RATANSHI,RAJKOT V. INCOME TAX OFFICER, MORBI

ITA 171/RJT/2024

AI Insights

The case involves Ratanshi Gandubhai Bhut, an individual with income from agricultural activities, who appealed against the order of the Commissioner of Income-tax (Appeals) confirming the addition of Rs. 10,79,000 as unexplained money under section 69A read with section 115BBE of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer following the discovery of substantial cash deposits in the assessee's bank accounts during the demonetisation period. The Tribunal noted that additional evidences submitted by the assessee were not examined by the Assessing Officer or the CIT(A), leading to a violation of the principles of natural justice. Consequently, the Tribunal remanded the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780649 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 20-03-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV; LD.
• Assessee Lawyers: KALPESH PAREKH; LD
• Keywords: Set aside; Additional evidence; Principle of natural justice
• Section: 143(3); 139

Judgement Text

"ITA No.171/Rjt/2024 (AY-17-18) Ratanshi G Bhut 1 आयकर अपीलȣय अͬधकरण, राजकोट Ûयायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBERAND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं/.ITA No.171/RJT/2024 Ǔनधा[रण वष[ / Assessment Year: (2017-18) Ratanshi Gandubhai Bhut C/o K.P. Parekh & Co. Office No.113-114, J.P. Towers, Tagore Road, Nr. Bhakti Nagar Station Plot, Rajkot-360 002 बनाम/ Vs. Income Tax Officer, Ward-4, Morbi, Income Tax Office, Aayakar Vibhag, J.K. Chamber, National Highway 8A, Lalpar, Morvi- 363 642 èथायीलेखासं /. जीआइआरसं /. PAN/GIR No BJHPB 2473 D (अपीलाथȸ/Assessee) .. (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Kalpesh Parekh, Ld. AR राजèव कȧ ओर से/Revenue by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR सुनवाई कȧ तारȣख /Date of Hearing : 07/08/2025 घोषणा कȧ तारȣख /Date of Pronouncement : 09/10/2025 आदेश/Order Per Dr. Arjun Lal Saini, A.M Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2017-18, is directed against the order passed under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) by the National Faceless Appeal Centre (NAC) Delhi/Commissioner of Income-tax (Appeals) [in short ‘Ld.CIT(A)’], dated 29.01.2024, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Act, dated 04.11.2019. 2. The grounds of appeal raised by the assessee are as follows: “1.The assessment order passed u/s 143(3) of the Act is bad in law. 2. The learned Assessing Office has erred in law as well as on facts in making the huge addition of Rs.10,79,000/- u/s 143(3) of the Act on account of cash deposited in bank account and the same is treated as unexplained money u/s 69A r.w.s. 115BBE of the Income Tax Act, 1961. The learned CIT(A) has erred in confirming the same and Printed from counselvise.com ITA No.171/Rjt/2024 (AY-17-18) Ratanshi G Bhut 2 dismissing the appeal of the assessee on based on conclusion that the evidences with regards to cash deposit in bank account by the assessee.” 3. Succinctly, the factual panorama of the case is that assessee before us is an Individual and having income from agriculture activity. The assessee filed his return of income u/s 139 of the income-tax Act, 1961, vide acknowledgement number 499879880250318 on 25/03/2018 declaring total income of Rs. Nil/- and also agriculture income of Rs. 2,06,609/-. The case was selected for limited scrutiny under CASS for the examination of reason \"cash deposit during demonstration period\". During the assessment proceedings, the assessing officer noticed that assessee has deposited cash in the bank account during the demonetisation period to the tune of Rs. 10,79,000/-. Therefore, assessing officer, issued a show cause notice to the assessee to explain the source of cash deposit in the bank account during the demonetisation period. In response to notices issued, the assessee filed his submission through E-proceedings facility. The assessee vide online submission dated 08.10.2018 submitted copy of Agriculture Income-Expenditure A/C, Balance Sheet & computation only which was verified & placed on records by the assessing officer. During demonetization period, the assessee has deposited cash amounting to Rs. 10,79,000/- (by way of SBNs) in his various bank accounts. During the course of assessment proceedings, the assessee was specifically asked to explain the source of cash deposited in his bank accounts but the assessee failed to establish with evidence the source of cash deposited during demonetisation period. Since, the assessee failed to establish the source of cash deposited during demonetisation, therefore, Rs. 10,29,000/- was added back to the total income of the assessee as unexplained money u/s 69A r.w.s.115 BBE of the Act. 4. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the learned CIT(A), who has confirmed the action of the assessing officer, therefore, assessee is in appeal before us. Printed from counselvise.com ITA No.171/Rjt/2024 (AY-17-18) Ratanshi G Bhut 3 5. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee. The Ld.Counsel for the assessee submitted that cash book for AY 2016-17 and cash book of AY 2017-18. The assessee also submitted the documents relating agricultural land holding, such as Form-7/12 and 8A respectively to prove the ownership of agricultural land, these documents were not in the file of the assessing officer. The assessee also submitted the sale bills of agricultural produce, which were not produced before the assessing officer. The assessee submitted confirmation letters from whom assessee sold agricultural produce, the same were not submitted before AO. 6. By way of alternative argument, Ld. Counsel for the assessee submitted that entire cash deposited in the bank accounts should not be treated as net profit of the assessee. Therefore, a fair estimate may be done in the case of assessee and profit element may be estimated. 7. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue relied on the findings of the assessing officer. 9. We have considered submissions of both the parties and we note that assessee has submitted before us paper book, which contains the additional evidences which were not submitted before the assessing officer. The learned Counsel for the assessee argued before the Bench based on the documents and evidences filed in the paper, which are additional evidences, which were claimed to be submitted only to the learned CIT(A), who has not called the remand report from the assessing officer. Therefore, alternative argument advanced by the learned Counsel for the assessee that profit element may be estimated in the hands of the assessee, cannot be accepted because assessee submitted before us additional evidences, which were pressed by the assessee during the course of hearing and which were not examined by the assessing officer. The list of additional evidences are reproduced below: Printed from counselvise.com ITA No.171/Rjt/2024 (AY-17-18) Ratanshi G Bhut 4 Printed from counselvise.com ITA No.171/Rjt/2024 (AY-17-18) Ratanshi G Bhut 5 10.Therefore, we note that documents at serial number 2 (a) to (j ) were submitted during the appellate proceedings, before the learned CIT(A) and assessing officer has not examined these additional evidences, as the learned CIT(A) did not send these additional evidences to the assessing officer for his examination and for calling the remand report on such additional evidences.This is pertinent for the reason that even if the additional evidences are admitted but opportunity is not given to the assessing officer, and if the appeal is allowed by the CIT(A) taking cognizance of the additional evidences, then, in that circumstances there has been violation of principle of natural justice by not giving opportunity to assessing officer thereby violating the provision contained in Rule 46A of the Rules. The Tribunal, if found correct, without going into the merits of the case, would simple set aside the matter to the file of the lower authorities. Therefore, based on these facts and circumstances, we set- aside the order of CIT(A) and remand the various issues raised by the assessee in the grounds of appeal before CIT(A) for fresh consideration by the assessing officer with a liberty to the assessee to prove his case by producing sufficient evidence/material to the satisfaction of the assessing officer. For statistical purposes the appeal of the assessee is allowed. 11.In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 09/10/2025 Sd/- Sd/- (DINESH MOHAN SINHA) (DR. ARJUN LAL SAINI) Æयाियक सदÖय/JUDICIAL MEMBER लेखा सदÖय/ACCOUNTANT MEMBER राजकोट /Rajkot िदनांक/ Date: 09/10/2025 By order/आदेश से , सहायक पंजीकार आयकर अपीलीय अिधकरण ,राजकोट Printed from counselvise.com "