DCIT, CENTRAL CIRCLE-2, THANE vs. NISHIT BECHAR PATEL, MUMBAI

At the time of hearing, none appeared on behalf of the assessees despite repeated calls. No application seeking adjournment was filed.

On the other hand, the learned Departmental Representative (DR), appearing on behalf of the Revenue, was ready to advance the arguments. Accordingly, these appeals are being disposed of ex parte qua the assessees on the basis of the material available on record and after hearing the learned DR.

The grounds raised by the Revenue in both the appeals challenge the action of the learned CIT(A) in deleting the additions made by the Assessing Officer under section 69 of the Act on account of alleged unaccounted interest received on capital introduced by the partners, as well as the deletion of the protective additions relating to cash capital introduced and withdrawn.

The facts, in brief, are that a search and seizure action under section 132 of the Income-tax Act, 1961 was carried out in the Patel RPL Realty Group on 08.08.2019 and concluded on 30.09.2019. Consequent thereto, notices under section 153A were issued and assessments were completed under section 153A vide orders dated 30.09.2021.

During the course of the search, certain Excel sheets titled "Partner's Capital 2" and "RR" were found and seized from the laptop of a key person of the group. According to the Assessing Officer, the seized spreadsheets contained details of capital introduced by partners, withdrawals made by them, and interest earned thereon, wherein the abbreviation "RR" represented cash transactions and "CH" represented cheque transactions. On the basis of these seized materials, the Assessing Officer made substantive additions towards alleged unaccounted interest income and protective additions towards cash capital introduced and withdrawn.

In the case of Pankaj Raghu Patel, substantive additions of Rs.87,60,945/- and Rs.6,24,433/- were made under section 69 on account of interest received on capital introduced through cash and cheque respectively, besides protective additions in respect of cash capital introduced and withdrawn.

The learned CIT(A) deleted the aforesaid additions primarily on the ground that M/s Apace Realty had disclosed additional income before the Interim Board for Settlement and that the issues were covered by the order passed by the Interim Board in the case of another partner, Shri Sanjay Agarwal.

The learned CIT(DR) submitted that the learned CIT(A) erred in deleting the additions without carrying out any independent verification. It was contended that a partnership firm and its partners are distinct taxable entities under the Act and the alleged interest received by the individual partners cannot automatically be regarded as having been assessed merely because certain disclosures were made by the partnership firm before the Interim Board for Settlement. It was further submitted that there was no verification as to whether the specific amounts reflected in the seized documents had in fact been offered to tax in the hands of the concerned partners.

We have considered the submissions of the learned CIT(DR) and perused the material available on record.

It is an undisputed position that the learned CIT(A) deleted the additions by placing reliance upon the proceedings before the Interim Board for Settlement in the case of M/s Apace Realty and the order passed in the

The issue as to whether the income reflected in the seized material has already suffered tax in the hands of the concerned assessees or otherwise requires factual verification. In our considered view, such verification ought to have been carried out before granting relief. Since the learned CIT(A) deleted the additions without such verification and without calling for the comments of the Assessing Officer on the assessee's claim, we deem it appropriate, in the interest of justice, to set aside the impugned orders on these issues and restore the matter to the file of the Assessing Officer.

The Assessing Officer shall verify the scope of the disclosures made before the Interim Board for Settlement, examine whether the impugned amounts have already been subjected to tax in the hands of the respective assessees or otherwise, and thereafter decide the issue afresh in accordance with law after affording adequate opportunity of being heard to the assessees.

Accordingly, the orders of the learned CIT(A) on the above issues are set aside and the matters are restored to the file of the Assessing Officer for fresh adjudication.

Consequently, ITA Nos. 4060/MUM/2025 and 4061/MUM/2025 filed by the Revenue are allowed for statistical purposes.

The assessee has challenged the orders of the learned CIT(A) confirming additions made under section 69A of the Act.

None appeared on behalf of the assessee to prosecute the appeals or substantiate the grounds raised. We have, however, perused the orders of the authorities below and examined the material available on record.

Ground No.1 in both the appeals assails the validity of the assessment proceedings on the ground of violation of the principles of natural justice and the legality of the assessment order. In the absence of any submissions or material demonstrating any procedural infirmity or violation of statutory provisions, we find no reason to interfere with the findings recorded by the learned CIT(A). Accordingly, Ground No.1 in both the appeals is dismissed.

In Assessment Year 2015-16, the additions of Rs.2,50,000/- and Rs.30,000/- under section 69A have been sustained by the learned CIT(A). Likewise, for Assessment Year 2018-19, the addition of Rs.5,00,000/- under section 69A has been confirmed.

No material has been placed before us to demonstrate that the findings recorded by the authorities below are factually incorrect or that the seized documents did not relate to the relevant assessment years. In the absence of any contrary evidence or arguments on behalf of the assessee, we do not find any reason to interfere with the orders of the learned CIT(A). The additions sustained by the learned CIT(A) are accordingly upheld.

In the result, ITSSA Nos. 3250/MUM/2025 and 3251/MUM/2025 filed by the assessee are dismissed. 6

In the result, the appeals filed by the Revenue in ITA Nos. 4060 & 4061/MUM/2025 are allowed for statistical purposes, whereas the appeals filed by the assessee in ITSSA Nos. 3250 & 3251/MUM/2025 are dismissed.