GRAND BAZAAR DEVELOPERS LLP,KOLKATA V. A.C.I.T., CC - 4(2), KOLKATA, KOLKATA

ITA 1266/KOL/2024

AI Insights

The case involves Grand Bazaar Developers LLP, which faced an addition of Rs. 50,00,000 under section 69A of the Income Tax Act, 1961, based on documents seized during a search operation. The documents allegedly showed cash transactions for flat bookings not reflected in the company's ledger. The appellant contested the addition, arguing that the documents were dated before the relevant assessment year and that the additions were made without proper opportunity of hearing, violating principles of natural justice. The ITAT found that the documents could not be considered for the Assessment Year 2019-20, leading to the allowance of the appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 46779 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-10-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 05-06-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Principle of natural justice
• Section: 250; 69A

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA श्री राजपाल यादव, उपाध्यक्ष (कोलकाता क्षेत्र) एवं श्री संजय अवस्थी, लेखा सदस्य क े समक्ष Before SRI RAJPAL YADAV, VICE-PRESIDENT & SRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No.: 1266/KOL/2024 Assessment Year: 2019-20 Grand Bazaar Developers LLP………..…………………………………Appellant [PAN: AAPFG 4653 G] Vs. ACIT, CC-4(2), Kolkata..........................................................Respondent Appearances: Assessee represented by: S.K. Pransukha, FCA. Department represented by: Abhijit Kundu, CIT DR. Date of concluding the hearing : October 15th, 2024 Date of pronouncing the order : October 18th, 2024 ORDER Per Sanjay Awasthi, Accountant Member: In this case, a search action was conducted on 10.10.2018 and subsequent dates. Thereafter, another search action was conducted on M/s. Everest Ply and Vineer Pvt. Ltd. on 30.11.2018. Shri Ashish Garg one of the designated partners of M/s. Grand Bazaar Developers LLP was also covered. It was during this search that certain loose sheets were seized, which have been used to make the impugned additions. 1.1. To recapitulate the facts briefly, it is seen that the loose sheets (presented in the paper book at pages 117 and 118 by the ld. A/R) allegedly I.T.A. No.: 1266/KOL/2024 Assessment Year: 2019-20 Grand Bazaar Developers LLP. Page 2 of 3 depicted two applications for booking of a flat by two persons (Mr. Murali Mohan Rao and Mrs. Jinugu Anuradha). In one of these sheets, it was written “cash agreement” and it was mentioned that basic price was Rs. 50,00,000/- against which Rs. 11,00,000/- was paid. These payments were not reflected in the ledger of the assessee. However, an important fact that emerges out of these documents is that both papers are dated 05.01.2018 (recorded in para 5.2.1 of impugned order and visible on pages 117 -118 of the paper book). On the basis of narration in these sheets of paper, the ld. AO added Rs. 50 Lakh u/s 69A of the Act. 2. After having failed at the level of both ld. AO/ld. CIT(A), the appellant is before the ITAT through the following grounds of appeal: “1) For that the Order passed by the Ld. CIT (Appeals), Kolkata-27 under section 250 of the Income Tax Act dated 06/05/2024 is bad in law as well as on facts and hence the same be quashed and/or set aside. 2) For that the order passed by the Ld. CIT (Appeals), Kolkata-27 is without according proper opportunity of hearing to the appellant, therefore the same was passed in violation of Principles of Natural Justice and hence the said order be quashed and/or set aside. 3) That the Ld. CIT(A) Kol-27 has erred in confirming the order of Assessing Officer adding Rs.50,00,000/- u/s. 69A of the Income Tax Act, 1961 and not considering the submission of assessee that the addition u/s. 69A is not applicable in this case and consequently the charging of income u/s. 115BBE and Surcharge @ 25% of tax on demand is bad in law. 4) The Ld. CIT(A)-Kol27 has erred in not considering the fact that the alleged Page No. 179 & 180 of agreement bear the signature dated 05/01/2018 and if at all assessable then alleged income cannot be assessed in Assessment Year 2019-20. 5) The Ld. CIT (A) Kol-27 erred in confirming the addition made by L’d AO amounting to Rs.50,00,000/- without appreciating the fact that purported cash receipt was never received by the appellant and the Ld. A.O. also did not make any enquiry regarding alleged payment of Rs. 50,00,000/- by flat buyer to the assessee.” 2.1. Right at the outset, the ld. A/R pointed out that the ground no. 4 needed to be adjudicated first as it would be crucial for determining the assessibility of the impugned amount. The ld. A/R pointed out that since the document was dated 05.01.2018 then at best assessment on it could have been done in I.T.A. No.: 1266/KOL/2024 Assessment Year: 2019-20 Grand Bazaar Developers LLP. Page 3 of 3 AY 2018-19 only and not AY 2019-20 (the present year). 2.2. The ld. D/R fairly admitted that with 05.01.2018 as the date on the documents it was only possible to consider it for AY 2018-19. He however, requested to give directions for the same to be assessed in the appropriate year, being AY 2018-19. 3. We have carefully perused the impugned documents and the orders of authorities below. It is quite clear that the impugned loose sheets could not be considered for AY 2019-20 (present year) and thus, the addition made in this year is directed to be deleted. Regarding the request of ld. D/R to direct assessment in appropriate year, it is felt that no opinion needs to be expressed as the provisions of the Income Tax statute should be known to all those administering the Act and they need to act as per their mandate. 4. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 18th October, 2024. Sd/- Sd/- [Rajpal Yadav] [Sanjay Awasthi] Vice President Accountant Member Dated: 18.10.2024 Bidhan (P.S.) Copy of the order forwarded to: 1. Grand Bazaar Developers LLP, 72, Bentinck Street, Kolkata, West Bengal, 700001. 2. ACIT, CC-4(2), Kolkata. 3. CIT(A)-27, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "