AKHILESH PARASNATH TRIPATHI,NAVSARI V. THE INCOME-TAX OFFICER, WARD - 1, NAVSARI, NAVSARI

ITA 767/SRT/2025

AI Insights

The case involves Akhilesh Parasnath Tripathi, who appealed against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs. 24,04,000 as unexplained cash deposit during the demonetization period under Section 68 of the Income Tax Act, 1961. The Assessing Officer (AO) had initially treated these deposits as unexplained due to insufficient evidence linking them to legitimate business activities. The ITAT found that the assessee had not adequately substantiated the source of the deposits during the assessment proceedings and remanded the case for further investigation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 825190 (ITAT-SURAT)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 18-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY UKE
• Assessee Lawyers: ASTHA MANIAR
• Keywords: Set aside; Business income; Corroborative evidences
• Section: 143(3); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SURAT” BENCH, SURAT [Conducted through E-Court at Ahmedabad] BEFORE SHRI SANJAY GARG, JUDICAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 767/Srt/2025 (िनधाŊरण वषŊ / Assessment Year : 2017-18) Akhilesh Parasnath Tripathi 305, Ruchita Apartment, Shailesh Park Society, Nr. Parmesh Diamond, Navsari, Gujarat- 396445 बनाम/ Vs. The Income-tax Officer, Ward-1, Navsari èथायी लेखा सं./जीआइआर सं./PAN/GIR No. : ADIPT2583Q (Appellant) .. (Respondent) अपीलाथŎ ओर से /Appellant by : Ms. Astha Maniar, CA ŮȑथŎ की ओर से/Respondent by : Shri Ajay Uke, Sr. DR Date of Hearing 10/12/2025 Date of Pronouncement 29/12/2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, (in short ‘the CIT(A)’), dated 10.06.2025 for the Assessment Year 2017-18 in the proceeding under Section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’). Printed from counselvise.com ITA No. 767/Srt/2025 [Akhilesh Parasnath Tripathi vs. ITO] A.Y. 2017-18 - 2 – 2. Brief facts of the case are that the assessee had filed his return of income for A.Y. 2017-18 on 23.03.2018 declaring total income at Rs.5,60,110/-. The case of the assessee was selected for complete scrutiny. The AO found that the assessee had made cash deposit of Rs.24,04,000/- in the bank account during demonetization period. As the AO was not satisfied with the explanation of the assessee regarding the source of cash deposit, the entire cash deposit of Rs.24,04,000/- made during demonetization period was treated as unexplained and added to the income. The assessment was completed u/s.143(3) of the Act on 28.12.2019 at total income of Rs.29,64,110/-. 3. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now, the assessee is in second appeal before us. The following grounds have been taken in this appeal: “1. The Ld. CIT(A), NFAC erred in law and on facts in confirming the addition of Rs. 24,04,000/- made by the AO, treating the same as unexplained cash deposit in bank during demonetization period u/s. 68 of the Act. 2. The Ld. CIT(A), NFAC erred in law and on facts in confirming invoking the provisions of Section 115BBE of the Act for consequent levy of tax. 3. The Appellant craves leave to add, amend, delete or alter one or more grounds of appeal.” Printed from counselvise.com ITA No. 767/Srt/2025 [Akhilesh Parasnath Tripathi vs. ITO] A.Y. 2017-18 - 3 – 5. Ms. Astha Maniar, Ld. AR of the assessee explained that the assessee had duly explained the source of cash deposits in the course of assessment. She explained that the cash deposit represented sale proceeds of the assessee out of business of poultry feed. The details in respect of purchase and sales were also brought on record and, therefore, the AO was not correct in holding that the assessee had only fabricated the business story in order to justify the cash deposits. The Ld. AR submitted that considering the evidence for sales and purchase as brought on record, no addition on account of cash deposit was called for, as the entire amount represented business receipt. 6. Per contra, Shri Ajay Uke, Ld. Sr. DR submitted that the AO had given a categorical finding that cash balances appearing in the cash book were not matching with the closing balance for different months as submitted by the assessee. Further, the major purchase of poultry feed item was made from one party, namely Mahida Traders to whom no payment was made through banking channel. The Ld. Sr. DR further submitted that the cash deposits in the bank account during demonetization period was transferred to MOPEL and two other parties to whom no business connection was established by the assessee. Considering these facts, the AO had disbelieved the story of poultry feed item business and rightly treated the cash deposits in the bank account as unexplained. 7. We have considered the rival submissions. The contention of the assessee is that the entire cash deposit in the bank account Printed from counselvise.com ITA No. 767/Srt/2025 [Akhilesh Parasnath Tripathi vs. ITO] A.Y. 2017-18 - 4 – during demonetization period was sale proceeds out of poultry feed business. It is found that the assessee had filed the explanation before the AO at the fag end of the assessment proceeding and the AO had no time left to verify the explanation of the assessee regarding the business activities and the nexus between the cash deposits and the business receipts. In this regard, it is relevant to reproduce the observation of the AO in the assessment order: “6. Further since the details have been submitted at the fag end of the on going proceeding therefore, it is not possible to ask the assessee to furnish more details justifying the issues involved. Rather, the assessee should have submitted all the details with supporting evidences at least in response to the show cause notice. Thus, it is clear that assessee has failed to discharge his onus to establish the source of cash deposit and it is also clear that assessee has no explanation and supporting evidences to justify the source. In the circumstances, the assessee's reply in response to the show cause notice is not acceptable on merit. Further, it is also clear that cash deposit made in the bank account is from unexplained sources.” 8. It is further noticed that the AO had rejected the explanation of the assessee considering the other discrepancies viz. no payment in cheque was made to Mahida Traders from whom purchases were made. Further, the rationale for transfer of cash deposit to MOPEL and other parties was also not explained. Considering the submissions of the assessee and the discrepancies pointed out in the assessment order, we deem it proper to set aside the matter to the file of the Jurisdictional AO with a direction to allow another opportunity to the assessee to explain the source of cash deposits in the bank account during demonetization period. The assessee is directed to make Printed from counselvise.com ITA No. 767/Srt/2025 [Akhilesh Parasnath Tripathi vs. ITO] A.Y. 2017-18 - 5 – compliance in the set aside proceeding and furnish the explanation and details as required by the AO in respect of the explanation for cash deposits. The AO will be also free to make inquiries vis-à-vis the explanation of the assessee, as deemed fit. 9. In the result, the appeal of the assessee is allowed for statistical purpose. This Order pronounced on 29/12/2025 Sd/- Sd/- (SANJAY GARG) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 29/12/2025 S. K. SINHA True Copy 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. By order/आदेश से, Deputy/Asstt. Registrar/DDO ITAT, Surat 1.Date of dictation on 22.12.2025 2.Date on which the typed draft is placed before the Dictating Member 22.12.2025 3.Date on which the approved draft comes to the Sr.P.S./P.S. 4.Date on which the fair order is placed before the Dictating Member for pronouncement 5.Date on which the fair order comes back to the Sr.P.S./P.S 6.Date on which the file goes to the Bench Clerk 7.Date on which the file goes to the Head Clerk…………. 8.The date on which the file goes to the Asstt. Registrar for signature on the order…………………… 9.Date of Dispatch of the Order………Date on which the typed draft is placed before the Dictating Member 19.12.2019Other Member…………………Date on which the approved draft comes to Printed from counselvise.com "