AI Insights
The case involves an appeal by the Revenue against the order of the CIT(A) which had allowed the claims of Suraj Enterprise P. Ltd. regarding rent expenses and the treatment of shares purchased at a price lower than their fair market value. The Revenue contended that the CIT(A) erred in law and on facts by deleting the disallowance of rent expenses and the addition made on account of the purchase of shares below fair market value. The Tribunal examined the facts and legal provisions, including section 153A and section 56(2)(viia)(ii) of the Income Tax Act, 1961, and found no merit in the Revenue's appeal, leading to the dismissal of the appeal.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 133488 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
4 year(s) 3 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
20-04-2023
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
06-02-2023
Assessment Year
2013-2014
Appeal Filed On
02-01-2019
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.09/Ahd/2019 Assessment Year : 2013-14 DCIT, Cent.Cir.1(3) Ahmedabad. Vs. Suraj Enterprise P.Ltd. Suraj House Opp: Usmanpura Garden VidhyanagarSociety Usmanpura Ahmedabad. PAN : AALCS 2331 N 0 अपीलाथ / (Appellant) यथ /(Respondent) Assessee by : Shri Jignesh Parikh, AR Revenue by : Shri Vijay Kumar Jaiswal, CIT-DR स ु नवाई क तार ख/Date of Hearing : 07/02/2023 घोषणा क तार ख /Date of Pronouncement: 21/04/2023 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)-11, Ahmedabad [hereinafter referred to as “ld.CIT(A)”] dated 5.10.2018under section 250(6) of the Income Tax Act, 1961 ("the Act" for short)pertaining to Asst.Year2013-14. 2. The grounds raised by the Revenue read as under: “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 disallowance of Rs.37,67,000/- made on account of rent expenses. 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 IT(SS)A No.09/Ahd/2019 2 Rs.5,71,38,447/- made on account of purchase of shares of listed company at lower than the fair market price. 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 is not appreciating the provisions of section 153A of the I T Act, 1961 which requires the total income to be brought under tax without any restrictions. 4. On the facts and in the circumstance of the case and in law, the Ld.CIT(A) has erred in law and on facts in holding that such assessment or reassessment u/s 153A of the I T Act, 1961 is to be restricted only to the incriminating materials found during the search. 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.” 3. Taking up Ground No.1 relating to deletion of addition made of rent expenses incurred by the assessee, the brief facts relating to the issue are that during assessment proceedings, it was noted that the assessee had claimed rent expenses of Rs.37,67,000/- whichwas expended by the assessee as being paid for the purpose of guesthouse leased in Mumbai. The assessee explained that it was in the business of trading in shares and securities and Mumbai being hub of such activities, the premises was taken on rent for the purpose of being used as guesthouse for accommodating Directors visiting Mumbai for the purpose of expanding facilities for carrying on business activities in shares securities from Mumbai. The directors of the assessee had started its business operation in Mumbai and gained out of it over a period of time. The AO held that the impugned rent expenses were not incurred for the purpose of business noting that this rent expenses were disallowed in the preceding assessment year also i.e.Asst.Year 2012-13, and in identical facts and circumstances. Accordingly, rent expenses of Rs.37,67,000/- incurred by the assessee were disallowed by the AO as not incurred for the purpose of business. 4. The ld.CIT(A) allowed the assessee’s claim noting that he had allowed identical claim of the assessee in the preceding year also IT(SS)A No.09/Ahd/2019 3 i.e.Asst.Year 2011-12 and 2012-13. His relevant finding at para-11 of his order is as under: IT(SS)A No.09/Ahd/2019 4 5. Before us, the ld.DR was unable to distinguish in any way the facts of the case in the preceding year as compared to the facts in the impugned year before us. Further, he was unable to bring to our notice any reversal of the order of the ld.CIT(A) in the preceding year by the ITAT. IT(SS)A No.09/Ahd/2019 5 6. We have gone through order of the ld.CIT(A). We have heard the contentions of both the sides and we do not any infirmity in the order of the ld.CIT(A). The genuineness of the rent expenses is not doubted in the present case, as rightly noted by the ld.CIT(A).. Also it is not the Revenues case that the property was found being used for non business purposes. The sole basis for making the disallowance is that since the assesses share trading business is carried out online there was no need or requirement for maintaining any guest house in Mumbai. It is settled law that it is not open to the department to decide what type of expenditure the assessee should incur and in what circumstances. The Hon’ble Apex court held so in the case of CIT vs Dhanrajgirji 91 ITR 544(SC).The jurisdiction of the AO is confined to deciding the reality of the expenditure, namely whether the amount claimed was factually expended as laid down and whether it was wholly and exclusively for the purpose of business. Once the nexus between the expenditure and purpose of business is established , the AO cannot claim to put itself in the armchair of a businessman to decide in what manner the business is to be carried out by the assessee. We agree with the ld.CIT(A) in this regard. 7. It is not the Revenues case that the expenditure was not incurred for the purpose of business of the assessee. Their only contention is that it was not required to be incurred. That does not automatically lead to the conclusion that the expenditure was not incurred for the purpose of business of the assessee. What is relevant for ascertaining whether the expenditure was incurred wholly and exclusively for the purpose of business is the direct concern and purpose for which the money is expended. The assessee in the present case had stated that the property was leased for the purpose of expanding its business of trading in shares/securities in Mumbai with Mumbai undeniably being commercial hub, and any person dealing in shares and securities would like to expand its business over there. The assessee stated that it had acted with IT(SS)A No.09/Ahd/2019 6 fore-sightedness in order to improve its business and to save extra hotel expenses by taking the premises on lease in Mumbai. The Revenue has not pointed out falsity/infirmity in the aforestated business purpose explanation of the assessee. We therefore agree with the Ld.CIT(A) that there is no impropriety in the explanation of the assessee and the business purpose of the expenditure stands established. 8. In the given facts and circumstances, we hold, the impugned expenses incurred by the assessee has been rightly held by the ld.CIT(A) for the purpose of the business of the assessee only. Accordingly, we uphold the order of the ld.CIT(A) allowing claim of the assessee of its rental income of Rs.37,67,000/- , and the ground of appeal raised by the Revenue in this regard, therefore, rejected. 9. As regards ground no.2, the issue raised in the present ground relates to addition to the income of the assessee in terms of provisions of section 56(2)(viia)(ii) of the Act on accountof shares bought in by the assessee-company far less than its fair market value. 10. The facts of the case being that the assessee had purchased shares of listed company totaling to 19,05,250 equity shares of Suraj Limited (earlier known as Suraj Stainless Ltd.) from one of the group companies viz. Suraj Impex P.Ltd. forRs.13.56 per share. This purchase was done off-market i.e. outside the stock exchange. From the copy of the DEMAT account, it was seen that delivery of the shares was duly received by the assessee-company. On the basis of Bombay Stock Exchange (BSE) data, the AO observed that lowest traded price of this scrip –Suraj Stainless Ltd. was of Rs.43.55 on 26.3.2013 when the shares were purchased, and therefore, he was of the view that the assessee has purchased shares less thanthe FMV, and accordingly, the AO held that the assessee had benefited at Rs.5,71,38,447/- on these purchases, and added the same to the income of the assessee as per the provision of section 56(2)(viia)(ii) of the Act. The ld.CIT(A) deleted the addition noting that the shares IT(SS)A No.09/Ahd/2019 7 purchased by the assessee were of listed company, which company qualified as company in which the public had substantial interest, and such company’s shares purchased were exempt from the applicability of provisions of section 56(2)(viia)(ii) of the Act. The relevant finding of the ld.CIT(A) at page no.20 of his order in this regard is as under: 8. Foruth& Fifth Grounds of appeal are in respect of addition of Rs.5,71,38,447/- on account of purchase of shares of listed company lower than the fair market value and thereby got the advantage to that extent. It is seen that during the previousyear-2012-13, the appellant company has purchased 19,05,250 equity shares of Surat Limited(earlier known as Suraj Stainless Ltd.), a lifted company from one of the group company namely Suraj Impex Pvt. Ltd at Rs.13.56 per share. This purchase was done off market, i.e. outside the stock exchange. From the copy of the D-Mat account, it is seen that the delivery of the said shares were duly received by the appellant company. This fact has not been disputed by the AO. On the basis of the BSE data the AO-observed that the lowest traded price of this scrip - Suraj Stainless Ltd. is of Rs\43.55j>n 26/03/2013 and therefore the AO is of the view that the appellant has purchased shares less than the fair market value. Accordingly, the AO is of the view that the appellant has clearly got the benefit of Rs.5,71,38,447/- on this purchase. The AO has further observed that listed company's shares have to be traded on recognized stock exchanges. The purchase price and sale price of listed company shares are driven by market force. Trading in such shares is open for all public and they make profit or loss on the basis of day to day trading or long term or short term investments. The mechanism of stock exchanges are in existence so that public cannot be cheated by the private interest of the corporate entities. If the companies themselves indulged in trading of listed shares off market, then public interest would be distorted. Accordingly, the AO held that the appellant has purchased listed company's shares lower than fair market value and thus got advantage of Rs. 5,71,38,447/- and therefore added to the total income. On the other hand, the AR of the appellant contended that the off market transactions are duly recognized by the SEBI also and there is no prohibition under any law for the off market transactions. He further submitted that from the perusal of the assessment order, it is not clear as to under which provision of the Act, the AO has made the addition of Rs. 5,71,38,447/-. However, it is clearly evident from the comparison of the purchase price and FMV of the shares so purchased, done by the AO, that she has made the impugned addition of Rs. 5,71,38,447/- u/s. 56(2)(viia)(ii) of the Act. By analyzing the provisions of said Section u/s. 56(2)(viia)(ii) of the Act as reproduced hereinabove, the AR contended that one of the conditions of said section is not satisfied and therefore, the provisions of Sec. 56(2)(viia)(ii) of the Act are not attracted in the case of the appellant and therefore the additions made by the AO is illegal and unjustified. It is seen that one of the conditions of Sec. 56(2)(viia)(ii) is that the property received should be the shares of any company not being a company in which public are substantially interested. In the present case, the shares purchased by the appellant is of Suraj Stainless Ltd., a listed company. The shares of the said company are listed on the BSE and NSE. This fact has not been denied by the AO in the assessment order. In the present case, the shares transacted are the shares of a listed company viz. Suraj Ltd. (earlier known as Suraj Stainless Ltd.) and therefore one of the conditions is not satisfied and therefore the provisions of sec. 56(2)(viia) of the Act is not be attracted. After considering the totality of the facts of the case, submission and the provisions of the Act, I am of the considered view that the provisions of section 56(2)(viia)(ii) of the Act are not attracted / applicable to the appellant company since one of the conditions is not satisfied. Further, during the course of search, no incriminating materials has been found indicating actual IT(SS)A No.09/Ahd/2019 8 receipt of such benefit/advantage by the appellant company by transacting the purchase and sale of the shares of listed company. Therefore, the addition of Rs.5,71,38,447/- made by the AO as advantage received by the appellant on account if difference between the purchase price and fair market value of the share is directed to be deleted. These grounds of appeal are allowed.” 11. On perusing the finding of the ld.CIT(A) it was noted that the ld.CIT(A) had apparently accepted the assessee’s contention that the shares of the company purchased by the assessee being listed on BSE and NSE, therefore, one of the conditions provided in section 56(2)(viia)(ii) was not fulfilled so as to attract the provisions of section 56(2)(viia)(ii) of the Act. Since it was not coming out clearly from the order of the Ld.CIT(A) as to how he was satisfied that the shares purchased by the assessee were excluded from the provisions of section 56(2)(viia) of the Act, the provisions of the said section were perused and it was noted that the exclusion was to shares purchased of companies in which public is not substantially interested. The provisions of the section are as under; 56. (1) .... (2) In particular, and without prejudice to the generality of the provisions of sub- section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely :— ... .... .... ..... ... .... .... ..... (viia) where a firm or a company not being a company in which the public are substantially interested, receives, in any previous year, from any person or persons, on or after the 1st day of June, 2010 but before the 1st day of April, 2017, any property, being shares of a company not being a company in which the public are substantially interested,— (i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property; (ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration : Provided that this clause shall not apply to any such property received by way of a transaction not regarded as transfer under clause (via) or clause (vic) or clause (vicb) or clause (vid) or clause (vii) of section 47. Explanation.—For the purposes of this clause, "fair market value" of a property, being shares of a company not being a company in which the public are substantially interested, shall have the meaning assigned to it in the Explanation to clause (vii); 12. The ld.counsel for the assessee therefore was asked at Bar to demonstrate as to how the ld.CIT(A) was convinced that the shares of the company which were purchased by the assessee, qualified as a company IT(SS)A No.09/Ahd/2019 9 in which public is not substantially interested. It was pointed out that the term “company in which pubic is substantially interested” is defined under section 2(18) of the Act as under: 2(18) "company in which the public are substantially interested"—a company is said to be a company in which the public are substantially interested— (a) if it is a company owned by the Government or the Reserve Bank of India or in which not less than forty per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that bank ; or (aa) if it is a company which is registered under section 25 of the Companies Act, 1956 (1 of 1956)9 ; or (ab) if it is a company having no share capital and if, having regard to its objects, the nature and composition of its membership and other relevant considerations, it is declared by order of the Board to be a company in which the public are substantially interested : Provided that such company shall be deemed to be a company in which the public are substantially interested only for such assessment year or assessment years (whether commencing before the 1st day of April, 1971, or on or after that date) as may be specified in the declaration ; or (ac) if it is a mutual benefit finance company, that is to say, a company which carries on, as its principal business, the business of acceptance of deposits from its members and which is declared by the Central Government under section 620A10 of the Companies Act, 1956 (1 of 1956), to be a Nidhi or Mutual Benefit Society ; or (ad) if it is a company, wherein shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than fifty per cent of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the relevant previous year beneficially held by, one or more co-operative societies ; (b) if it is a company which is not a private company as defined in the Companies Act, 1956 (1 of 1956)10a, and the conditions specified either in item (A) or in item (B) are fulfilled, namely :— (A) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) were, as on the last day of the relevant previous year, listed in a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder ; (B) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than fifty per cent of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the relevant previous year beneficially held by— (a) the Government, or (b) a corporation established by a Central, State or Provincial Act, or (c) any company to which this clause applies or any subsidiary company of such company if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year. Explanation.—In its application to an Indian company whose business consists mainly in the construction of ships or in the manufacture or processing of goods or in mining or in the generation or distribution of electricity or any other form of power, item (B) shall have effect as if for the words "not less than fifty per cent", the words "not less than forty per cent" had been substituted ; IT(SS)A No.09/Ahd/2019 10 13. The ld.counsel for the assessee was directed to demonstrate as to how the shares purchased by the assessee-company, of Suraj Stainless Ltd., qualified as shares of company in which the public is substantially interested in terms of section 2(18) of the Act, and whether the same was demonstrated to the ld.CIT(A) also. In this regard, he drew our attention to the submissions of the assessee to the ld.CIT(A) placed before usat PB Page No.84 to 99. The relevant portion of the submission to theld.CIT(A) dealing with this aspect were pointed out to us from page no.95 onwards at para-6 wherein the ld.counsel for the assessee contended that it was demonstrated to the ld.CIT(A) that the shares qualified as that of company in which the public is substantially interested as under: “6. From the plain reading of the above provisions of Sec. 56(2)(viia) of the Act, all the following conditions should be fulfilled/satisfied so as to considered it as Income from Other Sources u/s. 56(2)(viia)(i) OR (ii), as the case may be: i) The recipient should be either a firm or a company not being a company in which the public are substantially interest. ii) The receipt of the property should be from any person or persons, iii) The receipt of the property must be on or after 1st day of June, 2010. iv) The property received should be the shares of any company not being a company in which public are substantially interested. v) The aggregate value of the property so received must exceeds rupees Rs.50,000/- It is submitted that in the present case of the appellant company, it has purchased (i.e. received) the shares of the company namely Suraj Ltd. (a company in which public are substantially interested) from the seller company namely Suraj Impex PvL Ltd. Thus, the conditions mentioned at Sr. No. (iv) hereinabove is not fulfilled / satisfied. Therefore, the provisions of Sec. 56(2)(viia)(ii) of the Act are not attracted in case of the appellant company in respect of the said purchase of shares of Suraj Ltd. (previously known as Suraj Stainless Ltd.) from Suraj Enterprise Pvt. Ltd. For easy understanding, the conditions of Sec. 56(2)(viia) to be fulfilled / satisfied and how it is satisfied or not satisfied in the case of the appellant company is tabulated hereunder: Sr. No. Conditions to be fulfilled / satisfied for applicability of provisions of Sec. 56(2)(viia) Applicability of the respective conditions in case of the facts of the Appellant's case Whether condition is fulfilled / satisfied? (i) The recipient should be either a firm or a company not being a company in which the public are substantially interest. The recipient (i.e. the Appellant company is a Pvt. Ltd. Company. Yes IT(SS)A No.09/Ahd/2019 11 (ii) The receipt of the property should be from any person or persons. The receipt of the shares of Suraj Ltd. (previously known as Suraj Stainless Ltd.) is from a Pvt. Ltd. company namely Suraj Impex Pvt. Ltd. Yes (iii) The receipt of the property must be on or after 1st day of June, 2010. The said shares have been purchased on 04/05/2012, which is obviously after 01/06/2010. Yes (iv) The property received should be the shares of any company not being a company in which public are substantially interested. The shares are of Suraj Ltd. (previously known as Suraj Stainless Ltd.), which is a listed company in which public are substantially interested No (v) The aggregate value of the property so received must exceeds rupees Rs. 50,000/-. The aggregate value of the shares received by the appellant company is of Rs.2,58,35,190/-which is more than Rs.50,000/- Yes 14. Our attention was further drawn to para-8 of the submissions wherein the assessee had submitted that the shares qualified as the shares of a company in which the public is substantially interested being shareholders of listed company in BSE and NSE as under: “8. The definition of the term "company in which public are substantially interested" has been given in Sec. 2(18) of the Act. For the sake of convenience, the same is reproduced hereunder: 2(18) "Company in which public are substantially interest" - a company is said to be a company in which the public are substantially interested - (a) if it is a company owned by the Government or the Reserve Bank of India or in which not less than forty per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that bank; or (aa) if it is a company which is registered under section 25 of the Companies Act, 1956; or (ab) if it is a company having no share capital and if, having regard to its objects, the nature and composition of its membership and other relevant considerations, it is declared by order of the Board to be a company in which the public are substantially interested: Provided that such company shall be deemed to be a company in which the public are substantially interested only for such assessment year or assessment years (whether commencing before the 1st day of April, 1971, or on or after that date) as may be specified in the declaration; or IT(SS)A No.09/Ahd/2019 12 (ac) if it is a mutual benefit finance company, that is to say, a company which carries on, as its principal business, the business of acceptance of deposits from its members and which is declared by the Central Government under section 620A of the Companies Act, 1956 (1 of 1956), to be a Nidhi or Mutual Benefit Society; or (ad) if it is a company, wherein shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than fifty per cent of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the relevant previous year beneficially held by, one or more co- operative societies; (b) if it is a company which is not a private company as defined in the Companies Act, 1956, and the conditions specified either in item (A) or in item (B) are fulfilled, namely: (A) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) were, as on the last day of the relevant previous year, listed in a recognised stock exchange in India in with the Securities Contracts (Regulation) Act, 1956 and any rules made thereunder; (B) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than fifty per cent of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the relevant previous year beneficially held by: (a) the Government, or (b) a corporation established by a Central, State or Provincial Act, or (c) any company to which this clause applies or any subsidiary company of such company if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year. Explanation - In its application to an Indian company whose business consists mainly in the construction of ships or in the manufacture or processing of goods or in mining or in the generation or distribution of electricity or any other form of power, item (B) shall have effect as if for the words "not less than fifty percent", the words 'not less than forty percent had been substituted; [Emphasis supplied] The company Suraj Stainless Ltd. (presently known as Suraj Ltd.) is a listed company on BSE and NSE. Accordingly, as per the above definition, said company is a "company in which public are substantially interested". 