The Principal Commissioner Of Income Tax (Central), Surat v. M/S. Shree Ram Developers

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 87 of 2022 ========================================================== THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL), SURAT Versus M/S. SHREE RAM DEVELOPERS ========================================================== Appearance: MR MR BHATT, SENIOR COUNSEL WITH MR KARAN SANGHANI,ADVOCATE FOR M R BHATT & CO.(5953) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALAandHONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 11/01/2022 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1This is an appeal at the instance of the Revenue under Section260A of the Income Tax Act, 1961 (for short, “the Act, 1961”) and isdirected against the order passed by the Income Tax Appellate Tribunal,Surat Bench, Surat dated 8[th] March 2021 in the ITA No.1841/Ahd/2016for the assessment year 2006-07. 2The Revenue has proposed the following questions of law for theconsideration of this Court: “(A) Whether on the facts and the circumstance of the case and in law,the Appellate Tribunal is justified in upholding the decision of CIT(A)that the amendment order passed in the case of non-existing entity isinvalid without appreciating the fact that inspite of being aware of allfacts and circumstances of the case, the partners of the firm includingShri Jayantilal Babaria have not complied with the statutory noticesissued by the Assessing Officer during the course of assessmentproceedings which led to an ex-parte order in this case? (B) Whether on the facts and the circumstances of the case and in law,the Appellate Tribunal is justified in upholding the decision of theCIT(A) without appreciating the fact that the incriminating documentsseized during the course of search and circumstantial evidences clearlyshow receipt of on money from the project Shrusti Row House, whichwas jointly developed by the firm, Shree Ram Developers and also ShriJayantibhai Babariya in his individual capacity? (C) Whether on the facts and the circumstances of the case and in law,the decision of Appellate Tribunal leads to perversity being contrary tofacts emerging from incriminating documents and surroundingcircumstances including intentional non-compliance by the partners ofthe firm before the Assessing Officer? (D) Whether on the facts and in the circumstances of the case in law,the Appellate Tribunal is justified in upholding the decision of theCIT(A) in accepting the contention of the assessee that the unaccountedincome unearthed during the course of search proceedings werepertaining to Shri Jayatibhai Babariya in his individual’s capacity andnot to the firm for the sole reason that as the firm was not in existenceduring the relevant period of time, without appreciating the overallfacts of the case and also by not issuing necessary directions to theAssessing Officer by exercising the powers conferred upon the appellateauthorities under Section 150(1) of the Act for taking necessary actionin the case of Shri Jayantibhai Babariya?” 3We have heard Mr. M. R. Bhatt, the learned Senior Counselappearing for the Revenue. 4We take notice of the findings recorded by the Appellate Tribunalin para 7 of the impugned order. The same reads thus: 3We have heard Mr. M. R. Bhatt, the learned Senior Counselappearing for the Revenue. 4We take notice of the findings recorded by the Appellate Tribunalin para 7 of the impugned order. The same reads thus: “We have considered rival submission of the parties and have gonethrough the order of the authorities below. We have also gone throughthe various documentary evidences furnished by the learned AR of theassessee. We have noted that the AO made addition on the basis ofseized documents by taking view that seized documents prima faciereflects the receipts of plot wise on money in coded form. And that noexplanation and evidences furnished by the assessee. The ld. CIT(A)while deleting the addition held that there is no evidence on record toestablish that assessee firm was involved in plotting of the scheme.Further, the addition on the basis of Annexure A/1 has been made incase of Jayantibhai Virjibhai Babariya for A.Y. 2007-08 (in individualcapacity vide PAN: AFHPB 0820 M). The firm was not in existence and it was formed by way of partnership deed dated 01.06.2007.” 5Thus, it appears that even the CIT(A), while deleting the addition,took notice of the fact that there was nothing on record to indicate thatthe assessee – firm was involved in plotting of the scheme. In fact, thefinding of fact recorded by the CIT(A) as affirmed by the AppellateTribunal is that the firm was not in existence and it was formed only byway of a partnership deed dated 1[st] June 2017. 6In view of the aforesaid, there is no good ground for us to disturbthe order passed by the Appellate Tribunal. 7In the result, this appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) CHANDRESH (NISHA M. THAKORE,J)