THE ITO, WARD-1(3)(1), AHMEDABAD vs. CHIRAGBHAI HASMUKHBHAI SONI, AHMEDABAD

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ITSSA 137/AHD/2021Status: DisposedITAT Ahmedabad29 October 2024AY 2017-187 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal on the grounds of low tax effect. The assessee's AR calculated the tax effect at Rs.43,64,360/-, which is below the threshold of Rs.60,00,000/- prescribed by CBDT Circular No. 09/2024 for filing appeals to the ITAT. The Tribunal noted that the Revenue had not challenged the CIT(A)'s decision regarding the non-applicability of section 115BBE of the Act. The CIT(A) had held that since the additions made by the AO were deleted, the ground of appeal concerning section 115BBE became academic. The Tribunal agreed that the tax effect calculated by the AO, which included the higher tax rate under section 115BBE, was incorrect as the CIT(A)'s order on this aspect was not challenged by the Revenue. Therefore, the appeal was dismissed in light of the CBDT Circular and the uncontested decision of the CIT(A) regarding section 115BBE.

What were the facts?

The Revenue is in appeal against the order of the CIT(A)-12, Ahmedabad, dated 24.06.2021, for Assessment Year 2017-18. The original assessment order was passed by the AO under section 153C read with section 144 of the Income Tax Act, 1961. The assessee, Chirag Hasmukhlal Soni, proprietor of M/s. Swayam Trading, had filed a return declaring Rs.3,74,320/-. The AO made additions of Rs.93,00,000/- for unexplained cash credits, Rs.22,17,100/- for unexplained cash deposits during demonetization, and rejected books of accounts under section 145(3), estimating gross profit at Rs.13,48,096/-. The CIT(A) partly allowed the assessee's appeal, deleting these additions. The Revenue's appeal challenges these deletions.

What were the issues?

1. Whether the CIT(A) erred in holding that there was no justification for initiating proceedings under section 153C of the Act, despite the AO recording satisfaction. 2. Whether the CIT(A) erred in deleting the addition of Rs.93,00,000/- under section 68 in respect of amounts received from SVP Corporation. 3. Whether the CIT(A) erred in deleting the addition of Rs.22,17,100/- under section 68 on account of excess cash sales made up to 8th November 2016. 4. Whether the CIT(A) erred in deleting the addition of Rs.13,48,096/- on account of estimation of gross profit at 1% after rejecting books of accounts under section 145(3). Assessee's Contention: The Revenue's appeal should be dismissed on the grounds of low tax effect, citing CBDT Circular No. 09/2024, as the tax effect is Rs.43,64,360/-, below the Rs.60,00,000/- threshold. The assessee also contended that the CIT(A) had decided in favor of the assessee regarding the non-applicability of section 115BBE, and since the Revenue did not challenge this in its appeal, the tax effect should be calculated without the higher tax rate. The assessee relied on the CIT(A)'s order concerning section 115BBE. Revenue's Contention: The Revenue sought to restore the AO's order. The Revenue's grounds of appeal implicitly argue that the CIT(A) erred in deleting the additions and that the AO's satisfaction for initiating proceedings under section 153C was justified. The Revenue also calculated the tax effect at Rs.83,58,234/-, considering section 115BBE.

Which sections of the Income-tax Act were involved?

Section 153C,Section 144,Section 68,Section 145(3),Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “ A ” BENCH, AHMEDABAD

Before: MS. SUCHITRA KAMBLE & SHRI MAKARAND V. MAHADEOKAR

For Appellant: Shri Hardik Vora, AR
Hearing: 24/10/2024Pronounced: 29/10/2024

आदेश की #ितिलिप अ$ेिषत/Copy of the Order forwarded to : अपीलाथ% / The Appellant 1. #&थ% / The Respondent. 2. संबंिधत आयकर आयु' / Concerned CIT 3. आयकर आयु' अपील 4. ( ) / The CIT(A)-12, Ahmedabad िवभागीय #ितिनिध आयकर अपीलीय अिधकरण राजोकट/DR,ITAT, Ahmedabad, 5. , , गाड� फाईल / 6. Guard file.

आदेशानुसार/ BY ORDER, स&ािपत #ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad

1.

Date of dictation (word processed by Hon’ble AM in his laptop) : 25.10.2024 28.10.2024 2. Date on which the typed draft is placed before the : Dictating Member. 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating : Member for pronouncement. 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the : 29.10.24 Sr.P.S./P.S. 7. Date on which the file goes to the Bench Clerk. : 29.10.24 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar : for signature on the order. 10. Date of Despatch of the Order :

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