Shri Bharatbhai Shankarlal Jadwani, Vadodara V. The Deputy Commissioner of Income Tax, Circle-3(1), Vadodara

ITA 1315/AHD/2017

AI Insights

The case involves Bharatbhai Shankarbhai Jadwani, an individual engaged in civil construction and development, who appealed against the order of the Commissioner of Income-tax (Appeals)-1, Vadodara. The appeal arose from an assessment order under section 143(3) of the Income Tax Act, 1961 for the assessment year 2012-13, which included additions under section 68 for unsecured loans and cash credits from a land sale. The Tribunal admitted additional evidence not previously available during the lower proceedings and remanded the matter back to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134560 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-04-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 30-05-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Set aside
• Section: 68; 143(3)

Judgement Text

आयकर अपीलीय अिधकरण, अहमदाबाद ᭠यायपीठ ‘B’ अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND T.R. SENTHIL KUMAR, JUDICIAL MEMBER ITA No.1315/Ahd/2017 Assessment Year : 2012-13 Bharatbhai Shankarbhai Jadwani 400, Meera Flats Manjalpur, Baroda 5 PAN : ADWPJ 5178 P Vs DCIT, Cir.3(1) Baroda. (Applicant) (Responent) Assessee by : Shri Manish J. Shah, with Shri Rushin Patel & Shri Jimi Patel, Revenue by : Shri Sudhendu Das, CIT-DR स ु नवाई कȧ तारȣख/Date of Hearing : 12/04/2023 घोषणा कȧ तारȣख /Date of Pronouncement: 26/05/2023 आदेश/O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER This appeal is filed by the assessee against appellate order dated 09.3.2017 passed by the Commissioner of Income-tax (Appeals)-1, Vadodara arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) relating to the Asst.Year 2012-13. 2. Brief facts of the case are that the assessee is an individual and engaged in the business of civil construction and developers. For the Asst.Year 2012-13, the assessee filed its return of income declaring total income at Rs.17,24,980/-. The return was taken for scrutiny assessment and the AO found that the assessee had ITA No.1315/Ahd/2017 2 received unsecured loans from different persons. The assessee failed to prove the genuineness of the transactions, credit worthiness and identity of the persons; thus the AO made an addition of Rs.70,50,000/- under section 68 of the Act. Further, the AO has noticed that the assessee has received advance deposit against sale of land at Miyagam Tal. Karjan Dist: Vadodara for a consideration of Rs.3.17 crores from M/s.Guruvandan Developers. However, the AO not satisfied with the explanation offered by the purchasers in the absence of any Agreement of Sale or Bhanakhat entered into between the parties, therefore, the ld.AO added the entire amount of Rs.3.17 crores as cash credit in the hands of the assessee. 3. Aggrieved against the same, the assessee filed an appeal before the ld.CIT(A). As against the alleged unsecured loans from various parties, the ld.CIT(A) on verification of documents on record, deleted the additions to the extent of Rs.50 lakhs and the balance amount of Rs.20.50 lakhs was confirmed. Regarding sale of land amounting to Rs.3.17 crores to Guruvandan Developers, the ld.CIT(A) held that there was no evidence on any dealing between the assessee and the alleged firm Guruvandan Developers. The assessee has not been able to substantiate any of its claim made regarding receipt of this amount of Rs.3.17 crores. Accordingly, the addition made by the AO was upheld by the ld.CIT(A). 4. Aggrieved against the same, the assessee is in appeal before us raising the following grounds: “1. The C.I.T.(Appeals) erred in law and on facts in confirming the addition of Rs.20,50,000/- made by the Assessing Officer u/s.68 of the I.T. Act, 1961 without appreciating the facts of the case properly. 2. The C.I.T.(Appeals) erred in law and on facts in confirming the addition of Rs.3.17 crore made by the Assessing Officer u/s.68 of the I.T. Act, 1961 being advance received against the sale of land from Guruvandan Developers. ITA No.1315/Ahd/2017 3 2.1 The C.I.T.(Appeals) failed to appreciate the material placed on record including affidavits of the partners confirming amount advanced to the Appellant. 3. The C.I.T.(Appeals) erred in law and on facts in confirming the addition of Rs.1,26,000/- made by the Assessing Officer u/s.36(l)(iii) of the I.T. Act, 1961 on the allegation of diverting the interest bearing fund to various parties for non-business purpose.” 