MAHESHBHAI GORDHANBHAI KALKANI,SURAT, GUJARAT vs. INCOME TAX OFFICER WARD 3(2)(6) SURAT, SURAT, GUJARAT

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ITA 308/SRT/2026Status: DisposedITAT Surat01 June 2026AY 2017-186 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 5,50,000/- should be deleted as the bank account belonged to the assessee's wife and she provided necessary documents. The Tribunal also deleted the addition of Rs. 1,00,000/- as the assessee provided sufficient documentary evidence of past savings.

What were the facts?

The assessee deposited cash of Rs. 14,00,000/- in his bank accounts during demonetization. The Assessing Officer added this amount as unexplained cash deposit. The CIT(A) sustained an addition of Rs. 1,00,000/- and deleted Rs. 7,50,000/-.

What were the issues?

Whether the cash deposits made during demonetization were satisfactorily explained by the assessee, and if the CIT(A) erred in retaining a part of the addition.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Surat Bench, Surat

Before: Dr. Arjun Lal Saini

For Appellant: Shri Rakesh Shah, CA
For Respondent: Shri Ajay Uke, Sr. DR
Hearing: 12/05/2026

In The Income Tax Appellate Tribunal Surat Bench, Surat Before Dr. Arjun Lal Saini, Accountant Member आयकरअपीलसं./ITA No. 308/SRT/2026 (�नधा�रणवष�/Assessment Year: (2017-18) Maheshbhai Gordhanbhai Kalkani, Income Tax Officer, Wd- 3(2)(6) Vs. 27, Bajrang Nagar, Ambatalavadi Surat, Surat City, Surat, Katargam S.O. Income Tax Office, Surat, Anavil Gujarat - 395004 Business Center, Adajan Hazira Road, Adajan, Surat, Gujarat, 395007 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: ANIPK3490R (अपीलाथ�/Assessee) (��यथ�/Respondent) Assessee by : Shri Rakesh Shah, CA Respondent by : Shri Ajay Uke, Sr. DR Date of Hearing : 12/05/2026 : 01/06/2026 Date of Pronouncement

ORDER Per, Dr. Arjun Lal Saini, AM:

Captioned appeal filed by the assessee, pertaining to Assessment Year 2017- 18, is directed against the order under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi, dated 28.01.2026, which in turn arises out of an order passed by the Assessing Officer, u/s 143(3) of the Act, on 29.11.2019.

2.

The solitary grievance of the assessee, in this appeal is that out of total addition of Rs.14,00,000/-, made by the assessing officer, under section 69A of the Act, an amount of Rs.6,50,000/-, has been retained by the learned CIT(A) and

ITA No.308/Srt/2026 Maheshbhai G. Kalkani balance addition of 7,50,000/- was deleted by the learned CIT(A), however learned CIT(A) ought to have deleted the balance addition of Rs.6,50,000/-. The details of additions sustained by ld.CIT(A) are as follows:

(i) Sustain the addition of Rs.1,00,000/- under section 69A, ignoring that the said amount represented the Assessee own past savings. The authorities below failed to appreciate that availability of cash was duly explained and no adverse material was brought on record to disprove the explanation.

(ii) An addition of Rs. 5,50,000/- under section 69A in respect of cash deposited in a joint bank account held with the Assessee wife, without appreciating that the said amount belonged to the wife and was duly supported by her cash book for FY 2016 17, reflecting sufficient opening cash balance and availability of funds. The learned CIT (A) as well as AO failed to point out any defect in the cash book and wrongly presumed ownership of funds merely because the Assessee was a joint holder of the account.

3.

Brief facts qua the issue are that the assessee has filed return of income for assessment year (A.Y.) 2017-18, on 11.03.2018, declaring total income of Rs.2,33,050/-. The assessee’s case was selected for limited scrutiny under CASS. Accordingly, notice u/s 143(2) of the Act was issued on 24.09.2018, and duly served upon to the assessee. Thereafter, notice u/s 142(1) of the Act, along with detailed questionnaire was issued on 04.07.2019, and duly served upon the assessee. In response to the statutory notices issued u/s 143(2) & 142(1) of the I.T. Act, 1961, the assessee submitted reply in ITBA system through e-filing portal. During the year under consideration, the assessee has declared income under the head 'Salary' and Agricultural income. As per the information available with the assessing officer, it was noticed that the assessee has deposited cash of Rs.5,50,000/-, in his bank

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ITA No.308/Srt/2026 Maheshbhai G. Kalkani account no.270510310001141, with the Bank of India and Rs.8,50,000/- in his bank account no. 31223768718, with the State Bank of India during the demonetization period. On perusal of assessee's reply, it was noticed by the assessing officer that the assessee has not explained satisfactorily, the source of the above cash deposited amounting to Rs. 14,00,000/- ( Rs.5,50,000 + 8,50,000) in his bank accounts with the Bank of India and State Bank of India.

4.

In response to various notices issued by the assessing officer, the assessee submitted its reply. Further, regarding the cash deposited in the bank account with the Bank of India, the assessee stated that the same account is owned by his wife and the amount was also deposited by her wife. The assessee also explained the other amount deposited in the bank account stating that it was out of past savings and out of amount withdrawn from the bank for the purpose of purchase of a property, however, the purchase deal of the property was cancelled and consequently the assessee has re-deposited the said amount in the bank account and for that the assessee has submitted relevant documents and evidences before the assessing officer. The assessee also submitted the explanations about the agricultural income. However, the assessing officer, rejected the above contention of the assessee and held that assessee has stated that the amount of Rs.7,50,000/- was received from a person, Mr. Nareshbhai Kurjibhai Vaghasiya, on 24.10.2016, which was repayment of loan given by the assessee, to Nareshbhai Kurjibhai Vaghasiya earlier. However, no details of Nareshbhai Kurjibhai Vaghasiya, was given and the purpose of advancing loan to him was also not explained by the assessee. Also, the assessee has not stated any purpose for withdrawing the amount of Rs.7,50,000/-, on 25.10.2016 and why the same was kept unutilized with him till 08.11.2016. The assessee has also not given any details of earlier savings claim of Rs.1,00,000/-. Further, regarding the cash deposited in the bank account with the Bank of India, the assessee Page 3 of 6

ITA No.308/Srt/2026 Maheshbhai G. Kalkani stated that the same account is owned by his wife and the amount was also deposited by her wife. However, on verification of Bank Statement, it is noticed that the account no. 270510310001141 with the Bank of India is in the name of the assessee himself in which the assessee has made cash deposit of Rs.5,50,000/- during the demonetization period. Therefore, assessee's explanation for source of cash deposited in his bank account is not accepted and the same was treated as unexplained cash deposit in assessee's bank accounts. Hence, the total cash deposited during the demonetization period in assessee's bank accounts maintained with the Bank of India and State Bank of India amounting to Rs. 14,00,000/- was added to the total income of the assessee treating the same as unexplained cash deposit under the provisions of section 69A of the Income-tax Act, 1961 which is to be taxed u/s. 115 BBE of the Income-tax Act.

5.

Aggrieved by the order of the Assessing Officer, the assessee, carried the matter in appeal before the Ld. CIT(A), who has partly delete the addition made by the assessing officer, observing as follows:

“The submission of the assessee is carefully considered. The assessee withdrew cash of 7,50,000/- on 25.10.2016 from his account and the same was deposited on 14/11/2016 in the same bank account including Rs. 1,00,000/-. The source of cash of Rs. 7,50,000/- is verified from the confirmation by providing of ledger and PAN of Shri Nareshbhai Kurjibhai Vaghasiya. During the assessment proceedings, the assessee did not submit the confirmation of the said amount received from Shri Nareshbhai Kurjibhai Vaghasiya, therefore, the AO disallowed the claim of the assessee. Since, the confirmation of Rs. 7,50,000/- is submitted by the assessee and the same is verified from the bank account and ledger, PAN Shri Nareshbhai Kurjibhai Vaghasiya and the duration between cash withdrawn and cash deposited in the account is very short period, therefore, source of cash of Rs. 7,50,000/- is justified and explained. Regarding source of cash of Rs. 1,00,000/- the assessee has submitted that source of this cash was from own saving, however, the assessee did not submit documentary evidence. The assessee has no corroborative evidence of cash holding of Rs. 1,00,000/-. No cash book, balance sheet, or contemporaneous record was produced to substantiate continuous possession of the withdrawn cash. The return of income of the assessee is only 2,33,050/-, which does not support the capacity to hold substantial idle cash without credible explanation. The assessee failed to provide supporting documents of Rs. 1,00,000/-, In view of the above, the assessee has failed to Page 4 of 6

ITA No.308/Srt/2026 Maheshbhai G. Kalkani satisfactorily explanation regarding the source of the cash deposits Rs. 1,00,000/- with proper documentary evidence. The onus of proving the sources of such deposits lies with the assessee only. Thus, the explanation regarding source of cash deposits of Rs.1,00,000/-in the bank account out of earlier saving is not satisfactory. Accordingly, the cash deposits in the bank account of Rs. 1,00,000/- remain unexplained. Considering the above, source of Rs. 7,50,000/- is allowed as explained and remaining amount of Rs. 1,00,000/- is treated as unexplained income. Therefore, ground No. 3 is partly allowed.”

6.

Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before this Tribunal.

7.

Learned Counsel for the assessee submitted that assessee has deposited Rs.1,00,000/-, out of the past savings and therefore addition on account of cash deposit, out of past savings of the assessee, should not be made. Apart from this, the amount of Rs.5,50,000/-, was deposited in a joint bank account and the assessee’s name is as a second holder in the bank account, therefore money was deposited in the joint bank account, pertains to Smt. Shilpaben, wife of the assessee and for that assessee has submitted the income tax return and other documentary evidences pertaining to Shilpaben and explained the source of the cash deposit. The Ld. Counsel for the assessee also submitted that up to Rs.2,50,000/-, no addition should be made in the hands of the assessee, as it is the maximum amount, which is not chargeable to the tax. Hence, the addition made by the Assessing Officer should be deleted.

On the other hand, the Ld. DR for the Revenue has primarily reiterated the 8. stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

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ITA No.308/Srt/2026 Maheshbhai G. Kalkani 9. I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. I note that the assessee initially claimed during the assessment proceedings that the account belonged to his wife, which was found to be correct on verification. The assessee under consideration is merely second name holder in the bank account hence money belonged to his wife for that assessee produced affidavits and necessary documents at appellate stage. Therefore, addition Rs.5,50,000/- needs to be deleted. About the amount of Rs.1,00,000/-, the assessee submitted enough documentary evidences, such as, statement of past saving, cash flow statement, and sale of agricultural produce etc. Hence, based on these facts and circumstances, I am not inclined to accept the contention of the Assessing Officer in any manner and hence the addition so made is deleted. Accordingly, I delete the addition of Rs.6,50,000/- (Rs. 55,000 + Rs. 10,000).Hence, these grounds of the assessee are allowed.

10.

In the result, appeal filed by the assessee is allowed. Order is pronounced in the open court on 01/06/2026.

Sd/- [ Dr. Arjun Lal Saini ] लेखा सद�/Accountant Member //True Copy// Date : 01/06/2026 Place : Surat Copy of the order forwarded to :  The assessee  The Respondent  CIT The CIT(A) By order   DR, ITAT, Surat  Guard File Assistant Registrar/Sr. PS/P.S. ITAT, Surat Page 6 of 6

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