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IN - Simplifying Tax Laws - 2024 TAXSCAN (ITAT) 696

ITA No.1225/Ahd/2019
Assessment Year: 2011-12
Page 1 of 4
IN THE INCOME TAX APPELLATE TRIBUNAL

AHMEDABAD “A” BENCH, AHMEDABAD
BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND

Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER
Sanjaybhai Ranchhodbhai Patel, The Assistant Commissioner of

1, Shayona Tirth Bunglow, Income Tax,
Near I.D. Patel School, Central Circle – 2(4),
Ghatlodia, Vs. Ahmedabad.
Ahmedabad – 380 016.
[PAN – ACTPP 1157 C]
(Appellant) (Respondent)
Assessee by Shri R.B. Tank, CA
Revenue by Ms. Saumya Pandey Jain, Sr. DR
Date of Hea ring 20.02.2024

Date of P ronounce ment 24.04.2024
ORDER
PER SUCHITRA KAMBLE, JUDICIAL MEMBER :
This appeal is filed by the assessee against order dated 23.05.2019

passed by the CIT(A)-12, Ahmedabad for the Assessment Year 2011-12.
2. The assessee has raised the following grounds of appeal :-
“1. The learned Commissioner of Income Tax (Appeal)-12, Ahmedabad,

has grievously erred in facts and law while passing the order under
consideration.
2. That learned Commissioner of Income Tax (Appeal)-12, Ahmedabad

erred in upholding the validity of Notice issued u/s.148 of the Act.
3. That learned Commissioner of Income Tax (‘Appeal)-12,

Ahmedabad, erred in facts and in law in upholding the disallowance
of Rs.4,91,871/- made by the Assessing Officer u/s. 36(i)(iii) of
Income Tax Act, 1961.”
3. The original return of income was filed on 28.03.2012 showing total income
of Rs.41,81,710/- which was processed under Section 143(1) of the Income Tax
WWW.TAXSCAN.IN - Simplifying Tax Laws - 2024 TAXSCAN (ITAT) 696
Page 2 of 4
Act, 1961 on 25.04.2012. Thereafter, a revised return was field on 11.01.2013

showing total income of Rs.16,37,210/-. The revised income was on account of
capital gain of Rs.25,44,449/- which pertained to sale of agriculture which was
exempt from capital gain. Search action under Section 142 of the Act was carried
out in the group case of Shayona Group on 15.10.2013 in which documents
showing to a land transaction was found which pertained to all partners of the firm
M/s. Shayona Land Corporation. The residence of premises of all the partners
were covered under search action except that of Shri Sanjay R. Patel. The
assessments in case of the other seven partners were made under section 153A
of the Act making additions arising out of out of the incriminating documents. In
assessee’s case, after recording the reasons and taken approval as per
procedure, notice was issued under Section 148 of the Act on 28.03.2016. In
response to the notice issued under Section 148 of the Act the assessee filed
return on 02.06.2016 declaring income of Rs.16,37,270/-. Notices under Section
143(2) and 142(1) of the Act were issued on 21.06.2016 along with questionnaire
and copy of reasons recorded. In response to these notices issued, the assessee
raised objections against the reopening of the assessments which was dealt by
the Assessing Officer by a speaking order on 14.07.2016. The Assessing Officer
after taking cognisance of the assessee’s reply objected that during the search
survey under Section 133A of the Act was conducted on Shop No.22/23 Shayona
Complex and various documents pertaining to a land transaction were found and
impounded. An agreement for sale dated 20.03.2010 between Shri Rameshbhai
Desai and Shri Sureshkumar Ranchhodbhai Patel for a total sale consideration of
Rs.4,57,41,388/- was made. This issue was confronted vide statement of Shri
Sureshkumar Ranchhodbhai Patel recorded on 10.12.2013. After taking
cognisance of all the aspects of the said transactions, the Assessing Officer held
that since the funds for purchase of land has been sourced from the unsecured
loans from Shreeji Finance taken by the firm, M/s. Sayona Land Corporation, the
addition will be substantive in case of the firm. However, it is a fact that the
partners are equally liable to the firm and hence protective addition has been
made in case of the partners with substantive addition in case of the firm. Thus,
the difference of Rs.3,45,01,388/- was divided between the eight partners and
thus Rs.43,12,673/- was added as unaccounted investment under Section 69 of
the Act on protective basis. The Assessing Officer further made disallowance of
Page 3 of 4
Rs.4,91,871/- towards the disallowance under Section 36(1)(iii) of the Act. The
Assessing Officer also made disallowance under Section 14A of the Act
amounting to Rs.1,71,576/-
4. Being aggrieved by the Assessment Order, the assessee filed appeal
before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
5. The Ld. AR submitted that on the basis of material found, the reopening is
not permissible in respect of protective addition as the reasons are only of
assumption. The reasons categorially not mentioned by the assessee as
purchaser or seller and there was no nexus between the information and
formation of the assessee’s involvement in the transaction. Thus, the Ld. AR
submitted that there was no application of mind while reopening the assessee’s
case. The Ld. AR further submitted that notice issued under Section 148 of the
Act is also not erroneous as the Assessment Order mentioned in the said notice is
that of 2009-10 and not the year under consideration.
6. The Ld. DR submitted that the notice issued under Section 148 of the Act
was that for the year 2011-12 only and the mistake in the paragraph no.2 of the
notice is a typographical error as the subject itself mentions notice under Section
148 for the A.Y. 2011-12. As regards reopening not permissible under protective
addition, it will not be appropriate as the assessee is the partner in the group that
has been searched and, therefore, the reopening was validly done.
7. We have heard both the parties and perused all the relevant material
available on record. It is pertinent to note that the subject of notice under Section
148 of the Act clearly mentions that the Assessment Year is 2011-12 and,
therefore, mention of Assessment Year 2009-10 is just a typographical error,
appears to be genuine contention of the Ld. AR. As regards reopening not
permissible in respect of protective addition, since the substantive addition has
already been made in case of the firm, the Assessing Officer cannot make
protective addition in the present assessee’s case which tantamount to double
taxation and, therefore, ground no.2 is allowed.
8. Since the assessment itself becomes bad in law as stated hereinabove, the
merit is not decided upon.
Page 4 of 4
9. In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on this 24th April, 2024.
Sd/- Sd/-
(ANNAPURNA GUPTA) (SUCHITRA KAMBLE)
Accountant Member Judicial Member
Ahmedabad, the 24 th day of April, 2024

PBN/*
Copies to: (1) The appellant

(2) The respondent
(3) CIT
(4) CIT(A)
(5) Departmental Representative
(6) Guard File
By order
UE COPY
Assistant Registrar
Income Tax Appellate Tribunal
Ahmedabad benches, Ahmedabad

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WWW.TAXSCAN.

IN - Simplifying Tax Laws - 2024 TAXSCAN (ITAT) 696

IN THE INCOME TAX APPELLATE TRIBUNAL

BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND

Sanjaybhai Ranchhodbhai Patel, The Assistant Commissioner of

Date of Hea ring 20.02.2024

PER SUCHITRA KAMBLE, JUDICIAL MEMBER :

This appeal is filed by the assessee against order dated 23.05.2019

2. The assessee has raised the following grounds of appeal :-

“1. The learned Commissioner of Income Tax (Appeal)-12, Ahmedabad,

2. That learned Commissioner of Income Tax (Appeal)-12, Ahmedabad

3. That learned Commissioner of Income Tax (‘Appeal)-12,

Act, 1961 on 25.04.2012. Thereafter, a revised return was field on 11.01.2013

9. In the result, appeal of the assessee is allowed.

Order pronounced in the open Court on this 24th April, 2024.

Ahmedabad, the 24 th day of April, 2024

Copies to: (1) The appellant

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