AKBARBHAI VALIBHAI SANGHARIYAT,AHMEDABAD V. THE ITO, WARD-3(3)(1), AHMEDABAD

ITA 528/AHD/2025

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The case involves Akbarbhai Valibhai Sanghariyat, who appealed against the order of the Addl./Joint Commissioner of Income Tax (Appeals) for the assessment year 2017-18. The appeal was directed against the assessment framed under section 144 of the Income Tax Act, 1961, due to non-compliance and lack of supporting evidence for major expenses claimed by the assessee. The Assessing Officer disallowed a significant portion of the claimed expenses and treated agricultural income as unexplained cash credit. The CIT(A) upheld the assessment, leading to the current appeal. The Tribunal admitted additional evidence submitted by the assessee and restored the matter for fresh examination by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787545 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Appeal Filed On: 10-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: RAMESHWAR P. MEENA
• Assessee Lawyers: M.S. CHHAJED
• Keywords: Opportunity of being heard; Additional evidence; Corroborative evidences; Unexplained cash credit; Depreciation
• Section: 144; 142(1)

Judgement Text

"आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ ‘D’ अहमदाबाद। अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD ] BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER AND SHRI MAKARAND V.MAHADEOKAR, ACCOUNTANT MEMBER ITA No.528/Ahd/2025 Asstt.Year : 2017-18 Akbarbhai Valibhai Sanghariyat Vashila Complex, Nr.Sail Tiles Sarkhej, Ahmedabad 380 007. PAN : AHEPG 7314 G ITO, Ward-3(3)(1) Ahmedabad. (Applicant) (Responent) Assessee by : Shri M.S. Chhajed, AR Revenue by : Shri Rameshwar P. Meena, Sr.DR सुनवाई क तारीख/Date of Hearing : 18/11/2025 घोषणा क तारीख /Date of Pronouncement: 19/11/2025 आदेश आदेश आदेश आदेश/O R D E R PER MAKARAND V.MAHADEOKAR, ACCOUNTANT MEMBER: This appeal by the assessee is directed against the order dated 16.02.2025 of the Addl./Joint Commissioner of Income Tax (Appeals) from the office of Commissioner of Income Tax (Appeals), Ranchi [hereinafter referred to as “CIT(A)”], for the assessment year 2017–18 arising out of assessment framed under section 144 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] by the Assessing officer vide his order dated 17.12.2019. 2. Facts of the Case: 2.1 The assessee is engaged in the business of transport and related activities. The assessee filed his return of income on 09.11.2017 Printed from counselvise.com ITA No.528/Ahd/2025 2 declaring income of Rs.37,73,430/- Thereafter the assessee revised the return of income on 13.11.2017 revising income of Rs.18,13,710/- . The same was processed u/s 143(1) of the Act. The case was selected for scrutiny under CASS. Statutory notices under sections 142(1) and 143(2) were issued. The Assessing Officer recorded that there was persistent non-compliance by the assessee and no supporting evidence for major expenses was furnished despite opportunities. The Assessing Officer proceeded to complete assessment under section 144. 2.2 The Assessing Officer examined the quantitative and financial details and noted that the assessee had claimed major expenses under several heads, including Diesel and Petrol, Salary and Wages, Toll Tax, Transport expenses, and Tyre and Tube expenses aggregating to Rs.9,16,92,775/-. In absence of books of account or supporting evidence, the Assessing Officer held that the expenses were unverifiable and disallowed 15 percent thereof, resulting in an addition of Rs.1,37,53,916/-. The Assessing Officer further noted that the assessee had shown agricultural income of Rs.9,85,680/- but did not furnish evidence of land holding, crop cultivation, or sale proceeds. The Assessing Officer treated the agricultural income as unexplained cash credit under section 68. The Assessing Officer also disallowed depreciation of Rs.59,72,362/- as neither books nor supporting documents for assets were furnished. The total income was accordingly assessed under section 144. 2.3 The assessee preferred appeal before CIT(A) who confirmed the assessment order. The CIT(A) noted that multiple notices were issued which remained un-responded and despite being granted Printed from counselvise.com ITA No.528/Ahd/2025 3 opportunities, the assessee did not file the requisite evidences to substantiate the expenses, agricultural income, or depreciation claim. 3. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising following grounds: 1. The order passed by the Ld. CIT (A) is against law, equity and justice. 