GULAMMOHAMED SULEMAN MEMON,SURAT vs. ITO, (INT.TAX.) SURAT, SURAT

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ITA 567/SRT/2026Status: DisposedITAT Surat13 July 2026AY 2017-184 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had provided confirmations from relatives and explained the source of cash deposits, including his own cash from earlier withdrawals. These documents were ignored by the lower authorities, making the addition unjustified.

What were the facts?

The assessee, an NRI, deposited Rs. 12,90,000 in cash during the demonetization period in his Indian bank account. The Assessing Officer made an addition of Rs. 14,99,479 as total income due to unexplained deposits, as the assessee did not file an ITR and did not respond to notices.

What were the issues?

Whether the addition of cash deposits made by the assessee under Section 69A was justified when the assessee provided explanations and documentary evidence for the source of funds.

Which sections of the Income-tax Act were involved?

Section 69A,Section 142(1),Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT ‘SMC’ BENCH, SURAT

For Appellant: Shri Suresh K. Kabra, CA
For Respondent: Shri Ashish Kumar, Sr. DR
Hearing: 11.06.2026Pronounced: 13.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT ‘SMC’ BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER ITA No.567/SRT/2026 (Assessment Year: 2017-18) Shri Gulammohamed Suleman Income Tax Officer, (Int. Tax), Memon, Room # 10 5-109, Navu Faliyu, Income Tax Office, Vs. Kholwad, Kamrej, Anavil Business Centre, Surat Pal-Hazira Road, Adajan, Surat PAN: BWNPM2364M (Appellant) : (Respondent) Assessee by : Shri Suresh K. Kabra, CA Respondent by : Shri Ashish Kumar, Sr. DR Date of Hearing : 11.06.2026 Date of Pronouncement : 13.07.2026 O R D E R PER : SUCHITRA KAMBLE, J M: The appeal filed by the assessee is against the order passed by the Learned Commissioner of Income Tax (Appeals), [in short “CIT(A)”] dated 26.02.2025 for the Assessment Year (in short “AY”) 2017-18.

2.

The assessee has raised the following grounds of appeal: “1. The CIT(A)-NFAC has erred and was not just and proper on the facts of the case and in law in confirming addition of Rs 14.99,479/- u's 69A being deposit made in Bank Account 2. The Ld. Assessing Officer has erred and was not just and proper on the facts of the case and in law in invoking the provisions of section 69A of the act for making addition of the Bank deposit. 3. The addition of Rs 14,99,474 u/s 69A may be kindly deleted.

ITA No.567/SRT/2026 Shri Gulammohamed Suleman Memon 4. The invoking of the provisions of section 69A may be kindly struck down. 5. Personal hearing may be granted. 6. Any other relief that your honours may deem fit may be granted. 7. The appellant craves leave to add, amend, alter OR DLEETE any OR all of the above grounds of appeals.” 3. The assessee is an NRI residing at CANADA. The assessee had deposited Rs.12,90,000/- cash during demonetization period in his bank account with ICICI Bank in India. During this period of deposit, he was in India. On the basis of this information with the Department, notice u/s 142(1) of the Income Tax Act, 1961 (in short “the Act”) was issued for filing of the ITR. As no ITR was filed by the assessee, the case was taken up for scrutiny u/s 144 of the Act. No response received from the assessee. The assessment order was passed u/s 144 of the Act by making addition of Rs.14,99,479/- (Rs.12,90,000/- cash deposits and Rs.2,09,479/- other deposits) as total income.

4.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5.

The Ld. Authorised Representative (in short “Ld. AR”) for the assessee submitted the confirmation letter, the name, passport number, date of arrival & departure as well as cash amount given to assessee for deposit. The assessee has his own cash of Rs.5,00,000/- in old currency note and assessee’s family members have given total cash for Rs.8,50,000/-. In fact, during the assessment proceedings the assessee was not in India and not received notice and therefore could not attend the assessment proceedings. But before the CIT(A), assessee has filed the confirmations of his relatives. These evidences were totally ignored. The assessee explained the source of cash deposits.

ITA No.567/SRT/2026 Shri Gulammohamed Suleman Memon 6. The Ld. Departmental Representative (in short “Ld. DR”) relied upon the assessment order and the order of the Ld. CIT(A). The Ld. DR further submitted that the assessee’s family members came to India on 09.11.2016 & 10.11.2016 i.e. after demonetization is declared which means all the notes in the denomination of Rs.500 & Rs.1000 were no legal tender. The Ld. DR further submitted that the CIT(A) has categorically given a finding that the assessee could not explain the cash deposit and hence the addition has been rightly made on account of unexplained credit entries.

7.

We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the very fact that the assessee’s family came to India after declaration of demonetization. The prior withdrawal of the earnings of the relatives was in the old denomination notes. Thus, the assessee has very well established that the assessee has received the cash from his relatives and has also given the confirmation from the said relatives. The assessee was also having cash in India with the earlier withdrawals which was properly explained by the assessee to the AO as well as to the CIT(A). But these documents were totally ignored by the AO as well as the CIT(A). Thus, the addition made by the AO as unexplained credit entries is not justified.

8.

In result, the appeal of the assessee is allowed.

Order pronounced in the open court on 13.07.2026

Sd/- Sd/- (B.M. BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat; Dated: 13.07.2026 * Kishore, Sr. P.S.

ITA No.567/SRT/2026 Shri Gulammohamed Suleman Memon Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Surat 5. Guard File By order,

Assistant Registrar/Sr.PS/PS ITAT, Surat Bench

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