FARIDABANU FARIDMIYA SHEIKH LEGAL HEIR OF LATE FARIDMIYA HUSSENMIYA SHEIKH,AHMEDABAD V. ACIT CENTRAL CIRCLE-1(2), AHMEDABAD

MA 64/AHD/2025

AI Insights

The case involves Faridabanu Faridmiya Shaikh, the legal heir of Late Faridmiya Hussenmiya Shaikh, who filed Miscellaneous Applications against the order of the Income Tax Appellate Tribunal which had earlier made additions to the assessee's income under section 69A of the Income Tax Act. These additions were based on unaccounted receipts allegedly linked to a Daily Sales Report (DSR) and other documents seized during a search and seizure operation. The Tribunal, upon re-examination of the submissions and evidence, including the fact that the partnership firm M/s. Sojas Corporation was reconstituted after the death of the original assessee, found that the additions were not applicable to the assessee for the specified assessment years. The Tribunal also referenced a similar case involving another related person, which had led to a deletion of similar additions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790921 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Appeal Filed On: 31-07-2025
• Other Referred Cases: Yunus Haji Ibrahim Fazalwala vs. CIT(A) & Ors., Saravana Selvarathnam Retails Pvt. Ltd. vs. CIT(A) & Ors., Evergreen Bar & Restaurant vs. CIT(A) & Ors., Shri Kuberji Associates vs. CIT(A) & Ors.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PICK; CHOOSE METHOD; IGNORE ANOTHER ONE WHICH
• Keywords: Business income; Documents seized; Search and seizure
• Section: 145

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Makarand Vasant Mahadeokar, Accountant Member Faridabanu Faridmiya Shaikh Legal Heir of Late Faridmiya Hussenmiya Shaikh 3,4 Maharana Pratap Complex Behind V.S. Hospital, Ahmedabad-380006 PAN: AEAPS0625M (Appellant) Vs The ACIT Central Circle-1(2) Ahmedabad (Respondent) Assessee Represented: Shri Anil Kshatriya, Advocate Revenue Represented: Shri Abhijit, Sr. D.R. Date of hearing : 07-11-2025 Date of pronouncement : 02-12-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- These three Miscellaneous Applications are filed by the assessee stating that in Paragraph No. 6 of the common order dated 23-07-2025 passed by this Tribunal in ITA Nos. 679 to 681/ Ahd/2025, wherein the submissions made by the assessee on account of addition made under section 69A of the Act of Rs.37,29,300/-; Rs.29,99,100/- and Rs.5,60,400/= relating to the M.A. Nos: 64 to 66/Ahd/2025 in ITA Nos: 679 to 681/Ahd/2025 Asst Years: 2020-21 to 2022-23 Printed from counselvise.com M.A. Nos. 64 to 66/Ahd/2025 (in ITA Nos. 679 to 681/Ahd/2025) A.Ys. 2020-21 to 2022-23 Faridabanu Faridmiya Shaikh legal heir of Late Faridmiya Hussenmiya Shaikh Vs. ACIT 2 asst. years 2020-21 to 2022-23 were not recorded by the Tribunal and directly came to the conclusion by relying on the Co-ordinate Bench decision in the case of Shri Mustufamiya Hussainmiya Shaikh and given the relief to the assessee. 2. We have perused the common order passed by this Tribunal, we find that the facts relating to the addition made u/s.69A on the unaccounted receipts are discussed in Paragraph No. 2.7 and 3 of the common order of this Tribunal. However, in Paragraph No.6 the submissions of the assessee are not recorded and direct conclusion/decision arrived which is an apparent mistake on record and therefore the common order is modified as follows: “6. The assessee has raised several contentions which has summarized as follows: a. That the root of the subject matter involving impugned addition of Rs.37,29,300/- representing alleged unaccounted receipt in cash treating it unexplained money u/s.69A of the Act goes to the search and seizure proceedings u/s.132 of the Act carried out on 16.11.2021 at the business premises of M/s. Sojas Corporation, a partnership firm during which one DSR (Daily Sales Report) dated 27.08.2021 for the remote places of Sanand and Viramgam was seized as reproduced at page-8 of assessment order and statement of one Shri Wasim Shaikh recorded on 16.11.2021 u/s.132(4) of the Act (para-4 of the assessment order). b. Shri Wasim Shaikh was not looking after the financial affairs but certain other part of partnership M/s. Sojas Corporation