Shri Arvind M. Makwana, Ahmedabad V. The Income Tax Officer, Ward-(2)(2)1, Ahmedabad

ITA 394/AHD/2020

AI Insights

The case revolves around an appeal by Arvind M Makwana against the order of the CIT(Appeals)-10, Ahmedabad, which confirmed an addition of Rs. 8,00,000 as unexplained investment in shares under Section 69B of the Income Tax Act for the assessment year 2007-08. The Income Tax Officer (ITO) had initially made a protective addition, which was upheld by the CIT(A). However, the ITAT set aside the assessment and directed a fresh decision, leading to the current appeal. The Tribunal noted that the substantive addition had been deleted in a related case involving Adarsh Engitech Projects Pvt. Ltd., and thus, the protective addition in Makwana's case was also liable to be deleted. The Tribunal accepted the evidence provided by Makwana, including bank statements, which indicated that the investment was funded by Shri Shantilal Jain, not Makwana himself.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299972 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-02-2023
• Assessment Year: 2007-2008
• Appeal Filed On: 02-07-2020
• Laws Referred To: Section 69, Section 271(1)(c), Section 143(3) r.w.s. 147, Section 148
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Condonation of delay
• Section: 148; 143(3); 69B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . No .3 94 /A h d / 20 20 ( A s se ss m e nt Y e a r : 20 07- 08 ) Ar v in d M M ak wa na C - 8 0/ 95 6, S r e en a t h A p a r t me n t, Nr . V ya s w a d i, N av a V ad aj , Ah me da bad - 3 80 01 4 Vs .I T O War d - 2 ( 2) ( 1 ) , A h me da ba d [P AN N o.A M G P M 4 49 3 D] (Appellant) .. (Respondent) Appellant by : None Respondent by: Shri Y. R. Raval, Sr. D.R. D a t e of H ea r i ng 15.02.2023 D a t e of P r o no u n ce me nt 24.02.2023 O R D E R The appeal filed by the assessee is against the order passed by the Ld. CIT(Appeals)-10, Ahmedabad on 29.01.2020 for A.Y. 2007-08. 2. The grounds of appeal raised by the assessee are as under: “1. The Ld. AO has erred in law by making an addition u/s 69 of Rs. 8.00 lacs in the hands of the assessee without identifying the facts of the case and real nature of transactions involved without appreciating the fact that the assessee is only an accommodation entry provider. The Ld. CIT A has erred by confirming the same. 2. The Ld. AO has erred in law by initiating penalty u/s 271 1(c) on the above addition without proving intention to conceal income. 3. Any other ground of appeal shall be submitted at the time of hearing.” 3. The assessee filed return of income for A.Y. 2007-08 on 21.05.2008 declaring taxable income at Rs. 1,01,590/-. The case was re-opened and the return of income in response to notice under Section 148 was filed declaring total income of Rs. 1,17,590/-. An order under Section 143(3) r.w.s. 147 was passed on 04.11.2011 determining total income of Rs. 9,17,590/-. An addition of Rs. 8,00,000/- was made on protective basis being unexplained ITA No. 394/Ahd/2020 Arvind M Makwana vs. ITO Asst.Year–2007-08 - 2 - investment in purchase of shares of Adarsh Engitech Projects Pvt. Ltd. Whereas the substantive addition was made in the case of Adarsh Engitech Projects Pvt. Ltd. The assessee preferred an appeal before the CIT (Appeals) XIV, Ahmedabad against the addition of Rs. 8,00,000/- which was dismissed by the CIT(A) vide order dated 20.11.2013 in case of M/s. Adarsh Engitech Projects Pvt. Ltd. The CIT(A) hold the addition as substantive and confirm the same. The assessee preferred an appeal before the ITAT and the ITAT vide order dated 11.01.2017 set-aside the assessment back to the file of the Assessing Officer and directed to decide the same afresh after examining the finality of the addition in the hands of Shri Shantilal Jain. In case of Adarsh Engitech Projects Pvt. Ltd. the Tribunal dismiss the Revenue’s appeal vide order dated 22.11.2013 thereby deleting the addition of Rs. 2,50,00,000/- made by the Assessing Officer. The Assessing Officer observed that it is an undisputed fact that the investment in share has been done by any one of the entities either by Adarsh Engitech Projects Pvt. Ltd. or by Shri Arvind M. Makwana. The investments were made by the beneficiaries and the assessee Shri Arvind M. Makwana is onw of them. The Assessing Officer further observed that in respect of source of the cash it was stated that the cash was given by Shri Shantilal Jain, Director of M/s. Adarsh Engitech Projects Pvt. Ltd. introduced through the bank account of Shri Arvind M. Makwana. The Assessing Officer observed that no satisfactory explanatory in this regard was offered by the assessee in respect of amount of Rs. 8,00,000/- and therefore, made addition of Rs. 8,00,000/- as unexplained investment under Section 69B of the Act. ITA No. 394/Ahd/2020 Arvind M Makwana vs. ITO Asst.Year–2007-08 - 3 - 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee. 5. There is a delay of 66 days in filing the present appeal for which the assessee has not filed any condonation of delay application. At the time of hearing none appeared on behalf of the assessee despite giving several notices and the acknowledgement of last notice issued by the Registry dated 24.01.2023, the acknowledgement card from the postal authorities is there on record with the receiving signature. Therefore, we are proceeding on the basis of the contentions made by the assessee during the assessment proceedings as well as before the CIT(A) which are reproduced in the respective orders. 6. The Ld. D.R. submitted that the assessee is an entry provider and further submitted that the substantive addition has been already deleted by the Tribunal, thereby the protective addition may be confirmed. The Ld. D.R. relied upon the assessment order and the order of CIT(A). 7. Heard Ld. D.R. and perused all the relevant material available on record. It is pertinent to note that the delay was due to the pandemic and therefore, the same is condoned. As regards, the merits of the case in Para 7 of the CIT-A’s held that order of Aharsh Engitech Projects Pvt. Ltd. passed by the CIT(A) was reproduced and thereby 5 persons to whom two summons were issued includes assessee as well. It was stated therein that they have invested Rs. 8,00,000/- and the said amount was given to them by Shri Shantilal Jain. This contention was accepted by the Tribunal and the substantive addition was deleted. The assessee is herein also states that he ITA No. 394/Ahd/2020 Arvind M Makwana vs. ITO Asst.Year–2007-08 - 4 - is an accommodation entry provider and received the said amount from Shri Shantilal Jain for which the details of the bank statement were also filed before the Assessing Officer as well as the CIT(A). These documents were not taken into account by the CIT(A) and hence the findings given by the CIT(A) that the money invested in the shares belong to Director Shri Shantilal Jain has been proved by the assessee. Hence, the appeal of the assessee is allowed. 8. In result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 24/02/2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 24/02/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 23.02.2023 2. Date on which the type draft is placed before the Dictating Member 23.02.2023 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S .02.2023 5. Date on which the fair order is placed before the Dictating Member for pronouncement .02.2023 6. Date on which the fair order comes back to the Sr.P.S./P.S 24.02.2023 7. Date on which the file goes to the Bench Clerk 24.02.2023 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................