The ACIT, Central Circle-2(3), Ahmedabad V. Shri Rajeshkumar Kanjibhai Patel, Visnagar

ITSSA 513/AHD/2019

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6515 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-06-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-06-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 31-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Set aside
• Section: 68; 143(3); 142(1); 153A; 143(2)

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ “B”, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद । ।। । IN THE INCOME TAX APPELLATE TRIBUNAL “ B ” BENCH, AHMEDABAD ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTNAT MEMBER IT(ss)A No.513/Ahd/2019 Assessment Year : 2017-18 The ACIT Central Circle-2(3) Ahmedabad Vs Shri Rajeshkumar K. Patel 4,5,6, Rajhans Society Dharoi Colony Road Visnagar – 384 315 PAN: ABNPP 8566 G / (Appellant) / (Respondent) Assessee by : Shri K.C. Thaker, AR Revenue by : Shri Sudhendu Das, CIT-DR /Date of Hearing : 11/06/2024 /Date of Pronouncement: 14/06/2024 आदेश/O R D E R PER SHRI MAKARAND V. MAHADEOKAR, AM: This appeal by the Revenue is directed against the order of the Ld.Commissioner of Income Tax (Appeals)-12, Ahmedabad (hereinafter referred to as "the Ld.CIT(A)"), dated 29-08-2019, for the Assessment Year (AY) 2017-18, whereby the Ld.CIT(A) deleted the additions made by the Assessing Officer (hereinafter referred to as "AO") under section 68 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") in his order passed under section 143(3) read with section 153A of the Act. IT(ss)A No.513/Ahd/2019 The ACIT vs. Shri Rajeshkumar Kanjibhai Patel Asst. Year : 2017-18 2 Facts of the Case: 2. The assessee filed a return of income declaring an income of Rs.19,43,790/- for AY 2017-18 on 20/11/2017. Search and survey actions were conducted in the case of related to Rameshbhai Chaturbhai Prajapati and other Group, wherein Shri Rajesh Kumar K. Patel, who was a Director in R.K. Jewels (Visnagar Pvt. Ltd.), was also covered and became liable for proceedings under section 153A of the Act. Notice under section 143(2) of the Act was issued on 26/09/2018 followed by a Notice under section 142(1) of the Act issued on 30/11/2018. 2.1. During post-search proceedings, certain incriminating documents were extracted from the mobile phone of Shri Dignesh R. Patel, son of the assessee. On verification, it was noted that the same were pertained to M/s. Swastik Pipe Industries, a Partnership-concern where Shri Dignesh R. Patel was a Partner. 2.2. The AO noted an addition of Rs.2,58,00,000/- as unexplained cash credit in the hands of M/s. Swastik Pipe Industries, out of which Rs.1,50,00,000/- was allegedly provided by the assessee in cash, treating the same as “income from undisclosed sources” under section 68 of the Act. Jewellery was also found from the residence and Lockers No. 216, 702, and 579 with R.K. Safe Lockers in the names of family members. During assessment proceedings, the assessee was asked to furnish details of the jewellery found and sources of investment with documentary evidence. The assessee submitted a consolidated chart and claimed the jewellery per IT(ss)A No.513/Ahd/2019 The ACIT vs. Shri Rajeshkumar Kanjibhai Patel Asst. Year : 2017-18 3 Instruction No.1916 may be treated as explained. However, excess jewellery weighing 394.890gms belonging to late Smt. Manguben K. Patel was noted, and Rs.10,78,050/- was added to the income of the assessee being the legal heir. 3. Aggrieved by the order of AO, assessee filed an appeal before the Ld.CIT(A), who deleted the additions made by the AO. Therefore, the Revenue is in appeal before us on following grounds: “1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting addition of Rs.1,15,00,000/- made on account of unexplained cash credit u/s.68 of the I.T. Act, 1961. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting addition of Rs.10,78,050/- being unexplained jewellery. 3. 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. 4. 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.” On the Grounds of appeal: 4. The Ld.Departmental Representative (DR) contended that the Ld.CIT(A) erred in deleting the additions made by the AO. It was argued that the evidence extracted from the digital data clearly indicated unaccounted transactions by the assessee-firm and that the Ld.CIT(A) failed to appreciate the incriminating nature of the seized material. IT(ss)A No.513/Ahd/2019 The ACIT vs. Shri Rajeshkumar Kanjibhai Patel Asst. Year : 2017-18 4 5. The Ld.Counsel for the assessee submitted that the AO made the additions based on assumptions without properly considering the documentary evidence provided. It was argued that the transactions were related to expected donations for the Shamshan Ghat. He relied on the order of the Ld.CIT(A). 5.1. We have heard the arguments of both parties and perused the material available on record. We find that the Ld.CIT(A) while deciding the matter recorded the following: 1. The assessment order and assessee's submissions have been considered. It is observed that the AO's addition of Rs.1,15,00,000/- emanates from an image on the mobile phone of Shri Dignesh R. Patel, son of the assessee. The image contained several transactions which the AO deemed to be unaccounted cash credits. The Ld.CIT(A) referred to the appellate order in the case of M/s. Swastik Pipe Industries for AY 2017-18, wherein it was held that the transactions recorded in the image pertained to expected donations for the renovation of a cremation site managed by Antim Visamo Trust. The Trust had furnished relevant extracts from its books of accounts, confirming these amounts and issuing receipts in the names of donors. In the appeal proceedings of M/s. Swastik Pipe Industries, the Ld.CIT(A) held that the primary onus under sections 132(4)/292C of the Act had been discharged by Shri Dignesh R. Patel, Shri Rajesh Kumar K. Patel, and the Trust. The Trust had owned up the amounts and provided the evidence that IT(ss)A No.513/Ahd/2019 The ACIT vs. Shri Rajeshkumar Kanjibhai Patel Asst. Year : 2017-18 5 these amounts, actually received, were duly accounted for in its books. Consequently, the Ld.CIT(A) directed the deletion of the addition of Rs.1,15,00,000/- in the assessee's hands, subject to the finality of the case of M/s. Swastik Pipe Industries for AY 2017-18. 2. Regarding the addition of Rs.10,78,050/- on account of excess jewellery, the Ld.CIT(A) noted that the jewellery belonged to late Smt. Manguben K. Patel, and the appellant being her legal heir, offered this amount to tax. The Ld.CIT(A) observed that the will and family tree submitted by the assessee supported his claim that the jewellery was inherited. 3. The Ld.CIT(A) found no good basis to confirm the addition on account of excess jewellery and directed the deletion of Rs.10,78,050/-, allowing the related ground. 5.2. The Ld.CIT(A) has meticulously analyzed the facts and the evidence submitted by the assessee and the Trust, demonstrating that the transactions noted in the seized material pertained to expected donations duly accounted for in the Trust's books to the extent that are received. The assessee has satisfactorily explained the sources of the cash and jewellery as per the established legal principles and presumption rules under sections 132(4)/292C of the Act. In the absence of any contrary evidence provided by the Revenue to disprove the assessee's explanation, we find no reason to IT(ss)A No.513/Ahd/2019 The ACIT vs. Shri Rajeshkumar Kanjibhai Patel Asst. Year : 2017-18 6 interfere with the Ld.CIT(A)'s order, the same is hereby upheld. 6. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the Open Court on 14 th June, 2024 at Ahmedabad. Sd/- Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER (MAKARAND V.MAHADEOKAR) ACCOUNTANT MEMBER Ahmedabad, Dated 14/06/2024 . ी. य , . . ./T.C. NAIR, Sr. PS ! "# /Copy of the Order forwarded to : 1. "!ी $% / The Appellant 2. &य$% / The Respondent. 3. '(')* य य + / Concerned CIT 4. य य + )"!ी (/ The CIT(A)-12, Ahmedabad 5. . /ीय )* , य "!ी य ")* , ज /DR,ITAT, Ahmedabad, 6. / 12 3 /Guard file. / BY ORDER, &य ! //True Copy// ह य !'जी (Asstt. Registrar) य "!ी य ")* , ITAT, Ahmedabad 1. Date of dictation (word processed by Hon’ble AM in his laptop) : 12.6.2024 2. Date on which the typed draft is placed before the Dictating Member. : 12.6.2024 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 14.6.24 7. Date on which the file goes to the Bench Clerk. : 14.6.24 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 :