BHIKHALAL NANJI HIRANI,MANDVI vs. ITO WARD-1, GANDHI DHAM

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट । In The Income Tax Appellate Tribunal, “SMC” Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member आयकरअपीलसं/.ITA No. 682/RJT/2026 िनधा�रण वष�/Assessment Years : 2013-14 Bhikhabhai Nanji Hirani, ITO Ward-1, 1-A Juno Was, Ramapar-1, Vs. Gandhidham, Gujarat Ramapar Mandvi, Gujrat-370445 PAN No. ADJPH0386E (अपीलाथ�/assessee) (��यथ�/Respondent) :

�नधा�रतीक�ओरसे/Assessee by : Shri Kapil Sanghavi, Ld. AR राज�वक�ओरसे/Revenue by : Shri Anadi Dixit, Ld. Sr. DR सुनवाईक�तार�ख/Date of Hearing : 18/06/2026 घोषणाक�तार�ख/Date of Pronouncement : 07/09/2026 ORDER Per, Dr. Arjun Lal Saini, AM: The present appeal has been filed by the assessee, against the order passed by the Ld. Commissioner of Income Tax (Appeal), National Faceless Appeal, Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 15.05.2025 arising in the matter of assessment order passed u/s 143(3) of the Income Tax Act, 1961 dated 30.03.2016, relevant to the Assessment Year 2013-14. 2. The appeal filed by the assessee is barred by limitation by 273 days, before the Tribunal. Learned Counsel for the assessee explained the reasons for delay, stating that the appeal notices were served on the e-mail id of the old consultant, who in turn, did not inform the assessee about the proceedings going on before the Ld. CIT(A), therefore, because of the mistake of the old tax consultant, the assessee should not be penalized and hence, the delay may be condoned.

Therefore, the learned counsel adverted my attention to the affidavit filed in this regard citing reasons for condonation of delay and urged for a benign view and sought condonation of delay of 273 days in filling the appeal before the Tribunal. On the other hand, Ld. DR for the Revenue opposed the prayer of assessee for condonation of delay. A perusal of the affidavit gives me an impression of existence of mitigating circumstances to enable me to exercise my discretion in favour of the assessee. Accordingly, the delay is condoned.

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Act was issued by ITO, Ward-1, Gandhidham on 24.08.2015 and duly served upon the assessee. Thereafter, the case is received on transfer on 03/12/2015 from ITO-Ward-1, Gandhidham. Subsequently, a detailed questionnaire u/s 142(1) of the Act was issued on 08.03.2016 and was duly served upon the assessee. Due to change in incumbent, opportunity was granted under section 129 of the Act. In response to the notices issued, the Authorized Representative of the assessee Shri Kiran Sheth, CA attended from time to time and the case was discussed. The details called for have been furnished, which are placed on record. During the year under consideration, the assessee was engaged as civil contractor disclosed income in return u/s. 44AD of the Act. During the course of assessment proceedings, it is noticed that the assessee has made huge cash deposits in Joint bank A/c No.910010002796779 of Axis bank Ltd.

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But, it is seen from the return of income filed by the assessee that the assessee has not shown commodity transactions in his return. The assessee was asked for details of investment made in mutual fund/ shares etc. vide notice u/s 142 (1) of the Act dated 08.03.2016. However, the assessee has replied vide letter dated 10.03.2016 that he has no investment in mutual funds during the year.

i) The assessee has not shown commodity transactions in his return of income. The assessee has filed ITR-4S, but not shown profit @ 8% on commodity trading.

ii) The assessee has submitted bank book, cash book of himself and cash book, bank book (only Axis Bank) of his father Shri Nanji Manji Hirani and try to justify cash deposits in Axis Bank Joint A/c by reflecting some transactions in assessee's books and some transactions in Shri Nanji Manji Hirani's books.

iii) The assessee in his submission stated that he has taken loan of Rs.5,06,800/- from his father Shri Nanji Manji Hirani. But, this loan is nothing but difference in reconciliation of Axis bank Joint A/c bank transactions. In fact, no such real loan transactions have been done during the year under consideration.

iv) It is seen from the Axis bank book of his father that he has made transactions in commodity and made payment to Sharekhan Commodities on 04.10.2012 of Rs.49,000/-, on 18.01.2013 of Rs.3,00,000/- and on 05.03.2013 of Rs. 1,35,000/- . But, it is seen from the Sharekhan statement of the assessee that the above mentioned transactions have been done by the assessee.

v) The assessee has shown house hold withdrawal to the tune of Rs.24,000/- only.

vi) The assessee has shown sundry receivables of Rs.3,00,000/- as on 31.03.2012, but neither submitted address of debtors nor confirmation from her. The assessee has also not submitted complete ITR 4 filed for A.Y.2012-13 reflecting sundry receivables.

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9. In addition to it, the assessee has also made cash deposits in Dena bank A/c to the tune of Rs.3,31,000/-. The assessee has received gross receipts from business to the tune of Rs.7,69,150/-. Hence, total cash deposits in bank accounts come to Rs.28,74,500/- and total cash withdrawals come to Rs.6,34,100/- which may be utilized in business expenses as well as in house hold expenses. Therefore, net of business receipts and withdrawal for expenses come to Rs.1,35,050/- which may be considered as net deposits in bank A/c of the assessee. The remaining amount of Rs.27,39,450/- was considered as unexplained. During the assessment proceedings, the assessee has been granted sufficient time to prove the source of huge cash invested in Bank A/c. But, the assessee has failed to provide sufficient details regarding cash deposited in bank A/c. Therefore, cash deposited to the tune of Rs.27,39,450/- as discussed above was treated a unexplained investment u/s 69 of the Act and added back to the total income of the assessee.

As expressed by AO, appellant during assessment stage had not disclosed the cash deposits and trading through Share Khan. Share Khan is a platform to trade commodities on major recognized exchanges, such as MCX and NCDEX, from a single window. Later on appellant had produced books containing these entries. AO has mentioned that cash withdrawals are of Rs.6,34,100/- against cash deposits of Rs.28,74,500/-. AO has also pointed out that total payments to Share Khan is Rs.17,84,000/- and to other persons are Rs.3,80,000/-. Since, the appellant failed to explain the sources of the cash deposits and ultimately the investments in Share Khan and other persons satisfactorily, I am inclined to agree with the view of the AO, that the cash deposits in bank account are for the purposes of undisclosed investment. However, I find that the calculation offered by AO in this regard suffers from defects. AO has written that "total cash deposits in bank accounts comes to Rs.28,74,500/- and total cash withdrawals come to Rs.6,34,100/- which may be utilized in business expenses as well as in house hold expenses." Therefore, in my opinion, there remains an amount of Rs.22,40,400/-. Appellant has disclosed an income of Rs.2,04,680/- in his return of income. Therefore, undisclosed investment comes to Rs.20,35,720/-. AO is directed to take Rs.20,35,720 as the undisclosed investment and modify his order accordingly. The other grounds being consequential are dismissed. Conclusion: In the result, the appeal of the appellant is partly allowed. 11. Aggrieved by the order of the Ld.CIT(A), the assessee is in further appeal before this Tribunal. 12. At the outset, the Ld. Counsel for the assessee submitted during the assessment proceedings, the assessee submitted documents and evidences including Bank-Statement and Cash-Flow statement. However, the cash deposits in Joint bank A/c No.910010002796779 of Axis bank Ltd, was in joint capacity, therefore assessee wants to file additional evidences before the assessing officer to prove his claim. In addition to this, the assessee wants to file other additional evidences, to prove his claim on account of addition made by the assessing officer. Besides, the assessee was not provided proper opportunity by the assessing officer during the assessment proceedings, therefore, matter may be restored back to the file of the assessing officer for fresh adjudication.

“It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus : “We will straightaway agree with the assessee’s submission that the Income-tax Officer had not given to the assessee proper opportunity of being heard.” That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of setting out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard. Two questions were placed before the High Court, of which the second question is not pressed. The first question reads thus : “1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding arrived at by it that the Income-tax Officer had not given a proper opportunity of hearing to the assessee ?” In our opinion, there can only be one answer to this question which is inherent in the question itself : in the negative and in favour of the assessee. The appeals are allowed. The order under challenge is set aside. The assessment order, that of the Commissioner (Appeals) and of the Tribunal are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as aforestated.” 15. In view of the above facts and in the light of the Hon’ble Supreme Court’s decision in Tin Box Company (supra), I think it fit and proper to remit this issue back to the file of the Assessing Officer. The ld. DR for the revenue as well assessee did not have objection, if the matter is remitted back to the file of Assessing Officer. Therefore, in the interest of justice and fair play for both the parties, I set aside the order of ld. CIT(A) and remit the matter back to the file of Assessing Officer for de novo adjudication, and to decide the matter in accordance to law after giving opportunity of being heard to the assessee.

Order was pronounced in the open Court on 07/09/2026.

Sd/- [ Dr. Arjun Lal Saini ] लेखा सद�य/Accountant Member राजकोट /Rajkot िदनांक/ Date: 07/09/2026 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order //True Copy// Private Secretary ITAT, Rajkot

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