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2017 (1) TMI 1780 - ITAT AHMEDABADAddition made as unexplained capital - fictitious capital - survey action u/s 133A - capital building racket was organized by one Surat based Chartered Accountant, Shri Pankaj Danawala, by alluring gullible low income assessees and showing fictitious entries in their balance-sheets filed with their income tax returns incorporating fictitious capital built up. - HELD THAT:- Additions have been made only based on the fictitious balance-sheet entries which are accepted by Shri. Pankaj Danawala to be his creation and the assessees had no role therein. Moreover, the fictitious capital has never been used which were paper entries only thus no benefit ever accrued to assessee’s. Also find merit in the contention of assessee that in the case of Smt Leenaben Kantilal Nakrani [2010 (6) TMI 892 - ITAT AHMEDABAD] the addition was deleted by ld. CIT(A) and the Revenue’s appeal was dismissed by ITAT even when the fictitious capital was used in that case by said M/s. M.D. Patel Group and a protective addition was made in the hands of Smt Leenaben. In clear distinction to these facts in the case of assessees in question, the fictitious capital was not at all used or derived any benefit from Shri Danawala or M/s. M.D. Patel Group and the Department has not controverted these facts. Thus, the assessees at the most are guilty of falling prey to the design of an unscrupulous Chartered Accountant who created nefarious design and allured the assessees without any advantage having accrued to them. In the light of these facts, circumstances, observations and following ITAT judgment in the case of Smt Leenaben Kantilal Nakrani (supra), there is no justification in making addition in each case, which is deleted. The assessees’ appeals are thus allowed.
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