ITO, WARD-2(1)(3), AHMEDABAD vs. SHRI MUKESH N SHAH, AHMEDABAD

PER MS.SUCHITRA KAMBLE, JUDICIAL MEMBER

This appeal is filed by the Revenue against the order dated 24/12/2018 passed by the Commissioner of Income-tax (Appeals)-2, Ahmedabad [hereinafter referred to as “CIT(A)” in short] for Assessment Year (AY) 2010-11. 2. Grounds of appeal are as under:

“1. The Ld.CIT(A) has erred in law and on facts in restricting the protective addition to amount credited in the account of the assessee by Lunia Finlease Ltd. Asst.Year 2010-11

2

3 to notice u/s.148 of the Act, copy of audited books of accounts, bank details and copy of bank statements. After issuing reminder vide notice u/s.142(1) of the Act dated 24/08/2017, a show-cause notice u/s.142(1) dated 15/11/2017 was issued. The said notices were not complied by the assessee and, therefore, the Assessing Officer issued summons u/s.131 of the Act dated 24/11/2017 and served the same though affixture. Final show-cause notice dated 08/12/2017 was issued. The submission containing return of income filed on 15/12/2017 along with copy of computation of income and copy of financial statement in response to notice u/s.148 of the Act by the assessee. In the return of income, assessee has shown total income of Rs.7,63,520/- which includes the receipts as appearing in ITS data. The assessee further submitted letters dated 20/12/2017 and 21/12/2017, thereby taking a stand that he is just an introducer in the bank accounts and the transactions does not belong to him. The Assessing Officer observed that these transactions pertained to assessee as he acted as a person behind scene by becoming merely introducer in all the bank accounts to escape enquiry and litigation. Therefore, the Assessing Officer held that all the credit entries appearing in the bank accounts of the entities totalling to Rs.82,44,91,021/- should be added to his total income. The Assessing Officer held that all these entities; namely, M/s.Lunia Finlease Ltd., M/s.Shrichal Corporation and M/s.Ramdev Marketing have substantive additions in respect of credit entries in the respective bank accounts and, therefore, with a view to protect the interest of Revenue in assessee’s case, protective addition of Rs.82,44,91,021/- was made u/s.68 of the Act. Asst.Year 2010-11

“Sir

With reference to above subject, it is submitted that this office has tried it best to locate the case record of case record of Smt Tirupatiben H. Shah & Smt. Ushaben N. Shah for the A.Y. 2010-11 but exercise does not yield any significant result. The information in these two cases, as available with this office is given below:

Smt Tirupatiben H shah. Prop of Shrichal Corporation (BQRPS4757Q)

22 It is further informed to you that assessment case record of the A.Y. 2011-12 is found and in the case record order u/s.144 r.w.s. 147 dated 04.12.2018, available Asst.Year 2010-11

5 vide which addition of Rs.5,02,22,900/- for the unexplained credits in the bank account no 08060210000656 of the Uco Bank of the assessee was made. Moreover, penalty order u's 271F and 271(1)(c) of the act, are also available on the record. On going through 1TBA system, it is found that demands of above orders of A.Y. 2011-12 reflecting on the system.

Smt. Ushaben N Shah, Prop. of M/s Ramdev Marketing (BMPPS4956R)

6 Finlease Ltd. Shri Rajiv D.Shah is a neighbour of the assessee and both are residing in the same Apartments. The Ld.DR submitted that since there was no substantial addition in the other entities, the protective addition has to be confirmed by the CIT(A).

7 application filed by the said three Directors of the said companies. In case(s) of M/s.Shrichal Corporation and M/s. Ramdev Marketing, the same was applied for opening of bank accounts and PAN Card, Driving Licence and Election Card have been submitted for KYC documents. Shri Mukesh N. Shah, i.e. assessee has signed as introducer for opening the bank account only and the Assessing Officer, at no point of time, has pointed out that the sale amount was, in fact, of the assessee’s amount which is lying in these three accounts. The e-mail submitted by the Ld.DR at the time of hearing categorically mentions that the demand in case of M/s.Shrichal Corporation was reflected in the system for AY 2011-12 for unexplained credits in the bank account. As regards AY 2010-11 is concerned, no records were found. Similarly, in case of M/s.Ramdev Marketing no demand of the assessment was found, but this will not prove the case of the Revenue that the assessee is liable to the additions which are actually the additions relating to those two parties. The Department, at no point of time, has pointed out as to the credit entries appearing in all these three entities are belonging to the assessee and, therefore, protective addition cannot be held as substantive addition when the Department has not taken proper cognizance in the cases, where the substantive addition should have been done. The CIT(A) has categorically made the observation that the Assessing Officer has no evidence whatsoever that the accounts of these three companies belonged to assessee. In fact, where there was a doubt, the CIT(A) has categorically made protective addition to the extent of Rs.1,50,000/- on account of M/s.Lunia Finlease Ltd. Thus, there is no need to interfere with the finding of the CIT(A). The appeal of the Revenue is dismissed. Asst.Year 2010-11

Order pronounced in the Court on 21st February,2024 at Ahmedabad. (ANNAPURNA GUPTA) JUDICIAL MEMBER

Ahmedabad, Dated 21/02/2024

ट".सी.नायर, व."न.स./T.C. NAIR, Sr. PS

आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant

आदेशानुसार/ BY ORDER,

स"या"पत ""त ////

सहायक पंजीकार (Asstt.