NIRAVKUMAR NARENDRABHAI SHAH,AHMEDABAD V. ITO, WARD -1(3)(1), AHMEDABAD

ITA 1460/AHD/2025

AI Insights

The case involves Niravkumar Narendrabhai Shah, the appellant, who contested the order of the Income Tax Officer regarding the assessment year 2012-13. The primary contention was the addition of Rs. 7,73,674 under section 68 of the Income Tax Act, which was treated as unexplained income from alleged accommodation entries related to share transactions. The Assessing Officer had initially conducted an ex-parte assessment under section 144 due to non-response from the assessee to multiple notices. The CIT(Appeals) upheld the addition, leading to the current appeal. The Tribunal, considering the circumstances and the potential for the assessee to provide substantial evidence, decided to set aside the previous order and remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790401 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 19-07-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDRA
• Assessee Lawyers: PARIN SHAH
• Keywords: Condonation of delay; Set aside; Additional evidence; Income from undisclosed sources; Cost of acquisition; Reopening of assessment; Capital Gains; Accommodation entries; Bogus
• Section: 147; 148; 144; 271(1)(c); 68; 234B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.1460/Ahd/2025 (Assessment Year: 2012-13) Niravkumar Narendrabhai Shah, A/12, Punit Park Society, B/h. Ratnadeep Society, Naroda, Ahmedabad-382330 Vs. Income Tax Officer, Ward-1(3)(1), Ahmedabad [PAN No.BFUPS6146F] (Appellant) .. (Respondent) Appellant by : Shri Parin Shah, AR Respondent by: Shri Ravindra, Sr. DR Date of Hearing 06.11.2025 Date of Pronouncement 25.11.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 16.05.2025 passed for A.Y. 2012-13. 2. The assessee has raised the following grounds of appeal: 1. The order passed by lower authorities is invalid, bad in law and required to be quashed. 2. The reopening of assessment u/s 148 of the Act is bad in law and required to be quashed. 3. Ld. NFAC erred in law and on facts in confirming addition of Rs. 77,3674/- made u/s 68 of the Act. 4. Ld. NFAC ought to have granted deduction of cost of purchase of while determining capital gain. Printed from counselvise.com ITA No. 1460/Ahd/2025 Niravkumar Narendrabhai Shah vs. ITO Asst.Year –2012-13 - 2– 5. Charging of interest u/s 234B and 234C of the Act are unjustified. 6. Initiation of penalty proceeding u/s 271(1)(c) of the Act is unjustified.” 3. The brief facts of the case are that the assessee filed a return of income for A.Y. 2012-13 declaring total income of Rs. 1,40,740/-. The return of income of the assessee was processed under section 143(1) of the Act. The Assessing Officer based on information received regarding transactions in the scrip of M/s. VMS Industries Ltd., alleged to be a penny stock used for providing accommodation entries, reopened the assessment under section 147 of the Act. Despite service of multiple notices under sections 148 and 142(1), followed by a detailed show cause notice, the assessee did not file a return in response and neither did the assessee furnish the documentary evidence called for. The Assessing Officer therefore proceeded ex-parte under section 144 of the Act and held that the alleged purchase of shares was not genuine and that the assessee had availed accommodation entries to introduce unaccounted income in the guise of capital gains. The Assessing Officer treated the sale proceeds of Rs. 7,73,674/- as unexplained and made an addition under section 68 of the Act and also initiated penalty proceedings under section 271(1)(c) of the Act. 4. In appeal before CIT(Appeals), the assessee raised several grounds including that no bogus transactions had been entered into, that the purchase cost was not considered, that the addition under section 68 was not justified, and that the order was bad in law. The assessee also requested condonation of delay and admission of additional evidence. However, Printed from counselvise.com ITA No. 1460/Ahd/2025 Niravkumar Narendrabhai Shah vs. ITO Asst.Year –2012-13 - 3– despite issuance of multiple notices by the CIT(A), the assessee again did not respond or file submissions. The CIT(A), after considering the material on record, upheld the action of the Assessing Officer and confirmed the addition of Rs. 7,73,674/-, observing that no plausible explanation or documentary evidence had been furnished. Accordingly, the appeal was dismissed. 5. The assessee is in further appeal before us. At the outset, the counsel for the assessee submitted that the assessee has a good case on merits but was unable to properly represent the matter before the lower authorities, and therefore, in the interests of justice, the matter may be restored to the file of the Assessing Officer for de-novo consideration after providing adequate opportunity. It was contended that relevant evidence is available and would be produced before the Assessing Officer if given an opportunity. 6. We have heard the submissions and perused the material on record. We note that the assessment was completed ex-parte under section 144 and the CIT(A) also dismissed the appeal in the absence of representation from the assessee. In the interest of justice and fair play, and considering the submission of the counsel that the assessee is in a position to produce relevant evidence to substantiate the claim, we are of the view that one more opportunity deserves to be granted to the assessee. 7. Accordingly, the assessment order is set aside and the matter is restored to the file of the Assessing Officer for de-novo consideration, after Printed from counselvise.com ITA No. 1460/Ahd/2025 Niravkumar Narendrabhai Shah vs. ITO Asst.Year –2012-13 - 4– providing due opportunity to the assessee to file submissions and evidence in support of the claim. The Assessing Officer shall decide the matter afresh as per law. 8. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 25/11/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 25/11/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 24.11.2025 (Hon’ble Member dictated on his dragon software) 2. Date on which the typed draft is placed before the Dictating Member 24.11.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S .11.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 25.11.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 25.11.2025 7. Date on which the file goes to the Bench Clerk 25.11.2025 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 Dispatch of the Order…………………………………… Printed from counselvise.com "