MASENGJI KALAJI SOLANKI,BANASKANTHA V. THE ITO, WARD-3, PALANPUR

ITA 1939/AHD/2024

AI Insights

The case involves Masengji Kalaji Solanki, who appealed against the orders of the Income Tax Officer and the Commissioner of Income-tax (Appeals) regarding the addition of Rs. 59,01,400 to his income as unexplained cash deposit for the Assessment Year 2011-12. The Assessing Officer had reopened the case and issued a notice under Section 148 of the Income-tax Act, 1961, following which the assessee was unable to satisfactorily explain the source of the cash deposits. The CIT(A) upheld the Assessing Officer's decision, leading to the appeal before the Tribunal. The Tribunal examined the business activities of the assessee, the nature of the deposits, and the lack of consideration of the provided bank statements and other documents by the lower authorities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47212 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVAN LIMBASIYA
• Assessee Lawyers: JIMI PATEL
• Section: 148; 143(3); 250; 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No. 1939/Ahd/2024 (Assessment Year: 2011-12) Masengji Kalaji Solanki, Gunj Bazar, Bhabhar Highway, Wav, Banaskantha, Gujarat-385575 [PAN : CMTPS 5453 C] Vs. The Income-Tax Officer, Ward-3, Palanpur (Appellant) .. (Respondent) Appellant by : Shri Jimi Patel, AR Respondent by: Shri Kavan Limbasiya, Sr DR Date of Hearing 12.03.2025 Date of Pronouncement 09.04.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (in short ‘the CIT(A)’) dated 23.09.2024 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as \"the Act\" for short], for Assessment Year (AY) 2011-12. 2. The Assessee has taken following grounds of appeal:- “01. Notice issued u/s 148 datd.24.03.2018 is bad in law as the same is issued without acquiring valid jurisdiction and accordingly, order passed u/s 143(3) r.w.s 147 dated.30.12.2018 and demand notice issued u/s 156 are bad in law for want of issuance of valid notice u/s 148. ITA No.1939/Ahd/2024 Masengji Kalaji Solanki Vs. ITO Asst. Year : 2011-12 - 2– 02. Ld. CIT(A) erred in law and on facts in confirming the addition of Rs.59,01,400/- being alleged unexplained cash deposit u/s 69A of the Act without appreciating facts and law of the case properly.” 3. The brief facts of the case are that the assessee was stated to be engaged in the business of sale of milk and trading of cattle during the year under consideration. The Assessing Officer observed that the assessee had made a cash deposit of Rs. 59,01,400/- in the State Bank of India for the year under consideration, for which the case was reopened by the Assessing Officer after issuing a notice u/s 148 of the Act on 24.03.2018. In response to the reopening notice, the assessee filed a return of income on 12.11.2018, declaring a total income of Rs. 1,47,520/-. During the re-assessment proceedings, various notices were issued to the assessee requesting details and explanations regarding the cash deposits. Since the Assessee failed to provide the required explanations, leaving the source of the cash deposit unexplained, the cash deposit of Rs. 59,01,400/- was treated by the Assessing Officer as unexplained money u/s 69A of the Act and was added to the total income of the assessee. 4. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who dismissed the appeal of the assessee. 5. Aggrieved, the assessee is now in appeal before the Tribunal. ITA No.1939/Ahd/2024 Masengji Kalaji Solanki Vs. ITO Asst. Year : 2011-12 - 3– 6. Before us, Ld. AR submitted that the Assessing Officer failed to consider the details provided by the assessee during the assessment proceedings, more specifically the bank statement and the statement of accounts, which were furnished by the assessee, were not considered while passing the assessment order. He contended that the notice issued by the Assessing Officer under section 148 Act dated 24.03.2018 was issued without acquiring valid jurisdiction. It was argued that since the issuance of this notice was not in accordance with the provisions of the Act, the order dated 30.12.2018 passed u/s 143(3) r.w.s. 147 was not sustainable in the eyes of the law. On merits of the addition made by the Assessing Officer, Ld. AR submitted that the assessee was engaged in the business of being a commission agent for cattle trading, acting as an intermediary between sellers and buyers. Ld. AR submitted that all the amounts deposited into the assessee’s bank account during the relevant period were proceeds from cattle sales and the commission earned thereof. He argued that the Assessing Officer had made the assessment without properly considering the nature of his business and the return of income filed. The Ld. AR, therefore, urged that, on the merits of case also, the cash deposits in assessee’s bank account should not be considered as income and requested that the same be deleted. 7. The Ld. DR, on the other hand, relied on the orders of the authorities below. He submitted that the assessee could not furnish any evidence being a cattle trader and also no evidence of purchase ITA No.1939/Ahd/2024 Masengji Kalaji Solanki Vs. ITO Asst. Year : 2011-12 - 4– bills, sales bills, invoices/vouchers, GSTIN, cash book, cash flow statement etc. have been furnished. It was argued that the assessee had not furnished any sale bills or details of work orders or details of the traders who placed orders with him, to substantiate his claim. The Ld. DR submitted that mere filing of affidavits without furnishing further details viz. identity of the persons, trading activity of persons, ITR copies, their books of accounts and assessee ledger in their accounts etc. cannot prove the genuineness of the assessee’s contention. Ld. DR, therefore, contended that in the absence of the details furnished to prove that the commission income earned, the claim of the assessee cannot be ascertained and accepted. The Ld. DR submitted that the assessee has not proved any nexus between the cash deposits/cash withdrawals/transfers by explaining the transactions. He therefore argued that, with no explanation being offered by the assessee, no connection between the transactions can be established. 8. Heard both the parties and perused all the material available on record. 9. We find that the assessee has been in the business of cattle trading for years. We have gone through the bank account statement of assessee wherein the deposits and withdrawals are reflected throughout the year. The fact that the assessee is in the business of milk trading and earning of Dalali income is not in dispute. The Revenue has gone only to the issue of deposits, but there have also ITA No.1939/Ahd/2024 Masengji Kalaji Solanki Vs. ITO Asst. Year : 2011-12 - 5– been cash withdrawals which have been ignored by the Assessing Officer. The deposits have been reflected from April to end of the year so as the withdrawals, which shows a regular pattern of cash business. In the line of cattle business, it cannot be expected that the assessee maintains purchase bills, sales bills, invoices/vouchers, GSTIN, cash book, cash flow statement etc. Hence, keeping in view the peculiar facts and circumstances of the instant case, the addition made by the Assessing Officer u/s 69A of the Act cannot be sustained. 10. In the result, the appeal of the assessee is allowed. The order is pronounced in the open Court on 09.04.2025 Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 09/04/2025 btk 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 उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "