RAMESHBHAI HARVARA,JAMNAGAR vs. ITO WARD 1(3), JAMNAGAR, JAMNAGAR

ITA 442/RJT/2025Status: DisposedITAT Rajkot14 October 2026AY 2017-185 pages
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What did the Tribunal hold?

The Tribunal held that the reassessment proceedings were not sustainable in law. The primary issue was the validity of the reopening based on the factual premise that the entire Rs. 1,72,90,000 was deposited during the demonetisation period, whereas only Rs. 10,10,000 was deposited during that specific period, and the aggregate amount related to the entire financial year. The Tribunal found merit in the assessee's contention that this discrepancy went to the foundation of the reasons recorded for reopening. Since the reassessment proceedings were initiated on an erroneous factual premise, they could not be sustained. Consequently, the addition of Rs. 1,72,90,000 under Section 68, and the portion thereof sustained by the CIT(A), were directed to be deleted. The assessee's appeal was allowed. The Revenue's appeal, challenging the partial relief granted by the CIT(A), became academic in light of the invalidity of the reassessment proceedings and was therefore dismissed.

What were the facts?

The assessee, Rameshbhai Harvara, filed his return of income for AY 2017-18 declaring Rs. 3,41,630. The assessment was reopened under Section 147 based on information that he deposited Rs. 1,72,90,000 in his bank account during the relevant previous year, including Rs. 10,10,000 during demonetisation. The assessee explained these as business receipts and cash withdrawals. The Assessing Officer (AO) found the explanation unsatisfactory, treated the entire Rs. 1,72,90,000 as unexplained cash credits under Section 68, and taxed it under Section 115BBE, leading to a total income of Rs. 1,76,31,630. The Commissioner of Income Tax (Appeals) [CIT(A)] partly allowed the appeal, sustaining an addition of Rs. 62,70,000 by accepting explanations for cash withdrawals and demonetisation deposits. Both the assessee and the Revenue filed appeals against the CIT(A)'s order.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income-tax Act, 1961, are valid, given that the reasons recorded for reopening were based on the erroneous factual premise that the entire cash deposits of Rs. 1,72,90,000 were made during the demonetisation period, when in fact, only Rs. 10,10,000 were deposited during that period, and the aggregate amount pertained to the entire financial year? Assessee's contention: The reassessment proceedings are bad in law as they were initiated on an incorrect factual basis, and therefore, the entire addition should be deleted. The assessee relied on the reasons recorded for reopening which stated that the entire Rs. 1,72,90,000 was deposited during the demonetisation period, citing a document at page 258 of the paper book. Revenue's contention: The Revenue supported the validity of the reassessment proceedings.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 148,Section 68,Section 115BBE,Section 144B,Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. BRR Kumar & Shri Sonjoy Sarma

For Appellant: Shri Sarvesh Gohil, Ld. AR
For Respondent: Shri Shishir Kumar, Ld. Sr. DR
Hearing: 29/07/2026Pronounced: 14/10/2026

Heard together (2 matters)

ITA No. 442/RJT/2025
ITA No. 450/RJT/2025

Read from the judgment's own cause title. This page is filed under one of them.

Per, Shri Sonjoy Sarma, JM: ITA Nos. 442 and 450/Rjt/2025 fo

The order continues below.

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