HETAAL JASWANTRAI PAREKH,MUMBAI vs. INCOME TAX OFFICER, WD-33(1)(5), MUMBAI

आयकर अपीलीय अधिकरण, म ुंबई पीठें, म ुंबई INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI BENCH: SMC BEFORE SMT. BEENA PILLAI, HON’BLE JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, HON’BLE ACCOUNTANT MEMBER ITA 4294/MUM/2026 निर्धारण वर्ा/Assessment Year: 2017-18) HETAAL JASWANTRAI INCOME TAX OFFICER, PAREKH WD-33(1)(5) F-1008 KAMLA VIHAR, ROOM NO. 951, 9TH FLOOR, MAHAVIR NAGAR, KANDIVALI KAUTILYA BHAVAN, C- 41 WEST,, MUMBAI-400067, TO C-43, G BLOCK, BANDRA Vs. MAHARASHTRA KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051, MAHARASHTRA अपीलधर्थी Appellant प्रत्यर्थी Respondent

Permanent Account Number of AIHPP3873F Assessee:

अपीलधर्थी द्वारा/Appellant represented Shri Bhavesh Bhatia a/w by: Manavi Singh, ARs प्रत्यर्थी द्वारा/Respondent represented Shri Dinesh R. Pardeshi, Sr. by: DR

सुनवाई की तारीख / Date of conclusion of hearing: 28-Jul-2026 घोषणा की तारीख / Date of pronouncement: 11-09-2026 आदेश / ORDER PER SMT. BEENA PILLAI, JUDICIAL MEMBER: The present appeal filed by the assessee arises out of the order dated 11/03/2026 passed by the NFAC, Delhi [hereinafter “Ld.CIT(A)”] for A.Y. 2017-18.

“1) That on the facts and circumstance of the case and in law, the Ld. CIT(A) erred in upholding the order of the Ld. A.O. wherein an addition of Rs.32,15,383/- was made on account of unexplained money u/s 69A of the Income Tax Act, 1961. 2) That on the facts and circumstance of the case and in law, the Ld. CIT(A) and the Ld. A.O. failed to appreciate the fact that the source of deposit is cash sales, which has already been offered to tax. Therefore, the addition made u/s 69A of the Act is bad-in-law and should be deleted. 3) Without prejudice to the above, it is submitted that the entire income is already offered to tax. Therefore, if the deposit made out of the said revenue is taxed again, the same will result into double taxation which is not permissible as per the Act. 4) That on the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the Appellant has filed a return of income under presumptive scheme under section 44AD of the Act and therefore, the Appellant is not required to maintain any books of account. 5) That on the facts and circumstances of the case and in law, the Ld. AO has failed to consider the CBDT Circulars to verify the demonetized cash deposited during the assessment year. 6) That the appellant craves leave to add, alter or delete all or any of the grounds of appeal.” 2.1. The assessee has also filed an application dated 23/07/2026 seeking admission of the following additional ground:

“That on the facts and circumstances of the case and in law the Ld. AO has failed to consider the CBDT Circulars to verify demonetized cash deposited during the Assessment Year 2017-18.” 2.2. The Ld. AR submitted that the additional ground raises a legal issue arising from the material already available on record and does not require investigation into any fresh facts. Reliance was placed on the decision of the Hon’ble Supreme Court in National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) for admission of the additional ground.

2.3. We have considered the submissions advanced by both sides. The additional ground relates to the applicability of CBDT Instructions/Circulars governing verification of cash deposits made during the demonetisation period. The issue raised is a legal issue arising out of the facts already available on record and no fresh investigation into facts is required for its adjudication. Respectfully following the ratio laid down by the Hon’ble Supreme Court in National Thermal Power Co. Ltd. v. CIT (supra), the additional ground is admitted.

The assessee is an individual. During the year under consideration, cash deposits were made in the bank account of the assessee during the demonetisation period. The Ld. AO was not satisfied with the explanation furnished by the assessee regarding the source of such cash deposits and made an addition of Rs.32,15,383/- u/s. 69A of the Act treating the same as unexplained money.

3.1. The case of the assessee is that the cash deposited in the bank account represented cash sales/business receipts which already formed part of the turnover offered to tax. It was thus contended that bringing the very same amount to tax once again u/s. 69A of the Act would result in taxation of the same receipts twice.

3.2. The assessee further contended that the return of income was filed under the presumptive taxation scheme u/s. 44AD of the Act and that the authorities below failed to examine the cash deposits keeping in view the applicable CBDT Instructions/Circulars specifically issued for verification of cash deposits made during the demonetisation period. The Ld. CIT(A), upheld the addition made by the Ld. AO.

Aggrieved by the same, the assessee is in appeal before this Tribunal.

4.1. The Ld.DR relied on the orders passed by the authorities below.

We have perused the submissions advanced by both sides in light of the record placed before us.

5.1. The Coordinate Bench specifically took note of the following CBDT Instructions/Circulars:

a) Instruction No.3/2017 dated 21/02/2017; b) Instruction No.4/2017 dated 03/03/2017; c) Circular F. No.225/363/2017-ITA.II dated 15/11/2017; and d)Circular F. No.225/145/2019-ITA.II dated 09/08/2019.

5.2. Considering the facts of the present case and respectfully following the above decision of the Coordinate Bench, we deem it appropriate to restore the issue to the file of the Ld. AO. The Ld. AO is directed to verify the cash deposited during the demonetisation period in the light of the CBDT Instruction/Circular applicable to the facts and circumstances of the present assessee. The Ld. AO shall examine the nature and source of cash deposits, the business carried on by the assessee, the turnover disclosed, the return of income filed u/s. 44AD, wherever applicable, and the explanation/evidences furnished by the assessee, in accordance with law.

5.3. The assessee is directed to furnish such details and supporting evidences as may be required by the Ld. AO for verification of the cash deposits. The Ld. AO shall thereafter decide the issue afresh in accordance with law after granting reasonable opportunity of being heard to the assessee.

Accordingly, the grounds raised by the assessee stands allowed for statistical purposes.

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

Order pronounced in the open court on 11-09-2026

Sd/- Sd/- BIJAYANANDA PRUSETH BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 11-09-2026 Shamik Sr. P.S.

Copy to: HETAAL JASWANTRAI PAREKH, F-1008 KAMLA VIHAR, MAHAVIR 1 NAGAR, KANDIVALI WEST,, MUMBAI-400067, MAHARASHTRA INCOME TAX OFFICER, WD-33(1)(5), ROOM NO. 951, 9TH FLOOR, KAUTILYA BHAVAN, C- 41 TO C-43, G 2 BLOCK, BANDRA KURLA COMPLEX, BANDRA (EAST),, MUMBAI-400051, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE TRUE COPY

ASSISTANT REGISTRAR / SR. PRIVATE SECRETARY I.T.A.T., MUMBAI