2. Assessment order passed by the Ld. A.O. is void and illegal as additions made are other than reasons for which assessment selected for scrutiny i.e. CASS reasons. 3. Assessment order passed by the ld. A.O. U/S 144 of the Act is void and illegal. 4. The Ld. CIT(A) has erred in law and on facts in upholding the addition made of Rs.1,37,53,916/- by Ld. A.O. being 15% of expenses of Rs.9,16,92,775/-. 5. The Ld. CIT(A) has erred in law and on facts in upholding the addition made amounting Rs.9,85,680/- by Ld. A.O. as agriculture income treated as unexplained cash credit. 6. The Ld. CIT(A) has erred in law and on facts in upholding the disallowance of depreciation made of Rs.59,72,362/- by Ld. A.O. 7. The appellant Craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal. 4. During the course of hearing, the Authorised Representative (AR) submitted that the assessee could not produce necessary supporting evidence before the Assessing Officer and the CIT(A) due to lack of proper guidance. The AR filed an application dated seeking admission of additional evidence under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963. The application states that the evidence now being submitted consists of the relevant ledgers pertaining to Diesel and Petrol expenses, Salary and Wages, Toll Tax, Transport expenses, and Tyre and Tube expenses. It is claimed that these documents directly relate to the issues in dispute and are essential for determination of real income. The AR further submitted that all major expenses were paid through cheques or through regular banking channels and hence the additions were made without Printed from counselvise.com ITA No.528/Ahd/2025 4 appreciating the true facts. It was submitted that in the interest of justice and for fair adjudication, the additional evidence be admitted. 4.1 The learned Departmental Representative opposed the admission of additional evidence and submitted that the assessee had failed to comply with repeated notices both during assessment and appellate proceedings. The DR argued that if the Tribunal is inclined to admit the additional evidences, the matter may be restored to the file of the Assessing Officer for examination and verification in accordance with law. 5. We have carefully considered the rival submissions and perused the assessment order, the order of the CIT(A), the grounds of appeal, and the application filed by the assessee to admit additional evidence. 5.1 It is evident from the record that the assessment was completed under section 144 due to non-compliance. The CIT(A) also passed an ex parte order due to continued absence of the assessee. The additions made by the Assessing Officer are based on absence of supporting evidence for large expenditure claims and other items of income. 5.1 The assessee has now furnished an application seeking admission of additional evidence consisting of ledgers relating to major expense heads. These materials have a direct bearing on the issues in dispute and go to the root of the additions made in assessment. However, the fact remains that the assessee failed to furnish these documents at earlier stages despite opportunities. 5.2 In the interest of justice and considering that the additional evidence is relevant for proper adjudication, we deem it appropriate to admit the additional evidence. At the same time, to ensure fairness Printed from counselvise.com ITA No.528/Ahd/2025 5 to the Revenue and to discourage non-compliance in statutory proceedings, we consider it appropriate to impose a cost. 5.3 In view of the above, the assessment issues require fresh examination by the Assessing Officer after considering the additional evidence. The assessee shall cooperate fully and furnish all documents as may be required. The additional evidence filed by the assessee is admitted. The matter is restored to the file of the Assessing Officer for de novo adjudication of all issues arising in assessment, after providing reasonable opportunity of being heard. 5.4 As a deterrence for the non-compliant conduct of the assessee during assessment and first appellate proceedings, the assessee is directed to deposit a cost of Rs.25,000/- to the credit of the Income Tax Department within thirty days from the receipt of this order. Proof of such payment shall be furnished to the Assessing Officer at the time of remand proceedings. 5.5 All grounds of appeal are restored to the Assessing Officer for adjudication on merits in accordance with law. 6. In the result, the appeal is allowed for statistical purposes. Order pronounced in the Court on 19th November, 2025 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER Ahmedabad, dated 19/11/2025 vk* Printed from counselvise.com "