ASHOK HEMANDAS ADNANI,ULHASNAGAR vs. INCOME TAX OFFICER, KALYAN

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ITA 688/MUM/2026Status: DisposedITAT Mumbai07 July 2026AY 2013-146 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the order of the CIT(A) and restored the matter for de novo adjudication. The assessee was given an opportunity to produce necessary evidence, subject to payment of costs, to support their claim that bank deposits represented business and financing transactions.

What were the facts?

The assessee's return of income for AY 2016-17 declared a lower gross receipt than the deposits in their bank accounts. The Assessing Officer (AO) reopened the case and made an addition of Rs. 1,41,13,357 as unexplained money under Section 69A due to non-compliance and lack of evidence. The CIT(A) upheld the addition and disallowed a deduction under Section 80C.

What were the issues?

Whether bank deposits constitute unexplained money when the assessee claims they are business receipts from bill discounting, and if the assessee is entitled to a deduction under Section 80C without sufficient evidence.

Which sections of the Income-tax Act were involved?

Section 69A,Section 80C,Section 144,Section 147,Section 148,Section 250

AI-generated summary — verify with the full judgment below

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “A” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.688/MUM/2026 (AY: 2013-14) Ashok Hemandas Adnani vs. Income Tax Officer Block No C 654, Room No 1308, Income Tax Department Mohan Plaza Netaji C Block Road, Ulhasnagar, Kalyan West, Kalyan-421203. Kalyan-421004. PAN/GIR No: AAQPA7647D (Appellant) (Respondent) Assessee by Shri Dipesh Poptani, CA Revenue by Shri Surendra Mohan (SR DR) Date of Hearing 07.07.2026 Date of Pronouncement 24.07.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

This appeal filed by the assessee emanates from the order passed u/s250

of the Income-tax Act, 1961 (in short, ‘Act’) by the National Faceless Appeal

Centre [in short, ‘CIT(A)’], dated 24.11.2025 for the assessment year (AY) 2013-

14.

2.

The grounds of appeal raised by the assessee are as under:

“1. The Ld AO has made addition of Rs 1,41,13,357 The Ld AO have made additions on the basis of credits in the bank account. The credits in our bank were not forming part of our turnover We were engaged in bill discounting activities, hence, only net commission income is to be considered as declared by us in our return of income

2.

The Ld AO has made an addition on the basis of Section 69A which is not relevant to our case Section 69A is attracted when there is unexplained assets found with the assessee. However, in the present case, we have proper explanation for the transactions 2 in our bank account. The profits were correctly declared in our return of income and just because there were credits in our bank account doesn t mean that 1 the entire amount is our profit. There were equivalent amount of payments as well as we are involved in business activities.

3.

The Ld AO has disallowed the deductions claimed u s 80C for 3 Rs 1,00,000 The claim of deductions is on the basis of actual investments made and hence it cannot be disallowed

4.

The Ld. CIT (Appeals) have not considered any of our Grounds of Appeal and dismissed the case due to non 4 attendance. However we have also submitted request for an adjournment of 10 days as our CA was busy in filing Income tax Returns and audits

5.

The Appellant hereby request your honor to consider the facts 5 and DROP the Addition made by the Learned Income tax officer R of Rs. 1,42, 13,357

6.

The Appellant also request your honor to give us one more opportunity to attend the case before the Learned Income tax 6 officer OR the case shall be remand back to the concerned Assessing Authority to submit the documents and to attend the fresh hearing.

7.

The above Grounds are crave to add, amend OR alter at any time before the final date of hearing.”

3.

Facts of the case, in brief, are that the assessee filed return of income for the AY 2016-17 on 31.03.2014 declaring total income of Rs.2,07,310/-. On the basis of information received from the DDTI (Inv.), Kalyan that the assessee had maintained three bank accounts in which deposits aggregating to Rs.1,71,33,120/- were made during the relevant previous year, whereas the assessee had disclosed gross receipts of only Rs.30,19,763/- in the return of income, the case was reopened and notice u/s 148 of the Act, was issued on 26.02.2020 after recording reasons and obtaining the requisite sanction u/s 151 of the Act. Thereafter, several notices u/s 142(1) and 148 of the Act were issued calling upon the assessee to furnish details regarding the nature of business, bank statements, source of deposits and supporting documentary evidences. Despite repeated opportunities, no compliance was made by the assessee. Consequently, the assessment was completed ex parte u/s 144 r.w.s. 147 and 144B of the Act by adding the difference of Rs.1,41,13,357/- as unexplained money u/s 69A of the Act. Further, the deduction of Rs.1,00,000/- claimed u/s 80C was disallowed for want of supporting evidence. Accordingly, the total income was assessed at Rs.1,44,20,667/- and penalty proceedings were also initiated. 4. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A).

