DEPUTY COMMISSIONER OF INCOME TAX , VADODARA V. DIYA ASSOCIATES, VADODARA

ITA 927/AHD/2024

AI Insights

The case involves the Deputy Commissioner of Income Tax, Vadodara, as the appellant, and Diya Associates, a real estate development firm, as the respondent. The dispute arose from a survey conducted under Section 133A of the Income-tax Act, 1961, where the assessee admitted to undisclosed income. Initially, the assessee disclosed Rs.2,72,12,500 during the survey but later reported only Rs.72,12,500 in the tax return, leading the Assessing Officer to add Rs.2 crores to the total income. The CIT(A) later allowed the assessee's appeal, leading to the Revenue's appeal to the Tribunal. The Tribunal's decision focused on the lack of material evidence to support the additional income claim and the comparative progress of the assessee's projects with others.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 771836 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2014-2015
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: MANISH J SHAH
• Keywords: Income from undisclosed sources; Retraction
• Section: 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No.927/Ahd/2024 (Assessment Year: 2014-15) The Deputy Commissioner of Income Tax, Vadodara. Vs. Diya Associates, Vedant Vishram Jambua, Vadodara-390014. [PAN :AAIFD6885 C] (Appellant) .. (Respondent) Appellant by : Shri Abhijit, Sr. DR Respondent by: Shri Manish J Shah with Shri Rushin Patel, ARs Date of Hearing 14.08.2025 Date of Pronouncement 25.08.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal is filed by the Revenue against the appellate order dated 06.03.2004 passed by the Learned Commissioner of Income Tax (Appeals), Ahmedabad, under Section 250 of the Income-tax Act, 1961, relating to the Assessment Year 2014-15. 2. The Revenue has raised the following grounds of appeals: 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in directing the Assessing Officer to delete the addition made of Rs.2,00,00,000/- being unaccounted income disclosed during the survey in the statement recorded on oath without appreciating the fact that admission of undisclosed income by the assessee is based on the evidences gathered during the course of survey proceedings? 2. Whether on the facts and in the circumstances of the case and in , the Ld. CIT(A) is justified in directing the Assessing Officer to delete the addition made of Rs.2,00,00,000/- being unaccounted income disclosed during the survey in the statement recorded on oath without appreciating the fact the Printed from counselvise.com ITA No. 927/Ahd/2024 DCIT Vs. Diya Associates Asst. Year : 2014-15 - 2– retraction from the disclosure while filing return of income is without any corroborative material? 3. The appellant craves leaves to add, modify, amend or alter any grounds of appeal at the time of, or before, the hearing of appeal.” 3. The assessee is engaged in the business of Real Estate Development and Constructions of residential/commercial complexes. The total turnover of the assessee was Rs.4.11 crores and other income of Rs.73,17,252/- has been credited to P&L A/c. The net profit declared by the assessee was Rs.1,02,83,800/-. During the survey conducted u/s 133A of the Act, the assessee admitted undisclosed income to the tune of Rs.2,72,12,500/-, whereas in the return of income the assessee has disclosed Rs.72,12,500/- as undisclosed income. Since the undisclosed income of remaining Rs.2 crores has not been offered to tax in the return of income, the Assessing Officer, based on the statements recorded during the survey, made addition of Rs.2 crores to the total income. 4. Aggrieved by the order of the Assessing Officer, the Assessee filed appeal before the Ld. CIT(A) who allowed the appeal of the assessee on the following grounds:- • Survey has been conducted on 11 firms, managed by the same partners • Total amount of Rs.25.52 crores has been disclosed by Shri Nikhil Gajjar and N.G. Patel during the survey which includes disclosure of Rs.2.72 crores on account of the assessee firm which is one among 11 other firms. • The disclosure in all other firms has been duly honoured and taxes have been paid by the respective firms. • The reason for retraction in the assessee firm was that the project was in the initial state of construction and meager sales were booked. 5. Aggrieved by the order of the Ld. CIT(A), the Revenue filed appeal before the Tribunal. Printed from counselvise.com ITA No. 927/Ahd/2024 DCIT Vs. Diya Associates Asst. Year : 2014-15 - 3– 6. Before us, the Ld. DR relied on the order of the Assessing Officer and the Ld. AR supported the order of the Ld. CIT(A). 7. We have heard the rival contentions and perused the material available on record. We find that there is no material found and impounded by the Revenue Authorities with regard to the disclosure made in the case of the assessee-firm. The partners have disclosed approximately Rs. 23 crores in other 10 firms wherein survey has been conducted along with the assessee-firm. The disclosure was honoured based on completion of the projects and the work-in- progress. The project undertaken by the assessee consists of 12 towers, consisting of 146 one BHK flats and 84 two BHK flats and 5 HK flats - a total of 235 flats. As on the date of survey, the assessee-firm has booked 34 - one BHK flats costing Rs.9.5 lakhs each, and 21 – two BHK flats – costing Rs.14.51 lakhs each. The Ld. CIT(A) held that only 14.81% of the work has been completed in the present project, whereas in other projects undertaken by the other firms substantial work has been done and hence disclosure in the 10 firms to the tune of Rs.23 crores has been rightly honoured and taxes paid by the assessee. After examining the facts, the Ld. CIT(A) rightly concluded that the disclosure of Rs.72,12,500/- out of Rs.2,72,12,500/- is an acceptable proposition. Since the decision of the Ld. CIT(A) is based on complete examination of the material on record, statements of the partners, booking of the flats, work-in-progress, disclosure of Rs.23 crores of other entities, we hereby affirm the decision of the Ld. CIT(A). 8. In the result, the appeal of the Revenue is dismissed. The order is pronounced in the open Court on 25.08.2025. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 25.08.2025 MV Printed from counselvise.com ITA No. 927/Ahd/2024 DCIT Vs. Diya Associates Asst. Year : 2014-15 - 4– आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 18.08.2025 2. Date on which the typed draft is placed before the Dictating Member 19.08.2025 3. Other Member 20.08.2025 4. Date on which the approved draft comes to the Sr.P.S./P.S 22.08.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 25 .08.25 6. Date on which the fair order comes back to the Sr.P.S./P.S 25.08.25 7. Date on which the file goes to the Bench Clerk 25.08.25 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 "