THE JCIT (OSD), CENTRAL CIRCLE-2(2), AHMEDABAD V. GOPALBHAI MAVJIBHAI PATEL, AHMEDABAD

ITSSA 147/AHD/2021

AI Insights

The case involves cross-appeals by the assessee, Gopalbhai Mavjibhai Patel, and the Revenue against the orders of the CIT(A) for the assessment years 2013-14, 2015-16, and 2016-17. The primary issue was the addition of substantial amounts to the assessee's income under Section 69A of the Income-tax Act, 1961, following a search and seizure operation. The Assessing Officer had made these additions based on presumed on-money payments and unaccounted investments in land, extrapolating from documents seized from a related entity's premises. The CIT(A) deleted these additions, which the Revenue challenged. The Tribunal's decision relied heavily on the absence of direct incriminating evidence against the assessee and the inconsistent treatment of similar transactions involving other entities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126740 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Other Referred Cases: Commissioner of Income-tax (Central)-III vs. Kabul Chawla, Pr. Commissioner of Income Tax-3 V/s Anil Bholabhai Patel, Principal Commissioner of Income Tax V/s Sanghvi Fincap Ltd., Sunrise Finlease (P.) Ltd. vs. Desai Construction, CIT vs. Best Infrastructure (India) (P) Ltd., Pr.CIT vs. Lata Jain, PCIT-3, Ahmedabad Vs. Himanshu Chandulal Patel, Pr. CIT (Central), New Delhi Vs. Meeta Gutgutia, Pr. CIT-1 Vs. Devangi, Pr. CIT (Central)-4 Vs. Jignesh P. Shah, Pr. CIT, Ahmedabad Vs. Dipak Jaswantlal Panchai, JCIT Vs. Shri Rameshbhai N. Antala
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return; Unexplained cash credit; Documents seized; Search and seizure; Accommodation entries; Source of fund; Bogus; Principal; Dismissed; Disallowance of expense; Commissioner; Commissioner of Income Tax; Purchases; Transactions; Exempt; Deleted; 153C; 153A; Academic and infructuous; Department; Abated; Section 68 of the Act; Purchase of land; Associate concern; Directors; Explanation; Section 132; Deletion of the addition
• Section: 143(3); 250; 54; 132; 153A; 139(1); 68; 69; 69A; 139; 153C; 142(2A)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE PRESIDENT MS. SUCHITRA KAMBLE, JUDICIAL MEMBER IT(SS)A Nos. 141, 143 & 144/Ahd/2021 (Assessment Years: 2013-14, 2015-16 & 2016-17, respectively) Gopalbhai Mavjibhai Patel, 10, Sahjanand Villa, B/h. Devine High Land, Sola Hebatpur Road, Sola, Ahmedabad-380060 [PAN : ACHPP 0002 C] Vs. Jt. Commissioner of Income-tax (OSD), Central Circle 2(2), Ahmedabad IT(SS)A Nos. 147, 148 & 149/Ahd/2021 (Assessment Years: 2013-14, 2015-16 & 2016-17, respectively) Jt. Commissioner of Income-tax (OSD), Central Circle 2(2), Ahmedabad Vs. Gopalbhai Mavjibhai Patel, Shaligram House, B/h. SG Highway, Rajpath Rangoli Road, Ahmedabad-380059 [PAN : ACHPP 0002 C] (Appellant) .. (Respondent) Assessee represented by : Shri S.N. Soparkar, Sr. Advocate & Shri Parin Shah, AR Department represented by: Shri V. Nandakumar, CIT-DR Date of Hearing 11.03.2025 Date of Pronouncement 25.04.2025 O R D E R PER: DR. B.R.R. KUMAR, VICE PRESIDENT: These appeals have been filed by the Assessee and the Revenue against the orders of the Ld. Commissioner of Income-Tax (Appeals)-12, Ahmedabad (hereinafter referred to as \"CIT(A)\" for short) of even dated 20.07.2021 passed u/s 250 of the Income-tax Act, 1961, (hereinafter referred to as \"the Act\" for short) for the Assessment Years 2013-14, 2015-16 & 2016-17, respectively. 2. We heard all the appeals together and deem it appropriate to dispose of these appeals by this common order. ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 2– Brief Facts:- 3. The brief facts of the case are that the assessee is an Individual who is engaged in the business of real estate construction through group and associate entities known as 'Shaligram Group'. The assessee filed his regular return of income for AY 2012-13 u/s 139(1) of the Act on 29.09.2012, declaring total income at Rs 15,52,870/-. A search and seizure action u/s 132 of the Act was conducted by DDIT(Inv), Ahmedabad on 06.03.2018 covering the various entities, persons and concerns known as forming part of Satyam Group, Sangani Group and Shaligram Group of entities, inter-alia covering the assessee being a part of Shaligram Group of persons. The assessee was subjected to proceedings u/s 153A of the Act vide notice issued on 30.01.2019. In response to notice u/s 153A of the Act, the assessee filed its return of income on 23.08.2019 declaring total income at Rs 15,52,870/-. There is no variation in the returned income u/s 139 of the Act vis-a-vis return filed u/s 153A of the Act. The case of the assessee has been referred for special audit u/s 142(2A) of the Act and the Special Audit report was furnished by the assessee before the Assessing Officer on 19.06.2020. Subsequently, the assessment proceedings were completed u/s 153A r.w.s 143(3) of the Act vide order dated 15.04.2021, assessing the total income of the assessee at Rs.58,66,82,870/- thereby making an addition of Rs.58,51,30,000/- u/s 69A of the Act on account of alleged investment in land which was not accounted in its books of accounts. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who deleted the impugned addition made by the Assessing Officer. IT(SS)A No.148/Ahd/2021 – AY 2015-16 - Revenue’s appeal Ground No. 6 – Deletion of Rs.1.59 Crs. made by the AO u/s 69 of the Act IT(SS)A No.149/Ahd/2021 – AY 2016-17 - Revenue’s appeal Ground No. 6 – Deletion of Rs.1.96 Crs. made by the AO u/s 69 of the Act 4. Heard both the parties and perused the material available on record. ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 3– 4.1 This ground is in respect of challenging the legality of the addition made in respect of on-money payment for purchase of land u/s. 69 of the Act amounting to Rs. 1,59,39,484/- (AY 2015-16) in absence of any seized or incriminating material on record. The brief facts of the case are as under: 4.2 The Assessing Officer in the assessment order vide para No.7 has made the addition whereby the whole issue has been discussed. The Assessing Officer observed that on verification of the records, the assessee has purchased a plot No. 10 in Sahjanand Villa, Sola from M/s. Himalaya Darshan Developers (Gujarat) Pvt. Ltd. for the deed Value of Rs. 1,00,72,000/-. During the course of search action at the residential premises of Shri Ashwin B. Dudhat, who happens to be a partner of a related entity namely Shrimate Infrastructure Pvt. Ltd., incriminating document relating to sale of Sahjanand Bungalow and purchase and construction of Sahjanand Villa were found and seized. The page No. 58-60 of Annexure A1 seized at the residence of Shri Ashwin B. Dudhat has been extracted at page No. 5 & 6 of the assessment order. On perusal of these pages, it was noted that Shri Ashwin B. Dudhat and his two brothers have paid on-money to Himalaya Darshan Developers (Gujarat) Pvt. Ltd. on purchase of the plots No. 27, 12 and 29 in Sahjanand Villa. On the basis of entries found noted in the seized pages, the Assessing Officer extrapolated and assumed the on-money payment might have been paid by the assessee also as it has also purchased the plot No. 10 in the same scheme. 4.3 In the show cause notice issued by the Assessing Officer to the assessee on 21.12.2020, the Assessing Officer has observed that the on-money payment on purchase of the said plot of land by the assessee to Himalaya Darshan Developers (Gujarat) Pvt. Ltd. cannot be ruled out. So, by applying the rate of on-money in the case Shri Ashwin B. Dudhat, the on-money payment component in respect of assessee was estimated at Rs.3,56,29,700/-. In response to the same, the assessee ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 4– has given the common reply for Asst. Year 2012-13 to 2018-19 and the same has been extracted on page 7 to 8 of the assessment order. While making the addition, the Assessing Officer observed that Shri Ashwin B. Dudhat was partner in Shrimate Infrastructure LLP for last 5 to 6 years and happens to be neighbor of the assessee in the society namely Sahjanand Bungalow. Similarly, both have purchased and shifted to the new location i.e. Sahjapand Villa. So, this was enough to prove the association of the assessee with Shri Ashwin B. Dudhat. The Assessing Officer also observed that the entire part and parcel of the land and construction thereupon in respect of Sahjanand Bungalow has been sold to M/s. Shaligram Infra Project LLP. Therefore, the transaction might have taken place in respect of all the occupants. The Assessing Officer also observed that since Shri Ashwin B. Dudhat has paid on money to Himalaya Darshan Developers (Gujarat) Pvt. Ltd. in respect of purchase of plot in Sahjanand Villa, so, the possibility of making the payment of on-money by the assessee in purchase of the plot in the same scheme cannot be ruled out. Considering the transactions found noted on the papers seized, the Assessing Officer assumed that the on-money payment might have taken place in respect of the other parties who have sold the plots in Sahjanapd Bungalows and purchased the plot in the new scheme namely Sahjanand Villa. Accordingly, the Assessing Officer worked out the addition of Rs.3,56,29,700/- out of which the addition of Rs. 1,96,90,216/- has been made in Asst. Year 2016-17 towards on-money receipts on sale of Sahjanand Bungalow and balance of the on- money payment of Rs. 1,59,39,484/- (Rs.3,56,29,700/- - Rs. 1,96,90,216/-) has been held to be made in the Asst. Year 2015-16 on purchase of new plot in Sahjanand Villa and addition thereof is made u/s. 69 of the I.T. Act. 4.4 The facts reveal that in the year under consideration, the assessee has registered an agreement for purchase of land at Unit No. 10 in Sahjanand Villa with M/s. Himalaya Darshan Developers (Gujarat) Pvt. Ltd. in AY 2015-16. Further, in Asst. Year 2016-17, the assessee has registered an agreement for sale ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 5– of his bungalow No. 4 in Sahjanand Bungalow with Shaligram Infra Projects LLP. In Asst. Year 2016-17, the assessee has sold his bungalow in Sahjanand Bungalows for a consideration at Rs. 1,50,00,000/- through registered sale deed dated 16.05.2015. Accordingly, the sale transaction, of the Sahjanand Bungalow was shown in the return of income filed for the year under consideration by claiming the indexed cost at Rs.21,26,790/- and exemption u/s. 54 of the Act at Rs. 1,28,73,210/- leaving the LTCG at Rs. Nil. 4.5 During the course of search proceedings at the residence of Shri Ashwin Dudhat, page No. 58 & 60 of Annexure A1 were found and seized in respect of the transactions of sale of Sahjanand Bungalow and purchase of land in Sahjanand Villa by Ashwin Dudhat and his brothers. No entries / details about the sale and purchase of the land of the assessee was noted on the above seized papers. On the basis of the notings of the on-money transactions found noted in respect of purchase and sale of plots by Shri Ashwin Dudhat and his brothers, it was presumed by the Assessing Officer that the assessee might have been paid and received the on-money on purchase and sale of plots also. The Assessing Officer made the addition on his understanding that since Shri Ashwin Dudhat has entered into some unaccounted transaction, the assessee ought to have entered into the same. 4.6 The addition in the case of the assessee has been made extrapolating the details found noted on page No. 58 & 60 of Annexure A1 seized at the residence of Shri Ashwin Dudhat and those papers were having the details of the on-money on purchase and sale of plots by Shri Ashwin Dudhat and not by the assessee. Even at the premises of the assessee during the course of search, not a single document has been seized which could indicate the on-money transactions of the assessee on purchase and sale of plots. The addition has been made without any basis and incriminating documents in respect of the assessee’s transactions. Even in the statement recorded during the course of search and post search proceedings, no ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 6– enquiry/questions about the on-money receipts/payments have been asked to the assessee. The Assessing Officer has issued notices to various members of Sahjanand Villa and in majority of the cases, the respective members have made the reply and no such on-money payment was admitted/surfaced on record. The Assessing Officer was not absolutely in possession of any information of relevant material which could either be of any indicative in nature so as to assume to the fact that the assessee has indulged into a similar unaccounted transactions as that in case of Shri Ashwin Dudhat. Even there is no facts available on record that the Assessing Officer has required Shri Ashwin Dudhat to confirm as to whether other members have received any alleged on-money or the other members have also paid any alleged on-money. Even in the statement recorded, Shri Ashwin Dudhat has mentioned that the page No. 58 pertains to a comparison sheet prepared detailing the purchases and sale of bungalow between him and his brothers and further page No. 60 contains details of unsecured loans and interest calculations. In no manner, he has stated that the same pertains or relates to the assessee or vice versa. So, considering the statement recorded on oath of Shri Ashwin Dudhat and for similar reasons, it can nowhere be said that the assessee has made any on- money transactions. 4.7 It is noticed that in this group search and seizure action u/s. 132 of Act was carried out on 6.3.2018 and subsequent dates. Thereafter notice u/s. 153A was issued and the assessee had filed the return of income on 23.08.2019 with the returned income at Rs.87,62,880/-. Since this was the abated assessment year and as noticed from the assessment order that no incriminating documents in respect of the on-money receipts and payments for the sale of plot in Sahjanand Bungalows and purchase of plot in Sahjanand Villa has been found. The fact which requires appreciation at this stage is that even in the assessment order framed u/s.153A, wherein addition made, there is no reference of any incriminating material. We find that the Ld. CIT(A) relied on the judgement of Hon'ble Delhi High Court in case of Commissioner of Income-tax (Central)-III vs. Kabul Chawla ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 7– [2015] 61 taxmann.com 412 (Delhi). The Hon’ble High Court in the same case has noted the following facts and has held as under: “On a conspectus of section 153A(1), read with the provisos thereto, and in the light of the law explained in various decisions, the legal position that emerges is as under: (i) Once a search takes place under section 132, notice under section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six assessment years immediately preceding the previous year relevant to the assessment year in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such assessment years will have to be computed by the Assessing Officers as a fresh exercise. (iii) The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six assessment years 'in which both the disclosed and the undisclosed income would be brought to tax'. (iv) Although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment 'can be arbitrary or made without any relevance or nexus with the seized material. (v) In absence of |any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment cad be made. The word 'assess' in section 153A is relatable to abated proceedings (i.e., those pending on the date of search) and the word 'reassess' to complete assessment proceedings. (vi) Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each assessment year on the basis of the findings of tile search and any other material existing or brought on the record of the Assessing Officer. ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 8– (vii) Completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. [Para 37] 5. We find that the Ld. CIT(A) relied on the following decisions: - (i) Pr. Commissioner of Income Tax-3 V/s Anil Bholabhai Patel Dated- 30/08/2017 (Guj.) (ii) Principal Commissioner of Income Tax V/s Sanghvi Fincap Ltd. Dated- 20/02/2018 (Guj.) (iii) Sunrise Finlease (P.) Ltd. reported in 89 taxmann.com 1 (Guj.) (iv) Desai Construction reported in 81 taxmann.com 271. (Guj.) (v) M/s Spectrum Coal& Power Ltd and others ITA Nos. 6103 & 6104/Del/2016 dated 17.01.2018. (Delhi) (vi) CIT vs. Best Infrastructure (India) (P) Ltd. reported in 397 ITR 82 (Delhi) (vii) Pr.CIT vs. Lata Jain reported in 384 ITR 543 (viii) PCIT-3, Ahmedabad Vs. Himanshu Chandulal Patel in Tax Appeal No.342 of 2019 (ix) Pr. CIT (Central), New Delhi Vs. Meeta Gutgutia (2018) 96 Taxman.com 468 (SC) (x) Pr. CIT-1 Vs. Devangi (2017) 88 Taxman.com 610 (Gujarat) (xi) Pr. CIT (Central)-4 Vs. Jignesh P. Shah (2018) 99 Taxman.com 111 (Bombay) (xii) Pr. CIT, Ahmedabad Vs. Dipak Jaswantlal Panchai (2017) 88 Taxman.com 611 (Gujarat). 6. Since the addition has been made sans any incriminating materials found at the place of assessee during the course of search with regard to the issue of addition and also the fact that this was not the abated assessment year, we decline to interfere with the order of the Ld. CIT(A). 7. In the result, the Revenue’s appeal for AYs 2015-16 & 2016-17 are hereby dismissed. ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 9– IT(SS)A No.147/Ahd/2021 –AY 2013-14 - Revenue’s appeal Ground No. 6 – Deletion of Rs.4.20 Crs. made by the AO u/s 68 of the Act – loans received from Ganga Marketing Pv.t Ltd, and Gemini Vanijya Pvt Ltd. 8. We have considered the facts and submission of the assessee. Search and survey action was carried out on 6.3.2018 and subsequent dates in the cases of connected groups namely Sangani, Satyam and Shaligram including the assessee. As per para No.7 of the assessment order, it has been noticed by the Assessing Officer that during the course of assessment proceedings, the assessee was required to submit details of transactions for amounts received as advance against sale of land from Ganga Marketing Pvt. Ltd. at Rs.2,40,00,000/- and Gemini Vanijya Pvt. Ltd. at Rs. 1,80,00,000/- totaling to Rs.4,20,00,000/- as noted in the assessment order. The addition of Rs.4,20,00,000/- in respect of the aforesaid two parties were made by the Assessing Officer, treating the same as unexplained cash credits u/s. 68 in the hands of assessee. 9. The Ld.CIT(A) held that the Assessing Officer has not brought anything on record to prove or to substantiate as to how the assessee has failed to discharge the onus that lays upon the assessee u/s. 68 of the Act. The assessee has duly proved before the Assessing Officer that it was a mere conduit in routing the cheques back to the associate concerns i.e. Shrimate Infrastructure LLP. The assessee has also submitted that it has received the sums from Ganga Marketing Pvt. Ltd., besides two other companies, which has been ultimately reached to the originate source namely Shrimate Infrastructure LLP. 10. The Ld. CIT(A) held that the same Assessing Officer has completed the assessment u/s. 153C of the Act in the case of Ganga Marketing Pvt. Ltd. and accepted the entire chain of transaction made from Shrimate Infrastructure LLP through the assessee and others. Having considered all the facts and mere the conduit entity, the Assessing Officer completed the assessment of Ganga Marketing Pvt. Ltd. without any addition when the assessee as well as Ganga ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 10– Marketing Pvt. Ltd. both were the intermediaries and conduit entities in the chain of transactions. Thus, there was no basis to accept the transactions in the hands of Ganga Marketing Pvt. Ltd. and completed the assessment without any addition, but made the addition in the hands of the assessee for the similar set of transactions. 11. We also find that this matter of the amounts being received from Ganga Marketing Pvt Ltd. and Gemini Vanijya Pvt Ltd stand examined and adjudicated by the order of the Coordinate Bench in the case of JCIT Vs. Shri Rameshbhai N. Antala in IT(SS)A No. 36/Ahd/2021 and others, vide order dated 21.02.2025. For the sake of reference, the relevant part of the order is reproduced hereunder:- Facts of the case in that order :- 4. A search operation under Section 132/133A of the Act was conducted on 06/03/2018 and subsequent dates in the case of SSS Group, which included the residence of the assessees. Pursuant to the search, the AO initiated proceedings under Section 153A for the assessees and completed assessments, making additions under Section 68, treating the credits received from certain Kolkata-based entities as unexplained cash credits. The details of assessment and the additions are as follows: Particulars Shri Kamleshbhai Purshottambhai Savaliya Shri Rameshbhai Narsinhbhai Antala Assessment Order Date 30/12/2019 29/12/2019 Section Invoked 153A r.w.s 143(3) 153A r.w.s 143(3) Original Return Filing Date 30/09/2013 28/09/2013 Original Declared Income (Rs.) 12,22,330 8,40,950 Notice under Section 153A Issued on 28/01/2019 30/01/2019 Return Filed under 153A on 23/08/2019 23/08/2019 Income Declared in Revised Return (Rs.) 12,22,330 8,40,950 Additions Made by AO u/s 68 of the Act (Rs.) 4,54,00,000 4,54,00,000 Total Assessed Income (Rs.) 4,66,22,330 4,62,40,950 ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 11– 4.1 The additions in respect of both the assessee were related to amounts received from following entities: Sl. No. Name of Entity Amount Received (Rs.) 1 Ganga Marketing Pvt. Ltd. 80,00,000 2 Gemini Vanijya Pvt. Ltd. 60,00,000 3 Shubhlabh Commodeal Pvt. Ltd. 3,14,00,000 Total 4,54,00,000 5. The AO alleged that these were accommodation entries provided by the above entities. The amounts were purportedly part of bogus compensation expenses booked in the books of Shrimate Infrastructure LLP. The cash was allegedly routed back to the original source through multiple layers of transactions. During the assessment proceedings the assessees submitted that the transactions under question were part of a compensation structure related to Shrimate Infrastructure LLP (formerly Shrimate Infrastructure Pvt. Ltd.). The assessees further submitted that in lieu of the debited expenses in the books of Shrimate Infrastructure LLP cash was generated as detailed below: Sl. No. Particulars Amount (Rs.) 1 Bhaskar Steel & Ferro Alloy Ltd. 11,79,29,000 2 Brahm Alloys Pvt. Ltd. 11,58,79,500 3 SRMB Srijan Ltd. 11,37,47,000 Total 34,75,55,500 4 Less: Commission Expenses Incurred (@1%) -34,75,500 Cash Received Back 34,40,79,945 5 Add: Amount Received Back on Account of Cheques Issued / Refunds of Amounts Initially Received from Said Parties 3,90,00,000 Grand Total Cash Received (Feb 2013 - March 2013) 38,30,79,945 5.1 The assessee further submitted that the cash so generated was partly (Rs. 22,70,00,000/-) used to obtain accommodation entries as detailed below: Particulars Ganga Marketing Pvt. Ltd. (Rs.) Gemini Vanijya Pvt. Ltd. (Rs.) Shubhlabh Commodeal Pvt. Ltd. (Rs.) Total (Rs.) Shri Kamleshbhai Purshottambhai Savaliya 80,00,000 60,00,000 3,14,00,000 4,54,00,000 Shri Rameshbhai Narsinhbhai Antala 80,00,000 60,00,000 3,14,00,000 4,54,00,000 ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 12– Shri Gopalbhai Patel 2,40,00,000 1,80,00,000 0 4,20,00,000 Shri Mavjibhai Patel 0 0 9,42,00,000 9,42,00,000 Total (Rs.) 4,00,00,000 3,00,00,000 15,70,00,000 22,70,00,000 5.2 The assessee also submitted following application of funds – Amount Paid by/to Shrimate Infrastructure LLP (Formerly as Private Limited Co.) Shaligram Buildcon Private Limited Total (Rs.) Kamleshbhai Savaliya 4,01,00,000 46,00,000 4,47,00,000 Rameshbhai Antala 4,01,00,000 46,00,000 4,47,00,000 Gopalbhai Patel 12,03,00,000 1,45,00,000 13,48,00,000 Amount paid by Shaligram Buildcon Pvt. Ltd. to Shrimate and in-turn received by Shaligram Buildcon from Kamleshbhai, Rameshbhai, and Gopalbhai 16,80,00,000 (16,80,00,000) - Total 21,73,00,000 69,00,000 22,42,00,000 5.3 The assessee argued that the actual beneficiary of the transactions was Shrimate Infrastructure LLP, which had already claimed the amounts as compensation expenses in its books. The funds were merely circulated and ultimately routed back to Shrimate, meaning no real income was generated for taxation. The assessee contended that taxing these amounts would result in double taxation, which is against the principles of tax law. The assessee relied on the Wellknown Technologies Pvt. Ltd. (ITA No.2912,2913,2914,2915/Mum/2018) case, where the ITAT Mumbai held that only disallowance of expenses was justified, but taxing the same routed funds was impermissible. It was further argued that Section 68 was not applicable in this case since the transactions were already explained, and detailed documentary evidence had been submitted. 5.4 The AO concluded that the funds received from Ganga Marketing Pvt. Ltd., Gemini Vanijya Pvt. Ltd., and Shubhlabh Commodeal Pvt. Ltd. were accommodation entries, as the amounts were subsequently routed back to Shrimate Infrastructure LLP. Since the case of Shrimate Infrastructure LLP was under special audit u/s 142(2A) and the findings were still awaited, the AO disregarded the assessee's explanation and treated the amount of Rs. 4.54 crore as unexplained cash credits under Section 68. ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 13– ……. ……. 6.2 On the grounds relating to additions u/68 of Rs. 4,54,00,000/- CIT(A) examined the facts and found that the assessee had satisfactorily explained the source, identity, and genuineness of the deposits. The CIT(A) observed that the actual beneficiary of the transactions was Shrimate Infrastructure LLP, which had claimed these payments as compensation expenses in its books. The funds received by the assessees were routed back to Shrimate, making it a mere conduit in the entire transaction. The CIT(A) further observed that the AO did not dispute the movement of funds from Shrimate to various concerns, including the assessees, and back to Shrimate. The transactions were verifiable through bank accounts, and no infirmity was found in the assessee’s detailed working of the fund flow. The CIT(A) held that in the absence of any seized or incriminating documents, an addition under Section 68 was not sustainable. The CIT(A) also noted that the assessee had submitted documentary evidence, including ledger confirmations, bank statements, and agreements showing the nature of transactions. The CIT(A) further noted that the same AO had completed the assessment of Ganga Marketing Pvt. Ltd. under Section 153C, accepting the entire transaction chain from Shrimate through the assessees and others. However, while no addition was made in Ganga Marketing Pvt. Ltd.’s case, the addition was made in the hands of the assessees for the same transaction, which was not justified. The CIT(A) relied on the ITAT Mumbai ruling in Wellknown Technology Pvt. Ltd., which held that a mere routing of funds without any unexplained income component cannot be taxed under Section 68. Accordingly, the CIT(A) deleted the addition. ………… ………… 9. During the course of hearing the Departmental Representative (DR) relied on the order of AO and argued that the addition was made on the basis of documents seized during the course of search operation. The DR further argued that the Ao can make addition on the basis of all the material available in addition to incriminating material. To support his contention he pointed out the para 14 (iii) of the judgement of Hon’ble Supreme Court in case of PCIT Central-3 Vs. Abhisar Buildwell P. Ltd. ….. …... ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 14– 12.1 On Ground No. 5 - Revenue’s Argument - The CIT(A) erred in deleting the addition of Rs. 4,54,00,000/- made under Section 68 of the Act. The deletion by CIT(A) is legally justified. The AO has not referred to any incriminating material in the assessment order to substantiate the addition under Section 68. The factual report submitted by the AO during appellate proceedings cannot retrospectively justify an addition if the same was not relied upon in the original assessment order. Additionally, we note the contradiction pointed out by the CIT(A) in the assessment approach of the AO. The AO accepted the transactions as genuine in the case of parties such as Ganga Marketing Pvt. Ltd. under Section 153C but proceeded to treat the same transactions as unexplained cash credits in the hands of the assessee. The same entries cannot be treated differently in different hands, unless backed by cogent evidence. If the AO believed the amounts were unexplained, an addition should have been made in the hands of the entry providers, but no such addition was made, exposing the inherent inconsistency in the AO’s approach. Furthermore, the aspect of double taxation cannot be ignored. The funds originated from Shrimate Infrastructure LLP, where they were already debited as compensation expenses. The same amount has been subjected to tax again in the hands of the present assessees, despite the fact that the transactions were part of a circular fund movement, ultimately returning to Shrimate Infrastructure LLP. The Tribunal, in Wellknown Technologies Pvt. Ltd. (ITA No. 2912, 2913, 2914, 2915/Mum/2018, ITAT Mumbai), has held that merely routing funds through different entities without introducing unexplained income does not warrant taxation under Section 68. Thus, in the absence of incriminating material, due to the contradiction in the Revenue's stand, and to prevent double taxation, we uphold the order of the CIT(A) and dismiss this ground of appeal. 12.2 On Ground No. 6 - Revenue’s Argument- The CIT(A) failed to appreciate that the assessee did not establish the creditworthiness and genuineness of transactions with the Kolkata-based shell companies— Ganga Marketing Pvt. Ltd., Gemini Vanijya Pvt. Ltd., and Subhlabh Commodeal Pvt. Ltd. 12.3 The CIT(A) carefully examined the facts and documentary evidence submitted by the assessee, including ledger confirmations, bank statements, PAN details, and agreements. The AO did not conduct independent inquiries or summon the directors of these companies. Additionally, the same AO completed the assessment of Ganga Marketing Pvt. Ltd. under Section 153C without making any addition, despite accepting the entire transaction flow from Shrimate Infrastructure LLP. Thus, this ground is dismissed.” ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 15– 12. From the detailed examination of the above order, it can be found that the issue of Ganga Marketing Pvt Ltd and Gemini Vanijya Pvt Ltd., the authenticity and genuineness thereof and the source of funds from Shrimat Infrastructure LLP have all been stand examined and adjudicated. Incidentally, one of the signatories of this order was also the signatory of the order in IT(SS)A No. 36/Ahd/2021. Since, in the absence of any change in the facts of the case and the legal proposition, the appeal of the Revenue is hereby dismissed. 13. In the result, the appeal of the Revenue for AY 2013-14 is dismissed. IT(SS)A Nos. 141, 143 & 144/Ahd/2021 – Assessee’s appeals AY: 2013-14, 2015-16 & 2016-17 14. Since the Revenue’s appeals have already been dismissed and the order of the learned CIT(A) confirming the deletion of the additions made by the Assessing Officer for all the relevant years has been upheld, the grounds raised by the assessee in its appeals - being purely technical in nature - have become academic and infructuous. Accordingly, all the appeals filed by the assessee for the impugned assessment years are dismissed as infructuous. 15 In the result, all the appeals filed by the assessee as well as Revenue are dismissed. This Order pronounced in Open Court on 25.04.2025 Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE PRESIDENT Ahmedabad; Dated 25.04.2025 **btk TRUE COPY ITSSA Nos. 141, 143, 144, 147, 148 & 149/Ahd/2021 Gopalbhai Mavjibhai Patel Vs. JCIT (Cross Appeals) AYs : 2013-14, 2015-16 & 2016-17 - 16– आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation ……22.04.2025………… 2. Date on which the typed draft is placed before the Dictating Member ……23.04.2025.. 3. Other Member………23.04.2025………… 4. Date on which the approved draft comes to the Sr.P.S./P.S ……24.04.2025……….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…25.04.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S …25.04.2025…………. 7. Date on which the file goes to the Bench Clerk …25.04.2025…………… 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…………………………………… "