MOHAMMAD ISMAIL HAJI SHEIKH ABDULLAH,YAVATMAL V. ITO WARD -2, YAVATMAL

ITA 209/NAG/2024

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The case involves Mohammad Ismail Haji Sheikh Abdullah, an individual engaged in travel services, who faced an addition of Rs 30,70,100 to his income for the assessment year 2017-18 due to unexplained cash deposits during the demonetization period. The Assessing Officer (AO) issued notices under section 142(1) of the Income Tax Act, 1961, which were allegedly not properly served. The AO completed the assessment under section 144, adding the unexplained deposits to the assessee's income. The first appellate authority (CIT(A)) granted partial relief, accepting the explanation for Rs 20,00,000 of the deposits but sustaining the addition of Rs 10,00,000. The Tribunal, after considering the facts and circumstances, decided to grant further relief by reducing the addition to Rs 15,35,500.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474268 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Assessee Lawyers: NARESH JAKHOTIA
• Section: 142(1); 205; 69; 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER SMC MATTER ITA no.209/Nag./2024 (Assessment Year : 2017–18) Mohammad Ismail Haji Sheikh Abdullah Reliable Tower, Aditya Nagar Sahara Park, Pusad 445 205 Yavatmal PAN – ABVPH6901M ……………. Appellant v/s Income Tax Officer Ward–2, Yavatmal ……………. Respondent Assessee by : Shri Naresh Jakhotia Revenue by : Shri Abhay Y. Marathe Date of Hearing – 13/02/2025 Date of Order – 21/03/2025 O R D E R Captioned appeal by the assessee is emanating from the impugned order dated 30/01/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2017–18. 2. The assessee has raised following grounds:– “1. The assessee Mohammad Ismail Haji Sheikh Abdullah is a deals in Travell service. 2. The AO issued notices U/s 142(1) of the Income Tax Act 1961 but not served to assessee .nor any e mail id to appellant. 2 Mohammad Ismail Haji Sheikh Abdullah ITA no.209/Nag./2024 3. The Ld. AO passed order with addition of Rs 3070100/- and in appeal relief given of Rs 2000000/- balance of Rs 1070100/- is taxable as per order of Income Tax Department dated 30/01/2024. 4. In this order not mention of our full submission I e balance sheet, registration certificate of vehicle. 5. In order Ground no 1& 2 mention that During assessment proceedings the appellant failed to explain the source of cash deposit whereas the order passes u/s 144 of the income tax act. Due to notice not properly served.” 3. The only issue that I need to adjudicate in this appeal is, whether or not the Assessing Officer was justified in making addition under section 69 of the Income Tax Act, 1961 (\"the Act\") at ` 34,53,862, on account of unexplained cash deposit during demonetization. 4. The assessee is an Individual who has not filed his return of income for the present year under consideration. The assessee, during the demonetization period, deposited ` 30,70,000, including cash deposited of ` 10,00,000, in old currency. The Assessing Officer issued statutory notices, however, the assessee did not respond to it. Hence, the Assessing Officer obtained bank statement of the account in which the assessee deposited cash and completed the assessment under section 144 of the Act determining total income at ` 30,70,000, which resulted in issuance of demand of ` 34,53,862, by making addition under section 69 of the Act, which was added to the total income of the assessee. Consequent upon issuance of such assessment order passed by the Assessing Officer, the assessee preferred appeal before the first appellate authority. 5. The learned CIT(A) granted part relief to the assessee holding that the assessee could explain the source of ` 20 lakh only through bank entries, 3 Mohammad Ismail Haji Sheikh Abdullah ITA no.209/Nag./2024 hence the learned CIT(A) accepted ` 20 lakh and the balance of ` 10 lakh was sustained. Accordingly, the learned CIT(A) granted relief of ` 20 lakh out of ` 30,70,100. 6. I have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below. Keeping in view the overall facts and circumstances of this case and to meet the ends of justice, I find it appropriate to grant 50% relief to the assessee i.e., 50% of ` 30,70,100 which comes to ` 5,35,500. Balance addition of 50% i.e., ` 5,35,500, is hereby confirmed. The Assessing Officer is directed to re– compute the computation of income accordingly. The assessee gets part relief. 7. In the result, assessee’s appeals stands partly allowed. Order pronounced in the open Court on 21/03/2025 NAGPUR, DATED: 21/03/2025 Sd/- V. DURGA RAO JUDICIAL MEMBER Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "