Shray Kumar vs ITO-2(1)

“1.

That the Ld. CIT(A) has erred in law and on facts in upholding the action of the Ld. AO in assessing the income of the Assessee for an amount of Rs. 1,12,51,106/- as against the declared income of Rs.13,90,660/- under the assessment framed u/s 147 r.w.s. 144B of the Act.

2.

That the Ld. CIT(A) has erred in law and on facts in upholding the reassessment order passed by Ld. AO u/s 147 of the Act despite the proper jurisdiction and non-compliance with the mandatory provisions of the sections 148A. 147 to 15I of the Act.

2.1

That the Ld. CIT(A) has erred in law and on facts in upholding the reassessment order passed by Ld. AO despite non-complying with mandatory provision qua approval by appropriate authority u/s 151 of the Act for issuing notice u/s 148A(b) of the Act. Therefore, the whole proceedings is invalid and liable to be quashed.

2.2

That the Ld. CIT(A) has erred in law and on facts in passing the impugned reassessment order for the reason that no material was provided by the Ld. AO with notice issued u/s 148A(b) of the Act. This goes to prove that Ld. AO before issuance of notice u/s 148A(b) just relied on the Insight Portal information and nothing else, which has amounted to violation of the principles of natural justice.

2.3

That the Ld. CIT(A) has erred in law and on facts in upholding the validity of show cause notice issued u/s 148A(b) and order passed u/s I48A(d). despite the facts that. same suffered from jurisdiction defect, violate the principles of natural justice and were issued without providing tangible material or specific information to the Appellant, thereby rendering them legally untenable.

2.4

That the Ld. CI|(A) has failed to appreciate the fact that the order passed u/s 148A(d) of the Act is based on mere presumption, guess work, and these are not more than suspicion, making it invalid in eyes of law.

2.5

That the ld. CIT(A) has erred in conforming the initiation of reassessment proceedings despite the fact that the Ld. AO failed to apply his independent mind while passing the order u/s 148A(d) of the Act to show that there is an income which has escaped assessment, as such the same is not valid in the eyes of law.

2.6

That the Ld. CII(A) has wrongly upheld the reassessment order u/s 147 of the Act, passed by the Ld. AO as there is the absence of any fresh tangible material which has come to the knowledge of Ld. A0. The reassessment proceedings were thus initiated based on mere change of the opinion which is impermissible in law.

2.7

That the Ld. CII(A) has erred in law and facts in upholding the order of Ld. AO as notice issued u's 148A(b) is without complying with statutory provisions provided u/s 151A of the Act.

2.8

That having regard to the facts and circumstances of the case, Ld. AO has erred in law and on facts in framing the impugned reassessment order and that too without assuming jurisdiction as per law and without complying with mandatory conditions u/s 147 to 151 as envisaged under the Act.

3.

That the Ld. CIT(A) had erred in law and facts in upholding the decision of the Ld. AO of making addition of Rs.86.28.200/- by treating it as alleged unexplained money u/s 69A r.w.S. 115BB: that too by recording incorrect facts and findings and without providing the entire adverse material on record and without observing the principles of natural justice and by disregarding the submissions, evidences and material placed on record by the assessee and without granting the opportunity of cross examination of the deponents.

4.

That the Ld. CITA) had erred in law and facts in upholding the decision of the Ld. AO of disallowing the amount of Rs.6,99,642/- (at GP/Turnover to 4.9%) on account of purchases and expenditure that too by recording incorrect facts and findings and without providing the entire adverse material on record and without observing the principles of natural justice and by disregarding the submissions, evidences and material placed on record by the assessee and without granting the opportunity of cross examination of the deponents.

5.

That the Ld. CIT(A) had erred in law and facts in upholding the decision of the Ld. AO of disallowing the amount of Rs.2,29,366/- and Rs.3,03,238/-(Rs.5.32.604/-) on account of interest on car loan and interest on home loan respectively that too by recording incorrect facts and findings and without providing the entire adverse material on record and without observing the principles of natural justice and by disregarding the submissions, evidences and material placed on record by the assessee and without granting the opportunity of cross examination of the deponents.

6.

That the Ld. CIT(A) has erred in upholding the action of Ld. AO in passing the assessment order as the same has been passed without disclosing the adverse material/information/basis of passing the impugned assessment order against the Assessee and also without providing sufficient and proper opportunity of hearing. This has amounted to violation of principle of natural justice.

7.

That having regard to the facts and circumstances of the case. the Ld. CIT(A) has erred in law and facts in upholding action of Ld. AO in making an addition of Rs. 86,28,200/ on account of unexplained money u/s 69A rw.s. 115BBE of the Act is bad in law and against the facts and circumstances of the case.

7.1

That having regard to the facts and circumstances of the case. the Ld. CIT(A) has erred in law and facts in upholding action of the Ld. AO in making an addition of Rs. 86,28,200 on account of unexplained money u/s 69A rw.s 115BBE of the Act that too recording incorrect facts and findings and without observing the principles of natural justice.

7.2

That having regard to the facts and circumstances of the case. the Ld. CIT(A) has erred in law and facts in upholding action of Ld. A0 in making a disallowance of Rs.6,99,642/- is bad in law and against the facts and circumstances of the case and without observing the principles of natural justice.

7.3

That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in law and facts in upholding action of Ld. AO in making a disallowance of Rs.5,32,604/- is bad in law and against the facts and circumstances of the case and without observing the principles of natural justice.

8.

That having regard to the above facts and circumstances of the case, the Ld. CIT(A) has erred in law and facts in upholding the actions of the Ld.AO without providing the sufficient opportunity of hearing, which has amounted to violation of principles of natural justice.

9.

That the Ld. CIT(A) has erred in law and on facts in upholding the actions of the Ld. AO in imposing the penalties.

10.

That the assessment so framed, upheld an addition made suffers from perverse findings, contrary to the facts on record and without providing the material against Appellant.

11.

That the levy of interest under the Act is disputed and as such unsustainable in law besides being excessive.

12.

The appellant craves leave for adducing necessary evidence, amendments and explanation including written one to the aforesaid grounds and also raised additional grounds in the course of hearing of the appellate proceedings. It is therefore, humbly prayed that it be held that, addition so made and upheld are not in accordance with law and therefore along with interest levied be deleted and appeal on the Appellant be allowed.”

“5.2

The appellant has submitted written submissions in response to the notices issued from time to time u/s. 250 of the Act, which are as under:-

5.2.1 Submission dated 22.08.2025: -

“I am submitting this reply in response to the notice issued under Section 250 of the Income Tax Act, DIN ITBA /NFAC/F/APL_1/2025-26/1076572419(1), regarding my income tax assessment f or Financial Year 2016-17 (Assessment Year 2017-18). I have carefully reviewed the details mentioned in the notice and would like to provide the following explanation as per statement of facts Non-submission of ITR: The Income Tax Return for A.Y. 2017-18 was filed under Section 148 on 25-05-2024. The earlier nonfiling was unintentional and not deliberate. A copy of the filed ITR is attached for reference. Gross Profit Consideration: As per books of accounts, the gross profit ratio for A.Y. 2017-18 is 4.37% . However, in the assessment, it was considered as 4.9%. The Profit and Loss Account and Balance Sheet are attached, and it is requested that the expenses recorded in the financials may kindly be considered for correct computation of gross profit ratio. Cash Deposits: The assessee deposited cash of Rs. 86,28,200 during the relevant year. These deposits are genuine and fully related to business transactions. For verification, the Cash Book and Bank Ledger of the relevant year are attached. Expense Ledgers: The department had asked for details of Purchases, Employee Benefit Expenses/Salary, Polish and Painting Expenses, and Shipping and Forwarding Expenses. All the required ledgers are attached herewith for consideration. Disallowance of Interest on Car and Home Loan: Both loans were availed for business purposes only. The supporting loan documents are attached and therefore the interest should be allowed as business expenditure. Grounds of Appeal: Based on the above records and supporting documents, the actual profit of the assessee comes to Rs. 13,90,660 and not Rs. 1,98,80,030 a s assessed. The addition under Section 147 has resulted in an incorrect tax liability of Rs. 1,39,61,021 on the wrongly computed taxable income of Rs. 1,98,80,030. In view of the above submissions, I respectfully request your goodself to kindly reconsider the assessment and provide appropriate relief. I remain committed to compliance with all provisions of the Income Tax Act and am ready to provide any further clarifications or documents as required. Thanking you, Yours faithfully, Shray Kumar Proprietor, Glob al Solutions PAN: BXHPK5659Q.”

“6.2

Therefore, in Para 3.4 of the Assessment order, variation proposed on the basis of inference grounds have been mentioned based on which, a show cause notice was issued to the appellant on 17.02.2025 and additions were proposed in the case of the the appellant. In subsequent Paras, the assessing officer has remarked that the notices under section 142(1) of the IT Act as well as show cause notices were not responded to by the appellant till date of the order and the appellant has not submitted his reply. Therefore, the assessing officer went on to make the additions. In this way, the appellant has not responded to the various notices issued by assessing officer leading to assessment of his case based on the material available on record.

6.3

Now during the course of appellant proceedings also, the appellant responded to the notice issued by this office however it has been observed that the appellant has not furnished any written submission and has simply uploaded few documents which do not make any sense in absence of any written submission along with bills/vouchers. Even correlating these documents with the additions made in the assessment order is not possible without any plausible explanation by the appellant annexed with these uploaded documents. This is specially so in light of the fact that the appellant has been non responsive by and large before the assessing officer and now also only some financial documents, a fixed asset details, few ledgers of purchases, shipping and forwarding expenses, Employee benefit expenses and ITR5 have been uploaded without any explanation for the same. How they are supportive of appellant’s case and what does the appellant want to corroborate through these documents has not been explained in the reply uploaded. For example, the appellant has uploaded the cashbook without clear narrations and without corresponding bank account statements certified by the bank to correlate the entries. Even if an effort is made to check the cash book and the bank deposits and correlating these entries, it is not possible because the bank account statements along with narrations have not been uploaded which clearly shows lack of interest on part of appellant to present his case clearly at appellate stage too. Moreover, the expenses are not supported by any bills/vouchers or any written submissions which could be examined or forwarded to the assessing officer for remand report, had an appropriate request had been made by the appellant as per rules which is not the case here. Despite these serious lacunae, another notice dated 13.11.2025 was issued to the appellant to give him an opportunity to upload detailed written submission, bank account statements and any other submission that appellant wants to make. However, the same remains uncompiled Therefore, I am constrained to agree with the assessing officer that the appellant has completely failed to prove that the additions made by the assessing officer were without any basis and therefore the grounds of appeal of the appellant are liable for rejection due to lack of any substantial evidence submitted by the appellant who has failed at both assessment as well as appellate stage to furnish relevant documents despite so many opportunities given at both stages.”