PRAGJIBHAI PARSHOTAMBHAI PATEL,NAVSARI V. INCOME TAX OFFICER, WARD-4, NAVSARI

ITA 858/SRT/2024

AI Insights

The case involves Pragjibhai Parshotambhai Patel, the appellant, who contested several additions made to his income by the Income Tax Officer, Ward-4, Navsari, for the Assessment Year 2014-15. The additions included Rs.10,00,000 for an alleged difference in the opening cash balance, Rs.6,58,538 as unexplained cash credit from sundry debtors, and Rs.2,08,293 invoking sections 50C/43CA of the Income-tax Act, 1961. The Tribunal heard the arguments and evidence presented by both parties and found that the additions were not substantiated by the Revenue, leading to the decision to allow the appeal and delete the additions.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831716 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 12-08-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Unexplained cash credit; Sale consideration of property below Jantri Value
• Section: 44AD

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No. 858/SRT/2024 (Assessment Year: 2014-15) Pragjibhai Parshotambhai Patel, B-28, Ayodhyanagar, Vijalpore, Navssari-396450 [PAN : AOBPP 7320 R] Vs. Income Tax Officer, Ward-4, Navsari (Appellant) .. (Respondent) Appellant represented by : Shri P.M. Jagasheth, CA Respondent represented by: Shri Ashish Kumar, Sr DR Date of Hearing 21.01.2026 Date of Pronouncement 23.01.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the assessee against the order dated 12.06.2024 passed by the Ld. Addl/JCIT(A)-1, Delhi (hereinafter referred to as the “Ld. CIT(A)”), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) for Assessment Year 2014-15. 2. The assessee has raised multiple grounds of appeal challenging … (i) addition of Rs.10,00,000/- on account of alleged difference in opening cash balance, (ii) addition of Rs.6,58,538/- treated as unexplained cash credit received from sundry debtors, and (iii) addition of Rs.2,08,293/- made by invoking section 50C/43CA of the Act. Printed from counselvise.com ITA No. 858/SRT/2024 Pragjibhai Parshotambhai Patel Vs. ITO Asst. Year : 2014-15 - 2– 3. The brief facts of the case are that the assessee is engaged in business of trading in agricultural land/plots and declared income on presumptive basis u/s 44AD of the Act. The case was selected for limited scrutiny. During assessment proceedings, the Assessing Officer made the impugned additions, which were confirmed by the Ld. CIT(A). 4. We have heard the rival submissions and perused the material available on record. 5. As regards the addition of Rs.10,00,000/- on account of difference in opening cash balance, we find that the assessee had explained that the difference arose due to a clerical/typographical error while filing the return of income for the preceding year. The cash balance was sought to be supported by past agricultural and business income. It is also an undisputed fact that the assessee has declared income under section 44AD and was not maintaining regular books of account. No material has been brought on record before us by the Revenue to establish that the impugned amount represented unexplained money of the assessee. Therefore, the addition of Rs.10,00,000/- is unsustainable and is directed to be deleted. 6. With regard to the addition of Rs.6,58,538/- treated as unexplained cash credit, we observe that the amount represents recovery from sundry debtors arising out of business transactions. It was submitted that these amounts also form part of the receipts for computation of profits u/s 44AD of the Act during the year. The explanation of the assessee has not been disproved by the Assessing Officer with any cogent evidence. Accordingly, the addition of Rs.6,58,538/- is also directed to be deleted. 7. As regards the addition of Rs.2,08,293/- made by the Assessing Officer by applying section 50C/43CA of the Act, we note that the property sold was held as Printed from counselvise.com ITA No. 858/SRT/2024 Pragjibhai Parshotambhai Patel Vs. ITO Asst. Year : 2014-15 - 3– stock-in-trade and the assessee had already declared income on presumptive basis. Further, the addition has been made merely on the basis of stamp duty valuation without bringing any material on record to show that the assessee had received consideration over and above the stated sale consideration. In such circumstances, the addition is not justified. Hence, the same is directed to be deleted. 8. In view of the above discussion, all the additions made by the Assessing Officer and confirmed by the Ld. CIT(A) are deleted. Accordingly, all the grounds raised by the assessee are allowed. 9. In the result, the appeal of the assessee is allowed. This order is pronounced in the open Court on 23.01.2026 Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Surat; Dated 23/01/2026 btk 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 , अिधकरण अपीलीय आयकर , /DR,ITAT, Surat, 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Surat Printed from counselvise.com "