PRAVINCHANDRA MAHASUKHLAL VADECHA (HUF),SURAT vs. ITO, WARD 1(3)(4), SURAT

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ITA 544/SRT/2025Status: DisposedITAT Surat21 July 2026AY 2014-155 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the matter to the CIT(A) to decide the appeal afresh. The assessee was directed to provide explanations for the genuineness of transactions without seeking unnecessary adjournments.

What were the facts?

The assessee's case was selected for scrutiny, and notices were issued. However, the assessee failed to comply with the notices, leading to an ex-parte assessment. Additions were made for unexplained unsecured loans, sundry creditors, and bogus purchases.

What were the issues?

Whether the CIT(A) erred in confirming additions without providing a proper opportunity to the assessee to explain the transactions. The core issue revolves around the unexplained nature of loans, creditors, and purchases.

Which sections of the Income-tax Act were involved?

Section 68,Section 144,Section 271AAC,Section 234A,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

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

For Appellant: Shri P.M. Jagasheth, C.A
For Respondent: Ms. Neerja Sharma, Sr. DR
Hearing: 04/05/2026Pronounced: 21/07/2026

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT Before: Shri T. R. Senthil Kumar, Judicial Member & Shri Ratnesh Nandan Sahay, Accountant Member

ITA No: 544/SRT/2025 Assessment Year: 2014-15

Pravinchandra Mahasukhlal Vs ITO, Vadecha (HUF), Ward – 1(3)(4), 710, Royal Palace Opp. Surat. Agarwal Samaj Bhavan, Ghod Dod Road, Surat-395001. (Appellant) (Respondent)

Assessee Represented by : Shri P.M. Jagasheth, C.A. Revenue Represented by : Ms. Neerja Sharma, Sr. DR Date of hearing : 04/05/2026 Date of pronouncement : 21/07/2026 आदेश/ORDER PER: RATNESH NANDAN SAHAY, AM: 1. This is an appeal filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi [In short, ‘the ld. CIT(A)’] dated 12/03/2025 for the assessment year (AY) 2014-15 wherein the assessee has raised following grounds of appeal: "1. On the facts and circumstances of the case as well as law on the subject, the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in in making addition of Rs.1,39,22,000/- on account of alleged unexplained unsecured loans u/s.68 of the Income Tax Act, 1961.

2 ITA No. 544/Srt/2025 Pravinchandra Mahasukhlal Vadecha (HUF) Vs ITO 2. On the facts and circumstances of the case as well as law on the subject, the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.81,50,243/ on account of alleged unexplained sundry creditors.

3.

On the facts and circumstances of the case as well as law on the subject, the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs. 18,50,243/ out of total addition of Rs.42,44,890/- on account of alleged unexplained purchase, which is shown as sundry creditors.

4.

On the facts and circumstances of the case as well as law on the subject, the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in not considering the submission and details filed and not provide the proper opportunity to explain the details, hence the case may please be set aside and restore to the AO or CIT(A).

5.

On the facts and in the circumstances of the case as well as the law on the subject, the learned Assessing Officer has erred in initiated penalty u/s.271AAC of Income Tax Act, 1961.

6.

On the facts and in the circumstances of the case as well as the law on the subject, the learned Assessing Officer has erred on facts and in law in charging 234A, 234B, and 234C of the IT Act, 1961.

7.

It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper.

8.

Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal." 2. Facts of the case in brief, are that the case of the assessee was selected for scrutiny and notice under Section 143(2) of the Income Tax Act, 1961 (in short, the Act) was accordingly issued

on 31/08/2015 which was duly served upon the assessee. Further notice under Section 142(1) read with section 129 of the

3 ITA No. 544/Srt/2025 Pravinchandra Mahasukhlal Vadecha (HUF) Vs ITO Act was also issued to the assessee on 06/06/2016 which was also duly served upon the assessee. However, no compliance was made by the assessee. When the assessee did not make any compliance on the notices issued by the Assessing Officer from time to time, assessment was completed under Section 144 of the Act and following additions were made. (i) Addition of ₹ 1,39,22,000/- under Section 68 of the Act. (ii) Addition of ₹ 81,50,243/- on account of non-verifiable sundry creditors and (iii) Addition of ₹ 42,44,890/- on account of bogus purchases. 3. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the ld. CIT(A), who vide the impugned order dated 12/03/2025 partly allowed the appeal of the assessee by confirming the addition of ₹ 1,39,22,000/- made under Section 68 of the Act, addition of ₹ 81,50,243/- on account of non- verifiable sundry creditors and restricted the addition of ₹ 18,82,517/- on account of bogus purchases by deleting the addition of ₹ 23,62,737/- on the ground that the assessee could not establish the identity of the creditors, their creditworthiness and genuineness of the transactions before the Assessing Officer. Even during the course of the assessment proceedings,

4 ITA No. 544/Srt/2025 Pravinchandra Mahasukhlal Vadecha (HUF) Vs ITO the Assessing Officer, though verified the transactions with all the thirteen parties from whom the loans claimed to have been taken but it was found that the appellant could not establish the creditworthiness of the creditors. The ld. CIT(A) after giving due consideration of the balance sheet provided by the assessee further confirmed a sum of ₹ 18,82,517/- and remaining addition was deleted. 4. Gggrieved by the order of the ld. CIT(A), the assessee is in appeal before this Tribunal. 5. During the course of appellate proceedings before us, the ld. AR has submitted that one more opportunity may kindly be given to the appellant to explain its case before the ld. CIT(A) who has decided the appeal on the basis of the remand report and the appellant has not been given any opportunity of being heard to explain the genuineness of the entire transaction. Accordingly, we restore the matter back to the file of the ld. CIT(A) to decide the appeal afresh after giving the assessee a reasonable opportunity of being heard. The assessee is also directed to explain the genuineness of the transactions without seeking any unnecessary adjournments.

5 ITA No. 544/Srt/2025 Pravinchandra Mahasukhlal Vadecha (HUF) Vs ITO 6. In the result, this appeal of the assessee is allowed for statistical purposes only. Order is pronounced under the provisions of Rule 34 of IT(AT) Rules, 1963 on 21/07/2026.

Sd/- Sd/- (T. R. SENTHIL KUMAR) (RATNESH NANDAN SAHAY) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Dated 21/07/2026 *Ranjan आदेश�ȧĤǓ�ͧ �ͪ �\ Ē ȯͪ��/ Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT 6. Guard file. By order/आदेशसे,

उप/सहायकपंजीकार आयकर\ �Ȣ�ȣ�\ͬ ����, सूरत

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