RAJNIKANT VITHALDAS PATEL,AHMEDABAD V. THE INCOME TAX OFFICER, WARD-3(2)(4) NOW WARD 3(2)(1), AHMEDABAD

ITA 1084/AHD/2024

AI Insights

The case involves Rajnikant Vithaldas Patel, who operates an 'Amul Parlour' engaged in retail trading of milk and milk products. The Income Tax Officer (ITO) added Rs. 27,37,800 to Patel's income for the assessment year 2017-18, considering it unexplained cash deposit during the demonetization period. The Commissioner of Income Tax (Appeals) upheld this addition due to the assessee's non-appearance. Patel appealed to the Income Tax Appellate Tribunal, which found that the assessee had sufficiently explained the source of the cash deposits as business income and reversed the earlier decisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473698 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Kale Khan Moharnmad Hanif v CIT [1963] 50 ITR 1 (SC), Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K MANGLA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.1084/Ahd/2024 (Assessment Year: 2017-18) Rajnikant Vithaldas Patel, Rajninat Vithaldas Patel, ADC Bank, Katosan Road, Sunvala Dettroj Rampura, Ahmedabad-382145 Vs. Income Tax Officer, Ward-3(2)(4), Ahmedabad Now Ward-3(2)(1) [PAN No.DDTPP4321Q] (Appellant) .. (Respondent) Appellant by : None Respondent by: Shri V K Mangla, Sr. DR Date of Hearing 18.12.2024 Date of Pronouncement 22.01.2025 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)”), ADDL/JCIT (A)-2, Gurugram vide order dated 27.03.2024 passed for A.Y. 2017-18. 2. The assessee has taken the following grounds of appeal:- “1. The Ld. National Faceless Appeal Centre, Delhi (NFAC) is bad and erroneous in law and/or on facts. 2. The Ld. National Faceless Appeal Centre, Delhi (NFAC) has grievously erred in law and/or on facts in misinterpreting the various facts and documentary evidences and disregarding the various submission made and documentary evidences produced during the course of the assessment Proceedings. 3. The Ld. National Faceless Appeal Centre, Delhi (NFAC) has erred in making an addition of Rs. 27,37,800/- as income of the appellant u/s. 69A of the Income Tax ITA No. 1084/Ahd/2024 Rajnikant Vithaldas Patel vs. ITO Asst.Year –2017-18 - 2– Act. It is submitted that on the facts and circumstances of the case it is totally illegal, incorrect, unjustified and the same be deleted. 4. The Ld. National Faceless Appeal Centre, Delhi (NFAC) has violated of principles of natural justice as the order was passed u/s 143(3) of the Act without giving reasonable opportunity of being heard to the assesse. 5. The learned NFAC erred in applying the provisions of section 115BBe to the transaction. It is submitted that on the facts and circumstances of the case it is totally illegal, incorrect, unjustified and the same be deleted. 6. The Order passed by the learned NFAC is bad in law and contrary to the provisions of law and facts. It is submitted that the same be held so now. 7. Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final hearing of appeal.” 3. The brief facts of the case are that the assessee is individual and engaged in the business of retail trading in milk and milk products from running “Amul Parlour” and also earning “income from other sources”. As per details available on record, Assessing Officer observed that assessee had deposited huge cash during the impugned assessment year in his bank account. The assessee filed reply dated 01.10.2019 giving explanation with respect to cash deposited in his bank account held by the assessee with Bank of Baroda, Ahmedabad. However, the Assessing Officer did not accept the contention of the assessee and added a sum of Rs. 27,37,800/- as unplanned cash deposited during demonetization period and added the same to the total income of the assessee. 4. In appeal before Ld. CIT(A), he dismissed the appeal of the assessee on account of non-appearance and confirmed the order passed by the Assessing Officer, with the following observations: “It is pertinent to state that to decide this appeal in timely manner several notices/ communications through ITBA portal were sent to the appellant as noted above. Hence, in view of the aforesaid non-compliance of the instant appeal on the part of the ITA No. 1084/Ahd/2024 Rajnikant Vithaldas Patel vs. ITO Asst.Year –2017-18 - 3– appellant, the instant appeal adjudicated and disposed of, as under, ex-parte, primarily on the basis documentation available on record. Further, it is settled law that where the assessee fails to discharge the onus by producing cogent evidence and explanation, the AO would be justified in making the addition back into the income of assessee as held in Kale Khan Moharnmad Hanif v CIT [1963] 50 ITR 1 (SC) and Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC). This onus on the tax payer has neither been discharged at the assessment stage nor at the appellate stage. Therefore, I find no infirmity in the addition made by the Ld. AO. In this view of the matter, addition of Rs. 27,37,800/- is confirmed. Consequently, the grounds of the appellant are dismissed.” 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). 6. On going through the case records, we observe that the assessee is a vendor and running a milk booth “Amul Parlour” and is engaged in trading of mild and milk products. On going through the Profit & Loss Account of the assessee, it is observed that it had made total sale of Rs. 9,40,80,047/- for the impugned year under consideration (Page 2 of the Paper Book). Further, we observe that the accounts of the assessee have also been duly audited for the impugned year under consideration. Further, on perusal of details provided by the assessee, it is observed that the assessee had made sale of “milk” amounting to Rs. 9,45,45,464/- and “paneer” (milk product) amounting to Rs. 2,34,583/- during the year under consideration. Out of total sales of Rs. 9,47,80,047/- made by the assessee during the impugned year under consideration, the assessee had made cash deposits of Rs. 4,13,36,147/- during this year out of such sales. Further, during the demonetization period, the assessee had made cash deposits amounting only to Rs. 76,20,300/-. On going through the case records, we are of the considered view that the assessee has been able to explain the source of cash deposited by him, during ITA No. 1084/Ahd/2024 Rajnikant Vithaldas Patel vs. ITO Asst.Year –2017-18 - 4– demonetization period as arising out of sale of milk and paneer from his “Amul Parlour”. Further, on perusal of the assessment order, we are of the considered view that the Assessing Officer has not given any basis or reasoning for rejecting the explanation submitted by the assessee. Accordingly, in light of the above observations, the appeal of the assessee is allowed. 7. In the result, the appeal of the assessee is allowed. This Order is pronounced in the Open Court on 22/01/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 22/01/2025 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, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 20.01.2025 2. Date on which the typed draft is placed before the Dictating Member 21.01.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 21.01.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 22.01.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 22.01.2025 7. Date on which the file goes to the Bench Clerk 22.01.2025 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…………………………………… "