LATABEN MAHENDRAKUMAR AGRAWAL,JHALOD V. INCOME TAX OFFICER WARD 2 DAHOD, DAHOD

ITA 1426/AHD/2025

AI Insights

The case involves Lataben Mahendrakumar Agrawal, the Assessee, who appealed against the order of the Addl. Commissioner of Income Tax/JCIT (Appeals)-1, Nashik. The appeal arose from an assessment order under section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2017-18. The primary contention was regarding the addition of Rs. 4,90,000 as unexplained money deposited during the demonetization period, which was taxed at a rate of 60% under section 115BBE of the Act. Additionally, an ad-hoc disallowance of 10% on miscellaneous expenses was contested. The Tribunal's decision addressed these issues, leading to a partial allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790399 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 12-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Period of limitation; Time period of passing order
• Section: 143(3); 234B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member Lataben Mahendrakumar Agrawal Mandir Faliya, Jhalod-389180, Gujarat, India PAN: ADVPA4441R (Appellant) Vs Income Tax Officer Ward-2, Dahod, Dahod (Respondent) Assessee Represented: Ms. Vidhi V. Pandya, C.A. Revenue Represented: Shri Rohit Aasudani, Sr. D.R. Date of hearing : 13-11-2025 Date of pronouncement : 25-11-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 31.03.2025 passed by the Addl. Commissioner of Income Tax/JCIT (Appeals)-1, Nashik 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 the Assessment Year 2017-18. ITA No: 1426/Ahd/2025 Assessment Year: 2017-18 Printed from counselvise.com I.T.A No. 1426/Ahd/2025 A.Y. 2017-18 Page No Lataben Mahendrakumar Agrawal vs. ITO 2 2. The registry has noted that there is delay of 42 days in filing the above appeal. The assessee explained that due to change in Representative, appeal could not be filed within the limitation period and requested to condone the delay. Considering the submission of the assessee, the delay of 42 days in filing the appeal is hereby condoned. 3. The Grounds of Appeal raised by the assessee are as follows: 1) Addition on account of unexplained money of Rs. 4,90,000/- u/s 69A of the Income Tax Act, 1961: On facts and in the circumstances of the case and in law, Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in making addition of Rs. 4,90,000/- to the income of the appellant on account of cash deposits made in the bank accounts during the demonetization period and taxed the same u/s 115BBE of the Act at the rate of 60%. 2) Ad-hoc disallowance of Rs. 69,218 being 10% of total miscellaneous expenses of Rs. 6,92,175/-: On facts and in the circumstances of the case and in law. Ld. CIT(A) by confirming order passed by the Ld. AO has grossly erred in making ad-hoc disallowance of Rs. 69,218/-being 10% expense of total miscellaneous expenses of Rs. 6,92,175/-. 3) Initiating penalty proceeding u/s 271AAC of the Income Tax Act, 1961: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. 271AAC of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. 4) Levy of interest u/s 234B of the Income Tax Act, 1961: On facts and in the circumstances of the case in law, the Ld. AO has grossly erred in levying interest u/s 2348 of the Act when no such interest is leviable. The interest levied by the Ld. AO should be deleted. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any grounds of appeal at the time of or before the hearing of the appeal. Printed from counselvise.com I.T.A No. 1426/Ahd/2025 A.Y. 2017-18 Page No Lataben Mahendrakumar Agrawal vs. ITO 3 4. Brief facts of the case is that the assessee is an individual carrying on business of wholesale trading of grain in the name of Ankit Traders. For the Asst. Year 2017-18, assessee filed its Return of Income on 28-10-2017 disclosing total income of Rs.2,29,400/-. The return was taken up for scrutiny assessment as there was cash deposit during demonetization period. The assessee explained that the nature of business and cash deposits made even the previous years. The assessee also submitted break-up of month-wise sales and cash deposits. However the assessing officer not satisfied with the reply, made an addition of Rs.4,90,000/- u/s. 69A of the Act and also made adhoc disallowance of 10% on trade, shop and vehicle expenses and demanded tax thereon. 5. Aggrieved against the same, assessee filed an appeal before Ld. Addl.CIT(A) who was confirmed the same without considering the explanation offered by the assessee. 6. Ld. Counsel submitted before us that the total sales for the financial year is Rs.3,94,26,893/- out of which cash sales is Rs.3,86,49,581/- wherein net profit of Rs.2,97,745/-. Similarly for the previous Asst. Year 2016-17, the total sales is Rs.2,51,54,835/- in which cash sales is Rs.2,60,42,921/- wherein net profit of Rs.2,04,632/-. The above figures are not disputed by the assessing officer. It is a normal practice in the trade of grains cash deposit which is followed by the assessee regularly. Thus the addition made on account of cash deposit of Rs.4,90,000/- during demonetization period is not justifiable, therefore the same is liable to be deleted. Printed from counselvise.com I.T.A No. 1426/Ahd/2025 A.Y. 2017-18 Page No Lataben Mahendrakumar Agrawal vs. ITO 4 6.1. Regarding Ground No. 2 on Misc. expenses adhoc disallowance on trade, shop and vehicle expenses, the same is restricted to 5%, since all necessary details are not filed before the lower authorities. 6.2. Regarding Ground Nos. 3 & 4 namely initiating levy of penalty u/s. 271AAC and charging of interest u/s. 234B are consequential in nature and does not require separate adjudication. 7. In the result, the appeal filed by the Assessee is partly allowed for statistical purpose. Order pronounced in the open court on 25-11-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 25/11/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / 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 अपीलȣय अͬधकरण, अहमदाबाद Printed from counselvise.com "