which came into existence only w.e.f. 07.05.2021 and was consisted of two partners (i) Printed from counselvise.com M.A. Nos. 64 to 66/Ahd/2025 (in ITA Nos. 679 to 681/Ahd/2025) A.Ys. 2020-21 to 2022-23 Faridabanu Faridmiya Shaikh legal heir of Late Faridmiya Hussenmiya Shaikh Vs. ACIT 3 Mohammed Anas Faridmiya Shaikh and (ii) Mohammed Asad Shaikh having 50% share therein. c. That the referred DSR dated 27.08.2021 cannot be construed as a basis to draw adverse inference before the constitution of the firm and if at all it is to be considered then it may be taken in the case of M/s. Sojas Corporation for A.Y.2022-23 and not in the case of the appellant or for any period prior to 07.03.2021 i.e. the date of constitution of the firm. d. That in concluding statement recorded of Shri Mohammed Anas Shaikh by the authorized officer in reply to specific question no. 6, he categorically explained that various persons come to buy goods from outside also; which in other words includes local buyers too and sale bills are prepared on the basis of instruction of client or in the name of buyer as the case may be and sales bills are invariably recorded regular books of account with details as noted at Sl. No.12 of the Panchnama dated 18.11.2021. e. The A.O. has not invoked and applied provisions of section 145 of the Act for making this addition but for the pages related to Mayank Khatri and as such without rejecting such books, no estimation for the years under consideration particularly in the absence of any evidence of any such DSR relatable to A.Y.2020-21, 2021-22 & 2022- 23 (for the period beginning from 01.04.2021 to 05.07.2021 i.e. the death of the original assessee Late Shri Faridmiya Hussainmiya Shaikh) can be made by the A.O. as such liable to be deleted on this count. f. Even the rejection of books in A.Y.2021-22 and 2022-23 for the additions made on the basis of documents seized from the third party i.e. Mayank Ashok Khatri and relatable to him are unjustified on the basis of finding recorded in Para-7 of ITA No. 1888 & 1889/AHD/2024 as under. g. Therefore, in view of the above finding as applicable in the case of appellant mutatis mutandis, the so called rejection Printed from counselvise.com M.A. Nos. 64 to 66/Ahd/2025 (in ITA Nos. 679 to 681/Ahd/2025) A.Ys. 2020-21 to 2022-23 Faridabanu Faridmiya Shaikh legal heir of Late Faridmiya Hussenmiya Shaikh Vs. ACIT 4 books of accounts u/s.145 though not invoked and additions were made for A.Y. 2021-22 but invoked for A.Y. 2020-21 & 2022-23 on subsequently made the two assessment orders for these A.Ys for the additions made on the basis of documents seized from the third party le. Mayank Ashok Khatri and additions made on the basis of one DSR dated 27.08.2021 as made are unsustainable and are liable to be deleted in full on this count also. It is pertinent to state here that in all the three related assessment years, the first addition u/s.69A of the Act on account of the alleged DSR dated 27.08.2021 was made without invoking the provisions of section 145 and section 145 was invoked for the assessment year 2020-21 & 2022- 23 subsequently but for the additions made on account of the alleged four pages found and seized from one Shri Mayank Khatri an unrelated third party. Therefore also, on such identical circumstances of the case of appellant, particularly in the absence of any evidence of any such DSR relatable to A.Y.2021-22, 2020-21 & 2022-23 cannot be made by the A.O. as such are liable to be deleted, too. h. The appellant has also placed reliance on the judgment of Hon'ble Jurisdictional High Court of Gujarat in the case of Yunus Haji Ibrahim Fazalwala, Saravana Selvarathnam Retails Pvt. Ltd. vs. CIT(A) & Ors., Evergreen Bar & Restaurant (ITAT Mumbai) & Shri Kuberji Associates (Surat-Trib) (Kindly refer Page-11, 21, 23 & 28 of the brief note filed on 01.07.2025), for the preposition that A.O's estimating sale @Rs.300/- per day (based on DSR dated 27.08.2021), throughout the earlier period and applying special rate u/s.115BBE of the Act and arriving at an addition of Rs.37,29,300/- is wholly unjustified because during the course of search and seizure proceedings, out of many documents, a single DSR dated 17.08.2021 is being