AHMEDALI KURBANHUSAIN PIPLODWALA & CO.,DAHOD V. THE ITO, WARD-1, DAHOD

ITA 1612/AHD/2025

AI Insights

The case involves Ahmedali Kurbanhusain Piplodwala & Co., who appealed against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which confirmed an addition of Rs.42 Lakhs to the assessee's income as unexplained cash deposit during the demonetization period. The Income Tax Officer had initially added Rs.28,59,583, which was the amount of unexplained cash deposit after the assessee demonstrated that only one of the two contested bank accounts belonged to him. The Tribunal found that the CIT(A) had not considered the facts correctly and had passed the order without proper application of mind, leading to the restoration of the case for a fresh adjudication.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827390 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 25-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAKOLI UTTAM GHOSH
• Assessee Lawyers: URVASHI SODHAN
• Keywords: Onus to prove

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 1612/Ahd/2025 (िनधा[रण वष[ / Assessment Year : 2017-18) Ahmedali Kurbanhusain Piplodwala & Co. Station Road, At & Po. Piplod, Tal. Dev. Baria, Dist. Dahod, Gujarat- 389130 बनाम/ Vs. Income Tax Officer Ward 1, Dahod èथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAGFA3093F (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Ms. Urvashi Sodhan, AR Ĥ×यथȸ कȧ ओर से/Respondent by : Smt. Kakoli Uttam Ghosh, Sr. DR Date of Hearing 16/10/2025 Date of Pronouncement 08/01/2026 O R D E R PER ANNAPURNA GUPTA, AM: The present appeal has been filed by the Assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”) dated 30.07.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2017-18. 2. The grounds of appeal raised by the assessee are as under: Printed from counselvise.com ITA No.1612/Ahd/2025 [Ahmedali Kurbanhusain Piplodwala & Co. vs. ITO] A.Y. 2017-18 - 2 – “1. Erred in dismissing appeal as an ex-parte. 2. Erred-in-law in confirming addition of 28,59,583/- as unexplained income. 3. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 3. The solitary issue in the present appeal relates to addition made to the income of the assessee on account of cash found deposited in the bank account of the assessee, source of which, remained unexplained. 4. Ld. Counsel for the assessee pointed out that while the AO had made addition on account of the same to the tune of Rs.28,59,583/-, the Ld. CIT(A) in his order upheld addition made by the AO to the tune of Rs. 42 Lakhs. The contention of the Ld.Counsel for the assessee was that the Ld. CIT(A) had passed the order without any application of mind to the facts of the case and on record before him and by recording incorrect findings. His pleading therefore, was that the appeal be restored back to the Ld. CIT(A) for adjudication afresh. She pointed out that the Ld. CIT(A) had passed an ex parte order but she contended that the Ld. CIT(A) needed to re-consider the appeal on account of the fact that he had not considered the facts on record before him and had passed his order without application of mind, recording incorrect finding of facts. 5. We have heard both the parties. The assessment order reveals that the case of the assessee was reopened noting that there was cash found deposited in his bank account during Printed from counselvise.com ITA No.1612/Ahd/2025 [Ahmedali Kurbanhusain Piplodwala & Co. vs. ITO] A.Y. 2017-18 - 3 – demonetization period amounting to Rs.42 Lakhs. The cash was found deposited in two bank accounts which was alleged by the Department to belong to the assessee both the accounts being in The Godhra Urban Co.Op. Bank Ltd. The assessee, however, demonstrated to the AO that only one bank account in The Godhra Urban Co.Op. Bank Ltd. belonged to the assessee. He demonstrated to the AO that the other bank account was operated by another entity though with the similar sounding name and whose assessment also had been completed for the impugned year, accepting the cash found deposited in the said bank account to the tune of Rs.12 Lakhs. The AO accepted this contention of the assessee and accordingly, noted that the cash deposited during demonetization period pertained to only one bank account, in the Godhra Urban Co.Op. Bank Ltd. and amounted to Rs.30 Lakhs. During the course of assessment proceeding, the assessee had submitted the source of cash deposited as being out of cash sales made by him in the business carried out by him of Nilgiri wood, Sagi wood, cement sheets, Panchrau wood (wood use for making food and fire at home) and on account of recovery from its debtors. The AO, however, noted that during demonetization period the cash deposited in the bank account was unusually large as compared to the other periods of year and he, therefore, accepted the assessee’s explanation of the source of the cash deposited during the impugned period only to the tune of Rs.1,40,417/-, pertaining to cash sales made in the said period. Thus, out of the cash deposit of Rs.30 Lakhs made in the bank account of the assessee, the source to the tune of Rs.1,44,417/- was accepted by the AO as out of explained sources i.e. from the Printed from counselvise.com ITA No.1612/Ahd/2025 [Ahmedali Kurbanhusain Piplodwala & Co. vs. ITO] A.Y. 2017-18 - 4 – cash sales made by the assessee during demonetization period and the balance amount of cash amounting to Rs.28,59,583/- was added to the income of the assessee on account of source thereof remaining unexplained. 6. The Ld. CIT(A)’s order, we have noted, was passed ex parte since the assesse did not respond to any notice of hearing issued by the Ld. CIT(A). However, as rightly pointed out by the Ld. Counsel for the assessee, the ld. CIT(A) has held addition made by the AO to the tune of Rs.42 Lakhs to be confirmed when as noted above, the AO had made addition only to the tune of Rs.28,59,583/-. Further, the Ld. Counsel for the assessee pointed out that the Ld. CIT(A) recorded incorrect finding that the assessee had not provided any submission on merits, no bank statement, no cash book or other financials etc. even during assessment proceedings. She drew our attention to para (xi) of the Ld. CIT(A)’s order noting the said fact and, thereafter, she pointed out that the Ld. CIT(A) held that since the assessee had failed to discharge the onus to prove the source of cash deposited in the bank account, therefore, he confirmed the addition made by the AO. She drew our attention to para (xiv) of the Ld. CIT(A)’s order in this regard: xiv. Also as the onus is on the appellant assessee to prove the transactions and the facts of its case. But in the present case the appellant assessee has failed to do so. Thus, this Appellate authority places its reliance on the following judgments of the Hon'ble Supreme Court and High court: 7. Ld. Counsel for the assessee contended that the facts were to the contrary, which she contended, was evident from the Printed from counselvise.com ITA No.1612/Ahd/2025 [Ahmedali Kurbanhusain Piplodwala & Co. vs. ITO] A.Y. 2017-18 - 5 – assessment order itself wherein the AO had repeatedly noted the assessee to have submitted the source of cash deposit as being out of cash sales made by him. The AO had given the benefit of cash deposit in the bank account during the demonetization period to the extent of cash sales made by the assessee during this period accepting the assessee’s said explanation. She pointed out that the assessee had submitted complete books of accounts to the AO to substantiate its claim vide letter dated 17.04.2023 reproduced at page 5 of the assessment order. Referring to the same, she pointed out that the assessee had submitted cash register, books of accounts and the copy of the bank statement of The Godhra Urban Co.Op. Bank Ltd., wherein cash of Rs.30 Lakhs was deposited. She, thereafter, drew our attention to page 7 of the assessment order wherein the reply of the assessee on 25.04.2023 and 27.04.2023 was reproduced, the statement of the bank account of the assessee in The Godhra Urban Co.Op. Bank Ltd. wherein cash of Rs.30 Lakhs was deposited during demonetization period, cash register and books of accounts for the impugned year, month-wise details of cash receipt in the cash register demonstrating the same to have been accounted for in the bank accounts alongwith documentary evidences. She drew our attention to the detail so submitted by the assessee reproduced at page 8 of the assessment order reflecting the cash deposited in the bank account of the assessee as out of cash sales made and pointing out the cash deposited in the bank account during demonetization period as being out of cash sales and recovery from debtors. She drew our attention to para 4.2.8 of the order wherein the AO has recorded the fact of the assessee having Printed from counselvise.com ITA No.1612/Ahd/2025 [Ahmedali Kurbanhusain Piplodwala & Co. vs. ITO] A.Y. 2017-18 - 6 – explained the source of cash deposited as being out of cash sales. Copy of the letter furnished to the AO dated 15.05.2023 was also placed before us pointing out therefrom that the assessee had submitted the complete list of customers from whom cash was received during 05.09.2016 to 08.11.2016, covering demonetization period and which was deposited in the bank account. She pointed out that from the said letter that all documents, such as cash book, bank book, bank statements, sales register, purchase register, cash sale register, general ledger, ledgers of debtors and even copies of sales bills were submitted during assessment proceedings. She, therefore, contended that the Ld. CIT(A) had confirmed the addition by recording incorrect fact that no evidences were placed on record by the assessee to prove the source of cash deposited in the bank account being out of the cash sales made by the assessee. 8. The Ld. DR was unable to controvert the factual contention of the Ld. Counsel for the assessee as above. 9. In view of the same, we agree with the Ld. Counsel for the assessee that the Ld. CIT(A) has confirmed the addition of Rs.42 Lakhs on account of cash deposited during the demonetization period remaining unexplained without any application of mind, since the AO had made addition on account of the same only to the tune of Rs.28 Lakhs while he confirmed the addition of Rs.42 Lakhs. We agree with the contention of the Ld. Counsel for the assessee that the Ld. CIT(A) has confirmed the addition by recording incorrect fact of the assessee having not filed any Printed from counselvise.com ITA No.1612/Ahd/2025 [Ahmedali Kurbanhusain Piplodwala & Co. vs. ITO] A.Y. 2017-18 - 7 – details or submissions during the assessment proceedings explaining the source of cash deposit, since, the Ld.Counsel for the assessee has demonstrated before us to the contrary, having filed complete books of accounts and even the details of showing the source of cash deposit in the bank account as being from cash sales made by the assessee. Since, we have noted the Ld. CIT(A) to have passed his appellate order without application of mind at all, we are of the view that the matter needs re-consideration by the Ld. CIT(A). The appeal is, therefore, restored back to the file of the Ld. CIT(A) to be dealt with afresh after giving due opportunity of hearing to the assessee. 10. In the result, the appeal of the asessee is allowed for statistical purposes. This Order pronounced on 08/01/2026 Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 08/01/2026 S. K. SINHA True Copy आदेश कȧ Ĥितिलǒप अĒेǒषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंिधत आयकर आयुƠ / Concerned CIT 4. आयकर आयुƠ(अपील) / The CIT(A)- 5. ǒवभागीय Ĥितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "