ASHWINKUMAR SHANKARLAL PATEL (HUF),AHMEDABAD vs. ITO, WARD 6(1)(1), AHMEDABAD
Facts
The assessee, an HUF, was subjected to assessment for AY 2017-18. The Assessing Officer (AO) added Rs. 11,60,000 as unexplained cash deposits during the demonetization period, citing Section 69A of the Income-tax Act. The CIT(A) confirmed this addition.
Held
The Tribunal held that the addition made by the AO was not sustainable. The assessee had declared substantial agricultural income and provided supporting documents like sales bills, farm income details, and cash book. The Tribunal noted the continuous pattern of cash deposits in earlier years, which corroborated the assessee's claim.
Key Issues
Whether the addition of Rs. 11,60,000 as unexplained cash deposits during demonetization is justified when the assessee has demonstrated agricultural income and continuous cash deposits in prior years?
Sections Cited
69A, 145(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: Ms. Suchitra Kamble
आदेश/ORDER This is an appeal filed against the order dated 12-11- 2025 passed by Addl/JCIT(A)-9, Mumbai for assessment year 2017-18
The grounds of appeal are as under:- “1. That, the Ld. CIT(A) has wrongly confirmed the addition of alleged unexplained money under section 69A of the Income-tax Act amounting to Rs. 11,60,000/-. 2. That, the Ld. CIT(A) has erred in confirming the addition without properly considering the facts and explanations submitted by the appellant and without passing a reasoned and speaking order. 3. That, the Ld. CIT(A) has wrongly upheld the finding that the books of account were prepared after demonetisation, merely on the basis of the timing of filing of returns without pointing out any defect in the books and without rejection of the books under section 145(3) of the Act.
I.T.A No. 2558/Ahd/2025 Ashwinkumar Shankarlal Patel (HUF), A.Y. 2017-18
That, the Ld. CIT(A) has falled to consider that in the show cause notice issued by the Ld. AO, agricultural income of Rs. 5,49,456/- was accepted and explanation was sought only for Rs. 6,10,544/-, whereas the addition of the entire amount of Rs. 11,60,000/- was made without issuing any further notice or granting opportunity to the appellant. 5. That, the Ld. CIT(A) has erred in confirming the addition based on assumptions and presumptions regarding human conduct, such as what a prudent person would do, instead of examining the documentary evidence on record. 6. That, the Ld. CIT(A) has failed to appreciate that the books of account were produced, examined during assessment proceedings and were not rejected. Therefore the cash deposits of Rs. 11,60,000/- duly recorded in books of accounts could not be treated as unexplained. 7. That, the order passed by the Ld. CIT(A) is not a speaking order and therefore, bad in law and on facts and liable to be set aside. The appellant craves, leave, to add, to alter or modify any of the grounds on or before final date of hearing of appeal.”
The assessee filed return of income on 16-03-2018 declaring total income at Rs. 2,17,610/-. The assessee’s case was selected for limited scrutiny for large value of cash deposit during demonetization period and large agricultural income shown in ITR. The Assessing Officer issued statutory notices for which the assessee filed details of agricultural income along with sale bills agricultural produce, copy of 7/12 extracts, bank statements, farm income, ledger and cash book. The Assessing Officer made addition of Rs. 11,60,000/- as unexplained cash deposits during demonetization period u/s. 69A of the Act.
The assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The ld. A.R. submitted that the CIT(A) has confirmed the addition mainly on assumption that the assessee does not explain the cash deposited in bank account. The ld. A.R. submitted that the agricultural expenses was properly shown to the Assessing Officer as well as to the CIT(A) that it is very low is 2
I.T.A No. 2558/Ahd/2025 Ashwinkumar Shankarlal Patel (HUF), A.Y. 2017-18
not right as the assessee has given all the details related to the agricultural income. The ld. A.R. further submitted that the Assessing Officer has only sought explanation for Rs. 6,10,544/- and accepted the same whereas the entire amount of Rs. 11,60,000/- was added despite giving the details.
The ld. D.R. submitted that the Assessing Officer has rightly made addition as the assessee has been slight in regard to trailing entries located to the cash deposited during demonetization period being transferred to account of Ashwin Autocast Pvt. Ltd. The ld. D.R. relied upon the assessment order and the order of the CIT(A).
Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has declared gross agricultural income in the return of income to the extent of Rs. 6,99,962/- which was demonstrated by the assessee through its balance sheet and the farm income, ledger as well as cash book ledger. From the perusal of the sales bills, the assessee has given the details of advances to Ashwin Autocast Pvt. Ltd. for the assessment year 2013-14 and also confirmed the farm income for the assessment year 2013-14. From the perusal of the earlier assessment years, the assessee is continuously depositing the cash which is as under:-
01-04-2012 to 31-1- Aggregate cash Rs. 6,15,800/- 03-2013 deposit 01-04-2013 to 31 Aggregate cash Rs. 2,68,800/- 31-03-2014 deposit 01-04-2014 to 31- Aggregate cash Rs. 2,00,000/-
I.T.A No. 2558/Ahd/2025 Ashwinkumar Shankarlal Patel (HUF), A.Y. 2017-18
03-2015 deposit
However, a cursory glance of the dates on which return of income has been filed for the A.Y.2015-16 to A.Y.2018-19 reflects that all of them have been filed together after period of demonetization.
Α.Υ. Date of filing Total Income(Rs.) 2015-16 19.08.2015 Rs. 2,44,830/- 2016-17 24.03.2018 Rs.4,19,420/- 2017-18 16.03.2018 Rs.2,17,160/- 2018-19 02.07.2018 Rs.2,16,460/-
Thus, the assessee has already demonstrated before the Assessing Officer as well as before the CIT(A), the details of cash in hand prior to demonetization and the deposits to that extent during the demonetization period along with the land holding which gives categorical support to the assessee’s agricultural income. Therefore, the addition made by the Assessing Officer does not sustain.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 16-03-2026
Sd/- (Suchitra Kamble) Judicial Member a.k. Ahmedabad : Dated 16/03/2026 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:-
I.T.A No. 2558/Ahd/2025 Ashwinkumar Shankarlal Patel (HUF), A.Y. 2017-18
Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद
