The Dy.Commissioner of Income Tax Central Circle-1(2), Ahmedabad V. Kandarpbhai Kanchanbhai Patel, Ahmedabad

ITA 1286/AHD/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0969 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C THAKER
• Keywords: Set aside; Capital Gains
• Section: 143(3); 142(1); 153A; 143(2); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) [THROUGH VIRTUAL COURT] ITA. NO: 1286/AHD/2016 (ASSESSMENT YEAR: 2009-10) THE DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(2), AHMEDABAD V/S KANDARPBHAI KANCHANBHAI PATEL, PARISEEMA COMPLEX, C.G. ROAD, AHMEDABAD- 380006 PAN NO. AGWPP 6765B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DILEEP KUMAR, SR. D.R. RESPONDENT BY : SHRI K.C. THAKER ( )/ ORDER DATE OF HEARING : 02-11-2020 DATE OF PRONOUNCEMENT : 17-12-2020 PER MAHAVIR PRASAD, J.M. 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (HEREINAFTER CALLED CIT(A)) ORDER NO. CIT(A)-11/23/CC-1(2)/2014-15 ORDER DATED 21/01/2016 ARISING OUT OF ASSESSMENT ORDER DATED 30/01/2014. REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: ITA NO. 1286/AHD/2016 . A.Y. 2009-10 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN DELETING THE ADDITION OF RS. 12,30,00,000/- MADE ON ACCOUNT OF DISALLOWANCE OF SHORT TERM CAPITAL LOSS ON SALE OF SHARES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT (A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. 2. IN THIS CASE, A SEARCH U/S 132 OF THE INCOME-TAX ACT WAS CONDUCTED IN THE CASE OF MARUTI-SAVVY GROUP ON 27/04/2011. A WARRANT OF AUTHORIZATION U/S. 132 OF THE ACT WAS ALSO ISSUE IN THE CASE OF THE ASSESSE. SUBSEQUENTLY, NOTICE U/S. 153A OF THE ACT WAS ISSUED 22.09.2011. IN RESPONSE TO THE SAID NOTICE U/S 153A OF THE ACT, THE ASSESSE FILED RETURN OF INCOME ON 31/12/2009 DECLARING TOTAL INCOME OF RS. 10,03,920/-. THEREAFTER, NOTICE U/S. 143(2) AND U/S. 142(1) WERE ISSUED. 3. IN THIS CASE, ASSESSE DECLARED SHORT TERM CAPITAL LOSS OF RS. 7,35,00,000/- ON SALE OF SHARES OF MANUBHAI ZAVERI ORNAMENTS PVT. LTD. AND LOSS OF RS. 4,95,00,000/- ON SALE OF SHARES OF SHRINIVAS ORGANIZERS PVT. LTD. THE ASSESSE EARNED LONG TERM CAPITAL GAINS OF RS. 12,24,13,419/- ON ACCOUNT OF SALE OF SHARES OF DIAMOND INFRA PVT. LTD. 4. BUT LD. A.O. DISALLOWED THE CLAIM OF LOSS OF THE ASSESSE STATING THAT SOURCE OF INVESTMENT IN SHARES WAS FROM UNSECURED LOANS RECEIVED FROM CLOSE RELATIVES AND THEIR BUSINESS CONCERNS IN ORCHESTRATED MANNER TO MAKE INVESTMENTS AND CREATED THE RESULTANT LOSS ON THE SALE OF THE SHARES AND MADE ADDITION OF RS. 12,30,00,000/-. 5. AGAINST THE SAID ORDER, ASSESSE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESSE ON THE GROUND THAT THERE IS NO INDICATION IN THE CONTENTS OF THE ASSESSMENT ORDER THAT THE ADDITION WAS MADE ON THE BASIS OF SEIZED MATERIAL. THE REMAND REPORT OF THE A.O. WAS ALSO SILENT ON THIS ISSUE. AND AFTER CONSIDERING THE FACTS OF THE CASE, THE POSITION OF LAW ON THE ISSUE AND RESPECTFULLY ITA NO. 1286/AHD/2016 . A.Y. 2009-10 3 FOLLOWING THE ORDERS OF HONBLE GUJARAT HIGH COURT AND TRIBUNAL GRANTED RELIEF TO THE ASSESSE. 6. NOW REVENUE HAS COME BEFORE US BY WAY OF SECOND STATUTORY APPEAL. 7. AT THE OUTSET, LD. D.R. ON DIRECTION OF THIS BENCH SUBMITTED A PAPER ALONG WITH ENCLOSURE WHEREIN IT IS MENTIONED IN THIS CASE, NO INCRIMINATING MATERIAL HAS BEEN SEIZED DURING THE COURSE OF SEARCH. 8. WE DRAW SUPPORT FROM A JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE MATTER OF PR.CIT VS. SAUMYA CONSTRUCTION PVT. LTD. (2016) 387 ITR 529 (GUJ.,) WHEREIN IT IS HELD AS UNDER: WHERE AN ASSESSMENT HAS BEEN FRAMED EARLIER AND NO ASSESSMENT OR REASSESSMENT WAS PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSE UNDER SECTION 153A OF THE ACT, ADDITIONS OR DISALLOWANCES CAN BE MADE ONLY ON THE BASIS OF THE INCRIMINATING MATERIAL FOUND DURING THE SEARCH OR REQUISITION. 9. SINCE DEPARTMENT HAS ACCEPTED THAT THERE IS NO INCRIMINATING MATERIAL AGAINST THE ASSESSE, HENCE, IN SUCH CASE, NO ADDITION CAN BE MADE U/S 143(3) R.W.S. 153A OF THE ACT. IN OUR CONSIDERED OPINION, LD. CIT(A) HAS PASSED DETAILED AND REASONED ORDER AND SAME DOES NOT REQUIRE ANY KIND OF INTERFERENCE AT OUR END. 10. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 17- 12- 2020 SD/- SD/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 17 /12/2020