THE ACIT, CENTRAL CIRCLE-2(3), AHMEDABAD vs. BHARATKUMAR RASIKLAL SHAH, MEHSANA

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ITSSA 59/AHD/2021Status: DisposedITAT Ahmedabad26 June 2024AY 2015-1617 pages
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What did the Tribunal hold?

Regarding the addition of Rs.19,69,500/- (booking cancellation and site expenses), the Tribunal noted the assessee's claim that these were cash transactions considered in the cash flow statement. However, the assessee failed to provide documentary evidence for the refund of Rs.10,00,000/- or the site expenses of Rs.9,69,500/-. While Section 69C allows for addition of unexplained expenditure, the use of 'may' makes it discretionary. Applying the principle of preponderance of probabilities, the Tribunal found that the AO was not justified in adding the total amount. The Tribunal observed that the AO accepted the refund of one plot but not others, neglecting the preponderance of probabilities. The cash balance in hand, as presented in the cash flow statement, considered the refund and expenses. Therefore, the Tribunal held that the AO was not justified in adding the total amount of Rs.19,69,500/- under Section 69C. The CIT(A) had granted relief of Rs.5,00,000/- on an ad-hoc basis. The Tribunal directed that the AO should consider the refund and expenses in light of the cash flow statement and the principle of preponderance of probabilities, and deleted the addition of Rs.19,69,500/-. Thus, the Assessee's appeal on this point was allowed, and Revenue's Ground 1 was dismissed. Regarding the addition of Rs.21,29,917/- under Section 69, the Tribunal found merit in the assessee's argument that the AO misconstrued jottings as investments. The receipts were towards plot bookings on an installment basis. The entire receipt of Rs.37,74,440/- was accounted for in the cash-flow statement for additional income under Section 153A. The Rs.3,00,000/- received in AY 2015-16 was disclosed, and the remaining Rs.34,74,440/- was considered in AY 2016-17. The addition of Rs.3,00,000/- in AY 2015-16 was a double addition. Similarly, Rs.18,29,917/- was part of the AY 2016-17 disclosure. Therefore, the Tribunal upheld the CIT(A)'s deletion of Rs.21,29,917/- under Section 69, dismissing Revenue's Ground 2. Regarding the addition of Rs.64,00,000/- under Section 69A, the Tribunal noted that the CIT(A) had deleted this addition. The judgment excerpt does not contain the Tribunal's decision or reasoning on this specific ground, nor does it mention the arguments presented by the parties on this issue. Therefore, this issue remains undecided in the provided text.

What were the facts?

The assessee, Bharatkumar Rasiklal Shah, filed original income for AY 2015-16 on 31-03-2016. A search under Section 132/133A was conducted on 15-02-2017, covering the assessee. This triggered Section 153A proceedings, with a notice issued on 09-04-2018. The assessee filed a revised return on 30-09-2019 declaring Rs.15,07,420/-. The Assessing Officer (AO) passed an order under Section 143(3) read with Section 153A on 28-12-2019, determining total income at Rs.2,06,54,920/-. The Commissioner of Income Tax (Appeals) - 12, Ahmedabad, partly allowed the assessee's appeal. Both the assessee and the Revenue have filed appeals against the CIT(A)'s order dated 31-3-2021.

What were the issues?

1. Whether the CIT(A) erred in upholding the disallowance of Rs.10,00,000/- for booking cancellation and partially confirming the disallowance of Rs.4,69,500/- for site expenses, and whether these amounts should be deleted (Assessee's Grounds 1-3). The assessee argued that these cash transactions were part of a scheme called "Anmol Sahara-2" and were considered in the cash flow statement. The refund of Rs.10,00,000/- and expenses of Rs.9,69,500/- should be considered, and the CIT(A)'s relief was ad-hoc. The Revenue argued that the CIT(A) erred in deleting an addition of Rs.5,00,000/- out of Rs.19,69,500/- treated as unexplained expenditure under Section 69C (Revenue's Ground 1). 2. Whether the CIT(A) erred in deleting the addition of Rs.21,29,917/- made by the AO under Section 69 (Revenue's Ground 2). The assessee contended that the AO misconstrued jottings as investment in loans, whereas they were calculations of installment receipts for plot bookings. The entire receipt of Rs.37,74,440/- was accounted for in the cash-flow statement for additional income under Section 153A. The AO's addition of Rs.3,00,000/- for AY 2015-16 and Rs.18,29,917/- as receivable but not received constituted double addition as these amounts were considered in AY 2016-17. 3. Whether the CIT(A) erred in deleting the addition of Rs.64,00,000/- made by the AO treating it as unexplained income under Section 69A (Revenue's Ground 3). This addition was based on a digital image from the accountant's laptop showing investment in land purchase at Shankheshwar Village. The assessee denied any such transaction or investment by himself or family members.

Which sections of the Income-tax Act were involved?

Section 132,Section 133A,Section 143(3),Section 153A,Section 69,Section 69A,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “ B ” BENCH, AHMEDABAD

Before: MS. SUCHITRA KAMBLE & SHRI MAKARAND V. MAHADEOKAR, ACCOUNTNAT MEMBER

For Appellant: Shri K.C. Thaker, AR
Pronounced: 26/06/2024

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त ( अपील ) / The CIT(A)-12, Ahmedabad 5. �वभागीय ��त�न�ध , आयकर अपील�य अ�धकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाड� फाईल /Guard file.

आदेशानुसार/ BY ORDER,

स�या�पत ��त //True Copy//

सहायक पंजीकार (Asstt. Registrar) आयकर अपील�य अ�धकरण, ITAT, Ahmedabad

14.6.2024 1. Date of dictation (word processed by Hon’ble AM in his laptop) : 2. Date on which the typed draft is placed before the : 14.6.2024 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 : 26.6.24 Sr.P.S./P.S. 7. Date on which the file goes to the Bench Clerk. 26.6.24 : 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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