KAMLESH VISHANDAS MIRANI,AHMEDABAD V. WARD 5(3)(2), AHMEDABAD, AHMEDABAD

ITA 1986/AHD/2024

AI Insights

The case involves Kamlesh Vishandas Mirani, the appellant, who contested the order of the CIT(Appeals) regarding the addition of Rs. 11,98,000 as unexplained money under section 69A of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer due to substantial cash deposits during the demonetization period, which the assessee failed to satisfactorily explain. The CIT(Appeals) dismissed the appeal due to the appellant's non-compliance and lack of substantive arguments. The Tribunal found that the matter required reconsideration, noting the appellant's claim that the deposits were from business income and were recorded in the books of accounts.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712790 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.P. MAKWANA
• Assessee Lawyers: RAJENDRA SINGHAL
• Keywords: Set aside; Business income
• Section: 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.1986/Ahd/2024 (Assessment Year: 2017-18) Kamlesh Vishandas Mirani, 303/A, Dev-181, Sterling City, Nr. Tulip International School, Bopal, Ahmedabad-380015 Vs. Income Tax Officer, Ward-5(3)(2), Ahmedabad [PAN No.AWEPM8083F] (Appellant) .. (Respondent) Appellant by : Shri Rajendra Singhal, AR Respondent by: Shri B. P. Makwana, Sr. DR Date of Hearing 15.07.2025 Date of Pronouncement 29.07.2025 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 23.09.2024 passed for A.Y. 2017-18. 2. The assessee has raised the following grounds of appeal: “1. The order passed by the ld. Commissioner of Income-tax, National Faceless Appeal Center (NFAC) Rajkot-1 is bad in law, invalid. 2. The ld. CIT(A) erred on facts as also in law in dismissing the appeal without giving adequate opportunity as well as in deciding the appeal without considering the facts as available before him. 3. The ld. CIT(A) erred on facts as also in law in upholding the addition made u/s. 69A of the Act of Rs. 11,98,000/-, though the relevant transactions are duly recorded in the books of account maintained for the year under consideration. Printed from counselvise.com ITA No. 1986/Ahd/2024 Kamlesh Vishandas Mirani vs. ITO Asst.Year –2017-18 - 2– 4. The ld. CIT(A) erred on facts as also in law in upholding aforesaid addition made u/s. 69A of the Act made on presumption and conjecture, ignoring the audited books of accounts. 5. The Appellant prays that the addition of Rs. 11,98,000/- made u/s. 69A of the Act may kindly be deleted. 6. The grounds of are without prejudice to one another. 7. Your Honour’s appellant craves leave to add, to amend, alter, vary and / or withdraw any one or more grounds of appeal on/or before hearing of appeal.” 3. The brief facts of the case are that the assessee filed return of income for A.Y. 2017-18 declaring income of Rs. 8,41,360/- which was processed under section 143(1) of the Income Tax Act (Act). The case of the assessee was selected for complete scrutiny, however, the assessee failed to comply to notices under sections 143(2) and 142(1) of the Act. Upon scrutiny of case records, the Assessing Officer noted that the assessee had made substantial cash deposits of Rs. 11,98,000/- during the demonetization period in three bank accounts held by him, which he could not satisfactorily explain despite being given multiple opportunities of hearing. Since no credible source or documentary evidence was furnished by the assessee, the Assessing Officer proceeded to add the entire amount of Rs. 11,98,000/- as unexplained money under section 69A of the Act. The addition was taxed at 60% under section 115BBE of the Act, and penalty proceedings under section 271AAC were initiated. 4. In appeal, CIT(Appeals) noted that during the appellate proceedings, multiple notices under section 250 of the Act were issued to the assessee, but there was no compliance or request for adjournment sought by the assessee. This consistent non-appearance indicated that the assessee was not interested in pursuing the appeal. CIT(Appeals) by placing reliance on various judicial Printed from counselvise.com ITA No. 1986/Ahd/2024 Kamlesh Vishandas Mirani vs. ITO Asst.Year –2017-18 - 3– precedents stressing on the necessity of effective pursuit of appeals, held that the assessee had failed to demonstrate any objection against the assessment order or intention to contest it meaningfully. Accordingly, the additions and disallowances made by the Assessing Officer were confirmed, and the appeal of the assessee was dismissed by CIT(Appeals) due to total non-compliance and absence of any submissions from the assessee. 5. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. Before us, the Counsel for the assessee submitted that the deposits made by the assessee during demonetization period were sourced out of business income of the assessee. It was submitted that the assessee is running a small business and that such deposits were sourced out of the business activities carried out by the assessee. It was submitted that the Assessing Officer erred in not appreciating that relevant transactions were duly recorded in the books of accounts, regularly maintained by the assessee. 6. In response, the Ld. DR placed reliance on the observations made by the Assessing Officer and Ld. CIT(Appeals) in their respective orders. 7. We have heard the rival contentions and perused the material on record. During the course of hearing, the learned Counsel for the assessee submitted that the cash deposits in question were made out of business income and that the assessee was engaged in small-scale trading activities. It was further submitted that the relevant transactions were duly recorded in the books of accounts regularly maintained by the assessee and that the Assessing Officer did not properly consider this aspect while making the addition. The Printed from counselvise.com ITA No. 1986/Ahd/2024 Kamlesh Vishandas Mirani vs. ITO Asst.Year –2017-18 - 4– assessee sought an opportunity to furnish necessary documentary evidence and books of accounts to substantiate the claim. Having considered the rival contentions and the material available on record, we are of the view that the matter requires reconsideration. The assessment in this case was completed ex-parte and the appeal before the CIT(Appeals) was also dismissed due to non-compliance on the part of the assessee. In the interest of justice, and to afford the assessee an opportunity to present the necessary evidence in support of the claim, we are of the considered view that the matter may be restored to the file of the Assessing Officer for de novo consideration. Accordingly, the impugned order of the CIT(Appeals) is set aside, and the matter is restored to the file of Assessing Officer for fresh adjudication after giving due opportunity to the assessee to present his case and furnish the required documentary evidence. 8. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 29/07/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 29/07/2025 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 "