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Facts
The assessee challenged additions made by the AO and confirmed by the CIT(A) for AY 2017-18. The assessee contended that statutory notices were not received and additional evidence was not admitted. A significant portion of the cash deposit was claimed to belong to the HUF, not the individual assessee.
Held
The Tribunal found that the bank statements and cash books showed income from remuneration and interest, and provided details for cash deposits, including Rs. 7,50,000/- belonging to the Nilesh Natwarlal HUF. The AO was incorrect in making the addition to the individual assessee's income.
Key Issues
Whether the addition of Rs. 14,00,000/- as unexplained cash deposit was justified when a substantial part belonged to the HUF and whether additional evidence and statutory notices were properly handled.
Sections Cited
68, 69A, 115BBE
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Income Tax Appellate Tribunal, SURAT “SMC” BENCH, SURAT
Before: Dr. BRR Kumar, Hon’ble & Ms. Suchitra Kamble
आदेश/ORDER Per Suchitra Kamble, Judicial Member:
This is an appeal filed against the order dated 07-10- 2025 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2017-18.
The grounds of appeal are as under:- “1. On the facts and circumstances of the case as well as law on the subject, the learned ADDL/Joint Commissioner of Income Tax (Appeals), Chennai has erred in confirming the action of assessing officer in not appreciating the fact that the statutory notices were never received by the assessee, either through registered post or by e-mail, and consequently, the assessee could not make due compliance during the course of assessment proceedings. 2. On the facts and circumstances of the case as well as law on the subject, the learned ADDL/Joint Commissioner of Income Tax (Appeals), Chennai has
I.T.A No.1181/Srt/2025 Nileshkumar Natvarlal Shah A.Y.2017-18
erred in not admitting additional evidences furnished in view of provisions of rule 46A of the I.T. rules, 1962, even though sufficient reasons were provided for non-production of the same during assessment proceedings. 3. On the facts and circumstances of the case as well as law on the subject, the learned ADDL/Joint Commissioner of Income Tax (Appeals), Chennai has erred in confirming the action of assessing officer in making addition of Rs. 14,00,000/- as unexplained money u/s 69A of IT Act, 1961 without even appreciating the apparent fact that out of total cash deposit of Rs. 14,00,000/-, Rs. 7,50,000/- were deposited by the HUF of the assessee and not by the assessee. 4. On the facts and circumstances of the case as well as law on the subject, the learned ADDL. Joint Commissioner of Income Tax (Appeals), Chennai has erred in confirming the action of assessing officer in invoking provisions of section 115BBE of the Act and levying surcharge at 25 percentage which is not applicable on above addition. 5. It is therefore prayed that above addition made by assessing officer and confirmed by learned ADDL. Joint Commissioner of Income Tax (Appeals), Chennai may please be deleted. 6. Appellant craves leave to add, alter or delete ground(s) either before or in the course of hearing of appeal. Total tax effect Rs. 10,81,500”
The assessee filed its return of income for assessment year 2017-18 declaring total income of Rs. 3,95,269/- on 23-11-2017. The statutory notices were issued but the assessee failed to given the detail of bank statement and the details of his business to the Assessing Officer, therefore the Assessing Officer made addition of Rs. 14 lacs u/s. 68 of the Act. The Assessing Officer observed that the assessee has made cash deposits amounting to Rs. 14 lacs and the same remained unexplained as the assessee has shown salary and interest received from partnership firm Kalpeshkumar & Co., Jagdishchandra but has not given the details about the business activities from where the cash can be generated. Thus, the Assessing Officer made addition of Rs. 14,00,000/- u/s. 68 of the Act.
I.T.A No.1181/Srt/2025 Nileshkumar Natvarlal Shah A.Y.2017-18
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 not taken cognizance of evidence filed before the CIT(A) including the bank statements of the assessee as well as bank certificate and PAN card, details of the HUF along with income tax return, cash books maintained by the assessee. The ld. A.R. submitted that the assessee derived income from remuneration and interest from partnership firm and other income from other sources.
The ld. D.R. relied upon the assessment order and the order of the CIT(A).
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that from the perusal of bank statement as well as the cash books, the assessee has shown the income as a remuneration from the partnership firm along with interest income and also has given the details of bank certificate related to the amount of Rs. 7,50,000/- in respect of Nilesh Natwarlal HUF which was deposited on various dates. From the perusal of these details, it appears that the assessee has given the source of the cash deposits. The bank deposits mentioned by the Assessing Officer in the assessment order does not belong to the assessee but that of the cash deposit related to Nilesh Nartwarlal HUF and thus the Assessing
I.T.A No.1181/Srt/2025 Nileshkumar Natvarlal Shah A.Y.2017-18
Officer was not right in making the addition in the individual case.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 02-04-2026
Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 02/04/2026 TRUE COPY a.k. आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Surat 6. Guard file. By order, Assistant Registrar, Income Tax Appellate Tribunal, Surat
Strengthened preparation & delivery of orders in the ITAT 1) Date of dictation 27/03/2026 2) Date on which the typed draft is placed before the 30/03/2026 (4 pages of Dictating Member & Other Member dictation notebook attached)
3) Date on which the approved draft comes to the Sr. /04/2026 P.S./P.S. 4) Date on which the fair order is placed before the /04/2026 Dictating Member for pronouncement 5) Date on which the fair order comes back to the Sr. 02/04/2026 P.S./P.S. 6) Date on which the file goes to the Bench Clerk 02/04/2026 7) Date on which the file goes the Head Clerk 8) Date on which the file goes to the Assistant Registrar for signature on the order 9) Date of Dispatch of the order