MAULIK HIMANSHU PATEL,SURAT vs. ITO, WARD-3(2)(10), SURAT

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ITA 89/SRT/2026Status: DisposedITAT Surat29 April 2026AY 2017-183 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had provided sufficient details of his cash flow, sales, and purchases, thereby establishing the source of the cash deposits. The addition made by the Assessing Officer was therefore not justifiable.

What were the facts?

The assessee deposited Rs. 13,95,000/- in cash into his bank accounts during the demonetization period. The Assessing Officer added this amount as unexplained money, which was confirmed by the CIT(A).

What were the issues?

Whether the cash deposits made by the assessee during demonetization were sufficiently explained, and if the addition under Section 69A was justified.

Which sections of the Income-tax Act were involved?

Section 69A,Section 44AD,Section 115BBWE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT “SMC” BENCH, SURAT

Before: MS. SUCHITRA KAMBLE

For Appellant: Shri Kamlesh Bhatt, CA
For Respondent: Shri Ashish Kumar, Sr. DR
Hearing: 05.03.2026

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT “SMC” BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No.89/Srt/2026 (Assessment Year: 2017-18) Maulik Himanshu Patel, Vs. Income Tax Officer 4/230, Bhaththi Sheri, Galemandi, Ward-3(2)(10), Suart-395004 Surat [PAN No.BCOPP0576R] (Appellant) .. (Respondent) Appellant by : Shri Kamlesh Bhatt, CA Respondent by: Shri Ashish Kumar, Sr. DR Date of Hearing 05.03.2026 29.04.2026 Date of Pronouncement O R D E R The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals) (in short “Ld. CIT(A)”), ADDL/JCIT(A), Kochi on 28.11.2025 for A.Y. 2017-18.

2.

The assessee has raised the following grounds of appeal:

“1. In view of the facts and circumstances of the case the Ld. CIT(A), ADDL/JCIT(A) erred in law and in facts, in not appreciating the facts of the case and the evidence & thereby confirming the addition of Rs. 13,95,000/- U/s. 69 of The Income Tax Act, 1961. And hence Your Appellant PRAYS that the additions being UNFAIR, ILLEGAL AND IN TOTALDISREGARD OF THE FACTS, be deleted. Without prejudice to the above the Ld. AO has erred in law and in facts in invoking the provisions of S. 115BBWE and hence your petitioner prays that the action of the Ld. AO be quashed and he be directed to calculate the tax at NORMAL RATES.” 3. The assessee filed return of income on 28.01.2018 declaring total income of Rs. 4,92,210/-. The case of the assessee was selected for scrutiny and notice under Section 143(2) of the Income Tax Act was issued on 29.09.2018. The Assessing Officer observed that during the demonetization period the assessee made cash deposits of Rs. 13,95,000/-

ITA No. 89/Srt/2026 Maulik Himanshu Patel vs. ITO Asst. Year –2017-18 - 2– in his bank account with Bank of India and Bank of Baroda. The assessee filed response to the notice under Section 142(1) of the Act. The Assessing Officer after going through the details made addition of Rs. 13,95,000/- under Section 69A of the Act as unexplained money.

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. AR submitted that the assessee started imitation jewellery retail business on very small scale basis since the A.Y. 2015-16. The assessee had opted scheme under Section 44AD of the Income Act, 1961 and declared net profit accordingly. The assessee was not keeping regular books of account for the A.Y. 2017-18 as also in the case of earlier assessment year. But the assessee has given the details of sales register and copies of all sale bills, purchase register and copied of all purchase bills along with cash flow statement for the relevant assessment year. Thus, the assessee has established the cash in hand and the deposit subsequently during the demonetization period.

6.

The Ld. DR relied upon the assessment order and the order of the CIT(A).

7.

We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the assessee has given all the details of cash flow statement along with sale register, purchase register and sample sales bills. The assessee has regularly maintaining the sales register and purchase register and is continuously having cash in hand which regularly is deposited in his bank account. Thus, during the demonetization period as well the assessee has given the

ITA No. 89/Srt/2026 Maulik Himanshu Patel vs. ITO Asst. Year –2017-18 - 3–

details as to how much amount the assessee has deposited. Therefore, the assessee has established his onus related to the cash deposit which was totally ignored by the Assessing Officer as well as CIT(A). Thus, the addition made by the Assessing Officer is not justifiable.

8.

In result, the appeal of the assessee is allowed. This order Pronounced in open court on 29/04/2026

Sd/- Sd/- (DR. BRR KUMAR) (SUCHITRA KAMBLE) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 29/04/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, सूरत / DR, ITAT, Surat 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, सूरत / ITAT, Surat

1.

Date of dictation 29.04.2026 2. Date on which the typed draft is placed before the Dictating Member 29.04.2026 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S .04.2026 5. Date on which the fair order is placed before the Dictating Member for pronouncement 29.04.2026 6. Date on which the fair order comes back to the Sr.P.S./P.S 29.04.2026 7. Date on which the file goes to the Bench Clerk 29.04.2026 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order……………………………………

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