VARSHABEN BHARATBHAI CHAVDA,DEESA vs. THE ITO, WARD-1, PALANPUR

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ITA 27/AHD/2026Status: DisposedITAT Ahmedabad06 August 2026AY 2015-165 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee had provided explanations and evidence regarding the source of cash deposits and credit entries, which were not properly considered by the lower authorities. Therefore, the matter was set aside to the CIT(A) for fresh adjudication.

What were the facts?

The assessee did not file a return for AY 2015-16. The AO reopened the case based on information of cash deposits of Rs. 66,15,000/- and added the total bank credits of Rs. 94,63,200/- as unexplained income. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether the aggregate credits in the bank account were correctly treated as unexplained income without properly considering the assessee's explanations and evidence. Whether the reassessment proceedings were valid and within the limitation period.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144B,Section 144,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri S. N. Divatia & Shri Samir Vora AR’s
For Respondent: Shri Deependra Kumar, SR-DR
Hearing: 08.07.2026Pronounced: 06.08.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the Assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 19.11.2025 for the Assessment Year (A.Y.) 2015-16 in the proceeding u/s 147 r.w.s. 144B of the Income Tax Act [hereinafter referred as “the Act”].

2.

The brief facts of the case are that the assessee did not file return of income for A.Y. 2015-16. The case of the assessee was reopened on the basis of information received by the AO that the assessee had made cash deposit of Rs. 66,15,000/- in the bank account with HDFC bank. In

ITA No. 27/Ahd/2026 Varshaben Bharatbhai Chavda Vs ITO, AY-2015-16 2

the course of assessment, the AO had made inquiry with the bank by issue of notice u/s. 133(6) of the Act. On the analysis of the bank statement provided by the bank, it transpired that the total credits in the bank account, including cash deposit, was to the extent of Rs. 94,63,200/-. The AO was not satisfied with the explanation of the assessee regarding the source of cash deposits and the credits appearing in the bank account. Therefore, the entire amount of Rs. 94,63,000/- credited to bank account was treated as unexplained and added to income. The assessment was completed u/s. 147 r.w.s. 144 of the Act on 12.03.2024 at total income of Rs. 94,92,170/-.

3.

Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed.

4.

Now the assessee is in second appeal before us. The following grounds have been taken in this appeal:

1.1. The Order u/s. 250 passed on 19.11.2025 by NFAC.CIT(A), Delhi (for short CIT(A) for AY 2015-16 upholding the credits in the HDFC Bank account No.44 to the tune of Rs. 94,63,200/- as unexplained money u/s 69A is wholly illegal, unlawful and against the principles of natural justice. 1.2. The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the explanations furnished and the evidence produced by the appellant from time to time. The CIT(A) has passed a non-speaking order and given no reasons for rejecting the material produced before him. Thus, there is a gross violation of the principles of natural justice. 2.1. The Ld. CIT(A) has grievously erred in law and or on facts in upholding that the aggregate credits in the bank account No.44 with HDFC Bank of Rs. 94,63,200/-as unexplained money and thereby confirming the addition of Rs.94,63,200/-

ITA No. 27/Ahd/2026 Varshaben Bharatbhai Chavda Vs ITO, AY-2015-16 3

2.2. That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) has grievously erred in upholding that the aggregate credits in the bank account No.44 with HDFC Bank of Rs. 94.63.200/- as unexplained money and thereby confirming an addition of Rs. 94.63,200/- 2.3. The Id. CIT(A) has grossly erred in holding the credits in the said bank account of Rs. 94,92,170/- as unexplained money inspite of detailed explanation with documents/evidence, ledger accounts etc. produced before him from time to time which have been totally ignored nor disputed by him. 3.1. Both the Id. Lower authorities have grievously erred in law and on facts in failing to appreciate that the proceedings u/s 147 were illegal, unlawful and barred by limitation of time so that the same should have been quashed 3.2. Both the Id. Lower authorities have grievously erred in law and on facts in failing to appreciate that the impugned notice u/s 148 was issued on 26.05.2022 for AY 2015-16 which was clearly barred by limitation of time of six years from the end of relevant AY so that same should have been quashed. It is therefore prayed that the addition of Rs.94.63,200/-made by the AO should be deleted.

5.

Shri S. N. Divatia, the Ld. AR of the assessee submitted that the assessee is engaged in business as stockiest of Mustard and other agricultural produce on whole sale basis. He explained that the cash deposits in the bank account represented the cash in hand from cash sales of the agricultural commodities. He contended that a detailed explanation in this regard was filed before the AO, which was not considered by him. Further that. the assessee has also filed a detailed submission before the Ld. CIT(A) which was uploaded on 06.05.2023 wherein it was explained that the cash deposits represented the sale proceeds of the assessee and the other credits in the bank account represented bank loan transactions. The Ld. AR submitted that the evidences filed by the assessee were neither considered by the AO nor by the Ld. CIT(A) and that the Revenue was not correct in treating the entire cash and credit deposits appearing in the bank account as income of the assessee. He, therefore, requested that the matter may be set aside

ITA No. 27/Ahd/2026 Varshaben Bharatbhai Chavda Vs ITO, AY-2015-16 4 to the file of the Ld. CIT(A) with a direction to consider the reply of the assessee and thereafter decide the matter on merits.

6.

Per contra, Shri Deependra Kumar, the Ld. SR-DR supported the order of the lower authorities.

7.

We have considered the rival submissions. From the copy of P&L account brought on record in the paper book, it is found that the total turn- over of the assessee during the year was Rs. 69,82,400/- which was explained to be on account of sale of agricultural produce. The assessee vide letter dated 22.12.2023 had given a detailed explanation regarding the source of cash deposits and the credit entries appearing in the bank accounts. Before the Ld. CIT(A) also, the assessee had filed cash flow statement, sales registers and explanation for each of the cash deposits in the bank account, which was uploaded on 06.05.2023. A copy of this acknowledgment had been brought on record in the paper book filed by the assessee. The Ld. CIT(A) while deciding the appeal has not referred to these submissions made by the assessee. Considering the explanation of the assessee that the cash deposits in the bank account represented the sale proceeds, the Revenue was not correct in treating the entire cash/credit deposits in the bank account as unexplained income of the assessee. In the interest of justice, therefore, we deem it proper to set aside the matter to the file of the Ld. CIT(A) with a direction to verify the submissions of the assessee regarding the source of cash deposits/credit entries appearing in the bank account and, thereafter, re-adjudicate the matter on merits, as per law. The Ld. CIT(A) may call for a remand report of the AO on the submissions of the assessee, if so required. The assessee may also be allowed a proper opportunity of being heard in the course of set aside appellate proceeding.

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8.

In the result, the appeal of the Assessee is allowed for statistical purpose.

Order pronounced in the Court on 06/08/2026 at Ahmedabad.

Sd/- Sd/- (SANJAY GARG) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 06th August, 2026 Neelesh, Sr. PS (True Copy) आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file. आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार पंजीकार (Dy./Asstt.Registrar) उप उप/सहायक उप उप सहायक सहायक पंजीकार सहायक पंजीकार पंजीकार आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद / ITAT, Ahmedabad अहमदाबाद

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