KIRANBHAI RAMANBHAI PATEL,NADIAD V. THE ITO, ANAND CIRCLE, ANAND

ITA 1193/AHD/2024

AI Insights

This case involves an appeal by Kiranbhai Ramanbhai Patel against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs. 10,94,500 as unexplained money under section 69A read with section 115BBE of the Income Tax Act, 1961, for the assessment year 2017-18. The addition was based on cash deposits made during the demonetization period, which the Assessing Officer treated as the assessee's deemed income. The Tribunal found that the assessee had sufficient cash on hand, withdrawn from bank accounts, to explain the deposits, and that the lower authorities had not properly considered the assessee's submissions and evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315663 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVAN LIMBASIYA
• Assessee Lawyers: BANDISH SOPARKAR; PARIN SHAH
• Keywords: Revised return; Salary income; Tax effect; Initiation of penalty proceedings; Deemed to accrue or arise in india

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Kiranbhai Ramanbhai Patel, C/O Chhotabhai Jethabhai Patel & Co. CJ House, Mota Pore, Nadiad PAN: ACXPP5099H (Appellant) Vs The ITO, Anand Circle, Anand (Respondent) Assessee by: Shri Bandish Soparkar, A.R. & Shri Parin Shah, A.R. Revenue by: Shri Kavan Limbasiya, Sr. D.R. Date of hearing : 16-04-2025 Date of pronouncement : 13-05-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member: This is an appeal filed against the order dated 13-05- 2024 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2017-18. 2. The grounds of appeal are as under:- “1. The order passed by lower authorities is bad in law and required to be quashed. 2. Ld. NFAC erred in law and on facts in dismissing appeal ignoring submission of the appellant. ITA No. 1193/Ahd/2024 Assessment Year 2017-18 I.T.A No. 1193/Ahd/2024 Kiranbhai Ramanbai Patel, A.Y. 2017-18 2 3. Ld. NFAC erred in law and on facts in confirming addition of Rs. 10,94,500/- u/s 69A ignoring fact that appellant has sufficient cash on hand balance withdrawn from bank accounts during the year and accordingly, NFAC ought to have consider submission and ought to have granted the relief. 4. Both lower authorities failed to bring on record any evidence that appellant expended cash withdrawn from bank and accordingly there is no case for addition. 5. Ld. NFAC erred in upholding invocation of section 115BBE of the Act. 6. Charging of Interest u/s 234A,234B,234C & 234D are unjustified. 7. Initiation of penalty proceedings u/s 270A is unjustified. Total tax effect Rs. 11,39,237/-” 3. The assessee filed return of income for assessment year 2017-18 on 24-07-2017 declaring total income of Rs. 1,49,52,380/-. The assessee filed revised return of income on 05-01-2019 declaring total income at Rs. 1,49,52,380/- after claiming deduction of Rs. 2,05,484/- under Chapter VI-A of the Act. The case was selected for security under CASS to examine cash deposit during demonetization period. The statutory notices were issued to the assessee. The assessee has shown income from salary of Rs. 20,37,600/-, income from house property at Rs. 87,47,350/-, income from share in profit and loss of firms of Rs. 36,42,695/-, income from other sources under the head income from interest of Rs. 6,09,940/-, income from STCG of Rs. 47,774/- and other income of Rs. 19,245/-. In response to the statutory notices, the assessee filed various details. During the course of assessment proceedings, the Assessing Officer observed that the assessee made deposits I.T.A No. 1193/Ahd/2024 Kiranbhai Ramanbai Patel, A.Y. 2017-18 3 of Rs. 10,94,500/-with Bank of Baroda during demonetization period which was withdrawn by the assessee from the same bank account from 07-04-2016 to 05-11-2016. After taking cognizance of the assessee’s reply, the Assessing Officer made addition of Rs. 10,94,500/- as unexplained money u/s. 69A r.w.s. 115BBE of the Act by treating it to be assessee’s deemed income. 4. Being aggrieved by the assessment order, the assessee filed appeal before CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. A.R. submitted that the assessee had deposited the SBN cash out of the cash withdrawn by the assessee between the 01-04-2016 and 05-11-2016 for various household expenses and has also given the details as to how the sale amount has been spent. The assessee has also shown closing amount at hand balance as on 31- 03-2017. The ld. A.R. submitted that the amount withdrawn amount is commensurate with the income offered. Thus, the A.R. submitted that the Assessing Officer as well as CIT(A) has not taken cognizance of the assessee’s evidences and submissions. 6. The ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. We have heard both the parties and perused the materials available on record. It is pertinent to note from I.T.A No. 1193/Ahd/2024 Kiranbhai Ramanbai Patel, A.Y. 2017-18 4 the bank account statement as well as from the details filed by the assessee, are related to withdrawals from the bank account for the period 01-04-2016 to 05-11-2016 and the same is also mentioned in the assessment order. In fact, the closing cash at hand balance was also mentioned by the assessee and has not been questioned by the Assessing Officer which is 5.75 lakhs. Thus, the assessee has given the explanation related to the cash deposits including the sources of cash. Hence, the addition made by the Assessing Officer and confirmed by CIT(A) is not justified. The appeal of the assessee is allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 13-05-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 13/05/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "