DCIT Vs Danaram Jivaram Choudhary (ITAT Ahmedabad)
Reopening Based on Borrowed Satisfaction Held Invalid – ₹5.21 Crore Addition Deleted- ITAT Ahmedabad
Ahmedabad ITAT has dismissed the appeal filed by the Revenue in the case, upholding the order of CIT(A) which had quashed reopening & deleted addition of ₹5.21 crore made u/s 69A.
Assessee had filed return of income declaring ₹23.53 lakh. Subsequently, AO received information from DDIT (Inv.), Ahmedabad pursuant to survey u/s 133A in the case of Mudra Finvest (Guj) Ltd. During survey, digital data in laptops & hard disks allegedly showed ledger of group concern Mudra Real Estate Pvt. Ltd. reflecting opening balance of ₹15.41 crore & cash payments of ₹5.21 crore to Assessee.
On this basis, AO reopened the case u/s 147 & added ₹5.21 crore as unexplained cash u/s 69A.
CIT(A), however, deleted the addition holding reopening invalid & unsustainable on facts as well as on merits. CIT ruled that AO merely reproduced information of DDIT (Inv.) in reasons for reopening & there was no independent enquiry or application of mind. Ledger account relied upon was not even in the assessee’s name – it was in the name of Danabhai Choudhary, while assessee’s name is Danaram Jivaram Choudhary. Statement of Director of Mudra Real Estate Pvt. Ltd., Shri Sanjay Hundia, did not admit such cash payments & even denied connection with the premises surveyed. Information itself suggested the cash reflected repayment of loans of earlier years & not fresh income of Assessee. Thus, there was no cogent material in AO’s possession to justify reopening or addition.
