REKHA VIJAY MULCHANDANI,GUJARAT vs. INCOME TAX OFFICER WARD 3 (3)(2), AHMEDABAD

The grounds of appeal taken by the assessee are reproduced as under: “Ground No. 1: On the facts and in the circumstances of the case, the Appellant submits that she was prevented by circumstances beyond his control to reply to the various notices issued and upload responses for the submission during the appeal proceedings. The Appellant submits that an opportunity of being heard be given as a matter of natural justice and the matter be remitted to the file of Hon'ble National Faceless Appeal Centre, Delhi for fresh hearing and adjudication, affording the Appellant full opportunity to present its case with proper notice, thereby curing the procedural defects in the ex-parte appeal. Ground No. 2 Addition of Rs. 5,16,81,730/- made as Unexplained Cash Credits u/s 68 of The Income Tax Act, 1961. a. On the facts and in the circumstances of the case, the Appellant submits that the Hon'ble National Faceless Appeal Centre, Delhi erred in upholding the action of the Learned Assessing Officer of making addition of Rs. 5,16,81,730 u/s 68 as Unexplained Cash Credits contended by the appellant and take necessary action, if required, in case of Vijay Mulchandani HUF. On the facts and in the circumstances of the case, the Appellant submits that the Hon'ble National Faceless Appeal Centre, Delhi has travelled beyond the powers conferred upon him as per the provisions of Section 251 r.w.s. 250 of The Income Tax Act, 1961. The Appellant submits that the said direction be quashed. Ground No. 4 The Appellant craves leave to reserve to itself the right to add, after, amend or annul any of the grounds of appeal at or before the time of hearing and to produce such further evidences, documents and papers as may be necessary.”

The Assessee claimed before the lower Authorities that the Assessee had received an amount of Rs. 5,04,84,991/- from her HUF, namely, Ms. Vijay Mulchandani HUF on account of repayment of loan earlier given by the Assessee to her HUF. It was also claimed that out of the said repayment of loan amount, an amount of Rs. 4,06,68,622/- was the opening balance as on 01.04.2019 due to the Assessee from Vijay Mulchandani HUF.

The learned AO, however, observed from the records that the Assessee had not given any loan to his HUF and, therefore, the plea that the Assessee had received repayment of loan from Vijay Mulchandani HUF was not correct. Therefore, he treated the amount of Rs. 5,16,81,730/- as unexplained cash credits in the hands of the Assessee as the Assessee failed to prove the source of the said amount in the hands of the Vijay Mulchandani HUF. The learned CIT(A) confirmed the addition so made by the AO.

We have heard the rival contentions and gone through the record. The learned counsel for the Assessee has reiterated the submissions as were made before the lower authorities. He, however, has further produced on record a copy of the assessment order passed in the case of Vijay Mulchandani HUF for AY 2020-21 vide order dated 19.11.2025 having DIN No. ITBA/AST/S/147/2025-26/1082791775(1), wherein an identical issue came for consideration and it was pleaded by Vijay Mulchandani HUF (Assessee therein) that the credits appearing in its bank account to the tune of Rs. 5,49,38,128/- were on account of loan from Smt. Rekha V. Mulchandani, wife of the Karta of the HUF (Assessee herein). However, the AO rejected the said contention and made the addition of Rs. 5,49,38,128/- in the hands of the 6. The learned counsel for the Assessee has submitted that since the addition of Rs. 5,49,38,128/- has already been made in the hands of Vijay Mulchandani HUF and the amount of Rs. 5,16,81,730/- was admittedly received by the Assessee from Vijay Mulchandani HUF, therefore, the source of the same in the hands of the Assessee gets established. He, therefore, has submitted that since the addition of the same amount has been made in the hands of the HUF, therefore, making the addition of the same amount in the hands of the Assessee will amount to double addition of the same amount.

Learned DR, however, has relied upon the findings of the lower authorities.

We have considered the rival submissions and gone through the records. Admittedly, the Assessee had received the said amount of Rs. 5,16,81,730/- from her HUF, namely, Vijay Mulchandani HUF. The Assessee claimed it as repayment of the loan amount, however, the said contention has been rejected by the lower authorities. The addition of the said amount has already been made in the hands of Vijay Mulchandani HUF. Therefore, addition of the said amount in the hands of the Assessee will amount to double addition of the same amount. Since the said amount has been treated as income of the HUF, hence, the source of the said amount stood explained in the hands of the Assessee. Therefore, the addition is not sustainable in the hands of the Assessee and the same is accordingly ordered to be deleted.

In the result, the appeal of the Assessee stands allowed. Order pronounced in the Open Court on 13/05/2026. (Annapurna Gupta ) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 13/05/2026 DS, PS आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant

""थ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned CIT 4. आयकर आयु" अपील ( ) / The CIT(A)- 5. िवभागीय "ितिनिध आयकर अपीलीय अिधकरण अहमदाबाद/DR,ITAT, Ahmedabad. , , 6. गाड" फाईल / Guard file.