THE JT. CIT (OSD), CENTRAL CIRCLE-2(2), AHMEDABAD vs. SHRI KRUNAL HANUBHAI SANGANI, AHMEDABAD

ITSSA 65/AHD/2021Status: DisposedITAT Ahmedabad17 January 2024AY 2018-198 pages
AI SummaryRemanded

What were the facts?

The appeals were filed by the Joint Commissioner of Income Tax (OSD) against the orders of the Commissioner of Income Tax (Appeals)-12, Ahmedabad. The assessment years involved were 2012-13 and 2018-19. The appeals concerned the deletion of additions made by the Assessing Officer (AO) under Section 153A of the Income Tax Act, 1961. In the case of Shri Vyomesh Vinodrai Patel (Assessment Year 2012-13), an addition of Rs. 1,75,00,000/- under Section 68 was deleted by the CIT(A). For Shri Krunal Hanubhai Sangani and Shri Sandip Kantilal Andani (Assessment Year 2018-19), additions under Section 68 and Section 69 were also deleted. The common issue revolved around the scope of assessment under Section 153A and the requirement of incriminating material for making additions.

What did the Tribunal hold?

The Tribunal restored the matters to the file of the Assessing Officer with a direction that additions on a substantive basis can only be made either in the hands of the assessee or in the hands of M/s. Satyam Developers Ltd., but not in both. In the specific case of Shri Vyomesh Vinodrai Patel, the assessee had filed a confirmation letter from M/s. Satyam Developers Ltd. accepting ownership of the transactions. Therefore, if the addition is confirmed in the hands of M/s. Satyam Developers Ltd. on a substantive basis, the same addition cannot be made again in the hands of the assessee. The Tribunal noted that the Assessee had consistently maintained that the transactions belonged to M/s. Satyam Developers Ltd. For the other appeals, where facts and issues were similar, the same directions were applied. The Tribunal did not explicitly decide on the broader legal question of whether additions under Section 153A require incriminating material, but rather focused on the specific facts of double addition.

What were the issues?

1. Whether, in assessment proceedings under Section 153A, additions can be made only on the basis of incriminating material found during a search under Section 132(1) of the Income Tax Act, 1961, or if additions can be made even without such material, as contended by the Revenue. The Revenue argued that Section 153A does not stipulate that additions must be confined to incriminating material and that disallowing additions in the absence of such material would render the scheme of assessment under Section 153A ineffective. They also cited decisions of the Delhi High Court in CIT vs. Anil Kumar Bhatia and Kerala High Court in E.N. Gopakumar vs. Commissioner of Income-tax (Central). The Assessee argued that additions made on the basis of loose papers found from the Corporate Office of Satyam Developers Ltd. were unsustainable as similar additions were made in the hands of Satyam Developers Ltd. itself, which had taken ownership of the transactions. The Assessee relied on the Supreme Court decision in ACIT vs. SRS Mining. 2. Whether additions made under Section 68 and Section 69 of the Income Tax Act, 1961, by the AO were correctly deleted by the CIT(A).

Which sections of the Income-tax Act were involved?

Section 153A,Section 132,Section 68,Section 143(3),Section 153BI,Section 158BB,Section 69

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.(SS)A. No. 62/Ahd/2021 (Assessment Year: 2012-13) Central Circle-2(2), Opp. Karnavati Club, Jodhpur, Ahmedabad Satellite, Ahmedabad [PAN No.AKGPP2230D] (Appellant) .. (Respondent) I.T.(SS)A. No. 65/Ahd/2021 (Assessment Year: 2018-19) Central Circle-2(2), Opp. Karnavati Club, B/s Fun Ahmedabad Republic, Satellite, Ahmedabad [PAN No.BTKPS1193L] (Appellant) .. (Respondent) I.T.(SS)A. No. 66/Ahd/2021 (Assessment Year: 2018-19) C-302, Saphire Green, Opp. Central Circle-2(2), Hariharshray Bunglows, Thaltej, Ahmedabad Ahmedabad [PAN No.AJRPA8502H] (Appellant) .. (Respondent)

Appellant by : Shri Parin S Shah, A.R. Respondent by: Shri Sudhendu Das, CIT D.R.

Date of Hearing 08.01.2024 Date of Pronouncement 17.01.2024

IT(SS)A Nos. 62,65&66/Ahd/2021 JCIT(O ) vs. Shri Vyomesh Vinod

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