Though the appeal was filed with a delay of about 18 months, the CIT(A), after

considering the reasons furnished for the delay, condoned the delay in the

interest of justice and admitted the appeal for adjudication on merits. During the

appellate proceedings, the CIT(A) afforded the assessee six opportunities of

hearing. However, except for seeking repeated adjournments and filing illegible

copies of certain bank statements, no substantive submissions or documentary

evidence were furnished in support of the grounds of appeal. The CIT(A),

therefore, proceeded to decide the appeal on the basis of the material available

on record. On merits, the CIT(A) observed that despite claiming that the

impugned bank deposits represented business receipts and receipts arising from

financing/bill-discounting activities, the assessee failed to produce the books of

account, cash book, ledger, bank-wise reconciliation, details of borrowers,

confirmations, agreements, bills, vouchers or any other documentary evidence either before the AO or during the appellate proceedings. Holding that the

burden of explaining the nature and source of the deposits had not been

discharged, the CIT(A) upheld the addition of Rs.1,41,13,357/- made by the AO

u/s 69A of the Act. With regard to the disallowance of deduction u/s 80C

amounting to Rs.1,00,000/-, the CIT(A) observed that no documentary evidence

had been produced to substantiate the claim either during the assessment

proceedings or in appeal. Accordingly, the disallowance was also confirmed.

Consequently, all the grounds raised by the assessee were dismissed and the

appeal was rejected.

5.

Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The Ld. AR submitted that the lower authorities were not justified in treating the bank deposits as unexplained money u/s 69A of the Act. It was contended that the deposits represented business receipts and transactions relating to financing/bill discounting activities and, therefore, the provisions of section 69A were not applicable. It was further submitted that adequate opportunity was not given to the assessee and the evidences now placed on record deserve to be considered. The Ld. AR also challenged the disallowance of deduction u/s 80C of the Act. He requested that another opportunity may be given to the assessee to plead the case on merit. 6. On the other hand, the Ld. Sr. DR supported the order of lower authorities. He, however, submitted that the Tribunal may decide the matter as it thinks fit.

7.

We have heard both sides and perused the materials on record. It is

noticed that the assessment was completed ex parte u/s 144 r.w.s. 147 of the Act

and the CIT(A) also confirmed the additions mainly for want of supporting evidence. Before us, the assessee has expressed willingness to produce the

necessary books of account and other documentary evidence in support of the

claim that the impugned bank deposits represent business and financing transactions. In the interest of justice, we deem it proper to set aside the

impugned order of the CIT(A) and restore the matter to the file of the CIT(A) for

de novo adjudication after affording adequate opportunity of being heard to the assessee. However, we find that the explanation given by the assessee for non-

compliance is suboptimal and leaves something more to be desired. In view of these facts, we set aside the order of CIT(A) and restore the matter to the file of

CIT(A) for fresh adjudication subject to payment of cost of Rs.10,000/- (Rupees

Ten thousand only) to the credit of the Prime Minister’s National Relief Fund within 30 days from receipt of this order. Subject to such payment, the CIT(A) shall

decide the matter on merits in accordance with law after granting adequate and

reasonable opportunity of being heard of the assessee. The ground is allowed for statistical purpose.

7.1 We make it clear that we have not expressed our opinion on merit of the

case, which the AO shall independently decide as per law.

8.

Since we have set aside the order of CIT(A) and remanded it to his file for

fresh adjudication, the other grounds become academic in nature and do not

require adjudication.

9.

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

Order is pronounced on 24.07.2026.

Sd/- Sd/- (ANIKESH BANERJEE) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER

*Aniket Chand; Sr. PS MUMBAI Date: 24.07.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File

By Order

Assistant Registrar ITAT, MUMBAI

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