AJAYKUMAR MAHADEVBHAI PATEL,VADODARA V. THE ITO, WARD-1(2)(1) PREVIOUSLY WARD-1(2)(4), VADODARA

ITA 1197/AHD/2025

AI Insights

The case involves Ajaykumar Mahadevbhai Patel, the appellant, who appealed against the order of the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre, Delhi, which confirmed the addition of Rs. 27,07,000 as unexplained cash deposits in the bank account of the assessee for the Assessment Year 2017-18. The primary contention was regarding the source of cash deposits during the demonetisation period, which the assessee claimed were gifts from his NRI brother. The Assessing Officer initially disbelieved this explanation, leading to the addition under section 69A of the Income Tax Act. However, the Tribunal, after reviewing the evidence, including the donor's bank statements and the accepted gift deeds, ruled in favor of the assessee, allowing the appeal and reversing the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 771848 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATEEK SHARMA
• Assessee Lawyers: P B PARMAR
• Keywords: Gift; Principle of natural justice; Initiation of penalty proceedings

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No.1197/Ahd/2025 (Assessment Year:2017-18 Ajaykumar Mahadevbhai Patel, B-198, Shrenik Park, Productivity Road, Akota, Vadodara-390020. [PAN :AEPPP2801 M] Vs. The Income Tax Officer, Ward 1(2)(1), (Previously Ward-1(2)(4), Vadodara.) (Appellant) .. (Respondent) Appellant by : Shri PB Parmar, AR Respondent by: Shri Prateek Sharma, CIT. DR Date of Hearing 05.08.2025 Date of Pronouncement 25.08.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal is filed by the Assessee against the appellate order dated 21.04.2025 passed by the Commissioner of Income Tax (Appeals) /National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2017-18. 2. The assessee has raised the following grounds of appeal: 1. The Ld.CIT(A) has erred, both in law and on facts, in confirming the addition of Rs.27,07,000/- under section 69A of the Act in respect of alleged unexplained cash deposits in the bank account. 2. Both, AO & CIT(A), have erred in passing the impugned orders without properly appreciating facts of the case, submissions of the assessee and documentary evidences available on record in the correct perspective. Such an act is in gross violation of the principles of natural justice and hence, the impugned order deserves to be quashed. 3. The Ld.CIT(A) has erred in law and on facts of the case in confirming levy of interest u/s.234A/B/C/D of the Act. Printed from counselvise.com ITA No. 1197/Ahd/2025 Ajaykumar M Patel Vs. ITO Asst. Year : 2017-18 - 2– 4. The Ld.CIT(A) has erred in law and on facts of the case in confirming initiation of penalty proceedings under section271AAC(1) of the Act. 5. 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 assessee filed his return of income on 22.07.2017 declaring total income of ₹2,86,290/-. The case was selected for complete scrutiny under CASS on account of high cash receipts and abnormal increase in cash deposits during the year, including during the demonetisation period. During the assessment proceedings, the assessee explained that the cash deposits were sourced from a gift of ₹47,00,000/- received from her brother, an NRI, comprising ₹26,00,000/- in cash and ₹21,00,000/- through cheques. Documentary evidences such as notarised gift deed, donor’s passport, donor’s bank statement, and assessee’s bank statement were furnished. The Assessing Officer, however, disbelieved the cash gift during demonetisation period and made an addition of ₹27,07,000/- u/s 69A of the Act. Aggrieved by the assessment order, the assessee filed appeal before the Ld. CIT(A) who confirmed the addition made by the Assessing Officer. 4. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 5. We have gone through the entire material before us. The donor has gifted Rs.47 lakhs on 06.09.2016, 07.09.2016 & 08.09.2016; out of which Rs.21 lakhs by cheques and Rs.26 lakhs by cash from his brother Shri Purnesh Patel, the bank statements of Shri Purnesh Patel are on Printed from counselvise.com ITA No. 1197/Ahd/2025 Ajaykumar M Patel Vs. ITO Asst. Year : 2017-18 - 3– record reflecting the transactions and the Revenue had no objection on the Gift Deeds. Having accepted the Gift Deeds and the amounts received, the Revenue cannot object to the cash deposits at a later date. 6. In the result, the appeal of the assessee is allowed. The order is pronounced in the open Court on 25.08.2025. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 25.08.2025 MV आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "