MUKESHKUMAR NATHULAL SHAH,SURAT V. ITO WARD -3(3)(1), SURAT

ITA 1268/SRT/2024

AI Insights

The case involves Mukeshkumar Nathulal Shah, the appellant, who appealed against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which dismissed his appeal on an ex-parte basis. The primary issues in the appeal were the additions made under Section 68 of the Income Tax Act, 1961, concerning unsecured loans and unexplained cash credits. The assessee argued that the CIT(A) had not considered the evidence and submissions provided, leading to a dismissal that was perceived as predetermined. The tribunal, after reviewing the submissions and evidence, decided to restore the matter to the CIT(A) for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708757 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY UKE
• Assessee Lawyers: RAMESH MALPANI
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (HYBRID HEARING) BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER I.T.A. No. 1268/SRT/2024 (Assessment Year: 2017-18) Mukeshkumar Nathulal Shah, A-8, Ravi Society, Hira Baug, Varachha Road, Surat-395006 Vs. Income Tax Officer, Ward-3(3)(1), Surat [PAN No.ACTPS6403J] (Appellant) .. (Respondent) Appellant by : Shri Ramesh Malpani, CA Respondent by: Shri Ajay Uke, Sr. DR Date of Hearing 08.07.2025 Date of Pronouncement 18.07.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 23.12.2024 passed for A.Y. 2017-18. 2. The assessee has raised the following grounds of appeal: “(1) That on the facts and in the circumstances of the case as well as in law, Id. CIT (A), NFAC, Delhi [CIT (A)] has erred in dismissing the appeal of the appellant on ex-parte basis, without considering the submission of appellant in the 'statement of facts' and without considering the evidences furnished to the AO and relied before Id. CIT (A) also as per clause '11' of the appeal memo in Form No. '35' and which were available for consideration on ITBA portal. Ld. CIT (A) has clearly erred in law in dismissing all the grounds of appeal without considering above submission and evidences. (2) That on the facts and in the circumstances of the case as well as in law, ld. CIT (A) has erred in upholding the addition of Rs. 46,59,737/- (correct summation ITA No.1268/Srt/2024 Mukeshkumar Nathulal Shah vs. ITO Asst. Year – 2017-18 - 2– figure is Rs. 41,59,737/-) u/s 68 of the I. T. Act, 1961 (the Act) in respect of genuine and duly proved unsecured loans, by wrongly dismissing the appeal of the appellant without considering the submission and evidences filed/ relied before him as above. Addition so made is grossly wrong and unjustified. Appellant prays for deleting the same. (3) That on the facts and in the circumstances of the case as well as in law, ld. CIT (A) has erred in upholding the addition of Rs. 11,75,606/- (correct summation figure is Rs. 9,05,607/-) u/s 68 of the Act in respect of credit balance of five creditors, by wrongly dismissing the appeal of the appellant without considering the submission and evidences filed/ relied before him as above. Addition so made is grossly wrong and unjustified. Appellant prays for deleting the same. (4) Without prejudice to generality of above grounds, that the ld. CIT (A) has erred even not considering and deciding the arithmetical mistakes in the figures of additions pointed out in the statement of facts as well as grounds of appeal. This shows the pre-determined manner for dismissing the appeal, without even reading the statement of facts and grounds of appeal. (5) That the ld. CIT (A) has also erred in dismissing the ground of appeal against charging of tax at higher rate of 60% + surcharge u/s 115BBE of the Act, which is a legal ground. (6) That on the facts and circumstances of the case as well as in law, the interest charges by Id. A.O. u/s. 234B/234D of the Act is wrong and unjustified and Id. CIT (A) has erred in upholding the same by dismissing the appeal of the appellant on ex-parte basis. (7) Appellant craves leave to add, alter, delete or modify any ground of appeal.” 3. The brief facts of the case are that the assessee is engaged in the business of retail trade of hardware and sanitary items and also earning rent and interest income. During the course of assessment, the Assessing Officer added a sum of Rs. 46,59,737/- under Section 68 of the Act on account of unsecured loans received by the assessee from six lenders, for which the assessee could not explain the source thereof. Further, the Assessing Officer also made an addition of Rs. 11,75,606/- by treating the balances of five creditors as unexplained cash credit under Section 68 of the Act. ITA No.1268/Srt/2024 Mukeshkumar Nathulal Shah vs. ITO Asst. Year – 2017-18 - 3– 4. In appeal, Ld. CIT(A) issued various notices of hearing, which remained uncomplied with. Accordingly, Ld. CIT(A) dismissed the appeal of the assessee on account of non-appearance with the following observations: “3.8 Considering the above discussion and facts, it is clear that the appellant assessee is not pursuing its case on merits. In pursuance of its appeal the appellant assessee did not file any documents in support of its claim that why addition of Rs. 58,35,343/- is not sustainable. The appeal cannot be decided merely on the basis of grounds of appeals and statement of facts as no corroborative evidence of any kind has been submitted by the appellant assessee. Based on these observations the appeal filed by the appellant assessee is dismissed and the order of the AO is confirmed.” 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A), dismissing the appeal of the assessee. Before us, the Counsel for the assessee submitted that Ld. CIT(A) had passed the order in a hurried manner without giving adequate opportunity of hearing to the assessee. The Counsel for the assessee submitted that all evidences regarding the unsecured loans from six parties including their names, copies of ITR etc. were furnished before the Assessing Officer and also before the Ld. CIT(A), but the same were not considered by Ld. CIT(A) and the appeal of the assessee was dismissed in a summary manner without affording adequate opportunity of hearing. The Counsel for the assessee submitted that account confirmations of parties alongwith ITR acknowledgement, computation of income, their respective balance sheets, bank statements and cash summary of various lenders were also submitted by the assessee before the Assessing Officer and also before the Ld. CIT(A), but the same were completely omitted to be considered while dismissing the appeal of the assessee. The Counsel for the assessee ITA No.1268/Srt/2024 Mukeshkumar Nathulal Shah vs. ITO Asst. Year – 2017-18 - 4– submitted that assessee has a good case on merits and all additions in the hands of the assessee are liable to the deleted, considering the assessee’s set of facts. 6. On going through the facts of the assessee’s case and the Paper Book filed by the giving details of source of unsecured loans, details of creditors appearing in the assessee’s books, we are of the considered view that in the interests of justice would be served if the matter is restored to the file of Ld. CIT(A) for de-novo consideration. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced under proviso to Rule 34 of ITAT Rules, 1963 on 18/07/2025 Sd/- Sd/- (BIJAYANANDA PRUSETH) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 18/07/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, सूरत / DR, ITAT, Surat 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, सूरत/ ITAT, Surat 1. Date of dictation 16.07.2025 2. Date on which the typed draft is placed before the Dictating Member 16.07.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 17.07.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 18.07.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 18.07.2025 7. Date on which the file goes to the Bench Clerk 18.07.2025 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…………………………………… "