MANISH BHIKHABHAI SHAH,VADODARA vs. THE DY.CIT, CENTRAL CIRCLE-2, VADODARA

ITSSA 109/AHD/2023Status: DisposedITAT Ahmedabad11 June 2026AY 2009-1016 pages
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What were the facts?

The assessee, Manish Bhikhabhai Shah, is in appeal before the Income Tax Appellate Tribunal (ITAT) against orders of the Commissioner of Income Tax (Appeals) for Assessment Years (AYs) 2009-10 to 2015-16. These appeals arise from assessment orders passed under section 153A read with section 143(3) of the Income Tax Act, 1961, following a search action under section 132 on November 13, 2014, in the Sigma Group of companies. The assessee, son-in-law of the group's main person and a director in group companies, admitted to undisclosed income from salary, consultancy, and car interest during his statement recorded under section 132(4). The Assessing Officer (AO) made additions based on discrepancies between returns filed under section 139(1) and section 153A, and the admitted income. The CIT(A) confirmed some additions and deleted others.

What did the Tribunal hold?

The Tribunal decided the issues as follows: Issue 1 (Undisclosed Salary Income): The Tribunal allowed the assessee's ground for AYs 2009-10 to 2013-14 and up to June 2014, directing deletion of additions. It reasoned that seized material indicated salary payments from July 2014 onwards, and additions before that date lacked corroborative evidence, violating the principle that search assessment additions must be based on seized material, not presumptions. However, for AYs 2014-15 (from July 2014) and 2015-16, the alleged salary was confirmed. Issue 2 (Unexplained Bank Credits - Rs.10,59,007/-): The Tribunal dismissed this ground as devoid of merits, implying it was confirmed against the assessee. Issue 3 (Unexplained Bank Credits - Rs.7,15,371/-): This ground was partly allowed. Additions of Rs.1,89,600/- and Rs.98,000/- as business income were confirmed. An addition of Rs.2,50,000/- and Rs.1110 was set aside to the AO for verification regarding its offer before the Settlement Commission. An addition of Rs.1205 was directed to be deleted, following an earlier year's order. Issue 4 (Foreign Travel Expenditure - Rs.2,02,518/-): This ground was partly allowed. The AO was directed to verify the claim that the expenditure was sponsored by the father-in-law and offered in a Settlement Application, and allow it if in accordance with law. Issue 5 (Unexplained Bank Credits - Rs.1,56,33,404/-): This ground was partly allowed. Additions of Rs.7,83,650/- and Rs.5,00,000/- as business income were confirmed. Additions related to Shree Ghamasha Co-op. Credit Society were remitted back to the AO for verification of offer before the Settlement Commission. A loan from Kailash Agrawal was remitted back to the AO for verification of bank statements. A loan from Neotech Education was deleted. A loan from Preet Patel was deleted, as the assessee discharged the onus under section 68. Operative Directions: Remand for verification in certain cases, deletion of additions in others, and confirmation of additions where justified. The ratio is that additions in search cases must be based on seized material, and the onus under section 68 can be discharged with proper documentation.

What were the issues?

1. Whether the addition of Rs.3,30,000/- as alleged undisclosed salary income for AYs 2009-10 to 2013-14 and up to June 2014 is justified, considering the seized material indicated salary payments from July 2014 onwards? (Question of law and fact, concerning Section 153A). 2. Whether the addition of Rs.10,59,007/- as alleged unexplained bank credits is sustainable? (Question of law and fact, concerning Section 68). 3. Whether the addition of Rs.7,15,371/- as alleged unexplained bank credits is correct? (Question of law and fact, concerning Section 68). 4. Whether the addition of Rs.2,02,518/- as alleged unexplained foreign travel expenditure for AY 2015-16 is valid? (Question of law and fact, concerning Section 69). 5. Whether the addition of Rs.1,56,33,404/- as alleged unexplained bank credits for AY 2015-16 is correct? (Question of law and fact, concerning Section 68). Assessee's Contentions: - Regarding salary income, there is no evidence of unaccounted salary payments before July 2014; additions should be based on seized material, not presumptions. - For unexplained bank credits, explanations and supporting documents (gift confirmation, wife's ITR, Settlement Application details, loan confirmations, bank statements) were provided. - Foreign travel expenditure was sponsored by the father-in-law and offered in a Settlement Application. Revenue's Contentions: - The revenue did not contravene the assessee's submissions regarding salary income, acknowledging the seized material indicated payments from July 2014 onwards. - The judgment does not explicitly record the revenue's specific arguments for other grounds, but the AO's additions were upheld or partly deleted by the CIT(A) and the Tribunal's decisions reflect the revenue's stance in opposing the assessee's claims.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3),Section 132,Section 139(1),Section 132(4),Section 68,Section 69,Section 64(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: DR. BRR Kumar & Shri T. R. Senthil Kumar

PER BENCH:-

These appeals are filed by the Assessee as against separate appellate orders all dated 08-05-2023 passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad arising out of the assessment orders passed under section 153A r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years 2009-10 to 2015-16. Since common issues are involved in all these appeals, for the sake convenience the same are disposed of by this common order.

I.T.(SS)A Nos. 109 to 114/Ahd/2024 & Ors. A.Ys. 2009-10 to 2015-16 2 Manish Bhi

The order continues below.

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