PALAK RAJESHKUMAR DUDHIYA,AHMEDABAD V. THE ITO, WARD-3(3)(2), AHMEDABAD

ITA 113/AHD/2025

AI Insights

This case involves an appeal by Palak Rajeshkumar Dudhiya against the order of the National Faceless Appeal Centre, Delhi, which upheld the addition of Rs. 15,00,000 to her income for the assessment year 2017-18 under section 69A read with section 115BBE of the Income Tax Act. The addition was made on the grounds that the cash deposits made during the demonetization period were unexplained. The assessee argued that these deposits were from legitimate sources, including withdrawals from another bank account. The Tribunal examined the evidence provided, including bank statements and cash books, and concluded that the assessee had sufficiently explained the source of the deposits, thus allowing the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 313927 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N. J. VYAS
• Assessee Lawyers: M.S. CHHAJED
• Keywords: Principle of natural justice
• Section: 142(1)

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before Shri Suchitra Kamble, Judicial Member Palak Rajesh Kumar Dudhiya, 7 Nilkanth Bunglows Prahladnagar, Ahmedabad-380015, Gujarat PAN: AORPD3838E (Appellant) Vs The Income Tax Officer, Ward-3(3)(2), Ahmedabad (Respondent) Assessee by: Shri M.S. Chhajed, A.R. Revenue by: Shri N.J. Vyas, Sr. D.R. Date of hearing : 19-03-2025 Date of pronouncement : 05-05-2025 आदेश/ORDER This is an appeal filed against the order dated 18-11- 2024 passed by National Faceless Appeal Centre, Delhi for assessment year 2017-18. 2. The grounds of appeal are as under:- “1. The order passed by the Ld. CIT(A) is against the law, equity and principle of natural justice. 2. The Ld. CIT(A) has erred in law in upholding the addition u/s 69A of the Act to the extent of Rs. 15,00,000/-. 3. The Ld. CIT (A) has erred in not allowing VC hearing inspite of specific request made by appellant. ITA No. 113/Ahd/2025 Assessment Year 2017-18 I.T.A No. 113/Ahd/2025 Palak Rajeshkumar Dudhiya, A.Y. 2017-18 2 4. The Ld. CIT(A) has erred in law and on facts in upholding the invoking of section 115BBE of the Act when transaction are occurred prior to insertion of provision on statute. 5. The appellant craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal.” 3. The assessee filed return of income for assessment year 2017-18 on 19-08-2017 at total income of Rs. 6,44,560/- along with computation of income. The return of income was processed u/s. 143(1) of the Income Tax Act. The assessee is an individual and claimed to have earned income from interest income. The case was selected for limited scrutiny for the reason “cash deposit during demonetization period”. Accordingly, notice u/s. 143(2) of the Act was issued on 24-09-2018 which was served on the assessee. Thereafter, notice u/s. 142(1) was issued on 11- 01-2019 and 12-10-2019. The assessee did not apply to the notice and therefore penalty notice u/s. 272(A)(1)(d) of the Act was issued. The Assessing Officer observed that the assessee made a cash deposit to Rs. 15,00,000/- during the period of demonetization in the bank account with Indian Overseas Bank. In response to the show cause notice dated 04-11-2019, the assessee furnished written submission, bank statement, cash book in support of the source of cash deposit made during demonetization. The Assessing Officer observed that the cash deposit was made on 16-11-2016 was Rs. 3,00,000/- was deposited on 18-11-2016 during the period of demonetization. The assessee submitted that she made withdrawal from her bank account with Kalupur Co- I.T.A No. 113/Ahd/2025 Palak Rajeshkumar Dudhiya, A.Y. 2017-18 3 operative Bank which was subsequently deposited in her bank with Indian Overseas bank during demonetization period. The assessee did not furnish cash book for entire year, bank account statement for the year under consideration and has only given written cash book for the month of Nov, 2016 and statement of Kalupur Co-operative Bank account. The Assessing Officer made addition of Rs. 15,00,000/- u/s. 69A r.w.s. 115BBE of the Act treating the same as assessee’s un-explained money. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The ld. A.R. submitted that the assessee has already given the details related to cash deposits are out of the cash withdrawals from Kalupur Co-operative bank and the subsequent deposit of the said amount with Indian Overseas bank. The ld. A.R. submitted that from the demonetization period i.e. 09-11-2016 to 30-12-2016, the assessee deposited cash of Rs. 15,00,000/- in the account held with Indian Overseas Bank and Rs. 85,000/- in account held with Kalupur Co-operative bank. The ld. A.R. submitted that section 115BBE has been introduced in Act as a result of the Taxation Laws (2nd Amendment) Act 2016 on 15-12-2016 and therefore the transaction occurred prior to introduction of section 115BBE will not be coming under the purview of section 115BBE of the Act. The ld. A.R. submitted that the assessee has explained all the details I.T.A No. 113/Ahd/2025 Palak Rajeshkumar Dudhiya, A.Y. 2017-18 4 and hence the Assessing Officer as well as CIT(A) was not justified in confirming the addition. The ld. A.R. submitted that the assessee was having the opening cash balance as on 09-11-1996 of Rs. 15,62,500/- and the opening cash balance was Rs. 5,22,000/-. The ld. A.R. further submitted that the Assessing Officer has not raised any query regarding utilization of funds of the assessee during the assessment proceedings and that is why the assessee was not required to explain as to how cash withdrawal in earlier years or earlier days was utilized by the assessee. The ld. A.R. submitted that the deposit into the bank account cannot be added u/s. 69A of the Act as deposited into bank account does not fall within the definition of money, bullion and jewellry. The ld. A.R. relied upon the synopsis filed during the hearing of the case. 6. The ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant materials available on record. From the perusal of the documents, it cannot be seen that the bank statement held with Indian Overseas bank the assessee has given the details from December, 2015 therein the assessee is depositing the amount to the extent of Rs. 6,90,000/-, Rs. 1,48,000, Rs. 46,000/- and on the different dates the assessee is withdrawing as well the amounts. The bank statement of the assessee Kalupur Co-operative bank is also reflected from Sep, 2015 and from that period up till 2017 I.T.A No. 113/Ahd/2025 Palak Rajeshkumar Dudhiya, A.Y. 2017-18 5 the assessee has given the details of withdrawals as well as the subsequent deposits on 29th April, 2016 and on 24th May, 2011, the assessee has withdrawn Rs. 5,00,000/- each on these two dates and thus, in May, 2016, was having the cash of Rs. 10,00,000/-. Subsequently, the assessee was also having cash of Rs. 2,00,000/- from 1st Feb, 2016 as well as, if the same is tallied or co-related with the bank statement of Indian Overseas Bank, the assessee was having cash balance of Rs. 15,62,500/- in hand and therefore the trail of cash deposits during the period of demonetization has been explained by the assessee before the Assessing Officer as well before the CIT(A). Therefore, the Assessing Officer was not right in making the addition u/s. 69A of the Act. The appeal of the assessee is allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 05-05-2025 Sd/- (Suchitra Kamble) Judicial Member Ahmedabad : Dated 05/05/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / 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, I.T.A No. 113/Ahd/2025 Palak Rajeshkumar Dudhiya, A.Y. 2017-18 6 उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "