BHAVIN AMRATLAL SHAH,AHMEDABAD vs. ITO WARD 5(3)(1), AHMEDABAD, AHMEDABAD

ITA 1202/AHD/2026Status: DisposedITAT Ahmedabad14 October 2026AY 2017-186 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the issue required proper verification of the relevant bank accounts, KYC records, books of account, Sales Register, and other supporting evidence, especially considering the assessee's specific claims regarding account ownership and the source of deposits (cash sales). Since these claims were not effectively substantiated before the lower authorities, the Tribunal, in the interest of justice, restored the issue to the file of the Assessing Officer for fresh adjudication. The assessee was directed to deposit Rs. 10,000/- in the Prime Minister’s National Relief Fund as a cost for negligence in not properly representing the case before the lower authorities. Subject to this condition, the impugned order of the CIT(A) was set aside, and the matter was remanded. The AO was instructed to examine the assessee's claims and decide afresh. The grounds relating to the addition were allowed for statistical purposes, and consequential grounds for interest and penalty would be dealt with accordingly. No specific finding was made on the merits of the addition itself, as the matter was remitted.

What were the facts?

The assessee, Bhavin Amratlal Shah, filed an appeal against the order of the Ld. CIT(A) NFAC, Delhi, dated 21.12.2023, which upheld an addition of Rs. 3,33,50,500/- made by the Assessing Officer (AO) under Section 143(3) read with Section 115BBE of the Income Tax Act, 1961, for Assessment Year 2017-18. The addition was on account of unexplained cash deposits aggregating to Rs. 3,33,50,500/- during the demonetization period. The assessee had declared a total income of Rs. 4,90,000/-. The AO noted that the assessee failed to cooperate and provide explanations for these deposits despite multiple opportunities. The Ld. CIT(A) also confirmed the addition due to the lack of substantiation by the assessee. The appeal to the ITAT was filed with a delay of 768 days, which was condoned by the Tribunal.

What were the issues?

1. Whether the Ld. CIT(A) erred in confirming the addition of Rs. 3,33,50,500/- as unexplained money under Section 69A of the Income Tax Act, 1961, on account of cash deposits during the demonetization period. Assessee's Contentions: - The cash deposits during the demonetization period do not constitute a violation of the Income Tax Act, especially since the Reserve Bank of India permitted such deposits before the 'appointed date'. - The assessee claimed that two of the bank accounts did not belong to him, and deposits in the SBI account were out of cash sales. Revenue's Contentions: - The revenue, through the AO and Ld. CIT(A), argued that the assessee failed to provide any explanation or supporting documentary evidence for the cash deposits despite numerous opportunities. - The AO noted that KYC details for one RBL account showed the assessee as the proprietor of M/s Navkar Infomedia, leading to the treatment of the entire deposits as unexplained.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(3),Section 115BBE,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI RAHUL CHAUDHARY, JUDICIALMEMBER &SHRI GANGADHAR PANDA

For Appellant: Shri Biren Shah, AR
For Respondent: Shri Manish Kasodekar, Sr. DR
Hearing: 04.08.2026Pronounced: 14.10.2026

PER GANGADHAR PANDA - ACCOUNTANTMEMBER:

The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi dated 21.12.2023 under Section 250 of the Income Tax Act, 1961 arising out of the Assessment Order, dated 26.12.2019 completed under Section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2017-18. 2. The assessee has raised the following grounds of appeal:

“1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in confirming add

The order continues below.

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