The Income Tax Appellate Tribunal, Delhi Bench ‘E’, adjudicated the appeal filed by the assessee against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, for Assessment Year 2014-15, arising out of reassessment proceedings completed under Section 147 read with Section 144B of the Income-tax Act, 1961.

The assessee, proprietor of M/s Inertia International, engaged in export and trading of home furnishing items, filed the return declaring income of ₹13,36,170/-. The case was reopened on the basis of a Tax Evasion Petition (TEP) alleging that the assessee had earned substantial undisclosed profits during the relevant financial years. Based on the TEP, notice under Section 148 was issued and proceedings under Section 148A were carried out.

The Assessing Officer treated an amount of ₹3,86,63,830/- as alleged bogus purchases and applied a net profit rate of 2.5%, resulting in an addition of ₹96,65,965/-. The reassessment was completed at an assessed income of ₹1,14,95,918/-. The CIT(A) dismissed the assessee’s appeal, confirming the addition.

Before the Tribunal, the assessee contended that the reopening was based solely on vague and unsubstantiated allegations contained in the TEP without any supporting details. It was further submitted that the assessee had maintained audited books of account, which were not rejected, and that purchases and payments were duly recorded. The assessee also highlighted that for identical facts, reassessment for A.Y. 2013-14 had been quashed by the Coordinate Bench and that no addition was made for A.Y. 2015-16 despite reopening on the same TEP.

The Tribunal observed that the TEP did not contain any specific details except a lump-sum figure of alleged profit and that there was no basis or material on record to treat the amount as bogus purchases. No breakup or evidence was provided either in the order passed under Section 148A(d) or in the assessment order. The Tribunal further noted the consistent stand taken by the Revenue in other assessment years involving the same allegations.

In view of the absence of any tangible material and considering the identical treatment in other assessment years, the Tribunal held that the addition of ₹96,65,965/- was wholly unjustified and without any basis. Accordingly, the addition was deleted and the appeal of the assessee was allowed.

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