5. The ld.counsel for the assessee, Shri Manish J. Shah appearing for the assessee submitted before us two sets of Paper Books - one was filed before the ld.CIT(A) and another set containing new documents/ additional evidences viz. bank statements, affidavits of the creditors and registered sale deed executed on 21.6.2019 between the assessee and the Guruvandan Developers for a consideration of Rs.3.17 crores. The ld.counsel submitted that though the assessee received sale consideration in instalments from 27.01.2011 till 27.12.2011 by way of cheque payments, which were reflected in the registered sale deed. However, the registration of sale deed was happened only in 21.6.2019. Thus, the same could not be produced before the ld.CIT(A) who passed the impugned appellate order dated 9.3.2017. Thus, the ld.counsel for the assessee pleaded that these documents are very much relevant to determine taxability of the income in hands of the assessee. Therefore, he requested to admit the additional evidences placed for the first time before the Tribunal. 6. The ld.DR appearing for the Revenue, though objected to the admission of additional evidences, since these documents are pertained to the period after passing of the assessment order and the appellate order. The ld.DR however has no objection in setting aside the matter back to the file of the AO for fresh consideration of the above documents. ITA No.1315/Ahd/2017 4 7. We have given our thoughtful consideration and perused the material available on record. As pleaded by the ld.counsel, registered sale deed executed on 21.6.2019 much after the appellate order dated 09.03.2017 passed by the ld.CIT(A). However, The ld.CIT(A), with the material available on record, held that the sale transaction entered by the assessee with Guruvandan Developers and its partners, was not genuine, and thereby confirmed the addition of Rs.3.17 crores. Further, Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 provides for admission of additional evidences before the Tribunal filed for the first time. It is seen from the record that the assessee could not produce these additional evidences for reasons beyond its control. Therefore, in order to meet ends of justice, we thought it fit to entertain the additional documents filed by the assessee for the first time, and thereby set aside the order passed by the ld.CIT(A) with direction to the AO to pass fresh assessment order after taking into account the additional documents filed by the assessee. 8. Regarding ground no. 3, addition of Rs. 1,26,000/- made by the Assessing Officer u/s. 36(1)(iii) on divertion of interest bearing fund to various parties for non-business purposes. The Ld. CIT(A) observed that during the assessment proceedings, the assessee had not made any reply. During the appellate proceedings also a generalized statement has been filed that the interest free fund available is more than interest free advance given. However no details has been furnished as to from where these interest free advances were given. Thus the Ld. CIT(A) upheld the addition made by the A.O. Ld. Counsel drawn our attention to the balance sheet filed by the assessee, wherein on the receipt of Rs. 3.17 crores being the advance received from sale of land. These advances are paid by ITA No.1315/Ahd/2017 5 the assessee for business purposes only and therefore the addition made by the Assessing Officer is liable to be deleted. 8.1. We have considered the submissions of the Ld. A.R. As we have already set aside the assessment to the file of the Ld. A.O. for passing fresh orders. We set aside this issue also to the file of the A.O. to consider it on merits. 9. Needless to say, the assessee should co-operate with the AO in the de novo assessment. With these directions, the grounds raised by the assessee are hereby allowed for statistical purpose. 10. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the Court on 26 th May, 2023 at Ahmedabad. Sd/- Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER True Copy (T.R. SENTHIL KUMAR) JUDICIAL MEMBER Ahmedabad, dated 26/05/2023 vk* आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आय ु Èत / Concerned CIT 4. आयकर आय ु Èत(अपील) / The CIT(A) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण / DR, ITAT, 6. गाड[ फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलȣय अͬधकरण, अहमदाबाद / ITAT, Ahmedabad