ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(2), AHMEDABAD, AHMEDABAD vs. DIMPLE ROBIN GOENKA, AHMEDABAD

ITSSA 72/AHD/2023Status: DisposedITAT Ahmedabad30 May 2025AY 2013-201431 pages
AI SummaryDismissed

What were the facts?

A search action under section 132 of the Income Tax Act, 1961, was conducted on the 'Sankalp group' on October 30, 2018. This search involved Mr. Robin Ramavatar Goenka, a key person in the group, and his wife, Mrs. Dimple Robin Goenka, as well as his accountant, Mr. Dilipkumar Chhotalal Patel. The search uncovered incriminating materials such as handwritten diaries and loose papers, indicating on-money transactions and unaccounted cash sales in real estate projects. Consequently, assessments were framed under section 143(3) read with section 153A of the Act for Assessment Years 2018-19 and 2019-20. The Assessing Officer (AO) made substantial additions to Mr. Goenka's income and protective additions to Mr. Patel's income. Appeals were filed before the Commissioner of Income Tax (Appeals) against these assessment orders.

What did the Tribunal hold?

The Tribunal held that the additions made by the Assessing Officer (AO) in the unabated assessment years were not based on any incriminating material found during the search. The Tribunal referred to the Supreme Court's decision in PCIT vs. Abhisar Buildwell P. Ltd., which clearly states that in the case of unabated/completed assessments, no addition can be made by the AO in the absence of any incriminating material unearthed during the search. The Tribunal noted that the limitation period for issuing notice under section 143(2) for the assessment years in question had expired prior to the date of the search. Therefore, the AO lacked the jurisdiction to proceed under section 153A based solely on 'other material' without incriminating evidence. The Tribunal found no merit in the grounds of appeal filed by the Revenue and upheld the findings of the CIT(A) that the additions made by the AO were rightly deleted. The specific issue regarding the profit element versus gross receipts and telescoping of payments was implicitly resolved by the deletion of additions due to lack of incriminating material, as the CIT(A) had already directed the AO to confine the business income at a certain amount and delete the remaining. The Tribunal did not expressly decide on the profit margin or telescoping theory as the primary basis for deletion was the absence of incriminating material.

What were the issues?

1. Whether the additions made by the Assessing Officer on account of unaccounted receipts and payments in the real estate business can be taxed on a gross basis, or if only the profit element should be taxed, considering the assessee's claim that expenses were incurred for business purposes and the principle of telescoping payments against receipts (Section 69C of the Income Tax Act, 1961). 2. Whether additions made by the Assessing Officer in unabated assessment years, without any incriminating material found during the search action, are valid, particularly when the limitation period for issuing notice under section 143(2) had expired prior to the search (Section 153A and Section 143(3) of the Income Tax Act, 1961). Assessee's Arguments: - For issue 1: The assessee argued that only the profit element (approximately 8-10%) of the real estate receipts should be taxed, as expenses were incurred for business purposes. They contended that taxing both gross receipts and payments leads to double taxation and that the theory of telescoping payments against receipts should be applied. Reliance was placed on the CIT(A)'s observation that additions on both counts would be contrary to facts and legality. - For issue 2: The assessee contended that all additions made by the AO were not based on incriminating material found during the search. Since the assessment years were unabated and the limitation for issuing notice under section 143(2) had expired before the search, the AO lacked jurisdiction to make additions under section 153A without incriminating material. Reliance was placed on decisions of the Supreme Court and various High Courts, including Abhisar Buildwell P. Ltd. and Kabul Chawla. Revenue's Arguments: - The Revenue, represented by the CIT-DR and Sr. D.R., did not contravene the facts presented by the assessee and did not place any seized material on record to support the additions made by the AO.

Which sections of the Income-tax Act were involved?

Section 132,Section 143(3),Section 153A,Section 69C,Section 115BE,Section 68,Section 14A,Section 8D,Section 147,Section 148

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Makarand Vasant Mahadeokar, Accountant Member IT(SS)A No. 46/Ahd/2023 and ITA No. 434/Ahd/2023 IT(SS)A Nos: 119 & 120/Ahd/2023 for Asst Years: 2018-19 & 2019-20 Sri. Robin Ramavtar The ACIT Goenka Central Circle-1(2), House, B/h. Rajpath Club, Bodakdev, Ahmedabad- Gujarat 380054 PAN: AFAPG9631E Central Circle-1(2), Goenka Ahmedabad Plot No.3, Sankalp House, B/h.Rajpath Club, Bodakdev, Ahmedabad, Gujarat 380054 PAN: AFAPG9631E (Appellant) (Respondent)

IT(SS)A Nos: 117 & 118/Ahd/2023 Asst. Years: 2018-19 & 2019-20 Central Circle-1(2), Patel Ahmedabad A-Atulyam, Opp. Palam Plaza, Torrent, Makarba, Ahmedabad Gujarat-380051 PAN: AJRPP7897G (Appellant) (Respondent)

I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No 2 IT(SS)A Nos: 72 to 75/Ahd/2023 Asst. Years: 2013-14, 2015-16 to 2017-18 Central Circle-1(2), Sur. No. 207/20, Ahmedabad F.P. No. 271/2, Sankalp House, B/h. Rajpath Club, Bodakdev, Ahmedaba

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