INCOME TAX OFFICER, MUMBAI vs. GEETABEN MAHESH THAKKAR (LEGAL HEIR OF NATAWARLAL MANGALJI THAKKAR), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 2400/Mum/2025 (Assessment Year: 2017-18) Income Tax Geetaben Mahesh Office41(2)(3) Thakkar (Legal heir Room No.835, BKC, Vs. of Natwarlal Mangalji Mumbai - 400051 Thakkar) Room 402, 4th floor, Shivkripa Society, Gauri Shankar Wadi, Opp. Jain Temple, Ghatkopar (E), Mumbai-400 077. PAN/GIR No. AJEPT2084Q (Applicant) (Respondent) Assessee by Shri Anil Thakrar, Ld. AR Revenue by Shri Swapnil Choudhari, Ld. DR Date of Hearing 08.06.2026 Date of Pronouncement 11.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal by the Revenue is directed against the order dated 29.12.2023 passed by the learned Commissioner of Income

2 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the learned CIT(A)"], under section 250 of the Income-tax Act, 1961[hereinafter referred to as "the Act"] for Assessment Year 2017-18, arising out of the assessment order dated 24.12.2019 passed by the Income Tax Officer, Ward- 26(2)(7), Mumbai [hereinafter referred to as “Assessing Officer”] under section 144 of the Act. 2. Briefly stated, the facts of the case are that the assessee, an individual, filed his return of income for Assessment Year 2017- 18 on 31.10.2017 declaring total income of Rs.8,47,580/-. The return was processed under section 143(1) of the Act. Subsequently, the case was selected for scrutiny under the Computer Aided Scrutiny Selection (CASS) mechanism and notice under section 143(2) dated 21.09.2018 was issued and served through the e-filing portal. 3. The Assessing Officer observed that, based upon data analytics and information available with the Income Tax Department relating to the demonetisation period, the assessee was identified as one of the persons who had deposited substantial cash in bank accounts during the period commencing from 09.11.2016. According to the Assessing Officer, the assessee had deposited cash amounting to Rs.45,31,000/- during the demonetisation period in account No. ODTD342 maintained with The Kapol Co-operative Bank Ltd.

3 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) 4. During the course of assessment proceedings, notices under sections 143(2) and 142(1) of the Act were issued from time to time. The Assessing Officer recorded that notices dated 21.09.2018, 21.10.2019, 20.11.2019 and 08.12.2019 were duly served upon the assessee through the registered e-mail address, e-filing portal and ITBA portal. However, according to the Assessing Officer, no compliance was made by the assessee. The Assessing Officer further recorded that despite repeated opportunities, the assessee failed to furnish details relating to business activities, nature and source of income, bank accounts maintained, cash deposits made therein and source thereof. Consequently, the Assessing Officer proceeded to frame the assessment ex parte under section 144 of the Act. 5. The Assessing Officer further noted that apart from cash deposits of Rs.45,31,000/- made during the demonetisation period, the assessee had also deposited Rs.2,58,04,000/- in another account maintained with The Kapol Co-operative Bank Ltd. and Rs.2,46,26,000/- in Canara Bank account No. 1373201002606. Thus, according to the Assessing Officer, total cash deposits aggregating to Rs.5,49,61,000/- were found in the assessee's bank accounts during the relevant previous year. 6. The Assessing Officer observed that no explanation regarding the nature and source of the cash deposits and credit entries appearing in the bank accounts was furnished by the assessee. Invoking the provisions of section 69A of the Act, the

4 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) Assessing Officer held that the cash deposits of Rs.45,31,000/- made during the demonetisation period represented unexplained money and added the same to the total income of the assessee under section 69A read with section 115BBE of the Act. 7. The Assessing Officer further observed that total credits of Rs.5,04,30,000/- other than demonetisation deposits were found in the assessee's bank accounts. Since no details were furnished by the assessee despite repeated opportunities, the Assessing Officer estimated business income at 10% of such deposits and made an addition of Rs.50,43,000/- as business income. 8. The Assessing Officer also recorded that information available with the Department revealed that the assessee had received consideration of Rs.30,52,000/- on sale of an immovable property during the relevant previous year. Since the assessee had neither offered any capital gain in the return of income nor furnished any details regarding the acquisition cost or computation of capital gains, the Assessing Officer proceeded to compute short-term capital gain by adopting the stamp duty value of Rs.30,52,000/- as sale consideration, taking the cost of acquisition at Rs.100/- and assuming the date of purchase as 01.04.2015. Consequently, short-term capital gain of Rs.30,51,900/- was brought to tax. 9. On the basis of the aforesaid findings, the Assessing Officer completed the assessment under section 144 of the Act

5 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) determining the total income at Rs.1,34,73,480/- after making the following additions: Sr. Particulars of Addition/Disallowance Amount (Rs.) No. (i) Addition under section 69A of the 45,31,000/- Income-tax Act, 1961 on account of cash deposits during the demonetisation period (ii) Estimated business income computed at 50,43,000/- 10% of cash deposits (iii) Short-term capital gain on alleged sale of 30,51,900/- immovable property Total Aggregate Additions 1,26,25,900/-

6 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) Store). It was stated that the nature of business was predominantly cash-based and therefore the cash deposited in the bank accounts represented business receipts. The assessee further contended that he did not own any immovable property and that no property had ever been sold by him. 13. Upon examination of the return of income, the learned CIT(A) noted that the assessee had disclosed sales of Rs.3,80,46,042/-, total credits to the profit and loss account of Rs.4,09,84,975/- and profit of Rs.5,67,576/-. The learned CIT(A) further observed that the assessee had disclosed in the return of income the bank accounts maintained with Canara Bank, Kotak Mahindra Bank and Kapol Co-operative Bank Ltd. and had also disclosed the cash deposits made in those bank accounts. 14. With regard to the addition of Rs.45,31,000/- made under section 69A, the learned CIT(A) held that the bank account and corresponding cash deposits had already been disclosed by the assessee in the return of income and, therefore, it could not be said that the deposits were undisclosed. On that basis, the learned CIT(A) directed the Assessing Officer to delete the addition of Rs.45,31,000/-. 15. As regards the addition of Rs.50,43,000/- made by estimating 10% of the cash deposits as business income, the learned CIT(A) held that the bank accounts and deposits were duly disclosed in the return of income and that the turnover had

7 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) already been offered to tax. Accordingly, the addition of Rs.50,43,000/- was deleted.

8 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) 18. At the outset, the learned Departmental Representative (DR) submitted that the present appeal has been filed by the Revenue against the order passed by the learned CIT(A), NFAC, Delhi under section 250 of the Act dated 29.12.2023 whereby the additions made by the Assessing Officer were deleted. The learned DR invited our attention to the fact that the Revenue had earlier challenged the said appellate order by filing ITA No. 805/Mum/2024 before the Tribunal on 22.02.2024. However, vide order dated 20.08.2024, the Co-ordinate Bench dismissed the said appeal on technical grounds, observing that the cause title of the appeal had not been correctly filled and Form No. 36 filed before the Tribunal was not signed by the Assessing Officer, while simultaneously granting liberty to the Revenue to file a fresh appeal in accordance with law. 19. The learned DR further submitted that the order of the Tribunal dated 20.08.2024 was received in the office of the Pr. CIT on 24.12.2024. Thereafter, necessary administrative approvals were obtained and a fresh appeal was filed before the Tribunal on 04.04.2025 in compliance with the liberty granted by the Tribunal. It was submitted that the last date for filing the fresh appeal was 22.04.2025 and the present appeal having been filed on 04.04.2025 was within the permissible period. Therefore, according to the learned DR, the appeal cannot be regarded as barred by limitation merely because the Registry has computed delay with reference to the date of the original appellate order.

9 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) 20. The learned DR submitted that the delay, if any, occurred solely on account of technical defects in the earlier appeal and not due to any deliberate inaction on the part of the Revenue. It was argued that the Revenue had diligently pursued its remedy by filing the original appeal within time and, upon dismissal of the same on technical grounds, immediately took steps to file the present appeal after curing the defects pointed out by the Tribunal. The learned DR therefore submitted that sufficient cause has been demonstrated and prayed that any delay in filing the present appeal may kindly be condoned and the appeal be admitted for adjudication on merits in the interest of substantial justice. 21. Per contra, the learned Authorised Representative (AR) strongly objected to the condonation of delay in filing of the present appeal by the Revenue. Referring to the written submissions filed, the learned AR submitted that the appeal filed by the Revenue suffers from substantial delay of approximately 400 days reckoned from the date of the appellate order passed by the learned CIT(A) on 29.12.2023. It was contended that the Revenue has not demonstrated any sufficient or bona fide cause warranting condonation of such an inordinate delay.The learned AR submitted that the assessee, Shri Natwarlal Thakkar, expired on 12.04.2021 and the present proceedings are being pursued through his legal heir, Mrs. Geeta N. Thakkar. It was argued that considering the peculiar facts and circumstances of the case, including the demise of the assessee, the extraordinary delay on

10 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) the part of the Revenue ought not to be condoned merely as a matter of routine. 22. According to the learned AR, the dismissal of the earlier appeal itself demonstrates negligence and lack of due diligence on the part of the Department. It was contended that a litigant who is negligent in prosecuting its own appeal cannot subsequently seek equitable relief by way of condonation of delay.The learned AR also submitted that even while filing the present appeal, the Revenue did not disclose the delay in Form No.36 and sought to proceed as if the appeal was within limitation. According to him, such conduct disentitles the Revenue from claiming any discretionary relief from the Tribunal. 23. The learned AR additionally submitted that although Mrs. Geeta N. Thakkar has been brought on record as legal heir of the deceased assessee, no estate has been inherited by her from the deceased. It was submitted that late Shri Natwarlal Thakkar left behind no substantial assets and, on the contrary, the legal heir had incurred considerable expenditure towards his medical treatment during his lifetime. According to the learned AR, in the absence of any inheritable estate, compelling the legal heir to contest stale proceedings arising out of a belated departmental appeal would cause undue hardship. 24. On the aforesaid grounds, the learned AR prayed that the Revenue having failed to establish sufficient cause for the delay,

11 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) the delay in filing the present appeal ought not to be condoned and the appeal deserves to be dismissed as barred by limitation. 25. We have considered the rival submissions on the preliminary issue relating to condonation of delay and have perused the material available on record. 26. It is an admitted position that the Revenue had originally preferred an appeal against the order of the learned CIT(A) dated 29.12.2023 before the Tribunal vide ITA No. 805/Mum/2024 within the period prescribed under the Act. The said appeal, however, came to be dismissed by the Coordinate Bench vide order dated 20.08.2024 on account of certain technical defects, namely incorrect mentioning of the cause title and non-signing of Form No. 36 by the Assessing Officer. While dismissing the appeal, the Coordinate Bench specifically granted liberty to the Revenue to file a fresh appeal in accordance with law. 27. The records further reveal that upon receipt of the aforesaid order, the Department took steps to rectify the defects pointed out by the Tribunal and thereafter filed the present appeal. Thus, the case before us is not one where the Revenue remained inactive or failed to challenge the order of the learned CIT(A) within the prescribed period. On the contrary, the Revenue had already invoked the appellate jurisdiction of the Tribunal within time and the earlier appeal was dismissed on account of procedural defects without any adjudication on merits.

12 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) 28. The settled legal position is that procedural defects should not ordinarily defeat substantive rights, particularly where a litigant has exhibited a clear intention to pursue the remedy available under law. The expression "sufficient cause" employed in section 253(5) of the Act is required to receive a liberal construction so as to advance substantial justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to prevail. 29. The objection of the learned AR that the earlier appeal was dismissed due to negligence on the part of the Department certainly merits consideration. However, in the peculiar facts of the present case, we find that the defects pointed out by the Coordinate Bench were procedural in nature and the Revenue has acted upon the liberty granted by the Co-ordinate Bench by filing the present appeal after curing the defects. The fact that the original appeal had been instituted within limitation demonstrates that the Department had not acquiesced in the order of the learned CIT(A) nor abandoned its statutory remedy. 30. We are also unable to accept the contention that the delay should be rejected merely because the assessee has expired and the legal heir has been brought on record. The issue of limitation has to be examined on the touchstone of the conduct of the appellant and the existence of sufficient cause. The circumstances relating to the legal heir or the extent of estate

13 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) inherited may be relevant for adjudication of liability, but cannot by themselves constitute a ground for refusing condonation when sufficient cause is otherwise shown. 31. Having regard to the totality of facts and circumstances, particularly the fact that the Revenue had filed the original appeal within the prescribed period of limitation, that the earlier appeal was dismissed on technical grounds with liberty to file a fresh appeal, and that the present appeal has been filed pursuant to such liberty after removal of defects, we are satisfied that the Revenue has demonstrated sufficient cause for the delay. 32. Accordingly, in the interest of substantial justice, the delay in filing the present appeal is condoned and the appeal is admitted for adjudication on merits. 33. On merits, the learned DR relied upon the assessment order and reiterated the reasoning recorded by the Assessing Officer. The learned DR submitted that despite repeated statutory notices issued under sections 143(2) and 142(1) of the Act, the assessee failed to participate in the assessment proceedings and did not furnish any evidence whatsoever in support of the cash deposits found in the bank accounts or the transaction relating to sale of immovable property. It was submitted that the assessment was ultimately completed under section 144 of the Act only because of the persistent non-compliance on the part of the assessee.

14 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) 34. The learned DR, while assailing the order of the learned CIT(A), submitted that the primary infirmity in the impugned appellate order is that the learned CIT(A) granted relief to the assessee without carrying out any verification whatsoever of the factual assertions made in the statement of facts accompanying Form No. 35. The learned DR invited our attention to paragraph 1.3 of the appellate order wherein the learned CIT(A) has himself recorded that despite issuance of notices on multiple occasions, the assessee did not furnish any reply or make any compliance during the appellate proceedings. Thus, according to the learned DR, the appeal was effectively decided ex parte even before the learned CIT(A).The learned DR submitted that notwithstanding the complete absence of any supporting evidence, books of account, bank statements, reconciliation statements or documentary material, the learned CIT(A) accepted the assertions contained in the statement of facts as correct and proceeded to delete all the additions made by the Assessing Officer. 35. It was therefore submitted that the relief granted by the learned CIT(A) was based solely on unverified assertions contained in the statement of facts filed along with Form No. 35 and not on any evidence brought on record. The learned DR accordingly contended that the order of the learned CIT(A) suffers from violation of the principles governing appellate adjudication and deserves to be set aside, with the matter being restored either to the file of the Assessing Officer for proper verification of the factual claims made by the assessee.

15 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) 36. On merits, the learned AR supported the order of the learned CIT(A) and submitted that the additions made by the Assessing Officer were wholly unsustainable on facts as well as in law. Referring to the paper books filed, the learned AR submitted that the Revenue's first ground itself proceeds on an incorrect factual premise. According to him, the Assessing Officer has proceeded on the footing that aggregate deposits in the bank accounts amounted to Rs.5,49,61,000/-, whereas the actual aggregate deposits reflected in the bank statements are only Rs.3,73,36,915/-, comprising cash deposits of Rs.3,30,89,000/- and cheque deposits of Rs.42,47,915/-. It was submitted that the relevant bank statements forming part of the supplementary paper book clearly establish the correct quantum of deposits and therefore the very foundation of the addition made by the Assessing Officer is factually erroneous. 37. The learned AR further submitted that the second ground raised by the Revenue is also devoid of merit as the assessee did not own any immovable property during the relevant previous year. It was argued that the financial statements placed in the paper book do not disclose ownership of any immovable property and therefore the allegation regarding sale of property is unsupported by any material brought on record by the Department. 38. Addressing the merits of the additions, the learned AR submitted that the assessee was regularly carrying on business

16 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) in the name and style of "New Shreeji Foods" and had consistently filed returns of income along with audited financial statements and tax audit reports. It was submitted that the financial statements for Assessment Years 2016-17, 2017-18 and 2018-19 form part of the paper book and clearly disclose the nature of business carried on by the assessee. The learned AR pointed out that all bank accounts maintained by the assessee during the relevant period stood disclosed in the financial statements as well as in the return of income and, therefore, there was no suppression either of bank accounts or of business transactions. 39. The learned AR further submitted that the cash deposits made during the demonetisation period represented normal business receipts generated in the ordinary course of retail trading activity. In support thereof, attention was invited to the cash summaries for the period from 9th November to 30th December for three consecutive years. According to the learned AR, cash deposits during the corresponding period amounted to Rs.55,39,000/- for the period 09.11.2015 to 30.12.2015, Rs.47,36,000/- for the period 09.11.2016 to 30.12.2016 and Rs.39,00,000/- for the period 09.11.2017 to 30.12.2017. It was submitted that the comparative figures clearly demonstrate that the cash deposits during the demonetisation period were consistent with the assessee's normal business pattern and did not represent any unexplained money.

17 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) 40. The learned AR also referred to the VAT returns and Annual VAT Audit Report in Form No. 704 for the relevant period and submitted that the same corroborate the genuineness of the assessee's business activities, turnover and cash receipts. According to him, the deposits in the bank accounts were duly supported by the disclosed business turnover and stood reflected in the books of account maintained in the ordinary course of business. 41. The learned AR submitted that although the assessment came to be framed ex parte under section 144 of the Act, the assessee had already filed his returns of income, audited accounts, tax audit report, VAT returns and other statutory records with the Department. It was contended that the Assessing Officer could have verified the business activities and bank accounts from the records already available with the Department. The learned AR further submitted that owing to advanced age and non-receipt of notices, the assessee could not effectively participate in the assessment proceedings. In this regard, reference was made to the letter dated 13.03.2020 addressed by the assessee to the learned CIT(A) explaining the circumstances leading to non-compliance. 42. The learned AR therefore submitted that the learned CIT(A), upon examination of the return of income, financial statements and disclosures made by the assessee, rightly concluded that the bank accounts and deposits were already disclosed in the return

18 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) of income and that no material existed to sustain the additions made by the Assessing Officer. Accordingly, it was prayed that the order of the learned CIT(A) be upheld and the Revenue's appeal be dismissed. 43. Before proceeding to adjudicate the grounds on merits, it would be relevant to note one additional fact brought to our notice by the learned Authorised Representative. He invited our attention to a communication dated 14.12.2023 issued by the Income Tax Officer, Ward-26(2)(1), Mumbai to the jurisdictional Assessing Officer, ITO-41(2)(3), Mumbai, wherein a letter dated 27.11.2023 received in the office on 05.12.2023 in the case of Late Shri Natwarlal Maganlalji Thakkar (PAN: AADPT8178R) was forwarded for necessary action. The said communication specifically records that the assessee was deceased and further acknowledges that jurisdiction over the assessee's case vested with the recipient Assessing Officer. Relying upon the said document, the learned AR submitted that the Department was fully aware of the death of the assessee at least from December 2023 and, therefore, the Revenue cannot contend that the surrounding circumstances leading to non-compliance or the factual assertions made on behalf of the deceased assessee were not within the knowledge of the Department. According to the learned AR, the said document assumes significance while appreciating the Revenue's contention that the learned CIT(A) granted relief merely on the basis of unverified assertions.

19 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) 44. We have heard the rival submissions and perused the material available on record. The substantive grievance of the Revenue is that the learned CIT(A) deleted the additions without proper verification, though the assessment was framed ex parte under section 144 of the Act. The Revenue has challenged deletion of the addition of Rs.50,43,000/- made on estimated basis and deletion of Rs.30,51,900/- made on account of alleged short-term capital gain. 45. At the outset, we find that the assessment was framed under section 144 of the Act primarily on account of non- compliance by the assessee. However, merely because the assessment was framed ex parte, the additions made therein cannot be sustained unless they are supported by material on record and are based on a reasonable nexus with such material. The power to frame best judgment assessment does not dispense with the requirement that the estimate or addition must have some rational basis and must not be arbitrary. 46. So far as the first issue is concerned, the Assessing Officer noticed cash deposits and credit entries in the bank accounts and proceeded to estimate business income at 10% of the cash deposits, thereby making addition of Rs.50,43,000/-. The learned CIT(A), however, on examination of the return of income, recorded a categorical finding that the assessee had disclosed sales of Rs.3,80,46,042/-, total credits to the profit and loss account of Rs.4,09,84,975/- and profit of Rs.5,67,576/-. The learned CIT(A)

20 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) further recorded that the assessee had disclosed the bank accounts maintained with Canara Bank, Kotak Mahindra Bank and Kapol Co-operative Bank Ltd. and had also disclosed the cash deposits made in the said bank accounts. 47. The assessee's explanation before the learned CIT(A) was that he was carrying on retail business of food grains, pulses and grocery items in the name of New Shreeji Foods and that the nature of business was such that sales were substantially in cash. Before us also, the learned Authorised Representative has referred to the financial statements, tax audit reports, VAT returns and annual VAT audit report in Form No.704 to support the genuineness of business activity and the disclosed turnover. The assessee has also placed reliance on comparative cash summaries for the corresponding period of three years to demonstrate that cash deposits during 09.11.2016 to 30.12.2016 were not abnormal when compared with similar periods in earlier and subsequent years. 48. In this backdrop, we find that the learned CIT(A) was justified in holding that once the bank accounts and cash deposits were disclosed and the turnover was already offered in the return of income, the Assessing Officer could not have again estimated 10% of the cash deposits as additional business income without first demonstrating that such deposits were outside the disclosed turnover. The addition made by the Assessing Officer is purely ad hoc. There is no finding that the

21 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) assessee maintained any undisclosed bank account. There is also no finding that the cash deposits exceeded the disclosed business turnover after proper reconciliation. In fact, the Revenue's ground itself proceeds on the comparison between credits in the books and total cash deposits, but no exercise was carried out by the Assessing Officer to identify any specific unexplained deposit or to exclude deposits already forming part of disclosed business receipts. 49. It is well settled that an addition cannot be sustained merely on suspicion or on a broad estimate when the assessee is admittedly engaged in cash-based retail business and the turnover has been disclosed in the return of income. The Assessing Officer was required to bring on record some cogent material to establish that the deposits represented income over and above the disclosed business receipts. In the absence of such material, the addition of Rs.50,43,000/- made by applying 10% on deposits cannot be sustained. We, therefore, find no infirmity in the order of the learned CIT(A) deleting the said addition. 50. Coming to the second issue relating to addition of Rs.30,51,900/- on account of alleged short-term capital gain, we find that the Assessing Officer made the addition on the basis of information stated to be available in the Departmental system regarding sale of immovable property. However, the assessment order does not mention the basic particulars of the alleged property, such as the address of the property, nature of property,

22 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) date of purchase, date of sale, name of purchaser, document number or any other identifying detail. The Assessing Officer proceeded to adopt Rs.30,52,000/- as sale consideration, assumed the purchase cost at Rs.100/- and further assumed the date of purchase as 01.04.2015. Such computation is based entirely on assumptions. 51. The assessee had specifically contended before the learned CIT(A) that he did not own any immovable property and had not sold any property. The learned CIT(A), after examining the assessment order, recorded a categorical finding that the Assessing Officer had not given any details of the property alleged to have been sold and that the details such as address of the property, type of property and date of sale were not mentioned. In the absence of such primary particulars, the learned CIT(A) held that the addition was not sustainable. 52. We concur with the finding of the learned CIT(A). Once the assessee denied ownership and transfer of immovable property, the minimum requirement on the part of the Revenue was to bring on record the relevant information or document on the basis of which the alleged transfer was inferred. A mere reference to ITS information, without placing the underlying transaction particulars on record, cannot justify an addition towards capital gains. Even in a best judgment assessment, the computation of capital gain cannot be made by assuming cost of acquisition at Rs.100/- and date of acquisition as 01.04.2015 in the absence of

23 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) any supporting material. Such an addition cannot be sustained on conjectures. 53. We also find merit in the submission of the learned Authorised Representative that the financial statements placed on record do not show any immovable property belonging to the assessee. The Revenue has not brought any contrary material before us to show that the assessee owned or transferred any specific immovable property during the relevant previous year. Therefore, the learned CIT(A) was justified in deleting the addition of Rs.30,51,900/-. 54. The principal objection of the Revenue is that the learned CIT(A) granted relief on the basis of the statement of facts without verification. However, on perusal of the appellate order, it is evident that the learned CIT(A) did not grant relief merely on an unverified assertion. The learned CIT(A) examined the return of income and noticed disclosure of sales, total credits to the profit and loss account, profit, bank accounts and cash deposits. As regards the capital gain addition, the learned CIT(A) found that the assessment order itself lacked the basic particulars necessary to sustain the addition. Thus, the relief granted by the learned CIT(A) is founded on the material available on record and on the inadequacy of the basis adopted by the Assessing Officer. 55. We also find merit in the contention of the learned AR that the Department was admittedly aware of the death of the assessee. The communication dated 14.12.2023 placed on record

24 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) shows that a letter received in the case of Late Shri Natwarlal Maganlalji Thakkar was forwarded by one Assessing Officer to the jurisdictional Assessing Officer for necessary action. Thus, the factum of death of the assessee and the correspondence submitted on behalf of the deceased assessee were already within the knowledge of the Department. This circumstance assumes relevance because the Revenue's challenge is founded upon the allegation that the learned CIT(A) acted on unverified assertions. However, the record shows that the Department itself possessed material concerning the deceased assessee and his representatives. Therefore, the matter cannot be viewed as one where the learned CIT(A) accepted wholly unsupported or unverifiable claims. 56. It is also relevant to note that before us the Revenue has not placed any material to rebut the factual findings recorded by the learned CIT(A). No bank-wise reconciliation has been brought to show that the deposits were over and above the disclosed turnover. Similarly, no document or transaction detail has been placed to establish sale of immovable property by the assessee. In the absence of any such material, we are unable to accept the Revenue's contention that the order of the learned CIT(A) calls for interference. 57. Accordingly, we uphold the order of the learned CIT(A) deleting the addition of Rs.50,43,000/- made on estimated basis

25 ITA No. 2400/Mum/2025 Geetaben Mahesh Thakkar (Legal heir of Natwarlal Mangalji Thakkar) and Rs.30,51,900/- made on account of alleged short-term capital gain. The grounds raised by the Revenue are dismissed.

Order pronounced in the open court on 11.06.2026.

Sd/- Sd/- (CHALLA NAGENDRA PRASAD) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 11/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. संबंधधत आयकर आयुक्त / The CIT(A) 3. आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai