SOMNATH COLD STORAGE,GANDHINAGAR V. THE ITO, WARD-1, GANDHINAGAR

ITA 771/AHD/2025

AI Insights

This case involves an appeal by Somnath Cold Storage against the order of the National Faceless Appeal Centre (NFAC), Delhi, which confirmed additions made by the Assessing Officer under sections 68 and 69 of the Income Tax Act, 1961, for the assessment year 2017-18. The additions pertained to unexplained credits in the capital account and unsecured loans, totaling significant amounts. The Tribunal examined the submissions and evidence provided, including affidavits, bank statements, and agricultural income proofs of the partners, and found that the Assessing Officer had not adequately considered these during the assessment. The Tribunal's decision emphasized the need for a thorough examination of the evidence before concluding on the unexplained nature of the credits.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 828530 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Ahmedabad
• Assessment Year: misc
• Appeal Filed On: 11-04-2025
• Laws Referred To: The Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: ADJOURNMENT APPLICATION FILED
• Keywords: Unexplained cash credit; Tax effect
• Section: 69

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Somnath Cold Storage, Block No. 96(A), At. Chandrala Opp. Bus Stand Chandrala, Gandhinagar-382321 PAN: ADAFS7476F (Appellant) Vs The ITO, Ward-1, Gandhinagar (Respondent) Assessee by: Adjournment Application Filed Revenue by: Shri Abhijit, Sr. D.R. Date of hearing : 12-01-2026 Date of pronouncement : 16-01-2026 आदेश/ORDER Per Suchitra Kamble, Judicial Member: This is an appeal filed against the order dated 06-03- 2025 passed by National Faceless Appeal Centre(NFAC), Delhi for assessment year 2017-18. 2. The grounds of appeal are as under:- “1.01. That Learned C. I. T. (Appeal), Gandhinagar has erred in confirming addition made by Learned Assessing Officer of on account of addition in Capital account amounting to Rs. 2,52,80,028/- u/s.68 of The Income Tax Act, 1961. 1.02. That various reasons advanced by Learned C. I. T. (Appeal), Gandhinagar while conforming addition are contrary to the facts and circumstances of the case. ITA No. 771/Ahd/2025 Assessment Year 2017-18 Printed from counselvise.com I.T.A No. 771/Ahd/2025 Somnath Cold Storage, A.Y. 2017-18 2 1.03. Therefore, addition of Rs.2,52,80,028/-u/s 68 of The Income Tax Act, 1961 confirmed by Learned C. I. T. (Appeal), Gandhinagar deserves to be deleted. 2.01 That Learned C. I. T. (Appeal), Gandhinagar has erred in confirming addition made by Learned Assessing Officer of on account of addition on account of unsecured loan amounting to Rs. 2,50,000/- u/s. 68 of The Income Tax Act, 1961. 2.02 That various reasons advanced by Learned C. I. T. (Appeal), Gandhinagar while conforming addition are contrary to the facts and circumstancesof the case. 2.03 Therefore, addition of Rs.2,50,000/- u/s 68 of The Income Tax Act, 1961 confirmed by Learned C. I. T. (Appeal), Gandhinagar deserves to be deleted. 3.00. The appellant craves leave to add, amend, alter, edit, delete, modify any of the grounds of appeal at the time of or before final hearing of the appeal. Total Tax Effect 3,38,31,307” 3. The assessee filed return of income on 28-10-2017 declaring total income of Rs. 9,630/-. The assessee’s case was selected for scrutiny and notice u/s. 143(2) was issued on 11- 08-2018. The assessee did not comply with statutory notices and thus the Assessing Officer made addition of Rs. 34,89,500/- as unexplained cash deposits u/s 69 of the Act. The Assessing Officer also made addition of Rs. 31,30,909/- as unexplained credit in respect of unsecured loan u/s. 68 of the Act. The Assessing Officer also made addition in respect of cash account to the extent of Rs. 2,52,80,028/- as unexplained credit u/s. 68 of the Act. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. Printed from counselvise.com I.T.A No. 771/Ahd/2025 Somnath Cold Storage, A.Y. 2017-18 3 5. At the time of hearing, none appeared on behalf of the assessee and the assessee’s representative filed the adjournment application dated 18-12-2025. But from the perusal of the records, the assessee was categorically informed on 1st Oct, 2025 not to seek further adjournment which was totally ignored by the A.R. from time to time as the assessee’s representative has sought adjournment on 11-11-2025, 13-11-2025 as well as on 10-01-2026. Thus, we rejected the application of the ld. A.R. and proceeding on the basis of the assessment order and the order of the CIT(A). 6. The ld. D.R. submitted that the CIT(A) has categorically mentioned the remand report filed by the Assessing Officer during the appellate proceedings and thus, the CIT(A) has categorically mentioned that one of the partners possibly have the creditworthiness to make an investment at least on partly basis income from agriculture in assessment year 2017-18. The ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. We have heard ld. D.R. and relied upon the assessment order and the order of the CIT(A). The CIT(A) has categorically mentioned that one of the partners has the creditworthiness to make an investment and is not doubting his genuinenity as well as the creditworthiness. Beside this, the assessee submitted before the CIT(A) that the capital account of the partners, copy of affidavit by 7 partners, their bank statements as well as 7/12, proof of holding, land in support of agricultural income along with copy of return of income in case of 3 partners out of 10 partners for assessment year 2017-18 as well as copy of returns of income in case of 7 partners out of 10 partners for the Printed from counselvise.com I.T.A No. 771/Ahd/2025 Somnath Cold Storage, A.Y. 2017-18 4 assessment year 2016-17. The Assessing Officer at no point of time is disputing the identity, creditworthiness of the parties as well as genuineness of the transaction. Thus, the Assessing Officer as well as the CIT(A) cannot question the creditworthiness and genuinenity of the capital account transaction to the extent of these parties/partners. Thus, the Assessing Officer was not right in treating the same as unexplained credit u/s. 68 of the Act. As regard to unexplained cash deposits u/s. 69A and section 68 addition relating to unexplained credits amounting to Rs. 31,30,000/-, the Assessing Officer has not taken cognizance of all the 9 parties while giving remand report and the same amount was already taken into account by the CIT(A). Hence, 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 16-01-2026 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 16/01/2026 a.k. 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, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद Printed from counselvise.com "