ABDULHAKK ADAMBHAI RANGUNI,BHARUCH, GUJARAT vs. THE DY.CIT, CIRCLE 2(1)(1), VADODARA, VADODARA, GUJARAT

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ITA 2175/AHD/2025Status: DisposedITAT Ahmedabad07 August 2026AY 2020-217 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of ₹14,83,650 was unwarranted as the assessee had provided bank statements reflecting the source of funds. The confirmation of interest and penalty proceedings was also set aside.

What were the facts?

The assessee purchased a 50% share in agricultural land for ₹14,83,650, declaring business income and other sources. The assessee provided bank statements and disclosed the investment in the fixed asset schedule.

What were the issues?

Whether the addition made by the AO on account of investment in immovable property was justified when the source of funds was through banking channels. Whether interest and penalty were leviable in such circumstances.

Which sections of the Income-tax Act were involved?

Section 271AAC(1),Section 234A,Section 234B,Section 234C,Section 234D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

For Appellant: Shri Ashish Bhoola, AR
For Respondent: Shri Drop Singh Meena, Sr. DR
Hearing: 07.07.2026Pronounced: 07.08.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-

This appeal is filed by the Assessee against the appellate order dated 24.09.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2020-21.

ITA No.2175/Ahd/2025 Asst. Year : 2020-21 - 2–

2.

The assessee has raised the following grounds of appeal:

1.

Addition of Rs. 14,83,650/- being variations in respect of issue of investment in Immovable Property: (a) On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in confirming the additions made by the Assessing Officer without considering the submissions made by the appellant. The entire funds invested by the appellant are through banking channels with source of funds reflected in bank statements. Inspite of this fact, unwarranted additions have been made by the AO and upheld by the learned CIT(A)s without considering the submissions made by the appellant. (b) On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in confirming interest levied u/s.234A/B/C/D since the said additions were not warranted for at the time of filing of return of income by the appellant (c) On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in confirming penalty proceedings u/s.271AAC(1) without considering the submissions made by the appellant.

3.

The brief facts of the case are that assessee had purchased a 50% share in an agricultural land bearing Survey No. 230, Village Bhuva, Taluka Amod, District Bharuch, jointly with Mr. Tapodhan Snehalkumar Sureshbhai, for a consideration of ₹14,83,650/-.The assessee had declared an income of ₹3,32,330/- from business and other sources. During the assessment proceedings, the assessee furnished the bank statements of: Current Account No. 37360200000033 with Bank of Baroda in the name of M/s. Rangoonwala Auto Consultant, Savings Account Nos. 37360200000092 and 37360100001931 in the name of

ITA No.2175/Ahd/2025 Asst. Year : 2020-21 - 3– the assessee, covering the period from 01.04.2019 to 31.03.2020. The assessee also disclosed the addition of ₹14,83,650/- towards agricultural land in the Fixed Asset Schedule filed along with the return and the details submitted during the assessment proceedings. The Assessing Officer observed from the purchase index copy obtained from the Sub-Registrar Office, Bharuch, that the property was registered on 31.12.2019 for a value of ₹24,00,000/-. Although the assessee had stated that his 50% share in the property amounted to ₹14,83,650/-, the Assessing Officer held that the assessee had failed to explain the source of investment in the said property. According to the Assessing Officer, no satisfactory explanation regarding the source of investment was furnished by the assessee. Accordingly, the amount of ₹14,83,650/- was treated as unexplained investment under Section 69 of the Income- tax Act, 1961, and the same was added to the total income of the assessee.

4.

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). The Ld.CIT(A) dismissed the appeal of the assessee since the assessee failed to submit substantial explanation and evidence of source of unexplained investment.

ITA No.2175/Ahd/2025 Asst. Year : 2020-21 - 4–

5.

The Ld. Counsel for the assessee before us submitted a detailed fund flow statement regarding funds utilized for purchase of Agriculture Land situated at R S No.230, Village Bhuva, Taluka Amod, District Bharuch to establish the source of investment of Rs.14,83,650/- is as under:

Sr.No. Date Particulars Amount Amount Source of Received Fund (In Rs.) 1. 31-12-2019 Stamp Duty 2,83,650/- - Out of cash Paid in cash balance available 2. 28-02-2020 Paid to Anis 2,00,000/- 1,71,608/- Agriculture Inshka Patel Income from bank received on by issuing 20-02-2020 cheque 25,000/- Cash deposited on 26-02-2020 80,000/- 3. 17-08-2020 Paid to Ani 2,00,000/- Received Ishak Patel from Son on from Bank 31-07-20- by Issuing 2020 Cheque

Carting 60,000/- Income directly credited in bank account on 03-08-2- 2020 80,000/- Cash

ITA No.2175/Ahd/2025 Asst. Year : 2020-21 - 5– deposited on 17-08-2020 4 21-09-2020 Paid to Anis 2,00,000/- 4,00,000/- Sales Ishak Patel Consideration from Bank received on by issuing sale of Cheque property on 05-09-2020, which was withdrawn from bank and again re deposited in bank 5 20-09-2022 Paid to Anis 2,00,000/- 2,00,000/- Cash Ishak patel deposited on from bank 20-09-2022 by using Cheque 6. 30-09-2022 50,000/- Carting Income Paid to Anis Ishak Patel from Bank by directly RTGS credited in bank account 2,00,000/- on 27-09- 2022 1,51,000/- Cash deposited on 28-09-2022 3,000/- Cash deposited on 30-09-2022 7. 04-10-2022 Paid to Anis 2,00,000/- 2,00,000/- Cash Ishak Patel deposited on from Bank 04-010-2022 by issuing Cheque The Ld. Counsel for the assessee further submitted that once availability of cash in hand is proved from earlier accepted returns, no addition can be made merely on suspicion. The lower authorities have neither disputed the correctness of the ITR nor rejected the

ITA No.2175/Ahd/2025 Asst. Year : 2020-21 - 6– books of accounts. Hence, the provisions of section 69 are not applicable to the facts of the present case. Accordingly, it was prayed that the addition of ₹14,83,650/- made towards alleged unexplained investment in the immovable property be deleted.

6.

We have heard the rival submissions and perused the material available on record. The issue involved is the addition of ₹14,83,650/- made under section 69 of the Act on account of alleged unexplained investment in agricultural land. The assessee had disclosed the investment in the Fixed Asset Schedule and furnished the relevant bank statements during the assessment proceedings. Before us, the assessee has also filed a fund flow statement explaining that the investment was made out of cash balance, agricultural income, carting income and other identifiable sources. The Revenue has not brought any material on record to rebut the explanation furnished by the assessee nor has it established that the investment was made from undisclosed sources. In our considered view, once the investment is duly recorded in the books and its source is supported by documentary evidence, the addition under section 69 cannot be sustained merely for want of further explanation. Accordingly, the addition of ₹14,83,650/- is directed to be deleted. Since the quantum addition has been deleted, the levy of interest under sections 234A, 234B, 234C and 234D and the penalty proceedings under section 271AAC(1), being consequential in nature, shall not survive. Accordingly, the grounds raised by the assessee are allowed.

ITA No.2175/Ahd/2025 Asst. Year : 2020-21 - 7– 7. In the result, the appeal of the assessee is allowed .

The order is pronounced in the open Court on 07.08.2026. S/- Sd/- Sd/- (RAHUL CHAUDHARY) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 07.08.2026 MV

आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy

सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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