chosen by the A.O. adopting sale as if entire sale of this day would be the sale value of every day of the previous year under consideration and earlier years, too. i. Further, that the differential amount and other income on the basis of seized document has already been considered by giving its due effect in the books of account case of Shri Printed from counselvise.com M.A. Nos. 64 to 66/Ahd/2025 (in ITA Nos. 679 to 681/Ahd/2025) A.Ys. 2020-21 to 2022-23 Faridabanu Faridmiya Shaikh legal heir of Late Faridmiya Hussenmiya Shaikh Vs. ACIT 5 Mohammed Anas Shaikh for A.Y.2022-23 for the period beginning from 07.05.2021 to 21.11.2021 i.e. date of search, by including an additional business income of Rs.27,19,604/- as disclosed in his ROI, being his own income as pocketed by him only and the remaining amount is credited and accounted for in the books of account of M/s. Sojas Corporation, a partnership firm consisting of two partners namely Mohammed Anas Shaikh and Mohammed Asad Shaikh (Kindly refer to computation of income & copies of books of account, in the case of Shri Mohammed Anas Shaikh at PBP-149 to 157). That the A.O. has accepted such return of income in the case of appellant's son Mohammed Anas Shaikh for A.Y.2022-23 (Kindly refer to PBP-158 & 171 being the assessment order in his case). j. Thus, the factum of acceptance of pocketing of the differential amount on DSR and others by Mohammed Anas Shaikh and its disclosure in his personal books of account and also very acceptance of the same by the A.O. for A.Y.2022-23, proves beyond doubt that the appellant was not beneficial owner of such differential income and it cannot be applied for a period earlier than 07.05.2021. k. That as a matter of fact on record, the DSR was prepared later on 27.08.2021 and the constitution of the firm takes place well before i.e. on 07.05.2021, hence no cognizance should be taken for referred document. Incidentally, while recording statement u/s.131 of the Act by the assessing officer on 22.12.2022 on confronted with the DSR, while replying answer no.7, he denied anything about it and stated that he has no knowledge about financial transaction. Thus, despite specific question put, Shri Wasim Shaikh has not re-affirmed the original admission extracted for such alleged difference of Rs.300/- but also clarified that he did not know anything about it. Therefore, the referred statement of Shri Wasim Shaikh cannot be treated as reliable evidence due to inconsistency in the statements and hence both the statements are have to be read as a whole to be appreciated in proper perspective Printed from counselvise.com M.A. Nos. 64 to 66/Ahd/2025 (in ITA Nos. 679 to 681/Ahd/2025) A.Ys. 2020-21 to 2022-23 Faridabanu Faridmiya Shaikh legal heir of Late Faridmiya Hussenmiya Shaikh Vs. ACIT 6 and not by using the statement favourable to the revenue by pick and choose method and ignore another one which is not favourable to the revenue, as such impermissible. 6.1. Per contra the Ld. D.R. appearing for the Revenue supported the orders passed by the Lower Authorities and requested to uphold the additions. 6.2. We have considered the rival submissions and perused the materials available on record. The assessee Late Shri Faridmiya Hussainmiya Shaikh died on 06-05-2021 and his wife is impleaded as the Legal Heir. After the death of the assessee, the Proprietorship Firm M/s. Sojas Corporation was reconstituted on 07-05-2021 consisting of two Partners namely Mohammed Anas Shaikh and Mohammed Asad Shaikh having 50% shares each. Thus the so called Daily Sales Report (DSR) dated 27-08-2021 and the statement recorded u/s. 132(4) one Shri Wasim Shaikh on 16-11-2021 cannot be the basis for making addition in the hands of the assessee. It is undisputed fact that Mohammed Anas Shaikh for the Asst. Year 2022-23 for the period beginning from 07- 05-2021 to 21-11-2021 (i.e. till the date of search) has offered additional business income of Rs.27,19,604/- disclosed in his Return of income as his own income as pocketed by him only and the remaining amount is correctly credited and accounted for in the books of account of M/s. Sojas Corporation, being the new Partnership Firm. This income was accepted and assessed in the hands