KAVISH DILIPKUMAR SOLANKI,MUMBAI vs. WARD 22(1)(6), MUMBAI

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “(SMC)” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM I.T.A. No.2929/Mum/2026 (Assessment Year: 2018-19) Kavish Dilip Kumar Solanki Ward 22(1)(6) 2302/ Lodha Park, Parkside B Piramal Chamber, Lalbaug, Parel, wing, Near Kamala Mills, Mumbai – 400012. Vs. Ganpatrao Kadam Marg, Lower Parel, Mumbai- 400013. PAN: HEZPS2413M

Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assessee by : Ms. Poonam Naran Revenue by : Smt. B. Brahma Vidya (Sr. DR.) Date of Hearing : 12.05.2026 Date of Pronouncement : 25.05.2026

ITA NO. 2929/Mum/2026 Kavish Dilip Kumar Solanki

O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee, against the order of Commissioner

of Income Tax Appeals/ National Faceless Appeal Centre (NFAC), Delhi [“the Ld.

CIT(A)] dated 15.01.2026 for the assessment year 2018-19, which in turn arises

from assessment order u/s 143(3) of the Income Tax Act, 1961 (“the Act”) dated

19.03.2021 passed by National e-Assessment Centre, Delhi (in short, “the Ld. AO”).

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

“1. On the facts and in the circumstances of the case and in law, the Ld. NFAC has erred in confirming the addition made by the assessment order passed u/s 143(3) of the Act which is invalid and erroneous and liable to be deleted. 2. On the facts and in the circumstances of the case and in law, the Ld. NFAC erred in confirming the addition of INR 4,60,000/- made by the Ld. Assessing Officer u/s 68 of the Act on account of alleged unexplained cash deposits, whereas the fact remains that the said cash deposits were already forming part of the business receipts recorded in the books of account and reflected in the Profit & Loss Account.” 3. The appellant craves leave to add, amend, alter or withdraw any of the above grounds at the time of hearing.” 2. The brief facts of the case are that the assessee e-filed his original return of

income on 14.06.2018, declaring total income at Rs. 5,65,400/- from business,

salary, house property and other sources. The case of assessee was selected for

compulsory scrutiny marking reasons “Transaction in immovable property”. Notice

under this section 142(1) of the Act was issued on 14.03.2020. Necessary details

ITA NO. 2929/Mum/2026 Kavish Dilip Kumar Solanki where furnished by the assessee on ITBA Portal. It is observed by the Ld. AO that

during the year under consideration, the assessee along with three others,

purchased an immovable property for Rs. 4,39,89,552/-. The Stamp duty valuation

Authority valued the market value of the said property at Rs. 4,53,32,230/-, the

difference, therefore was of Rs. 13,42,678/-. The Ld. AO treated the difference to

be taxable under section 56(2)(vii)(b) of the Act. Accordingly, one-fourth of the

difference that is Rs. 3,35,670/- was added to the income of assessee being 25%

partner in the said property.

the Ld. AO that the assessee has deposited a cash amounting to Rs. 4,60,000/-

between 19.06.2017 to 28.06.2017. A question was raised to explain the nature

and source of such cash deposits. In response, the assessee submitted that the

property was purchased on an amount less that the stamp duty valuation.

However, the same does not represent undisclosed income. Regarding cash

deposit of Rs. 4,60,000/-, the assessee submitted that the cash deposits were out

of earlier years savings and gift received by the assessee over a period of time. The

assessee also received some part of cash deposits, as interest free loan given by

him to friends and family and now received back during the year. The contentions

ITA NO. 2929/Mum/2026 Kavish Dilip Kumar Solanki of assessee could not find favour by the Ld. AO. Accordingly, two additions where

made to the income of assessee:

wherein, the Ld. CIT(A) deliberated on both the issues and have decided the issue

of addition under section 56(2)(vii)(7) in favour of the assessee, being the

difference between actual consideration and stamp duty valuation was within

acceptable limits of 10% of safe harbour, as per third proviso to section 50(c) of

the Act.

the ground of assessee stating that the assessee failed to produce any

documentary evidence regarding the claim before the Ld. AO and again before the

Ld. CIT(A) Appeals. Therefore, the addition was confirmed.

assessee, the assessee is in appeal before us.

from the order of Ld. AO as well as Ld. CIT(A).Submitted that the cash deposit in

ITA NO. 2929/Mum/2026 Kavish Dilip Kumar Solanki bank account of the assessee was made out of his income during the year but the

same was wrongly represented by the earlier counsel of the assessee by stating

that the same was from past savings of the assessee and the amount received as

gifts as well as re-payment of loans extended by the assessee to his friends and

family members. To substantiate the genuineness of cash deposits in bank

account, Ld. AR furnished a statement of cash generation during the year by the

assessee. The same is extracted as under:

6,16,000/- the assessee has deposited Rs. 4,60,000/- in his bank account and,

therefore, the amount which is treated as unexplained cash credit within the

ITA NO. 2929/Mum/2026 Kavish Dilip Kumar Solanki meaning of section 68, the same is duly explained and, therefore, the addition

under section 68 cannot sustain.

orders of the revenue authorities.

on record and case laws relied upon the assessee. Admittedly, in present case the

assessee had deposited cash amounting to Rs. 4,60,000/- in his bank account

which was examined by the Ld. AO, the assessee was queried to furnish the nature

and source of such deposits. At first instance before the Ld. AO, the assessee has

explained that this amount was deposited out of past savings, gifts from relatives

and receipts of interest free unsecured loans given by the assessee to his friends

and family. The assessee explained the issue before the Ld. CIT(A) also. However,

was unable to furnish any corroborative evidence to support his contentions.

Before us, assessee came up with a new explanation, stating that the amount was

received on account of gold ornament labour charges received by the assessee on

28.04.2017 and 29.05.2017, which is apparent from the chart furnished by the

assessee before us [referred to as ‘supra’]. A query was raised by the bench to

furnish details and evidence for gold ornament labour charges earned by the

ITA NO. 2929/Mum/2026 Kavish Dilip Kumar Solanki assessee during the year. However, the assessee was unable to furnish any details

and it is simply said that the assessee was in that tread during those days and have

generated such income. The assessee again was unable to furnish any substantial

evidence to corroborate the explanations before us.

the facts involved in the case laws relied upon by the assessee in Anantpur

Kalpana Vs. ITO in ITA No. 541/Bang/2021 dated 13.12.2021 and in the case of

M/s Karnataka Ginger Trading Company Vs. The Income Tax Officer in ITA No.

2235/Bang/2025 dated 05.03.2026, wherein the cash deposits of the assessee are

treated as genuine cash deposit, since the same are arising out of business

receipts duly recorded in the regular books of accounts maintained by the

assessee. Coming to the facts of present case wherein the assessee was unable to

produce any supporting evidence to substantiate the generation of cash within

the year, though have claimed to received the income in the form of labour

charges on gold ornaments during the month of April and May 2017, however, on

a fair considerationof the facts and circumstances, it can be presumed that the

assessee might have had a reasonable cash balance amounting to Rs. 2,00,000/-

with him, which in our considered opinion the assessee will be entitle for

deduction from the addition made under section 68. We thus, direct to reduce the

ITA NO. 2929/Mum/2026 Kavish Dilip Kumar Solanki addition under section 68 to the extent of Rs. 2,00,000/- and confirm the balance

addition of Rs. 2,60,000/- in the hands of assessee. The order of Ld. CIT(A) Appeals

is accordingly modified to above extent and the ld. AO is directed to give effect of

aforesaid directions.

Order pronounced in the open court on 25 -05-2026.

Sd/- Sd/- (SMT. BEENA PILLAI) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated : 25-05-2026. Soumili Das, PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai