VIMAL JAGDISHPRASAD AGARWAL,AHMEDABAD V. .THE PR. CIT, AHMEDABAD-3, AHMEDABAD

ITA 508/AHD/2024

AI Insights

The case involves an appeal by Vimal Jagdishprasad Agarwal against the order of the Principal Commissioner of Income Tax-3, Ahmedabad, which was passed under section 263 of the Income Tax Act. The Principal CIT had directed a de novo assessment concerning an addition of Rs. 92,00,000 made by the Assessing Officer, which was based on information about accommodation entries received by the assessee. The main contention in the appeal was the extent of the revisionary powers under section 263, specifically whether it could direct a de novo assessment beyond the scope of the initial inquiry. The Tribunal found that the Principal CIT's directions should be limited to the commission paid on the accommodation entries, which was between 1% to 3%.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 25300 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 21-03-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AO SINGH
• Assessee Lawyers: MANISH J SHAH
• Keywords: Revision of order
• Section: 263

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE DR.BRR KUMAR, VICE PRESIDENT SHRI TR SENTHIL KUMAR, JUDICIAL MEMBER I.T.A. No.508/Ahd/2024 (Assessment Year: 2014-15) Vimal Jagdishprasad Agarwal, 185, New Cloth Market, Raipur, Ahmedabad-380022. Vs. The Principal Commissioner of Income Tax-3, Ahmedabad. [PAN No.AAQPA0501J] (Appellant) .. (Respondent) Appellant by : Shri Manish J Shah, with Shri Rushin Patel ARs. Respondent by: Shri AO Singh, CIT. DR Date of Hearing 09.12.2024 Date of Pronouncement 10.12.2024 O R D E R PER: DR. BRR KUMAR, VICE PRESIDENT: This appeal has been filed by the Assessee against the order passed by the Ld. Principal Commissioner of Income Tax-3, Ahmedabad, vide order dated 23.02.2024 passed for the Assessment Year 2014-15. 2. The Assessee has taken the following grounds of appeal:- 1. The Principal CIT erred in law and on fact in holding that assessment order passed u/s.143(3) r.w.s 147 dated 30.03.2022 is erroneous and prejudicial to the interest of Revenue by invoking the provision of section 263 of the Act and thereby directing the Assessing Officer to carry out inquiries in terms of direction issued in his order passed u/s.263 of the Act. 2. The Principal CIT erred in law in directing the Assessing Officer to carry out denovo assessment, and thereafter, directed to pass fresh assessment order without appreciating that direction to carry out denovo assessment cannot be issued by exercising power u/s.263 is only entitled to inquire the issue on which revision power is exercised by the commissioner. 3. Heard both the parties and perused the material available on record. ITA No. 508/Ahd/2024 Vimal Jagdishprasad Agarwal. vs. PCIT Asst.Year –2014-15 - 2– 4. In this case, the addition of Rs.92,00,000/- has been made by the Assessing Officer based on the information received from the internal sources of the Department, being the accommodation entry received by the assessee. The ld. PCIT opportunely resorted to proceedings u/s 263 of the Act as the AO omitted to add the percentage of commission paid the entry operator on account of receipt of entry of Rs.92,00,000/- and directed the AO to pass a fresh assessment order de novo. The issue of addition of Rs.92,00,000/- is pending before the ld. CIT(A) for adjudication. The ld. Counsel submitted that since the quantum addition has already been made and pending before the ld. CIT(A), the directions of the ld. PCIT if at all treated as valid, should be restricted to the quantum of commission paid by the assessee. The ld. DR has also submitted that the only issue taken up by the ld. PCIT pertains to the commission paid which could be 1% to 3% on the entry taken. We find that the amount could be anywhere between Rs.92,000/- to Rs.2,76,000/-. The Assessing Officer shall restrict his proceedings to this extent in determining percentage of commission and nothing beyond. 5. In the result, the order u/s 263 is made effective to the extent of commission paid by the assessee and the appeal of the assessee is partly allowed. This Order pronounced in Open Court on 10.12.2024 Sd/- Sd/- (TR SENTHIL KUMAR) (DR. BRR KUMAR) JUDICIAL MEMBER VICE PRESIDENT Ahmedabad; Dated 10.12.2024 Manish, Sr. PS ITA No. 508/Ahd/2024 Vimal Jagdishprasad Agarwal. vs. PCIT Asst.Year –2014-15 - 3– TRUE COPY आदेश क\u0007 \b\tत\u000bल\rप अ\u0010े\rषत/Copy of the Order forwarded to : 1. अपीलाथ\b / The Appellant 2. \u000bयथ\b / The Respondent. 3. संबं\u0010धत आयकर आयु\u0017त / Concerned CIT 4. आयकर आयु\u0017त(अपील) / The CIT(A)- 5. \u001aवभागीय \u001eत\u001eन\u0010ध, आयकर अपील!य अ\u0010धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील\u001eय अ\u001fधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 09.12.2024 2. Date on which the typed draft is placed before the Dictating Member 09.12.2024 3. Other Member……09.12.2024…………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 09.12.2024 5. Date on which the fair order is placed before the Dictating Member for pronouncement 10.12.2024 6. Date on which the fair order comes back to the Sr.P.S./P.S 10.12.2024 7. Date on which the file goes to the Bench Clerk 10.12.2024 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…………………………………… "