NILESH MANSUKHLAL TOLIYA,JAMNAGAR V. THE ACIT, CENTRAL CIRCLE-1(2), AHMEDABAD

MA 25/AHD/2025

AI Insights

The case involves a Miscellaneous Application by Nilesh Mansukhlal Toliya against an order of the Income Tax Appellate Tribunal, which had previously directed an examination of certain financial transactions linked to Toliya for the Assessment Year 2014-15. The original appeal by the Revenue raised concerns about an addition of Rs.2,25,20,000 as unexplained cash under Section 69A of the Income Tax Act, 1961. The Tribunal's earlier order directed the Assessing Officer to verify the ownership of the cash deposits and the purpose of cheque payments found in seized documents, and to investigate any commission income Toliya might have earned from arranging loan transactions. Toliya's application contested the Tribunal's directions, arguing they inadvertently suggested an enhancement of his income, which was beyond the Tribunal's powers. The Tribunal clarified that its directions were not for enhancement but for a thorough examination of the transactions and allowed Toliya to present his case regarding the nature of these transactions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314682 (ITAT-AHMEDABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B.P. SRIVASTAVA
• Assessee Lawyers: BIREN SHAH
• Keywords: Set aside; Opportunity of being heard; Document seized; Documents seized

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER M.A. No.25/Ahd/2025 (In IT(SS)A No.25/Ahd/2020) Assessment Year: 2014-15 Nilesh Mansukhlal Toliya, Plot No.9A, Nr. Rishikesh Apartment, Joggers Park, Opp. Virag Baug, Jamnagar – 400 057. (Gujarat) [PAN – AAZPT 5844 Q] Vs. Assistant Commissioner of Income Tax, Central Circle – 1(2), Ahmedabad. (Appellant) (Respondent) Assessee by Shri Biren Shah, AR Revenue by Shri B.P. Srivastava, Sr. DR Date of Hearing 02.05.2025 Date of Pronouncement 06.05.2025 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: The present Miscellaneous Application is filed by the assessee against the order of this Tribunal in IT(SS)A No.25/Ahd/2020 dated 01.08.2024 for the Assessment Year (A.Y.) 2014-15. 2. Shri Biren Shah, Ld. AR of the assessee explained that one of the grounds raised by the Revenue in this appeal was against the addition of Rs.2,25,20,000/- made under Section 69A of the Income Tax Act, 1961 (“the Act” hereinafter) in respect of unexplained cash. He submitted that M.A. No.25/Ahd/2025 (In IT(SS)A No.25/Ahd/2020 – A.Y. 2014-15 Nilesh Mansukhlal Toliya vs. ACIT Page 2 of 7 while adjudicating this ground, the Tribunal had given the following directions: - “a) As the cash was deposited in the name of various persons and the assessee has contended that they are the real owners of the cash, the AO should verify the correctness of this claim after making independent enquiry from those persons. b) Further, the reason for routing all these cash transactions through the assessee should also be enquired into. c) The assessee has also not explained the purpose of cheque payments as appearing in the seized documents. d) In case the assessee is only found to be instrumental in arranging the loan transactions, then the commission income earned by the assessee for arranging such transactions should also be looked into.” 3. The Ld. AR submitted that the direction as given in ‘c’ & ‘d’ above was for enhancement of income of the assessee which was beyond the powers of the Tribunal under Section 254 of the Act. He submitted that this direction was inadvertently given as no addition was made by the assessee in respect of cheque transactions and that no additional material or evidence was brought on record for giving such direction. He, therefore, requested that the direction for enhancement given in the order may be recalled or suitably modified. 4. Per contra, Shri B. P. Srivastava, Ld. Sr. DR submitted that the issue was set aside to the jurisdictional Assessing Officer with a direction to examine the source of cash appearing in the name of the assessee in the seized document Annexure A-8. The said document also had entries of cheque payments. It was in that connection that the direction was given by the Bench to also examine the nature of cheque payments. Further, M.A. No.25/Ahd/2025 (In IT(SS)A No.25/Ahd/2020 – A.Y. 2014-15 Nilesh Mansukhlal Toliya vs. ACIT Page 3 of 7 that the direction was only to examine the earning of commission income, if any, by the assessee for arranging loan transactions. The Sr. DR submitted that the assessee had himself admitted that it was earning commission income in respect of land dealing transactions and a separate addition in this respect was also made by the Assessing Officer. Therefore, the direction given by the Bench regarding examination of the commission income on the loan transactions was considering the modus operandi already accepted by the assessee. He further submitted that there was no direction for enhancement of the income and the direction was only to examine the nature of transactions, after allowing proper opportunity of being heard to the assessee. 5. We have considered the rival submissions. The ground no.3 taken by the Revenue was in respect of addition of Rs.2,25,20,000/- in respect of unexplained cash and dealt in paragraph nos.9 to 18 of the order dated 01.08.2024. This addition was deleted by the Ld. CIT(A) on the ground that the addition was already made in the hands of M/s. Krishna Infrastructure (KI). As discussed in paragraph no.17 of the order, this finding of the CIT(A) was not found correct. It was also observed that the Ld. CIT(A) had not examined why the payment was channelized through the assessee if the cash belonged to third parties, who had given loan to M/s. Krishna Infrastructure. It was also noted that apart from cash deposits there were other cheque transactions in the name of the assessee appearing in the seized documents Annexure-A8 and the assessee had not explained the purpose of cheque payments through its account to the account of M/s. Krishna Infrastructure. It was, therefore, held that until and unless this aspect is also examined, the real nature of the transactions cannot be ascertained. The matter was, therefore, set aside M.A. No.25/Ahd/2025 (In IT(SS)A No.25/Ahd/2020 – A.Y. 2014-15 Nilesh Mansukhlal Toliya vs. ACIT Page 4 of 7 to the jurisdictional Assessing Officer with a direction to examine the source of cash appearing in the name of the assessee in the seized documents Annexure-A8 and also to enquire about the purpose of cheque payments appearing in the same seized documents. It was in this context that a direction was given that if the assessee is only found to be instrumental in arranging the loan transactions, then the commission income earned by the assessee for arranging such transactions should also be looked into. 6. From the direction as given in paragraph no.18 of the order dated 01.08.2024, it is evident that no direction has been given to enhance the income of the assessee. The direction given is to examine the source of cash appearing in the name of the assessee in the seized document Annexure A-8 and also to examine the purpose of cheque payments as appearing in the same seized documents Annexure-A8, in order to find out the real nature of the transactions as appearing in Annexure-A8. The direction to look into the commission income of the assessee was considering the fact that the assessee had himself admitted, in his statement recorded during the search, that his main role in the transactions in respect of NTPC land deal was to bring customers, for which he had received commission income. In fact, a separate ground no.2 in respect of addition of commission income was also taken by the Revenue in its appeal. Therefore, the direction to examine the earning of commission income, if any, in the loan transactions was also found necessary. Further, direction was also given that the assessee should be allowed a reasonable opportunity of being heard to explain the real nature of the transactions. Considering the direction as given in paragraph no.18 of the order, we do not find any specific direction for enhancement of M.A. No.25/Ahd/2025 (In IT(SS)A No.25/Ahd/2020 – A.Y. 2014-15 Nilesh Mansukhlal Toliya vs. ACIT Page 5 of 7 income of the assessee. The direction is only in respect of examination of real nature of the transactions and for earning commission income, if any, in the arrangement of loan transactions. The provision of section 254 of the Act empowers the Tribunal to pass such orders in respect of the appeal, as it thinks fit. Accordingly, the direction as given in the order was thought fit, after considering the explanation and the factual circumstances of the case. This direction does not mean that the addition for commission income have to be mandatorily made. It is open for the assessee to explain before the JAO, the nature of transactions in the seized documents Annexure-A8 and establish that no commission income was earned in respect of cash and cheque transaction as appearing in seized document Annexure-A8. 7. In view of the above facts, we do not find any merit in the Miscellaneous Application filed by the assessee as no direction was given for enhancement of income of the assessee. Therefore, the Miscellaneous Application filed by the assessee is dismissed. 8. In the result, Miscellaneous Application of the assessee is dismissed. Order pronounced in the open Court on this 6th May, 2025. Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 6th May, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) M.A. No.25/Ahd/2025 (In IT(SS)A No.25/Ahd/2020 – A.Y. 2014-15 Nilesh Mansukhlal Toliya vs. ACIT Page 6 of 7 (5) Departmental Representative (6) Guard File By order COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad "