HARSHADKUMAR BHOGILAL RAVAL,UNJHA, DISTRICT. MEHSANA, GUJARAT V. INCOME TAX OFFICER, WARD 1, PATAN, GUJARAT, PATAN, GUJARAT

ITA 2105/AHD/2024

AI Insights

This case involves an appeal by Harshadkumar Bhogilal Raval against the order of the CIT(A), National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2013-14. The primary contention was the legality of the re-opened assessment and the additions made under Section 68 and Section 69C of the Income Tax Act, 1961, which were based on alleged accommodation entries and unexplained expenditure. The assessee argued that the re-opening was conducted without proper inquiry and was influenced by higher authorities, lacking independent application of mind. The CIT(A) had confirmed the additions made by the Assessing Officer, which led to the appeal before the Tribunal. The Tribunal found procedural lapses in the hearing process at the CIT(A) level and thus remanded the case for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312502 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVAN LIMBASIYA
• Assessee Lawyers: SHRUTI VORA
• Keywords: Unexplained cash credit; Unexplained expenditure; Principle of natural justice; Accommodation entries
• Section: 147; 68; 69C

Judgement Text

"ITA No.2105/Ahd/2024 Assessment Year: 2013-14 Harshadkumar Bhogilal Raval vs. ITO Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.2105/Ahd/2024 Assessment Year: 2013-14 Harshadkumar Bhogilal Raval, 14, Mangalam Flat, Opp. Bharat Nagar Society, Unjha, District Mehsana, Gujarat – 384 170. [PAN – AESPR 8735 B] Vs. Income Tax Officer, Ward-1, Patan, Gujarat (Appellant) (Respondent) Assessee by Ms. Shruti Vora, CA Revenue by Shri Kavan Limbasiya, Sr. DR Date of Hearing 13.03.2025 Date of Pronouncement 01.05.2025 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER: This appeal is filed by the Assessee against order dated 17.10.2024, passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year (A.Y.) 2013-14. 2. The Assessee has raised the following grounds of appeal: “1. The Learned CIT(A) – NFAC has erred in confirming the re- open assessment though it was bad in law, since Larned AO has re-opened the assessment without conducting inquiry and ITA No.2105/Ahd/2024 Assessment Year: 2013-14 Harshadkumar Bhogilal Raval vs. ITO Page 2 of 4 re-opened under the directions of higher authorities and did not apply his mind, 2. The Learned CIT(A) – NFAC has erred in deciding the appeal ex-parte and confirming the assessment of Learned A.O. who made the addition of Rs.1,13,30,000/- under Section 68 read with section 115BBE. Learned CIT(A) – NFAC further erred in not deciding the appeal on merits. 3. Learned CIT(A) – NFAC has erred in confirming addition under Section 68 read with section 115BBE in as much as, assessee was doing commission agency business in APMC Unjha market and as per market Rules he had earned commission.” 3. The assessee is proprietor of M/s. Laxmi Cattle Traders and filed return of income for the year under consideration on 16.08.2013 declaring income of Rs.3,72,342/-. The assessment proceedings under Section 147 of the Income Tax Act, 1961 were initiated based on information received from DDIT Investigation, Mehsana that the assessee received credits worth Rs.1,13,30,000/- in his Bank account from M/s. Riya Traders. M/s. Riya Traders along with M/s. Nayan Trading Company who were engaged in the activities of providing accommodation entries to persons including the assessee but the transactions made by the assessee with M/s. Riya Traders of that of Rs.1,13,30,000/- was held as accommodation entry and the Assessing Officer made addition of Rs.1,13,30,000/- under Section 68 of the Act as unexplained cash credit being accommodation entry. The Assessing Officer has made addition on account of unexplained expenditure being commission paid for accommodation entry under Section 69C of the Act. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. ITA No.2105/Ahd/2024 Assessment Year: 2013-14 Harshadkumar Bhogilal Raval vs. ITO Page 3 of 4 5. The Ld. AR submitted that the CIT(A) has passed ex-parte order on merit without giving opportunity to the assessee of hearing and contesting the mater before the CIT(A). Therefore, the Ld. AR summited that the matter may be remanded back to the file of the CIT(A) for proper adjudication of the issues after giving opportunity of hearing to the assessee. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(A) issued the notice of hearing to the assessee but the assessee could not furnish the details and without the details confirmed the addition made by the Assessing Officer. The assessee was not given opportunity of hearing but at the same time the assessee has sought adjournment on 8 occasions. Therefore, we are of the view that the assessee will pay a cost of Rs.1,000/- to the Treasury of Income Tax Department within two weeks from the date of order. The matter is remanded back to the file of the CIT(A) for proper adjudication of the issues, after giving opportunity of hearing to the assessee by following the principles of natural justice and adjudicate the issues on merit as per Income Tax Act. Thus, appeal of the assessee is partly allowed for statistical purpose. ITA No.2105/Ahd/2024 Assessment Year: 2013-14 Harshadkumar Bhogilal Raval vs. ITO Page 4 of 4 8. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 1st May, 2025. Sd/- Sd/- (DR. BRR KUMAR) (SUCHITRA KAMBLE) Vice President Judicial Member Ahmedabad, the 1st May, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad "