DHANUBEN MADHUBHAI PRAJAPATI,MUMBAI vs. WARD 42(1)(2), KAUTILYA BHAVAN, MUMBAI

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ITA 3602/MUM/2025Status: DisposedITAT Mumbai24 November 2025AY 2017-18Bench: SMT. BEENA PILLAI (Judicial Member), SHRI OMKARESHWAR CHIDARA ( (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the lower authorities had not considered relevant CBDT Circulars. The AO was directed to verify the addition based on demonetized cash, considering applicable circulars and allowing an opportunity of hearing to the assessee.

What were the facts?

The assessee's appeal arose from an order confirming an addition of Rs. 6,75,000 made by the AO based on cash deposits during the demonetization period. The assessee had declared Nil income. The assessee had expired, and the legal heir represented the appeal.

What were the issues?

Whether the lower authorities properly considered CBDT circulars regarding demonetized cash deposits while making/confirming the addition? Whether proper opportunity of hearing was granted to the assessee?

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “K” BENCH, MUMBAI

Before: SMT. BEENA PILLAI & SHRI OMKARESHWAR CHIDARA

For Appellant: Mr. Bhavin Solanki, A/R
For Respondent: Shri Bhagirath Ramawat, Sr. D/R
Hearing: 06.11.2025Pronounced: 24.11.2025

Assessment Year: 2017-18 Mr. Jitendra Prajapati Vs. Ward – 42(1)(2) [Legal Heir of Late Dhanuben Madhubhai Prajapati] Shop No. 3, Diwali Darshan M G Road, Borivali East Mumbai – 400066 PAN: AABPP2255P (legal heir) PAN: AGRPP4118K (Dhanuben Madhubhai Prajapati) (Appellant) (Respondent) Appellant by Mr. Bhavin Solanki, A/R Respondent by Shri Bhagirath Ramawat, Sr. D/R Date of Hearing 06.11.2025 Date of Pronouncement 24.11.2025 ORDER Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of the order dated 24/03/2025 passed by Ld. CIT(A) -1, Ahmedabad, [hereinafter ‘Ld. CIT(A)’) for assessment year 2017-18.

2.

At the outset, the Ld. AR submitted that the assessee expired on 29/10/2020 and, therefore, the legal heir is representing the present appeal before this Tribunal. He submitted that, the addition made by the Ld. AO is based on cash deposits made during the demonetisation period amounting to Rs. 13,50,000/-.

2.1. The Ld. AR submitted that, the assessee maintained her account with Bank of India and had deposited the said amount during the period 09/11/2016 to 31/12/2016. The Ld. AO noted that the assessee offered Nil income in the return of income filed for the year under consideration and, therefore, the addition was made in hands of the assessee amounting to Rs. 6,75,000/- u/s 69A of the Act.

Aggrieved by the order of the Ld. AO, the assessee preferred appeal before the Ld. CIT(A).

3.

The Ld. CIT(A) upheld the addition made by the Ld. AO.

4.

We have considered the submissions advanced by both the sides in light of the records placed before us.

4.1. It is noted that the authorities below has not considered the following CBDT Circulars/Instructions :- a) Instruction 3/2017, issued on February 21, 2017. b) Instruction No. 4/2017 dated 3rd March, 2017. c) Circular F. No. 225/363/2017 – ITA. II, dated 15/11/2017. d) Circular F.no.225/145/2019-ITA.II dated 09/08/2019.

4.2. The Ld. AO is directed to verify the addition based on demonetized cash based on the applicable Circular specific to the assessee. The assessee is directed to furnish PAN and other details of the depositors if circumstances so warrant, in order to assist the Ld. AO to consider the claim in accordance with law. Needless to say that proper opportunity of being heard must be granted to the assessee in accordance with law.

Accordingly, Grounds raised by the assessee stand partly allowed for statistical purposes.

In the result, appeal filed by the assesse stands partly allowed for statistical purposes.

Order pronounced in the open court on 24/11/2025

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