DALSUKHBHAI JIVRAJBHAI SAVALIA,LILIYA MOTA V. ITO WD 3(1)(4), RAJKOT-AMRELI, AMRELI

ITA 188/RJT/2025

AI Insights

The case involves Dalsukhbhai Jivrajbhai Savalia, who appealed against the order of the Commissioner of Income-tax (Appeals) which confirmed a partial addition to his income for the Assessment Year 2017-18. The addition was initially made by the Assessing Officer under section 69A of the Income Tax Act, 1961, due to unexplained cash deposits totaling Rs. 32,93,205 during the demonetization period. The CIT(A) sustained 30% of the addition, amounting to Rs. 9,87,961. The Tribunal, after considering the documents and evidence provided by the assessee, including affidavits and bank statements, found that the addition sustained by the CIT(A) was excessive and reduced it to 8% of the total deposits, citing that the assessee had sufficiently explained the source of the deposits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714762 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMR GUPTA
• Assessee Lawyers: MEHUL RANPURA
• Keywords: Business income; Revised return
• Section: 143(3); 142(1)

Judgement Text

" आयकर अपीलȣय अͬधकरण,राजकोट Ûयायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, “SMC” RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.188/RJT/2025 Ǔनधा[रण वष[/Assessment Year : 2017-18 Dalsukhbhai Jivrajbhai Savalia C/o Agro Service Center, Near SBI, Station Road, Liliya Mota, Amreli-365 535 बनाम/ Vs Income Tax Officer, Ward-3(1)(4), Rajkot-Amreli, Income Tax Department, Amreli- 360 001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: EHUPS 0323 D (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Mehul Ranpura, AR राजèव कȧ ओर से/Revenue by : Shri Dheeraj Kumr Gupta, Sr-DR सुनवाई कȧ तारȣख /Date of Hearing : 15/05/2025 घोषणा कȧ तारȣख /Date of Pronouncement : 04/08/2025 आदेश/Order Per Dr. Arjun Lal Saini, A.M Captioned appeal filed by the assessee, pertaining to Assessment Year 2017-18, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income-tax (Appeals) [in short, “Ld.CIT(A”], dated 29.01.2025, which in turn arises out of an order passed by Assessing Officer u/s 143(3) of the Act, on 24.12.2019. 2. The assessee has raised the following grounds of appeal: “1. The grounds of appeal mentioned hereunder are without prejudice to one another. Printed from counselvise.com ITA No. 188/RJT/2025 (AY:17-18) Dalsukhbhai J Savalia Page | 2 2.The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as the \"CIT(A)\"] erred on facts as also in law in confirming addition to the extent of Rs.9,87,961/-, out of addition made by Assessing officer of Rs.32,93,205/-. Out of total addition, 30% addition retained by Ld. CIT(A) is bad in law as also on facts and therefore the same may kindly be deleted. 3.The Ld. CIT(A) erred on facts as also in law in partly confirming the addition made by AO. 4.Your Honor's appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.” 3. Succinctly, the factual panorama of the case is that assessee before me is an individual and had filed revised return of income for assessment year (AY) 2017-18, through e-filing on 30.03.2018, declaring total income of Rs.2,98,160/-. The assessee`s case was selected for scrutiny through CASS and notice u/s 143(2) of the Act was issued to the assessee. Subsequently notice u/s 142(1) of the Act, along with questionnaire was issued on 26.09.2019. Information was obtained from banks by issuing notice u/s133(6) of the Act and as per bank statement, the assessing officer noticed that assessee has deposited cash in three bank accounts during demonetization period. Sl. No. Name of bank Account No. Amount of cash deposited during FY 16-17 1 Amreli Jilla Madhyasth Sahakari Bank Ltd. 202001969573 2,93,205/- 2 Kotak Mahindra Bank 820010011439 2,00,000/- 3 Kotal Mahindra Bank 5820044000782 28,00,000- 4. A further show -cause notice was issued to the assessee. In response to the show cause notice, the assessee submitted computation of income, cashbook for financial year 2016-17 up to 31.12.2016. The assessee has business income of Rs.2,54,013/-. The assessee has provided a copy of affidavit received from his mother regarding the agricultural business. In his profit and loss account the assessee submitted khetiwadi income amounting to Rs.4,19,040/-. Printed from counselvise.com ITA No. 188/RJT/2025 (AY:17-18) Dalsukhbhai J Savalia Page | 3 5. However, the assessing officer, rejected the above documents and contention of the assessee, and held that in the absence of any submissions for the sources for cash deposits amounting to Rs.32,93,205/- remains unexplained therefore, assessing officer made addition u/s 69A of the Act, as undisclosed cash deposit. 6. Aggrieved by the order of Assessing Officer, assessee carried the matter in appeal before Ld.CIT(A), who has partly confirmed the addition made by the Assessing Officer. The ld.CIT(A) noticed that the assessee had furnished that some of the income was received from his mother which was kept as accumulated savings and deposited during demonetization period. Further, during the year, some cash withdrawals from Kishan Credit Account was done by the assessee, which was subsequently redeposited during the demonetization period. The assessee was also holding some agricultural land and also earned agricultural income apart from regular business income, for the year under consideration, the assessee has shown khetiwadi income of Rs.4,19,040/-. Thus, from the facts and circumstances, the ld CIT(A) noticed that the assessee mainly deriving income from agricultural operation. The assessee was also handling affairs of his mother as it appears that there were reasonable savings which is lying as cash in hand in the assessee’s accounts for a period of time. Considering all these facts circumstances, 30% of the addition was sustained by ld.CIT(A), which comes to Rs.9,87,961/- and balance addition was deleted. 7. Aggrieved by the order of Ld. CIT(A), the assessee is in appeal before this Tribunal. 8. I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Learned Counsel for the Printed from counselvise.com ITA No. 188/RJT/2025 (AY:17-18) Dalsukhbhai J Savalia Page | 4 assessee, argued that assessee has submitted proof of agricultural income earned, cashbook showing opening cash and subsequent realization of cash up to the demonetization period, copies of bank statements, bills for agriculture produces sold, affidavit of mother, bank statement for withdrawn of funds from loan account etc. It was explained before the Assessing Officer that withdrawal was made from the bank, and bank account clearly shows withdrawal of cash. Besides, the assessee has submitted a plethora of documents, before the assessing officer, such as, balance sheet, profit and loss account, capital account, cash book, cash deposited statement during demonetization period, total income computation statement, income tax receipts etc, to prove his claim. Before the Ld.CIT(A), the assessee submitted all the evidences which were produced before the Assessing Officer. Therefore, the source of money, which was deposited, during the demonetization period, has been clearly explained by the assessee, hence, entire addition made by the assessing officer may be deleted. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. I note that the assessee had deposited Rs.32,93,205/-, in SBNs notes. Before the Assessing Officer, the assessee furnished a copy of affidavit in which the mother of the assessee has authorized to look after the agriculture business and handle all the financial affairs. In addition to this, before the assessing officer, the assessee furnished, documents of agricultural land holding, that is, forms Nos. 7/12 and 8-A and some income was received from his mother which was kept as accumulated savings and deposited during demonetization period. Further, during the year, some cash withdrawals from Kishan Credit Account was shown by the assessee. I find that the amount deposited during demonetization period to the tune of Rs.32,93,205/-, was partly from Khetiwadi income of Rs.4,19,040/- also. Considering these facts, I find that addition sustained by the learned CIT(A) at Printed from counselvise.com ITA No. 188/RJT/2025 (AY:17-18) Dalsukhbhai J Savalia Page | 5 the rate 30% is very higher side. I find that assessee has submitted a plethora of documents and evidences before the authorities below. I note that assessing officer has not refuted or discredited these evidences and documents. The assessing officer does not mention why he is not accepting these evidences. On the contrary, the assessing officer has just brushed aside these evidences without even a word on why they are not acceptable. It is a well settled Law that when an assessee has all the possible evidence in support of its claim, they cannot be brushed aside based on surmises. Based on this factual position, I sustain the addition at the rate of 8% on Rs.32,93,205/-, which comes to Rs. 2,63,456/- (8% of Rs.32,93,205). Hence, I direct the assessing officer, to sustain the addition in the hands of the assessee, to the tune of Rs.2,63,456/-. 9. Before parting, I would like to make it clear that since the assessee had explained the source of cash deposit, therefore, 8% addition of Rs. 2,63,456/-, sustained by me, should be taxable under the normal rate of income-tax (not u/s 115BBE of the Act). 10. In the result, the assessee’s appeal is partly allowed, in above terms. Order pronounced in the open court on 04/08/2025. Sd/- (Dr. A.L. SAINI) लेखा सदèय/ACCOUNTANT MEMBER राजकोट /Rajkot Ǒदनांक/ Date: 04/08/2025 DKP Outsourcing Sr.P.S Printed from counselvise.com ITA No. 188/RJT/2025 (AY:17-18) Dalsukhbhai J Savalia Page | 6 आदेश कì ÿितिलिप अúेिषत/ Copy of the order forwarded to :  अपीलाथê/ The Appellant  ÿÂयथê/ The Respondent  आयकर आयुĉ/ CIT  आयकर आयुĉ(अपील)/ The CIT(A)  िवभागीय ÿितिनिध, आयकर अपीलीय आिधकरण, राजकोट/ DR, ITAT, RAJKOT  गाडªफाईल/ Guard File By order/आदेश से, // True Copy // सहायक पंजीकार आयकर अपीलȣय अͬधकरण, राजकोट Printed from counselvise.com "