ANJANABEN DINESHKUMAR PATEL,AHMEDABAD V. THE ITO, WARD-5, GANDHINAGAR

ITA 671/AHD/2023

AI Insights

The case revolves around an appeal by Anjanaben Dineshkumar Patel against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs. 49,10,200 as undisclosed income for the assessment year 2011-12. The Income Tax Department had reopened the assessee's case under section 147 of the Income Tax Act, citing unexplained cash deposits in her bank accounts. The assessee contended that these deposits were from unsecured loans received from fellow villagers, which were substantiated by various documents and affidavits. The Tribunal, after examining the evidence and the proceedings, concluded that the assessee had discharged her burden of proof regarding the source of the deposits, thus allowing her appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774978 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 05-09-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH CHAND MEENA
• Assessee Lawyers: M. K. PATEL
• Keywords: Reopening of assessment; Earning of tax free income
• Section: 147; 148

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Anjanaben Dineshkumar Patel, B/502, Kushal Vatika, Shahubaug, Ahmedabad PAN: AOBPP7665P (Appellant) Vs The ITO, Ward-5 Gandhinagar (Respondent) Assessee by: Shri M.K. Patel, A.R. Revenue by: Shri Suresh Chand Meena, Sr. D.R. Date of hearing : 03-07-2025 Date of pronouncement : 03-09-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member: This is an appeal filed against the order dated 07-07- 2023 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2011-12. 2. The grounds of appeal are as under:- “1. That on facts, and in law, the learned AO has grievously erred in re-opening of assessment u/s 147 of the Act. 2. That on facts, and in law, the learned NFAC-CIT (A) has grievously erred in confirming the addition of cash deposit of Rs.49,10,200/- as undisclosed income of the appellant. 3. That on facts, and in law, and on the evidences on record, the entire addition ought to have been deleted, as prayed for. ITA No.671/Ahd/2023 Assessment Year 2011-12 Printed from counselvise.com I.T.A No. 671/Ahd/2023 Anjanaben Dineshkumar Patel, A.Y. 2011-12 2 4. The appellant craves liberty to add, alter, amend any ground of appeal.” 3. The case of the assessee was reopened for scrutiny u/s. 147 of the Act. The Revenue observed that the assessee made cash deposits in saving bank accounts amounting to Rs. 38,10,200/- during financial year 2010-11. Notice u/s. 148 of the Act was issued on 30-03-2018 and the assessee submitted its details to the notices and also filed return in response to the notice u/s. 148 on 01-08-2018 at Rs. 6570/- being interest income and exempt agricultural income. The Assessing Officer observed that during the year under consideration, the assessee made cash deposits amounting to Rs. 49,10,200/- in various banks during the year. The source of such cash deposits being submitted by the assessee is unsecured loans from thirty fellow villagers who lent money from their agricultural income. Out of these thirty lenders, only two lenders advanced loan more than Rs. 2,00,000/- which is through bank channel and the remaining 28 lenders have lent amount ranging between 1.5 lac to Rs. 1.90 lac through cash mode only and all were non-filers of the return of income. Thus, the Assessing Officer held that the identity, genuineness and creditworthiness of these persons were not brought on record by the assessee and hence made addition of Rs. 49,10,200/- as undisclosed income in respect of cash deposits. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the assessee is farmer having income from milk and dairy farming alongwith agricultural Printed from counselvise.com I.T.A No. 671/Ahd/2023 Anjanaben Dineshkumar Patel, A.Y. 2011-12 3 income. The Ld. AR submitted that the assessee has given following documents to the CIT(A) to prove the identity, genuineness and creditworthiness of unsecured loan:- • Election Card of the person who have given loan • Confirmation of accounts of confirming transaction with the assessee • Form 7/12 extract which indicates that the person who has given money is farmer and capable of giving loan The Ld. AR further submitted that out of total 29 lenders from whom, the assessee received amount in cash, the assessee has produced four persons personally before the Assessing Officer and six persons at the time of remand proceedings. All the persons have accepted the fact that they have given money to the assessee and these statements were not disputed by the Assessing Officer at the remand stage. In fact, the assessee has submitted affidavit of 29 parties and therefore the Assessing Officer was not right in making an addition under the head undisclosed income related to cash deposits. 6. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). The ld. D.R. further submitted that the land holding which was admitted by the lenders, are not sufficient land holding for declaring agricultural income stating that to be exempt income. The ld. D.R. submitted that the matter may be remanded back to the Assessing Officer to verify regarding the payment of these amounts to the concerned lenders. 7. We have heard both the parties and perused all the relevant material available on record. From the perusal of the statements u/s. 132(4)/131/133A of the Income Tax Act, all the parties that of six parties has confirmed that the said parties Printed from counselvise.com I.T.A No. 671/Ahd/2023 Anjanaben Dineshkumar Patel, A.Y. 2011-12 4 have given the loans to the assessee. From the perusal of the affidavit, it can be seen that the assessee has received amount from farmers only and that too below Rs. 2 lac threshold. The subsequent statements recorded at the time of remand proceedings also highlights that the assessee has received the cash component below 2 lacs except two parties who lent Rs. 9,00,000/- and Rs. 6,15,917/- which was confirmed by those parties. The Assessing Officer in remand proceedings categorically stated that out of five, four lenders have confirmed the loan after issuing the summons. The Assessing Officer has not issued summons to all the 30/29 lenders, but the assessee has submitted the 7/12 extracts of all these lenders at the time of assessment proceedings, thereby providing the details of land holding and the agricultural income these parties were earning. Merely on the conjuncture and surmises, the Assessing Officer cannot held that the creditworthiness of the lenders and the genuineness of the transaction was not established by the assessee. In fact, by giving the details of the payment and also establishing the creditworthiness of the parties, the assessee has discharged its burden. Hence, the Assessing Officer was not right in making the addition. The appeal of the assessee is allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 03-09-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 03/09/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) Printed from counselvise.com I.T.A No. 671/Ahd/2023 Anjanaben Dineshkumar Patel, A.Y. 2011-12 5 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद Printed from counselvise.com "