INCOME TAX OFFICER , AHMEDABAD vs. KETU MADHUKANT SHETH, AHMEDABAD

ORDER \nPER MAKARAND V. MAHADEOKAR, AM:\nThe Revenue has filed an appeal against the order of the Commissioner\nof Income Tax (Appeals)-13, Ahmedabad [hereinafter referred to as\n“CIT(A)"] dated 16.02.2024 for Assessment Year (AY) 2011-12, challenging\nthe deletion of additions made by the Assessing Officer [hereinafter referred\nto as “AO"] under Section 143(3) read with Section 147 of the Income Tax Act,\n1961 [hereinafter referred to as “The Act”].\n\n2. The assessee has also filed a cross-objection (CO) challenging the\nmaintainability of the Revenue's appeal based on CBDT Circular No.17/2019\ndated 08.08.2019 and Circular No.5/2024 dated 15.03.2024 and further\nsupporting the CIT(A)'s decision on the merits.\n\n3. The Revenue, in its appeal, challenges the deletion of additions made\nby the AO, contending that the CIT(A) erred in deleting the addition of\nRs.37,79,452/- towards unexplained investment in shares of Vax Housing\nFinance Co. Ltd. (VHFCL), which was allegedly involved in accommodation\nentries. Further, the Revenue disputes the deletion of Rs.51,30,000/- treated\nas unexplained cash credits under Section 68 of the Act, arguing that the\nassessee failed to establish the creditworthiness of lenders. Additionally, the\nRevenue asserts that the CIT(A) wrongly quashed the reassessment\nproceedings without considering the merits of the case.\n\n4. The assessee, in his cross-objection, primarily contends that the\nRevenue's appeal is not maintainable as the tax effect is below the threshold\nprescribed under CBDT Circular No. 17/2019, and the case does not fall\nwithin the exceptions outlined in CBDT Circular No. 5/2024. The assessee\nfurther argues that the AO's additions were not related to bogus LTCG/STCL\nthrough penny stocks and, therefore, do not qualify as an organized tax\nevation case under the CBDT exceptions. On merits, the assessee asserts that\nthe CIT(A) correctly deleted the additions, as the AO failed to substantiate\nthe assessee's ownership of the shares and did not conduct proper inquiries\nregarding the unsecured loans, making the additions unsustainable.\n\n5. During the course of the hearing before us, the assessee submitted an\napplication requesting withdrawal of the appeal, as he has opted for the\nDirect Tax Vivad Se Vishwas (DTVSV) Scheme, 2024.\n\n5.