RAMESHBHAI M. PATEL,VADODARA vs. THE DY. CIT, CIRCLE-1(1)(1), VADODARA

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ITA 2264/AHD/2025Status: DisposedITAT Ahmedabad15 October 2026AY 2018-194 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the issue required a factual examination at the AO's level. The assessee was directed to furnish a statement of account from the bank clearly indicating the amount actually deposited during the year and identifying duplicate entries resulting from auto-sweep or reverse entries. The AO was instructed to examine these entries. If the assessee could reconcile the entries, no addition would be made on this issue. Consequently, the impugned order of the CIT(A) was set aside, and the matter was restored to the AO for a de novo assessment on this specific issue. The Tribunal did not decide the merits of the addition but remanded the case for further factual verification.

What were the facts?

The assessee, Rameshbhai M. Patel, filed an appeal against the order of the CIT(A) dated 26.08.2025, which confirmed an addition of Rs. 3,14,38,851/-. This addition was made by the Assessing Officer (AO) under Section 69A of the Income Tax Act, 1961, for the Assessment Year 2018-19. The AO had identified aggregate credit entries totaling Rs. 3,21,45,937/- in the assessee's bank accounts. The assessee explained that these included Rs. 1.57 Crores received from a developer under a Joint Development Agreement and that other entries were due to auto-sweep and reverse entries, causing duplication. The AO, however, found the assessee unable to reconcile the entries and treated the entire deposits as unexplained income. The CIT(A) upheld the AO's addition.

What were the issues?

1. Whether the addition of Rs. 3,14,38,851/- on account of unexplained money under Section 69A of the Income Tax Act, 1961, is legally sustainable? Assessee's contentions: The assessee argued that the CIT(A) erred in confirming the addition. The assessee submitted documentary evidence, including bank statements and sweep account statements, to demonstrate that a significant portion of the deposits was received through banking channels and that the aggregate figure arrived at by the AO was inflated due to duplication of entries arising from auto-sweep and reverse entries. The assessee also stated that the actual deposit during the year was Rs. 1.57 Crores and that capital gains had been offered in AY 2019-20. Revenue's contentions: The revenue, through the AO and supported by the CIT(A), contended that the assessee failed to correlate and reconcile the various bank entries. The AO treated the entire deposits as unexplained income.

Which sections of the Income-tax Act were involved?

Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI GANGADHAR PANDA

For Appellant: Shri Jigar Adhyaru, AR, Shri R P Rastogi, CIT. D.R
For Respondent: Shri R P Rastogi, CIT. D.R
Hearing: 29/09/2026Pronounced: 15/10/2026

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI GANGADHAR PANDA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 2264/Ahd/2025 (िनधा�रण वष� / Assessment Year : 2018-19) बनाम Rameshbhai M. Patel Dy. Commissioner of / 201, Niharika Apartment, Income Tax Vs. Subhanpura Road, Circle-1(1)(1), Vadodara Subhanpura, Vadodara, Gujarat-390023 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AUKPP6215E (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Jigar Adhyaru, AR ��यथ� क� ओर से/Respondent by : Shri R P Rastogi, CIT. D.R. Date of Hearing 29/09/2026 Date of Pronouncement 15/10/2026

(आदेश)/ORDER Per Sanjay Garg, Judicial Member: The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”), dated 26.08.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2018-19.

ITA No.2264/Ahd/2025 [Rameshbhai M. Patel vs. DCIT] A.Y. 2018-19 - 2 – 2. The assessee has taken following grounds in this appeal:

“1. That the learned Commissioner of Income-tax (Appeals) has erred in law and on facts in confirming the addition of Rs. 3,14,38,851/- on account of unexplained money under section 69A of the Income Tax Act, 1961. 2. That the CIT(A) failed to appreciate the documentary evidences & explanation filed during appellate proceedings. 3. That the addition is bad in law and liable to be deleted. 4. That the appellant craves leave to add, amend, alter, or withdraw any of the above grounds at the time of hearing.”

3.

Brief facts of the case are that the Assessing Officer (in short ‘the AO’) has noticed that there were certain credit entries in the different bank account of the assessee, totaling to Rs. 3,21,45,937/-, which are tabulated as under:

Sr. No. Bank A/c No. Aggregate amount Bank Name deposited during AY 2018-19 (in Rs.) 1 02060100000374 2,19,784/- Bank of Baroda, Bhaily, Vadodara 2 02060100008508 98,639/- Bank of Baroda, Bhaily, Vadodara 3 02060100011393 3,17,93,969/- Bank of Baroda, Bhaily, Vadodara 4 20068062095 33,545/- State bank of India, Vadodara Total aggregate deposits Rs.3,21,45,937/-

On being asked to explain, in this respect, the assessee explained that the assessee had entered into a Joint Development Agreement with M/s. Bluets Infra and that the assessee had received a total amount of Rs.2.85 Crores, out of which, Rs.1.57 Crore was

ITA No.2264/Ahd/2025 [Rameshbhai M. Patel vs. DCIT] A.Y. 2018-19 - 3 – received during the Financial Year (in short ‘F.Y.’) 2017-18 relevant to the assessment year under consideration. It was further explained that the remaining entries were Auto Sweep entries, which means, it was duplication of the entries and, therefore, the figure arrived at by the AO was not correct. It was further explained that all the amounts were received by the assessee from the Developer through banking channel and, further that, the assessee had already offered capital gains in A.Y. 2019-20. The AO, however, held that the assessee had failed to co-relate and reconcile the various entries in the bank account. He, therefore, treated the entire deposits as ‘unexplained income’ of the assessee and made the addition u/s 69A of the Act. The Ld. CIT(A) confirmed the addition so made by the AO.

4.

Before us, Ld. Counsel for the assessee has referred to the bank statement of the assessee to submit that the assessee, during the year, had received Rs.1.57 Crores through banking channel only. He has also referred to the Sweep account statement, whereby, the amount lying in the savings bank account got automatically transferred to the Fixed Deposits and then again reversed to the savings account, when, the amounts lying in the savings account stood withdrawn. The Ld. Counsel, therefore, has submitted that because of this, Auto Sweep and reverse entries, there is duplication of entries, but, the actual amount of deposit was Rs.1.57 Crore during the year only.

ITA No.2264/Ahd/2025 [Rameshbhai M. Patel vs. DCIT] A.Y. 2018-19 - 4 – 5. We note that the issue is required to be factually examined at the ends of the AO. The assessee is directed to furnish the statement of account from the bank, clearly revealing as to what was the amount actually deposited during the year in the bank account of the assessee and of what were duplicate entries because of the auto sweep / Reverse entries in the account of the assessee. The AO will examine the entries and, if the assessee will be able to reconcile the entries, no addition will be made on this issue. With the above observations, the impugned order of the Ld. CIT(A) is set aside and the matter is restored to the file of the AO for de novo assessment on this issue.

6.

In the result, the appeal of the assessee is treated as allowed for statistical purposes.

This Order is pronounced on 15/10/2026

Sd/- Sd/- (GANGADHAR PANDA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 15/10/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT आयकर आयु�(अपील) / The CIT(A)- 4. 5. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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