MONTUKUMAR RAJNIKANTBHAI JAYSWAL,MEHSANA vs. THE ITO, WARD-1, PATAN

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ITA 2220/AHD/2025Status: DisposedITAT Ahmedabad05 June 2026AY 2023-244 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the amounts received from the assessee's wife and father were genuine. The assessee had provided sufficient documentary evidence, including bank statements and confirmations, to substantiate the transactions.

What were the facts?

The assessee paid credit card bills using cash, withdrawals from a partnership firm, and funds received from his wife and father. The Assessing Officer accepted cash and partnership withdrawals but disallowed funds from the wife and father, treating them as unsecured loans.

What were the issues?

Whether the disallowance of funds received from close relatives as unsecured loans was justified without proper appreciation of documentary evidence and bank transaction trails.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

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

For Appellant: Shri Chirag Raval, CA
For Respondent: Shri Girish Parihar, Sr. DR
Hearing: 01.04.2026Pronounced: 05.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD ‘SMC’ BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.2220/AHD/2025 (Assessment Year: 2023-24) Mr. Montukumar Rajnikantbhai Income Tax Officer, Ward-1, Jayswal, 1st Floor, Chinmay Corporate House-1, Pathano Madh, Nadiol Darvajo, Vs. Patan-Deesa Highway, Vadnagar, Mehsana - 384355 Patan – 384265 Gujarat Gujarat PAN: AYSPJ1014B (Appellant) : (Respondent) Assessee by : Shri Chirag Raval, CA Respondent by : Shri Girish Parihar, Sr. DR Date of Hearing : 01.04.2026 Date of Pronouncement : 05.06.2026 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), National Faceless Appeal Centre (NFAC), Delhi [in short “Ld. CIT(A)”] dated 24.09.2025 for the Assessment Year (in short “AY”) 2023-24.

2.

The assessee has raised the following grounds of appeal: “1.1 The learned Commissioner of Income-tax (Appeals), NFAC (hereinafter referred as "learned CIT(A)"], erred in law and on facts in confirming the disallowance of Rs.19,15,295/- (being Rs.12,51,000/- received back from the appellant's wife and Rs.6,64,295/- received from the appellant's father), without properly appreciating the complete documentary evidences furnished by the appellant, including income-tax returns, bank statements, confirmations, and fund-flow details of both parties. The learned CIT(A) failed to appreciate that all the transactions were routed through verifiable banking channels, duly substantiated, and consistent with the appellant's submissions during assessment as well as appellate proceedings. 1.2 The learned CIT(A) erred in holding that the amount of Rs. 12,51,000/- received from the appellant's wife lacked creditworthiness or business activity, without appreciating that the amount represented repayment of advances earlier made by the appellant only, duly

ITA No.2220/AHD/2025 Mr. Montukumar Rajnikantbhai Jayswal supported by the bank trail evidencing corresponding debits and credits. The learned CIT(A) further erred in disregarding her return of income filed under section 44AD, ignoring that presumptive taxation legally dispenses with the requirement of maintaining detailed books of account and that absence of additional documentation cannot invalidate the declared turnover. 1.3 The learned CIT(A) also erred in sustaining the disallowance of Rs.6,64,295/-received from the appellant's father through his proprietorship concern HR MAP Solutions, despite the appellant furnishing confirmations, bank statements, and income-tax returns demonstrating the availability of funds. The finding that creditworthiness was not proved is unreasoned, contrary to the evidences placed on record, and based on conjecture. The appellant cannot be compelled to prove the "source of the source", as repeatedly held in judicial precedents. 1.4 The learned CIT(A) erred in treating the legitimate bank transactions between closely related family members as "circular movement of funds" or "self-serving entries", without conducting any independent verification or demonstrating with evidence that the funds were non-genuine. The adverse observations are based on suspicion and surmises rather than concrete material. Therefore, the disallowance of Rs. 19,15,295/- is arbitrary, inconsistent, and unsustainable, particularly when the Assessing Officer himself accepted the genuineness of (a) cash-based credit card payments and (b) withdrawals from the partnership firm, and chose to doubt only the electronic-mode payments without cogent reasoning. The appellant's statutory burden under section 68 stands duly discharged during the assessment proceedings only.”

3.

The assessee is an individual and filed his return of income for AY 2023- 24 on 30.07.2023 declaring total income at Rs.4,67,890/-. The case of the assessee was selected for scrutiny to verify the issue of large cash payments made for credit card purchase. The Ld. Assessing Officer (in short “Ld. AO”) observed that the assessee has paid huge credit card bills both in cash as well as online mode. The source claimed by the assessee as per his submissions before the Ld. AO including the details of computation of income, credit card statement, bill payment, bank account, the assessee has paid the said bills, both in cash and in online mode through business receipts, accumulated personal savings and cash withdrawals made during the year. The Ld. AO after examining the evidences accepted the source of cash of Rs.21,68,500/-, which was used by the assessee for paying the credit card bills. The Ld. AO further observed that Rs.8,89,080/- were withdrawn by the assessee from his partnership firm M/s. Hatkesh Infrastructure and the same was used for credit card bill payment. 2

ITA No.2220/AHD/2025 Mr. Montukumar Rajnikantbhai Jayswal However, in respect of funds received from Jagruti Jayswal of Rs.12,51,000/- and funds received from his father of Rs.6,64,295/- for making credit card payment electronically, the Ld. AO did not accept the claim as the funds were received from the assessee’s wife and father. The source of the payment of the credit card, received from Jagruti Jayswal and Rajnikant Jayswal was treated as unsecured loan amounting to Rs.19,15,295/- and hence the Ld. AO disallowed the same.

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 assessee received the amount from his wife which was earlier given to her. For which, the assessee has given the details of transfer of Rs.12,56,000/- to his wife through credit card on different dates and out of the same, Rs.12,51,000/- was returned through banking channel. As regards, amount received from his father the assessee received an unsecured loan from HRMAP Solutions, proprietorship of his father Rajnikant Jayswal. The assessee had received unsecured loan of Rs.17,20,000/- during the year under consideration on different dates and out of that credit card dues amounting to Rs.6,64,295/- were paid. The assessee submitted the income tax return, computation, bank statement and confirmation of the Rajnikant Jayswal. The Ld. AR submitted that the identity of the lenders were not in doubt and in fact the source of the source was also disclosed including that of creditworthiness and genuineness of these two parties.

6.

The Ld. Departmental Representative (in short “Ld. DR”) for the Revenue relied upon the assessment order and the order of the Ld. CIT(A).

7.

Heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the Ld. AO at no point of time has disputed the amount transferred to the assessee’s wife from time to time prior to the amount received from his wife. The assessee has given all the details of bank statement of both his wife as well as his own for corresponding transfers. Thus,

ITA No.2220/AHD/2025 Mr. Montukumar Rajnikantbhai Jayswal the amount received from Jagruti Jayswal was genuine receipt of the payment made to the assessee for credit card purchases. Besides this, the assessee’s father has also given the loan to the assessee for which the assessee has given the details of his father’s partnership firm concern and the repayment of the amount of Rs.6,64,295/-. All these details of these two parties were before the Ld. AO as well as before the Ld. CIT(A) but both the authorities have not given any comment on the same. Merely doubting the creditworthiness without looking into the details filed by the assessee is not justifiable. Hence, the addition confirmed by the Ld. CIT(A) was not justified.

8.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on 05.06.2026

Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated: 05.06.2026 * 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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