BIJAL AVKESH SHAH,JAMNAGAR vs. ITO, WARD 2(6), JAMNAGAR, JAMNAGAR

ITA 787/RJT/2025Status: DisposedITAT Rajkot15 October 2026AY 2015-165 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer was not justified in treating the entire cash deposits of Rs. 68,44,230/- as unexplained money under Section 69A, as the assessee had opted for presumptive taxation under Section 44AD and offered income at the presumptive rate. The failure to maintain regular books of account, by itself, does not establish that the entire deposit represents unexplained money. Therefore, the addition of Rs. 68,44,230/- was deleted. Regarding the addition of Rs. 1,57,118/-, the Tribunal accepted the assessee's explanation that it represented maturity proceeds of an insurance policy, and in the absence of any material from the Revenue to controvert this, the addition was deleted. Similarly, the disallowance of Rs. 59,500/- under Chapter VI-A, which comprised tuition fees and interest on savings bank deposits, was also directed to be deleted as the claim was explained by the assessee. Consequently, all additions and disallowances sustained by the CIT(A) were deleted, and the assessee's appeal was allowed.

What were the facts?

The assessee, Bijal Avkesh Shah, an individual, failed to file an original return for Assessment Year 2015-16. Information revealed cash deposits of Rs. 68,44,230/- in his bank account, interest income of Rs. 3,419/-, and a payment of Rs. 1,57,118/- for a life insurance policy. A notice under Section 148 was issued, and the assessee filed a return declaring income under Section 44AD. The Assessing Officer treated the cash deposits as unexplained money under Section 69A and the insurance payment as unexplained investment under Section 69, disallowing a Chapter VI-A deduction. The reassessment order determined total income at Rs. 70,55,372/-. The CIT(A) dismissed the assessee's appeal. The assessee appealed to the ITAT, with a 19-day delay which was condoned.

What were the issues?

1. Whether the Tribunal had to decide if the Assessing Officer was justified in treating the entire cash deposits of Rs. 68,44,230/- as unexplained money under Section 69A of the Income-tax Act, 1961, when the assessee had opted for presumptive taxation under Section 44AD and offered business income at the presumptive rate. - Assessee's contention: The AO was not justified as the cash deposits represented business receipts, and under Section 44AD, regular books of account are not mandatory. The assessee had already offered income at the presumptive rate. - Revenue's contention: The AO was justified as the assessee failed to furnish documentary evidence for transactions and substantiate the nature of business. 2. Whether the Tribunal had to decide if the addition of Rs. 1,57,118/- towards the SBI Life Insurance policy payment could be treated as unexplained investment under Section 69 of the Act. - Assessee's contention: The amount represented maturity proceeds of a life insurance policy and could not be treated as unexplained investment. - Revenue's contention: Not recorded. 3. Whether the Tribunal had to decide if the disallowance of Rs. 59,500/- under Chapter VI-A of the Act was justified. - Assessee's contention: The deduction comprised tuition fees and interest on savings bank deposits, which were duly reflected in the computation of income. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 69A,Section 69,Section 44AD,Section 148,Section 250,Section 147,Section 144,Section 143(2),Section 142(1),Section 144B,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Shri Sonjoy Sarma

For Appellant: Shri Chetan Agarwal, Ld. AR
For Respondent: Shri Ganesh Iyer, Ld. Sr. DR
Hearing: 14/10/2026Pronounced: 15/10/2026

Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2015-16, is directed against the order under section 250 of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] passed by the National Faceless Appeal Centre [hereinafter referred to as ‘NFAC’], dated 20.08.2025, which in turn arises out of an order passed by assessing officer u/s. 147 read with section 144 of the Act, dated 11.03.2023. 02. Brief facts of the case are

The order continues below.

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