RAJENDRASINH HIMMATSINH RANA,VADODARA vs. THE ITO, WARD-1(2)(2), VADODARA

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ITA 881/AHD/2025Status: DisposedITAT Ahmedabad06 May 2026AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the issue was primarily factual and required verification of evidence related to agricultural income and cash flow. Since the assessee claimed to possess new supporting evidence, the matter was restored to the Assessing Officer for fresh examination.

What were the facts?

The assessee deposited Rs. 63,52,000/- in cash into his bank account. The Assessing Officer treated this as unexplained income as the assessee failed to provide satisfactory explanation and supporting evidence. The CIT(A) upheld this addition, finding the assessee's claims of agricultural income and withdrawals as an afterthought.

What were the issues?

Whether the cash deposits in the bank account were unexplained income, and if the peak credit theory was applicable. The Tribunal also considered the admissibility of additional evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Hemant Suthar, AR
For Respondent: Shri Rameshwar P Meena, Sr. DR
Pronounced: 06.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.881/Ahd/2025 (Assessment Year: 2012-13) Rajendrasinh Himmatsinh Rana, Vs. Income Tax Officer, B-33, Shivanjali Society, Ward-1(2)(2), Narayan Garden Road, Gorwa, (Previously ITO, Ward-1(2)(5) Vadodara-390009 Vadodara [PAN No.BEEPR0454Q] (Appellant) .. (Respondent) Appellant by : Shri Hemant Suthar, AR Respondent by: Shri Rameshwar P Meena, Sr. DR 05.05.2026 Date of Hearing Date of Pronouncement 06.05.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 10.03.2025 passed for A.Y. 2012-13.

2.

The assessee has raised the following grounds of appeal:

“1. The Ld. CIT(A), National Faceless Appeal Centre (NFAC) has erred in law and in facts in confirming the action of the Ld. A.O. in the addition of Rs. 63,52,000/- being cash deposited in bank account treating the same unexplained income. The impugned addition of Rs. 63,52,000/- being bad in law and in facts is prayed to be deleted. 2. Without prejudice to the above ground of appeal, the Ld. CIT(A), NFAC has erred in law and in facts in not accepting the submission of the appellant to apply the peak credit theory and thereby restricting the addition to the extent of the peak amount only. The Ld. CIT(A) should have accepted the proposal of the appellant and directed the Ld. AO to restrict the addition to the extent of peak amount.

ITA No. 881/Ahd/2025 Rajendrasinh Himmatsinh Rana vs. ITO Asst.Year –2012-13 - 2– 3. Appellant craves liberty to add, alter, amend substitute or withdraw any of the grounds of appeal hereinabove contained.” 3. The brief facts of the case are that the assessee is an individual whose case was reopened under section 147 of the Income-tax Act, 1961 ("the Act") on the basis of information received through AIR/ITS demonstrating substantial cash deposits in bank accounts. In response to notice issued under section 148 of the Act, the assessee filed return of income declaring total income of ₹81,280/- and agricultural income of ₹15,00,000/-. During the course of assessment proceedings, the Assessing Officer observed that the assessee had deposited cash amounting to ₹63,52,000/- in his bank account. As the assessee failed to furnish satisfactory explanation along with supporting evidences regarding the source of such cash deposits, the Assessing Officer treated the same as unexplained money and made addition of ₹63,52,000/- to the total income. Further, the Assessing Officer made an addition of ₹5,235/- on account of interest income. Accordingly, the assessment was completed under section 143(3) read with section 147 of the Act assessing the total income at ₹64,38,515/-.

4.

Aggrieved, the assessee preferred appeal before the CIT(Appeals). During appellate proceedings, the assessee contended that he was a Government employee and was also engaged in agricultural activities, and that the cash deposits represented withdrawals redeposited along with agricultural income and opening cash in hand. The assessee also sought admission of additional evidences under Rule 46A in the form of cash flow statements and bank statements. The CIT(Appeals), after considering the submissions and remand material, observed that the assessee failed to furnish basic evidences such as proof of land holdings, details of agricultural

ITA No. 881/Ahd/2025 Rajendrasinh Himmatsinh Rana vs. ITO Asst.Year –2012-13 - 3– activities, sale and purchase of agricultural produce, or any corroborative material to substantiate the claim of agricultural income. The CIT(Appeals) further noted that the assessee had not filed returns in earlier years reflecting such agricultural income and that the explanation offered appeared to be an afterthought. The CIT(A) held that the theory of peak credit was not applicable in the absence of any regular business activity and that the assessee had failed to discharge the burden of explaining the source of cash deposits. Accordingly, CIT(Appeals) confirmed the addition of ₹63,52,000/-. The addition of ₹5,235/- on account of interest income was also upheld. Thus, the appeal of the assessee was dismissed.

5.

The assessee is in appeal before us against the order passed by the CIT(Appeals) dismissing the appeal of the assessee.

6.

We have carefully considered the rival submissions and perused the material available on record. The ld. counsel for the assessee has submitted before us that the assessee is in possession of evidences demonstrating ownership of agricultural land and carrying on of agricultural activities, and that the cash deposits are sourced from agricultural income and withdrawals from bank accounts. It has been contended that such evidences could not be properly furnished before the lower authorities and may now be considered in the interest of justice.

7.

On consideration of the facts, we find that the issue involved is primarily factual in nature and hinges upon verification of evidences relating to agricultural income, land holdings, and cash flow. Although the Assessing Officer and CIT(Appeals) have recorded findings against the assessee, it is

ITA No. 881/Ahd/2025 Rajendrasinh Himmatsinh Rana vs. ITO Asst.Year –2012-13 - 4– equally important that all relevant evidences are duly examined in the interests of justice. Since the assessee has now claimed to possess supporting evidences substantiating agricultural activities and source of funds, in our considered view, the matter requires fresh examination.

8.

Accordingly, in the interest of justice, we restore the issue to the file of the Assessing Officer with a direction to examine the evidences relating to land holdings, agricultural activities, and source of cash deposits, after affording adequate opportunity of being heard to the assessee. The assessee is directed to furnish all necessary documentary evidences in support of his claim.

9.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 06/05/2026

Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 06/05/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. 2. ��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. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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