The ITO, Ward-4(1)(3), Ahmedabad V. Shaival Reality .Ltd., Ahmedabad

ITSSA 554/AHD/2019

AI Insights

The case revolves around an appeal by the Revenue against the order of the CIT(A) which quashed the notice issued under section 153C of the Income Tax Act, 1961, concerning the assessment year 2011-12. The Revenue challenged the CIT(A)'s decision which was based on the grounds that the documents seized during a search operation did not belong to the assessee, Shaival Reality Ltd., but to another entity, the Barter group. The Tribunal examined the legal provisions under section 153C, particularly focusing on the amendments made by the Finance Act, 2015, and the judicial interpretation provided by the Hon'ble High Court in the case of Anilkumar Gopikishan Agrawal & Others Vs. ACIT. The Tribunal found that the CIT(A) had correctly applied the law as per the High Court's decision, leading to the dismissal of the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133491 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-01-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 04-12-2019
• Other Referred Cases: Anilkumar Gopikishan Agrawal & Others Vs. ACIT, SCA No.12825 of 2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 153C

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘A’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SMT. MADHUMITA ROY, JUDICIAL MEMBER, JUDICIAL MEMBER IT(SS)A No.554/Ahd/2019 Assessment Year :2011-12 ITO, Ward-4(1)(3) Ahmedabad. Vs. Shaival Reality Ltd. A-1, Maharaja Palace Opp: Ras Ranjan Vijay Char Rasta Navrangpura Ahmedabad. PAN : AABCS5607F 0 अपीलाथ / (Appellant) यथ /(Respondent) Assesseeby : Shri M.K. Patel, AR Revenue by : Shri Vijay Kumar, Jaiswal, CIT-DR स ु नवाई क तार ख/Date of Hearing : 11/01/2023 घोषणा क तार ख /Date of Pronouncement: 25/01/2023 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the Revenue against order passed by the ld.Commissioner of Income-Tax(A)-8, Ahmedabad [hereinafter referred to as “ld.CIT(A)”] dated 17.9.2019 under section 250(6) of the Income Tax Act, 1961 ("the Act" for short)pertaining to Asst.Year2011-12. 2. The ground raised by the Revenue is as under: “1. Whether the ld.CIT(A) was correct in deleting the addition on account of unaccounted cash receipt of rs.5,00,00,000/- by quashing the notice u/s.153C of the IT Act, 1961.” IT(SS)A No.554/Ahd/2019 2 3. As transpires from a bare reading of the ground above the solitary issue in the present appeal relates to deletion of addition made on account of unaccounted cash receipt of Rs.5 crores by quashing notice issued under section 153C of the Act. The finding of the ld.CIT(A) in this regard are at para 6 and 7 of the order as under: IT(SS)A No.554/Ahd/2019 3 IT(SS)A No.554/Ahd/2019 4 *** **** **** *** IT(SS)A No.554/Ahd/2019 5 *** **** **** *** *** **** **** *** IT(SS)A No.554/Ahd/2019 6 4. On going through the above order, we find that the ld.CIT(A) has recorded a categorical finding of fact that the addition in the impugned case has been made on the basis of documents which were found on search action conducted in the case of Barter group, an alleged accommodation entry provider. The document seized, on the basis of which addition was made in the case of the assessee, was a diary which contained entries revealing information relating to the assessee, as the assessee having received unaccounted money. Taking note of this fact, the ld.CIT(A) found that these documents clearly did not belong to the assessee, the diary belonging to the Barter group, and as per the existing provisions of section 153C of the Act, jurisdiction to frame assessment u/s 153C of the Act could have been assumed by the AO only on being in possession of documents belonging to the assessee. The ld.CIT(A) has referred to the decision of Hon’ble jurisdictional High Court in the regard in the case of Anilkumar Gopikishan Agrawal & Others Vs. ACIT, SCA No.12825 of 2018, laying down the said ratio , to the IT(SS)A No.554/Ahd/2019 7 effect that in the case of material found during search not found to be belonging to the assessee jurisdiction to frame assessment u/s 153C of the Act cannot be assumed by the AO. Ld.CIT(A) noted that the Hon’ble High Court held that prior to the amendment of provision of section 153C brought in w.e.f 1-6-2015, it was only on the basis of the documents found ‘belonging’ to the assessee that proceedings under section 153C could be initiated. Subsequent to the amendment to this section w.e.f. 1-6-2015, the word “belonged” was substituted with “pertained” and proceedings under section 153C could be initiated even if the documents or material seized did not “belong to” the assessee, but was found to “pertain to” the assessee. The ld.CIT(A) has noted that Hon’ble jurisdictional High Court in the case cited (supra) held that this amendment in section 153C of the Act to be prospective in nature. He has thereafter noted that in the present case, search was conducted at the Barter Group on 4.12.2014 and notice under section 153C of the Act issued on the basis of seized material found during this search. He, accordingly, held that as per the decision of Hon’ble jurisdictional High Court, the notice under section 153C was invalid and the assessment accordingly framed liable to be quashed. 5. The ld.DR was unable to point out any distinguishing facts nor was he able toestablish that documents/incriminating material found during the course of search in the Barter group belonged to the assessee. He was unable to bring to our notice any contrary decision of the Hon’ble apex court or for that matter any subsequent decision of the Hon’ble jurisdictional High Court. IT(SS)A No.554/Ahd/2019 8 6. In view of the same, we see no reason to interfere in the order of the ld.CIT(A) quashing the assessment order as invalidly initiated. Thus, the ground appeal of the Revenue is rejected. 7. In the result, the appeal of the Revenue is dismissed. Order pronounced in the Court on 25 th January, 2023 at Ahmedabad. Sd/- Sd/- (MADHUMITA ROY) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad,dated 25/01/2023