Shri Saurabhkumar Amrutbhai Patel, Aaravalli V. The ITO, Ward-1, Modasa

ITA 219/AHD/2020

AI Insights

The case involves Saurabhkumar Amrutbhai Patel, who appealed against the order of the CIT(A)-2, Ahmedabad, concerning the Assessment Year 2012-13. The primary contention was the legality of the reassessment under Section 147 of the Income Tax Act, 1961, instead of Section 153C, following a search at KKP Marketing India Ltd., where Patel was a director. The reassessment was based on a cash investment of Rs.10,00,000 in KKP Marketing India Ltd., alleged to be unexplained. The Tribunal examined whether the reassessment should have been conducted under Section 153C, as argued by the assessee, and whether the addition made was justified.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129309 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 17-01-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 27-02-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 69; 144; 139; 143(3); 153C

Judgement Text

ITA No.219/Ahd/2020 A.Y. 2012-13 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.219/Ahd/2020 Assessment Year: 2012-13 Saurabhkumar Amrutbhai Patel, vs. Income Tax Officer, C/o. Swastik Sales, Ward - 1, Modasa. Post Rajpur Kampa, Vadagam, Tal. Dhansura, Dist. Aaravalli (Gujarat) - 383 307. [PAN – ALNPP 0997 P] (Appellant) (Respondent) Assessee by : Shri A.C. Shah, AR Respondent by : Shri R.R. Makwana, Sr. DR Date of hearing : 18.01.2023 Date of pronouncement : 31.01.2023 O R D E R This appeal is filed by the Assessee against the order dated 16.07.2019 passed by the CIT(A)-2, Ahmedabad for the Assessment Year 2012-13. 2. The grounds of appeal raised by the assessee are as under :- “1. The reassessment is bad in law in as much as there is no escapement of income. The reassessment made under Section 143(3) r.w.s. 147 is bad in law since the provisions of Section 153C are applicable and not Section 147. 2. The learned CIT(A) has erred in confirming the addition of Rs.10,00,000/- under Section 69 as cash investment with KKP Marketing India Limited in as much as the assessee has never made any such cash investment with the said company and that no addition can be made only on the basis of loose paper found during search on the said company.” 3. The assessee did not file return of income under Section 139 of the Income Tax Act, 1961 and the case was reopened under Section 147 of the Act on the basis of ITA No.219/Ahd/2020 A.Y. 2012-13 Page 2 of 4 information available with the Revenue Office after recording reasons for doing so in writing and taking approval under Section 151(1) of the Act. Notice under Section 142(1) dated 24.05.2018 was issued to the assessee and the assessee was asked to furnish the source of cash investment of Rs.10,00,000/- made with KKP Marketing India Limited of Bhuj. The assessee did not furnish the source of cash. The Assessing Officer observed that the assessee is a salaried person employed with Khodiya Food Pvt. Ltd. and also partner in the firm M/s. Swastic Sales. The Assessing Officer made addition of Rs.10,00,000/- as unexplained investment in respect of Project Mandavi Township/KKP Township of KKP Marketing India Limited. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. There is a delay of 154 days in filing the present appeal. The assessee has filed affidavit explaining the delay due to the person who was dealing with the accounts of the assessee did not file the appeal within time. The reasons given by the assessee appears to be genuine and hence the delay is condoned. 6. The Ld. AR submitted that in respect of search at the premises of the KKP Marketing India Limited conducted on 30.07.2013, several incriminating documents were found and seized and addition was made in the case of KKP Marketing India Ltd. The assessee is Director of KKP Marketing India Ltd. along with one Mr. Danji Patel who is a partner. The Ld. AR submitted that in case of Danji Patel, the CIT(A) has granted relief and in fact assessment was passed under Section 144 read with Section 153C of the Act. The Ld. AR submitted that in the present assessee’s case, the Assessing Officer has reopened the assessment proceedings and it is related to search at the premises of KKP Marketing India Ltd. and, therefore, the assessment should have been made under Section 153C and not under Section 147 of the Act. The Ld. AR on merits submitted that the sales account were already added so addition cannot be done and in fact it is only projection addition. The Ld. AR submitted that in case of partner in the same firm where the assessee is Director, the addition on the on similar basis were deleted by the CIT(A) and ,therefore, the Department cannot take different stand in assessee’s case. ITA No.219/Ahd/2020 A.Y. 2012-13 Page 3 of 4 7. The Ld. DR submitted that the assessee’s case was rightly reopened under Section 147 of the Act and order is valid order. On merit, the Ld. DR submitted that the CIT(A) has already taken into account the decision in the case of KKP Marketing India Ltd. where addition has been made related to seized material and assessee’s name has been appeared as cash invoice of Rs.10,00,000/- in the seized material. 8. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that as regards the technical aspect about order under Section 147, the Assessing Officer has reopened the case in respect of search but that cannot debar the Revenue Authorities for taking cognisance under Section 147 of the Act. The contention of the assessee that Section 153C of the Act has to be invoked does not appears justifiable. Hence, the said contention of the assessee is rejected. As on merits of the case, the sales accounts were already added and, therefore, once again making the addition on projection basis cannot be the criteria for making the addition. The assessee has given all the details that the proposed scheme which eventually took place on the proposed land on which the proposed construction was to be undertaken that land could not be converted into NA, the project could not be materialised and, therefore, the payment in cash did not take place and the loose material found are dump documents only. The documents which were found at the premises of the KKP Marketing India Ltd. does not bear signature of the assessee though in the said documents signature of Danji Patel was there where the CIT(A) has given the relief. In the light of all the documents before us, it appears that the addition made by the Assessing Officer does not sustain. 9. In the result, appeal of the assessee is partly allowed. Order pronounced in the open Court on this 31 st day of January, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 31 st day of January, 2023 PBN/* ITA No.219/Ahd/2020 A.Y. 2012-13 Page 4 of 4 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad