JAGDISH PETHALJI CHAVDA,AHMEDABAD V. THE INCOME TAX OFFICER, WARD-3(3)(7), AHMEDABAD

ITA 1232/AHD/2024

AI Insights

The case involves Jagdish Pethalji Chavda, who appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, which confirmed several additions made by the Assessing Officer for the Assessment Year 2017-18. The additions pertained to unexplained cash balances and income from various sources, including the sale of cars and a joint venture. The Tribunal examined the evidence presented, including cash books and bank statements, and considered the legal provisions under Sections 68 and 69A of the Income Tax Act. The Tribunal's decision was based on the adequacy of evidence provided to substantiate the claims of the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24963 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: CIT vs Orissa Corporation, NRA Iron & Steel Pvt. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: TRUPTI PATEL
• Assessee Lawyers: SULABH PADSHAH
• Keywords: Salary income; Income from undisclosed sources; Deemed to accrue or arise in india; Bogus
• Section: 68; 133(6); 69A; 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.1232/Ahd/2024 (Assessment Year: 2017-18) Jagdish Pethalji Chavda (Individual), 51, Shaival Complex, S.G. Highway, Opp. Rajpath Club, Ahmedabad-380054 Vs. Income Tax Officer, Ward-3(3)(7), Ahmedabad [PAN No.ADDPC8098A] (Appellant) .. (Respondent) Appellant by : Shri Sulabh Padshah, A.R. Respondent by: Smt. Trupti Patel, Sr. DR Date of Hearing 13.02.2025 Date of Pronouncement 21.03.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 26.03.2024 passed for A.Y. 2017-18. 2. The assessee has taken the following grounds of appeal:- “1. The learned Commissioner of Income Tax (Appeals) (NATIONAL FACELESS APPEAL CENTRE) grievously erred both in law and on facts in confirming the addition of Rs. 88,64,304/- made by A.O. by wrongly invoking section 69A of the IT Act in respect of opening cash balance as per cash flow statement furnished by the appellant. Considering the past withdrawals and availability of cash in respect of various earlier years, the opening cash balance ought not to be added as deemed income. It be so held now and addition sustained be deleted. 2. The ld. CIT(A) [NFAC] further also grievously erred both in law arid on facts in confirming the addition of Rs.20,90,000/- ignoring the submission that considering the overall availability of cash , the deposits in bank accounts was fully and satisfactorily explained. Since the source of such deposit is explained, the ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 2– addition made and sustained is not justified. It be so held now and addition of Rs. 20,90,000/-be deleted. 3. The ld CIT(A) [NFAC] also grievously erred both in la wand on facts in confirming the addition of Rs.36,10,000/- on irreleval grounds and ignoring the fact that merely on account of alleged reply of the purchasers and without inquiry with the person through whom cars were sold and also ignoring the documentary evidence of sale note furnished is wholly unjustified. It be so held and the additions made of Rs. 36,10,000/- be directed to be deleted now. 4. The ld CIT(A) [NFAC] further grievously erred both in la wand on facts in confirming addition of Rs. 1,10,00,000/- received from Late Prabhatsinhji Thakor as contribution for joint venture as per copy of duly Notarised MOU furnished to the AO and when PAN of the payer was also furnished. The addition made by wrongly invoking section 68 in the hands of appellant without required inquiry and merely on suspicion ought to be deleted by Id CIT(A). It be so held now and addition of Rs. 1,10,00,000/- made against sanction of law be deleted. 5. The ld CIT(A) [NFAC] also erred both in la wand on facts in confirming addition of Rs. 49,99,900/- in respect of amount received on sale of shares for which abundant evidences in the form of confirmation and audited accounts of the purchasers were furnished. Addition made by wrongly invoking section 69A of the Act without proper inquiry with the purchasers of shares sold by appellant held since long being patently wrong ought to be deleted. It be deleted now. 6. The ld CIT(A) [NFAC] grievously erred both in la wand on facts in not properly considering the detailed submission on each of the grounds of appeal before him and not appreciating the facts as well as legal decisions cited before him as regards erroneous order. It be so held now and additions made to the extent sustained by ld CIT(A) [NFAC] be directed to be deleted. 7. Without prejudice to the above, the ld CIT(A) also erred in not considering that the additions of Rs. 61,01,524/- were already covered by withdrawals and being duplication ought to be deleted. It be so held now. 8. The ld CIT(A) [NFAC] ought to have accepted the various grounds of appeal by allowing them in toto. 9. The appellant craves leave to add, alter, modify or delete any of the grounds at the time of hearing.” 3. At the outset, we observe that the appeal is time barred by 20 days. The delay of 20 days is condoned on due consideration of facts and owing to smallness of delay causing no perceptible prejudice to other side. ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 3– Ground No. 1:- Ld. CIT(A) erred in confirming additions of Rs. 88,64,304/- under Section 69A of the Act. 4. The brief facts in relation to this addition is that the assessee is an individual and he filed his return of income for the impugned assessment year, declaring income of Rs. 19,13,440/-. The Assessing Officer observed that the assessee had deposited old currency notes of a total value of Rs. 3,69,14,500/- in his bank accounts, during the demonetization period. In response to the notice issued by the Assessing Officer, the assessee gave details of various sources of the cash deposits made by the assessee in his bank account, during the demonetization period and one of the sources of deposit claimed by the assessee was out of opening cash balance of Rs. 88,64,304/-. The Assessing Officer, however, after analyzing the history of returns filed by the assessee was of the view that the authenticity of the opening cash balance of Rs. 88,64,304/- declared by the assessee was not authenticated. The Assessing Officer analysed the returns of income filed by the assessee from A.Y. 2011-12 onwards and observed that the assessee was only earning salary income and declaring meagre return of income in the vicinity of Rs. 1.5 lakhs to Rs. 2.5 lakhs for previous assessment years and therefore, the assessee was not able to demonstrate that he had substantial income to justify opening cash balance of Rs. 88,64,304/- declared by him, for the impugned assessment year. The Assessing Officer was of the view that the assessee has not submitted any documentary evidence to demonstrate that he had other sources of income, other than salary income to justify the huge opening cash balance of Rs. 88,64,304/- declared by him. Accordingly, the Assessing Officer held that the source of opening cash balance of assessee amounting to Rs. 88,64,304/- remained unsubstantiated. Accordingly, the Assessing ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 4– Officer treated the same as unaccounted income of the assessee and added the same under Section 69A of the Act, to the income of the assessee. 5. In appeal, Ld. CIT(A) upheld the additions with the following observations: “…The appellant submitted cash book to explain source of cash deposit. But when enquired about cash books of previous year to verify closing/opening balance the appellant argued that he is not liable to maintain books of account. Till AY 2016- 17 the appellant was earning less than Rs.3 lakhs per annum. He could not produce any documentary evidence to prove the source from where cash of Rs.88,64,304 was accumulated as opening balance. The appellant by his own admission had entered into real estate venture during AY 2017-18 and was liable to keep books of accounts even though he chose to file ITR-1. The cash book shows transactions related to business activity and the appellant had made withdrawals for this purpose. But there is nothing to prove opening cash balance. Hence it is held that the addition of Rs.88,64,304 under section 69A is valid and correct. As a result, ground no 1 is dismissed.” 6. The assessee is in appeal before us against the aforesaid addition confirmed by Ld. CIT(A). 7. Before us, the Counsel for the assessee submitted that the assessee is a salaried person and is not required to maintain any cash book. However, only with a view to cooperate with the Department, the assessee had prepared a cash book and submitted the same before the Assessing Officer. The Counsel for the assessee submitted that it is a settled law that since the opening figure of cash balance pertains to income generated from past years, the same cannot be added as unexplained income of the assessee during the impugned year under consideration. Before us, the Counsel for the assessee submitted that in response to query raised by the Assessing Officer, the assessee had submitted cash flow statement in the form of cash book. The opening balance was arrived at on the basis of assessee’s bank statements of various bank accounts held by the assessee. During the course of assessment, the Assessing Officer has not doubted ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 5– that the only source of income of the assessee was “salary” income and there is no allegation that the assessee earned any income, other than salary income, outside the books of accounts. As far as opening balance is concerned, the Counsel for the assessee submitted that the cash flow statement was prepared by the assessee based only on the withdrawals made by the assessee from his bank accounts in the prior years. The assessee had submitted cash book from 01.04.2012 to 31.03.2017 which had been prepared only on the basis of entries of cash withdrawals and deposits from assessee’s bank accounts. Therefore, once it is accepted by the Assessing Officer that the assessee had only one source of income i.e. salary income, addition under Section 69A of the Act is not permissible. Further, it was submitted that the Assessing Officer has not pointed out to any entry in the cash book as being incorrect or unexpalined. Even as on 01.04.2015, the opening cash balance was Rs. 75,75,779/- and no infirmity was pointed out with respect to this figure submitted by the assessee. The Counsel for the assessee submitted that the entire cash book and opening cash balance were only based on the withdrawals and deposits made by the assessee in his bank account and once there are withdrawals made by the assessee and there is cash on hand available with the assessee for re- depositing in the bank accounts the same cannot be rejected without the Department proving that the cash so withdrawn was used by the assessee at some other place, in view of the settled legal position on this issue. 8. On going through the records of the case, we observe that the assessee had submitted cash book for various years under consideration, on the basis of cash withdrawn / deposited by the assessee in his bank accounts held with various banks. The Assessing Officer has not pointed out any source of income of the assessee, apart from salary income and there is no allegation that the assessee had earned any unexplained income ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 6– outside the books of accounts. Further, there is no allegation by the Department that the cash so withdrawn by the assessee from his bank accounts, was not available with the assessee for being re-deposited in his bank account. It is a well settled principle that if the Assessing Officer has not brought on record any evidence to show that the cash withdrawals made by the assessee has been used elsewhere and that the same were not available with the assessee for re-depositing, then it has to be presumed that the subsequent re-deposit in the bank accounts were sourced out of earlier withdrawals made by the assessee from his bank account. Accordingly, considering the assessee’s facts, in our considered view, since opening cash balance was sourced out of withdrawals made from the assessee’s bank accounts and since there was no specific allegation that the amount was not available with the assessee for re-depositing, the opening cash balance of Rs. 88,64,304/- cannot be added as income of the assessee under Section 69A of the Act. 9. In the result, Ground No. 1 of the assessee’s appeal is allowed. Ground No. 2: Ld. CIT(A) erred in confirming addition of Rs. 20,90,000/- 10. The brief facts in relation to this ground of appeal are that during the course of assessment, the assessee stated that the assessee had withdrawn an amount of Rs. 1,25,00,000/- immediately prior to demonetization period and therefore, the credit of the amount withdrawn prior to the demonetization period may be given to the assessee. The Assessing Officer held that out of the claim of withdrawal of Rs. 1.25 crores, the assessee has been able to explain the withdrawal of Rs. 1,04,10,000/- and the balance withdrawal of Rs. 20,90,00/- remained ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 7– explained by the assessee and therefore, the claim of the assessee to that extent cannot be considered. Accordingly, an amount of Rs. 20,90,000/- was added as income of the assessee under Section 69A of the Act. 11. Before us, the Counsel for the assessee submitted that Assessing Officer erred in making addition of Rs. 20,90,000/- since no infirmity has been found in the total availability of cash as per cash flow statement submitted by the assesee. Further, the Assessing Officer has not pointed out to any specific item not matching with the earlier withdrawals and cash on hand as opening balance. Since there is no specific allegation that the assessee had utilized the cash withdrawals elsewhere, in our view, there is no reason for the Assessing Officer to make addition of Rs. 20,90,000/- under Section 69A of the Act. 12. On going through the facts of the instant case, we observe that no specific observations were made by the Assessing Officer while making the addition that the assessee had utilized the cash withdrawals elsewhere and further, the Assessing Officer has not pointed out as to why the cash withdrawn by the assessee from his bank account was not available with the assessee for re-deposit. 13. Accordingly, keeping in view the assessee’s facts, the addition of Rs. 20,90,000/- is directed to be deleted. 14. In the result, Ground No. 2 of the assessee’s appeal is allowed. Ground No. 3: Ld. CIT(A) erred in confirming addition of Rs. 36,10,000/- received by the assessee from sale of cars. ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 8– 15. The brief facts in relation to this ground of appeal are that the assessee had sold three cars during the impugned year under consideration. The assessee had sold “Renault Fluence Car” on 15.07.2016 for a sum of Rs. 10 lakhs, for which sale note and delivery note were also furnished. Further, the assessee had also given identity of the purchaser, by filing his Voter ID Card and also furnished confirmation of the purchaser. Further, the assessee had also sold “Santro” car on 15.07.2016 for a sum of Rs. 2,00,000/- to Shri Dilip Arjunbhai Rathod and the assessee had furnished similar details with regard to such sale viz. sale note, delivery note, address of the purchaser, Aadhar Card of the purchaser and confirmation from the purchaser of having paid Rs. 2,00,000/- for purchase of Santro car. 16. However, the Assessing Officer added the aforesaid amount of sale consideration on sale of Renault Fluence Car and Santro Car by holding that though notices were issued to both the purchasing parties, these parties failed to respond to notices issued by the Assessing Officer under Section 133(6) of the Act and therefore, the assessee has not been able to establish the genuineness of sale consideration of Rs. 12,00,000/-, which was therefore treated as unaccounted income of the assessee. Further, the assessee had statedly sold Mercedes Benz car for a sum of Rs. 24,10,000/- on 28.10.2016 to Shri Darshan Lakhani in cash. However, during the course of investigation, statement of Shri Darshan Lakhani was taken in which he stated that he had purchased Mercedes Benz for a sum of Rs. 50,00,000/- by taking loan from Kotak Mahindra Prime Ltd. and further on the basis of documents submitted by Shri Darshan Lakhani, it was evident that the car was purchased from Shri Vivek Vijay Gupta and the date of payment of such car was 22.07.2016. Accordingly, the Assessing Officer was of the view that the assessee had never sold Mercedes Benz car to Shri Darshan Lakhani, as stated and there was complete mismatch ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 9– between assessee’s facts and details of purchase obtained from Mr. Darshan Lakhani. Accordingly, a sum of Rs. 24,10,000/- was added as unexplained income of the assessee. 17. In appeal, Ld. CIT(A) confirmed the additions with the following observations: “6. Ground no 4 is against the addition of Rs.12,00,000 in respect of amount received from sale of Renault Fluence and Santro treating the same as unaccounted income. Ground no 5 is against the addition of Rs.24,10,000 received in cash by the appellant from Sale of Mercedez Benz. The appellant submitted sale letter/delivery notes. The assessing officer issued notices u/s 133(6) to buyers of above cars. Buyers of Fluence arid Santro did not respond to notice. The buyer of Mercedes stated that alleged payment \"of Rs.24,10,000/- by way of cash is extremely wrong. I have purchased Mercedise car for Rs.50.00 lacs (approximately) by obtaining loan from Kotak Mahindra Prime Ltd and said payment has been made by cheque only\". The appellant claimed that the sale of Mercedes was through M/s. Kamadhenu motors. However he could not produce confirmation letter and bank statement, of Kamadhenu motors showing cash payment. The appellant or respective buyers did not submit proof of cash payment or RC Book and documents related to vehicle as requested by the AO. The appellant failed entirely to provide a satisfactory explanation or proof regarding receipt of cash on sale of cars. It is also pertinent how an individual earning less that Rs.3 lakhs salary per annum could own 3 cars including Mercedes and after selling those cars whether he bought a new car and for how much. Apart from these unanswered questions there is nothing on record to show that the appellant received Rs. 36,10,000 as cash from car sales. Hence the addition is sustained and grounds 4 and 5 are dismissed.” 18. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). 19. On going through the facts of the instant case, we observe that so far as sale of Renault Fluence Car and Santro Cars are concerned, complete details with regards to the purchaser were furnished by the assessee, during the course of assessment proceedings and the only reason why the addition was made in the hands of the assessee was only on the ground that the purchaser failed to respond to notices issued by the Income Tax Department. However, no other adverse inference / observations was ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 10– made by the Assessing Officer / CIT(A) while confirming the addition in the hands of the assessee. Accordingly, looking into the assessee’s set of facts, in our considered view addition of Rs. 10,00,000/- (on sale of Fluence car) and Rs. 2,00,000/- (Santro car) are liable to be deleted. 20. However, so far as sale of Mercedes Benz car is concerned, the assessee has not brought anything on record to controvert the findings made by the Assessing Officer / CIT(A) while confirming the addition. The only submission given by the assessee is that the car was sold through an agent. However, apart from this statement, nothis has been brought on record to controvert the findings of the Assessing Officer and the assesse,e in our view, has not been able to establish the genuineness of the sale of Mercedes Car. Therefore, on going through the records of the assessee’s case, we find no infirmity in the order of Ld. CIT(A) so as to call for any interference. Accordingly, addition of Rs. 24,10,000/- on sale of Mercedes Benz car is liable to be sustained in the hands of the assessee. 21. In the result, Ground No. 3 of the assessee’s appeal is partly allowed. Ground No. 4: Ld. CIT(A) erred in confirming addition of Rs. 1,10,00,000/- received from Late Prabhatsinhji Thakor as contribution for joint venture under Section 68 of the Act. 22. The brief facts of this ground are that during the course of assessment proceedings, the Assessing Officer observed that assessee had shown cash receipts of Rs. 1.10 crores from Shri Prabhatsinghji Thakor against Development joint venture MOU for land situated at Moti Bhura, Ahmedabad. The assessee also filed copy of joint venture MOU for Moti Bhura Land Development dated 15.10.2016 signed between the assessee ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 11– and Pratapsingh Ataji Thakor for a sum of Rs. 2,20,00,000/-. On perusal of the MOU, the Assessing Officer observed that the terms of the MOU does not mention any fact regarding cash receipts of Rs. 1,10,00,000/- from Shri Pratapsingh Ataji Thakor as claimed by the assessee. Since the assessee had introduced cash receipt of Rs. 1,10,00,000/- on 31.10.2016, in his cash book, the assessee was asked to prove the genuineness of such cash receipt. Further, on verification, the Assessing Officer observed that Shri Pratapsingh Thakor had not filed any return of income and the creditworthiness of the cash creditor was not proved. However, despite having been given an opportunity, the assessee did not furnish any further reply in response to notices issued by the Assessing Officer to prove the genuineness of cash receipt. Accordingly, the Assessing Officer held that the cash credits of Rs. 1,10,00,000/- are liable to be treated as non-genuine and added the same as income of the assessee under Section 69A of the Act. 23. In appeal, Ld. CIT(A) confirmed the addition, with the following observation: “7. Ground no 6 is against addition of Rs. 1,10,00,000 as unexplained cash receipt. The appellant entered into an MOU to develop a land parcel. The assessee claimed that he received Rs. 1,10,00,000 in cash from Shri. Prabhatsingh Attaji Thakpre as part of the MoU. However, the appellant could neither produce proof of cash receipt nor the payer in person as requested by the AO. The AO also found that Thakor Pratapsingh Aataji (PAN-ACRPT8500B) has not filed any return of income and the creditworthiness of the cash creditor is not proved. The appellant argued that merely because the other party was not filing Return it could not be concluded that the receipt from him was not explained and was appellants unexplained income and it is not the onus of the assesse to explain the source of source. The appellant relied on the judgment of Supreme Court in the case of CIT vs Orissa Corporation 159 ITR 78. In this case Rs.1,50,000 was given by individuals who were income tax filers and hence not squarely applicable to appellant's case. However, in a later decision of Supreme Court in the case of NRA Iron & Steel Pvt. Ltd, 2019 SCC OnLine SC 311, it was held that, the authorities below have erroneously held that merely because the assessee had filed all the primary evidence, the onus on the Assessee stood discharged. The lower appellate authorities failed to appreciate that the investor companies which had filed income ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 12– tax returns with a meagre or nil income had to explain how they had invested such huge sums of money in the Assesse Company - Respondent. Clearly the onus to establish the credit worthiness of the investor companies was not discharged. The entire transaction seemed bogus, and lacked credibility. The Court/Authorities below did not even advert to the field enquiry conducted by the AO which revealed that in several cases the investor companies were found to be non-existent, and the onus to establish the identity of the investor companies, was not discharged by the assessee. The appellant stated that the cash payment is received from a business partner or investor as per MoU. In above decision, the Supreme Court reiterates that even if the amount is received through banking channels, the recipient has to prove creditworthiness of investor. In the instant case cash was received from a non-filer. Respectfully following the guidance of Supreme Court, it is hereby held that as long as the creditworthiness of a payer or creditor stands disproved the burden of proof of the appellant is not discharged. Hence the addition u/s 69A is sustained and ground no 6 is dismissed.” 24. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A) confirming the addition made in the hands of the assessee. 25. On going through the facts of the instant case and in light of the arguments put forth by the Counsel for the assessee, we observe that the Joint Development deal with Shri Prabhatsingh Attaji Thakore did not materialize and the land development in terms of the MOU never took place. Further, we were also informed that the money so statedly received by the assessee from Shri Prabhatsingh Attaji Thakore was also never returned back by the assessee. Although, the confirmation of Shri Prabhatsingh Attaji Thakore was placed on record, however, in our considered view, this itself does not prove the genuineness of the transaction and nor does it prove the creditworthiness of the party. Shri Prabhatsingh Thakore had not filed return of income for the impugned year under consideration and nothing has been brought on record to show the creditworthiness of Shri Prabhatsingh Attaji Thakore to advance such substantial amount to the assessee. Accordingly, we find no infirmity in the order of Ld. CIT(A) so as to call for any interference. ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 13– 26. In the result, Ground No. 4 of the assesee’s appeal is dismissed. Ground No. 5: Ld. CIT(A) erred in confirming addition of Rs. 49,99,900/- in respect of sale of shares under Section 69A of the Act. 27. The brief facts in relation to this ground of appeal are that during the course of assessment, the Assessing Officer observed that assessee had sold 4,99,900 shares of Balsam Enterprise Pvt. Ltd. to M/s. Fincruise Credit Services Pvt. Ltd. Notably at the time of sale of such shares, the assessee was the main Director of both the companies and was also the Chairman of Fincruise Credit Services Pvt. Ltd. Regarding, the availability of cash with M/s. Fincruise Credit Services Pvt. Ltd., the assessee was requested to furnish copy of cash book as proof of source of cash payment, towards the aforesaid purchase transaction. However, the assessee failed to provide any supporting documents and accordingly, the Assessing Officer was of the view that source of cash receipt of Rs. 49,99,900/- is not proved. The Assessing Officer noted that the said transaction was carried out on 25.10.2016 and the assessee had shown cash receipts of Rs. 49,99,900/- on 25.10.2016, against sale of shares of Balsamn Enterprise Pvt. Ltd. However, on verification of the cash book for the period, the Assessing Officer observed that no such cash receipts were reflecting in the cash book. Therefore, the cash book submitted by the assessee was found to be unreliable. Further, the Assessing Officer noted that the assessee also failed to furnish copy of cash book of Fincruise Credit Services Pvt. Ltd. for the impugned period and therefore, the availability of cash with the said company was also not proved by the assessee. Accordingly, in light of the above facts, the Assessing Officer was of the view that a sum of Rs. 49,99,900/- was liable to be treated as unexplained income in the hands of the assessee. ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 14– 28. In appeal, Ld. CIT(A) confirmed the addition in the hands of the assessee with the following observations: “8. Grounds 7, 8 and 9 are against the addition of Rs:49,99,900 as unexplained income. The appellant had sold 4,99,990 shares of Balsam Enterprise Pvt. Ltd to Fincruise Credit Services Pvt Ltd. It was very unusual that share transaction was conducted in cash. The sale was off market and the appellant was director of the purchasing company. So the assessing officer asked for cash book of the company as proof of cash transactions. The appellant claimed that there was corresponding entry of payment in the audited books of purchaser company. However there is no mention of cash payment. As per hank statement the appellant had received Rs.1,50,00,000 from Fincruise Credit Services Pvt Ltd through banking channels on 16.12.2016 - the share sale was on 25.10.2016. On an earlier occasion the assessee had issued D.Ds of Rs.1,00,00,000/- in the name of two directors of the company. Apparently, Rs.1,00,00,000 received from Fincruise Credit Services Pvt Ltd was this Rs. 1,00,00,000 plus sale proceeds of shares. The appellant could not produce the cash book of the company to show separate cash payment of Rs. 49,99,900. The sale of shares would have happened but there is nothing to show that the appellant received cash as sale proceeds. Hence grounds 7, 8 and 9 are dismissed.” 29. Before us, the Counsel for the assessee placed reliance on the confirmation filed by M/s. Fincruise Credit Services Pvt. Ltd. towards cash payment on purchase of shares from the assessee. Further, the Counsel for the assessee submitted that all evidences regarding transaction of shares viz. Shares transfer Form, audited accounts of the purchaser company etc. were furnished, and that there is no doubt that such sale of shares were made by the assessee, in lieu of cash of Rs. 49,99,990/-. Therefore, this addition is liable to be deleted. 30. On going through the facts of the instant case, we are of the considered view that the assessee has failed to furnish the creditworthiness of M/s. Fincruise Services Pvt. Ltd. and there is nothing on record to show that M/s. Fincruise Services Pvt. Ltd. paid an amount of RS. 49,99,990/- to the assessee in cash. The assessee despite being given several opportunities, did not produce cash book of the purchaser company to show separate cash payment of Rs. 49,99,990/-. Further, in absence of ITA No. 1232/Ahd/2024 Jagdish Pethalji Chavda (Individual) vs. ITO Asst.Year –2017-18 - 15– cash book of M/s. Fincruise Services Pvt. Ltd. it is also not possible to ascertain whether the purchaser company had availability of cash at the relevant time to make such share purchase in cash, as stated by the assessee. Accordingly, keeping in view the fact of assessee’s case, we find no infirmity in the order of Ld. CIT(A) so as to call for any interference. 31. In the result, Ground No. 5 of the assessee’s appeal is dismissed. 32. In the combined result, the appeal of the assessee is partly allowed. This Order is pronounced in the Open Court on 21/03/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 21/03/2025 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 1. Date of dictation 20.03.2025 2. Date on which the tyed draft is placed before the Dictating Member 20.03.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 21.03.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 21.03.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 21.03.2025 7. Date on which the file goes to the Bench Clerk 21.03.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… "