SANKALP IN,AHMEDABAD V. THE ACIT, CENTRAL CIRCLE-1(2), AHMEDABAD

MA 21/AHD/2025

AI Insights

The case involves Sankalp IN, the appellant, contesting against the Assistant Commissioner of Income-tax, Central Circle-1(2), Ahmedabad, the respondent, concerning additions made on account of unsecured loans and commission expenses for the Assessment Years 2015-16 and 2016-17. The additions were initially upheld by the ITAT based on findings from a search action that revealed unaccounted receipts and payments related to the assessee's business. The CIT(A) had earlier deleted these additions on a technical count without addressing the merits, which led to the current appeal. The ITAT recognized the need for a decision on the merits following the settlement of the jurisdictional issue by the Supreme Court and thus remanded the matter back to the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669049 (ITAT-AHMEDABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Other Referred Cases: Abhisar Buildwell Pvt. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Narendra Prasad Sinha, Accountant Member Sankalp IN, 1705. Sankalp Square 3A, Near Taj Hotel Skyline Sindhu Bhavan Road, Shilaj, Ahmedabad-380059 PAN: ACAFS6442A (Appellant) Vs Asst. Commissioner of Income-tax, Central Circle-1(2), Ahmedabad (Respondent) Assessee Represented: Shri Tushar Hemani, Sr. Adv. & Shri Parimalsinh B. Parmar, A.R. Revenue Represented: Shri Sudhakar Verma, Sr. D.R. Date of hearing : 02-05-2025 Date of pronouncement : 26-06-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- These Miscellaneous Applications are filed by the assessee as against the common appellate order dated 31-01-2025 passed in (IT(SS)A Nos. 45 & 46/Ahd/2022) relating to Asst. Years 2015-16 and 2016-17. M.A. Nos: 21 & 22/Ahd/2025 (in IT(SS)A Nos: 45 & 46/Ahd/2022) Assessment Years: 2015-16 & 2016-17) M.A. No. 21 & 22/Ahd/2025 (in IT(SS)A Nos. 45 & 46/A/2022) A.Y. 2015-16 & 2016-17 Sankalp In Vs. ACIT 2 2. It was held in Para 14.2 of the order as follows: “….. In the present case, during the search action certain incriminating materials were found and seized which revealed there were certain unaccounted receipts and unaccounted payments in relation to hotel, restaurant and real estate business carried out by the assessee firm. The present additions made on account of unsecured loans and commission thereon are 'other materials' available with the AO, including the income declared in the returns for the Asst. years 2015-16 and 2016-17. Thus the findings arrived by the Ld CIT[A] is against the verdict of Hon'ble Supreme Court in Abhisar Buildwell. Therefore the findings arrived by the Ld CIT[A] is liable to be reversed and the additions made by the Ld AO is to be upheld, since assessee failed to make any submissions on merits of the case. In the result Revenue's Ground Nos.6 & 7 [relating to the Asst. years 2015-16 & 2016-17 only] are hereby allowed.” 3. The assessee submitted that the Ld. CIT(A) deleted the addition merely on technical count/jurisdictional issue without going into merits of the case. Since the jurisdictional issue is now settled by Hon’ble Supreme Court, the case ought to have been decided on merits after considering the entire materials available on record. However the Hon’ble ITAT confirmed the addition without going into merits of the case which is a mistake apparent from record and therefore requested to rectify the order to the extent of Ground Nos. 6 & 7 of the Revenue appeals. 4. Heard rival submissions and perused the materials available on record. The power of rectification u/s. 254(2) of the Income Tax Act can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake, which is apparent from record and not a mistake which is requires to be established by arguments and long drawn process of reasoning on points, on M.A. No. 21 & 22/Ahd/2025 (in IT(SS)A Nos. 45 & 46/A/2022) A.Y. 2015-16 & 2016-17 Sankalp In Vs. ACIT 3 which there may conceivably two opinion. The claim of the assessee that no arguments were advanced on Ground Nos. 6 & 7 of the Revenue appeal. Since the Ld. CIT(A) deleted the addition of unsecured loan and commissioner expenses on the ground that the Asst. Years 2015-16 and 2016-17 as unabated assessments and in the absence of any incriminating materials, deleted the additions. Thus the Ld. CIT(A) has not considered the merits of the case. Therefore the findings arrived by Ld. CIT(A) is against the judgment of Hon’ble Supreme Court in Abhisar Buildwell Pvt. Ltd. but on the merits of the case which requires adjudication by the Ld. CIT(A). 5. Thus we modify the order in Paragraph No. 14.2 by setting-aside the issue back to the file of Ld. CIT(A) to decide the issue on merits and pass a speaking order. Thus the Revenue Grounds Nos. 6 & 7 relating to the Asst. Years 2015-16 and 2016-17 are allowed for statistical purpose. 6. In the result, the Miscellaneous Applications filed by the Assessee are allowed. Order pronounced in the open court on 26-06-2025 Sd/- Sd/- (NARENDRA PRASAD SINHA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 26/06/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) M.A. No. 21 & 22/Ahd/2025 (in IT(SS)A Nos. 45 & 46/A/2022) A.Y. 2015-16 & 2016-17 Sankalp In Vs. ACIT 4 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "