ANTS STUDIO PVT. LTD.,AHMEDABAD vs. THE DCIT CENTRAL CIRCLE-2(2), AHMEDABAD

ITSSA 123/AHD/2021Status: DisposedITAT Ahmedabad03 September 2025AY 2010-1118 pages
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What were the facts?

The assessee, Ants Studio Private Limited, filed five appeals before the Income Tax Appellate Tribunal (ITAT) against orders of the CIT(A)-12, Ahmedabad, for Assessment Years (AY) 2009-10 to 2013-14. These appeals arose from proceedings under Section 153C read with Section 143(3) of the Income Tax Act, 1961. The proceedings were initiated following a search under Section 132 in the case of Shri Vikas A. Shah, during which documents belonging to the assessee were seized. The assessee contended that assessments were ex-parte as the newly appointed Director, Shri Vikas A. Shah, did not have access to company records from the erstwhile management. Shri Vikas A. Shah later expired, and his legal heirs were unaware of the company's affairs, preventing the submission of supporting documents at various stages of appeal.

What did the Tribunal hold?

The Tribunal decided on the issues as follows: Issue 1 (Cash Deposits): For AY 2009-10, Rs.6,77,93,396/- was added. The Tribunal, following its decision in IT(SS)A No.122/Ahd/2021 for AY 2009-10, deleted the addition of Rs.7,72,710/- on account of unexplained cash deposit, allowing the ground. For AY 2013-14, Rs.29,35,700/- was added. The Tribunal confirmed this addition, finding that the assessee failed to provide evidence that the cash deposits represented cash-in-hand with branches, especially since business activities had ceased from AY 2012-13. Issue 2 (Section 40(a)(ia)): The grounds related to this section were not specifically detailed in the provided text for individual AYs, but the overall outcome for AY 2009-10 indicates that the disallowance was confirmed in one instance (Rs.6,03,423/-) and the ground related to Rs.25,33,669/- was not explicitly addressed in the provided excerpt's holdings. Issue 3 (Share Capital): The ground related to the introduction of share capital treated as unexplained income under Section 68 was not explicitly addressed in the provided excerpt's holdings for AY 2009-10. Issue 4 (Depreciation): For AY 2009-10, the disallowance of Rs.9,80,195/- was confirmed due to the assessee's failure to provide bills and vouchers for asset additions. For AY 2012-13, the disallowance of Rs.9,76,695/- was also confirmed for similar reasons. Issue 5 (Section 43B): The disallowance of Rs.6,590/- under Section 43B for AY 2009-10 was not explicitly addressed in the provided excerpt's holdings. Issue 6 (10% Disallowance of Expenses): For AY 2009-10, the lump sum 10% disallowance out of various expenses (Rs.86,04,789/-) was restricted to 5%, granting partial relief. Issue 7 (Addition of Rs.5,88,514/- for AY 2012-13): The disallowance of expenses was restricted to 5% of the AO's disallowance, providing a relief of Rs.2,94,257/-. Issue 8 (Jurisdiction under Section 153C): The additional legal grounds challenging the AO's jurisdiction under Section 153C were not pressed by the assessee and were dismissed. Operative Directions: For AYs 2009-10 to 2012-13, the appeals were partly allowed. For AY 2013-14, the appeal was dismissed. The specific relief granted was a reduction in disallowance for expenses in AY 2009-10 and AY 2012-13, and deletion of a portion of cash deposit addition in AY 2009-10.

What were the issues?

1. Whether the addition of Rs.6,77,93,396/- (for AY 2009-10) and Rs.29,35,700/- (for AY 2013-14) on account of cash deposits in bank accounts, made under Section 68 of the Act, is justified? 2. Whether the disallowance of Rs.25,33,669/- (for AY 2009-10) and Rs.6,03,423/- (for AY 2009-10) under Section 40(a)(ia) of the Act is correct? 3. Whether the disallowance of Rs.9,66,700/- (for AY 2009-10) on account of share capital introduction, treated as unexplained income under Section 68 of the Act, is justified? 4. Whether the disallowance of depreciation amounting to Rs.9,80,195/- (for AY 2009-10) and Rs.9,76,695/- (for AY 2012-13) is correct? 5. Whether the disallowance of Rs.6,590/- (for AY 2009-10) under Section 43B of the Act is correct? 6. Whether the lump sum 10% disallowance out of Salary & allowance, Franchise fees, Sales & marketing expenses, and Professional charges amounting to Rs.86,04,789/- (for AY 2009-10) is justified? 7. Whether the addition of Rs.5,88,514/- (for AY 2012-13) on account of disallowance of various expenses is justified? 8. Whether the assumption of jurisdiction by the Assessing Officer under Section 153C and the consequential assessment order under Section 153C read with Section 153A and Section 143(3) of the Act are valid? Assessee's Contentions: The assessee argued that assessments were ex-parte due to lack of access to records by the new director and later by his legal heirs. They contended that the additions/disallowances lacked basis and co-relation with seized material, and that the years were non-abated. They also raised a legal ground challenging the AO's jurisdiction under Section 153C. For specific grounds, they argued that cash deposits were explained, and that disallowances under Section 40(a)(ia) and 43B were arbitrary. They also argued that the 10% disallowance of expenses was excessive and that depreciation was wrongly disallowed. Revenue's Contentions: The Revenue, through the CIT-DR, supported the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 132,Section 143(3),Section 153A,Section 153B(1),Section 153C,Section 40(a)(ia),Section 43B,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD

Before: SHRI T.R. SENTHIL KUMAR & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Suresh Gandhi, AR
For Respondent: Shri Alpesh Parmar, CIT-DR
Hearing: 22.07.2025Pronounced: 03.09.2025

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

These five appeals are filed by the assessee against separate orders of CIT(A)-12, Ahmedabad, all dated 05.04.2021, for the Assessment Years (A.Y.) 2009-10 to 2013-14 in the proceedings under Section 153C r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

The facts involved in all these appeals are identical and all these matters were heard together. Hence, these appeals are being disposed of vide this common

The order continues below.

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