VASUDEV CHOTABHAI PATEL,VADODARA V. THE INCOME TAX OFFICER, WARD-1(2)(5), VADODARA

ITA 704/AHD/2024

AI Insights

The case revolves around an appeal by Vasudev Chotabhai Patel against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs.1.53 crores to the assessee's income for the Assessment Year 2017-18. This addition was initially made by the Assessing Officer, who treated the sales made during the demonetization period as bogus and the corresponding cash deposits as unexplained income. The Tribunal examined the evidence presented, including sales registers and VAT returns, and noted that the petrol pumps were allowed to accept demonetization currency during the relevant period, which justified the increase in cash sales.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779632 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 12-04-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENKUMAR M. VASAVDA
• Assessee Lawyers: MEHUL K. PATEL
• Keywords: Business income; Bogus

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0011ायपीठ “ए“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ A ” BENCH, AHMEDABAD \u0015ी संजय गग\u001b, \u0011ाियक सद एवं अ पूण\u001b गु!ा, लेखा सद क े सम%। ] ] Before Shri Sanjay Garg, Judicial Member And Annapurna Gupta, Accountant Member आयकर अपील सं /ITA No.704/Ahd/2024 िनधा \u000fरण वष\u000f /Assessment Year : 2017-18 Vasudev Chotabhai Patel 1, Refinary Road Opp. IPCL Corporate Office At PO Undera Vadodara – 391 330 (Gujarat) बनाम/ v/s. The ITO Ward-1(2)(5) Vadodara – 390 007 \u0013थायी लेखा सं./PAN: ACPPP 2559 N (अपीलाथ(/ Appellant) ()* यथ(/ Respondent) Assessee by : Shri Mehul K. Patel, Advocate Revenue by : Shri Rajenkumar M.Vasavda, Sr.DR सुनवाई की तारीख/Date of Hearing : 15/10/2025 घोषणा की तारीख /Date of Pronouncement: 16/10/2025 आदेश/O R D E R Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 07/03/2024 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2017-2018. Printed from counselvise.com ITA No. 704/Ahd/2024 Vasudev Chotabhai Patel vs. ITO Asst. Year 2017-18: 2 2. The assessee, in this appeal, is aggrieved by the action of the Ld.CIT(A) in confirming the addition made by the Assessing Officer (in short “the AO”) of Rs.1.53 crores u/s.69A of the Act by treating the sales made by the assessee during the demonetization period as bogus and thereby treating the cash deposits made by the assessee as unexplained income of the assessee. 3. At the outset, the Ld. Counsel for the assessee has invited our attention to the impugned orders of the lower authorities to submit that both the lower authorities have made/confirmed the impugned addition by mentioning that the assessee has not filed the relevant details and evidences to show that the deposits made during the demonetization period were out of the sales of the assessee. He, in this respect, has submitted that the aforesaid observation of the lower authorities was factually incorrect. He has further submitted that the assessee is engaged in the business of running a Petrol Pump and that as per the Central Government Notification No.S.O.3544(E) dated 24/11/2016, the Petrol Pumps were allowed to accept cash in demonetization currency for the period upto 15/12/2016. He has submitted that the assessee has made cash sales and cash received thereof was deposited in the bank account, which included demonetization currency also. The Ld. Counsel, in this respect, has brought our attention to the papers filed in the paper-book to show that the assessee had furnished purchase register, sales register, stock statement, etc. to show that the sales made by the assessee were genuine. The Ld. Counsel has submitted that the assessee’s total sales were at Rs.9.40 crores out of which sales of Rs.7.65 crores were cash sales. He has further submitted that during the demonetization period, the cash sales were made of Rs.1.53 crores, which commensurate with the total cash sales of the assessee during the year. The Ld.Counsel submitted that even the assessee has filed VAT returns also in respect of the aforesaid sales. He, therefore, has Printed from counselvise.com ITA No. 704/Ahd/2024 Vasudev Chotabhai Patel vs. ITO Asst. Year 2017-18: 3 submitted that the impugned addition made by doubting the sales of the assessee was not justified. 4. The Ld.DR, on the other hand, has submitted that as mentioned in the assessment order as well as in the impugned order of the Ld.CIT(A), the assessee had not furnished the necessary details. He has also submitted that the cash sales of the assessee during demonetization period were more, as compared to the earlier period sales, which showed that the assessee had exaggerated the sales which were not actual and, hence, introduced his unaccounted money in the garb of cash sales. 5. We have heard the rival contentions of the Ld.Representatives of the parties and gone through the material available on record. The assessee has produced on the file the relevant material to prove the sales made during the year including that were made during demonetization period. A perusal of the data submitted by the assessee shows that the assessee’s cash sales during demonetization period commensurate with the total sales and cash of the assessee for the year under consideration. So far as the contention of the Ld.DR that the cash sales have been slightly increased during demonetization period is concerned, the fact that the petrol pumps were allowed to accept demonetization currency during the relevant period, is a determining factor in this respect. When certain types of currency was barred from circulation, in that event, it was a normal tendency of the people to circulate/make purchases in demonetization currency since the said currency was accepted at petrol pumps, hence obviously, this factor was relevant for increase in cash sales of the assessee during the demonetization period. However, it is noted that such increase in sales of the assessee was not so high, but showed a normal increase under such circumstances. The assessee has duly proved Printed from counselvise.com ITA No. 704/Ahd/2024 Vasudev Chotabhai Patel vs. ITO Asst. Year 2017-18: 4 that the amount deposited in the bank account was out of the cash sales made by the assessee. Therefore, there is no justification on the part of the lower authorities in making/confirming the impugned additions and the same are, accordingly, ordered to be deleted. 6. In the result, the appeal of the assessee stands allowed. Order pronounced in the Open Court on 16/10/2025. Sd/- Sd/- (Annapurna Gupta ) Accountant Member ( Sanjay Garg) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 16/10/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की \"ितिलिप अ#ेिषत/Copy of the Order forwarded to : 1. अपीलाथ$ / The Appellant 2. \"%थ$ / The Respondent. 3. संबंिधत आयकर आयु& / Concerned CIT 4. आयकर आयु& ) अपील ( / The CIT(A)- (NFAC), Delhi 5. िवभागीय \"ितिनिध , अिधकरण अपीलीय आयकर , अहमदाबाद/DR,ITAT, Ahmedabad. 6. गाड\u000f फाईल / Guard file. आदेशानुसार/ BY ORDER, स%ािपत \"ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (dictation pad is attached with file) : 15.10.2025 2. Date on which the typed draft is placed before the Dictating Member. : 15.10.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 16.10.2025 7. Date on which the file goes to the Bench Clerk. : 16.10.2025 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 Despatch of the Order : Printed from counselvise.com "