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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA
This appeal is filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)- 12, Ahmedabad (in short ‘the CIT(A)’), dated 28.11.2023 for the Assessment Year 2021-22.
The brief facts of the case are that the assessee is a political party and a search operation under Section 132 of the Income Tax Act, 1961 (in short ‘the Act’) was conducted on 02.02.2021. From the incriminating evidences found in the course of search, it transpired that the party’s bank accounts were utilized for the purpose of receiving funds in the form of donations and that the [ACIT vs. Kisan Party of India] A.Y. 2021-22 - 2 – donations were routed through layers of various dummy concerns and finally returned to the original donors either in form of cash or through banking channels. It was found that the total amount received in the bank accounts of the assesse as donations during the period relevant to A.Y. 2021-22 was Rs.2,50,39,97,162/-. The AO had made addition of this amount by treating the entire receipts in the bank accounts as income of the assessee. Further, an amount of Rs.5,35,72,646/- found from the bank account of the assessee was seized in the course of search operation. The AO had made protective addition of seized cash of Rs.5,35,72,646/- in the hands of the assessee and the substantive addition was made in the hands of one Shri Saumil K. Bhadiadra. The assessment was completed u/s.153A r.w.s. 144 of the Act on 31.03.2022 at total income of Rs.2,55,75,69,808/-.
Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which was decided vide the impugned order and the Ld. CIT(A) had allowed part relief to the assessee.
Now, the Revenue is in appeal before us. The following grounds have been taken by the Revenue in this appeal:
“1) "Whether in the facts and on the circumstances of the case, the Id.CIT(A) is correct in deleting the addition of Rs.5,35,72,646/- made on account of unexplained cash credits in the hands of assessee u/s. 68 r.w.s.115BBE of the Act?". 2). On the facts and in the circumstances of the case and in law the Ld. CIT(A) ought to have upheld the order of the A.O. 3). It is therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent.”
[ACIT vs. Kisan Party of India] A.Y. 2021-22 - 3 – 5. The only ground taken by the Revenue is against the deletion of addition of Rs.5,35,72,646/- in respect of seized cash. Shri Prateek Sharma, Ld. Sr. DR submitted that since the cash was found from the bank account of the assessee, the Ld. CIT(A) was not correct in deleting the addition made by the AO in this regard. No compliance was made on the part of the assessee.
We have gone through the order of the Ld. CIT(A) and considered the submission of the Revenue. The Ld. CIT(A) has given the following finding while deleting the addition of Rs.5,35,72,646/- in respect of seized cash:
“19.2.3 Further, I find that in this AY the AO has made an addition of Rs 5,35,72,646/-on protective basis in the hands of the appellant as unexplained cash credit u/s 68 r/w 115BBE. Corresponding substantive addition was made in the hands of Shri Bhadiadra. This corresponds to the amount found deposited in the State Bank of India A/c no. 39060072920 in the name of the appellant on 25/03/2023 and seized. The AO noted that the appellant has submitted that this amount is to be remitted to Shri Bhadiadra and does not belong to the appellant. This explanation was rejected by him. However, I find that this amount is part of the total deposit in the State Bank of India which has already been brought to tax in the hands of the appellant us 68 r/w 115DDE as Rs 19,37,62,858/- during AY 2020-21 & Rs 241,34,94,259/- for AY 2021-22 Without prejudice to the addition made in the hands of Shri Saumil Bhadiadra of this amount, addition of this amount again in the hands of Kisan Party of India is not justifiable as it is double taxation of same receipt. Hence addition of Rs 5,35,72,646/ is directed to be deleted. Ground of appeal
4 is partly allowed.”
7. The Ld. CIT(A) has allowed relief to the assessee for the reason that only protective addition was made in the hands of the assessee. The seized cash of Rs.5,35,72,646/- was added on substantive basis in the hands of Saumil Bhadiadra. Further, the AO had already made addition of Rs.2,50,39,97,162/- being the total amount received in the bank account as donations. The cash [ACIT vs. Kisan Party of India] A.Y. 2021-22 - 4 – of Rs.5,35,72,646/- lying in the bank account of the assessee was part of the total addition of Rs.250.39 crores separately made by the AO. Thus, the Ld. CIT(A) had rightly held that there was double addition in respect of the seized cash of Rs.5,35,72,646/-. The Revenue was unable to controvert this finding of the Ld. CIT(A). We, therefore, do not find any merit in the ground raised by the Revenue in this appeal. The Ld. CIT(A) has given his findings on correct appreciation of the facts of the case and, therefore, his order is upheld.
In the result, the appeal of the Revenue is dismissed.
This Order pronounced on 06/01/2025
Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 06/01/2025 S. K. SINHA True Copy आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent. 2. 3. संबं�धत आयकर आयु�त / Concerned CIT आयकर आयु�त(अपील) / The CIT(A)- 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,