JAYESHKUMAR JAYENDRABHAI PATEL,VADODARA V. INCOME TAX OFFICER WARD 1(3)(2), BARODA AYKAR BHAVAN, RACE COURSE, VADODARA 390007, VADODARA

ITA 2026/AHD/2024

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The case involves Jayeshkumar Jayendrabhai Patel, who was a partner in Shree Ram Cotton Ginning Factory and later engaged in a commission agent business. During the financial year, he made cash deposits totaling Rs. 45 Lakhs in his bank account, which raised suspicions leading to an assessment order under Section 143(3) of the Income Tax Act, 1961. The Assessing Officer (AO) added Rs. 5 Lakhs as unexplained money under Section 69A of the Act, which was confirmed by the Commissioner of Income Tax (Appeals). Patel appealed to the Income Tax Appellate Tribunal, which found that the additional evidence provided, including agricultural income and personal savings, was not adequately considered by the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471774 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N. J. VYAS
• Assessee Lawyers: RUSHIN PATEL
• Keywords: Additional evidence; Unexplained cash credit
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH BEFORE: DR. BRR KUMAR, VICE PRESIDENT & SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER ITA No. 2026/Ahd/2024 (Assessment Year: 2017-18) Jayeshkumar Jayendrabhai Patel Opp. Pancheswar Mahadev, Nanodi Bhagol, Dabhoi, Dist. Vadodara – 391110, Gujarat V/S Income Tax Officer Ward-1(3)(2), Baroda Aykar Bhavan, Race Course, Vadodara 390007 PAN NO. : AGQPP0029C (Appellant) (Respondent) Appellant by : Shri Rushin Patel, AR Respondent by : Shri N. J. Vyas, Sr.DR (आदेश)/ORDER Date of hearing : 17-03-2025 Date of Pronouncement : 21-03-2025 PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER: This appeal is filed by the assessee against the appellate order dated 08.11.2024 passed by the Ld. Commissioner of Income Tax (Appeals) ADDL/JCIT(A)-1, Chandigarh, National Faceless Appeal Centre (NFAC) (in short ‘CIT(A)’) arising out of the assessment order passed under Section 143(3) of the Income Tax Act, 1961, (hereinafter referred to as ‘the Act’) relating to Assessment Year 2017-18. 2. Brief facts of the case is the assessee is an individual and partner in Shree Ram Cotton Ginning Factory, a Partnership Firm, wherein he retired from this assessment year. However, he wanted to ITA No. 2026/Ahd/2024 (Jayeshkumar Jayendrabhai Patel vs. ITO) A.Y. 2017-18 2 do commission agent business, therefore, made cash deposits in bank account maintained with State Bank of India and also withdrawing cash regularly after some days of deposit of cash. The assessee deposited Rs.45 Lakhs during the financial year. The AO called for various information and held that a sum of Rs.5 Lakhs cash deposited is not from the withdrawals made by the assessee, therefore, added the same as unexplained money u/s.69A of the Act and demanded tax thereon. 3. Aggrieved against the same, the assessee filed an appeal before the Ld. CIT(A) who has confirmed the addition made by the AO. 4. Aggrieved against the appellate order, the assessee is in appeal before us raising the following Ground of appeal: “1. 1(a) Under the facts and circumstances of the case ld. CIT Appeals has erred both in law and in facts confirming cash deposit of Rs. 500000 as unexplained money. Even there is a calculation mistake. He ought to have accepted a this amount as reasonable availability of cash on hand considering the? documents submitted and family background? instead of rejecting additional evidence mechanically. (b) He has erred in confirming the action of Assessing Officer in invoking provisions of Section 115BBE of the Act and? in thereby taxing entire unexplained cash credits at 60 percentages and? levying surcharge at 25 percentages which is not applicable on above? amount? of addition made for which proper explanation is given as well as applicability of this provision for A.Y. 2017-18.? (c) Appellant craves leave to add, alter or delete any ground(s) either? before or in the course of hearing of the appeal.\" 5. Ld. Counsel for the assessee submitted before us a cash flow statement of the assessee and his father from the Asst. Years 2010-11 to 2017-18 as well as the Returns of Income filed by the parties and also amount of Rs.1,50,000/- received from his wife on 01.07.2016 out of her savings from beauty parlor business as well as agricultural income received from her parents. The assessee also submitted before ITA No. 2026/Ahd/2024 (Jayeshkumar Jayendrabhai Patel vs. ITO) A.Y. 2017-18 3 us the affidavit of agricultural lease of the lands and also bills showing sale of agricultural produce, namely, cotton. The above documents were although filed before the Ld. CIT(A), which was not considered, but confirmed the addition made by the A.O. Therefore, Ld. Counsel requested to delete the additions made by the lower authorities. 6. Per contra, Ld. Sr. DR appearing for the Revenue could not dispute the source of Rs. 5 Lakhs. 7. We have given thoughtful consideration and perused the materials available on record. Though, the assessee has filed documentary evidences for the cash deposits of Rs.5 Lacs, the source from the wife and agricultural income were not considered by the Ld. CIT(A) and confirmed the addition, which in our considered opinion, is not correct in law. Therefore, we deem it fit to delete the addition of Rs.5 Lakhs made by the lower authorities. 8. In the result, appeal filed by the assessee is allowed. Order pronounced in Open Court on 21 - 03-2025 Sd/- Sd/- (Dr. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad: Dated 21-03-2025 S. K. SINHA आदेश कì ÿितिलिप अúेिषत/Copy of the Order forwarded to : 1. अपीलाथê / The Appellant 2. ÿÂयथê / The Respondent. 3. संबंिधत आयकर आयुĉ / Concerned CIT 4. आयकर आयुĉ(अपील) / The CIT(A)- 5. िवभागीय ÿितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad ITA No. 2026/Ahd/2024 (Jayeshkumar Jayendrabhai Patel vs. ITO) A.Y. 2017-18 4 6. गाडª फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "