SANDIP MOHANLAL MAHESHWARI,SURAT vs. THE ITO WARD 2(3)(6), SURAT

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ITA 871/SRT/2025Status: DisposedITAT Surat12 June 2026AY 2017-183 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee was not given a proper opportunity of hearing by the CIT(A). Therefore, in the interest of natural justice, the matter was set aside and remanded back to the Assessing Officer for a fresh assessment.

What were the facts?

The assessee, engaged in wholesale trading, deposited a significant amount of old currency notes into his bank accounts during the demonetization period. The Assessing Officer made an addition of Rs. 35,00,000/- under Section 69A, treating it as unexplained cash, and taxed it under Section 115BBE.

What were the issues?

Whether the addition made on account of cash deposits during demonetization was justified without providing adequate opportunity of hearing to the assessee. The issue also concerns the proper treatment of cash sales as against unexplained cash deposits.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: Shri T.R. Sentil Kumar & Shri Ratnesh Nandan Sahay

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (PHYSICAL HEARING) Before: Shri T.R. Sentil Kumar, Judicial Member And Shri Ratnesh Nandan Sahay, Accountant Member ITA No: 871/SRT/2025 Assessment Year: 2017-18

Sandip Mohanlal Income Tax Officer Maheshwari Ward-2(3)(6), Mora Tekra, Vs Surat Bhatlal Road, Hazira, Surat-394510 Gujarat PAN: ANBPM4650Q (Respondent) (Appellant) Assessee Represented: Shri Mehul K. Patel, A.R. Revenue Represented: Shri Ajay Uke, Sr. D.R. Date of hearing : 30-04-2026 Date of pronouncement : 12-06-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 12.06.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18.

2.

The brief facts of the case that the assessee is an individual engaged in wholesale trading business. The assessee filed his Return

I.T.A No. 871//SRT/2025 A.Y. 2012-13 Page No 2 Sandip MOhanlal Maheshwari vs. ITO

of Income for the A.Y. 2017-18 on 29.09.2017 declaring total income of Rs. 6,39,990/-. The Return was taken for scrutiny assessment as the assessee made cash deposit in SBN to the tune of Rs. 47,50,000/- in his bank account at Bank of Baroda and Rs. 1,90,000/- with State Bank of India. Therefore, a detail show-cause notice was issued asking for explanation. After accepting the assessee’s explanation the Assessing Officer made addition of Rs. 35,00,000/- under Section 69A being cash deposit made in old currencies and taxed under Section 115BBE of the Act.

3.

Aggrieved against the same, the assessee filed appeal before Ld. CIT(A) and detail explanations were offered including cash sales made for the earlier five years and the VAT return filed by the assessee explaining the cash sale made by it. However, Ld. CIT(A) held that the cash balance of Rs. 55,42,023/- was made available on 08.11.0216 (demonetization period) but the assessee failed to prove documentary evidences that such huge cash balance in hand was generated from his regular cash sales or any other source of income. Thus, the addition of Rs. 35,00,000/- was confirmed by Ld. CIT(A).

4.

Aggrieved against the same, the assessee is in appeal before us raising the following grounds of appeal:

(1) That facts, and in law, the learned NFAC has grievously erred in confirming the addition of Rs.35,00,000/- made u/s 69A of the Act in respect of cash deposited in the appellant's bank account and in taxing the same u/s 115BBE of the Act. (2) That on facts, and in law, it ought to entire cash have been held that deposit is in respect of cash sales made by appellant and duly reflected as cash sales in appellant's accounts. (3) That on facts, and in law, the addition made amounts to double addition as entire cash deposit is already reflected as cash sales in appellant's accounts.

I.T.A No. 871//SRT/2025 A.Y. 2012-13 Page No 3 Sandip MOhanlal Maheshwari vs. ITO

(4) The appellant craves liberty to add, alter, amend any ground of appeal. 5. Heard rival submissions and perused the materials available on record. Perusal of the Ld. CIT(A) order makes it clear that no proper opportunity of hearing was given to the assessee to explain his case of cash deposit during demonetization period. Therefore, in the principle of natural justice, we deem it fit to set-aside the matter back to the file of Jurisdictional Assessing Officer (“JAO”) to give proper opportunity of hearing to the assessee and frame the assessment in accordance with the provision of law. Needless to say, the assessee should cooperate by filing all necessary details before the Jurisdictional Assessing Officer.

In the result, the appeal filed by the assessee is allowed for 6. statistical purposes. Order pronounced in the open court on 12/06/2026

Sd/- Sd/- (RATNESH NANDAN SAHAY) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad, Dated 12/06/2026 Tanmay, Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, सूरत

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