ALPESH KHODABHAI PATEL,AHMEDABAD vs. THE ITO, WARD-3(2)(6), AHMEDABAD

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ITA 618/AHD/2025Status: DisposedITAT Ahmedabad08 June 2026AY 2012-135 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had provided sufficient documentation, including confirmations from farmers who provided loans, and cash book entries, to explain the cash deposits and credits. The AO's additions were based on conjecture and failed to consider the provided evidence.

What were the facts?

The assessee, an individual, failed to file an income tax return and was subject to reassessment proceedings. The Assessing Officer (AO) made additions for unexplained cash credits in bank accounts and other credits, totaling over Rs. 10 lakhs. The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal.

What were the issues?

Whether the assessee adequately explained the source of cash deposits and credits in bank accounts, and if the AO erred in making additions without considering documentary evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

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

For Appellant: Shri Alpesh K. Patel, AR
For Respondent: Shri Girish Parihar, Sr. DR
Hearing: 01.04.2026Pronounced: 08.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD ‘SMC’ BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.618/AHD/2025 (Assessment Year: 2012-13) Mr. Alpesh Khodabhai Patel, Income Tax Officer, Ward-3(2)(6), A/88, Shreenath Society, Pratyakshkar Bhawan, Lambha, B/h. Stock Exchange, Vs. Tal. Dascroi, Nr. Panjara Pole Cross Road, Ahmedabad – 382405 Ambawadi, Ahmedabad Gujarat - 380015 PAN: AOMPP4677G (Appellant) : (Respondent) Assessee by : Shri Alpesh K. Patel, AR Respondent by : Shri Girish Parihar, Sr. DR Date of Hearing : 01.04.2026 Date of Pronouncement : 08.06.2026 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), ADDL/JCIT(A) [in short “CIT(A)”], Coimbatore dated 19.01.2025 for the Assessment Year (in short “AY”) 2012-13.

2.

The assessee has raised the following grounds of appeal: “1. The learned A.O. as well as Learned CIT (A) has erred in law and on facts while making afore said addition, the learned A.O. has made the addition while not properly interpreting the facts of the appellant in the true spirit. 2. The learned A.O. as well as Learned CIT (A) has erred in law and on facts while not considering that the appellant had agricultural income and had also income from the C & F agency as well as had cash on hand which had been deposited in bank and the source of all the funds was available. 3. The learned A.O. as well as Learned CIT (A) has erred in law and on facts while on his own surmises and conjectures with a pre determined mind and estimates, had concluded

ITA No.618/AHD/2025 Mr. Alpesh Khodabhai Patel that the persons those whom have given unsecured loan to the appellant were holding loan from various banks/co. operative societies and concluded that no prudent person will give loan to other person when he himself has taken loan from various banks in order to carry out agricultural activities by paying interest on those loan taken. 4. The learned A.O. as well as Learned CIT (A) has erred in law and on facts while not considered the confirmations given by those unsecured loan parties and brushed aside the facts and documents available on record. It is to be submitted that the appellant had agricultural income and has also obtained loans from friends/relatives and cash has been accounted in the cash book. It is to be noted that the persons from whom the appellant has accepted loan are farmers and accordingly, the copy of duly signed confirmations of those loans accepted persons alongwith their PAN cards, 7/12 extracts, hakk 6 patrak for land owned were submitted. The copy of cash book and bank book were also submitted, however the learned A.O. and learned CIT (A) did not considered the same. In view of above facts since the source of the cash deposited by the appellant during assessment year 2012-13 is explained as mentioned above the addition made by the learned A.O. on account of amount credited in bank accounts as unexplained of Rs. 5,75,000/- is required to be deleted. II. ADDITION ON ACCOUNT OF UNEXPLAINED CREDIT IN BANK RS.3,84,776/-. 1. The learned A.O. as well as Learned CIT (A) has erred in law and on facts since the learned A.O. has made the addition while not properly interpreting the facts of the appellant in the true spirit. The appellant had agricultural income and had also income from the C & F agency. During the course of assessment proceedings the appellant had submitted the cash book and bank book wherein each and every entry with narration was explained. However, the learned A.O. and learned CIT (A) without considering the same has proceeded to make the addition. The learned A.O. on his own surmises and conjectures with a pre determined mind and estimates, had concluded that the persons those whom the credit entries have been received are unexplained. 2. The learned A.O. as well as Learned CIT (A) has erred in law and on facts while not considering that the appellant had agricultural income and has also obtained loans from friends/relatives and cash has been accounted in the cash book. It is to be noted that the persons from whom the assessee has accepted loan are farmers and accordingly, the copy of duly signed confirmations of those loans accepted persons alongwith their PAN cards, 7/12 extracts, hakk 6 patrak for land owned are enclosed herewith. The copy of cash book and bank book were also submitted to the learned A.O. as well as learned CIT (A). In view of above facts since the source of the cash deposited by the appellant during assessment year 2012-13 is explained as mentioned above the addition made by the learned A.O. on account amount unexplained credit in bank of Rs. 3,84,776/- is required to be deleted. III. ADDITION ON ACCOUNT OF UNEXPLAINED OTHER CREDIT RS.37,564/-,

ITA No.618/AHD/2025 Mr. Alpesh Khodabhai Patel 1. The learned A.O. and learned CIT(A) has erred in law and on facts while not properly interpreting the facts of the appellant in the true spirit. The learned A.O. while considering on his own surmises and conjectures and worked that the appellant has commission income of Rs. 39,031/- as per bank and that to without issuing show cause notice made the addition. Under the circumstances the addition made by the learned A.O. on account unexplained other credit of Rs. 37,564/- is required to be deleted.” 3. The assessee is an individual and has not filed his return of income. As per the information, during the financial year 2011-12, the assessee deposited Rs.30,000/- cash in Oriental Bank of Commerce and received interest of Rs.51,702/- and commission income of Rs.2,934/-. The Ld. Assessing Officer (in short “Ld. AO”) issued notice u/s 148 of the Income Tax Act, 1961 (in short “the Act”) and initiated reassessment proceedings u/s 147 of the Act. The assessee thereafter filed return of income on 29.03.2019 for Rs.1,53,110/-. The case of the assessee was selected for scrutiny assessment and the Ld. AO observed that the assessee has received unsecured loan from various parties in cash more specifically mentioned on page 6 & 7 of the assessment order. Since the assessee failed to explain the nature of receipts, the Ld. AO made an addition of Rs.3,84,776/- and treated the same as unexplained credit entry. The Ld. AO also made addition of Rs.5,75,000/- as undisclosed income in respect of cash received from four parties. The Ld. AO also made an addition of Rs.37,564/- in respect of difference of commission income received.

4.

Being aggrieved by the assessment order, the assessee filed the 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 that the addition on account of unexplained credit in two bank accounts of Rs.5,75,000/-, the assessee had agricultural income and has also obtained loan from friends/relatives. The cash received by the assessee as agricultural income was accounted in the cash book. The persons from whom the assessee accepted the loans were all farmers and their duly signed confirmations along with PAN cards, 7/12 extracts and the other relevant land

ITA No.618/AHD/2025 Mr. Alpesh Khodabhai Patel documents were submitted before the Ld. AO. There were no discrepancies pointed out by the Ld. AO in respect of these farmers. The source of the cash deposited by the assessee during the AY was thoroughly explained, therefore this addition does not sustain.

6.

As regards, grounds No.1 & 2 related to addition on account of unexplained credit in bank amounting to Rs.3,84,776/-, the same is also reflected through documents as well as confirmations filed before the Ld. AO. As relates to charge of interest u/s 234 of the Act, the same is unjustified.

7.

The Ld. Departmental Representative (in short “Ld. DR”) for the Revenue submitted that the assessee has not given the details related to these parties and for what purpose the assessee received the cash that was also not explained by the assessee before the Ld. AO as well as the Ld. CIT(A).

8.

Heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the assessee has given the details of all the parties related to the cash received from those parties. In fact, the Ld. AO has not doubted that the assessee received amount from these parties but only a conjecture and surmises held that the assessee failed to explain the nature of receipts. The assessee is an agriculturist and for day-to-day activities related to the cultivation requires cash component for which the assessee has taken cash from his family as well as friends, the confirmations from these parties thoroughly explain that the assessee received cash component and the same was deposited in the bank accounts. Thus, the assessee has explained both Rs.5,75,000/- as well as Rs.3,84,776/- before the Ld. AO through the detailed documentation, but the Ld. AO failed to look into these details. Therefore, the addition made by the Ld. AO does not sustain. Grounds No.1 & 2 are allowed.

9.

As regards grounds No.3 in respect of the commission income, the assessee has given the details and hence the Ld. AO’s finding does not sustain. Thus, ground No.3 is allowed.

ITA No.618/AHD/2025 Mr. Alpesh Khodabhai Patel 10. In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 08.06.2026

Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated: 08.06.2026 * Kishore, Sr. P.S. Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Ahmedabad 5. Guard File By order,

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

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