The ACIT, Central Circle-2(1), Ahmedabad V. Relic Property Development Pvt. Ltd, Ahmedabad

ITSSA 323/AHD/2019

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A)-6, Ahmedabad, which had deleted an addition of Rs. 3,00,00,000 made by the Assessing Officer on account of unexplained unsecured loan under section 68 of the Income Tax Act. The assessee, Relic Property Development Pvt. Ltd., had received this amount from Kanhai Infrastructure Pvt. Ltd. The CIT(A) allowed the appeal based on the fact that the amount had already been disclosed and taxed in the hands of Mr. Sanjay H. Thakkar, who was involved in the land transaction related to the receipt. The Department challenged this decision, but the Tribunal found no infirmity in the CIT(A)'s order, noting that the income had already been subjected to tax in the hands of Mr. Thakkar as per the Settlement Commission's acceptance.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131376 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-02-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-12-2022
• Assessment Year: 2009-2010
• Appeal Filed On: 02-06-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 68; 143(3); 153A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Th e ACIT, Central Circle-2(1), Ah medabad (Appellant) Vs Relic Property Develo p ment Pvt. Ltd., Dev Arc, Isco n Cro ss Ro ad SG Highway , Satellite, Ah med abad (Resp ondent) PAN: AAD CR630 7D Asses see b y : None Revenue by : Shri S udhendu Das, CIT-D. R. Date of hearing : 12-12 -2022 Date of pronouncement : 17-02 -2023 आदेश /ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals)-6, Ahmedabad in Appeal no. CIT(A)-6/390/2015-16, in proceeding u/s. 143(3) r.w.s. 153A vide order dated 25/03/2019 passed for the assessment year 2009-10. 2. The Department has taken the following grounds of appeal:- IT(SS)A No. 323/Ahd/2019 Assessment Year 2009-10 I.T(SS).A No. 323/Ahd/2019 A.Y. 2009-10 Page No. ACIT vs. Relic Property Development Pvt. Ltd. 2 Sl. No. Grounds of Appeal Tax effect relating to each Ground of Appeal 1 On the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in law and on facts in deleting the addition of Rs.3,00,00,000/- on account of unexplained unsecured loan u/s.68 of the Act, though there is no clear finding in the Income Tax Settlement Commission's order in respect of objections raised in Rule 9 report by the Pr.CIT(Central), Ahmedabad and issues raised by CIT-DR regarding the higher income declared by the assessee in return of income filed u/s.153A of the Act, which was reduced before the Settlement Commission. 1,01,97,000/- 2 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.3,00,00,000/- on account of unexplained unsecured loan u/s.68 of the Act, though there is no mention in the order of Income Tax Settlement Commission, whether the assessee had declared entire amount of 3 crore or actual profit has been offered for taxation, which resulted in reduction of income. 3 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in observing that Shri Sanjay Thakkar has offered additional income of Rs.3,61,10,000/- and same is accepted by Hon'ble Settlement Commission whereas the assessee had offered additional income of Rs.32,15,130/- for A.Y. 2009-10 and same was accepted by the Hon'ble Settlement Commission as per Annexure-40 of order u/s 245D(4). 4 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that the assessee had reduced his income for A.Y. 2009-10 from that declared in his return filed u/s 153A than offered in the SOF, and the difference was Rs. 1,38, 4 1,1 32/- as per page 57 of order u/s 245D(4). 5 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 6 It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. Total Tax Effect 1,01,97,000/- I.T(SS).A No. 323/Ahd/2019 A.Y. 2009-10 Page No. ACIT vs. Relic Property Development Pvt. Ltd. 3 3. The brief facts of the case are that the assessee company had received a sum of Rs. 3,00,00,000/- through account payee cheque from Kanhai Infrastructure Pvt. Ltd. (Kanhai). During the course of assessment, the assessee submitted the confirmation of such party but the Assessing Officer made addition u/s. 68 of the Act on the ground that assessee has failed to prove the creditworthiness of the deposits. 