KASHISH GAURAV CHANDANI,AHMEDABAD vs. THE INCOME TAX OFFICER,WARD-3(3)(2),, AHMEDABAD

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ITSSA 147/AHD/2023Status: DisposedITAT Ahmedabad10 June 2024AY 2011-128 pages
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What did the Tribunal hold?

The Tribunal held that the addition of Rs.9,34,250/- made by the AO, which was paid by cheque, was not justified as these payments were duly recorded in the assessee's books of account and reflected in her Axis Bank account, and these entries were not disputed by the AO. Regarding the cash component of Rs.7,86,450/-, the Tribunal found that the assessee consistently denied making such payment, and the AO had not brought any corroborative evidence on record to substantiate this addition. The Tribunal noted that the AO made the addition solely based on seized data and statements of searched persons without affording the assessee an opportunity to cross-examine them, which is against the principles of natural justice. Respectfully following judicial precedents, the Tribunal deleted the addition of Rs.9,34,250/- and also deleted the addition of Rs.7,86,450/-. The Tribunal did not adjudicate grounds 1 and 2 as the assessee decided not to press them.

What were the facts?

The assessee, Kashish Gaurav Chandani, is appealing an order by the CIT(A)-11, Ahmedabad, dated 17-10-2023, which upheld an assessment order passed by the Assessing Officer (AO) under section 143(3) r.w.s. 153C of the Income Tax Act, 1961, for Assessment Year 2011-12. The AO's order, dated 21-12-2018, was based on data seized during a search on H N Safal Group on 04-09-2013, which indicated the assessee allegedly paid Rs.7,86,450/- in cash for Plot No. 188 in the NIRVANA Scheme of M/s. Manushi Land Developers LLP. The AO made an addition of Rs.17,22,700/-, comprising a cheque component of Rs.9,36,250/- and cash of Rs.7,86,450/-, relying on the seized data and statements of searched persons without providing cross-examination. The assessee contended the Section 153C proceedings were illegal, as the data did not belong to her.

What were the issues?

1. Whether the proceedings under Section 153C of the Income Tax Act, 1961, were valid, considering the seized data did not belong to the assessee and the conditions precedent were not satisfied, as argued by the assessee. The Revenue contended that the Section 153C proceedings were valid, referencing the Hon’ble Apex Court judgment in ITO vs. Vikram Sujit Kumar Bhatia & Others. The assessee also argued for a reasonable time period for issuing the notice under Section 153C, which was issued over 4 years after the search. The Revenue stated there was no specific time limit. The Tribunal decided not to adjudicate this ground as the assessee decided not to press it. 2. Whether the addition of Rs.17,22,700/- as unexplained investment under Section 69 of the Act was justified, as argued by the assessee. The assessee contended that payments by cheque aggregating to Rs.9,36,250/- were duly recorded in her books and bank account, and she denied the cash payment of Rs.7,86,450/-. The assessee further argued that the AO relied solely on an excel sheet without signatures and corroborative material, and that the developer admitted receiving 'on-money' in cash and paid tax thereon. The Revenue argued that the assessee was privy to the Settlement Commission order and that the excel sheet should be read with it. The assessee relied on the Gujarat High Court decision in Kaushik Nanubhai Majithia.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 153C,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “ B ” BENCH, AHMEDABAD

Before: SHRI SIDDHARTHA NAUTIYAL & SHRI MAKARAND V. MAHADEOKAR, ACCOUNTNAT MEMBER

For Appellant: Shri S. N. Divatia, AR and Shri Samir Vora, AR
Hearing: 04/06/2024Pronounced: 10/06/2024

आदेशानुसार/ BY ORDER,

स�या�पत ��त //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपील�य अ�धकरण, ITAT, Ahmedabad

06.05 .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 : 06.05 .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 : 10.6.’24 Sr.P.S./P.S. 7. Date on which the file goes to the Bench Clerk. 10.6.’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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