Nandish Dipakbhai Mehta, Himatnagar V. The Dy. CIT, Central Circle-1(4), Ahmedabad

ITSSA 44/AHD/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0122 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-08-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 19-06-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 22-05-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Loose papers
• Section: 132; 143(3); 142(1); 143(2); 153; 153C; 20

Judgement Text

IT(SS)A No.44/Ahd/2023 Assessment Year: 2013-14 Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER IT(SS)A No.44/Ahd/2023 Assessment Year: 2013-14 Nandish Dipakbhai Mehta, Mehta Finance, Nava Bazar, Himatnagar, Sabarkantha, Ahmedabad - 383 001 [PAN – ALWPM 4021 A] Vs. The Deputy Commissioner of Income Tax, Central Circle – 1(4), Ahmedabad. (Appellant) (Respondent) Assessee by Shri Aseem L. Thakkar, AR Revenue by Shri Sudhendu Das, CIT-DR D a t e o f H e a ri n g 20.06.2024 D a t e o f P ro n o u n c e m e n t 14.08.2024 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER: This appeal is filed by the Assessee against order dated 23.03.2023 passed by the CIT(A)-11, Ahmedabad for the Assessment Year 2013-14. 2. The assessee has raised the following grounds of appeal :- “1. The Ld. CIT(A) has erred in confirming the action of the Assessing Officer in issuing notice u/s.153C of Income Tax Act, 1961 which is illegal and bad in law hence the assessment so made requires to be quashed. 2. The Ld. CIT(A) has erred in confirming the addition of Rs.1,25,000/- made by the Assessing Officer for the investment made in Dev Aditya Scheme at Sargasan, Gandhinagar as alleged unaccounted transactions mentioned on page No.3 of AS/13 found and seized during the course of search u/s.132 of the Act on 30/07/2018 from the business premises of Mehta Finance and residential premise of Dipakbhai Mehta. 3. The Ld. CIT(A) has erred in confirming the disallowance of Rs.7,071/- made by the Assessing Officer for the alleged excess deduction claimed IT(SS)A No.44/Ahd/2023 Assessment Year: 2013-14 Page 2 of 5 by the Appellant in the return of income filed in compliance to notice u/s. 153C of the Act holding that the same has not been claimed in the original return of income.” 3. The original return of income was filed by the assessee on 18.11.2013 declaring total income of Rs.1,58,780/-. The case was selected for scrutiny and the same was assessed under Section 143(3) of the Income Tax Act, 1961 thereby accepting the assessee’s return of income. A search under Section 132 of the Act was carried out in the case of Mehta Soni Group of cases on 30.07.2018 in which the business premises of Mehta Finance as well as residential premises of Shri Deepakkumar Rasiklal Mehta was searched. Three lockers belonging to Deepakkumar Rasiklal Mehta were also covered during the course of search. During the search action under Section 132 of the Act, various loose papers were found and seized related to the present assessee. The same elaborates in 20 pages at page no.2 of the Assessment Order. Since the Assessing Officer observed that the seized materials were incriminating in nature pertains to the assessee accordingly provisions of Section 153C of the Act was invoked and, therefore, satisfaction was recorded on 02.02.2021. Notice under Section 153 of the Act was issued on 02.02.2021 after recording due satisfaction. In response to the said notice, the assessee furnished return of income under Section 153C of the Act on 07.02.2021 declaring total income of Rs.1,51,710/-. Notice under Section 143(2) of the Act was issued on 20.02.2021 and further notices under Section 142(1) of the Act along with questionnaire was issued on 23.02.2021, 16.02.2021 & 13.03.2921 and 08.04.2021. In response to these notices, the assessee submitted details on various dates. The assessee received remuneration income from Mehta Finance & Setu Organiser and has also earned income from other sources as observed by the Assessing Officer in the Assessment Order. The Assessing Officer further observed that the assessee also ran a proprietary concern in the name of Mehta Financial Services during the period related to A.Y. 2015-16. In response to the notices, the Assessing Officer has given the particulars of transactions which are recorded in the books of account and corresponding income i.e. profit from share capital income as disclosed in the return of income. After going through the assessee’s submissions and evidences, the Assessing Officer partially accepted the reply of the assessee and observed that the transaction amounting to Rs.1,25,000/- has not been accounted and, therefore, made addition of same as unexplained transaction. The Assessing Officer also made disallowance under Chapter VI-A IT(SS)A No.44/Ahd/2023 Assessment Year: 2013-14 Page 3 of 5 amounting to Rs.7,071/-. Thus, assessed the total income of the assessee under Section 143(3) read with Section 153B(i)(a) read with Section 153C of the Act at Rs.2,83,781/-. 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. The ld. AR submitted that the issuance of notice under Section 153C of the Act is illegal and bad in law as the documents found during the search belonged to the partnership firm and there is no nexus between the assessee and the seized papers, as such, the Ld. AR further submitted that the copy of the satisfaction note recorded in the case of the searched party and in the case of the assessee was not furnished to the assessee. On the basis of seized material an inference was drawn by the Assessing Officer that the noting which have been made therein relate to Dev Aditya Scheme at Sargasan, Gandhi Nagar in which the assessee’s share is 10%. The Ld. AR submitted that however, a perusal of loose papers would reveal that these are only dump documents and neither the name of the partnership firm or building project was mentioned in those documents. Further, on the basis of noting on page no.3 of Annexure AS13 and it has been shown that transaction of Rs.1,25,000/- was carried out by the assessee which is not recorded in the books of accounts. All these are only noting and jotting and there is no such transaction undertook by the assessee. The assessee claimed deduction under Chapter VI-A of Rs.1,00,000/- in the original return of income filed and in fact in the return of income filed under Section 153C of the Act deduction under Chapter VI-A has been claimed to the extent of Rs.1,07,071/-. The Assessing Officer has taken a view that the additional deduction claimed under Chapter VIA is not permissible while filing the return of income in compliance to notice under Section 153C of the Act. The Ld. AR submitted that the action of the Assessing Officer is completely unsustainable and in terms to support proposition of law, the ld. AR relied upon the decision in the case of ACIT vs. JSW Steel Limited, 422 ITR 71. The Ld. AR also relied upon the decision of DCIT vs. Krutika, 103 taxmann.com 9 (SC), PCIT vs. Allied Perfumers Pvt. Ltd., 431 ITR 237 (Delhi HC). IT(SS)A No.44/Ahd/2023 Assessment Year: 2013-14 Page 4 of 5 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant material available on record. As regards to the contention of the ld. AR that the search documents belonged to the other party appears to be not applicable in all the documents especially page nos.9 and 10 of Annexure AS-11 wherein there is details of introduction of capital and withdrawal by Shri Nandish Mehta in various concerns of Setu Group like Setu Buildcon, Setu Infrabuild, Setu Organisers, Line Infra, Line Procon LLP etc. After perusing the documents which are incorporated in Assessment Order, it can be seen that the documents are specifying certain transactions. Thus, in fact, the satisfaction note as stated will be in respect of transactions which after proper verification of transaction can be taken into account for final addition and to look into the transactions, the Assessing Officer has rightly invoked Section 153C of the Act wherein the assessee has filed his return of income. Therefore, ground no.1 is dismissed. 8. As regards to ground no.2, from the perusal of the particulars as given in paragraph no. 4.3 at page nos.5, 6, & 7 of the Assessment Order by the assessee, it explains the transaction recoded in the books of account and corresponding income i.e. profit from shares and partners’ capital interest which is clearly disclosed by the assessee and at no point of time the Assessing Officer has doubted the same. There was no nexus established by the Department related to unexplained transaction as the transactions were accounted and documents seized are clearly the documents which cannot be taken in the holistic way for making addition. It does not pertain to any transaction relating to the assessee. Thus, ground no.2 is allowed. 9. As regards to ground no.3, regarding alleged excess deduction claimed by the assessee also is justifiable from the perusal of records, as the same can be verified from its books and the assessee has claimed deduction under Chapter V-IA thereby quantifying the sum. Ground no.3 is allowed. IT(SS)A No.44/Ahd/2023 Assessment Year: 2013-14 Page 5 of 5 10. In the result, appeal of the assessee is partly allowed. Order pronounced in the open Court on this 14 th August, 2024. Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 14 th August, 2024 PBN/* 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