SHARAD ARUNBHAI PATEL,C- GOKULDHAM SOCIETY vs. THE ITO, WARD 2(1)(1), AHMEDABAD

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ITA 1256/AHD/2026Status: DisposedITAT Ahmedabad06 July 2026AY 2018-196 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment was valid. However, the additions made for cash deposits, unsecured loan, and household expenses were deleted as the assessee had provided sufficient explanations and the additions were based on vague assumptions.

What were the facts?

The assessee's assessment was reopened based on capital introduced in a firm where he was a partner. Additions were made for cash deposits in the assessee's bank account, an unsecured loan from his father, and inadequate household expenses.

What were the issues?

Whether the reopening of assessment was justified and whether the additions made under various sections for unexplained cash deposits, loans, and expenses were sustainable.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 69A,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG

For Appellant: Shri Jignashu Jani, A.R, Shri Veerabadram Vislavath, Sr. DR
For Respondent: Shri Veerabadram Vislavath, Sr. DR
Hearing: 30/06/2026Pronounced: 06/07/2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 1256/Ahd/2026 (िनधा�रण वष� / Assessment Year : 2018-19) बनाम Sharad Arunbhai Patel Income Tax Officer / C-3 Gokuldham Society , Ward-2(1)(1), Ahmedabad Vs. Opp. Stadium Sabarmati Ahmedabad Gujarat - 380005 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AOQPP4256B (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Jignashu Jani, A.R. ��यथ� क� ओर से/Respondent by : Shri Veerabadram Vislavath, Sr. DR Date of Hearing 30/06/2026 Date of Pronouncement 06/07/2026 (आदेश)/ORDER The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”), dated 18.02.2026 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2018-19.

2.

Ms. Jignashu Jani from the office of Shri Sunil Maloo has appeared and sought adjournment, however, considering the facts and circumstances of the case, I am of the view that the appeal can

ITA No.1256/Ahd/2026[Sharad Arunbhai Patel vs. ITO] A.Y. 2018-19 - 2 – be adjudicated. Ms. Jignashu Jani, who is an apprentice in the office of Shri Sunil Maloo, CA. Ld. AR of the assessee has come prepared with the case and, therefore, with her assistance and after hearing the Ld. DR, I proceed to adjudicate the appeal on merits.

3.

The assessee in this appeal has taken following grounds:

“1. The Ld. CIT(A) erred in laws and facts in upholding the action of Ld. AO in passing the assessment order u/s 147 r.w.s 144B of the Act, without appreciating that the Ld. AO failed to consider the material available on record. 2. The Ld. CIT(A) erred in laws and facts in upholding the action of Ld. AO by making the addition of Rs 2,50,000/- u/s 69A of the Act on account of cash deposited in assessee’s bank account. 3. The Ld. CIT(A) erred in laws and in facts in upholding the decision of Ld. AO by making the addition of Rs 1,00,000/- u/s 69A on account of unsecured loan from father alleging the Cash deposit into his father’s bank account. 4. The Ld. CIT(A) erred in laws and in facts in upholding the decision of Ld. AO in making the addition of Rs 2,40,000/- u/s 69C of the Act on account of inadequate household expenses. 5. The Appellant reserves the right to add alter amend or modify any of the grounds of appeal during the course of the appellate proceedings.” 4. Vide ground no.1, the assessee has agitated against the reopening of the assessment. After going through the assessment order and order of the Ld.CIT(A), it reveals that the Assessing Officer (in short ‘the AO’), during the assessment proceedings in the case of M/s Shreeji Buildcon, a firm, in which the assessee was the partner, noted that the assessee had introduced the capital of Rs.16 Lakhs in the said firm and, since, the said firm could not explain the source of capital contributed by the assessee, therefore, the assessment was reopened in the case of the assessee.

ITA No.1256/Ahd/2026[Sharad Arunbhai Patel vs. ITO] A.Y. 2018-19 - 3 – Considering the above facts, I do not find any infirmity in the action of the AO in reopening of the assessment, therefore, ground no.1 of appeal is, hereby, dismissed.

5.

Vide ground no.2, the assessee has contested the action of the lower authorities in making / confirming the addition of Rs.2,50,000/- u/s 69A of the Act on account of cash deposited in assessee’s bank account during assessment year under consideration.

6.

The AO noted that the assessee had deposited Rs.2,50,000/- in his bank account, the source of which, was doubtful. The AO show caused the assessee in this respect. In reply, the assessee furnished the bank statement and submitted that the said deposits were out of past cash withdrawals of the assessee. The assessee further furnished the cash book statement and explained that there was an opening cash in hand of Rs.3,22,314/- as on 01.04.2017. During the year, the assessee had withdrawn cash amount of Rs.1,45,000/- from his bank account. After deducting the withdrawal of Rs.10,000/- and Rs.25,000/-, the cash in hand at the time of alleged deposit was Rs.4,32,314/-, out of which, Rs.2,50,000/- was deposited in the bank account. The AO, however, noted that the assessee was not involved in such a business, which requires cash withdrawals. He, therefore, rejected the aforesaid explanation given by the assessee and made the impugned addition. The Ld.CIT(A) confirmed the addition so made by the AO.

ITA No.1256/Ahd/2026[Sharad Arunbhai Patel vs. ITO] A.Y. 2018-19 - 4 – 7. I have gone through the orders of the lower authorities and heard the rival contentions of the learned representatives of the parties. It is found that the assessee had duly explained before the AO the source of the deposit of Rs.2,50,000/-, which was out of the cash collected from the past withdrawals. The AO has not doubted the past withdrawals, but, has rejected the contention of the assessee observing that the assessee was not involved in such a business which requires cash withdrawals. This type of view of the AO in this matter is too vague and general. There may be so many requirements for cash withdrawals and it is not necessary that an individual will withdraw cash only for business requirements. Therefore, the impugned addition made by the lower authorities is not sustainable and the same is ordered to be deleted.

8.

Vide ground no.3, the assessee has contested the action of the lower authorities in making/confirming the addition of Rs.1 Lakh received by the assessee, as a loan from his father. The AO noted that the assessee had received a cash loan of Rs.5,80,000/- from his father. Though, the AO admitted the reasons of the remaining amount, however, doubted the source of the deposit of Rs.1 lakh by the father of the assessee in his bank account, from which, the loan was given to the assessee. The AO noted that the amount of Rs.1 Lakh was deposited in cash by the father of the assessee in his bank account. It was explained that the said amount of Rs.1 Lakh was deposited out of past withdrawals and savings. Considering that the father of the assessee was a Retired

ITA No.1256/Ahd/2026[Sharad Arunbhai Patel vs. ITO] A.Y. 2018-19 - 5 – Government Employee and receiving pension and was also earning income from agricultural activities, and also considering the smallness of the amount, it is quite reasonable that he would have cash in hand of Rs.1 Lakh, which was deposited in the bank account. Therefore, the impugned addition made by the AO is not sustainable and the same is, accordingly, ordered to be deleted.

9.

Vide ground no.4, the assessee has contested the addition made by the lower authorities of Rs.2,40,000/- on account of unexplained household expenses. The assessee, during the assessment proceedings, duly submitted that the assessee was living in a joint family and that his wife and daughter were also contributing in bearing household expenses and, moreover, his father was also contributing in household expenses. Considering the smallness of the amount and considering that there was four earning members in the family, the impugned addition made only on the basis of assumptions and presumptions is not sustainable. The same is ordered to be deleted.

10.

In the result, the appeal of the assessee stands allowed.

This Order pronounced on 06/07/2026

/- Sd/- (SANJAY GARG) JUDICIAL MEMBER Ahmedabad; Dated 06/07/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant ��यथ� / The Respondent. 2.

ITA No.1256/Ahd/2026[Sharad Arunbhai Patel vs. ITO] A.Y. 2018-19 - 6 – संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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