HARDIK JAGDISHBHAI PATEL,AHMEDABAD V. THE ITO, WARD-7(2)(1), AHMEDABAD

ITA 870/AHD/2025

AI Insights

The case involves Hardik Jagdishbhai Patel, who appealed against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs.2,11,36,467 to his income for the Assessment Year 2013-14. The addition was made under Section 69A of the Income Tax Act, 1961, based on the allegation that the assessee was a beneficiary of accommodation entry in share transactions. The Tribunal noted that the Assessing Officer had considered both purchase and sale transactions for the addition, which was incorrect. The assessee's inability to comply with the initial assessment was attributed to personal and health issues of his family and consultant during the relevant period.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790413 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 24-04-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: VINIT MOONDRA
• Keywords: Set aside; Business income; Additional evidence; Bogus
• Section: 147; 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH, AHMEDABAD BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.870/Ahd/2025 Assessment Year: 2013-14 Hardik Jagdishbhai Patel, 47, Anand Bunglows, Nr. Sola Overbridge, Thaltej, Ahmedabad – 380 054. (Gujarat). [PAN – AMUPP 8397 H] Vs. Income Tax Officer, Ward – 7(2)1, Aayakar Bhawan, Vejalpur, Anandnagar Ahmedabad – 380 015. (Gujarat). (Appellant) (Respondent) Assessee by Shri Vinit Moondra, AR Revenue by Shri Abhijit, Sr. DR Date of Hearing 06.10.2025 Date of Pronouncement 25.11.2025 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 19.03.2025 for the Assessment Year (A.Y.) 2013-14 in the proceeding under Section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The brief facts of the case are that the assessee had filed his return of income for the A.Y. 2013-14 on 30.09.2013 declaring Nil income. The case of the assessee was reopened on the basis of information received by the AO that the assessee was a beneficiary of accommodation entry Printed from counselvise.com ITA No.870/Ahd/2025 (Assessment Year: 2013-14) Hardik Jagdishbhai Patel vs. ITO Page 2 of 5 of Rs.86,22,817/- in respect of transactions of shares of M/s. Frontline Business Solutions Pvt. Ltd. and M/s. ACI Infocom Limited. In the course of assessment, no compliance was made by the assessee at all. The Assessing Officer had made enquiry with NSE u/s 133(6) of the Act and it transpired that the total transaction of the assessee in respect of the shares of two aforesaid companies was Rs.2,11,36,467/-. Accordingly, the entire transaction of Rs.2,11,36,467/- in the scrip of two companies was treated as unexplained money of the assessee under Section 69A of the Act. The assessment was completed under Section 147 r.w.s. 144 of the Act on 28.05.3023 at a total income of Rs.2,11,36,467/-. 3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now, the assessee is in second appeal before us. The following grounds have been taken in this appeal: - “1. In his order dated 28.05.2023, the Ld. AO has erred in law by making an addition of Rs.2,11,36,467/- u/s.69A without identifying the facts of the case and real nature of transactions involved. The CIT(A) has erred in law by confirming the same. 2. Any other grounds of appeal shall be submitted at the time of hearing.” 5. Shri Vinit Moondra, Ld. AR of the assessee submitted that no compliance could be made by the assessee before the Assessing Officer for the reason that his father was suffering from severe kidney disease and had ultimately passed away on 29.04.2023. The consultant of the assessee Shri Mukesh Dhruv, CA was also under medical treatment and Printed from counselvise.com ITA No.870/Ahd/2025 (Assessment Year: 2013-14) Hardik Jagdishbhai Patel vs. ITO Page 3 of 5 he also expired on 04.03.2023. The assessee himself was working during that period in Canada and was out of the country for most of the time during the year. These multiple factors had led to non-compliance before the Assessing Officer. On merit, the Ld. AR submitted that though the case was reopened to examine the accommodation entry of Rs. 86,22,817/-, the Assessing Officer had made addition of Rs.2,11,36,467/- which represented the total of purchase as well as sale transactions. He explained that the assessee was a regular investor in shares and all the transactions were made through recognised stock exchange. The assessee had purchased 96500 shares of Frontline Business Solutions during the year, out of which 69531 shares were sold during the year. Similarly, 15000 shares of ACI Infocom purchased during the year was also sold during the same year. The Ld. AR submitted that the assessee did not claim any Long Term Capital Gain (LTCG) exemption under Section 10(38) of the Act, rather short term Loss was incurred in the share transactions. He further submitted that no amount of Rs.86,22,817/- alleged as bogus and accommodation entry was received in the bank account of the assessee. The Ld. AR submitted that the assessee may be allowed another opportunity to explain the transactions by setting aside the matter to the file of the Assessing Officer. 6. Per contra, Shri Abhijit, Ld. Sr. DR supported the orders of the lower authorities. He has, however, had no objection if the matter was set aside to the Assessing Officer for allowing another opportunity to the assessee. 7. We have considered the rival submissions. The assessee has brought on record certain fresh evidences in the paper-book filed. From the copy of de-mat account statement appearing in the paper-book, it is Printed from counselvise.com ITA No.870/Ahd/2025 (Assessment Year: 2013-14) Hardik Jagdishbhai Patel vs. ITO Page 4 of 5 found that the 15000 shares of ACI Infocom Ltd. were purchased on 13.02.2013 which were sold in the same month. Similarly, 69531 shares of Frontline Business Solutions Limited were also sold within a year of purchase. All the purchase and sale transactions of the assessee were done through Kotak Securities Limited. The assessee has filed a copy of the account with Kotak Securities Limited, from which it is apparent that the total purchase during the year was Rs1,24,11,084/- and the total sales was Rs.85,07,813/- only. In view of these facts, the addition of Rs.2,11,36,467/- as made by the Assessing Officer, prima facie, does not appear to be correct. It appears that the Assessing Officer has considered both the purchase as well as sale transactions of the assessee for making the addition which cannot be held as correct. In the interest of justice, we, therefore, deem it proper to set aside the matter to the file of the Assessing Officer with a direction to allow another opportunity to the assessee to explain the share transactions. The assessee will be free to produce the additional evidences in support of the share transactions as filed before us or any other evidences as found necessary. The assessee is also directed to make compliance before the AO in the course of the set aside proceeding and also to produce the documents and clarifications as required by him. In case the assessee doesn’t make compliance, the AO will be at liberty to decide the matter on merits on the basis of materials on record. 8. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 25th November, 2025. Sd/- Sd/- (SANJAY GARG) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 25th November, 2025 Printed from counselvise.com ITA No.870/Ahd/2025 (Assessment Year: 2013-14) Hardik Jagdishbhai Patel vs. ITO Page 5 of 5 PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "