THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL), AHMEDABAD vs. SHRI RAVJIBHAI MANILAL PATEL

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TAXAP/174/2022HC GujaratGJHC24011722202214 March 2022Bench: HONOURABLE MR. JUSTICE J.B.PARDIWALA,HONOURABLE MS. JUSTICE NISHA M. THAKORE4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that none of the questions proposed by the Revenue could be termed as substantial questions of law. The Court noted that the Tribunal had recorded findings of fact on both issues: the deletion of unaccounted brokerage of Rs. 68 Lakh and the addition of Rs. 3 Crore based on the assessee's statement under Section 131 of the Income Tax Act, 1961, which was later retracted. The Court reviewed the reasoning adopted by the Tribunal in its impugned order. Since the Court found no substantial question of law arising from the Tribunal's order, it dismissed the appeals. The operative direction was the dismissal of the appeals.

What were the facts?

These are two Tax Appeals filed by the Revenue challenging the orders dated 29.09.2021 passed by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench. The appeals pertain to Assessment Year (AY) 2011-12. The Revenue is aggrieved by the ITAT's decision to uphold the deletion of additions made by the Assessing Officer. Specifically, the appeals concern the deletion of an addition of Rs. 2,89,83,750/- related to land transactions and an addition of Rs. 68,00,000/- as unaccounted brokerage. The assessee, Shri Ravjibhai Manilal Patel, had made certain admissions during search proceedings regarding commission received, which he later retracted. The ITAT had affirmed the deletion of these additions by the Commissioner of Income Tax (Appeals).

What were the issues?

The Tribunal had to decide whether the proposed questions of law were substantial questions of law. The Revenue argued that the Appellate Tribunal erred in upholding the deletion of the addition of Rs. 2,89,83,750/- and Rs. 68,00,000/-. The Revenue contended that the assessee admitted involvement in land transactions and receipt of Rs. 3.00 crores as commission for Pushkar Corporation, and also admitted receipt of unaccounted brokerage of Rs. 68,00,000/- based on diary entries and documentary evidence during search proceedings. The Revenue further argued that the assessee's retraction affidavit, filed after six months without supporting evidence, could not be accepted, especially since the onus was on the assessee to prove coercion. The assessee's arguments are not recorded in the judgment. The core issue is whether the ITAT's findings, which affirmed the deletion of additions based on admissions later retracted, involved substantial questions of law.

Which sections of the Income-tax Act were involved?

Section 260(A),Section 131

AI-generated summary — verify with the full judgment below

C/TAXAP/174/2022 ORDER DATED: 14/03/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 174 of 2022 With R/TAX APPEAL NO. 176 of 2022 ========================================================== THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL), AHMEDABAD Versus SHRI RAVJIBHAI MANILAL PATEL ========================================================== Appearance: M R BHATT & CO.(5953) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MS. JUSTICE NISHA M. THAKORE

Date : 14/03/2022

COMMON ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. These Tax Appeals under Section 260(A) of the Income Tax Act, 1961 (for short “the Act”) are at the instance of the Revenue and the Tax Appeal No.174 of 2022 is directed against the order passed by the Income Tax Appellate Tribunal, “A” Bench, Ahmedabad dated 29.09.2021 in the IT (SS) A No.121/Ahd/2018 for the A.Y. 2011-12. By way of Tax Appeal No. 176 of 2022, the Revenue has challenged the order dated 29.09.2021 passed by the Income Tax Appellate Tribunal, “A” Bench, Ahmedabad in C.O. No.110/Ahd/2019 for A.Y.2011-12. 2. The Revenue has proposed the following questions for consideration of this Court in both the Appeals: Tax Appeal No.174 of 2022: [A] "Whether on the facts and circumstances of the case and Page 1 of 4

C/TAXAP/174/2022 ORDER DATED: 14/03/2022 in law, the Appellate Tribunal has erred in upholding the decision of the CIT(A) deleting the addition of Rs.2,89,83,750/- without appreciating the fact that the assessee himself admitted involvement in land transactions and provided the information related to the land sold at Zundal and Chandkheda, and also admitted receipt of Rs.3.00 crores as commission thereon towards land dealing for Pushkar Corporation, even without posing specific question by the department?" [B] "Whether on the facts and circumstances of the case and in law, the Appellate Tribunal has erred in ignoring the fact that the assessee himself admitted the receipt of Rs.3.00 crores as commission and not brokerage during the recording of statement as well as the evidences like Diary having credit and debit entries regarding land transaction which were basis of admission by the assessee?" [C] "Whether on the facts and circumstances of the case and in law, the Appellate Tribunal has erred in upholding the decision of the CIT(A) deleting the addition of unaccounted brokerage of Rs.68,00,000/- without appreciating that the assessee himself admitted involvement of three partners and provided the details regarding rate of commission, calculation and details of survey number etc. of the lands in respect of which the unaccounted commission was earned at the time of giving his first statement on oath during search proceedings?" [D] "Whether on the facts and circumstances of the case and in law, the Appellate Tribunal failed to appreciate the fact that in the statement recorded during the search proceedings, the admission of receipt of unaccounted brokerage of Rs.68,00,000/- by the assessee was based on the diary impounded during the search proceedings and corroborated by the documentary evidences but the assessee never provided the details of the partners and merely filed the retraction affidavit without any supporting or cogent evidences?" Page 2 of 4

C/TAXAP/174/2022 ORDER DATED: 14/03/2022 [E] "Whether the Appellate Tribunal has failed to appreciate the fact that the assessee remained non compliant during the post search proceedings and filed retraction affidavit almost after 6 months which cannot be accepted as the assessee voluntarily admitted the receipt of Rs.3 crores as commission in the statement recorded u/s.131 of the Act on 13.06.2013?" [F] "Whether the Appellate Tribunal has failed to appreciate the fact that the assessee filed the retraction affidavit after a long gap of 6 months without any corroborative evidences even when the onus was on the assessee to prove that the statement was taken under coercion and without his consent?" Tax Appeal No.176 of 2022 [A] "Whether on the facts and circumstances of the case and in law, the Appellate Tribunal has erred in upholding the decision of the CIT(A) deleting the addition of Rs.2,89,83,750/- without appreciating the fact that the assessee himself admitted involvement in land transactions and provided the information related to the land sold at Zundal and Chandkheda, and also admitted receipt of Rs.3.00 crores as commission thereon towards land dealing for Pushkar Corporation, even without posing specific question by the department?" [B] "Whether on the facts and circumstances of the case and in law, the Appellate Tribunal has erred in ignoring the fact that the assessee himself admitted the receipt of Rs.3.00 crores as commission and not brokerage during the recording of statement as well as the evidences like Diary having credit and debit entries regarding land transaction which were basis of admission by the assessee?" [C] "Whether the Appellate Tribunal has failed to appreciate the fact that the assessee remained non compliant during the post search proceedings and filed retraction affidavit almost after 6 months which cannot be accepted as the assessee voluntarily admitted the receipt of Rs.3 crores Page 3 of 4

C/TAXAP/174/2022 ORDER DATED: 14/03/2022 as commission in the statement recorded u/s.131 of the Act on 13.06.2013?" 3. We have heard Mr. M.R. Bhatt, the learned senior counsel appearing for the Revenue. Essentially, there are two issues before us; one with respect to the CIT(A) deleting the addition of unaccounted brokerage of Rs.68 Lakh as affirmed by the ITAT and the second issue is with regard to addition of Rs.3 Crore on the basis of the statement made by the assessee as recorded under Section 131 of the Act. The statement, however, recorded under Section 131 of the Act, later came to be retracted by the assessee. 4. On both the aforesaid issues or rather to put in other words, on all the proposed questions of law, there are findings of the fact recorded by the Tribunal in its impugned order. 5. We have looked into in the line of reasoning adopted by the Tribunal right from para 4.4 or the order till para 11.9, so far as the addition of Rs.68 Lakh is concerned and from para 17 onwards, so far as the statement of the assessee recorded under Section 131 of the Act is concerned. 6. We are of the view that none the questions as proposed by the Tribunal to be termed as substantial questions of law. In the result, these Appeal fail and are hereby dismissed. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) Y.N. VYAS Page 4 of 4

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