DCIT, CC-2, JAIPUR, JAIPUR V. M/S. F S HOUSING PVT LTD., JAIPUR

ITA 287/JPR/2025

AI Insights

The case involves the Revenue Department appealing against the order of the Learned CIT(A), which had partly allowed the appeal of the assessee, M/s F S Housing Pvt. Ltd., against the assessment order for the year 2018-19. The assessment was based on findings from a search and seizure operation under section 132 and survey under section 133A of the Act, conducted on members of the Kiran Fine Jewellers Group, of which the assessee was claimed to be a part. The Assessing Officer had added certain amounts to the assessee's income, treating them as unexplained cash credits and unexplained expenditures related to sham transactions with a shell company, M/s Gemini Commerce Pvt. Ltd. The department argued that the case fell under exceptions to the monetary threshold for filing appeals, citing the seriousness of the additions made under sections 68 and 69C of the Act. However, the court dismissed the appeal as infructuous due to the initiation of separate proceedings under section 148.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712363 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITA RINES H; .
• Assessee Lawyers: ZEEBA MOHAMMADI
• Keywords: Unexplained cash credit; Unexplained expenditure; Income from undisclosed sources; Tax effect; Sham transactions; Search and seizure; Accommodation entries; Bogus
• Section: 148; 143(3); 132; 68; 69C; 133A

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A-Bench” JAIPUR Jh xxu xks;y] ys[kk lnL; ,oa Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI GAGAN GOYAL, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 287/JPR/2025 fu/kZkj.k o\"kZ@Assessment Year : 2018-19 Dy. Commissioner of Income Tax, Central Circle-2, Jaipur. cuke Vs. M/s F S Housing Pvt. Ltd. Plot No. A-4, Airport Enclave Durgapura, Tonk Road, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AARCS4919E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assessee by : Ms Zeeba Mohammadi, C.A. jktLo dh vksjls@Revenue by: Mrs. Anita Rinesh, JCIT-Sr.-DR lquokbZ dh rkjh[k@Date of Hearing : 28/07/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 30/07/2025 vkns'k@ORDER Per: NARINDER KUMAR, JUDICIAL MEMBER . Revenue-department has challenged order dated 27.12.2024 passed by Learned CIT(A), whereby the appeal filed by the assessee challenging assessment order dated 28.12.2019 passed u/s 143(3) r.w.s. 153C of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), relating to the Printed from counselvise.com 2 ITA No. 287/JPR/2025 M/s F S Housing Pvt. Ltd., Jaipur. assessment year 2018-19, has been partly allowed, for the reasons recorded therein. By way of the above said assessment order dated 28.12.2019, total income of the assessee was computed as under:- Loss declared in return of income 15,93,073 Add: as per para 6, supra (taxable at the rate of 60% as provision u/s 115BBE) 4,40,240 Add: as above para 7, supra (taxable at the rate of 60% as provision u/s 115BBE) 1100 Add: as per para 8, supra (taxable at the rate of 60% as provision u/s 115BBE) 4,49,484 Total income (loss cannot be setoff against the income determined u/s 68 & 69C as per provision of 115BBE and loss so claimed in return is allowed to carried forward) 890824 2. The assessment proceedings were initiated after search and seizure action u/s 132 of the Act, and/ or survey action u/s 133A of the Act , carried out by the Income tax Department on the members of Kiran Fine Jewellers Group on 02.08.2017. As claimed by the department, the assessee is one of the members of the said group. 3. On completion of the assessment proceedings, the Assessing Officer arrived at the following conclusion:- “In view of the above discussion and fact brought on record with the evidence it is evident that that M/s Gemini Commerce Pvt. Ltd. is a bogus/shell Company, and Printed from counselvise.com 3 ITA No. 287/JPR/2025 M/s F S Housing Pvt. Ltd., Jaipur. not involved any business activity. The assessee company has made sham transaction of Rs. 440240/- with a shell company M/s Gemini Commerce Pvt. Ltd. under grab of unsecured loan to introduced his unaccounted income which is held unexplained cash credit u/s 68 of the I.T. Act and added back to the total income of the assessee and taxable at the rate of 60% as provision u/s 115BBE Penalty proceedings u/s 271AAC(1) of the Act is initiated separately for as income determined includes income referred to section 68 of the Act. Addition of Rs. 440240/- 7. The fact is also unearthed during the course of investigation that the beneficiaries have also paid commission @ 0.25% on acquiring accommodation entries. Therefore, it is justifiable that commission paid @0.25% which computes at Rs. 1100/- are treated as unexplained expenditure for acquiring accommodation entry which is added to the total income u/s 69C of the I.T. Act in the hands of assessee for the year under consideration and taxable at the rate of 60% as provision u/s 115BBE. Penalty proceedings u/s 271AAC(1) of the Act is initiated separately for as income determined includes income referred to section 69C of the Act. Addition of Rs. 1100/- 8. Further, the assesee has shown interest expenditure of Rs. 449484/- on account of the unsecured loan purported to be received from M/s Gemmi Commerce Pvt. Ltd. which has been establish as shell company and the interest expenditure is a sham transaction which is held as unexplained expenditure u/s 69C of the I.T. Act and added back to the total income of the assessee and taxable at the rate of 60% as provision u/s 115BBE Penalty proceedings u/s 271AAC(1) of the Act is initiated separately for as income determined includes income referred to section 69C of the Act. Addition of Rs. 449484/-“ 4. Argument heard. File perused. Printed from counselvise.com 4 ITA No. 287/JPR/2025 M/s F S Housing Pvt. Ltd., Jaipur. 5. Ld. AR for the appellant has submitted that present appeal filed by the department deserves to be dismissed as disputed tax effect comes to Rs. 6,88,159/-, which is below the prescribed mandatory threshold. In this regard, Ld. AR for the appellant has relied on circular No. 9/2024, dated 17.09.2024, whereby mandatory limits for filing appeals by the department has been enhanced to Rs. 60 lakhs. In other words, as per submission of Ld. AR for the appellant the tax effect being less than Rs. 60 lakhs, this appeal deserved to be dismissed, being not maintainable. 6. On the other hand, Ld. DR for the department has submitted that present appeal is covered by one of the exceptions, one of the additions having been made due to the reasons that the assessee company made sham transactions with M/s Gemini Commerce Pvt. Ltd., a wholly bogus company, under the garb of unsecured loan, with intent to introduce its unaccounted income, which remained explained and attracted provisions of Section 68 of the Act. 7. However, Ld. AR for the department has candidly submitted that as per instruction from the department, the department has already initiated proceedings against the assessee u/s 148 of the Act. Printed from counselvise.com 5 ITA No. 287/JPR/2025 M/s F S Housing Pvt. Ltd., Jaipur. Result 8. In view of the above submission, made by Ld. DR for the department regarding initiation of proceedings u/s 148 of the Act, we find that present appeal as regards the assessment under section 143(3) r.w.s. 153C has become infructuous. Consequently, this appeal filed by the department is hereby dismissed as having become infructuous. File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 30/07/2025. Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 30/07/2025 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- DCIT, Central Circle-2, Jaipur. 2. izR;FkhZ@ The Respondent- M/s F S Housing Pvt. Ltd., Jaipur. 3. vk;dj vk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZ QkbZy@ Guard File ITA No. 287/JPR/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar Printed from counselvise.com "