MAYANK NAGINBHAI PATEL,VADODARA vs. THE INCOME TAX OFFICER, WARD-1(1)(3), VADODARA

The Learned Commissioner of Income Tax (Appeals) erred in holding that the Provisions of Section 69A where applicable to the facts of the case of the appellant and further erred in relying on various decisions in the Appellate Order.

The Learned Commissioner of Income Tax (Appeals) erred in holding that the appellant had failed to completely offer any explanation either before the Assessing Officer or before him during the appellate proceedings.

The Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.15,19,000/- being unexplained deposits in the bank account.

The appellant craves the right to add to or alter, amend, substitute, delete or modify all or any of the above grounds of appeal.

The brief facts of the case are that the assessee, Shri Mayank Naginbhai Patel, filed his return of income on 03.08.2017 declaring income of Rs. 8,60,830/-. The case was selected for scrutiny and during the assessment proceedings, the Assessing Officer noticed that the assessee had made cash deposits of Rs. 15,19,000/- in his bank accounts and also the bank account of his minor daughter during the period of demonetisation. The assessee explained the source of deposits as being Rs. 9,50,000/- from the sale of old gold ornaments, Rs. 4,01,000/- as gifts received by his minor daughter, and Rs. 1,68,000/- from past household savings. The Assessing Officer, however, rejected the explanations holding that the sale invoice of gold ornaments was unreliable, that the assessee had failed to substantiate the claim of gifts received by his minor daughter, and that the explanation of past savings was also not supported by evidence. Consequently, the entire cash deposits of Rs. 15,19,000/- were treated as unexplained money under section I.T.A No. 768/Ahd/2023 A.Y. 2017-18 Page No Mayank Naginbhai Patel vs. ITO

Aggrieved, the assessee filed an appeal before the CIT(A). During the appellate proceedings, the assessee reiterated that he belonged to a well-to-do Patel farming family, where possession of household gold and customary cash gifts on social occasions was common, and that the deposits represented legitimate family resources rather than unexplained money. The assessee also contested the reliance of the AO on the Inspector’s report, pointing out that the inspector had visited the wrong premises of the jeweller. It was further submitted that the AO had disregarded explanations regarding gifts and savings without properly appreciating the circumstances prevailing during demonetisation. The CIT(A), however, held that the assessee had failed to discharge the onus of proving the genuineness of the claimed sources, observing that there was no satisfactory explanation as to why large amounts of cash from the alleged sale of jewellery and gifts were kept at home for several months despite availability of multiple bank accounts. The CIT(A) further noted that the assessee had given inconsistent versions regarding the sources of deposits and had not produced cogent evidence such as wealth-tax records, valuation reports, or credible confirmation of gifts. The CIT(Appeals) placed reliance on various judicial precedents including the decisions of the Hon’ble Supreme Court in CIT v. Durga Prasad More (82 ITR 540) and Sumati Dayal v. CIT (214 ITR 801), and the CIT(A) applied the test of human probabilities and held that the explanation of the I.T.A No. 768/Ahd/2023 A.Y. 2017-18 Page No Mayank Naginbhai Patel vs. ITO

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. Before us, the Counsel for the assessee drew our attention to page 20-21 of Paper- Book and submitted that the assessee filed return of income declaring income of Rs. 1,02,700/- and was regularly filing return of income. Further, the Counsel for the assessee drew our attention to page 19 of Paper-Book and submitted that the sale of jewellery is duly supported by invoice. The mobile number of the assessee mentioned in the invoice also matches with that given in Form 36 filed before ITAT. Also, it was submitted that capital gains from sale of ornaments had also been disclosed by the assessee in his return of income and due taxes paid thereon. The Counsel for the assessee drew our attention to page 11-12 of Paper-Book in whihch names, addresses and PAN of parties giving gift of Rs. 4.5 lakhs to the daughtee of the assessee were also furnished to the Assessing Officer. However, without pointing out any defect in the details furnished by the assessee, additions were sustained by CIT(Appeals).

In response, the Ld. DR placed reliance on the observations made by the Assessing Officer and Ld. CIT(Appeals) in their respective orders. The Ld. DR submitted that when the Inspector visited the premises of the Jeweller to whom the jewellery had been I.T.A No. 768/Ahd/2023 A.Y. 2017-18 Page No Mayank Naginbhai Patel vs. ITO

We have heard the rival contentions and perused the material on record. The brief facts of the case are that the assessee, Shri Mayank Naginbhai Patel, had filed his return of income on 03.08.2017 declaring income of Rs. 8,60,830/-. The Assessing Officer during scrutiny proceedings noticed cash deposits of Rs. 15,19,000/- in the bank accounts of the assessee and his minor daughter during the period of demonetisation. The explanation of the assessee was that the deposits were sourced from the sale of old gold ornaments amounting to Rs. 9,50,000/-, gifts received by his minor daughter amounting to Rs. 4,01,000/-, and past household savings of Rs. 1,68,000/-. The Assessing Officer, however, rejected these explanations and treated the entire sum as unexplained money under section 69A of the Act. The addition so made was confirmed by the Ld. CIT(Appeals) who held that the assessee had not discharged the burden of proof and that the explanation was neither logical nor satisfactory. On careful consideration of the facts of the case and submissions of both sides, we find that the assessee had furnished documentary evidence in support of his claim. The invoice relating to the sale of jewellery clearly bears the mobile number of the assessee which matches with that given in Form 36 filed before the Tribunal. More importantly, the capital gains arising from such sale of jewellery were duly disclosed by the assessee in his return of income and I.T.A No. 768/Ahd/2023 A.Y. 2017-18 Page No Mayank Naginbhai Patel vs. ITO

Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,