PRABHABEN GOVINDBHAI VACHANI,PORBANDAR, GUJARAT vs. ITO WARD 2 (4), PORBANDAR, PORBANDAR, GUJARAT

ITA 466/RJT/2026Status: DisposedITAT Rajkot30 September 2026AY 2010-115 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged that the assessee is a widow, an agriculturist, and responsible for her children, with agriculture being her sole income source. The Tribunal noted that the AO had not considered the cash withdrawals of Rs. 21,22,500/- made during the year, which indicated that a majority of the cash deposits could have originated from earlier withdrawals, agricultural income, and past savings. However, the Tribunal also found the documents submitted by the assessee to be self-serving and not fully reliable. Consequently, the entire addition could not be deleted. Recognizing that the entire cash deposit cannot be treated as income and that a profit element should be taxed, the Tribunal directed an ad hoc estimated addition of 9% of the disputed amount, amounting to Rs. 1,97,551/- (9% of Rs. 21,95,012/-). This decision was made considering the peculiar facts of the case and the agreement of both parties for an estimated addition. The Tribunal explicitly stated that this adjudication should not be treated as a precedent.

What were the facts?

The assessee, Prabhaben Govindbhai Vachani, an individual and agriculturist, is appealing an order from the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi, dated 21.01.2026. This order upheld an addition of Rs. 21,95,012 made by the Assessing Officer (AO) under section 147 read with section 144 of the Income Tax Act, 1961, via an assessment order dated 15.09.2017. The AO had treated cash deposits totaling Rs. 21,95,012 in the assessee's State Bank of India accounts during the Financial Year 2009-10 (relevant to Assessment Year 2010-11) as unexplained money under section 69A of the Act, as the assessee had not filed a return of income. The assessee's explanation and submitted documents were deemed unsatisfactory by the AO and the CIT(A).

What were the issues?

1. Whether the addition of Rs. 21,95,012/- made by the Assessing Officer, treating cash deposits as unexplained money under section 69A of the Income Tax Act, 1961, is legally sustainable? Assessee's Contentions: - The assessee argued that cash flow statements, bank statements, sale bills of agricultural produce, and expense details were submitted to the AO and CIT(A) to substantiate the source of deposits, but these were not considered. - The assessee contended that cash withdrawals totaling Rs. 21,22,500/- during the year, evident from the bank account, were not considered by the AO. - Without prejudice, the assessee argued that only the profit element, not the entire cash deposit, should be taxed as income. Revenue's Contentions: - The Revenue's representative primarily reiterated the stand taken by the Assessing Officer. - The Revenue suggested that an estimated profit might be added to protect its interest.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144,Section 250,Section 139

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

For Respondent: Shri Shishir Kumar, Ld. Sr. DR
Hearing: 30/07/2026Pronounced: 30/09/2026

Per, Dr. Arjun Lal Saini, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year 2010-11, is directed against the order under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi, dated 21.01.2026, which in turn arises out of an assessment order passed by the Assessing Officer u/s 147 r.w.s.144 the Act, on 15.09.2017. 2. The grounds of appeal raised by the assessee

The order continues below.

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