13. Referring to the above, Ld Counsel for the assessee pointed out that, in terms of section 2(18)(b)(A) of the Act a company, which is not a private company, and whose shares are listed on a recognized stock exchange, qualifies as a company in which the public is substantially interested. He contended that Suraj Stainless Ltd., whose shares were purchased by the IT(SS)A No.09/Ahd/2019 13 assessee, was not a Pvt. Ltd. Company and its shares were listed on BSE and NSE which fact was noted by the Ld.CIT(A) . That accordingly it was demonstrated to the Ld.CIT(A) that the said company qualified as a company in which public is substantially interested. In this regard, he also produced before us the details extracted from BSE showing shares of Suraj Stainless Ltd being listed on the BSE as at the end of the impugned year thus fulfilling the condition provided in section 2(18) of the Act to qualify sharesof the company in which public are substantially interested. 14. The ld.DR was unable to controvert the above contentions made by the ld.counsel for the assessee. 15. In view of the above, since the finding of the ld.CIT(A) that the shares purchased by the assessee-company were that of a company in which the public is substantially interested, which finding, the ld.DR was unable to controvert before us in any manner,therefore, we see no reasons to interfere in order of the ld.CIT(A)holding that the provisions of section 56(2)(viia)(ii) were not attracted in the present case on account of shares purchased being excluded from the purview of the said section. The order of the ld.CIT(A), therefore, deleting the addition of 5,71,38,447/- is upheld. The ground no.2 raised by the Revenue is rejected. 16. As regards, the ground nos.3 and 4, the ld.counsel for the assessee, at the outset itself pointed out that there is no grievance to the Revenue in terms of the above grounds raised before the Tribunal. It was pointed out that before the ld.CIT(A), the assessee had challenged validity of the assessment framed in the present case under section 153C of the Act in the absence of any incriminating material found. He pointed out that the ld.CIT(A) had dismissed this legal ground raised by the assessee at para-6 of his order holding that the present case being that of an assessment unabated, the AO was empowered to make assessment on the basis of details and documents found during the course of assessment IT(SS)A No.09/Ahd/2019 14 proceedings, and need not confine himself to the incriminating material found during the course of search alone. He therefore contended that the grievance now raised by the Revenue in ground no.3 and 4 of the CIT(A) not appreciating that the total income need to be brought to tax in assessment framed under section 153A without any restrictions of the same to only incriminating material found during the course of search, is contrary to the finding of the ld.CIT(A) who had held in favour of the Revenue in this regard. The ld.DR fairly agreed with the same. The ground no.3 and 4 are therefore dismissed as of no consequence. 17. In the result, the appeal of the Revenue is dismissed. Order pronounced in the Court on 21 st April, 2023 at Ahmedabad. Sd/- Sd/- (MADHUMITA ROY) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 21/04/2023 vk* आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ! / The Appellant 2. "यथ! / The Respondent. 3. संबं&धत आयकर आय ु (त / Concerned CIT 4. आयकर आय ु (त)अपील (/ The CIT(A)- 5. वभागीय त न&ध ,आयकर अपील य अ&धकरण,राजोकट/DR,ITAT, Ahmedabad, 6. गाड1 फाईल /Guard file. आदेशान ु सार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ&धकरण, ITAT, Ahmedabad
Other Referred Cases
CIT vs Dhanrajgirji 91 ITR 544(SC)
Laws Referred To
Income Tax Act, 1961
Tax Holiday Secrets for Startups
₹0
1:1 Consultation with family dentist -Your Smile Deserves the Best Care!
₹250
Master The Pitch-Deck Game
₹0
Non-Compete Agreement
₹0
No Objection Letter for Use of Property – Partnership Firm
₹0
Why Meesho got ₹1,500 Crore Tax Demand ?
Team Counselvise - March 09, 2026
When Global Talent Meets GST: The Huawei Secondment Ruling explained
Team Counselvise - March 09, 2026
Finance Bill, 2026: Key Direct Tax Amendments on Assessments and Appeals
Team Counselvise - February 06, 2026