[Cites 4, Cited by 0]
Gujarat High Court
Hitarg Agritrade Commodities Pvt Ltd vs Income Tax Officer, Ward 1 (2)(3) on 9 December, 2025
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/12238/2025 JUDGMENT DATED: 09/12/2025
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 12238 of 2025
With
CIVIL APPLICATION (FOR AMENDMENT) NO. 1 of 2025
In R/SPECIAL CIVIL APPLICATION NO. 12238 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
==========================================================
Approved for Reporting Yes No
√
==========================================================
HITARG AGRITRADE COMMODITIES PVT LTD
Versus
INCOME TAX OFFICER, WARD 1 (2)(3) & ORS.
==========================================================
Appearance:
MR. TUSHAR HEMANI, SENIOR ADVOCATE WITH MR DHAVAL
SHAH(2354) for the Petitioner(s) No. 1
MR. MAUNIL YAJNIK, SENIOR STANDING COUNSEL for the Respondent(s)
No. 1,2,3
==========================================================
CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 09/12/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. Registry shall accept the appearance note of Mr. Maunil
Yajnik, learned Senior Standing Counsel for the respondents.
2. Rule. Learned Senior Standing Counsel Mr. Maunil
Yajnik waives service of notice of rule on behalf of the
respondents. Since a short issue is involved in the present
writ petition, the same is taken up for final hearing and
disposal today.
3. The present writ petition has been filed seeking
quashing and setting aside of the impugned Notice dated
NEUTRAL CITATION
C/SCA/12238/2025 JUDGMENT DATED: 09/12/2025
undefined
28.06.2025 issued by respondent No.1 under Section 148 of
the Income Tax Act, 1961 (for short, "the Act"), and the
impugned order issued under Section 148A(3) of even date,
i.e., 28.06.2025.
4. The brief facts leading to the filing of the present writ
petition are as under :
4.1 For the Assessment Year 2021-22, the petitioner filed its
return of income on 10.02.2022 declaring a total income of
Rs.3,35,780/-. The said return of income was processed and
accepted under Section 143(1) of the Act. Thereafter,
respondent No.1, based on specific information flagged on the
Insight Portal, issued a Show-Cause Notice dated 31.03.2025
under Section 148A(1) of the Act, inter alia alleging that
income chargeable to tax amounting to Rs. 58,62,61,000/- had
escaped assessment for the said year.
4.2 Thereafter, on 22.04.2025, 28.05.2025 and 23.06.2025,
the petitioner, in response to the Show-Cause Notice,
uploaded detailed replies furnishing the requisite details and
documents.
4.3 Vide impugned order dated 28.06.2025, respondent No.1
did not accept the explanation tendered by the petitioner and
held that income chargeable to tax to the tune of Rs.
58,62,61,000/- had escaped assessment within the meaning of
Section 147 of the Act, which was not reflected or shown in
the return of income filed for the Assessment Year 2021-22.
NEUTRAL CITATION
C/SCA/12238/2025 JUDGMENT DATED: 09/12/2025
undefined
4.4 Respondent No.1 thereafter issued the impugned Notice
dated 28.06.2025 under Section 148 of the Act proposing to
reassess the income for the Assessment Year 2019-20,
directing the petitioner to furnish a return of income within
90 days.
5 Learned Senior Advocate Mr. Tushar Hemani, appearing
with learned advocate Mr. Dhaval Shah for the petitioner, at
the outset submitted that the impugned order dated
28.06.2025 issued under Section 148A(3) of the Act as well as
the notice under Section 148 of the Act are required to be
quashed and set aside as the same are ex facie illegal and
without jurisdiction. It is submitted that the Assessing Officer
has incorrectly held that income had escaped assessment
despite the petitioner having categorically clarified in its reply
and during personal hearing that the financial transaction
with M/s. Astro Gems & Jewellery Private Limited, amounting
to Rs. 58,62,61,000/-, was fully disclosed as a loan transaction
which had been repaid, and accordingly, the interest
receivable thereon had been duly credited to the Profit and
Loss Account and offered as income in the return of income
filed for the Financial Year 2020-21. Thus, it is submitted that
the impugned notice and order are liable to be quashed.
6. Per contra, learned Senior Standing Counsel Mr. Maunil
Yajnik for the respondents, referring to the contents of the
Notice dated 28.06.2025 issued under Section 148 of the Act,
submitted that the petitioner had entered into a bogus
transaction of advancing an unsecured loan to M/s. Astro
Gems & Jewellery Pvt. Ltd. and receiving repayment during
NEUTRAL CITATION
C/SCA/12238/2025 JUDGMENT DATED: 09/12/2025
undefined
the relevant financial year. It is submitted that the
Investigation Wing has reported that the transactions
reflected in the bank account of M/s. Astro Gems & Jewellery
Pvt Ltd., were bogus in nature.
6.1 It is submitted that the assessee had no business
transactions with M/s. Astro Gems & Jewellery Pvt Ltd., and
hence the unsecured loan transaction appears to be an
accommodation entry. It is submitted that M/s. Astro Gems
did not cooperate with the inquiry and therefore the assessee
was called upon to explain the non-genuine loan transaction
aggregating to Rs. 58,62,61,000/-.
6.2 It is therefore urged that the present writ petition is not
maintainable and deserves dismissal.
7 We have heard the learned advocates appearing for the
respective parties at length. The undisputed facts on record
are that for the Assessment Year 2021-22, the petitioner filed
its return of income on 10.02.2022 declaring a total income of
Rs. 3,35,780/-, and the said return, along with Form ITR-6
dated 10.02.2022, was processed and accepted under Section
143(1) of the Act.
7.1 That the respondents reopened the assessment and
issued notice questioning the transaction of Rs. 58,62,61,000/-
with M/s. Astro Gems & Jewellery Pvt Ltd. The petitioner
submitted its detailed reply on 28.05.2025, explaining that a
loan of Rs. 29,31,29,000/- had been advanced to M/s. Astro
Gems & Jewellery Pvt Ltd., which was subsequently repaid,
NEUTRAL CITATION
C/SCA/12238/2025 JUDGMENT DATED: 09/12/2025
undefined
and while repaying, interest receivable at 13% per annum,
i.e., Rs. 1,91,85,520/-, was also paid and reflected in the
return. It was also specifically stated that the said amount was
duly accounted for in the books of account. The interest
income receivable from M/s. Astro Gems & Jewellery Pvt. Ltd.
was duly credited to the Profit and Loss Account and offered
as income in the return of income for Financial Year 2020-21.
This fact is not denied by the respondents. It is noteworthy
that while reopening the assessment and issuing the notice
under Section 148A(1) of the Act, the Assessing Officer
confined himself only to the amount of Rs. 58,62,61,000/- and
curiously did not refer to the interest amount of Rs.
1,91,85,520/- received by the petitioner towards the loan
transaction.
7.2 We fail to understand how the loan transaction, which
has already been disclosed and offered for assessment, can be
said to be income that has escaped assessment. The impugned
notice and order proceed solely on the ground that M/s. Astro
Gems, to whom the loan was advanced, has no business
relationship with the assessee and did not come forward to
explain the transaction, thereby rendering it bogus. Such an
opinion, drawn without examining the correct factual position
and overlooking the petitioner's disclosure of the entire
transaction including interest income in its return, is not only
vague but also arbitrary.
8 Thus, we find that the impugned Notice as well as the
order based on the Notice dated 28.06.2025 are arbitrary, not
NEUTRAL CITATION
C/SCA/12238/2025 JUDGMENT DATED: 09/12/2025
undefined
based on correct appreciation of facts, and therefore liable to
be quashed and set aside. Rule is made absolute.
9. In view of the disposal of the main matter, the Civil
Application is not pressed and stands disposed of accordingly.
(A. S. SUPEHIA, J)
(PRANAV TRIVEDI,J)
BIMAL /14
