LATE PRAVIN PREMJI CHHEDA,MUMBAI vs. THE INCOME TAX -19(2)(5), MUMBAI

ITA No. 8589/Mum/2025; Late Pravin Premji Chheda Per Arun Khodpia, AM:

The captioned appeal is filed by the legal heirs of the assessee, against the

order of Commissioner of Income Tax Appeals Additional/JCIT 1 Chennai [“the

Ld. CIT(A)] dated 08.10.2025 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 27.12.2019 passed by Income Tax Officer, Ward 19(2)(5), Mumbai (in

short, “the Ld. AO”). The grounds of appeal raised by the assessee are as under:

“1. General On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) (CIT(A)] has erred in dismissing the appeal. 2. Natural justice violated On the facts and circumstances of the case and in law, the CIT(A) failed to grant sufficient opportunity to present the case and thus principles of natural justice are grossly violated. 3. Addition of unexplained cash credit of Rs.9,07,000/- The Ld. CIT(A) erred in confirming the addition of Rs.9,07,000/-by treating the cash sales as unexplained cash credit u/s 68 and further applying special rate u/s 1158BE, without appreciating the facts and circumstances of the case. 4. Addition of unexplained cash credit of Rs.3,60,000/- The Ld. CIT(A) erred in confirming the addition of Rs.3,60,000/- by treating the capital introduced as unexplained cash credit u/s 68 and further applying special rate u/s 115BBE, without appreciating the facts and circumstances of the case. 5. Disallowance of Rs.5,000/-u/s 37(1) The Ld. CIT(A) erred in confirming the disallowance u/s 37(1) of Rs.5,000/- by treating the late fees paid as penal in nature, without appreciating the facts and circumstances of the case. 6. Credit for self-assessment tax paid On the facts and circumstances of the case and in law, the Ld. CIT(A) and Ld. AO failed to grant credit of self-assessment paid of Rs. 2,23,620/-. 7. Interest u/s 234A, 234B and 234C

ITA No. 8589/Mum/2025; Late Pravin Premji Chheda On merits, the Appellant denies its liability for the levy of interest u/s. 234A, 234B and 234C, hence the interest levied may be directed to be deleted. The Appellant submits that all the above grounds are without prejudice to each other. The Appellant craves leave to add, amend, alter, delete or substitute any of the aforesaid grounds at any time before or at the time of hearing of the matter with the Income Tax Appellate Tribunal.” 2. The concise facts of the case are, that the assessee has filed his return of

income on 20.11.2017 u/s 139 of the Income Tax Act, declaring total income at

Rs. 12,22,150/-. The case of assessee was selected for scrutiny. The assessee is

running a medical shop under the name Unique Chemist during the year under

consideration. It is observed by the Ld. AO that the assessee has deposited cash

during the demonetization period from 08.11.2016 to 30.12.2016 for Rs. 26.07L

in his account with Bank of Baroda and Canara Bank. As per information

furnished by the assessee, it is observed by the Ld. AO that the assessee’s sale

during the demonetization period has been increased as compared to the sale of

same period in the preceding two financial years. Ld. AO noted that the assessee

being covered with the notification issued by Government of India in the

category of pharmacy. However, the sale of such pharmacies are to be

considered on production of prescription and identity cards. During the

assessment proceedings, the assessee was required to furnish stock register and

necessary documentary evidence towards the cash share carried out during the

year. However, the assessee was failed to produce such documents. In absence

of such documents, the Ld. AO proceeded to estimate the unexplained sale of

ITA No. 8589/Mum/2025; Late Pravin Premji Chheda the assessee in the month of November, 2016. He worked out the average sales

of the assessee and has estimated the sales for the month of November at Rs.

17L, whereas the actual sale of assessee was Rs. 26.07L. Accordingly, the balance

sale of Rs. 9.07L was treated as unexplained cash credit u/s. 68 of the Act.

Further, it is noted by the Ld. AO that the assessee has introduced an amount of

Rs. 3,60,000/- in cash to enhance its capital under the proprietorship for which

no proof of the source such cash could be furnished by the assessee. Therefore,

one more addition of unexplained cash credit u/s. 68 was made. Further, the

assessee’s claim for an expenditure of Rs. 5,000/- in the profit and loss account

as late fee, which is considered as panel in nature and, therefore, the Ld. AO has

disallowed such expenditure. Finally, the assessment was completed with the

following computation:

Particulars (Rs.)

Total Income (as per computation of income) 12,22,150

(As per computation of Income)

Addition/Disallowances as discussed above: 9,07,000

ITA No. 8589/Mum/2025; Late Pravin Premji Chheda 3. Late fees disallowed u/s. 37(1) 5,000

Total Income 24,94,150

preferred an appeal before the Ld. CIT(A). However, again the assessee was

unable to furnish necessary evidence such as purchase bills for enhanced

purchase or any corroborative documents to support his contentions.

Accordingly, the appeal of assessee has been dismissed.

for additional evidence under rule 29 of the Income Tax Appellate Tribunal Rules,

1963, submitting therein the additional evidence in the form of bank ledger,

credit and cash purchase details, cash deposit and withdrawn from 1st April, 2016

to 31st March, 2017, copy of purchase register, purchase tax summary, etc. All

the aforesaid documents were not there before the authorities below. Ld. AR

also furnished a brief synopsis stating that the cash sales shown by the assessee

are genuine sales, the Ld. AO has not rejected the books of accounts and had

accepted the purchases of the assessee. Therefore, the addition u/s. 68 is not

sustainable. Regarding addition of Rs. 3,60,000/- towards capital introduction, it

is submitted that the assessee is filing his returns since assessment year 2004-05

ITA No. 8589/Mum/2025; Late Pravin Premji Chheda and in last thirteen years the assessee has shown income of Rs. 68,23,262/-.

Therefore, the cash deposit of meagre Rs. 3.60 lac by the assessee in his capital

account should not be doubted. Regarding disallowance of Rs. 5000/- for late

fee, it is submitted that the late filing fees under MVAT are compensatory and

arise from delayed compliance. They are incidental to business operation.

Reliance is placed on the decision of M/s. Mangalam Arts Pvt. Ltd. Vs. PCIT ITA

No. 239/JP/2023 dated 30.08.2023 and DCIT Vs. Satyam Industries Ltd. 2024

166 taxmann.com 733(Chandigarh Tribunal). Ld. AR also raised issues regarding

credit of self-assessment tax paid, interest u/s. 234 ABC etc.

authorities.

on records and case was relied upon by the assessee, we observe that the

assessee was unable to furnish necessary evidences before the authorities below

and, therefore, the issues could not be addressed and decided in the way in

which this should be dealt with by the authorities. Under such circumstances, we

deem it appropriate to restore this appeal back to the file of Ld. CIT(A) for fresh

adjudication after considering the bulky additional evidences furnished by the

assessee before us, being relevant to understand the facts and to decide the

after factual verification of such information.

ITA No. 8589/Mum/2025; Late Pravin Premji Chheda

opportunity of being heard in the set aside appellate proceedings. The assessee

is directed to be compliant and pro-active in compliance of the notices u/s. 250

by the Ld. CIT(A), failing which the Ld. CIT(A) would be at liberty to decide the

issue as per mandate of law.

Order pronounced in the open court on 17-06-2026.

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

Mumbai, Dated : 17-06-2026. Soumili Das, 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