of Mohammed Anas Shaikh vide assessment order dated 08-02-2024 passed by Printed from counselvise.com M.A. Nos. 64 to 66/Ahd/2025 (in ITA Nos. 679 to 681/Ahd/2025) A.Ys. 2020-21 to 2022-23 Faridabanu Faridmiya Shaikh legal heir of Late Faridmiya Hussenmiya Shaikh Vs. ACIT 7 ACIT Central Circle-1(1), Ahmedabad which is available at Page Nos. 158 to 171 of the Paper Book. Therefore the assessing officer is not correct making addition in the hands of the assessee and also without rejecting the books of accounts. Therefore the additions made u/s. 69A of the Act of Rs.37,29,300/-; Rs.29,99,100/- and Rs.5,60,400/- relating to the asst. years 2020-21 to 2022-23 are liable to be deleted. 6.3. Further in the case of Shri Mustufamiya Hussainmiya Shaikh namely another related person of MHS Group The Ld. CIT(A) deleted similar addition. As against Ld. CIT(A) deleting the addition, Revenue filed further appeal before this Tribunal in ITA No. 1888 & 1889/Ahd/2024. The Co-ordinate Bench of this Tribunal vide order dated 30-04-2025 confirmed the deletion made by the Ld. CIT(A) by observing as follows: “….. 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the statement of Shri Mayank Ashokbhai Khatri was not confronted to the assessee while recording the assessee’s statement by the Assessing Officer. Further the assessee during the assessment proceedings produced copy of ledger account from where the assessee demonstrated that the assessee has regular transactions of purchases from Zen Group and all the transactions of sales and purchase have been duly 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the statement of Shri Mayank Ashokbhai Khatri was not confronted to the assessee while recording the assessee’s statement by the Assessing Officer. Further the assessee during the assessment proceedings produced copy of ledger account from where the assessee demonstrated that the assessee has regular transactions of purchases from Zen Group and all the transactions of sales and purchase have been duly Mayank Khatri which was not even verifiable from the evidences produced by the Assessee. The Assessing Officer has not established the nexus of cash sale to the Zen Group to the assessee concern. The CIT(A) in para 4.4 categorically mentioned that there was no evidence related to unrecorded payment made in cash to Zen Group of concern which was Printed from counselvise.com M.A. Nos. 64 to 66/Ahd/2025 (in ITA Nos. 679 to 681/Ahd/2025) A.Ys. 2020-21 to 2022-23 Faridabanu Faridmiya Shaikh legal heir of Late Faridmiya Hussenmiya Shaikh Vs. ACIT 8 found during the course of search action. Besides this, neither the purchase party i.e. the assessee or his family members nor the seller party i.e. Shri Rashminbhai M. Majithia, Director of M/s Zen Tobacco Pvt. Ltd. & M/s Zen Industries Pvt. Ltd. had admitted in the statement recorded during the course of search action or post search action that the said seized page no. 156 to 159 was related to the assessee or his group concern regarding unaccounted purchase of tobacco or other products. Therefore, the CIT(A) as rightly held that the addition made on account of initial investment in unaccounted stock and estimation of GP does not survive. There is no need to interfere with the findings of the CIT(A). Thus, ITA No. 1888/Ahd/2024 for A.Y. 2020-21 filed by the Revenue is dismissed. 6.4. Respectfully following the Co-ordinate Bench decision, the addition made in the hands of the assessee is hereby deleted and Ground No. 3 raised by the assessee is allowed. “ 3.1. Thus the common order dated 23-07-2025 is modified to the extent Para 6 to 6.4 as above and the Miscellaneous Applications filed by the assessee are hereby allowed. 4. In the result, the Miscellaneous Applications filed by the Assessee are allowed. Order pronounced in the open court on 02-12-2025 Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 02/12/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) Printed from counselvise.com M.A. Nos. 64 to 66/Ahd/2025 (in ITA Nos. 679 to 681/Ahd/2025) A.Ys. 2020-21 to 2022-23 Faridabanu Faridmiya Shaikh legal heir of Late Faridmiya Hussenmiya Shaikh Vs. ACIT 9 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद Printed from counselvise.com "