DCIT, CIRCLE-2(1)(1), SURAT, SURAT V. 7 STAR DREAMS, SURAT

ITA 1288/SRT/2024

AI Insights

The case involves an appeal by the Deputy Commissioner of Income-tax against the order of the CIT(A) which had allowed the appeal of the assessee, 7 Star Dreams. The dispute originated from an assessment order passed under section 144 of the Income-tax Act, 1961 for the assessment year 2017-18, which was later revised under section 263, leading to a fresh assessment with additions on unexplained cash credits and discrepancies in creditors' confirmations. The CIT(A) allowed the assessee's appeal following the quashing of the revision order by the ITAT in a separate but related case. The Revenue's appeal to the ITAT contested the CIT(A)'s decision, which was based on the earlier ITAT's ruling that had quashed the revision order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473311 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Other Referred Cases: ITA No.95/SRT/2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAPNESH R SHETH
• Assessee Lawyers: RITESH MISHRA
• Keywords: Set aside; Unexplained cash credit; Revision of order
• Section: 144; 143(3); 250; 68

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1288/SRT/2024 Assessment Year: (2017-18) (Physical court hearing) Deputy Commissioner of Income-tax, Circle-2(1)(1) Surat, Room No.,612, Aayakar Bhawan, Majura Gate, Surat- 395 001 बनाम/ Vs. 7 Star Dreams 1001, World Trade Centre, Ring Road, Surat-395 002 èथायीलेखासं./जीआइआरसं./PAN/GIR No: AABFZ 2575 L (अपीलाथŎ/Appellant) (ŮȑथŎ /Respondent) िनधाŊįरती की ओर से /Appellant by Shri Sapnesh R Sheth, CA राजˢ की ओर से /Respondent by Shri Ritesh Mishra, CIT-DR सुनवाई की तारीख/Date of Hearing 11/03/2025 उद ्घोषणा की तारीख/Date of Pronouncement 24/03/2025 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the Revenue emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 22.10.2024 by the CIT(Appeals)/National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] for the assessment year (AY) 2017-18, which in turn arises out of assessment order passed by Assessing Officer (in short ‘AO’) u/s 143(3) r.w.s. 263 r.w.s 144B of the Act dated 27.03.2024. 2. At the outset, the Ld. AR of the assessee submitted that the AO had passed assessment order u/s 144 of the Act for AY 2017-18 on 23.12.2019 determining total income at Rs.4,71,75,090/- as against returned income of 2 ITA No1288/SRT/2024/AY.17-18 7 Star Dreams Rs.23,07,670/-. Subsequently, the Ld.PCIT invoked jurisdiction u/s 263 of the Act and passed order on 17.03.2022 setting aside the assessment order of AO with a direction to pass fresh assessment order on the issue of unexplained creditors of Rs.4,52,05,666/-. The AO, thereafter, passed order u/s 143(3) r.w.s. 263 r.w.s. 144B of the Act on 27.03.2023 by making additions of Rs.3,15,14,374/- and Rs.5,47,831/- on account of unexplained cash credit u/s 68 and u/s 41(1) of the Act being difference in the confirmation of parties and amount in the books of account of assessee respectively. The total income was determined at Rs.7,92,37,290/- as against the total income of Rs.4,71,75,090/- u/s 144 of the Act. Aggrieved by the order of AO assessee filed appeal before CIT(A) who allowed the appeal because the order u/s 263 dated 17.03.2022 was quashed by the ITAT in ITA No.95/SRT/2022 dated 30.03.2023. The Ld. AR submitted that the since the order of Ld.PCIT u/s 263 has been quashed by the Tribunal, the consequential orders passed by the AO and CIT(A) do not survive. 3. On the other hand, Ld.CIT-DR for the Revenue supported the order of lower authorities. 4. We have heard rival submissions of both the parties and perused the orders of the lower authorities. The original order passed by the AO dated u/s 144 dated 23.12.2019 was set aside by the Ld.PCIT u/s 263 of the Act dated 17.03.2022. The AO passed consequential order u/s 143(3) r.w.s. 263 r.w.s. 144B of the Act on 27.03.2023 by making additions of Rs.5,47,831/- and Rs.3,15,14,374/-. Against the order of AO, assessee filed appeal before CIT(A). 3 ITA No1288/SRT/2024/AY.17-18 7 Star Dreams The appellant also filed appeal against order of Ld.PCIT u/s 263 of the Act. The ITAT in its order ITA No.95/SRT/2022 dated 30.03.2023 quashed the order of Ld.PCIT. Relying on the above order of ITAT, the CIT(A) has allowed appeal of assessee because order u/s 263 was quashed by the Tribunal. We do not find any infirmity in the order of CIT(A) because there was no basis at all to make the addition in the consequential assessment order u/s 143(3) r.w.s. 263 r.w.s. 144B of the Act once the revision order u/s 263 of the Act itself has been quashed by the Tribunal. Therefore, the CIT(A) has rightly allowed the appeal of assessee. This ground of Revenue’s appeal is dismissed. 5. In the result, appeal of the Revenue is dismissed. Order pronounced under proviso to Rule 34 of ITAT Rules, 1963 on 24/03/2025 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) Æयाियक सदÖय/JUDICIAL MEMBER लेखा सदÖय/ ACCOUNTANT MEMBER सूरत /Surat Ǒदनांक/ Date: 24/03/2025 Dkp Outsourcing Sr.P.S* आदेश कì ÿितिलिप अúेिषत/ Copy of the order forwarded to :  अपीलाथê/ The Appellant  ÿÂयथê/ The Respondent  आयकर आयुĉ/ CIT  आयकर आयुĉ (अपील)/ The CIT(A)  िवभागीय ÿितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडª फाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार "