MR RISHABH RAVI GUPTA,MUMBAI vs. ITO, WARD 34(3)(2), MUMBAI

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ITA 8665/MUM/2025Status: DisposedITAT Mumbai12 May 2026AY 2016-1712 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the issue of the assessee's claim for exemption under Section 54F should be restored to the AO for de novo verification. The Tribunal also allowed the appeal for statistical purposes, implying that the additions related to loan repayments might be deleted after further examination.

What were the facts?

The assessee's appeals concerned additions made by the Assessing Officer (AO) and confirmed by the CIT(A) regarding unsecured loans, cash deposits, and long-term capital gains. The assessee contended that repayments received were from loans given by him, not new loans, and that a Section 54F exemption claim was wrongly rejected.

What were the issues?

Whether the CIT(A) erred in confirming additions related to loan repayments and cash deposits, and whether the claim for Section 54F exemption was wrongly rejected due to not being made in the original return.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 69A,Section 44AD,Section 54F,Section 50C

AI-generated summary — verify with the full judgment below

Before: SHRI SANDEEP GOSIAN & SHRI BIJAYANANDA PRUSETH

For Appellant: Shri M.P. Lohia
For Respondent: Shri Annavaram Kosuri (SR AR)
Hearing: 12.05.2026Pronounced: 14.07.2026

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “D” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSIAN, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA Nos.8664 & 8665/MUM/2025 (AYs: 2017-18 & 2016-17) Mr. Rishabh Ravi Gupta vs. ITO, Ward 34(3)(2) 202, Rushabh Tower, SV Road, Jain Kautilya Bhavan, C-41 to C-43, G Block Temple, Andheri (West), Mumbai- Bandra Kurla Complex, Bandra (East), 400058. Mumbai-400051. PAN/GIR No: AKNPG1162C (Appellant) (Respondent) Assessee by Shri M.P. Lohia Revenue by Shri Annavaram Kosuri (SR AR) Date of Hearing 12.05.2026 Date of Pronouncement 14.07.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

These appeals filed by the assessee emanate from the order passed under

section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the National Faceless

Appeal Centre [in short, ‘CIT(A)’], dated 12.11.2025 for the assessment years

(AYs) 2017-18 and 2016-17. Since the facts and grounds are similar, with the

consent of both parties, the appeals were clubbed and heard together and a

common order is being passed for the sake of convenience and brevity. ITA

No.8665/Mum/2025 (AY: 2016-17) is taken as the “lead case.”

2.

The grounds of appeal raised by the assessee in ITA No.8665/Mum/2025

(AY 2016-17) are as under:

“1. The Ld. CIT(A) erred in holding the reopening of assessment as valid and further erred in dismissing the ground of appeal of reopening of assessment. 1

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta

2.

The Ld. CIT(A) erred in confirming the following additions of Rs.53,50,000/-in respect of repayment of loan given by the Appellant in spite of the fact that the supporting evidence were furnished:

i. M/s Anushka Medicare - Rs.3,00,000/- ii. M/s Shah Housecon Pvt Ltd. Rs.18,00,000/- iii. M/s Jay Shree Infrastructure - Rs.9,00,000/- iv. Prospect Engineering- Rs.6,50,000/- v. Harish Juyal - Rs.5,00,000/- vi Gangaur Sweets- Rs.8,00,000/- vil. Anuj plastics- Rs 4,00,000/- Total Rs.53,50,000/-

3.

The Ld. CIT(A) erred in confirming the addition of Rs.2,45,000/- in respect of cash deposits out of cash on hand. 4. (i) The Ld. CIT(A) erred in rejecting the claim of appellant of treating the profit on sale of land as business income under section 44AD and further erred in holding the same as long term capital gain thereby confirming the addition of Rs.14,06,018/-under the head Long Term Capital Gain. (ii) The Ld. CIT(A) erred in rejecting the legitimate claim of the Appellant under section 54F of claiming exemption of Long-Term Capital Gain of Rs.14,06,018/- on the ground that the same was not claimed in the original return without appreciating the facts that in the original return said income was shown as business income as against which the same was treated as long term capital gain which has to be computed in accordance with the provisions governing the capital gain which grants exemption u/s 54F to which the Appellant was entitle.

5.

The Appellant reserves the right to add, to alter, to amplify and to modify the Grounds of Appeal.”

3.

The grounds of appeal raised by the assessee in ITA No.8664/Mum/2025

(AY 2017-18) are as under:

“1. The Ld. CIT(A) erred in holding the reopening of assessment as valid and further erred in dismissing the ground of appeal of reopening of assessment

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta 2. The Ld. CIT(A) erred in confirming the following additions of Rs26,78,300/-in respect of repayment of loan given by the Appellant in spite of the fact that the supporting evidence were furnished i. Tirupati Construction Rs.10,28,300/- ii. H Prospect Engineering- Rs.4,00,000/- iii. Harish Juyal- Rs.5,00,000/- iv. Jeevan Singh - Rs.50,000/- v. Anushka Medicare - Rs.7,00,000/- Total Rs.26,78,300/- 3. The Ld. CIT(A) erred in confirming the addition of Rs.10,000/- in respect of cash deposits out of cash on hand. 4. The Ld. CIT(A) erred in: i) not accepting the contention of the Appellant that the sale value of plot of land sold was less than the stamp duty ready reckoner value because of location and situation of the land at Dehradun moreover erred in not directing the Assessing officer to refer the same for valuation to Government approved departmental valuation officer Accordingly, he also erred in invoking the provision of Section 50C. ii) holding that the Appellant had not declared the capital gain in the Return of Income filed u/s 148 whereas the Long Term Capital Gain was declared in the Return of Income file u/s 148. iii) rejecting the legitimate claim of Appellant u/s 54F of claiming exemption of Long Term Capital Gain on the ground that the same was a fresh claim made for the first time during this appeal proceedings whereas the exemption u/s 54F was claimed in the Return of Income filed u/s 148. Therefore, he erred in holding that no claim for exemption u/s 54F was ever made during the assessment proceedings 5. The Appellant reserves the right to add, to alter, to amplify and to modify the Grounds of Appeal.”

4.

The appellant has not pressed ground No.1 in both years under

consideration. Hence, ground No.1 is dismissed as not pressed.

4.1 Ground No. 4(i) is also not pressed by the assessee and hence, the same is

dismissed as not pressed.

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta ITA No.8665/Mum/2025 (AY 2016-17)

5.

Facts of the case, in brief, are that the assessee electronically filed return

of income for the AY 2016-17 on 10.09.2016 declaring total income of

Rs.7,30,960/-. The case was reopened u/s 147 and notice u/s 148 of the Act was

issued on 22.07.2022. The assessee filed return on 19.03.2022 in response to

notice u/s 148 declaring the same total income of Rs.7,30,960/-. Thereafter, the

AO issue various statutory and show cause notices to the assessee. After

considering the reply of the assessee, the AO made total addition of

Rs.1,82,57,751/- and determined total income at Rs.1,89,88,711/-.

6.

Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The assessee filed various details and requested to admit additional grounds of appeal. He also filed additional evidences in respect of the credit entries in the bank account. The CIT(A) called for the remand report from the AO. In the remand report, the AO has stated that Rs.33,00,000/- credited in the bank account was towards sale consideration of property. He also stated that Rs.1,77,31,233/- was the unsecured loans from various persons. After considering the remand report, the CIT(A) deleted addition of Rs.1,21,83,233/- and confirmed addition of Rs.53,50,000/- towards unsecured loans i.e. (i) M/s Anushka Medicare - Rs.3,00,000/-, (ii) M/s Shah Housecon Pvt Ltd. - Rs.18,00,000/-, (iii) M/s Jay Shree Infrastructure - Rs.9,00,000/-, (iv) Prospect Engineering - Rs.6,50,000/-, (v) Harish Juyal Rs.5,00,000/-, (vi) Gangaur Sweets - Rs.8,00,000/- and (vii) Anuj plastics – Rs.4,00,000/-. He also confirmed cash deposit of Rs.2,45,000/- u/s 69A of the Act.

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta The CIT(A) also upheld addition of Rs.14,06,018/- under the head long-term capital gain (LTCG). He also did not allow deduction claimed u/s 54F of the Act. 7. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. Ground No.2 pertains to addition of Rs.53,50,000/- towards unsecured loan from 7 persons. The Ld. AR of the assessee has filed a paper book and submitted that the addition sustained by the CIT(A) is not proper. He submitted that the appellant had given certain loans to various parties in AY 2016-17 or earlier years and he had received back the impugned amounts towards repayment of loans during the year under consideration. However, the AO and the CIT(A) have considered the repayments received as loan and cash credits received by the appellant and has treated them as unexplained. Accordingly, they have confirmed the addition u/s 69A of the Act. Even though the appellant had filed duly confirmed copies of account, addresses, PANs along with copy of bank statements explaining the entries both for loans given and repayments received, the lower authorities misconstrued these entries as unexplained loans and cash credits on the touchstone of identity, genuineness and source u/s 69A of the Act. This is despite the fact that the appellant in the course of remand proceedings had also clearly pointed out the fact of various loans given by him and repayments received by him. He relied on the decision of the ITAT Mumbai Bench in the case of Zippy Finance Pvt. Ltd. (ITA No. 6883/Mum/2025) dated 15.04.2026 and submitted that the said addition may be deleted. 8. On the other hand, the Ld. Sr. DR of the revenue supported the order of lower authorities.

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta

9.

We have heard both the parties and perused the material available on

record. We have also carefully gone through the decision relied upon by the Ld.

AR in the case of Zippy Finance Pvt. Ltd. (supra). The AO had added

Rs.1,49,24,751/- towards unsecured loans received by the assessee. The assessee

has contended that the appellant had not received any unsecured loans during

the year but had actually received back the loans given by him earlier year. He has

filed various supporting documents to substantiate his claim. He also submitted

that during the remand proceedings also he has made the above claim, but both

AO and CIT(A) have disregarded the claim and sustained the addition. The ld. AR

has relied on the decision in case of Zippy Finance Pvt. Ltd. (supra). The relevant

portion of the decision is reproduced below for ready reference:

“13. We have heard the rival submissions and perused the materials available on record, including the relevant portion of the impugned appellate order. The core issue for adjudication is whether the amount of Rs. 15,00,000/- represents an unexplained cash credit within the meaning of section 68 of the Act or merely a repayment of an existing loan. On careful consideration of the facts, we find merit in the contention of the Ld. AR that no fresh loan was taken by the assessee during the impugned assessment year from M/s. Rati Diamonds Pvt. Ltd. Rather, the transaction represents repayment of an existing loan, which is duly reflected as a debit entry in the books of account. It is a settled legal position that section 68 is attracted only in respect of credits found in the books of account for which no satisfactory explanation is offered. In the present case, there is no fresh credit entry but only a repayment, and therefore the very foundation for invoking section 68 fails. We further note that the assessee has placed on record the ledger account, bank statements and confirmation from M/s. RDPL, which prima facie establish the nature of the transaction. The Ld. AO, however, proceeded on an incorrect appreciation of facts by treating the repayment as a fresh loan without bringing any cogent material on record to rebut the evidences

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta furnished by the assessee. The observations of the Ld. CIT(A) that the assessee failed to discharge the onus under section 68 are misplaced inasmuch as the primary condition for invoking section 68, i.e., existence of a credit entry, itself is not satisfied. Once it is demonstrated that the transaction is in the nature of repayment, the question of proving identity, creditworthiness and genuineness does not arise. In view of the above, we hold that the addition of Rs. 15,00,000/-made under section 68 of the Act is unsustainable in law and on facts. Consequently, the same is directed to be deleted.”

9.1 We have noticed that the facts in the instant case are similar to those of

the above case relied upon by the Ld. AR. The Sr. DR has not distinguished the

decision either on fact or on law. However, we find that the details including the

earlier loans given by the appellant and the repayment of the said loans have not

been verified by the lower authorities. Therefore, in the interest of justice, the

matter is restored to the file of AO for verification of the earlier loans as well as

the repayment of the said loans and to allow necessary relief in accordance with

law. The AO should grant adequate and reasonable opportunity of being heard to

the assessee. This ground is allowed for statistical purpose.

10.

The next ground pertains to addition of Rs.2,45,000/- in respect of cash

deposits out of cash in hand. The Ld. AR submitted that both AO and CIT(A) have

totally ignored the facts and submission of the assessee. The possibility of

accumulation of cash of Rs.1,45,000/- over a period cannot be ruled out

particularly when the assessee comes from a well to do family background. The

assessee's father is an established doctor and has been regularly filing returns of

income. He has declared gross total income of Rs.43,22,574/- in AY 2016-17.

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta Similarly, his mother has been also regularly filing returns of income and had

shown gross total income of Rs.14, 13, 189/. In these circumstances, the small

amount of cash of Rs.1,45,000/- may not be treated as unexplained. Regarding

the balance cash of Rs.1,00,000/-, the Ld. AR submitted that the same was

received from Ankush Kumar as advance from Ankush Kumar on 02.03.2016

against sale of land vide sale deed dated 08.04.2016, wherein the factum of

receipt of Rs. 1,00,000/- is duly recorded. In view of the aforesaid explanation,

cash deposit of Rs. 2,45,000/- may be deleted.

11.

On the other hand, the Ld. Sr. DR relied on the order of lower authorities.

12.

We have heard both sides and perused the materials on record. The

appellant has explained that Rs.1,00,000/- was received as advance from Shri

Ankush Kumar against the sale of land, which is evidenced by the sale deed dated

08.04.2016. Regarding the remaining cash of Rs.1,45,000/-, it was submitted that

this was out of the past savings of earlier years. Considering the smallness of the

amount and that possibility of accumulation of cash over a period cannot be ruled

out because the assessee comes from a well to do family, the ground is allowed.

13.

Ground No. 4(ii) pertain to disallowance of deduction claimed u/s 54F of

the Act amounting to Rs.14,06,018/- on the ground that the same was not

claimed in the original return of income. The assesse had shown the sale proceeds

of property as business income, which was considered as long-term capital gain

(LTCG) by the AO. The LTCG was Rs.14,06,018/-. Before the CIT(A) the appellant 8

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta did not dispute the computation of LTCG but claimed fresh deduction u/s 54F of

the Act. Since the appellant had in the original return offered income u/s 44AD of

the Act and never claimed deduction u/s 54F of the Act, the CIT(A) observed that

he cannot make an entirely new claim during the appellate proceedings.

Aggrieved, the assessee has filed appeal before the Tribunal and raised the

impugned ground.

14.

Before us, the Ld. AR submitted that the eligibility of the assessee's claim

for exemption u/s 54F on merit is neither denied by the AO in remand report nor

by the CIT(A). The CIT(A) denied claim of exemption u/s 54F only for the reason

that the same was not made in the original return of income and cannot be made

in appeal proceedings. The Ld. AR submitted that allowability of such subsequent

claim made in the course of appellate proceedings has already been allowed by a

number of decisions including that by the Hon’ble Supreme Court. He relied on

the decision of the ITAT Mumbai Bench in the case of M/s Dollar Chunilal Modi

HUF I.T.A. No. 7189/Mum/2025 date 19.01.2026.

15.

On the other hand, the Ld. Sr. DR supported the order of lower authorities.

16.

We have heard both sides and perused the materials on record. We have

also carefully considered the decision of the co-ordinate Bench in case of M/s

Dollar Chunilal Modi HUF (supra). The relevant part of the order is reproduced

below for ready reference:

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta “4. Admittedly, the claim for deduction under section 54F in respect of depreciable assets could not have been examined by the Ld.AO, as the same did not form part of the return of income filed by the assessee. Even before the Ld.CIT(A), such a claim could not have been entertained or verified, having regard to the decision of the Hon'ble Supreme Court in Goetze (India) Ltd. v. CIT reported in (2006) 284 ITR 323.

4.1. However, Hon'ble Supreme Court in Goetze (India) Ltd. (supra), while restricting the power of the assessing officer to entertain a fresh claim otherwise than by way of a revised return, categorically clarified that such restriction does not impinge upon the powers of the appellate authorities to consider and adjudicate a claim in accordance with law. Hon'ble Supreme Court observed as under:

4.

The decision in question is that the power of the Tribunal under section. 254 of the Income Tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the assessing officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income Tax Appellate Tribunal under section 254 of the Income Tax Act, 1961. There shall be no order as to costs.

4.2. In view of the above discussion, this Tribunal find that although the assessee did not claim deduction under section 54F of the Act in the return of income originally filed, such omission cannot, by itself, be a ground to deny examination of the claim at the appellate stage. As clarified by the Hon'ble Supreme Court in Goetze (India) Ltd. v. CIT (supra), the restriction laid down therein applies only to the powers of the assessing officer and does not curtail the jurisdiction of the appellate authorities to entertain a legal claim and adjudicate the same in accordance with law. 4.4. In these circumstances, and in the interest of substantial justice, this Tribunal deem it appropriate to restore the issue of the assessee's claim under section 54F to the file of the Ld. AO for de novo verification of the statutory conditions laid down under the said provision. The Ld. AO shall examine the claim, after affording a reasonable opportunity of being heard to the assessee, and shall pass a speaking order on the issue in accordance with law."

16.1 The Ld. Sr. DR has not been able to distinguish the decision either on fact

or on law. Hence, following the above decision, we deem it appropriate to restore

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta the issue of the assessee's claim u/s 54F of the Act to the file of the AO for de

novo verification of the statutory conditions laid down under the said provision.

The AO shall examine the claim, after affording a reasonable opportunity of being

heard to the assessee, and shall pass a speaking order on the issue in accordance

with law. The ground is allowed for statistical purpose.

17.

In the result, the appeal of the assessee is allowed for statistical purpose.

ITA No.8664/Mum/2026 (AY:2017-18)

18.

The grounds of appeal as well as the facts and circumstances of the appeals

for assessment year 2017-18 are similar to the grounds and facts and

circumstances of the case for AY 2016-17; therefore, the findings given in the

appeal for AY 2016-17 in ITA No.8665/Mum/2025 (supra) shall apply mutatis

mutandis to the assessment year 2017-18. Accordingly, the appeal is allowed for

statistical purpose.

19.

In the combined result, the appeal of the assessee is allowed for statistical

purpose.

Order is pronounced on 14.07.2026.

Sd/- Sd/- (SANDEEP GOSAIN) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER

*Aniket Chand; Sr. PS MUMBAI Date: 14.07.2026 Copy of the Order forwarded to:

ITA Nos.8664 & 8665/MUM/2025 Mr. Rishabh Ravi Gupta 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File

By Order

Assistant Registrar ITAT, MUMBAI

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