ITO Vs Ghanshyambhai Patel (ITAT Ahmedabad)
Wrong Person Taxed: Ahmedabad ITAT Allows Revenue Appeal but Flags Double-Taxation Safeguard
The Ahmedabad “A” Bench of the ITAT disposed of the Revenue’s appeal in ITO, Ward-1(2)(1), Ahmedabad vs. Ghanshyambhai Patel, ITA No. 1511/Ahd/2025, AY 2017-18, vide order dated 18.12.2025
The case originated from reopening u/s 147 on the allegation of huge cash deposits during the demonetisation period in the Assessee’s bank account. During reassessment, it was found that no such demonetisation cash deposits existed in the personal bank account of the Assessee. The deposits actually pertained to M/s Goldenstar Designer Pvt. Ltd., a separate legal entity in which the Assessee was a director. Accordingly, the AO dropped the original reopening issue.
However, the AO proceeded to make an addition of ₹1.22 crore u/s 69A in respect of credit entries received from M/s Namo Diamonds Pvt. Ltd., which were immediately transferred to M/s Goldenstar Designer Pvt. Ltd. The CIT(A), NFAC deleted the addition, holding it to be unsustainable.
On appeal by the Revenue, the Tribunal noted that there was no material on record to show that the amount of ₹1.22 crore had been assessed in the hands of M/s Goldenstar Designer Pvt. Ltd. In the absence of such evidence, the Tribunal held that the addition was rightly assessable in the hands of the Assessee, since the credits appeared in his bank account.
At the same time, the ITAT provided an important protective safeguard against double taxation, directing that if the Assessee is able to demonstrate before the Jurisdictional AO that the same amount has been assessed in the hands of the company, appropriate relief/remission must be granted to that extent.
Accordingly, the Revenue’s appeal was allowed for statistical purposes, keeping the issue open to adjustment to avoid double taxation.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the Revenue against the order dated 12.06.2025 passed by the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre, Delhi (“Ld. CIT(A)” for short), under Section 250 of the Income-tax Act, 1961 (“the Act” for short), relating to the Assessment Year 2017- 18.
