VERSIBHAI THAKOR,PATAN V. THE INCOME TAX OFFICER, WARD-3, PATAN

ITA 1509/AHD/2024

AI Insights

The case involves an appeal by Versibhai Thakor against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, which upheld the Assessing Officer's decision treating a cash deposit of Rs.14,18,000 in Thakor's bank account as unexplained money under Section 69A of the Income Tax Act, 1961. The Tribunal found that the CIT(A)'s decision was inadequate as it did not consider the explanations and evidence provided by Thakor, which included details of his charcoal trading business and agricultural income. The Tribunal's decision emphasized the need for a reasoned and fair consideration of the assessee's submissions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312190 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATEEK SHARMA
• Assessee Lawyers: ASTHA MANIAR
• Keywords: Right to appeal
• Section: 144

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE: SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 1509/Ahd/2024 (Ǔनधा[रण वष[ / Assessment Year : 2017-18) Versibhai Thakor 54-Balaji Green Society, Chanasma Highway, Patan, Dist:- Patan, Gujarat - 384265 बनाम/ Vs. The Income Tax Officer Ward -3, Patan Öथायी लेखा सं./जीआइआर सं./PAN/GIR No. : ATJPT4846P (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Ms. Astha Maniar, AR Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Prateek Sharma, Sr. DR Date of Hearing 05/02/2025 Date of Pronouncement 30/04/2025 (आदेश)/ORDER PER SMT. ANNAPURNA GUPTA, AM: The present appeal has been filed by the assessee against the order passed by the Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi (in short ‘the CIT(A)’) under Section 250 of the Income Tax Act, 1961 (in short ‘the Act’) dated 19.06.2024 pertaining to Assessment Year 2017- 18. ITA No. 1509/Ahd/2024 [Versibhai Thakor vs. ITO] A.Y. 2017-18 - 2 – 2. The solitary ground raised in the appeal by the assessee is as under: “1. The Ld. CIT-(A), NFAC erred in law and on facts in upholding the action of the AO of treating the cash deposited of Rs.14,18,000/- in bank accounts as unexplained money u/s.69A of the Act.” 3. The solitary issue in the present appeal pertains to addition made to the income of the assessee on account of cash found deposited in his bank account, source of which remained unexplained. The orders of the authorities below reveal that the AO had added the cash deposits in the bank account of the assessee as well as the other credits in his bank account amounting to Rs.23,72,282/- in the absence of any explanation of the source of the same. 4. We have gone through the order of the Ld. CIT(A) and with a sense of deep disappointment, we find that the order passed in first appeal is sheer waste of assesses right to appeal before the First Appellate Authority. The reason being that the order of the Ld.CIT(A), other than reproducing the facts of the case and the contentions of the assessee, does nothing else other than arriving at the conclusion that the credits in the bank account are to be deleted while those on account of cash needs to be confirmed. This is evident from the one page order passed by the First Appellate Authority, which is reproduced hereunder: “4. Appeal proceedings: ITA No. 1509/Ahd/2024 [Versibhai Thakor vs. ITO] A.Y. 2017-18 - 3 – The appeal has been received in the National Faceless Appeal Centre (NFAC), notice of hearing was issued calling for written submission to substantiate its grounds of appeal. However, compliance had been made. Further a notice has been issued providing an opportunity under faceless appeal scheme, 2021 notified on 28.12.2021 vide S.O. 5429E to make additional submission if any. 5. WRITTEN SUBMISSION: Respected Sir or Madam I would like to inform your honour that Learned AO errored in making addition in his Assessment Order dated 20/10/2019. The Learned AO without making proper verification added Rs. 1418000/- deposited cash in demonetization in Bank Accounts and other Credits in Bank Accounts during the F.Y. 2016-17 Sir/Madam during the year under consideration I was engaged in trading of Charcoal under the name of Khodiyar Charcoal Traders. My turnover/ Gross receipt for the year under consideration was Rs. 6,45,016/- Out of total Turnover Rs. 495016/- was received through Cash which is deposited during the year in Bank Accounts. Copy of Profit and loss Accounts for F.Y. 2016-17 is enclosed herewith for your ready reference. Further Sir I am agriculturist and having Gross Agriculture Income worth Rs. 331471/-. This income was received in cash and deposited in my Bank Accounts. Copy of Agriculture bills are enclosed herewith for your review and record. Sir/Madam in addition to this Your good self can verify from enclosed Bankbooks and Bank Statement that there are cash withdrawals which were re deposited which were not considered by AO while finalizing Assessment order. To prove my self being genuine, I am enclosing copy of my Profit and Loss Account, Copies of Bank Books, Bank Statements and Agriculture bills for sale of agriculture produce. I hope your good self-find above details in order. In case your honour requires further documents let me know. 6. DECISION: The appellant in its ground of appeal assailed the AO in making addition of Rs. 1418000 being cash deposit as unexplained money u/s 69A of the Act and further making addition of Rs.2372282 being credit entries in bank account as unexplained money u/s 69A of the Act. The AO in the assessment order noted that there was a cash deposit of Rs. 1418000/- in assessee's bank accounts and credit ITA No. 1509/Ahd/2024 [Versibhai Thakor vs. ITO] A.Y. 2017-18 - 4 – entries of Rs. 2372282/- in his bank account. The AO noted that the cash was deposited during the demonetization period. The AO issued notice however no compliance was made therefore the AO proceeded to assess income u/s 144 of the Act making addition of the case as well as the credit entries in the bank account in absence of explanation from the assessee. 6.1 The appellant in the course of the appellate proceedings submitted that he is a trader in charcoal and the cash as well as other entries pertains to the business transactions during the year. The appellant in this regard submitted the copy of the trading account, bills and the bank account. The submission of the appellant is examined. The addition of cash deposit of Rs. 1418000/- is sustained and the addition of Rs. 2372282/- is deleted. The ground of appeal is partly allowed.” 5. As is evident from the above, the assessee had explained the source of cash deposit in the bank account as from his business of Charcoal trading and agricultural income amounting to Rs.4,95,016 /- & Rs.3,31,471/- respectively. The assessee had substantiated the same by furnishing copy of the P&L account of his business and agricultural receipts. 6. The Ld. CIT(A), we find, gives no reason absolutely for finding no merit in the assessee’s explanation of the source of cash deposit in the bank account. It is a classic case of a non- speaking order and as we have stated above it has resulted in waste of the right exercised by the assessee before the First Appellate Authority for addressing his grievances. 7. Be that so, we have noted that the assessee has given a reasonable explanation of source of cash deposited in the bank account of Rs.14,18,000/- duly substantiated with evidence and since the Ld.CIT(A) has given no reason absolutely for ITA No. 1509/Ahd/2024 [Versibhai Thakor vs. ITO] A.Y. 2017-18 - 5 – disbelieving the explanation of the assessee, we see no reason to confirm the order of the Ld. CIT(A). We, therefore, direct deletion of the addition made on account of cash found deposited in the bank account of the assessee to the tune of Rs.14,18,000/-. 8. The grounds raised by the assessee are accordingly allowed. 9. In the result, appeal filed by the assessee is allowed. This Order pronounced on 30/04/2025 Sd/- Sd/- (T.R. SENTHIL KUMAR) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 30/04/2025 S. K. SINHA True Copy आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आयुÈत / Concerned CIT 4. आयकर आयुÈत(अपील) / The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, अहमदाबाद / ITAT, Ahmedabad "