INCOME-TAX OFFICER, WARD-1(2)(3), AHMEDABAD, AAYAKAR BHAWAN, VEJALPUR, AHMEDABAD V. JASMINE JAYANTIBHAI SANGHAVI, AHMEDABAD

ITA 1779/AHD/2025

AI Insights

The case involves an appeal by the Income Tax Officer against Jasmine Jayantibhai Sanghavi, concerning the assessment year 2016-17. The primary issue was the validity of reassessment proceedings initiated under section 148 of the Income Tax Act, based on information from the investigation wing. The AO had added Rs.1,98,723 as unexplained money and Rs.1,987 as unexplained expenditure, alleging that these were accommodation entries. The CIT(A) reversed these additions, leading to the Revenue's appeal. The Tribunal dismissed the appeal, agreeing with the CIT(A) that the assessee had adequately substantiated the transactions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790727 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 23-09-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH CHAND MEENA
• Assessee Lawyers: SUNIL TALATI
• Keywords: Reassessment proceedings; Unexplained expenditure; Accommodation entries; Competent authority; Tangible material; Borrowed satisfaction; Bogus
• Section: 148; 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA RAGHUNATH KAMBLE, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 1779/Ahd/2025 (िनधा[रण वष[ / Assessment Year : 2016-17) Income-Tax Officer Ward-1(2)(3), Ahmedabad बनाम/ Vs. Jasmine Jayantibhai Sanghavi 7-F, Swetal Flat, Khanpur bai Centre, Khanpur, Ahmedabad, Gujarat - 380001 èथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AQCPS1433R (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Suresh Chand Meena, Sr. DR Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Sunil Talati, AR Date of Hearing 01/12/2025 Date of Pronouncement 02/12/2025 O R D E R The appeal is filed by the Revenue against the order dated 08.08.2025 passed by the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2016-17. 2. The grounds of appeal filed by the Revenue are as under: 1. \"Whether on facts and circumstances of the case and in law, the ld.CIT(A) has erred in law and on facts in holding that the reassessment proceedings initiated vide notice u/s 148 dated 30.03.2021 were based on \"borrowed satisfaction\" and were hence invalid, without appreciating that the information received from the investigation Wing, which was specific, reliable and based on material unearthed during a survey u/s 133A, constituted sufficient \"tangible material\" for the formation of a bona fide belief that income had escaped assessment?\" Printed from counselvise.com ITA No. 1779/Ahd/2025 (ITO vs. Jasmine Jayantibhai Sanghavi) A.Y.– 2016-17 - 2 – 2. \"Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the addition made of Rs.1,98,723/- being unexplained money u/s. 69A and Rs.1,987/- as unexplained expenditure u/s 69C (being 1% commission for arranging the entry) without appreciating the fact that the assessee could not provide a satisfactory explanation regarding the trade value of Rs. 1,98,723/- made in the scrip of Nobel Polymers Limited?\" 3. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in law and on facts in deleting the addition of Rs.2,00,710/- (1,98,723/- u/s 69A + Rs.1,987/- u/s 69C) of the Act, by ignoring the direct and cogent evidence gathered during the investigation which established that the assessee is one of the beneficiaries who received accommodation entries by carrying out sale transactions in Penny Scrip of Company M/s Nobel Polimers Ltd., Group entities controlled and managed by Shri Sanjay Shah and Jignesh Shah?\" 3. The assessee is an individual and filed his return of income on 13.02.2017 declaring total income of Rs.3,74,130/- for A.Y. 2016-17. During the year under consideration, the assessee has undertaken transactions in the scrip of M/s. Nobel Polimers Limited for trade value of Rs.1,98,723/-. The AO observed that the same was not shown in the return of income. The case was taken up for scrutiny u/s.147 of the Act after taking approval of the competent authority. Subsequently, notice u/s.148 of the Act was issued on 30.03.2021. The assessee did not file income tax return in response to notice u/s.148 of the Act. In response to notices u/s.142(1) of the Act, the assessee filed reply on 16.02.2022 alongwith capital gain/loss computation statement, demat account statement transaction statement, Axis bank account statements, details of share before the AO. The AO observed that the assessee calculated long term capital gain by selling scrip of M/s. Nobel Polimers Limited in the capital gain computation statements but did not show the long term capital gain in his Printed from counselvise.com ITA No. 1779/Ahd/2025 (ITO vs. Jasmine Jayantibhai Sanghavi) A.Y.– 2016-17 - 3 – income tax return. After going through the records, the AO held that the assessee brought its unaccounted money in his account through accommodation entry and has not shown bogus long term capital gone in his income tax return for the said assessment year and, thus, added Rs.1,98,723/- as bogus long term capital gain u/s.69A of the Act as accommodation entry. 4. Being aggrieved by the assessment order, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) allowed the appeal of the assessee. 5. Ld. DR submitted that the Ld. CIT(A) was not correct in deleting the addition as the amount of Rs.1,98,723/- is unexplained money u/s.69A of the Act and Rs.1,987/- was unexplained expenditure u/s.69C of the Act being 1% commission for arranging the entry without appreciating the fact that the assessee could not provide a satisfactory explanation regarding the trade value of Rs.1,98,723/- made in the scrip of M/s. Nobel Polimers Limited. The Ld. DR relied upon the assessment order. 6. The ld. AR relied upon the order of the Ld. CIT(A). 7. Heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the Ld. CIT(A) has categorically mentioned that the assessee has submitted all the relevant documents which was also reflected in para 4 of the assessment order i.e. capital gain/loss computation statement, demat account statement, transaction statement, Axis Printed from counselvise.com ITA No. 1779/Ahd/2025 (ITO vs. Jasmine Jayantibhai Sanghavi) A.Y.– 2016-17 - 4 – bank account statements, details of share and the other relevant documents which was totally ignored by the AO during the assessment proceedings. The assessee in fact has proved the genuinity and the creditworthiness of the sale transaction of long term capital gain and, in fact, has given the details of trading in shares. There is categorically mentioned in the assessment order that the assessee has mentioned this transaction in computation of capital gain through its computation statement for F.Y. 2015-16 i.e. relevant A.Y. 2016-17. This cannot negate the fact that the assessee has rightly taken the same by filing the income tax return. Thus, on the legal aspect as well as on the merits, the Ld. CIT(A) has taken a proper cognizance and there is no need to interfere with the findings of the Ld. CIT(A). 8. In the result, appeal of the Revenue is dismissed. This Order pronounced on 02/12/2025 Sd/- (SUCHITRA RAGHUNATH KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 02/12/2024 S. K. SINHA True Copy आदेश कȧ Ĥितिलǒप अĒेǒषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंिधत आयकर आयुƠ / Concerned CIT 4. आयकर आयुƠ(अपील) / The CIT(A)- 5. ǒवभागीय Ĥितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "