JIGNESHKUMAR HASMUKHBHAI PATEL,VADODARA vs. THE INCOME TAX OFFICER, WARD 1(2)(1), VADODARA, VADODARA

Both, AO & CIT(A), have erred in passing the impugned orders without properly appreciating facts of the case, submissions of the assessee and documentary evidences available on record in the correct perspective. Such an act is in gross violation of the principles of natural justice and hence, the impugned order deserves to be quashed. 5. The Ld CIT(A) has erred in law and on facts of the case in confirming levy of interest u/s 234A/B/C/D of the Act 6. The Ld. CIT(A) has erred in confirming action of initiation of penalty proceedings under section 271(1)(c) of the Act. 7. The appellant craves leave to add, amend, alter, edit, DLEETE, 7 modify OR change all OR any of the grounds of appeal at the time of OR before the hearing of the appeal.” 3. The assessee vide ground No. 1 has agitated the reopening of the assessment. However, no argument has been advanced in respect of the said ground, hence, the same is dismissed as not pressed. Vide ground No. 2, the assessee has agitated against the action of the Ld. CIT(A) in confirming the addition of Rs. 8,00,000/- made by the Assessing Officer (in short “the AO”) on account of unexplained cash credits into the bank account of the assessee. The AO noted that the assessee had received a sum of Rs. 10,00,000/- in his bank account from one Shri Ghanshyambhai C. Borad (Patel). The AO was of the view that the assessee had not disclosed the capital gains on the sale of the property. However, it was explained by the assessee to the AO that the assessee had not sold any plot in question. That earlier an agreement to purchase was entered by the assessee with the owner of the said plot. The assessee had paid an amount of Rs. 2,00,000/- to the said party as earnest money. However, the deal did not mature. Ultimately the owner of the plot sold the said plot to one Shri Ghanshyambhai C.

Before me, the Ld. Counsel for the assessee has demonstrated that the aforesaid transaction of Rs. 10,00,000/- was a separate transaction. That Rs. 10,00,000/- was received by cheque by the assessee, which were refunded through banking channel only within a short span of two months. Since the amount stands refunded by the assessee within a span of two months, therefore, it is not a case of unexplained cash credits. Therefore, the addition made by the AO is ordered to be deleted.

Vide Ground No. 3, the assessee has agitated the confirmation of the addition of Rs. 14,20,000/- on account of unexplained cash credits in the bank account of the assessee. The Ld. Counsel for the assessee, at the outset, has brought my attention to the chart reproduced at Page 10 of the Assessment Order to show that immediately before the alleged cash deposit, there was cash withdrawal made by the assessee, which duly tallied with the cash deposits. Even the time period between the withdrawal and deposits is very short ranging from 3 to 5 days, except relating to one transaction of Rs. 8,00,000/-. The assessee has explained that Rs. 5,00,000/- were withdrawn on 20.01.2010 and Rs. 2,00,000/- on 03.03.2010 and Rs. 70,000/- on 10.03.2010. The assessee explained that the aforesaid amount of Rs. 8,00,000/- was deposited out of the aforesaid withdrawals and out of the agricultural income of the assessee. It is not disputed that the assessee is also earning agricultural income. Considering the short span of time between the withdrawal and deposits, the assessee has fully explained the transactions of deposits in the bank account and the same cannot be treated as unexplained cash credits. The impugned addition made by the Assessing Officer is ordered to be deleted. Rest of the grounds of appeal are general in nature and do not require adjudication.

In the result, the appeal of the assessee stands allowed. Order pronounced in the Open Court on 29/07/2026. (Sanjay Garg) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 29/07/2025Tanmay, Sr. P.S.