ROSHANLAL KHICHI,AHMEDABAD V. THE ITO, WARD-6(1)(1), AHMEDABAD

ITA 501/AHD/2025

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This case involves an appeal by Roshanlal Khichi against the order of the Commissioner of Income Tax (Appeals), which confirmed additions made by the Assessing Officer under section 68 of the Income Tax Act. The additions were made on account of unexplained cash credits from sundry creditors and unsecured loans totaling \\u20b960,71,863. The Tribunal noted the assessee's non-cooperation and failure to substantiate the genuineness and creditworthiness of the creditors and loan providers during both the assessment and appellate proceedings. However, in the interest of natural justice, the Tribunal decided to provide one more opportunity to the assessee to present his case, subject to the payment of a cost due to his previous non-cooperative conduct.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774131 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2021-2022
• Appeal Filed On: 05-03-2025
• Other Referred Cases: CIT vs. BN Bhattacharya (1997) 118 ITR 461 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: DIVYANG SHAH
• Keywords: Set aside; Opportunity of being heard; Revised return; Corroborative evidences; Unexplained cash credit; Bogus purchase; Principle of natural justice; Bogus
• Section: 68; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER I.T.A. No.501/Ahd/2025 (Assessment Year: 2021-22) Roshanlal Khichi, C/o. Divyang Shah & Co., Chartered Accountants, 201, 2nd Floor, Devashish Complex, Nr. Regenta, Central Antarim Hotel, Off. C G Road, Ahmedabad-380009 Vs. Income Tax Officer, Ward-6(1)(1), Ahmedabad [PAN No.AIFPK1011N] (Appellant) .. (Respondent) Appellant by : Shri Divyang Shah, AR Respondent by: Shri Abhijit, Sr. DR Date of Hearing 10.09.2025 Date of Pronouncement 12.09.2025 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 14.02.2025 passed for A.Y. 2021-22. 2. The assessee has taken the following grounds of appeal: “1. Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) has erred in considering sundry creditor’s credit balance of Rs.43,85,469/- as an unexplained cash credit u/s. 68 of the act? 2. Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) has erred in confirming unsecured loan of Rs. 16,86,394/- as an unexplained cash credit u/s. 68 of the act? Printed from counselvise.com ITA No. 501/Ahd/2025 Roshanlal Khichi vs. ITO Asst. Year –2021-22 - 2– 3. Whether, on facts and in circumstances of the case and in law, Ld. AO has erred in issuing notice u/s. 143(2) of the act? Further, appellant craves leave to add, amend, alter or withdraw all or any ground of appeal.” 3. The brief facts of the case are that the assessee, Shri Roshanlal Khichi is engaged in scrap trading under the name M/s. Bhairavnath Scrap Traders. The assessee filed a revised return for AY 2021-22 declaring income of ₹4,25,770/-. The case was selected for scrutiny, and significant discrepancies were noted in purchases from suspicious or non-compliant suppliers. Despite multiple opportunities and notices issued by the Assessing Officer, the assessee failed to fully substantiate the genuineness and creditworthiness of sundry creditors and unsecured loan providers, and gave only incomplete submissions and further no confirmations from creditors or loan parties were filed by the assessee during the course assessment proceedings. The Assessing Officer issued notices under section 133(6) and through a Designated Verification Unit which showed that the assessee had furnished non-existent addresses. Accordingly, the Assessing Officer made additions of ₹43,85,469/- and ₹16,86,394/- under section 68 of the Income Tax Act (Act) as unexplained cash credits from sundry creditors and unsecured loans, respectively, amounting to ₹60,71,863/-. 4. In appeal, CIT(Appeals) dismissed the appeal of the assessee on account of non-appearance, with the following observations: “5. Submissions: At the outset, it is to mention that appellant has remained non-responsive throughout the appellate proceedings and did not furnish any detail/evidence with regard to merits of the case and only sought adjournments on different dates. During the appellate proceedings, sufficient number of opportunities have been granted to the appellant on 23^)4,2024, Printed from counselvise.com ITA No. 501/Ahd/2025 Roshanlal Khichi vs. ITO Asst. Year –2021-22 - 3– 21.06.2024, 15.07.2024, 26.07.2024, 14.08,2024, 29.10.2024 and on 24.01.2025, but, appellant has not responded to any of these notices. That makes it amply clear that appellant is not participating in the appellate proceedings. In such scenario, I am inclined to decide the appeal on the basis of material available on record. Here, reference is made to the decision of Hon'ble Supreme Court in the case of CIT vs. BN Bhattacharya (1997) 118 ITR 461 (SC), in which the Hon'ble Apex Court while dealing with the issue of persuasion of appeal has stated that- \" Preferring an appeal means more than formally filling it but effectively pursuing it\". 6. Decision: Impugned assessment order, grounds of appeal, submissions of the appellant, all have been considered. Ground wise discussion and decision of the appeal is placed in ensuing paragraphs. 7 Ground Nos. 1 and 2 relate to additions made on account unexplained creditors and unsecured loans. In the impugned assessment order, AO has highlighted deficiency in documents in respect of both the issues i.e. unsecured loans and unexplained creditors. It was responsibility of the appellant to remove such deficiencies during the appellate proceedings in order to establish the case in its favour. The appellant, during the assessment proceedings and in the first appeal proceedings, has failed to discharge the onus cast on it, to prove claims with supporting evidences. The charging section 68 lays onus on appellant to establish credit worthiness of source and genuineness of transaction and but the same remains unsubstantiated. In view of non-compliance, I am constrained to confirm the findings of the assessing officer. Ground Nos. 1 and 2 stand rejected. 8. Ground no.3 is regarding issuance of notice u/s 143(2) of the Act. It is clear from the assessment order that credible information was available with Department regarding bogus purchases and hence the case was selected for scrutiny. In order to provide appellant an opportunity to produce evidence on which the appellant may rely in support of the return of income, it is a statutory requirement to issue notice u/s 143(2) of the Act. Therefore, notice u/s 143(2) was rightly issued. Ground No.3 stands dismissed. 9. In the result, appeal stands dismissed.” 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A) dismissing the appeal of the assessee. The Counsel for the assessee submitted that in the interest of justice, the matter may be restored to the file of Assessing Officer for de-novo consideration. In view of the above facts and circumstances of the case, and considering that the assessee Printed from counselvise.com ITA No. 501/Ahd/2025 Roshanlal Khichi vs. ITO Asst. Year –2021-22 - 4– had failed to substantiate the genuineness and creditworthiness of sundry creditors and unsecured loans during the assessment proceedings despite multiple opportunities, and also remained non-cooperative before the CIT(Appeals), we are of the considered opinion that the assessee deserves one more opportunity to present its case in the interest of natural justice. However, having regard to the non-cooperative conduct of the assessee before the tax authorities, we deem it appropriate to impose a cost of ₹10,000/-, which shall be deposited by the assessee with the Prime Minister’s Relief Fund within 30 days from the date of this order. Accordingly, the impugned assessment order and appellate order are hereby set aside, and the matter is restored to the file of the Assessing Officer for de-novo adjudication after providing due opportunity of being heard to the assessee and after examining all evidence that may be placed on record. The assessee is directed to appear before the Assessing Officer and fully cooperate in the proceedings. 6. In the result, the appeal of the assessee is allowed for statistical purposes. This Order is pronounced in the Open Court on 12/09/2025 Sd/- Sd/- (NARENDRA P. SINHA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 12/09/2025 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 Printed from counselvise.com "