4. The assessee filed appeal against the order passed by ld. CIT(A). 5. Before ld. CIT(A), the assessee submitted that one Mr. Sanjay H. Thakkar had initiated transactions for purchase and sale of land at village Godhvi. Since, Mr. Sanjay H. Thakkar could not purchase such land, he introduced Mr. Janak Barot of Kanhai Infrastructure Pvt. Ltd. (Kanhai) for purchase of such land from B. Nanji Group and in turn Rs. 3,00,00,000/- was received by the assessee company as unsecured loan. The assessee submitted that in the return of income filed by Mr. Sanjay H. Thakkar in response to notice u/s. 153A, he had made disclosure of 11,38,62,664/- for entire transaction of land situated at Village Godhvi which included the sum of Rs. 3,00,00,000/- received by the assessee from Kanhai Infrastructure Pvt. Ltd. The assessee also submitted copy of settlement application filed by Mr. Sanjay H. Thakkar wherein the relevant transaction of land was discussed and he has submitted before the Settlement Commission that the total income of Godhavi land is Rs. 9,95,20,468/- which includes figure of Rs. 3,00,00,000/- received by the assessee company. The assessee submitted copy of settlement order passed in the case of Mr. Sanjay H. Thakkar by Settlement Commission on 29 th Sep, 2016 and contended that disclosure I.T(SS).A No. 323/Ahd/2019 A.Y. 2009-10 Page No. ACIT vs. Relic Property Development Pvt. Ltd. 4 made by Mr. Sanjay H. Thakkar with respect to above land transaction was accepted by the Settlement Commission and hence addition cannot be made in the hands of the assessee because income is already offered to tax by Mr. Sanjay H. Thakkar in his Settlement Petition. In the light of above submission made by the assessee, the ld. CIT(A) allowed the assessee’s appeal on the ground that since addition made in the hands of the assessee has already been owned up by Mr. Sanjay H. Thakkar and which has also been accepted as correct disclosure by Hon’ble Settlement Commission, the addition made by the A.O. of Rs. 3,00,00,000/- in the hands of the assessee is hereby deleted. While passing the order ld. CIT(A) observed as follows:- “It is pertinent to note that Mr. Sanjay Thakkar vide letter dated 16 th September, 2016 has agreed to offer additional income of Rs.3,61,10.090/- and same is accepted by Hon'ble Settlement Commission at page No. 97 of its order. In view of above narrated facts it is clear that Mr. Sanjay Thakkar while filing his settlement petition has already conceded above amount received by Appellant through cheque from Kanhai as additional income and there is credence in the argument of Appellant that addition made in its case is already owned up by Mr. Sanjay Thakkar and which is accepted to be correct by Hon'ble Settlement Commission hence present addition made by AO for Rs.3,00,00,000/- is deleted. This ground of appeal is allowed.” 6. The Department is in appeal before us against the order passed by the ld. CIT(A) allowing complete relief to the assessee. Before us, the ld. Departmental Representative has not challenged the finding that the addition has already been confirmed/admitted in the hands of Mr. Sanjay H. Thakkar as evident from the order passed by Hon’ble Settlement Commission. Accordingly, once, the aforesaid sum has already been subject to tax in the hands of Mr. Sanjay H. Thakkar, we find no infirmity in the order of ld. CIT(A) that the same amount cannot be again taxed in the hands of the I.T(SS).A No. 323/Ahd/2019 A.Y. 2009-10 Page No. ACIT vs. Relic Property Development Pvt. Ltd. 5 assessee company. Even the ld. Departmental Representative has not disputed that the same amount has already been subject to tax in the hands of Mr. Sanjay H. Thakkar. Accordingly, we find no infirmity in the order of ld. CIT(A) so as to call for any interference. 7. In the result, the appeal of the Department is dismissed. Order pronounced in the open court on 17-02-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 17/02/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद