JIGAR PATEL,AHMEDABAD V. THE ITO, WARD-5(3)(1), AHMEDABAD

ITA 604/AHD/2025

AI Insights

The case involves Jigar Patel, who appealed against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which confirmed the addition of Rs.49,55,101 as unexplained cash credit to his income for the Assessment Year 2018-19. The Income Tax Officer had initially treated this amount as unexplained cash credit under section 68 of the Income Tax Act, following a scrutiny of the assessee's return, which showed an unusually high agricultural income in a year marked by significant natural calamity (Gujarat floods). The Tribunal found no merit in the assessee's arguments and upheld the addition, agreeing with the assessment officer's conclusion that the reported income was implausible given the circumstances.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669240 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B.P SRIVASTAVA
• Keywords: Unexplained cash credit

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER I.T.A. No.604/Ahd/2025 (Assessment Year: 2018-19) Jigar Patel, 3 Charotar Patel Co-op. HSG Soc. Opp. Swaminarayan Temple, Maninagar, Ahmedad-380006. [PAN : AFNPP3003 J] Vs. The Income Tax Officer, Ward-5(3)(1), Ahmedabad (Appellant) .. (Respondent) Appellant by : None Respondent by: Shri B.P Srivastava, Sr DR Date of Hearing 02.06.2025 Date of Pronouncement 26.06.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal is filed by the Assessee against the appellate order dated 04.03.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2018-19. 2. The assessee has raised the following ground of appeal: 1. The Learned CIT(A) erred in law and on facts in confirming addition of Rs.49,55,101/- made by the learned ITO (Assessment Unit) as unexplained cash credit u/s.68 of the Act. The Addition confirmed by the learned CIT(A) NFAC deserves to be deleted. The same be deleted now. 2. The Learned CIT(A) has erred in properly appreciating the facts, various submissions, explanations and information submitted by the appellant during the assessment proceedings which ought to have been considered in proper perspective before passing the impugned order. 3. The order passed by the Learned CIT(A) NFAC is invalid and bad in law. It be so held now. 4. The appellant crave to add, amend, alter, delete, change or modify any or all grounds of appeal before or at the time of hearing. ITA No. 604/Ahd/2025 Jigar Patel. Vs. ITO Asst. Year : 2018-19 - 2– 3. The brief facts of the case are that assessee e-filed his return of income on 31.07.2018 for the AY 2018-19 declaring total income at Rs.5,48,790/- and agriculture income of Rs.75,54,376/-. The case was selected for scrutiny under CASS under selection criteria “Agricultural Income”. In response to several statutory notices issued to the assessee to furnish details about the agricultural activities, the assessee’s representative Shri Shailesh C Parikh & Co. CAs submitted reply. The AO on examination of the entire case, came to the conclusion that for the year under consideration which witnessed widespread calamity i.e. Gujarat 2017 floods, the agricultural income cannot be more and the reply given by the assessee was nothing but a concocted story. The AO completed the assessment u/s.143(3) r.w.s 143(3A) & 143(3B) of the Act dated 18.03.2021, considering Rs.25,99,275/- as the agriculture income was held as income from the unexplained sources shown as agricultural income and Rs.49,55,101/- (i.e. Rs.75,54,376 – Rs.25,99,275) was treated as unexplained cash credit u/s.68 of the Act. 4. Aggrieved assessee filed an appeal before the Ld.CIT(A), who dismissed the appeal of the assessee by observing as under: “…Having considered the factual matrix of the case, I find that during the year under consideration, the assessee had shown net agricultural income of Rs.75,54,376/- which was a three fold jump from the previous year’s agricultural income. It has been observed by the AO that the assessee has got 91 Vighas of agricultural land. Gujarat Agricultural Land ceiling Act 1960 does not apply to him. But before the AO, the assessee did not give details of crops grown and sought adjournments. However, he filed a computerized ledger extracts of CASH Agricultural income which gave an impression that throughout the year, the assessee grew same types of produce – vegetables of bitter gourd, bottle gourd, brinjal, lemon, tomato chilly. The said ledger shows sale of agricultural produce almost on a daily basis and of almost same degree. The AO required the assessee to explain the reasons as to how the net agricultural income of the previous year 2017-18 has grown three times to Rs.75,54,376/- from the corresponding figure of the preceding fiscal of Rs.25,99,275/- and other details. The assessee submitted that the rise in agricultural income was due to reduction in agricultural expenses from 76.6% in the FY 2016-17 to 43.94% in the relevant previous year. He attributed this reduction to cutting down cost, experiences gathered etc. the submissions of the assessee did not find favour with the AO. The AO found that during the year under consideration, the state of Gujarat witnessed heavy floods ITA No. 604/Ahd/2025 Jigar Patel. Vs. ITO Asst. Year : 2018-19 - 3– causing damage to crops. I find great force in the argument of the AO that three times hike in net agricultural income in a year and that too, in the year of natural calamity was unbelievable and unsupported by documents. No proof in this regard was submitted by the assessee during the assessment or appellate proceedings. The photos of vegetables submitted during the assessment proceedings do not rebutted the findings of the AO and this ground of appeal remain unsubstantiated. In the circumstances, I do not have any reason but to sustain the well reasoned and speaking order of the AO estimating the agricultural income of the assessee at Rs.25,99,275/- and holding the balance income of Rs.49,55,101/- (Rs.75,54,376 – Rs.25,99,275) as income from the unexplained sources shown as agricultural income and added u/s.68 of the Act…” 5. On going through the record before us and after examining the matter on merits, we hold that the explanation of the assessee that there has been hike in agricultural income by three times in the current year and expenses have gone down from 76% to 43% cannot be held to be reasonable, logical and acceptable. We are in agreement with the Ld. CIT(A)’s observation in confirming the addition on merits of the case. 6. In the result, the appeal of the assessee is dismissed. The order is pronounced in the open Court on 26.06.2025 Sd/- Sd/- (T.R. SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 26.06.2025 MV आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "