ACIT CC 2(3) AHMEDBAD, AHMEDABAD V. MANAV ADHIKAR PARTY, MANINAGAR

ITSSA 25/AHD/2024

AI Insights

The case involves the Manav Adhikar Party, a political entity, which was subjected to a search under section 132 of the Income Tax Act, 1961. Following the search, substantial undisclosed receipts and unexplained money were identified, leading to additions in the income of the party and its officials. The primary legal contention revolved around the addition of Rs. 3,35,00,552/- as unexplained money under section 69A read with section 115BBE of the Act, which was contested by the Revenue after the CIT(A) deleted the addition, citing double taxation. The Tribunal's decision focused on the issue of double taxation and the proper application of tax laws concerning political parties and their financial disclosures.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23271 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus
• Section: 143(3); 153A; 68; 69; 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Makarant Vasant Mahadeokar, Accountant Member The ACIT, CC-2(3), Ahmedabad (Appellant) Vs Manav Adhikar Party 12 Swagat Complex, Rambaug, Ahmedabad Gujarat PAN: AAAGM0071Q (Respondent) Revenue Represented: Shri A.P. Singh, CIT-DR Assessee Represented: None (Written Submission filed) Date of hearing : 30-01-2025 Date of pronouncement : 25-02-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Revenue as against the appellate order dated 05.01.2024 passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad arising out of the assessment order passed under section 143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2021-22. IT(SS)A No: 25/Ahd/2024 Assessment Year: 2021-22 I.T.(SS)A No. 25/Ahd/2024 A.Y. 2021-22 Page No ACIT Vs. Manav Adhikar Party 2 2. Brief facts of the case is that the assessee is a Political Party established on 14-03-2014 having its registered office at Maninagar, Ahmedabad and Shri Ram Bhavan Ojha as its National President and his brother Shri Tribhavan Ramkalp Ojha as the National Secretary of the assessee party. There was a search action u/s. 132 of the Act on 02-02-2021 on the assessee and other political parties and charitable organizations. For the Asst. Year 2021-22, the assessee filed its belated return on 20-01-2022 declaring Nil Income. 3. On enquiries made by Investigation Wing, it came to knowledge that few of the unrecognized political parties registered with Election Commission of India, without carrying out any kind of political activity, but were actively engaged through its key persons in aiding and abetting other persons to evade taxes, by returning the amount received as donation, back to the original donors in cash or through bank who claimed such amount as deduction u/s. 80GGB (for non-individuals) and u/s. 80GGC (for individuals) of the Act in the return of income whereas the key persons earned commission in the process. 3.1. The assessee being a political party is also involved in such bogus donations scam. Hence search action carried out in the premises of the assessee. The National President of the assessee party categorically admitted in his statement u/s. 132(4) of the Act that the assessee is involved in providing accommodation entry and no actual political activities are carried out by it. Therefore the entire receipts made in the bank accounts of Rs. 103,44,14,314/- I.T.(SS)A No. 25/Ahd/2024 A.Y. 2021-22 Page No ACIT Vs. Manav Adhikar Party 3 being treated as undisclosed receipts and added to the total income of the assessee. 3.2. Further during the course of search, unexplained money of Rs. 3,35,00,552/- was found in the bank accounts and a sum of Rs. 2,34,81,522/- was seized. The assessee explained this money is payable to Shri Tribhavan Ojha and does not belong to the assessee party. Therefore the Assessing Officer made protective addition in the hands of the assessee of Rs.3,35,00,552/- u/s. 69A r.w.s. 115BBE of the Act. 4. Aggrieved against the additions, assessee filed an appeal before Ld. CIT(A) who has confirmed the additions of Rs. 103,44,14,314/- as the assessee is not eligible u/s. 13A of the Act and all the receipts deposited in bank accounts are taxable in its entirety. As far as the protective addition of Rs. 3,35,00,552/-, the Ld. CIT(A) held that this amount is part of the total deposit in the State Bank of India account which has already been brought to tax in the hands of the assessee. Therefore without prejudice to the addition made in the hand of Shri Tribhavan Ojha of this amount, addition again in the hands of the assessee party is not justifiable, as it amounts to double taxation of the same receipt and therefore directed to delete the addition. Thus Ld. CIT(A) partly allowed the assessee appeal. 5. Aggrieved against the appellate order, the Revenue is in appeal before us raising the solitary ground: I.T.(SS)A No. 25/Ahd/2024 A.Y. 2021-22 Page No ACIT Vs. Manav Adhikar Party 4 1. Whether in the facts and on the circumstances of the case and in law, the Ld. CIT(A) is correct in deleting the addition made of Rs. 3,35,00,552/- on account of unexplained money u/s. 69A r.w.s. 115BBE on Protective basis, without considering the facts that, the substantive addition was not accepted by Shri Tribhavan Ojha? 6. The solitary ground taken by the Revenue is the deletion of addition of Rs. 3,35,00,552/- made on protective basis. Ld. Sr. D.R. submitted that Shri Tribhavan Ojha has not accepted the substantive addition made in his hands, therefore Ld. CIT(A) is not correct in deleting the above protective addition in the hands of the assessee. 7. None appeared on behalf of the assessee but a written submission was filed. We have gone through the submissions of both parties and considered order passed by Ld. CIT(A). The findings of Ld. CIT(A) are as follows: “9.1 I find that in the AY 2021-22, the AO has made an addition of Rs3,35,00,552/-on protective basis in the hands of the appellant as unexplained cash credit u/s 69 A r/w 115BBE. Corresponding substantive addition was made in the hands of Shri Tribhavan Ojha. This corresponds to the amount found deposited in the State Bank of India A/c no. 37048853564 (Rs. 2,43,16,367) and Central Bank of India A/c No. 3748492456 (Rs. 91,84,155) held in the name of the appellant on 24& 25/03/2023 and seized. The AO noted that the appellant has submitted that this amount is to be remitted to Shri Tribhavan Ojha and does not belong to the appellant. This explanation was rejected by him as if the said amount belonged to Shri Tribhavan Ojha, he ought to have declared it in his return of income filed for AY 2021-22 which was not done. 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 u/s 68 r/w 115BBE as under: Amount received in the bank accounts a donations (in Rs.) A.Y. Bank of Baroda A/c No. 16550200000350 State Bank of India A/c No. 37048853564 Central Bank of India A/c No. 3748492456 Total of the Year (in Rs.) I.T.(SS)A No. 25/Ahd/2024 A.Y. 2021-22 Page No ACIT Vs. Manav Adhikar Party 5 2015-16 15,40,000 0 0 15,40,000 2016-17 31,15,32,643 0 0 31,15,32,643 2017-18 56,36,10,440 0 0 56,36,10,440 2018-19 61,75,95,281 26,27,19,626 0 88,0314,907 2019-20 39,34,36,800 113,31,96,612 0 153,17,96,478 2020-21 Account closed 139,39,52,505 2,17,22,621 141,51,65,126 2021-22 Account closed 94,97,04,299 8,47,10,015 103,44,14,314 Total 188,77,19,854 382,14,73,533 10,87,37,636 573,68,33,908 9.2 Therefore, without prejudice to the addition made in the hands of Shri Tribhavan Ojha of this amount, addition of this amount again in the hands of the appellant Party is/not justifiable as it is double taxation of same receipt. Hence addition of 3,35,00,552/- is directed to be deleted. Ground of appeal 4 is allowed.” 8. The Ld. CIT(A) deleted the above addition since the above amount of Rs. 3.35 crores is part of the total deposit in the State Bank of India account which has already brought to tax in the hands of the assessee. Further this amount is being substantially added in the hands of Shri Tribhavan Ojha and therefore addition of this amount again in the hands of the assessee will amount to double taxation, therefore directed the Ld. A.O. to delete the above addition. We do not find any infirmity in the direction given by Ld. CIT(A). Thus Ld. CIT(A) has rightly held that there was double addition of the amount of Rs. 3.35 crorers. The Revenue was unable to contravent this findings of Ld. CIT(A). Therefore we do not find any merit in the ground raised by the Revenue. Therefore the findings arrived by ld. CIT(A) does not require any interference. I.T.(SS)A No. 25/Ahd/2024 A.Y. 2021-22 Page No ACIT Vs. Manav Adhikar Party 6 9. In the result, the appeal filed by the Revenue is deserves to be dismissed. Order pronounced in the open court on 25 -02-2025 Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 25/02/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "