assessee has raised the following grounds of appeal:
“ General ground
1.On the facts and circumstances of the case and in law, the impugned order passed under section 250 of the Act by the Ld. CIT(A) in conjunction with the order passed under section 147 read with section 143(3) of the Act by Ld. AO, is bad in law and liable to be quashed.
Non-validity of re-assessment proceedings
2.That, on the facts and circumstances of the case and in law, the reassessment proceedings viz. notice under section 148A(b) of the Act and consequential order under section 148A(d) of the Act is invalid and liable to be quashed as the proceedings were not conducted in a faceless manner by National Faceless Assessment Centre ('NFAC') and as per the procedure laid down by Income Escaping Assessment Scheme, 2022.
3.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that the initial notice issued under section 148A(b) of the Act, consequential order passed under section 148A(d) of the Act and notice issued under section 148 of the Act are bad in law and liable to be quashed, inter-alia on the ground that in the initial 148A(b) notice, the Ld. AO has not even formed an opinion qua income escapement, which is a jurisdictional pre-requisite.
Additions made on incorrect reporting made by third party is bad in law
4.On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in sustaining the disallowance in the impugned order on the sole ground that no correction statement was filed by American Express for the subject year without appreciating that the said discrepancy has since been duly rectified by American Express, and therefore the basis on which the disallowance has been sustained no longer survives.
5.On the facts and circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate the well-settled principle, as upheld by various judicial pronouncements, that no addition can be made solely on the basis of incorrect or erroneous reporting made by a third party
6.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the disallowance of INR 26,24,21,433 as "expenses not wholly and exclusively expended for the purpose of business" based merely on presumptions, conjectures, and surmises, without identifying any specific instance of personal or non-business expenditure.
7.Without prejudice to above, on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in disregarding the confirmation issued by American Express, which acknowledged that out of total disallowance of INR 26,24,21,433, only INR 7,89,92,360 pertained to the Appellant
8.On the facts and circumstances of the case, the Ld. CIT(A) has erred in sustaining the disallowance without appreciating that the actual expenditure incurred by employees of the Appellant through credit cards was wholly and exclusively for business purposes only, duly recorded in the books of account and substantiated through ledger accounts submitted by the Appellant.
All of the above grounds of appeal are without prejudice to and notwithstanding to each other. The Appellant craves leave to add, alter, omit or substitute any or all of the above grounds of appeal, at any time before the final disposal of the appeal.”
Brief facts are that the assessee company filed its return for A.Y. 2017-18 on 30.11.2017 declaring net loss of Rs. 2,76,25,99,426/-. Assessment was completed u/s 143(3) r.w.s. 144C of the Act, at a net loss of Rs. 18629576/-. Subsequently, reassessment proceedings were initiated on the basis of information available on the insight portal as per which the American Express Banking Corporation (AMEX) had reported transaction amounting to Rs. 26.24 cr. In the name of Cargill Capital & Financial Services India Pvt. Ltd. (CCFSIPL, in short). This company had got amalgamated with the assessee company w.e.f. 1.4.2017. The AO added the amount of Rs. 26,24,21,433/- shown as credit card payments to Amex. Aggrieved, the assessee preferred an appeal before the CIT(A) claiming that only a part of the amount pertained to the assessee. However, the appeal was dismissed on the ground that no correction statement had been filed by Amex.
Further aggrieved, the assessee has filed present appeal before the Tribunal.
Before us, the Ld. AR has explained that the Amex had erroneously reported all the transactions of Cargill Group under the PAN of CCFSIPL. However, subsequently, the AMEX has corrected its reporting and the correction is consequently reflected in the Form 26AS of the CCFSIPL. He has placed on record a copy of the corrected Form 26As as well as a confirmation by AMEX acknowledging that only Rs. 7,89,92,360/- out of the total amount of Rs. 26,24,21,433/- pertained to the assessee. Ld. AR has further submitted that for similar issue, reassessment proceedings were initiated for A.Y. 2015-16 & A.Y. 2016-17 but in view of correction made by AMEX in its reporting, no addition was made by the AO and revised Form 26AS was accepted.
Ld. DR, on the other hand, had relied on the orders of the lower authorities and submitted that the correction was made subsequent to the orders of AO and the CIT(A).
We have heard the rival submissions and perused the documents available on record. We are of the considered view that since the figures in Form 26AS stand revised the addition of Rs. 26,24,21,433/- also needs to be reconsidered. Accordingly, we deem it appropriate to restore the mater to the Ld. AO for the limited purpose of verification of final figures reflected in Form 26AS and modify the assessment order accordingly.
In the result, appeal of the assessee is allowed for statistical purposes.