INCOME-TAX OFFICER, WARD-1, PALANPUR V. IMRANBHAI UMARBHAI QURESHI, BANASKANTHA

ITA 1605/AHD/2024

AI Insights

The case revolves around an appeal by the Income Tax Officer against the order of the CIT(A), which had deleted the addition made by the Assessing Officer regarding unexplained cash withdrawals amounting to Rs. 8,89,36,000 by the assessee, Imranbhai Umarbhai Qureshi, for the assessment year 2017-18. The Assessing Officer had treated these withdrawals as unexplained expenditure under Section 69C of the Income Tax Act. The CIT(A) found that the assessee had provided sufficient evidence to justify the withdrawals as business-related expenses for payments to farmers for bulls, which were later sold to slaughterhouses. The Tribunal upheld the CIT(A)'s decision, noting the lack of verification by the Assessing Officer and the inconsistency in rejecting the purchase transactions while accepting the sales.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772637 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHER SINGH
• Assessee Lawyers: S N DIVETIA; SAMIR
• Keywords: Additional evidence; Unexplained expenditure
• Section: 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER I.T.A. No. 1605/Ahd/2024 (Assessment Year:2017-18) Income Tax Officer, Ward-1, Palanpur Vs. Imranbhai Umarbhai Qureshi, 1 TA, Vadgam, Basu, Gujarat-385520 [PAN No.AAPPQ2217A] (Appellant) .. (Respondent) Appellant by : Shri Sher Singh, CIT-DR Respondent by : Shri S N Divetia, AR & Shri Samir Vora, A.R. Date of Hearing 19.06.2025 Date of Pronouncement 26.08.2025 O R D E R PER: ANNAPURNA GUPTA - AM: The present appeal has been filed by the Revenue against the order passed by the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) dated 09.07.2024 relates to A.Y. 2017-18. 2. The grounds of appeal raised by the Revenue are as under: “(a) The Ld.CIT(A) has erred in law and on facts in deleting the addition made by AO on account of cash withdrawal of Rs.8,89,36,000/- treated as unexplained expenditure u/s. 69C of IT Act? (b) The appellant craves leave to add, alter and / or to amend all or any the ground before the final hearing of the appeal.” Printed from counselvise.com ITA No.1605/Ahd/2024 ITO vs. Imranbhai Umarbhai Qureshi Asst.Year –2017-18 - 2 - 3. The solitary issue in present appeal, it was pointed out, was the huge cash withdrawals made by the assessee from his bank account amounting in to Rs. 8,89,36,000/- treated as unexplained expenditure of the assessee by the Assessing Officer under Section 69C of the Act and added to its income which, in turn, was deleted by the Ld. CIT(A). 4. The orders of the authorities below reveal that the assessee had filed return of income for the impugned year declaring income of Rs. 3,12,860/-. Subsequently, the assessee’s case was selected for scrutiny in CASS under limited category for the reason of large cash withdrawals. The assessee was noted to have withdrawn of Rs. 8,89,36,000/- from his bank account and when asked to explain the nature of withdrawals the assessee had submitted that it was in the business of taking live bulls from farmers and sending the same to slaughter house. The money was received from the slaughter house deposited in his bank account and was thereafter withdrawn in cash for payment to farmers who lived in rural areas. The assessee, in turn, earned commission on the same which he stated to have returned to tax. The assessee was asked to justify his explanation with evidences of both purchase and sales of bulls made by him. Due reply was filed by the assessee submitting copy of cash book and bank book and ledger account of all parties from whom amount was received on sale of bulls alongwith ledger account of amount paid to farmers. The Assessing Officer, however, was not satisfied with the reply of the assessee and held that the cash withdrawals from the banks remained unexplained. Accordingly, he proceeded to make addition of the entire cash withdrawn by the assessee amounted to 8.89 crores to the income Printed from counselvise.com ITA No.1605/Ahd/2024 ITO vs. Imranbhai Umarbhai Qureshi Asst.Year –2017-18 - 3 - of the assessee as unexplained expenditure in terms of Section 69C of the Act. 5. The matter was carried in appeal before Ld. CIT(A) where the assessee reiterated the contention made before the Assessing Officer. He further contended that the Assessing Officer had made the addition without appreciating the evidences filed before him evidencing the fact of cash withdrawals made for making payment to farmers from whom the bulls were purchased. He furnished all evidences of business carried out by him of sale and purchase of bulls to the Ld. CIT(A) who forwarded the same to the Assessing Officer for his report. The remand report was sought from the Assessing Officer and the assessee’s response was also taken by the Ld. CIT(A) to the remand report. The Assessing Officer had objected to the admission of the additional evidences by the assessee but the Ld. CIT(A) overruled the objection noting that there was sufficient cause with the assessee for not having produced the evidences during assessment proceedings. Thereafter, the Ld. CIT(A) noted that the Assessing Officer had failed to comment on the documents submitted by the assessee justifying the withdrawals made from his bank account for making payment to the farmers, noting the evidences to be filed both during the assessment proceedings and even in remand proceedings. He noted that the Assessing Officer had added the entire withdrawals without considering the nature of the assessee’s business and without rebutting his claim with concrete reasoning. Therefore, he held that in the absence of any inquiry, the addition made by the Assessing Officer was not appropriate. The Ld. CIT(A) noted that the assessee had submitted evidences of purchase and sales of bulls in support of his claim of Printed from counselvise.com ITA No.1605/Ahd/2024 ITO vs. Imranbhai Umarbhai Qureshi Asst.Year –2017-18 - 4 - carrying out the business of purchase and sales of bulls and had also returned commission income earned from the same to tax, therefore, considering the entire facts and circumstances of the case he held the withdrawals made by the assessee to be duly explained and deleted the addition made by the Assessing Officer of Rs. 8.89 crores under Section 69C of the Act. 6. Aggrieved by the same the Revenue has come up in appeal before us. 7. We have heard both the parties and have carefully gone through the orders of the authorities below and also the documents submitted before us in Paper Book filed by the Ld. Counsel of the assessee. The issue before us is whether the Ld. CIT(A) had rightly treated the amount of cash withdrawn by the assessee from his bank account of Rs. 8.89 crores as duly explained and not in the nature of unexplained expenditure as treated by the Assessing Officer. 8. The case of the assessee is that he is in the business of taking bulls from farmers and sending them to slaughter house and on the receipt of money from the slaughter houses in his bank account he withdraws cash for making payment to farmers who lived in villages. To support his explanation, the assessee filed:  the entire sale register showing date-wise sale amount and also details of major parties to whom sale was made:  the entire purchase register containing the list of parties to whom the cash payments were made,  the entire cash book,  copy of bank book, Printed from counselvise.com ITA No.1605/Ahd/2024 ITO vs. Imranbhai Umarbhai Qureshi Asst.Year –2017-18 - 5 -  copy of ledger account of all parties from whom amounts was received,  copy of ledger account of farmers to whom cash was paid  sample copies of bills of purchase and sale of bills were also filed. 8.1 The Ld. CIT(A) has noted that other than objecting to the additional evidences filed by the assessee the Assessing Officer did not verify the said evidences despite the same being furnished to him during the assessment proceedings and even during appellate proceedings. Having noted so, this fact has not been disputed by the Ld. DR before us. In light of the same we agreed with the Ld. CIT(A) that there is no case at all with the Revenue for disputing the deletion of addition made by the Ld. CIT(A) when the Assessing Officer himself made no efforts to verify the explanation of the assessee. Even otherwise we have noted that while the assessee’s claim of having made sale of bulls to slaughter houses has not been disturbed or touched upon by the Assessing Officer, it is only his claim of expenditure incurred in cash for purchasing bulls from farmers which has not been accepted as true by the Assessing Officer. The Assessing Officer has in fact disallowed the entire payment so made by the assessee. We fail to understand that when the Assessing Officer has accepted one leg of a business carried on by the assessee, how could then the Assessing Officer have disputed the incurrence of the other leg of the business which was imperative for carrying on the business in totality. The Assessing Officer having accepted the fact of the assessee having made sales of bulls to slaughter houses, it does not make sense at all for thereafter rejecting the entire purchases made by the assessee of bulls. The Assessing Officer could have rejected both sales and purchases Printed from counselvise.com ITA No.1605/Ahd/2024 ITO vs. Imranbhai Umarbhai Qureshi Asst.Year –2017-18 - 6 - of bulls holding that there was no business of trading in bulls carried out by the assessee at all and that these were all sham transaction, but this was not the case made out by the Assessing Officer. Having accepted the sale transaction of bulls he has only rejected the purchase transaction which makes no sense at all. In the light of the same we completely agree with the Ld. CIT(A) there was no case for treating the cash withdrawn by the assessee during the year of Rs. 8.89 crores explained by the assessee for the purpose of making payment of purchase of bulls, as being in the nature of unexplained expenditure. We, therefore, see no reason to differ with the Ld. CIT(A) that the Assessing Officer had no basis for making addition under Section 69C of the Act of Rs. 8.89 crores. The order of the Ld. CIT(A) is, therefore, upheld. 9. In the result, the appeal of the Revenue is dismissed. This Order pronounced in Open Court on 26/08/2025 Sd/- Sd/- (T R SENTHIL KUMAR) (ANNAPURNA GUPTA) (JUDICIAL MEMBER) ACCOUNTANT MEMBER Ahmedabad; Dated 26/08/2025 TANMAY, Sr. PS 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. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "