MASTER HANDLOM HOUSE,AHMEDABAD V. ITO, WARD 1(2)(3), AHMEDABAD, AHMEDABAD

ITA 1561/AHD/2025

AI Insights

The case involves Master Handlom House, which appealed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi. The appeal was concerning the confirmation of an addition of Rs.96,85,000 made under Section 69A of the Income-tax Act, 1961, for the Assessment Year 2017-18. The primary contention was that the appellant firm had been dissolved on 12.04.2010 and had no legal existence during the relevant assessment year. The appellant argued that the cash deposits were explained and accounted for in the books of a proprietary concern continued by Mr. Asif Jafarbhai Mansuri under the same trade name. The tribunal found that the partner had used the firm's account for continuing the business and thus required substantiation of the business activities through detailed documentation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783538 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 08-08-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: VIPUL GOHIL
• Keywords: Business income

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER I.T.A. No. 1561/Ahd/2025 (Assessment Year: 2017-18) Master Handlom House, 11-32, Maharana Paratap Complex, V S Hospital, Ellisbridge, Ahmedabad-380006 [PAN : AAKFM 9839 K] Vs. Income Tax Officer, Ward 1(2)(3), Ahmedabad (Appellant) .. (Respondent) Assessee by : Shri Vipul Gohil, CA Revenue by: Shri Abhijit, Sr DR Date of Hearing 03.11.2025 Date of Pronouncement 04.11.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT : This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as \"CIT(A)\" for short) dated 23.05.2025 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as \"the Act\" for short], for Assessment Year (AY) 2017-18. 2. The grounds of appeal raised by the Assessee are as follows:- “The Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs.96,85,000/- made under Section 69A of the Income-tax Act, 1961 in the hands of the appellant firm, without appreciating that the appellant firm was dissolved on 12.04.2010 and had no legal existence during the relevant assessment year, and further failed to consider that the cash deposits were duly explained and accounted for in the books of the proprietary concern of Mr. Asif Jafarbhai Mansuri, who had continued the business in his individual capacity under the same trade name.” Printed from counselvise.com ITA No. 1561/Ahd/2025 Master Handlom House Vs. ITO Asst. Year : 2017-18 - 2– 3. The facts reveal that the firm’s account has been utilized by the partner and the details of the accounts have been changed even in the bank. The Ld. Counsel argued that the partner, having taken over the accounts of the firm, continued business of the similar nature and used the account of the firm. 4. On the other hand, the Ld. DR argued that the partner, who has used the bank account, could not establish that the deposits are made out of business receipts. The Ld. DR argued that the assessee has absolutely failed to prove the factum of conducting of the business and receiving the money in cash by way of producing bills/vouchers/ purchase details/sales details. The Ld. DR argued that in the absence of crucial evidence of conducting of any business, the addition needs to be sustained and alternatively prayed that the factum of running of the business has to be established. 5. In these contextual facts, we deem it proper that the partner shall produce all the details of conducting of the business, by way of producing bills/vouchers/ purchase details/sales details and utilization of bank statement, failing which the partner shall be subjected to rigours of the provisions of the Act. 6. In the result, the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open Court on 04.11.2025 Sd/- Sd/- (T.R. SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 04/11/2025 **btk Printed from counselvise.com ITA No. 1561/Ahd/2025 Master Handlom House Vs. ITO Asst. Year : 2017-18 - 3– आदेश की \bितिलिप अ\u000eेिषत/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 1. Date of dictation ……Words processed by the Hon’ble VP on his PC on 03.11.2025.. 2. Date on which the typed draft is placed before the Dictating Member …….03.11.2025….. 3. Other Member……….03.11.2025………… 4. Date on which the approved draft comes to the Sr.P.S./P.S …….03.11.2025….………. 5. Date on which the fair order is placed before the Dictating Member for pronouncement ….04.11.2025…. 6. Date on which the fair order comes back to the Sr.P.S./P.S ……..04.11.2025………………. 7. Date on which the file goes to the Bench Clerk ….04.11.2025…. 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "