J D INFRASPACE PRIVATE LIMITED,AHMEDABAD vs. ITO, WARD 2(1)(1) AHMEDABAD, VEJALPUR, AHMEDABAD

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ITA 1135/AHD/2026Status: DisposedITAT Ahmedabad14 July 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in rejecting additional evidence without proper adjudication. The matter was set aside to the CIT(A) to admit the additional evidence and re-adjudicate the grounds on merits.

What were the facts?

The assessee, a land developer, received Rs. 50,00,000 from numerous individuals in small amounts, which were later returned. The assessee claimed these were deposits for scheme memberships that were subsequently cancelled. The AO treated the receipt as unexplained income due to lack of evidence for booking and cancellation.

What were the issues?

Whether the CIT(A) was justified in rejecting additional evidence without considering it on merits. Whether the addition of Rs. 50,00,000 under Section 68 was valid without proper verification of evidence.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 68,Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: MS SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Prakash D Shah, AR
For Respondent: Shri Abhijit, SR-DR
Hearing: 19.05.2026Pronounced: 14.07.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 14.01.2026 for the Assessment Year (A.Y.) 2017-18 in the proceeding u/s 143(3) of the Income Tax Act [hereinafter referred as “the Act”].

2.

The brief facts of the case are that the assessee had filed its return of income for A.Y. 2017-18 on 31.10.2017 declaring loss of Rs.29,37,110/- . The case was selected for complete scrutiny under CASS. The assessee is a land developer. The AO noticed that the assessee had received an

ITA No. 1135/Ahd/2026 J D Infraspace Private Limited. Vs ITO, AY- 2017-18 2

amount of Rs. 50,00,000/- from a number of persons in small quantum of Rs. 15,000/-, Rs. 20,000/- and Rs. 30,000/- on four specific days and the amounts received from them were returned back after demonetisation period. The assessee had explained that the 50 persons, from whom amount was received, had become member of scheme by depositing the amount. However, subsequently they had cancelled the booking and asked for refund. In the absence of any evidence for the booking amount and the cancellation of the booking, the AO had treated the receipt of Rs.50,00,000/- as unexplained and added to income. The assessment was completed u/s. 143(3) on 31.12.2019 at total income of Rs.50,00,000/-.

3.

Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Th

4.

Now the assessee is in second appeal before us. The following grounds have been taken in this appeal:

1.

That the notice issued under section 143(2) of the Act is not in a format issued by the Hon'ble Central Board of Direct Taxes and therefore the notice issued under section 143(2) of the Act, by the learned ITO, Ward 3(3)(2) is bad in law and therefore the notice issued under section 143(2) is to be held as invalid consequently the assessment order passed. 2. That the learned CIT(Appeal)/ National Faceless Appeal Centre, Delhi has erred in law and facts by not quashing the assessment order under section 143(3) of the Act passed by the Ld. ITO Ward 2(1)(2), Ahmedabad as the proceeding u/s 143(3) of the Act is without jurisdiction, against the law and facts, and therefore the Order passed by Ld. ITO is required to be quashed. 3. That the learned CIT(Appeal) National Faceless Appeal Centre, Delhi has erred in law and facts by confirming disallowance of Rs. 4,83 361/- u/s 40A(3)

ITA No. 1135/Ahd/2026 J D Infraspace Private Limited. Vs ITO, AY- 2017-18 3 on account of cash payments exceeding prescribed monetary limit and therefore, the learned AO should be directed to allow the payment made in cash while computing the total income 4. That the learned CIT(Appeal)/ National Faceless Appeal Centre. Delhi has erred in law and facts by confirming the addition of Rs 50,00,000/- under section 68 of the Act, though Rs 14,30,000/-has been received in FY 2015-16 (opening Balance) and the entire credit balance been repaid in FY 2016-17 and therefore, the learned ITO should be directed to delete the addition in full while computing the total income 5. That your appellant craves a leave to add, alter or amend any grounds at the time of hearing. . 5. Shri Prakash D Shah, the Ld. AR of the assessee submitted that the Ld. CIT(A) did not admit the additional evidences brought on record before him and had dismissed the appeal of the assessee without adjudicating the grounds taken by the assessee on merits. He submitted that the rejection of additional evidences was against the principles of natural justice. He submitted that the additional evidences could not be filed before the AO as it had taken considerable time in collecting the evidences from 50 customers who had cancelled their booking. He, therefore, requested that the matter may be set aside to the file of Ld. CIT(A), with a direction to admit the additional evidences and, thereafter, re-adjudicate the matter on merits.

6.

Per Contra, Shri Abhijit, the Ld. SR-DR had no objection if the matter was set aside to the file of Ld. CIT(A) for deciding the matter afresh.

7.

We have considered the rival submissions. It is found that the Ld. CIT(A) had rejected the admission of additional evidences on the basis of the remand report of the AO who had objected the admission of such evidences. The Ld. CIT(A) did not discuss the nature of additional

ITA No. 1135/Ahd/2026 J D Infraspace Private Limited. Vs ITO, AY- 2017-18 4 evidences brought on record. It is evident from the assessment order that the addition of Rs. 50,00,000/- was in respect of cash deposits received from 50 persons who had subsequently cancelled their bookings. The AO had given a finding that the assessee had submitted some cash receipts in which the name of the party was mentioned. However, the assessee could not file any written agreement and identity of the persons/members. Thus, the addition was made by the AO in the absence of agreement/confirmation of those 50 person from whom the cash was stated to be received. The Ld. CIT(A), therefore, should have considered the fact that the assessee must have taken considerable time in contacting those 50 persons and obtaining their confirmation. Under the circumstances, he should not have rejected the additional evidences merely because those evidences were not filed before the AO. The AO in his remand report had not given any finding that he had made any inquiry in respect of the additional evidences filed by the assessee and that the same were not found genuine.

8.

In the interest of justice, therefore, we deem it proper to set aside the matter to the file of the Ld. CIT(A) with a direction to admit the additional evidences filed by the assessee and, thereafter, re-adjudicate the grounds taken by the assessee on merits. The Ld. CIT(A) may call for a remand report of the Assessing Officer afresh, with a direction to verify the correctness of the additional evidences as brought on record before him.

ITA No. 1135/Ahd/2026 J D Infraspace Private Limited. Vs ITO, AY- 2017-18 5

9.

In the result, the appeal of the assessee is allowed for statistical purpose.

Order pronounced in the Court on 14/07/2026 at Ahmedabad.

Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 14th July, 2026 Neelesh, Sr. PS (True Copy) आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file. आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार पंजीकार (Dy./Asstt.Registrar) उप उप/सहायक उप उप सहायक सहायक पंजीकार सहायक पंजीकार पंजीकार आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद / ITAT, Ahmedabad अहमदाबाद

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