SHEELA BHARATKUMAR GANDHI (INDIVIDUAL),SURAT vs. ITO, WARD 1(3)(5), SURAT

ITA 1206/SRT/2025Status: DisposedITAT Surat25 September 2026AY 2016-175 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 809 days in filing the appeal, finding the assessee's explanation for the delay due to the previous AR's non-action to be satisfactory. Regarding the merits, the Tribunal noted that while the assessee claimed gifts were received from family members, these were not corroborated with any occasion, and confirmations from the respective family members were not on record. Specifically, the Tijori account, mentioned in the return of income, was not verified, and no explanation was provided by the assessee before the AO. Consequently, the Tribunal found that the matter required proper verification and adjudication. Therefore, the Tribunal remanded the entire issue back to the file of the AO for proper adjudication on merits, in accordance with the Income Tax Act, and directed that the assessee be given an opportunity of hearing following the principles of natural justice. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Sheela Bharatkumar Gandhi, filed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 09.06.2023 for Assessment Year (AY) 2016-17. The Assessing Officer (AO) had made additions totaling Rs. 67,61,326/- on account of unexplained investment under Section 69 of the Income Tax Act, 1961. The assessee's appeal before the CIT(A) was dismissed ex-parte due to the non-submission of replies by her previous Authorized Representative (AR). The assessee contended that the CIT(A) erred by confirming additions without considering submissions and documents, and that loans and gifts were received in earlier AYs or from family members with sufficient means. The assessee also claimed cash deposited in her bank account was supported by her cash book and that certain expenses were out of income already offered for taxation.

What were the issues?

1. Whether the addition of Rs. 12,25,000/- on account of loans of Rs. 6,75,000/- from Mr. Devraj Gajipara and Rs. 5,50,000/- from Mr. Devendra J. Gandhi was justified, considering the assessee's claim that these loans were taken in earlier assessment years (AY 2013-14 and AY 2014-15 respectively) and that Mr. Devendra J. Gandhi is the assessee's brother-in-law. 2. Whether the addition of Rs. 12,25,000/- on account of cash deposited in the bank account was justified, given the assessee's submission that a copy of the cash book was furnished during assessment proceedings to support the deposit. 3. Whether the addition of Rs. 30,00,000/- on account of gifts of Rs. 15,00,000/- from Mr. Jashubhai Gandhi (father-in-law) and Rs. 15,00,000/- from Mrs. Bhartiben Gandhi (mother-in-law) was justified, considering the assessee's claim that these gifts were from family members with sufficient means and reflected in their capital accounts. 4. Whether the addition of Rs. 13,11,326/- on account of unexplained expense, purportedly out of rent income, business income, and cash deposited, was justified, when the assessee claimed these incomes were already offered for taxation and that making additions for expenditure out of them would amount to double taxation. Assessee's Contentions: The CIT(A) erred in confirming additions due to the ex-parte order passed without considering submissions and documents. Loans were taken in earlier AYs. Gifts were from family members with sufficient means. Cash deposits were supported by the cash book. Expenses were out of already taxed income. The cash generated in the Tijori account was from these gifts. Revenue's Contentions: The explanation regarding the Tijori account was not provided by the assessee. The AO rightly observed that the gift of Rs. 15,00,000/- was not corroborated with evidence or confirmation from family members. The revenue relied on the assessment order and the CIT(A)'s order.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

Pronounced: 25.09.2026

PER : SUCHITRA KAMBLE, J M:

The appeal filed by the assessee is against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 09.06.2023 for the Assessment Year (in short “AY”) 2016-17. 2. The assessee has raised the following grounds of appeal: “Addition of Rs.12,25,000/- on account of loan taken of Rs.6,75,000/- from Mr. Devraj Gajipara and Rs.5,50,000/- from Mr. Devendra J. Gandhi: SHEELA BHARATKUMAR GANDHI

The order continues below.

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