ARYAN NAZIM JIVANI (LEAGAL HEIR OF NAZIM NOORDIN JIVANI) PROP.JIVANI WINE MART,MUMBAI V. INCOME TAX OFFICER, PIRAMAL CHAMBER

ITA 3172/MUM/2025

AI Insights

The case revolves around the appeal by Aryan Nazim Jivani, the legal heir of Nazim Noordin Jivani, against the order of the Commissioner of Income Tax (Appeals) which upheld the addition of Rs. 1,81,500 as unexplained credits under section 68 of the Income Tax Act. The addition was initially made by the Assessing Officer following the demonetization of Rs. 500 and Rs. 1000 notes in November 2016. The Tribunal examined the circumstances under which the cash was deposited and the evidence provided by the assessee, including a certificate from the Greater Bombay Cooperative Bank, which substantiated that only a portion of the deposits were made using old currency notes post-demonetization announcement.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840198 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2017-2018
• Appeal Filed On: 05-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN SALUNKHE
• Assessee Lawyers: VIKRAM KULKARNI
• Keywords: Reassessment proceedings; Unexplained cash credit
• Section: 147; 148; 142(1); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “H(SMC)” BENCH, MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.3172/MUM/2025 (Assessment Year : 2017-18) Aryan Nazim Jivani (Legal Heir of Nazim Noordin Jivani), B-8, Ferreira Mansion, Sitladevi Temple Road, Mahim, Mumbai - 400016 PAN: AACPJ1522G ............... Appellant v/s Income Tax Officer, Ward – 20(2)(1), Piramal Chamber, Dr. S.S. Rao Marg, Parel, Mumbai - 400021 ……………… Respondent Assessee by : Shri Vikram Kulkarni, CA Revenue by : Shri Pravin Salunkhe, Sr. DR Date of Hearing – 23/02/2026 Date of Order - 25/02/2026 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The legal heir of the assessee has filed the present appeal against the impugned order dated 07.03.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the assessment year 2017-18. 2. In this appeal, the assessee has raised the following grounds: - “1) The CIT(Appeals) has erred in adding Rs. 1,81,500/- as unexplained credits under Section 68 and the same be deleted. Printed from counselvise.com ITA No. 3172/Mum/2025 (A.Y. 2017-18) 2 2) The CIT(Appeals) has erred in treating the amount of SBN currency of Rs. 1,81,500/- deposited in the Bank as accepted by the Appellant demonetisation without any evidence or proof. 3) The CIT(Appeals) has erred in not appreciating the fact that the time given to deposit SBN currency was up to 30th December, 2016 and the Appellant had deposited the cash on 15th November, 2016 and 7th December, 2016. 4) The CIT(Appeals) has erred in not appreciating the fact that there was total chaos during the demonetisation period and it was not feasible/convenient to deposit SBN currency in the Bank.” 3. The solitary grievance of the assessee is against the addition of Rs. 1,81,500/- as unexplained credit under section 68 of the Act on account of cash deposited during the demonetization period. 4. We have considered the submissions of both sides and perused the material available on record. Pursuant to the information available that the assessee had made a cash deposit of Rs. 60,02,000/- during the year under consideration, notice under section 148 of the Act was issued on 24.12.2019, and reassessment proceedings under section 147 of the Act were initiated. In compliance with the notice issued under section 148 of the Act, the assessee filed his return of income on 01.03.2021. Upon perusal of the documents furnished by the assessee in compliance with the statutory notices issued under section 143(2) and 142(1) of the Act, it was noticed that during the financial year 2016-17, the assessee had cash in hand of Rs. 2,05,144/- as on 31.03.2016. After taking into account the details of day-to- day cash sales made by the assessee as per the sales register of his proprietary business in the name of Jivani Wine Mart, it was observed that the balance cash in hand as on 08.12.2016 was Rs. 8,73,940/-. Since the assessee deposited a total cash of Rs. 60,47,000/- in his bank account Printed from counselvise.com ITA No. 3172/Mum/2025 (A.Y. 2017-18) 3 during the demonetization period, and out of the said sum, Rs. 8,73,940/- was treated as explained and legally deposited in the bank account, the assessee was asked to explain the balance cash deposit of Rs. 51,73,060/- during the year under consideration. In response to the show cause notice, the assessee furnished a certificate issued by the Greater Bombay Cooperative Bank Limited, in support of his submission that out of the total cash deposited during the year under consideration, only an amount of Rs. 5,26,000/- was deposited in Specified Bank Notes (“SBN”) and the remaining cash was deposited in new currency. The certificate issued by the bank is reproduced as follows for ready reference: - Printed from counselvise.com ITA No. 3172/Mum/2025 (A.Y. 2017-18) 4 5. The Assessing Officer (“AO”), vide order dated 27.09.2021 passed under section 147 read with section 144B of the Act, agreed with the contention of the assessee to an extent of Rs. 1,17,500/- deposited in cash on 08.11.2016 and Rs. 2,27,000/- deposited in cash on 10.11.2016 by the assessee in his bank account maintained with the Greater Bombay Cooperative Bank Limited. However, in respect of cash of Rs. 56,500/- deposited on 15.11.2016 and Rs. 1,25,000/- deposited in cash on 07.12.2016, i.e. totalling to Rs. 1,81,500/-, the AO disagreed with the submissions of the assessee and held that there was no reason for the assessee to retain old SBN currency once the demonetization was announced on 08.11.2016. The AO held that the assessee had accepted old SBN currency even after the announcement of demonetization, which was not legally permissible. Accordingly, the AO made an addition of Rs. 1,81,500/- under section 68 of the Act by treating the cash deposit to that extent as unexplained cash credit. 6. The learned CIT(A), vide the impugned order, dismissed the appeal filed by the assessee on this issue and observed as follows:- “7.15 Therefore, in case where the assessee had deposited cash amounting to Rs.1,81,500/- in his bank account during the year under consideration, but the sources were neither explained nor such money offered for taxation, the onus is on the assessee to prove that this money did not bear the character of income. In this case, the assessee had failed to prove this fact. Further, by relying upon the decision of Hon'ble ITAT's & Hon'ble High Court's decisions cited supra held that there was ample evidence that the money was received by the assessee, which is prima facie evidence against the assessee on which the Department can proceed in absence of satisfactory explanation. 7.16 In view of the above factual discussions and legal matrix of the case, addition of Rs.1,81,500/- on account of unexplained money u/s. 68 r.w.s. 115BBE of the Act, made by the AO is upheld, hence confirmed. Thus, the ground of appeal no.2 is dismissed.” Printed from counselvise.com ITA No. 3172/Mum/2025 (A.Y. 2017-18) 5 Being aggrieved, the assessee is in appeal before us. 7. Having considered the submissions of both sides and perused the material available on record, at the outset, it is evident that the lower authorities have not disputed the fact that after taking into account the details of day-to-day cash sales made as per the sales register furnished by the assessee of his proprietary concern and the cash deposited in the bank account maintained with the Greater Bombay Cooperative Bank Limited, the assessee had a balance cash in hand of Rs. 8,73,940/- as on 08.11.2016, i.e., the day on which demonetization of SBN was announced. As noted in the foregoing paragraph, the Greater Bombay Cooperative Bank Limited issued a certificate in respect of cash deposited in the current account of the assessee’s proprietary concern during the period 08.11.2016 to 31.12.2016 and certified that only an amount of Rs. 5,26,000/- was deposited by the assessee on four different dates in old denomination of Rs. 500 and Rs. 1000 currency notes. It is further evident from the record that the AO has accepted the cash of Rs. 1,17,500/- and Rs. 2,27,000/- deposited by the assessee in the bank account on 08.11.2016 and 10.11.2016. Further, once the assessee has been found to have a balance cash in hand of Rs. 8,73,940/- as on 08.11.2016, we do not find any merit in disputing the claim of the assessee that the balance sum deposited on 15.11.2016 and 07.12.2016 was also out of the very same SBN available with the assessee in terms of cash in hand of Rs. 8,73,940/-. It is also pertinent to note that the AO merely alleged that the assessee had accepted old SBN currency Printed from counselvise.com ITA No. 3172/Mum/2025 (A.Y. 2017-18) 6 even after the announcement of demonetization, without substantiating the claim with any documentary evidence or material. In this regard, it is pertinent to note that the time granted by the Government to deposit the SBN currency was up to 31.12.2016, and therefore, the fact that the assessee had deposited the cash available in SBN in four trenches cannot go against the assessee, as the same was deposited within the permissible timeline. Therefore, as the assessee was found to be having balance cash in hand of Rs. 8,73,940/- as on 08.11.2016, which can only be in SBN, we find merit in the submission of the assessee that out of the said cash in hand, he deposited the entire sum of Rs. 5,26,000/- in his bank account during the demonetization period. Accordingly, the addition of Rs. 1,81,500/- made by the AO and upheld by the learned CIT(A) is deleted. As a result, the grounds raised by the assessee are allowed. 8. In the result, the appeal by the assessee is allowed. Order pronounced in the open Court on 25/02/2026 Sd/- VIKRAM SINGH YADAV ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 25/02/2026 Prabhat Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai. Printed from counselvise.com "