DUSHYANTBHAI RANCHHODBHAI PATEL,AHMEDABAD vs. THE DY.CIT, CIRCLE-2(1)(1), AHMEDABAD

The grounds of appeal raised by the assessee are as under:

That the Ld. assessing officer has re-open the case of the appellant after 4 years without any tangible material on record and hence the re-opening itself is bad in law illegal and required to be quashed.

That the reasons recorded to reopening the case of the appellant for A.Y. 2014-15 are vague and only a fishing activity and as such the re-opening itself is bad in law and order passed u/s 147 r.w.s. 144B dated 29.03.2022 required to be quashed.

That the notice issued u/s 148 dated 31/03/2021 by assessing officer Circle 2(1)(1), Ahmedabad is without juri iction and as such the reopening u/s 147 of the Income Tax Act, 1961 itself is bad in law and required to be quashed.

That the appellant case was re-opened u/s 147 on the basis of information or documents received from searched proceedings u/s 132 on 03.01.2013 is against the provision of section 153C of the Income Tax Act, 1961 and therefore the re-opening itself is bad in law, illegal and void.

That the addition made of Rs. 23,00,000/- u/s 69 of the Act, on the basis of declaration of M/s Dev Procon Ltd. before the settlement commission, without giving opportunity of cross examination is against the principal of natural justice and hence it requires to be deleted.

That the Ld. A.O. has made addition made u/s 69 of Rs. 23,00,000/- and sustained by the NFAC without any documents on record or without any evidence is not valid in law and require to be deleted.

That the appellant has specifically denied for any cash payment, however the addition made on the basis of third party declaration without cross examination and without any other material on record is against the facts on record, and hence heavy addition made of Rs. 23,00,000/- required to be deleted.

That the appellant has not suppressed any facts nor concealed any Income, however the penalty initiated u/s 271(1)(c) and 271(1)(b) requires to be drop.

That the appellant has neither committed default of Sec. 210 nor made any default in payment of advance tax and therefore unwanted interest charged u/s 234A, 234B, 234C and 234D requires to be deleted.

Your appellant craves leave to add, amend, deleted or alter any of the grounds till the appeal is finally heard and decided.”

Brief facts of the case are that the assessee had purchased property/commercial office space on 10th December, 2014 from M/s. Dev Procon Ltd. for a consideration of Rs.43,11,743/- in which assessee had 50% share and accordingly, the assessee paid Rs.21.55 Lakhs. Thereafter, the case of the assessee was reopened u/s.147 r.w.s. 148 of the Act after four years from the end of the relevant assessment year, wherein, the AO alleged that a search action was carried out in the case of Dev Group on 03.01.2013. Pursuant to which, the Dev Group approached the Settlement Commission and offered certain income on account of on-money received from the sale of the properties in the building in question. The AO, on the basis of the same, observed that since the Dev Group had admitted to have received on-money on sale of ITA No. 1721/Ahd/2025 [Dushyantbhai Ranchhodbhai Patel vs. DCIT] A.Y. 2014-15 - 4 –

Before this Tribunal, Ld. AR appearing for the assessee, has submitted that the assessee had purchased property on 10.12.2014 whereas the search action in the case of Dev Group was carried out on 03.01.2013. This apparently showed that the assessee had purchased the property after the search action was carried out in the case of Dev Group, therefore, income offered on account of on-money by Dev Group on sale of property before the date of search or any transaction found during the course of search has no implication, so far as the transaction of purchase of property by the assessee is concerned. The Ld. AR has further submitted that the assessee was the 50% shareholder of the property and the AO was, even otherwise, not supposed to make the entire addition in the hands of the assessee alone.

The Ld. DR has fairly agreed that since in this case the property was purchased by the assessee after the search action, therefore, any material found in the search action in the case of Dev Group cannot be made basis for making addition in the hands of the assessee.

In view of this, impugned addition made by the AO is not sustainable in the eyes of law and same is accordingly deleted.

In the result, appeal filed by the assessee stands allowed.

अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंिधत आयकर आयुƠ / Concerned CIT 4. आयकर आयुƠ(अपील) / The CIT(A)- 5. ǒवभागीय Ĥितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file.