ACIT CIRCLE 1RANCHI, RANCHI V. PANCHWATI PROMOTERS PVT. LTD, RANCHI

ITA 494/RAN/2024

AI Insights

The case revolves around an appeal by the revenue against the order of the ld CIT(A), which had deleted the addition made by the Assessing Officer regarding an amount of Rs.3,96,39,000 shown as 'advance against land' under 'other current liabilities' in the assessee's balance sheet. The Assessing Officer had initially treated this amount as unexplained cash credit, suspecting the transaction to be bogus. However, the ld CIT(A) found that the assessee had substantiated the transaction, leading to the deletion of the addition. The revenue challenged this decision, arguing that the Assessing Officer had sufficient grounds to doubt the transaction, as evidenced by the unsubstantiated explanation from JDPL during the notice under section 133(6) of the Income Tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717076 (ITAT-RANCHI)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 23-12-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT DATTA
• Assessee Lawyers: R.R. MITTAL
• Keywords: Unexplained cash credit; Bogus

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE S/ RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ACIT, Circle-1, Ranchi (Appellant Per Bench This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated 14/10071101 for the assessment year 2. Shri Rajat Datta, ld CIT DR appeared for the revenue and Shri R.R.Mittal, ld AR 3. It was the submission by ld CIT DR that the assessee had shown an amount of Rs.3,96,39,000/ head “other current liabilities” in its balance sheet. The Assessing IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI S/HRI GEORGE MATHAN, JUDICIAL MEMBER RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ITA No.494/RAN/2024 Assessment Year: 2014-15 1, Ranchi Vs. Panchwati Promoters Pvt Ltd., Office No.401, Panchwati Plaza, Kuchery Road, Ranchi PAN/GIR No.AADCP 5863 C (Appellant) .. ( Respondent Assessee by : Shri R.R.Mittal, Adv Revenue by : Shri Rajat Datta, CIT DR Date of Hearing : 19/08/202 Date of Pronouncement : 19/08/202 O R D E R This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated 24.2024 in Appeal No.CIT(A), for the assessment year 2014-15. Rajat Datta, ld CIT DR appeared for the revenue and Shri ld AR appeared for the assessee. It was the submission by ld CIT DR that the assessee had shown an amount of Rs.3,96,39,000/- as “advance against land” under the head “other current liabilities” in its balance sheet. The Assessing P a g e 1 | 7 IN THE INCOME TAX APPELLATE TRIBUNAL, HRI GEORGE MATHAN, JUDICIAL MEMBER AND RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER Panchwati Promoters Pvt Ltd., Office No.401, Panchwati Plaza, Kuchery Road, Ranchi AADCP 5863 C Respondent) : Shri Rajat Datta, CIT DR /2025 /2025 This is an appeal filed by the assessee against the order of the ld in Appeal No.CIT(A),NFAC/2013- Rajat Datta, ld CIT DR appeared for the revenue and Shri It was the submission by ld CIT DR that the assessee had shown as “advance against land” under the head “other current liabilities” in its balance sheet. The Assessing Printed from counselvise.com ITA No.494/RAN/2024 Assessment Year: 2014-15 P a g e 2 | 7 Officer doubted the transaction and had reopened the assessment. It was the submission that the assessee was asked to explain the said amount of Rs.3,96,39,000/-. It was the submission that the amount of Rs.3,96,39,000/- shown in the balance sheet represented the amount of Rs.89,30,000/- received by the assessee against the alleged sale agreement entered into by the assessee with M/s. Jagran Dealers Private Limited (in short ‘JDPL’). The said advance was allegedly for the transaction of the sale of certain lands held by the assessee. The balance of Rs.3,07,00,000/- was received during the impugned assessment year. The Assessing Officer after examining the evidences came to the conclusion that the transaction was bogus and the amount shown in the assessee’s balance sheet was treated as unexplained cash credit in the hands of the assessee. It was the submission that the ld CIT(A) has deleted the addition by holding that the assessee has proved the transaction. The ld CIT DR drew our attention to page 105 of the order of the ld CIT(A), NFAC to say that the ld CIT(A) had erred in holding that the Assessing Officer had not sought financial information from JDPL. It was the submission that the Assessing Officer had issued notice u/s.133(6) of the Act to M/s. JDPL and as the explanation given was unsubstantiated, the addition had been made. It was the prayer that the order of the ld CIT(A) be reversed and that of the AO be restored. Printed from counselvise.com ITA No.494/RAN/2024 Assessment Year: 2014-15 P a g e 3 | 7 4. In reply, ld AR of the assessee submitted that after the completion of assessment u/s.143(3) in the case of the assessee, the reopening proceedings has also been initiated in the case of JDPL and same has been dropped. The ld AR has placed the copy of order u/s.148A(d)of the Act, in the case of JDPL, which reads as follows: Printed from counselvise.com ITA No.494/RAN/2024 Assessment Year: 2014-15 P a g e 4 | 7 Printed from counselvise.com ITA No.494/RAN/2024 Assessment Year: 2014-15 P a g e 5 | 7 5. It was the submission that the JDPL is a group company of the assessee. It was the submission that the brother of the Director of the assessee was the Director in JDPL. There were no outsiders. It was also the submission that JDPL is a dealer in the land business. The assessee had entered into an agreement for the sale of land owned by the assessee to JDPL on 22.3.2013. The assessee has received the funds from JDPL as a consequence of the said agreement. However, as the transaction could not go through on account of certain defects in the land, the agreement was cancelled on 10.4.2016 after returning the entire advance during the assessment year 2015-16. It was the submission that the assessee had also categorically showed that the advances received were through banking channel and there was no cash transaction whatsoever with JDPL. It was the submission that the fact that the reopening in the case of JDPL had also been dropped clearly shows that the order of the ld CIT(A) is liable to be upheld. 6. We have considered the rival submissions. A perusal of the assessment order most specifically at pages 27 & 28 shows that the advances have been paid by JDPL to the assessee through banking channel and this information was before the Assessing Officer. Further, a perusal of the assessment order clearly shows that even the balance sheet was before the Assessing Officer in respect of JDPL, which is shown at page 25 of PB. A perusal of the reopening proceedings, which have been dropped in the Printed from counselvise.com ITA No.494/RAN/2024 Assessment Year: 2014-15 P a g e 6 | 7 case of JDPL also shows that the JDPL had adequate source for making the payment. A perusal of the order of the ld CIT(A) most specifically at pages 109 to 111 shows that the ld CIT(A) has examined the creditworthiness of JDPL and considered the evidences provided by the assessee. Ld CIT(A) NFAC has considered all these evidences in comparison with various case laws, which have been discussed in his order. It is only after the examination of all these evidences that the ld CIT(A) has deleted the addition. The revenue has not been able to dislodge any of the findings of facts as has been recorded by the ld CIT(A). Hence, we find no error in the order of the ld CIT(A) which calls for any interference and, accordingly, we uphold the same. 7. In the result, appeal of the revenue stands dismissed. Order dictated and pronounced in the open court on 19/08/2025. Sd/- sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi ; Dated 19/08/2025 B.K.Parida, SPS (OS) Printed from counselvise.com ITA No.494/RAN/2024 Assessment Year: 2014-15 P a g e 7 | 7 Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Ranchi 1. The Appellant : ACIT, Circle-1, Ranchi 2. The Respondent: Panchwati Promoters Pvt Ltd., Office No.401, Panchwati Plaza, Kuchery Road, Ranchi 3. The CIT(A)- NFAC, Delhi 4. Pr.CIT, Ranchi 5. DR, ITAT, Ranchi 6. Guard file. //True Copy// Printed from counselvise.com "