SANJAY SAVJIBHAI PATEL,BHAVNAGAR vs. THE ITO, WARD-1(1), BHAVNAGAR

The assessee has raised the following grounds of appeal: “1. The Ld. CIT(A) has erred, both in law and on facts, in confirming addition of Rs.12,00,000/-made u/s 68 of the Act in respect of deposits in bank account. 2. Both, AO & CIT(A), have erred in passing the impugned orders without properly appreciating facts of the case, submissions of the assessee and documentary evidences available on record in the correct perspective. Such an act is in gross violation of the principles of natural justice and hence, the impugned order deserves to be quashed. 3. The Ld. CIT(A) has erred in law and on facts of the case in confirming levy of interest u/s. 234A/B/C/D of the Act.

The assessee is salaried person and working in Tapibhai Government Ayurveda Hospital, Bhavnagar. The assessee has shown gross salary of Rs.9,13,302/- during the year. The assessee filed return of income thereby declaring total income of Rs.6,37,890/- for A.Y. 2017-18. The Assessing Officer (in short “AO”) observed that during the year under consideration, the assessee deposited cash of Rs.12,00,000/-. The case was selected for scrutiny and notice u/s 143(2) of the Income Tax Act, 1961 (in short “the Act”) was issued on 31.08.2018 whichw as served to assessee. The statutory notices u/s 142(1) of the Act along with questionnaire was issued and the assessee filed details as well as reply. The AO, after considering the assessee’s details, made addition of Rs.12,00,000/- u/s 68 of the Act.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The Ld. Authorised Representative (in short “Ld. AR”) for the assessee submitted that the assessee took out loan from the HDFC Bank as well as certain amounts from his savings for his son’s admission in medical college. Though the loan taken for the housing purpose from HDFC Bank, the said amount was withdrawn for the purpose of the urgent need of the assessee. The Ld. AR further submitted that the assessee has shown the details of repayment to the AO as well as to the CIT(A), but the same was totally ignored by the CIT(A). Thus, the addition made by the AO in respect of cash deposit in bank account is not justified.

The Ld. Departmental Representative (in short “Ld. DR”) for the Revenue relied upon the assessment order and the order of the Ld. CIT(A).

Heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the assessee filed appeal belatedly with a delay of 20 days. The reason for delay was thoroughly explained and hence the same is condoned. It is pertinent to note that the AO is not denying the fact that the assessee received the amount from HDFC Bank as top up loan. The same was withdrawn and later on deposited as shown by the assessee and in fact the assessee has also shown the repayment of the said loan. The factual aspect and the material produced before the Revenue Authorities are clearly setting out that the assessee was having the cash at the particular period and the same was deposited and later on used for repayment of loans. Therefore, the addition made by the AO as well as confirmed by the CIT(A) is not justified.

In result, appeal of the assessee is allowed. Order pronounced in the open court on 16.06.2026