A SHRIDHAR INFRACON LLP,AHMEDABAD vs. THE DY. CIT, CENTRAL CIRCLE-2(4), AHMEDABAD

ITSSA 73/AHD/2024Status: DisposedITAT Ahmedabad14 September 2026AY 2018-1964 pages
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What did the Tribunal hold?

The Tribunal decided on the issues as follows: Firstly, several appeals and cross-objections (IT(SS)A No. 72/Ahd/2024, CO No. 44/Ahd/2024, and CO Nos. 33 to 35/Ahd/2024) were dismissed as not pressed. Secondly, regarding the disallowance of short-term capital loss of Rs. 3,54,73,603/- for AY 2014-15, the Tribunal noted that the CIT(A) had allowed the assessee's appeal on a technical ground related to the validity of the notice under section 143(2). However, the Tribunal found that a substantive adjudication on merits was warranted, especially since a similar issue in the assessee's father's case had been settled under the Vivad se Vishwas Scheme. Therefore, the Tribunal set aside the CIT(A)'s order on this issue and restored the matter to the CIT(A) for fresh adjudication on merits, after considering all relevant material and submissions. The Tribunal explicitly stated it was not expressing any opinion on the merits of the addition/dispute. The appeals filed by the Revenue were allowed for statistical purposes on this issue. The judgment does not provide specific findings on the grounds raised by SS Realty concerning the validity of the Section 153A assessment, Section 153C, Section 153D, or the estimation of profit, as the operative part of the order only details the disposal of specific appeal numbers and does not elaborate on the findings for all grounds raised by SS Realty.

What were the facts?

The appeals and cross-objections before the Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench arose from orders passed by the Commissioner of Income Tax (Appeals) under section 250 of the Income-tax Act, 1961. These cases involved various assessees belonging to the A. Shridhar Group and concerned assessment years from 2014-15 to 2020-21. The matters stemmed from search proceedings conducted in the group. Several appeals and cross-objections were dismissed as not pressed. The lead case involved SS Realty for AY 2020-21, with grounds challenging the assessment order's validity, the use of documents seized from another person, non-compliance with Section 153D, and estimation of profit on alleged unaccounted collections. Another significant issue concerned a claim of short-term capital loss on sale of shares for AY 2014-15, which the Assessing Officer disallowed as bogus due to alleged price manipulation in penny stocks.

What were the issues?

1. Whether the assessment order passed under section 153A for AY 2020-21 in the case of SS Realty was non-est, bad-in-law, null, void, and without jurisdiction, considering the absence of incriminating documents, the routine nature of seized pages, estimation of on-money without cogent material, extrapolation of unaccounted income without evidence, assessment on conjecture, and the AO's failure to rebut affidavits and retraction affidavits, and whether additions based on papers seized from another person (Shri Harendra S. Yadav) were against the provisions of section 153A/153C. 2. Whether the AO complied with the provisions of Section 153D by obtaining valid approval after application of mind. 3. Whether the CIT(A) erred in estimating profit at 15% on alleged unaccounted collection in two schemes of SS Realty without appreciating explanations and evidence, and whether the seized papers were general in nature and did not indicate unaccounted income. 4. Whether the disallowance of short-term capital loss of Rs. 3,54,73,603/- claimed by the assessee for AY 2014-15 on sale of shares in alleged penny stock companies was justified. Assessee's Contentions (SS Realty): - Ground 1: Assessment order under Section 153A is bad-in-law as no incriminating documents were found, seized pages were routine, estimation of on-money and unaccounted income was without evidence, and affidavits were not rebutted. Additions based on papers from Shri Harendra S. Yadav are against Sections 153A/153C. - Ground 2: Assessment should have been under Section 153C as papers were seized from another person, requiring satisfaction from the AO of that other person. - Ground 3: AO did not comply with Section 153D as approval was mechanical. - Ground 4: AO did not rebut affidavits and retraction affidavits, and CIT(A) did not consider them. - Ground 5: CIT(A) erred in estimating profit at 15% on alleged unaccounted collection without corroborative material. Revenue's Contentions: - The revenue's primary contention, as implied by its appeal against the CIT(A)'s order, was that the disallowance of short-term capital loss was justified as the transactions in penny stocks were manipulative and lacked genuineness. The revenue likely argued that the CIT(A)'s technical ground for allowing the appeal was incorrect.

Which sections of the Income-tax Act were involved?

Section 250,Section 153A,Section 153C,Section 153D,Section 143(2)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SN IT(SS)A/CO AY Appellant Respondent No. 1 IT(SS)A No. 2016-17 DCIT, A. Shridhar Constructions 64/Ahd/2024 Central Circle 2 (4), Pvt. Ltd., Ahmedabad 2D, River View Apartments, Bh. Swastik Super Market, Ashram Road, Ahmedabad-380009 [PAN: AAFCS 0114 D] 2 CO No. 2016-17 A. Shridhar Constructions DCIT, 33/Ahd/2024 Pvt. Ltd., Central Circle 2 (4), Ahmedabad-380009 Ahmedabad [PAN: AAFCS 0114 D] 3 IT(SS)A No. 2017-18 DCIT, A. Shridhar Constructions 65/Ahd/2024 Central Circle 2 (4), Pvt. Ltd., Ahmedabad Ahmedabad-380009 [PAN: AAFCS 0114 D] 4 CO No. 2017-18 A. Shridhar Constructions DCIT, 34/Ahd/2024 Pvt. Ltd., Central Circle 2 (4), Ahmedabad-380009 Ahmedabad [PAN: AAFCS 0114 D] 5 IT(SS)A No. 2018-19 DCIT, A. Shridhar Constructions 66/Ahd/2024 Central Circle 2 (4), Pvt. Ltd., Ahmedabad Ahmedabad-380009 [PAN: AAFCS 0114 D] 6 CO No. 2018-19 A. Shridhar Constructions DCIT, 35/Ahd/2024 Pvt. Ltd., Central Circle 2 (4), Ahmedabad-380009 Ahmedabad [PAN: AAFCS 0114 D] 7 IT(SS)A No. 2018-19 SS Realty, DCIT, 70/Ahd/2024 2D, River View Central Circle 2 (4), Apartm

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