DASHRATBHAI B. RAWAL,AHMEDABAD vs. THE ITO, WARD-7(1)(5), AHMEDABAD

The instant three appeals filed by the assessee are directed against all orders both dated 25.06.2019 passed by the learned Commissioner of Income Tax (Appeals) – 7, Ahmedabad arising out of the order dated 21.12.2018 passed by the Income Tax Officer, Ward 7(1)(5), Ahmedabad under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment to 1323/Ahd/2019 (Dashratbhai B. Rawal vs. ITO) Asst.Years.– 2011-12 TO 2013-14 - 2 – Years 2011-12 to 2013-14; respectively. Since, all the appeals relate to same assessee and the issues involved therein are identical, these are heard analogously and are being disposed of by a common order.

The brief facts leading to the case are that on the basis of a search carried out in the case of one Shri Vipul Vidur Bhatt and his other related entities on 05.02.2016 and the statement recorded under S.132(4) of the Act claimed to have been revealed that said Mr. Bhatt is an entry operator and maintained 347 bogus entities/companies, which were used by him in providing various bogus accommodation entries to various beneficiaries for commission. A notice under S. 148 of the Act was issued on 26.02.2018 to the assessee on the count that the name of his son Shri Darshan Dashrath Raval was found to be the beneficiary and taken Rs.2Lakhs as bogus entity to one Santoshima Tradelinks Ltd. during F.Y. 2010-11. Since, Shri Darshan Dashrath Raval was a minor, the amount in question was required to be clubbed under S.64 of the Act with his father, the appellant before us, in his return of income for A.Y. 2011-12. Ultimately, the said amount of Rs.2 Lakhs was treated as investment for providing accommodation entries to bogus entities as ‘income from undisclosed sources’ and added or clubbed to the amount in the income of the assessee under S.64 of the Act with reference to Section 68 of the Act, which was, in turn, confirmed by the learned CIT(A). Hence, the instant appeal before us.

We have heard the parties and also perused the relevant materials available on record.

The case of the assessee is this that the bank statement maintained with Vijaya Bank and State Bank of India, which was duly submitted before the to 1323/Ahd/2019 (Dashratbhai B. Rawal vs. ITO) Asst.Years.– 2011-12 TO 2013-14 - 3 – authorities below clearly demonstrate that the first bank account of his son was opened on 27.12.2013. Further that the son of the appellant who was a minor did not know any of the person mentioned in the notice under S.148 of the Act as accommodation entry operators. This particular fact was though brought to the notice of the authorities below, the same was not considered in its proper perspective. Further that the learned counsel appearing for the assessee has drawn our attention to a letter dated 08.05.2017 annexed at page no.4 of the paper book filed before us which shows the categorical statement made by the son of the assessee that he never filed the return of income neither made any transaction in the bank prior to 2014. Apart from that, it was specifically stated that he has applied for PAN Card only in the year 2016. Therefore, he did not have any PAN number or any source of income as has been alleged by the authorities below. We do not find any contrary submission by the learned DR or any finding to that effect by the authorities below. The further case made out by the assessee is that though the learned AO was requested to supply the details about the nature of transaction took place or any evidences or consideration received by the assessee or his son, no such concrete evidence of the transaction has been provided to the assessee except this statement made in the show cause notice and an extract of ledger found in search mentioning only debit amount against the name of son of the appellant.

After considering the entire aspects of the matter, we find that mainly mentioning only debit amount against the name of the son of the assessee in the ledger of the searched person does not tantamount to either investment or income unless that is supported with corroborative evidence by the authorities below. In fact, no such evidence is forthcoming from the Revenue in support of the addition made against the assessee’s son. More so, when the bank account has been only opened on 27.12.2013 and no such transaction was found therein, the addition cannot be said to be sustainable. We note that no clear finding to this effect by the Revenue are forthcoming from the order impugned before us which could justify the to 1323/Ahd/2019 (Dashratbhai B. Rawal vs. ITO) Asst.Years.– 2011-12 TO 2013-14 - 4 – same. Hence, with the above observations, we do not find any merit in the addition made by the authorities below. The same is hereby deleted.

In the result, the assessee’s appeal for A.Y. 2011-12 is allowed.

The grounds of appeal as argued by the Ld. AR in 1323/Ahd/2019 are identical to that of the issue already been dealt with by us in for A.Y. 2011-12 and in the absence of any changed circumstances the same shall apply mutatis mutandis. Hence, these grounds of appeal preferred by the assessee in ITA Nos.1322 & 1323/Ahd/2019 are allowed.

In the combined result, all captioned appeals of assessee are allowed.