MITHABHAI JOMABHAI RABARI,BANASKANTHA vs. THE ITO, WARD-1, PALANPUR

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ITA 2458/AHD/2025Status: DisposedITAT Ahmedabad18 June 2026AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee provided additional documents, including sales bills and a cash flow chart, before the Tribunal that were not presented to the AO. Therefore, the matter was remanded to the AO for proper verification of these new details.

What were the facts?

The assessee did not file an income tax return for AY 2016-17. The AO reopened the case upon observing the introduction of new capital of Rs. 40,79,785/- in cash, which the assessee failed to explain. The CIT(A) confirmed the addition made by the AO.

What were the issues?

Whether the addition made under Section 69 for unexplained cash introduction was justified, and whether the assessee provided sufficient evidence to explain the source of funds.

Which sections of the Income-tax Act were involved?

Section 69,Section 115BBE,Section 271(1)(c),Section 147,Section 148,Section 44AD

AI-generated summary — verify with the full judgment below

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

For Appellant: Shri Kunal Shangvi, AR
For Respondent: Shri Saresa Kartik Laxmanbhai, Sr. DR
Hearing: 15.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD ‘SMC’ BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.2458/AHD/2025 (Assessment Year: 2016-17) Mr. Mithabhai Jomabhai Rabari, Income Tax Officer, Ward-1, At. Vadaval PO Lorwada Shri Hari Complex, Abu Highway, Deesa Vs. Palanpur Dist. Banaskantha Gujarat Gujarat PAN: BZPPR3878G (Appellant) : (Respondent) Assessee by : Shri Kunal Shangvi, AR Respondent by : Shri Saresa Kartik Laxmanbhai, Sr. DR Date of Hearing : 15.04.2026 : 18.06.2026 Date of Pronouncement 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 dated 14.10.2025 for the Assessment Year (in short “AY”) 2016-17.

2.

The assessee has raised the following grounds of appeal: “[1] The CIT(A), NFAC, Delhi addition of Rs. 40,79,785/-"Income from Other Sources" in law. was grievously erred in confirming the made by the Ld. A.O. under the head u/s. 69 of the I.T. Act, is illegal and bad The appellant submits that the Ld. CIT(A) has not considered the submission made during the appellate proceedings as well as assessment proceedings. [2] The appellant has provided the cash book which justifies the sources and already considering the financial statements & without verifying the cash deposit an addition was made as income from other sources u/s. 69 of the I. T. Act which is incorrect.

ITA No.2458/AHD/2025 Mr. Mithabhai Jomabhai Rabari [4] The Ld. CIT(A), National Faceless Appellate Centre was grievously erred in confirming the tax u/s. 115BBE of the of Act @30% made by the Ld. A.O. is illegal and incorrect and required to be deleted. [5] The Ld. CIT(A) National Faceless Appeal Centre was grievously erred in confirming the penalty proceedings made by the Ld. A.O. u/s. 271(1)(c) which is illegal and likely to be deleted. [6] The appellant therefore requests your Honour to kindly delete the above mentioned addition of Rs. 40,79,785/- made by the Ld. A.O. which was confirmed by the Ld. CIT(A) looking to the merits of the case.” 3. The assessee has not filed return of income for A.Y. 2016-17. As per the information, the Assessing Officer (in short “the AO”) observed that the assessee introduced new capital of Rs.40,79,785/- in cash and the source of the said new capital required to be examined, therefore the case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (in short “the Act”). Accordingly, notice u/s 148 of the Act was issued to the assessee on 30.03.2021. In response to the same, the assessee furnished his return of income for A.Y. 2016-17 on 21.07.2021 declaring gross total income of Rs.2,47,686/-. Statutory notices were issued and the assessee filed reply on 01.03.2022. The AO held that the assessee failed to furnish the source of introduction of new capital in cash amounting to Rs.40,79,785/- in the firm M/s. Swastik Cold Storage at Vadaval during the year under consideration. Thus, the AO made addition of Rs.40,79,785/- under the head “income from other sources” u/s 69 of the Act.

4.

Being aggrieved by the assessment order, the assessee filed 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 during the year under consideration the assessee was involved in the trading of potatoes. The assessee is a partner in the partnership firm M/s. Swastik Cold Storage with 25% shares in profit/loss having PAN number and also the partnership firm is involved in the business of storage of potatoes on a rental basis. After issuing of notice u/s 148 of the Act, in response, the assessee filed his return of income u/s 44AD of the Act. The Ld. AR submitted 2

ITA No.2458/AHD/2025 Mr. Mithabhai Jomabhai Rabari that the assessee had submitted all the documents like ownership deed, bank statement, copy of contract, confirmation of partnership in which capital introduced etc. During the hearing, the assessee has also given the details of the cash introduced along with sales bills which was not before the AO. The Ld. AR further submitted that the assessee has given the cash flow statement with the reconciliation at this juncture and the same may be looked into.

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 assessee, though has given the details before the AO, has not given the sales bills as well as the other relevant documents which are produced at the time of hearing before the Tribunal. Cash flow chart which is follows as under:

MITHABHAI JOMABHAI RABARI ITA No. 2458/AHD/2025 Cash In Flow Amount Supporting Documents and reference page to paper book Opening Balance 78,578.00 1. Trading Account (Pg.32) 2. Sales Register (Pg.153) 3. Sales Invoices -Attached Sale of Potatoes 30,67,862.00 Agrciculture Income 1.Ledger of Agriculture Income (Pg.127-128) Sale of Bajra 2,22,238.00 2. Details of Land (Pg-158-160) 3. Sales Invoices - Attached Sale of Mungfali 1,34,750.00 Sale of Potatotes 5,58,700.00 Withdrawal 19,84,000.00 1. Cash Book (Pg.100-126) 2. Union Bank Statement (Pg.24) 60,46,128.00

7.1 This chart with the reconciliation was not before the AO along with the sales bills. This requires verification. Therefore, the matter is remanded to the file of the AO for property verification of the details filed before the Tribunal and after verifying the same adjudicate the issues as per Income Tax Act.

ITA No.2458/AHD/2025 Mr. Mithabhai Jomabhai Rabari Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.

8.

In result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open court on 18.06.2026

Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated: 18.06.2026 * 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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