HARSHAD M. JOSHI ,MUMBAI vs. ITO WARD 1(2)(1), MUMBAI

PDF · subscribers
ITA 1856/MUM/2026Status: DisposedITAT Mumbai18 May 2026AY 2017-184 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the addition made by the Assessing Officer. The assessee failed to provide satisfactory and corroborative evidence to substantiate the source of cash payments, despite multiple opportunities.

What were the facts?

The assessee made credit card payments of Rs. 5,72,000/- in cash, claiming it was from cash accruals reflected in the cash book. The Assessing Officer made an addition as the assessee failed to explain the source of these cash payments despite specific notices.

What were the issues?

Whether the assessee adequately explained the source of cash used for credit card payments, and if the addition made by the AO was justified in the absence of sufficient evidence.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 142(1),Section 40(a)(ia),Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “J (SMC

Before: SHRI NARENDER KUMAR CHOUDHRY, JM & SHRI ARUN KHODPIA, AM

Hearing: 18.05.2026

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “J (SMC)” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JM & SHRI ARUN KHODPIA, AM I.T.A. No.1856/Mum/2026 (Assessment Year: 2017-18) Harshad M. Joshi ITO Ward 1(2)(1), Mumbai 401, Joanna Villa 28th Road, Mumbai-400050 Vs. Bandra (W), Mumbai-400050 PAN: ADYPJ2637H Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Shri Chandrashekhar Madkaikar Revenueby : Shri Pankaj Kumar (CIT Dr)/ Shri Aditya Rai (Sr. DR) : 20.04.2026 Date of Hearing : 18.05.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee against the order of Commissioner of Income Tax Appeals-ADDL/JCIT(A)-2 Vadodara [in short, “the Ld. CIT(A)”] dated 27.01.2026 for the assessment year 2017-18, which in turn arises from assessment order u/s 143(3) of the Income Tax Act, 1961 (“the Act”) dated 10.12.2019 passed by Income Tax Officer Ward 1(2)(2), Mumbai (in short, “the Ld. AO”). The grounds of appeal are as under: “The order of the assessing officer is erroneous as the addition made of Rs.5,72,000/- u/s 143(3) of the Income Tax Act, 1961 is biased and requires to be appealed. Hence, we appeal on the following grounds:

ITA No. 1856/Mum/2026 Harshad M. Joshi

1.

Credit card payment of Rs. 5,72,000/- from cash were done through cash accruals and are reflected in cash book. The source of this cash generation can also be documented. However we were not provided an extended opportunity to provide our contention. Hence we seek relief on addition of Rs. 5,72,000/- made by the assessing officer. 2. Appeal for relief in tax liability of Rs. 91,122/-. 3. Appeal for relief u/s 270A, of the Income Tax Act, 1961 in relation to penalty proceedings by the ITO as there is no case of under reporting of income or misreporting for Rs. 3,21,740”

2.

In the instant case, the case of assessee was selected for scrutiny assesment u/s 143(30 of the Act. The AO vide assessment order dated 10.12.2019 had made an addition of Rs.5,72,000/- on account of cash payments made towards credit card dues, mainly on the ground that the Assessee failed to explain the source of cash payments made towards credit card dues. One more disallowance u/s 40(a)(ia) for Rs. 2,35,394/- was also made but not contested before us. In the assessment order, it is clearly mentioned that despite the specific notice under section 142(1) of the Act, the Assessee did not furnish necessary details such as cash book, allocation of expenses to profit and loss account and explanation of business nexus etc.Aggrieved, the Assessee preferred first appeal before the ld. CIT(A), challenging the said addition, which was declined to be accepted by the Ld. CIT (A)-6 (Calcutta)vide order dated 05.02.2024 passed against which the Assessee filed second appeal before the Tribunal. The Hon'ble Coordinate Bench of the Tribunal vide order dated 24.07.2024 in ITA No.1595/M/2024,after considering the peculiar facts of the case, held that the source of cash was not supported by documentary evidence filed by the Assessee however, the Assessee 2

ITA No. 1856/Mum/2026 Harshad M. Joshi had claimed that if due opportunity may be given then, he could prove his contention, the case was remanded to the file of the ld. CIT(A) for decision afresh after affording due opportunity to the Assessee. 3. Thus, the ld. CIT(A) started the appellate proceedings and afforded opportunity, which is not in denial. It is a fact that the Assessee failed to file any confirmation, evidence for transfer of cash, returns, reconciliation in order to conclusivelyestablish the flow of cash from Om Steel Industry and Om Trading Co. to the Assessee.According,in absence of such evidence, the explanation remains unsubstantiated, and therefore, the Id. CIT(A) by considering the mandate of law that onus to explain the nature and source of cash payment lies squarely on the Assessee,mere entries in the self-maintained books or post facto explanation cannot dischargehis burden unless supported by legal and corroborative evidence. Further, the ld. CIT(A) also relied on the judgment of the Hon'ble Apex Court in the case of CIT vs. P. Mohankala, wherein it has been held that the explanation offered by the Assessee must be satisfactory and credible. Similarly, court has consistently held that cash credits of cash outgoing must be explained with cogent evidence and not merely on the basis of probability or narrative explanation. We,therefore, in order to examine the issue in detail, asked the assessee to explain the transactions with corroborative evidence, but still no gain. Ld. AR tried to explain the transactions supporting the same with cash book and summary of cash withdrawal from bank, but had furnished any external evidence such as bank statement etc., further the narrative made by the assessee to 3

ITA No. 1856/Mum/2026 Harshad M. Joshi substantiate the alleged transactions does not inspire any confidence to dislodge the findings of the revenue authorities. 4. Considering the aforesaid peculiar facts and circumstances, we deem it appropriate and/or constrained to upheld the order passed by the Ld. CIT(A) in sustaining the addition under consideration as the ld. D.R. specifically relied on the order passed by the Ld. CIT(A) by submitting that despite various opportunities, the Assessee made no compliance and/or filed not substantive material, therefore, the authorities below were forced to made and sustain the addition by way of respective orders. 5. In the result, Assessee's appeal is dismissed, in above terms. Order pronounced in the open court on 18-05-2026.

Sd/- Sd/- (ARUN KHODPIA) (NARENDER KUMAR CHOUDHRY) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated :18-05-2026. Ankit K., Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai 4

More judgments on Section 142(1)

All 17,244 judgments and leading authorities on Section 142(1) →

Recent GST High Court judgments

Search GST case law →