Loading judgment…

SMT PRANITA PANKAJ THAKUR,MUMBAI vs INCOME TAX OFFICER. WARD 4(1), MUMBAI | BharatTax

SMT PRANITA PANKAJ THAKUR,MUMBAI vs. INCOME TAX OFFICER. WARD 4(1), MUMBAI

ITA 1702/MUM/2025Status: DisposedITAT Mumbai30 April 2025AY 2011-12Bench: SHRI OM PRAKASH KANT (Accountant Member), SHRI RAHUL CHAUDHARY ( (Judicial Member)6 pages

AI SummaryAllowed

Facts

During a search operation on the 'Swastik' group, a cash credit of Rs. 7,50,000/- was found in the assessee's capital account for FY 2010-11. The AO made an addition of this amount as unexplained investment. The CIT(A) confirmed the addition.

Held

The Tribunal held that the said amount of Rs. 7,50,000/- was already offered for taxation and considered in the combined cash flow statement of the Swastik group, which was accepted by the Income Tax Settlement Commission (ITSC). Therefore, no further addition was required in the hands of the assessee.

Key Issues

Whether an addition made for unexplained cash credit is justified when the amount was already offered to tax and accepted by the ITSC as part of a group settlement.

Sections Cited

143(3), 147, 148, 68, 132, 245D(1), 245D(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “H(SMC

Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY

For Appellant: Mr. Sanjeev Mehta

For Respondent: Mr. Akhatar Hussain Ansari, Sr. DR

Hearing: 23/04/2025Pronounced: 30/04/2025

This appeal by the assessee is directed against order dated 27.02.2025 passed by the Ld. ADDL/JCIT (A)-5, Chennai [in short ‘the Ld. CIT(A)’] for assessment year 2011-12, raising following ground:-

“Grounds of Appeal

On the facts and in the circumstances of the case and in law, the order of the learned Commissioner of Income-tax confirming the assessment order passed u/s.143(3) r.w.s.147 is both bad-in-law and bad-in-facts. ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT: RS.7,50,000/-

2. On the facts and in the circumstances of the case and in law, the order of the learned Commissioner of Income-tax in confirming the addition of Rs.7,50,000/-on account of unexplained investments.

3. The assessee craves its rights to add, amend or alter any of the grounds on or before the hearing.

4. The assessee prays for justice”

2. Briefly stated facts of the case are that the assessee filed its return of income electronically on 27.11.2012 declaring total income at Rs. 11,09,580/-. Subsequently, a search u/s 132 of Income Tax Act, 1968 [in short the ‘the Act’] was carried out in the case of ‘Swastik’ group of cases on 31.07.2014. The assessee individually was also part of the ‘Swastik’ group, who was engaged in the business of the real estate development and dealing in land and its development. On the basis of the documents seized from the premises of the ‘Swastik’ group, it was found that the assessee had a credit of some of Rs. 7,50,000/- in cash during the financial year 2010-11 relevant to the A.Y. under consideration in its capital account. According to the Ld.AO, sources of the said cash was not explained and therefore, he recorded reasons to believe that income was escaped assessment and issued notice u/s 148 of the Act on 28.01.2016. During the course of reassessment proceedings, the assessee explained that source of the cash was from cash transactions with the Swastik groups, but said explanation was not accepted by the assessing officer and addition of Rs. 7,50,000/- was made u/s 68 of the Act. The Ld. CIT(A) also dismissed the appeal of the assessee.

4.

The Ld. Counsel further referred to the proof of submission of the cash book before the Income Tax Settlement Commission as Annexure A, which is available on paper book page No. 20. Further the Ld. counsel relied on the decision of the Coordinate bench in another entity of the Swastik group namely M/s. Swastik construction in ITAT No. 4818/Mum/2023 for A.Y. 2010-11, wherein amount of the disclosure as part of the cash flow statement filed before the Hon’ble ITSC was accepted and no separate addition was made in the hands of said assessee. Therelevant part of the decision is as under: “7. We find that the application filed before the Hon'ble ITSC was admitted vide order dated 26/12/2019 passed under section 245D(1) of the Act and subsequently, the order under section 245D(4) of the Act was passed by the Hon'ble ITSC on 25/09/2023. In order to substantiate the payment of tax by Sharp Realtors on the disclosure of additional income, the assessee has placed on record the details of the self-assessment tax paid and the copy of Form 26AS. We further find that all these details were also furnished before the learned CIT(A) and submission was made that the Swastik group has duly considered the amount of ₹21,65,000 for arriving at its taxable income while filing its application before the Hon'ble ITSC. However, we find that the learned CIT(A) merely proceeded on the basis that the taxpayers before the Hon'ble ITSC do not include the name of the assessee. Having considered the various details as noted above regarding the amount appearing in the loose sheets found during the search proceedings, we are of the considered view that since the amount of 21,65,000 has already been considered in the application filed before the Hon'ble ITSC by the Swastik group and the disclosure of additional income and the application has been accepted by the Hon'ble ITSC, the addition of the said amount of 21,65,000 in the hands of the assessee on account of entries appearing in the loose sheets will amount to double taxation which is completely impermissible. Therefore, we direct the AO to delete the impugned addition of 21,65,000 in the hands of the assessee as the same has already been offered to tax by the Swastik group and the due tax thereon has been paid. Accordingly, ground no. 2 raised in assessee's appeal is allowed.”