SATISH SHUKLA,BHOPAL vs. INCOME TAX OFFICER (1)(1) BHOPAL, BHOPAL

Per Paresh M Joshi, J.M.:

This is an Appeal filed by the Assessee under section 253 of

the income tax Act 1961,[ hereinafter referred to as the Act

for sake of brevity] before this tribunal as and by way of a

second appeal. The Assessee is aggrieved by the order

bearing no: - ITBA/ NFAC/S/250/2025-26/1085448655(1)

dated 02.02.2026 passed by the Ld. CIT (A) u/s 250 of the

Act, which is herein after referred to as the “Impugned

order”. The Relevant Assessment year is 2017-18 and the corresponding previous year period is from 01.04.2016 to

31.03.2017.

2.1 That as and by way of an Assessment order made u/s

143(3) of the Act, the total income of the Assessee was

computed & assessed at Rs. 49,15,250/-.The total income

as per the ROI was at Rs. 9,85,620/-. An addition of Rs.

39,07,000/- (unsecured loan) was treated as unexplained

cash credit u/s 68 of the Act and the addition was made

and yet another amount at Rs. 22,630/- was added as

personal conveyance expenses and was added too. That

the aforesaid assessment order bears no:-

ITBA/AST/S/143(3)/2019-20/1023270976(1) and that the

same is dated 27.12.2019 which is hereinafter referred to

as the “Impugned Assessment Order”.

2.2 That the Assessee had filed his ROI and the case of the

assessee was selected through CASS for complete scrutiny,

to examine the cash deposited during the demonetization

period and abnormal increase in sales with decrease in profitability as compared to preceeding previous year

during FY 2016-17. Notice (s) u/s 143 (2) and 142 (1) of the

Act were issued as are recorded in the “Impugned

AssessmentOrder”.

2.3 That the Assessee was engaged in the business of

running of retail liquor shops in the name of Patari

Bhalbamora Kalhar in Vidisha district. The assessee had

filed written submissions and relevant documents from time

to time and same were examined and considered in view of

various aspects of reason of CASS selection. The Ld.

Assessing Officer in the “Impugned Assessment Order” has

observed as under:-

 “In the light of the above discussion, I find no merits

in the arguments of the assessee. The legal

proposition based on the case laws cited (supra), is

clear that the onus lies with the assessee to

establish the identity, creditworthiness and

genuineness of the cash creditors. The department

does not have to establish that the said cash credit

was routed through the assessee and ploughed back in its books of accounts. I am therefore to hold

that the assessee had failed to offer satisfactory

explanation on the nature and source of the

unsecured loan shown in its books of account for the

relevant assessment year in question and hence the

same is treated as undisclosed income of the

assessee u/s 68 of the Act. It has been elaborately

established in the preceding paras that the

assessee had failed to discharge its onus in proving

the identity, creditworthiness and genuineness of

the lenders. The assessee failed to establish the

creditworthiness of the lender by producing any

bank statement etc. to justify that the lender is a

man of means, the unsecured loan so raised by the

assessee is not acceptable and added to the total

income of the assessee as income from undisclosed

sources.”

 “In view of the above, unsecured loan amounting to

Rs. 39,07,000/- is treated as unexplained cash credit u/s 68 of the Income Tax Act, 1961 and is

added to the income of the assessee.

 “As per the P&L account submitted the assessee has

claimed conveyance of Rs. 2, 26, 297/-. However

the bills and vouchers of expenses claimed by

assessee were not produced by him. Considering

the non-availability of all bills/vouchers and some

of them being of personal nature, a lump sum

expenditure of Rs. 22, 630/-@10% of expenses

incurred is disallowed and added under the head

income from business/profession.”

2.4 That the assessee being aggrieved by the aforesaid

“Impugned Assessment Order” prefers the first appeal

u/s 246A of the Act before the Ld. CIT (A) who by the

“Impugned Order” has dismissed the first appeal of the

assessee on the grounds and the reasons stated therein. The

core grounds and reasons for the dismissal of the first appeal

were as under:- 2.5 That the assessee being aggrieved by the “Impugned

Order” has preferred the instant second appeal before this

tribunal and has raised the following grounds of appeal in

the form no. 36 against the “Impugned Order” which are as

under:-

3.1 The hearing in the matter took place before this Tribunal

on 09.07.2026 when the Ld. AR for & on behalf of the

Assessee appeared before us & interalia contended that the

“Impugned Order” is bad in law, illegal & not Proper. It is in

the violation of the principles of natural justice. It therefore

deserves to be set aside.

3.2 The Ld. AR has placed on record of this tribunal an

affidavit dated 07.07.2026 which is reproduced by us as

below:- Basis above affidavit the Ld. AR contended that no sufficient

time was with the assessee to give full and material

particulars in support of his case to the lower authorities the

core reason being assessee was in jail and after the bail was

busy with the court proceedings instituted by MP state

excise department. These circumstances caused immense

mental stress and seriously disrupted his business

affairs. Hence assessee could not produce the supporting

documents which were sought by the lower authorities. Per

contra the Ld. DR appearing for and on the behalf of the

revenue supported the “Impugned Assessment Order” and

“Impugned Order” Hearing was over and closed.

4.1 We have to decide the legality, validity and proprietary of the

“Impugned Order” basis records of the case & the rival

submission canvassed before us.

4.2 We have carefully perused the records of the case and have

heard the submissions.

4.3 We basis records of the case & after hearing & further

upon examining the rival contentions of the Ld. AR & the Ld.

DR canvassed before us states that.

4.4 Basis record we observe that the “Impugned

Assessment Order” is dated 27.12.2019 and the

“Impugned Order” is dated 02.02.2026. The relevant

affidavit filed before this tribunal is dated 07.07.2026

wherein above pleas of arrest, mental agony, stress in the

business etc. have been taken for the first time. Same were

not pleaded before the Ld. Assessing Officer and the Ld.

CIT (A). Be that as it may in order to give one more

opportunity to the assessee as and by way of last chance we

set aside the “Impugned Order” and remand the case back

to the file of the Ld. CIT (A) on De novo basis. We

simultaneously direct the assessee to file all the necessary

reply, submissions material, evidences etc. in a systematic

manner duly indexed and paginated before the Ld. CIT (A)

within a period of 3 months from the date of receipt of

this order of the tribunal. We further direct the assessee

to pay cost of Rs. 5000/- in favour of “PM Relief Fund”

and show necessary proof in this regard to the Ld. CIT (A)

before he takes up de novo proceeding afresh. The Ld. CIT

(A) is further directed to pass a fresh order as expeditiously

as possible preferably within six months from date of

receipt of this order of the tribunal after due opportunity

is given to the assessee as aforesaid. Assessee is directed

not to seek any adjournment on any flimsy grounds.

5 Order

5.1 In result the “Impugned Order” is set aside as and by way of

remand back to the file of the Ld. CIT (A) with directions as

aforesaid including on the cost.

5.2 The appeal of the Assessee is allowed for statistical

purpose.

Pronounced in open court on 30.07.2026.

Sd/- Sd/-

(MANISH BORAD) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore Dated : 30 /07/2026 Patel/Sr. PS

Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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