DCIT, CENTRAL CIRCLE-1(1), AHMEDABAD vs. DHARMESH KALIDAS PATEL, AHMEDABAD

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ITA 289/AHD/2021Status: DisposedITAT Ahmedabad30 January 2025AY 2017-184 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided to set aside the matter to the file of the Jurisdictional Assessing Officer. The reasoning was that additional documents, including bank statements and ITR acknowledgements for three unsecured creditors, were filed for the first time before the Tribunal. The Tribunal found it fit to allow the assessee's appeal for statistical purposes, directing the Assessing Officer to consider these new documents and verify them, along with the assessee's submission that major portions of the loans have already been repaid. The ratio is that when crucial additional evidence is produced before the Tribunal for the first time, and the Revenue consents to its consideration but requests verification, the matter can be remanded to the Assessing Officer. The Tribunal expressly left undecided the merits of the additions, as the appeal was allowed for statistical purposes.

What were the facts?

The case involves cross-appeals by the assessee, Dharmesh Kalidas Patel, and the Revenue against an order dated 12.08.2021 passed by the CIT(A)-11, Ahmedabad, concerning Assessment Year 2017-18. The original assessment order was passed by the DCIT, Central Circle 1(1), Ahmedabad, under Section 143(3) of the Income-tax Act, 1961. The Assessing Officer made an addition of Rs.1,77,35,750/- on account of unsecured loans, citing the assessee's failure to provide details of creditors. An additional sum of Rs.20,42,336/- representing agricultural income was also added as unexplained money under Section 69A. The CIT(A) confirmed additions for most cash creditors, except for three parties, after receiving two remand reports.

What were the issues?

1. Whether the addition of Rs.1,77,35,750/- as unsecured loans, and the confirmation of Rs.24,20,640/- by the CIT(A) in respect of three creditors, under Section 68 of the Income-tax Act, 1961, was legally sustainable, considering the details of cash creditors submitted. Assessee's contention: The assessee argued that the addition and confirmation were erroneous, as proper details of cash creditors were submitted. For the first time before the Tribunal, the assessee sought to admit additional evidence (bank statements and ITR acknowledgements) for three unsecured creditors, explaining their unavailability before the lower authorities. The assessee invoked Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963. Revenue's contention: The Revenue did not object to entertaining the additional documents but requested that the matter be set aside to the Assessing Officer for verification of these new documents.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 69A,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI T.R. SENTHIL KUMAR & SHRI MAKARAND V. MAHADEOKAR

For Appellant: Shri Mehul Thakker, CA
For Respondent: Shri Rignesh Das, Sr DR
Hearing: 28.01.2025Pronounced: 30.01.2025

Heard together (2 matters)

ITA No. 276/Ahd/2021
ITA No. 289/Ahd/2021

Read from the judgment's own cause title. This page is filed under one of them.

Assessment Year : 2017-18 The Dy. Commissioner of Dharmesh Kalidas Patel, Vs Income-tax, 8/A, Sankalp Apartment, Central Circle 1(1), Opp. Shraddha Petrol Pump, Ahmedabad Judges Bungalow Road, Bodakdev, Ahmedabad- 380054 [PAN: AAYPP 0258 P] अपीलाथ�/ (Appellant) �� यथ�/ (Respondent) Assessee by : Shri Mehul Thakker, CA Revenue by : Shri Rignesh Das, Sr DR सुनवाई क� तार�ख/Date of Hearing : 28.01.2025 घोषणा क� तार�ख /Date of Pronouncement : 30.01.2025 आदेश/O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER :

These cross-appeals are filed by the assessee and the Revenue as against the appellate order dated 12.08.2021 passed by the Ld. Commissioner of Income-tax (Appeals)-11, Ahmedabad, [in short “Ld. CIT(A)”], arising out of the assessment order dated 10.12.2019 passed u/s 143(3) of the Income-tax Act, 1961 (in short “the Act”), relating to the Assessment Year 2017-18.

& 289/Ahd/2021 Dharmesh Kalidas Patel Vs. DCIT (Cross) AY : 2017-18 2

2.

At the outset, Ld. Sr. DR, appearing for the Revenue, submitted that as per Form No.36, clause No.10, the tax effect in this appeal is Rs.55,46,468/- which is below Rs.60 lakhs as prescribed under the new CBDT Circular No. 09/2024 dated 17.09.2024. Following the same, the appeal filed by the Department is liable to be dismissed. Recording the same, the Department’s appeal in is hereby dismissed.

ITA No. 276/Ahd/2021 – Assessee’s appeal

3.

The brief facts of the case are that the assessee is an individual deriving income from house property business, capital gain and other sources. The assessee filed his original return of income on 31.10.2017 declaring total income of Rs.50,810/- for the year under consideration. The return was selected for scrutiny assessment. The Assessing Officer made addition on account of unsecured loans totaling to Rs.1,77,35,750/- from various parties on the ground that the assessee failed to provide the details of the creditors viz. names, address, PAN and ITR details. The Assessing Officer also made addition of Rs.20,42,336/- being the agricultural income, considering it as unexplained money u/s 69A of the Act, and demanded taxes thereon.

4.

On appeal before the Ld. CIT(A), major cash creditors’ accounts, except in the case of Krunal A. Vyas (Rs.1,50,000/-), Kalpesh R. Patel (Rs.10,00,000/-) and Sonal K. Patel (Rs.12,70,640/-), were confirmed by the Ld. CIT(A) after getting two remand reports from the Assessing Officer.

& 289/Ahd/2021 Dharmesh Kalidas Patel Vs. DCIT (Cross) AY : 2017-18 3 5. Aggrieved against the order of the Ld. CIT(A), the assessee is in appeal before us raising the following grounds of appeal:-

“1. Both the Ld. AO and Ld. CIT(A)-11, Ahmedabad erred in law and fact in making addition of Rs.1,77,35,750/- and CIT(A)-11, Ahmedabad is confirming the addition of Rs.24,20,640/- in case of three persons being the cash credit u/s 68 o the IT Act, without properly considering the details of cash creditors submitted to them. 2. The appellant craves leave to add, alter or delete any ground either before or in the course of hearing of the appeal.”

6.

During the course of hearing, the Ld. Counsel for the assessee filed a paper-book relating to three unsecured creditors wherein bank statements and ITR acknowledgements are filed for the first time before this Tribunal. The Ld. Counsel pleaded that the above crucial documents could not be produced before the Assessing Officer, since the creditors were not readily available to produce the above documents. Therefore, invoking Rule 29 of Income-tax (Appellate Tribunal) Rules, 1963, the Ld. Counsel for the assessee sought permission to entertain the additional evidences filed by the assessee.

7.

Ld. Sr. DR has no objection in entertaining the new additional documents; however, pleaded that the matter may be set aside to the file of the Assessing Officer for verification of the same.

8.

We have given out thoughtful consideration and perused the material available on record, including the additional documents filed by the assessee. Since the additional documents are filed for the first time before the Tribunal, we deem it fit to set aside the matter back to the file of the Jurisdictional Assessing Officer to consider the same and make assessment in accordance with law. The assessee also submitted before us that the major portion of loans have already been & 289/Ahd/2021 Dharmesh Kalidas Patel Vs. DCIT (Cross) AY : 2017-18 4 repaid by the assessee. Therefore, it is open for the Assessing Officer to verify the same and pass order in accordance with law. Thus, the appeal filed by the assessee is allowed for statistical purposes.

9.

In the result, the appeal filed by the Revenue is dismissed, whereas the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 30.01.2025 at Ahmedabad.

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