INCOME TAX OFFICER WARD-3(2)(1)AHMEDABAD , AAYKAR BHAWAN VEJALPUR, AHMEDABAD V. MANILAL BHAMJIBHAI SHAH, ISANPUR AHMEDABAD

ITA 670/AHD/2025

AI Insights

The case involves an appeal by the Income Tax Officer against the order of the CIT(A), which had deleted an addition made by the AO regarding undisclosed freight income received by the assessee, Manilal Bhamjibhai Shah, from M/s. Electrotherm India Limited. The AO had made the addition under Section 69 of the Income-tax Act, 1961, based on information from the Investigation Wing that M/s. Electrotherm India Limited was involved in dubious activities, including bogus transportation charges. The CIT(A) found that the Revenue did not substantiate its claims with adequate evidence, leading to the deletion of the addition. The Tribunal agreed with the CIT(A)'s decision, noting the lack of proof of any receipts or tax claims from the said company under the assessee's old PAN.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827741 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 29-03-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENKUMAR M. VASAVDA
• Assessee Lawyers: TUSHAR HEMANI
• Keywords: TDS; Bogus
• Section: 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER I.T.A. No. 670/Ahd/2025 (Assessment Year: 2016-17) Income-Tax Officer, Ward 3(2)(1), Ahmedabad Vs. Manilal Bhamjibhai Shah, B-8 New Radhika Society, Near Rajshree Society, Isanpur, Ahmedabad-380008 [PAN : AFSPS 5896 M] (Appellant) .. (Respondent) Assessee by : Shri Tushar Hemani, Sr. Advocate & Shri Kushal Fofaria, AR Revenue by: Shri Rajenkumar M. Vasavda,Sr DR Date of Hearing 05.01.2026 Date of Pronouncement 07.01.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT : This appeal has been filed by the Revenue against the order of the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as \"CIT(A)\" for short) dated 10.01.2025, passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as \"the Act\" for short], for Assessment Year (AY) 2016-17. 2. The Revenue has raised following grounds:- “The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.3,52,44,796/- made by AO on account of undisclosed freight income received from M/s. Electrotherm India Limited u/s 69 of the IT Act, despite the fact that the credible information was received from Investigation Wing Printed from counselvise.com ITA No. 670/Ahd/2025 ITO Vs. Manilal Bhamjibhai Shah Asst. Year : 2016-17 - 2– that the entity M/s. Electrotherm India Limited was indulging in unscrupulous activities and assessee was one of the beneficiaries of bogus transportation charges from the said entity on which TDS has been deducted.” 3. The pertinent facts required for adjudication of the case are that the assessee is engaged in transport business through his proprietorship firm “Ashapura Roadlines”. The assessee has applied for a new PAN instead of requesting a duplicate copy of PAN, and the assessee has been allotted a new PAN on 05.08.2002. The assessee started filing returns under the new PAN for AY 2003-04 to AY 2016-17. The assessee has also submitted that he has surrendered the old PAN vide letter dated 03.03.2009. 4. The inquiries conducted by the Revenue in the case of M/s. Electrotherm India Limited revealed that the said company had resorted to bogus booking of transportation bills and had also shown TDS deductions to various transporters, of which assessee is one such transporter. As per the documents filed before us, the Revenue could not prove any receipts from the said company namely M/s. Electrotherm India Limited and also has not claimed any tax out of the said tax deducted at source by M/s. Electrotherm India Limited. Keeping in view these facts, the Ld. CIT(A) has deleted the addition which we find acceptable. 5. At the same time, we have no records before us to prove that whether the Revenue has rightly examined the claim of TDS in the old PAN of the assessee, i.e. AFSPS5896M and also the fact that if the payments made from M/s. Electrotherm India Limited have gone to any of the assessee’s concerns by examining the movement of funds from M/s. Electrotherm India Limited’s company bank Printed from counselvise.com ITA No. 670/Ahd/2025 ITO Vs. Manilal Bhamjibhai Shah Asst. Year : 2016-17 - 3– accounts. The Revenue shall examine this issue in the interest of exchequer and take action accordingly. 6. As far as the appeal before us is concerned, we decline to interfere with the order of the Ld. CIT(A). 7. In the result, the appeal of the Revenue is dismissed. The order is pronounced in the open Court on 07.01.2026 Sd/- Sd/- (T.R. SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 07/01/2026 **btk आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "