THE JT. CIT ,(OSD) CENTRAL CIRCLE-2(2), AHMEDABAD vs. SHRI KAMLESHBHAI P SAVALIYA, AHMEDABAD

ITSSA 35/AHD/2021Status: DisposedITAT Ahmedabad21 February 2025AY 2013-1418 pages
AI SummaryDismissed

What were the facts?

The Revenue filed appeals against orders of the CIT(A) for Assessment Year 2013-14, arising from assessment orders passed under Section 153C read with Section 143(3) of the Income Tax Act, 1961. The assessees, Shri Kamlesh P. Savaliya and Shri Rameshbhai N. Antala, also filed cross-objections. A search operation on 06/03/2018 in the case of SSS Group led to proceedings under Section 153A for the assessees. The Assessing Officer (AO) made additions under Section 68, treating credits of Rs. 4,54,00,000/- received from Kolkata-based entities as unexplained cash credits. The CIT(A) deleted these additions, leading to the Revenue's appeals.

What did the Tribunal hold?

The Tribunal held that for unabated assessments under Section 153A, additions must be supported by incriminating material found during the search. The CIT(A) correctly applied precedents like *Saumya Construction Pvt. Ltd.* and *Kabul Chawla* to delete the additions. The Revenue's argument that unrelated income might escape taxation was deemed hypothetical and contrary to settled law, citing a co-ordinate bench decision in *Sharadaben Arvindbhai Patel* which held that completed assessments should remain undisturbed in the absence of incriminating material. The Tribunal upheld the deletion of the Rs. 4,54,00,000/- addition under Section 68, noting the AO's failure to refer to any incriminating material in the assessment order. The Tribunal also highlighted inconsistencies in the AO's approach, such as accepting similar transactions in the hands of entry providers under Section 153C while treating them as unexplained in the assessees' hands. The Tribunal further considered the aspect of double taxation, as the funds originated from Shrimate Infrastructure LLP where they were already debited as compensation expenses, and cited *Wellknown Technologies Pvt. Ltd.* for the principle that merely routing funds without introducing unexplained income does not warrant taxation under Section 68. The assessees' cross-objections were allowed.

What were the issues?

1. Whether, in an unabated assessment under Section 153A, additions must be confined to incriminating material found during a search under Section 132(1) of the Act, as held by the CIT(A)? The Revenue argued that Section 153A does not stipulate such a condition and that disallowing additions in the absence of seized material would render the scheme of assessment nugatory. The Revenue contended that the CIT(A) erred in not appreciating that Section 153A requires returns for six years and allows assessment/reassessment, and that income unrelated to the search could escape taxation if not assessed under Section 153A. 2. Whether the CIT(A) erred in deleting the addition of Rs. 4,54,00,000/- made under Section 68 of the Act? The Revenue argued that the assessees failed to establish the creditworthiness and genuineness of transactions with Kolkata-based shell companies. The assessees argued that the CIT(A)'s order was supported by judicial precedents and correctly appreciated that no incriminating material was found during the search.

Which sections of the Income-tax Act were involved?

Section 153C,Section 143(3),Section 132(1),Section 153A,Section 68,Section 133A,Section 158BB,Section 153BI

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Heard together (2 matters)

C.O No.23/Ahd/2021
C.O No.24/Ahd/2021

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपीलीय अिधकरण, अहमदाबाद "ायपीठ “B“,अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ B ” BENCH, AHMEDABAD सु"ी सुिच"ा का"ले, "ाियक सद" एवं "ी मकरंद वसंत महादेवकर, लेखा सद" के सम"। ] ] BEFORE Ms SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /IT(SS)A No.35/Ahd/2021 With C.O No.23/Ahd/2021 िनधा"रण वष" /Assessment Year : 2013-14 Joint Commissioner of Shri Kamlesh P. Savaliya, बनाम/ Income Tax(O ), 8, Shaligram-1, Bunglows, v/s. Central Circle-2(2), Nr. Avelon Hotel, Ahmedabad. Thaltej Shilaj Road, Ahmedabad. "थायी लेखा सं./PAN: ADGPS0460H

AND आयकर अपील सं /IT(SS)A No.36/Ahd/2021 With C.O No.24/Ahd/2021 िनधा"रण वष" /Assessment Year : 2013-14 Joint Commissioner of Shri Rameshbhai N. Antala, बनाम/ Income Tax(O ), 16, Sahajanand Villa, v/s. Central Circle-2(2), Opp. Vrundavan-9, Ahmedabad. B/h. Devine High Land, Sola, Ahmedabad. "थायी लेखा सं./PAN: ACQPA2986B

अपीलाथ%/ Appellant) (&' यथ%/ Respondent) Revenue by : Shri V Nandakumar, CIT-DR Assessee by : Shri S.N Soparkar, Sr.Advocate सुनवाई की तारीख/Date of Hearing : 12/02/2025 घोषणा की तारीख /Date of Pronouncement: 21/02/2025

IT(SS)A Nos.35-36/Ahd/2021 with C.O No.23-24-Ahd-2

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