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2025 Supreme(Online)(ITAT) 4010
INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD BENCH)
DR. B.R.R. KUMAR, VP, Ms. SUCHITRA KAMBLE, J
Ashish Prafulbhai Patel – Appellant
Versus
DCIT, Central Circle-1(3), Ahmedabad – Respondent
IT(SS)A No. 429/Ahd/2019 | IT(SS)A No. 460/Ahd/2019 | CO No. 5/Ahd/2020 | IT(SS)A No. 431/Ahd/2019 | IT(SS)A No. 472/Ahd/2019 | CO No. 7/Ahd/2020 | IT(SS)A No. 462/Ahd/2019
For the Appellants/Petitioners: Shri Vartik Chokshi, Shri Biren Shah
For the Respondents: Shri Alpesh Parmar
Estimates of income from business activities should reflect actual transactions, supported by concrete evidence, with any additions based on mere notations in seized documents deemed improper.
Headnote:The Income Tax Appellate Tribunal dealt with multiple appeals regarding income estimation and assessment years 2004-05, 2006-07, and 2003-04, following a common methodology for adjudicating issues of unaccounted income tied to land transactions with the Sahara City Homes project, citing violations of various income tax provisions. The Tribunal concluded that the Assessing Officer's additions were unreasonable without substantiated evidence, especially concerning cash transactions and bogus claims, thus modifying certain assessments while upholding others according to the evidence collected during the investigation, summarized under relevant legal statutes and previous rulings. Ultimately, the Tribunal reduced the estimated income from Rs. 26.86 crores down to Rs. 12 crores based on the evidence presented by both parties, while addressing cross-objections regarding unexplained expenditures and notional incomes.
आदेश/O R D E R
PER DR.B.R.R. KUMAR, VICE-PRESIDENT:
The above-captioned appeals have been filed by both the Revenue and the Assessee against the orders of the Ld. Commissioner of Income Tax (Appeals), Ahmedabad [hereinafter referred to as "CIT(A)"], passed under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"], for the Assessment Years (AYs) 2004–05 and 2006–07. In addition, the Assessee has filed cross-objections for both of the aforementioned assessment years. For AY 2003–04, an appeal has been filed by the Revenue, and a corresponding cross-objection has been filed by the Assessee. Since the issues involved in the cross appeals filed by both parties and objection raised by assessee in the C.Os. are arising from the search action carried out by the Department on 04.08.2006, all these Appeals are taken together and decided through common order.
2. The brief facts of the case are that the assessee is engaged in the business of real estate dealings and financing activities. The assessee belongs to Radhe Group, Ahmedabad. During the A.Y. under consideration, assessee was running three proprietary concerns in his name which were (i) Abhyudaya Finance, (ii) Radhe Finance and (iii) Radhe Organiser. A search under Section 132 of the Act was carried out in case of assessee/Radhe Group on 4th August, 2006. The search was finally concluded by drawing final panchnama in the name of Assessee on 29th September, 2006. The Assessee had filed return of income for the year under consideration on 24th May, 2007 in response to notice under Section 153A of the Act, dated 4th May, 2007.
3. The Assessee had filed Settlement Application before Hon'ble Settlement Commission on 28th May, 2007 for A.Y. 2001-02 to 2007-08 but such settlement application was rejected by passing an order under Section 245HA on 4th October, 2007 on the ground that Assessee had not paid taxes for A.Y. 2004-05 and 2006-07. In the settlement application the assessee has disclosed additional income of Rs. 12,25,50,000/- for the year A.Y. 2003-04 to 2007-08. The assessee has challenged the order of Hon'ble Settlement Commission before Hon'ble Gujarat High Court. The Hon'ble High Court stayed operation of the Settlement Commission's order vide order dated 12.05.2008 and directed the Assessing Officer not to proceed with framing of the assessment. Against this order of the Hon'ble High Court, the Revenue filed SCA praying for vacating the stay granted. The assessee meanwhile filed another SCA before the Hon'ble High Court and the Hon'ble High Court passed the order on 07.12.2009 disposing both the SCA i.e. filed by the Revenue & the Assessee.
4. The Hon'ble High Court directed the Assessee to pay the admitted dues for Α.Υ. 2004-05 & 2006-07 within period of 8 weeks. Subsequent to this, the assessee paid Rs. 24.20 lacs for A.Y. 2004-05 and Rs. 4,84,65,000/- for A.Y. 2006-07 on 02.02.2010. But the stay granted vide order dated 12.05.2008 by the Hon'ble High Court for A.Y. 2001- 02 & 2007-08 continued. Meanwhile another search was conducted upon the assessee by the department on 07.10.2009 and final Panchnama was drawn on 01.12 2009. In view of this second search upon the assessee, the pending assessment proceedings (stayed by HC) for A.Y. 2004-05 to 2007-08 were affected in view of the second provision to Sec. 153A(1) of the Act and were therefore abated. The Assessing Officer issued fresh notice u/s 153A on 08.03.2011 for A.Y. 2004-05 to 2007-08 (in respect of second search assessment of which was also over lapping with the first search) which was served upon the Assessee on 10.03.2011.
5. In response to second search, the Revenue filed SCA no. 10395 of 2011 before the Hon'ble High Court, which was disposed of by the court vide order dated 19 12.2011 restraining the Assessing Officer from further assessment proceedings for A.Y. 2004-05 to 2007-08 initiated u/s 153A of the Act. The Hon'ble High Court clarified that this order would be subject to final
