The Asstt. Commissioner of Income Tax, Central Circle-1(4), Ahmedabad V. Riddhi Siddhi Gluco Biols Limited, Ahmedabad

ITSSA 42/AHD/2022

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which deleted a disallowance made under Section 14A of the Income Tax Act during the Assessment Year 2016-17. The disallowance was initially made by the Assessing Officer following a survey action under Section 133A, where a significant cash discrepancy was noted. The CIT(A) found that the material relied upon by the Revenue was not incriminating and thus deleted the disallowance. The Tribunal, after reviewing the submissions and evidence, concurred with the CIT(A) and dismissed the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302887 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-09-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-08-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 07-12-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. P. YADAV
• Keywords: Set aside
• Section: 131; 133A; 153A; 14A; 143(1)

Judgement Text

IT(SS)A No.42Ahd/2022 A.Y. 2016-17 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER IT(SS)A No.42/Ahd/2022 Assessment Year: 2016-17 The Assistant Commissioner of Income Tax, Central Circle – 1(4), Ahmedabad. Vs. Riddhi Siddhi Gluco Biols Limited, 10, Abhishree Corporate Park, Ambli Bopal Road, Ambli Bopal, Ahmedabad – 380 058. [PAN – AABCR3417 Q] (Appellant) (Respondent) Assessee by Shri P.D. Shah, AR Revenue by Shri A.P. Yadav, CIT (D.R.) Da te o f He a r in g 16.08.2023 Da te o f P ro n o u n ce m e n t 13.09.2023 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This appeal is filed by the Revenue against the order dated 21.09.2022 passed by the CIT(A)-11, Ahmedabad for the Assessment Year 2016-17. 2. The Revenue has raised the following grounds of appeal :- “1) On the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in deleting the disallowance u/s.14A of Rs.2,27,42,782/- and giving relief to the assessee by holding that no incriminating materials were found with regard to the issue on which addition was made in the assessment order. 2) 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. 3) It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the AO be restored to the above extent.” 3. The original return of income was filed on 01.10.2016 declaring total income at Rs.2,80,57,730/-. Further the return of income was revised on 03.01.2017 and IT(SS)A No.42Ahd/2022 A.Y. 2016-17 Page 2 of 3 income was declared at Rs.2,80,57,730/-. The assessment was processed under Section 143(1) of the Income Tax Act, 1961 on 18.08.2017. Initially a survey action under Section 133A of the Act was conducted on 01.02.2019 in which the business premises of the assessee were also part of the said action. During the survey proceedings, cash of Rs.4,51,02,330/- was found and the Assessing Officer observed that the cash balance as per the cash books of the concerns running from the said premises as on the date of survey was Rs.6,06,330/- and thus there was a discrepancy of Rs.4,44,96,000/- in the cash found and cash balance as per books as on the date of survey. Statement under Section 131 of the Act was recorded that of CFO, Vice President as well as one of the Directors of the assessee company. The assessee is engaged in Power Generation and trading of commodities. The assessee filed its reply in response to the notice under Section 153A of the Act and also field return of income on 06.12.2019 thereby declaring total income of Rs.2,80,57,730/-. The Assessing Officer made disallowance under Section 14A of the Act amounting to Rs.2,27,42,782/-. 4. Being aggrieved by the Assessment Order, the assessee filed appeals before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. DR submitted that the CIT(A) was not right in deleting the disallowance under Section 14A of the Act thereby holding that no incriminating material was found with regard to the issue on which addition was made by the Assessing Officer. The Ld. DR relied upon the Assessment Order. 6. The Ld. AR relied upon the order of the CIT(A) 7. We have heard both the parties and perused all the material available on record. It is pertinent to note that the proceedings under Section 153A of the Act was in respect of survey action where cash has been found and in respect of amount disallowable under Section 14A computed as per Rule 8D the assessee has categorically mentioned that the assessee suo moto disallowed Rs.1,29,69,838/- under Section 14A of the Act as the assessee has rightly taken cognisance of the Section 14A read with Rule 8D. In fact, this issue is not related to the incriminating material as alleged by the Revenue and in fact the material relied by the Revenue was IT(SS)A No.42Ahd/2022 A.Y. 2016-17 Page 3 of 3 not at all considered as incriminating and, therefore, the CIT(A) has rightly deleted the disallowance under Section 14A of the Act. There is no need to interfere with the findings of the CIT(A). Hence, appeal of the Revenue is dismissed. 8. In the result, appeal filed by the Revenue is dismissed. Order pronounced in the open Court on this 13 th September, 2023. Sd/- Sd/- (WASEEM AHMED) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 13 th day of September, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad