JOSE JACOB KALLARAKAL,THANE vs. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, THANE, THANE

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ITA 2536/MUM/2026Status: DisposedITAT Mumbai21 July 2026AY 2021-224 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's explanation of making payments from personal savings was reasonable, given his substantial disclosed income and the small amount of each payment spread over time. The addition was not justified.

What were the facts?

During a search, a ledger showed four cash payments of Rs. 15,000 each made by the assessee for jewellery purchases. The Assessing Officer treated this Rs. 60,000 as unexplained expenditure.

What were the issues?

Whether cash payments for jewellery purchases, made from personal savings, can be treated as unexplained expenditure under Section 69C without further evidence.

Which sections of the Income-tax Act were involved?

Section 69C,Section 132,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI JAGADISH

For Appellant: Shri Bhupendra Shah, CA
For Respondent: Shri Amit Gurav, SR. DR
Hearing: 19.05.2026Pronounced: 21.07.2026

Per: SHRI JAGADISH, A.M.:

1.

This appeal by the assessee is directed against the order dated 02.01.2026 passed by the learned Commissioner of Income-tax (Appeals), Pune–11, under section 250 of the Income-tax Act, 1961 (“the Act”), for the assessment year 2021–22, arising from the assessment order dated 28.12.2022 passed under section 143(3) of the Act by the Assistant Commissioner of Income-tax, Central Circle–2, Thane.

2.

The effective ground of appeal is against the confirmation of addition of Rs.60,000/- made by the Assessing Officer under section 69C of the Act as unexplained expenditure.

ITA No.2536/M/2026 Jose Jacob Kallarakal 3. Brief facts of the case are that the assessee is an individual and was deriving income from salary, house property and other sources. The assessee filed his return of income on 26.03.2022 declaring a total income of Rs.88,53,245/-. A search action under section 132 of the Act was carried out on 12.10.2021 in the case of Antony Waste Handling Group, during which the residential premises of the assessee were also covered. In the course of search, a ledger relating to M/s Tribhovandas Bhimji Zaveri Ltd. was found, showing four cash payments of Rs.15,000/- each made by the assessee on 02.12.2020, 22.01.2021, 23.02.2021 and 16.03.2021 towards the Kalpavruksha Plus Plan for purchase of jewellery. The Assessing Officer treated the aggregate amount of Rs.60,000/- as unexplained expenditure under section 69C of the Act and assessed the total income at Rs.89,13,245/-. The learned CIT(A) confirmed the addition on the ground that the assessee had not furnished a cash-flow statement or other documentary evidence demonstrating the availability of cash on the respective dates of payment.

4.

Before us, the learned Authorised Representative submitted that the four payments of Rs.15,000/- each were made out of the assessee’s personal savings. It was submitted that the assessee had declared total income of Rs.88,53,245/- for the year under consideration, which included salary income of Rs.91,55,550/-. Considering the assessee’s disclosed income and financial status, the availability of a small sum of Rs.15,000/- on each of the four occasions ought reasonably to have been accepted. Accordingly, it was prayed that the addition of Rs.60,000/- be deleted.

5.

The learned Departmental Representative relied upon the orders of the authorities below and submitted that the assessee had not furnished any documentary evidence or cash-flow statement to establish the source of the cash payments. He, therefore, supported the addition made under section 69C of the Act. 2

ITA No.2536/M/2026 Jose Jacob Kallarakal 6. We have heard the rival submissions and perused the material available on record. The limited question is whether the assessee’s explanation that the payments of Rs 60,000/- were made out of his personal savings is acceptable. The assessee had declared total income of Rs.88,53,245/- for the year under consideration, which included salary income of Rs.91,55,550/-. The payments were not made in one lump sum but were spread over four occasions between 02.12.2020 and 16.03.2021. Having regard to the substantial income disclosed by the assessee and the small amount of Rs.15,000/- paid on each occasion, the explanation that the payments were made out of personal savings is reasonable and consistent with the assessee’s disclosed financial capacity. Merely because a separate cash-flow statement was not furnished, an otherwise reasonable explanation cannot be rejected without bringing any material on record to show that the assessee did not possess sufficient disclosed resources. In these facts and circumstances, we are of the considered view that the addition of Rs.60,000/- under section 69C of the Act is not justified. We, accordingly, set aside the order of the learned CIT(A) on this issue and direct the Assessing Officer to delete the addition.

7.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 21/07/2026.

Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (JAGADISH) Accountant Member Judicial Member

Mumbai, Dated: 21/07/2026 Ashwani Rao Sr. Private Secretary

ITA No.2536/M/2026 Jose Jacob Kallarakal Copy of the order forwarded to: 1. Appellant 2. Respondent 3. The CIT 4. The CIT (Appeals) 5. The DR, I.T.A.T. By order

(Assistant Registrar) ITAT, Mumbai

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