THE ACIT, CENTRAL CIRCLE-2(3), AHMEDABAD vs. M/S. SWASTIK PIPE INDUSTRIES, MEHESANA

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ITSSA 514/AHD/2019Status: DisposedITAT Ahmedabad14 June 2024AY 2017-187 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the Ld. CIT(A), dismissing the Revenue's appeal. Regarding the addition under section 68, the Tribunal found that the assessee had provided substantial documentary evidence, including physical photos of the cremation site, press notes detailing donation collections, trust resolutions, and estimated costs. The Ld. CIT(A) had noted that the entries in the images were promises of donations. The Tribunal agreed that the assessee discharged the primary onus of explaining the seized image, and the AO's inference that it pertained to M/s. Swastik Pipe Industries was without basis. For the addition under section 69, the Tribunal noted that the transactions were from FY 2015-16 and, if liable for addition, could only be in AY 2016-17, not AY 2017-18. The AO's acceptance of similar transactions in another case also supported the assessee's contention. Therefore, the additions made by the AO were not justified.

What were the facts?

The Revenue (ACIT) is in appeal against the order of the CIT(A) for AY 2017-18, which deleted additions made by the AO under sections 68 and 69 of the Income Tax Act, 1961. The assessee, M/s. Swastik Pipe Industries, is a partnership firm that filed a return declaring a loss. The AO initiated proceedings under section 153C based on incriminating images extracted from the I-phone of Shri Dignesh R Patel during a search in another group. The AO added Rs. 2,58,00,000/- as unexplained cash credits under section 68, rejecting the assessee's explanation that these were donations for Shamshan Ghat construction. Additionally, Rs. 76,17,000/- was added as unexplained investment under section 69, based on digital data indicating unaccounted sales and purchases.

What were the issues?

1. Whether the Ld. CIT(A) erred in deleting the addition of Rs. 2,58,00,000/- made on account of unexplained cash credit under section 68 of the Income Tax Act, 1961. 2. Whether the Ld. CIT(A) erred in deleting the addition of Rs. 76,17,000/- being unexplained investment under section 69 of the Income Tax Act, 1961. Assessee's Contentions: The AO made additions based on assumptions without properly considering documentary evidence. The transactions related to expected donations for the Shamshan Ghat. The assessee relied on the order of the Ld. CIT(A). Revenue's Contentions: The Ld. CIT(A) erred in deleting the additions. The evidence extracted from digital data indicated unaccounted transactions, and the Ld. CIT(A) failed to appreciate the incriminating nature of the seized material. The Revenue relied on the order of the AO.

Which sections of the Income-tax Act were involved?

Section 68,Section 69,Section 153C,Section 143(3),Section 143(2),Section 142(1),Section 132(4A),Section 292C,Section 44AD

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
Hearing: 11/06/2024Pronounced: 14/06/2024

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

1.

Date of dictation (word processed by Hon’ble AM in his laptop) : 12.6.2024 2. Date on which the typed draft is placed before the : 12.6.2024 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 : 14.6.24 Sr.P.S./P.S. 14.6.24 7. Date on which the file goes to the Bench Clerk. : 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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