Appeal details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 314549 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
09-05-2025
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2016-2017
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 IT(SS)A No.33/Ahd/2021 Assessment Year: 2016-17 Assistant Commissioner of Income Tax, Central Circle – 2(1), Ahmedabad, 3rd Floor, Room No. A-306, Aaykar Bhavan Annexe, Ashram Road, Ahmedabad – 380 009. Vs. Shri Prakashbhai M. Patel, Unity Printers, Maninagar Char Rasta, Behind Dena bank, Maninagar, Ahmedabad – 380 008. [PAN – AASPP 9502C] (Appellant) (Respondent) Assessee by Shri Tushar Hemani, Sr. Advocate & Shri Parimalsinh B. Parmar, AR Revenue by Shri B.P. Srivastava, Sr. DR Date of Hearing 29.04.2025 Date of Pronouncement 09.05.2025 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This appeal is filed by the Revenue against the order of Commissioner of Income Tax (Appeals) - 12, Ahmedabad (in short ‘CIT(A)’) dated 12.01.2021 for the Assessment Year (A.Y.) 2016-17. 2. The brief facts of the case are that a search action under Section 132 of the Income Tax Act, 1961. (“the Act’ hereafter) was carried out in the group cases of Claris Group on 04.08.2015. Search warrants were also issued in the name of the assessee in respect of three bank lockers held by him and in the course of search thereof, no cash or jewellery was IT(SS)A No.33/Ahd/2021 Assessment Year: 2016-17 ACIT vs. Shri Prakashbhai M. Patel Page 2 of 7 found. During the course of search carried out at 1001, Parijaat Apartment, Judges Bungalow Road, Ahmedabad certain incriminating documents being page nos.13 & 14 of Annexure A-1 were found and seized. Based on the entries appearing in this seized material, the Assessing Officer was of the view that the assessee had received unaccounted cash of Rs.4,18,24,880/- in relation to certain property transactions noted therein. Accordingly, the Assessing Officer had made addition of Rs.4,18,24,880/- towards unaccounted cash receipts by the assessee. The assessment for the A.Y. 2016-17 was completed under section 143(3) read with Section 153A of the Act on 27.12.2017 at a total income of Rs.4,31,95,900/-. 3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the addition as made by the Assessing Officer was deleted. 4. Now the Revenue is in 2nd appeal before us. The following grounds have been taken in this appeal: - “1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.4,18,24,880/- made as unaccounted income on the basis of cash receipts of Rs.4,18,24,880/- which are noted in the Page No.14 of Annexure A-1 seized from 1001, Parijat Apartment, Judges Bungalow Road, Ahmedabad. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition as the assessee had never refuted the proposed addition in his hands in any of his reply during the assessment proceedings. Therefore, as said loose papers were found from the premises of the assessee, it becomes the liability of the assessee to explain the same with corroborative evidence as per the provisions of section 292C of the Act. The fact related to offering the capital gain in AY 2012-13 by M/s Unity Printers was not raised by the assessee in original grounds of appeal filed in form 35 on 15.02.2018. Therefore, the IT(SS)A No.33/Ahd/2021 Assessment Year: 2016-17 ACIT vs. Shri Prakashbhai M. Patel Page 3 of 7 addition was made for the cash component mentioned on the loose paper notings is correct. 3. 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. 4. 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.” 5. Shri B.P. Srivastava, Ld. Sr. DR explained that the addition in this case was made on the basis of documents seized from a third party. The document was seized from the premises 1001, Parijaat Apartment, Judges Bungalow Road, Ahmedabad and the assessee was a co-owner of the said property. That property was occupied by one Shri Arjun Handa, the other co-owner, and in the course of statement recorded during the search, Shri Arjun Handa had admitted that the seized document Annexure A-1 belonged to him but he was unable to explain the notings appearing in the seized document. Further, Shri Arjun Handa had filed an application before the Settlement Commission, Mumbai and the Department had taken a stand in Rule-9 report that the above pages belonged to Shri Arjun Handa and that he should own-up the transactions appearing therein. However, the status of the disclosure in respect of income recorded in seized documents Annexure A-1 was not clarified in the settlement application of Shri Arjun Handa. Therefore, the document was considered in the hands of the assessee being the co-owner of the property from which it was seized. The Assessing Officer had required the assessee to explain the entries appearing in the seized document. In the absence of any explanation by the assessee, the Assessing Officer had treated the cash receipt of Rs.4,18,24,880/- appearing in the seized documents, as belonging to the assessee and accordingly made the IT(SS)A No.33/Ahd/2021 Assessment Year: 2016-17 ACIT vs. Shri Prakashbhai M. Patel Page 4 of 7 addition. The Ld. Sr. DR submitted that the ld. CIT(A) was not correct in deleting the addition made on the basis of the documents found from the premises, co-owned by the assessee. 6. Per contra, Shri Tushar Hemani, Ld. Sr. Counsel submitted that the impugned addition was not made on the basis of any material recovered from the assessee in the course of search. The document was found from the premises of Shri Arjun Handa who had also owned up the document in the course of statement recorded during the search. He, therefore, submitted that the addition on the basis of seized document was required to be made in the hands of Shri Arjun Handa and not in the hands of the assessee. He further submitted that in the seized document the name of the assessee was nowhere appearing. Rather, the seized material itself revealed that the transaction pertained to M/s. Unity Printers, a partnership firm in which the assessee was a partner. Therefore, the action, if any, was required to be taken in the hands of M/s. Unity Printers and not in the hands of the assessee. The Ld. Sr. Counsel submitted that the Ld. CIT(A) had rightly appreciated the facts of the case and allowed the relief to the assessee. 7. We have carefully considered the rival submissions. We are of the considered opinion that the addition made by the Assessing Officer in the hands of the assessee, on the basis of the incriminating material found from third party, was totally misplaced. There is no dispute that the document was found from the premises of Shri Arjun Handa who was occupying the searched premises. Merely because the assessee was a co-owner of the searched property, the document cannot be considered as belonging to the assessee. The document was neither found from the premises of the assessee nor the name of the assessee was anywhere IT(SS)A No.33/Ahd/2021 Assessment Year: 2016-17 ACIT vs. Shri Prakashbhai M. Patel Page 5 of 7 appearing in the seized document. Shri Arjun Handa, in his statement recorded during the search, had admitted that the seized document Annexure A-1 belonged to him. Under such circumstances, the presumption under Section 132(4A) as well as under Section 292C of the Act was applicable in respect of Shri Arjun Handa only and such presumption could not have been transposed to the assessee. Further, when the Revenue had taken a stand in Rule-9 report in the case of Shri Arjun Handa that the seized document Annexure A-1 belonged to him and that he should own-up the transactions appearing therein, the Revenue was not correct to consider the documents in the hands of the assessee. The seized documents, based on which the addition has been made, is found reproduced in the assessment order. It is noted therefrom that the name of the assessee was nowhere appearing in the seized document. As per this document, the transaction in respect of certain property was for total amount of Rs.8,57,80,800/- out of which Rs.4,39,56,000/- was received by cheque and balance Rs.4,18,24,800/- was received in cash. Further the name of Unity was mentioned against the cheque payment. Thus, when the cheque payment pertained to M/s. Unity Printers, the cash payment also had to be considered in the hands of M/s. Unity Printers only. It is found that the Ld. CIT(A) had correctly appreciated the notings in the seized documents and given the following findings in this regard: - “8.3 On merits also, the appellant has also submitted that the aforesaid paper might have the details of the sale of property of the partnership firm namely M/s. Unity Printers who has sold one of the properties in AY 12-13 and the capital loss derived on such property has been shown in its return of income filed for AY 12-13 in its case. A copy of the return of income in support was made available to the AO in the assessment proceedings by the appellant. A copy was also provided to this office along with submission and after going IT(SS)A No.33/Ahd/2021 Assessment Year: 2016-17 ACIT vs. Shri Prakashbhai M. Patel Page 6 of 7 through the same, it is noticed that M/s. Unity Printers have shown the sale of the property on 11.08.2011 with the sale value at Rs.4,39,56,000/- and on the said property indexed cost as on 01.04.1981 was considered. On the same property, the net capital loss of Rs.19,20,850/- has been shown. So, the sale value of Rs.4,39,56,000/- received through cheque is clearly mentioned on page No.13 and 14 of Annexure A/1 which co-relates/corroborates that both the seized papers contain the details of the sale proceeds received through cheque and cash of the property owned and sold by M/s. Unity Printers in which the appellant was one of the partners and the same was pertaining to AY 2012-13. So, the unaccounted cash receipts on sale of the plot ought to have been taxed in the hands of M/s. Unity Printers, for which no action could have been taken in the case of the appellant.” 8. The Revenue has been unable to controvert the above finding of the Ld. CIT(A). No evidence of any transaction made by the assessee was found appearing in the seized documents. The addition was made in the hands of the assessee on the basis of wrong presumption, which was rightly deleted by the Ld. CIT(A). We, therefore, do not find any reason to interfere with the order of the Ld. CIT(A). Accordingly, all the grounds taken by the Revenue are rejected. 9. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on this 9th May, 2025. Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 9th May, 2025 PBN/* IT(SS)A No.33/Ahd/2021 Assessment Year: 2016-17 ACIT vs. Shri Prakashbhai M. Patel Page 7 of 7 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad "
AI Insights
The case revolves around an appeal by the Revenue against the order of the CIT(A) which had deleted an addition of Rs.4,18,24,880 made by the Assessing Officer (AO) as unaccounted cash receipts related to property transactions. The addition was based on documents seized during a search operation under Section 132 of the Income Tax Act, 1961, from a property co-owned by the assessee. The Tribunal examined whether the addition was correctly made in the hands of the assessee or should have been attributed to M/s. Unity Printers, the partnership firm associated with the assessee. The Tribunal concluded that the CIT(A) had correctly appreciated the facts and deleted the addition, leading to the dismissal of the Revenue's appeal.
