DEPUTY COMMISSIONER OF INCOME -TAX, CENTRAL CIRCLE-1(2), AHMEDABAD, AHMEDABAD V. BANSIDHAR INFRACON LLP, AHMEDABAD

ITSSA 45/AHD/2025

AI Insights

The case involves the Deputy Commissioner of Income Tax, Central Circle-1(2), Ahmedabad as the appellant and Bansidhar Infracon LLP as the respondent. The dispute arose from a search and seizure operation under section 132 of the Income Tax Act, which led to the issuance of notices under section 153C for the assessment years 2014-15 to 2020-21. The Assessing Officer made substantial additions to the assessee's income based on alleged unexplained investments and expenditures, which were contested and partially quashed by the CIT(A) on jurisdictional and merit grounds. The Tribunal, referencing a similar case involving the same property, decided to restore the matter to the Assessing Officer for further verification of facts and appropriate action.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787548 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Appeal Filed On: 29-04-2025
• Other Referred Cases: ACIT v Shailesh Kantilal Mistry
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: BIREN SHAH
• Assessee Lawyers: DA RSI SUMAN RATNAM
• Keywords: Set aside; Opportunity of being heard; Unexplained expenditure; Unexplained investment; Document seized; Documents seized; TDS; Search and seizure; Loose papers; Initiation of penalty proceedings
• Section: 143(3); 132; 153A; 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER I.T(SS).A. No.45/Ahd/2025 (Assessment Year: 2018-19) Deputy Commissioner of Income Tax, Central Circle-1(2), Ahmedabad Vs. Bansidhar Infracon LLP, 14, Sanidhya Bunglows, Opp. Ashokvatika, Nr. Ekta Farm, Ahmedabad-380058 [PAN No.AASFB8084H] (Appellant) .. (Respondent) Appellant by : Shri Biren Shah, AR Respondent by: Dr. Darsi Suman Ratnam, CIT-DR Date of Hearing 17.11.2025 Date of Pronouncement 19.11.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Department against the order passed by the Ld. Commissioner of Income Tax (Appeals)-11, (in short “Ld. CIT(A)”), Ahmedabad vide order dated 04.02.2025 passed for A.Y. 2018-19. 2. The Department has taken the following grounds of appeal:- “i) In the facts and on the circumstances of the case, the Ld. CIT(A) has erred in quashing the assessment proceedings u/s.153C of the Act by invoking provision of sectio153C(3) of the Act by holding that the date of initiation of search would be considered as 21.10.2021, in view of first proviso of section 153C, grossly ignoring that this proviso is applicable only for the limited purpose of calculating the number of assessment years as per second proviso to subsection (1) of section 153A of the Act, and hence the decision is perverse and not in accordance with law. ii) The Ld. CIT(A) has erred in quashing the proceeding u/s.153C of the Act without considering the incriminating documents seized & satisfaction drawn by A.O. as per provision of section 153C of the Act. Printed from counselvise.com IT(SS)A No. 45/Ahd/2025 DCIT vs. Bansidhar Infracon LLP Asst.Year –2018-19 - 2– iii) In the facts and on the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made u/s.69B of the I T Act on account of unexplained investment of Rs.6,03,52,000/- without considering the seized material. iv) In the facts and on the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made u/s.69C of the I T Act on account of unexplained expenditure of Rs.10,01,760/- without considering the seized material and statement of Shri Suresh R Thakkar. v) The Revenue craves leave to add/alter/amend and/on substitute any or all of the grounds of appeal.” 3. The brief facts of the case are that the assessee is engaged in the business of construction. The assessee filed its return of income on 15.10.2018 declaring total income at NIL. The return was selected for scrutiny under CASS, and the Assessing Officer thereafter completed the assessment under section 143(3) of the Act on 10.02.2021 accepting the returned income. Subsequently, a search and seizure action under section 132 of the Act was conducted on 15.10.2019 in the case of one Shri Suresh Ranchhodbhai Thakkar, who was involved in land broking activities. During the search, certain documents and digital data were found and seized from the residence of Shri Thakkar. According to the Assessing Officer, those documents pertained to the assessee, and therefore satisfaction under section 153C was recorded for issuing notices for A.Y. 2014–15 to A.Y. 2020–21. For the year under consideration, notice under section 153C was issued on 25.10.2021 and the assessee filed a return on 08.04.2022 again declaring NIL income. The Assessing Officer thereafter issued notices and, after considering the material on record, passed an order under section 153C on 24.03.2023 making additions of Rs. 6,03,52,000/- under section 69B of the Act on account of alleged unexplained investment in land and Rs. 10,01,760/- under section 69C on account of alleged unexplained brokerage expenditure. The additions were based primarily on certain handwritten documents and WhatsApp images found at the premises of Shri Suresh Printed from counselvise.com IT(SS)A No. 45/Ahd/2025 DCIT vs. Bansidhar Infracon LLP Asst.Year –2018-19 - 3– Thakkar, as well as his statement recorded during the search. The Assessing Officer treated these seized documents as evidence showing a higher consideration for purchase of land and the Assessing Officer held that brokerage must also have been paid, though no direct evidence of any such payment by the assessee was brought on record. 4. The assessee carried the matter in appeal before the CIT(A) and challenged the jurisdiction of the Assessing Officer to issue notice under section 153C as well as the additions made on merits. The CIT(A) examined the jurisdictional issue first and noted that under the first proviso to section 153C of the Act, in the case of “other persons,” the date of receiving seized documents by the Assessing Officer of the non-searched person is treated as the “date of search.” It was found that the satisfaction note in the assessee’s case was recorded on 21.10.2021 and therefore, applying section 153C(3), which prohibits initiation of proceedings under section 153C for searches conducted on or after 01.04.2021, the CIT(A) held that the proceedings initiated against the assessee were invalid. On this legal ground, the CIT(A) held that the assessment was without jurisdiction and quashed the proceedings. Without prejudice to the jurisdictional finding, the CIT(A) also examined the additions on merits. The CIT(Appeals) observed that the Assessing Officer had relied solely on loose papers and WhatsApp images found from a third party, which did not contain any dates, signatures, or names, and were not corroborated by any independent evidence showing that the assessee had paid any amount over and above the documented consideration of Rs. 14 crores for the land. The CIT(A) noted that the assessee had submitted the registered sale deed, bank statements reflecting payments through banking channels, TDS details, and ledger accounts showing purchase of land at Rs. 14 crores, and that there was no evidence Printed from counselvise.com IT(SS)A No. 45/Ahd/2025 DCIT vs. Bansidhar Infracon LLP Asst.Year –2018-19 - 4– of any cash payment. The CIT(A) also noted that the Assessing Officer failed to provide any opportunity to the assessee to cross-examine Shri Suresh Thakkar, whose statement was relied upon, and held that the seized documents amounted to “dumb documents” with no evidentiary value. In view of these findings, the CIT(A) deleted the entire addition of Rs. 6,03,52,000/- under section 69B. With respect to the addition of Rs. 10,01,760/- under section 69C for alleged unexplained brokerage, the CIT(A) observed that the Assessing Officer had made the addition purely on assumptions by estimating brokerage at 0.5% of the alleged higher consideration, without bringing any evidence on record showing that brokerage was actually paid. Since the assessee had produced material showing that no brokerage was paid and the broker himself had confirmed that he had not received any commission, the CIT(A) deleted the addition. The grounds relating to levy of interest were held to be consequential and the ground regarding initiation of penalty proceedings was dismissed as premature. In the result, the CIT(A) partly allowed the appeal. 5. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. 6. Before us, the Counsel for the assessee submitted that the case of the assessee is directly covered by the decision of ACIT v Shailesh Kantilal Mistry in IT(SS)A No.42 and 43/Ahd/2025, which has been passed with respect to the same property, in which the present assessee is also a co-owner. Accordingly, it was submitted that since ITAT has in the aforementioned Ruling has given relief to co-owner of the same property which is the subject matter of the present appeal, and which decision has been rendered with respect to identical set of facts as the present case, relief may be given to the assessee accordingly. Printed from counselvise.com IT(SS)A No. 45/Ahd/2025 DCIT vs. Bansidhar Infracon LLP Asst.Year –2018-19 - 5– 7. In response, the Ld. DR placed reliance on the observations made by the Assessing Officer and Ld. CIT(Appeals) in their respective orders. 8. We have heard the rival contentions and perused the material on record. The Counsel for the assessee has relied upon the decision of the Co-ordinate Bench in ACIT v. Shailesh Kantilal Mistry in IT(SS)A Nos. 42 & 43/Ahd/2025, wherein the Ahmedabad Tribunal had occasion to examine additions made on account of alleged on-money transactions relating to the same property. In that case, the Tribunal held that the additions made under sections 69A, 69B and 69C could not be sustained as they were based solely on loose papers, WhatsApp images and rough unsigned notings recovered from third parties, without any corroborative evidence showing that the assessee had either received or paid any cash outside the books. The Tribunal also held that such loose papers were “dumb documents” and that statements of third parties, without cross- examination and without any supporting material, cannot constitute incriminating evidence. On these findings, the Tribunal deleted the additions in the hands of Shri Shailesh Kantilal Mistry. 9. In the present case, the Counsel for the assessee has submitted that the assessee is also a co-owner of the same property, and therefore similar relief should be granted. However, from the material on record, it is not coming out clearly whether the assessee before us is in fact a co-owner of the very same property along with Shri Shailesh Kantilal Mistry, as asserted by the Counsel. Since this foundational factual aspect has not been verified by the lower authorities, and since such verification is necessary before applying the ratio of the above decision, we consider it proper that this issue be examined afresh by the Assessing Officer. Printed from counselvise.com IT(SS)A No. 45/Ahd/2025 DCIT vs. Bansidhar Infracon LLP Asst.Year –2018-19 - 6– 10. Having regard to the totality of facts, the nature of the seized material, the reliance placed on the above judicial precedent, and the need for proper factual verification, we deem it appropriate to restore the matter to the file of the Assessing Officer for de-novo consideration. The Assessing Officer shall verify whether the assessee is indeed a co- owner of the same property referred to in the case of Shri Shailesh Kantilal Mistry. After carrying out such verification, the Assessing Officer may grant appropriate relief to the assessee strictly in accordance with law, after giving adequate opportunity of being heard. 11. Accordingly, the impugned order is set aside and the matter is restored to the file of the Assessing Officer with the above directions. 12. In the result, the appeal is allowed for statistical purposes. This Order pronounced in Open Court on 19/11/2025 Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 19/11/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 18.11.2025 2. Date on which the typed draft is placed before the Dictating Member 19.11.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S .11.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 19.11.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 19.11.2025 7. Date on which the file goes to the Bench Clerk 19.11.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "