HASMUKHBHAI SAVJIBHAI JIYANI,SURAT vs. INCOME TAX OFFICER, WARD 3(2)(1), SURAT

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ITA 615/SRT/2024Status: DisposedITAT Surat30 July 2026AY 2017-187 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the orders of the lower authorities, finding that the assessee failed to provide satisfactory explanations for the cash deposits and other credit entries in his bank accounts. The assessee's failure to cooperate and provide cogent evidence led to the confirmation of additions.

What were the facts?

The assessee, an individual, failed to file a return of income for AY 2017-18 despite having significant cash deposits and credit entries in his bank accounts during the demonetization period. The Assessing Officer made additions under Section 69A for unexplained deposits and credits.

What were the issues?

Whether the additions made by the Assessing Officer for unexplained cash deposits and credit entries in the bank account are justified, given the assessee's failure to file a return and provide explanations.

Which sections of the Income-tax Act were involved?

Section 139,Section 144,Section 142(1),Section 69A,Section 115BBE,Section 133(6),Section 143(2),Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: Shri T.R. Sentil Kumar & Shri Ratnesh Nandan Sahay

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (PHYSICAL HEARING) Before: Shri T.R. Sentil Kumar, Judicial Member And Shri Ratnesh Nandan Sahay, Accountant Member

ITA No: 615/SRT/2024 Assessment Year: 2017-18

Hasmukhbhai Savjibhai Jiyani Income Tax Officer 35, Maninagar Society, Ward-3(2)(1), Opp. Roopsagar Society, Vs Surat A.K. Road, Surat Gujarat PAN: AAQPJ7195M (Appellant) (Respondent) Assessee Represented: Shri Suresh K Kabra, CA Revenue Represented: Shri Mukesh Jain, CIT-DR Date of hearing : 07-05-2026 Date of pronouncement : 30-07-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the assessee as against the appellate order dated 09.10.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the exparte assessment order passed under section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18.

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2.

Brief facts of the case are, the assessee is an individual who has not filed the return of income for the Assessment Year 2017-18. Information with department was that the assessee during demonetization period have made cash deposits in his bank account but not filed the return of income as required u/s. 139 of the Act. Therefore, notice u/s. 142(1) of the Act was issued to the assessee on 09.03.2018 who is required to furnish the said return of income as prescribed in Rule 12 of the Income Tax Rules, 1962 on or before 08.04.2018. But the assessee failed to response. Further, notices issued and were also not replied by the assessee which has resulted in completing the assessment u/s 144(1)(b) of the Act. The Assessing Officer noted that the assessee made cash deposits of Rs. 10,42,000/- in his two bank accounts with Bank of Baroda.

2.1 The AO issued notice u/s 133(6) of the Act to the banker and found that cash deposit of Rs. 3,08,81,000/- made during the domonitization period and credit entries of Rs. 7,53,36,853/- in all totaling at Rs. 10,62,17,853/- made in the account. Therefore, a show cause notice issued to the assessee to explain the deposits made in the account. The assessee failed to reply, hence another notice u/s. 143(2) of the Act issued on 18.09.2020. Again the assessee failed to reply which are resulted in passing exparte assessment order making addition u/s 69A of the Act of Rs. 10,42,000/- and additions u/s 69A of the Act of Rs. 6,26,54,653/- and demanded tax u/s. 115BBE of the Act.

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3.

Aggrieved against the assessment order, the assessee filed appeal before ld. CIT(A) who has also confirmed the additions made by the Assessing Officer by observing as follows:- “(A) Decision on Ground no. 1 & 2 pertaining to Unexplained credits in bank account amounting Rs.6,26,54,653.00 during the financial year 2016-17 relevant to A.Y.- 2017-18: The total credit entries in the bank accounts of the Assessee are totaling to an amount of Rs. 10,62,17,853.00, out of which Assessing officer has accepted the explanation offered by the assessee for Rs. 4,25,21,200.00 and cash deposits of Rs. 10,42,000.00 which has also been added in the following ground no.-2. The assessing officer had made an addition of Rs.6,26,54,653.00 (10,62,17,853.00-4,25,21,200.00- 10,42,000.00). The Assesse had submitted an unsigned Tally software print out of financials for the FY 2016-17 relevant to A.Y. 2017-18. In profit and loss account of the assessee the total turnover during FY 2016-17 is shown to be Rs. 53,46,000.00 and Net profit is Rs. 12,23,659.00. Considering the facts of the case like (i) non-compliant nature of assessee for not having filed any ITR on his own for the AY under consideration; (ii) also not filing any response to the AO's notice u/s 142(1), (iii) heavy deposits found in his bank account/s ie: to the tune of Rs. 10.62 crores and reportedly very less turnover of Rs. 53.46 lakh only (as submitted in unsigned print of P& L account), (iv) the remand report of the assessing officer, (v) non-submission of proper financial statements, schedule to financials like list of advances, loans etc. and lastly (vi) discussions made above from no.-(i) to point no. (xiii) above under the head decision of the appellate authority, this authority finds substance in the contentions of the Assessing officer and no infirmity in its assessment order. Consequently the decision of the Assessing officer w.r.t the addition of Rs. 6,26,54,653.00 to the income of the assessee considering it as unexplained credits / deposits in the bank account of assessee under section 69A of the Income Tax act 1961 is upheld alongwith Penalty proceeding us. 274 r.w.s. 271AAC of the Act is being initiated. Thus these grounds are decided in favor of Revenue and against the assessee. (B) Appellate Decision on Ground no. -3: Pertaining to cash deposit in bank amounting Rs. 10,42,000.00 during demonetization period:- a. Total cash deposited in bank accounts of assesse was Rs. 30,32,000.00 (Rs. 21,90,000/- in personal account and Rs. 8,42,000/- in proprietary firm M/s Shri Krishna account. Out of this total money deposited during the year Rs. 10,42,000/- was deposited during demonetization period. b. The Appellant assessee has not submitted any ITR during the assessment year under consideration and further the assessee has not filed any ITR in response to the notice u/s 142(1) of the Act so issued to him by the AO.

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c. Heavy credits are noted from the bank account of the Appellant assessee ie: of more than 10. crores in the bank accounts of assesse, addition was made by the Assessing Officer on both the grounds amounting to Rs. 10,42,000/- d. There is non-submission of any proof w.r.t the source of cash deposited in bank during demonetization period. The contention of the assessee that this cash deposit was from earlier cash withdrawls, gift received from Jaya Shree H. Jiyani (for which no evidence like gift deed etc, has been submitted before the AO or this Appellate authority), construction labor Income and Rental income (these incomes have not been offered by assesse for taxation as ITR for the relevant A.Y, has not been filed at all), is not acceptable in the eyes of this Appellate authority. Consequently this Appellate authority upholds the decision of the assessing officer to make addition of Rs. 10,42,000.00 to the income of the assessee, being un-explained money or cash deposits during demonetization period invoking the provisions of section 69A of the Income Tax Act 1961 and penalty proceeding us. 274 r.w.s. 271AAC of the Act is being initiated. Thus this ground is decided in favor of Revenue and against the assessee.

4.

Aggrieved against the appellate order, the assessee is in appeal before us, raising the following grounds of appeal as under:-

“1 The Ld CIT(A)-NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of 6,26,54,653/-. 2 The Ld CIT(A)-NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of Rs.10,42,000/-.

5.

Ld. Counsel appearing for the assessee filed before us, a paper book running to 209 pages which are nothing but the paper book filed before ld. CIT(A) with written submission, Annual statement of books of accounts, bank details, cash book, copy of extract of Sale Deed, confirmation and ledger account of unsecured loans. In support of the same. Ld. Counsel pleaded to delete the additions made by lower authorities.

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6.

Per contra, ld. Sr. DR appearing for the Revenue supported the orders passed by the lower authorities and requested to confirm the additions.

7.

We have given our thoughtful consideration and perused the materials available on record, including the paper book filed by the assessee. It is undisputed fact that during the assessment proceedings, the assessee failed to file the return of income and not responded to the notices issued which resulted in passing exparte assessment order. During the appellate proceedings, the assessee filed the paper book before CIT(A) and ld. CIT(A) called for a remand report from the Assessing Officer who has filed his remand report dated 15.09.2023 as follows:- “….Further, this Appellate Authority also sent certain additional evidences (as submitted by the assessee) to the AO on 14.08.2023 for its comments/ remand report. The AO concerned submitted a Remand Report dated 15.09.2023 [DIN & Letter no. ITBA/NFAC/F/24.2023-24/1056135487(1)] to this Appellate authority. The Ld AO submitted in its remand report dated 15.09.2023 stating as follows: "....The submission and attachment made by the assessee is gone through and it is learnt that the entire submission is nothing but a repetition of the same details as were furnished during the assessment proceedings. The order u/s 144 of the Act was passed in the case on 10.12.2019. The first notice u/s 142(1) of the Act was issued to the assessee on 09.03.2018 but the assessee has not furnished his return of income. During the assessment proceedings, the assessee was issued with notices on 26.06.2019, 24.09.2019, 27.09.2019 and 28.11.2019. The submission found attached under remand report work item is perused and it is found that the assessee has resubmitted the replies dated 11.09.2019, 13.09.2019, 03.10.2019 and 11.10.2019 and all these replies are resubmitted at appellate stage also. Other than the submission which has already been made during the assessment proceedings nothing is found attached. Thus, no fresh evidences are found filed under rule 46 A of the Income Tax rule 1962. The mandate as received under work list for remand report that "the appellant assessee had filed certain confirmations etc. from various parties vide his submissions dated: 30.12.2022. It is observed that, these confirmations etc. were apparently not filed before the AO during the assessment proceedings and therefore, are being considered as additional / fresh evidence filed under Rule 46A of the Income Tax rule 1962. As submitted, these documents and information so submitted by the assessee

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would be of substantial and vital importance in deciding this appeal pending before this appellate authority. The said documents are hereby attached with this Remand letter and w.r.t the same, the AO is directed to carry out such necessary statutory verification/inquiries required u/s. 250(4) of the IT Act, 1961. Please also consider this as an opportunity granted to the AO to offer such comments and submit its report, if any" is not found workable as the appellant assessee has not furnished any additional evidences..". OBSERVATION In the remand report the Assessing Officer clearly states that, the submissions provided by the appellant assessee is nothing but a repetition of the submissions provided by the assessee during the assessment proceedings and also the Appellant assessee has not provided any of the additional documents/information to the Assessing Officer and the Appellant assessee is not cooperating with the appellate proceedings. The Appellant Assessee has not provided any documents to prove the source of cash deposits and also failed to prove the genuineness and the creditworthiness for other credit entries in its account. 7.1. It is seen from the page no. 14 of the appellate order, ld. CIT(A) given another opportunity of hearing vide notice dated 25.09.2023 to file reply by the assessee on or before 29.09.2023 against the Remand Report. However, the assessee failed to make any submission before ld. CIT(A) which are resulted in confirming the order by A.O. The ld. CIT(A) also relied upon the following case laws:- “…..Lastly, it is noted that, various higher forums and courts have held such matters against the assessee as done in the case of Smt. S. Sakunthala Sivam (Madras High Court) (2022) it was held that, where the “...source of cash deposits could not be satisfactorily explained by the assessee. hence the appeal was dismissed". ii, K.V. Mathew vs. ITO 42 taxmann.com 571 (Kerala High Court) (2014) it was held that, “.. Where the amount in SB account remained unexplained, addition u/s 69A was justified". iii. Roshan Di Hatti v. CIT (1992) 2 SCC 378 (SC) wherein it was held that if the assessee faits to discharge the onus by producing cogent evidence and explanation, the AO would be justified in making the additions back into the income of the assessee.” 8. We do not find any infirmity in the order passed by lower authorities. The assessee failed to explain the cash deposit and credits

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in his bank account during the assessment proceedings and also during the appellate proceedings by way of remand report called from the AO. This clearly shows that the assessee has no explanation to offer against the additions made by the authorities below. Further, the grounds raised by the assessee before us are also vague and without proper and cogent explanation. Therefore, the grounds are liable to be rejected.

9.

In the result, the appeal filed by the assessee is hereby dismissed.

Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 30-07-2026 Sd/- Sd/- (RATNESH NANDAN SAHAY) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat: Dated 30/07/2026 *Ganesh Kumar, Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Surat 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, सूरत

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