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Facts
An addition of Rs. 9,23,000/- was made to the assessee's income under Section 69A for unexplained cash deposits in a bank account. The assessee argued that the bank account belonged to his HUF, for which relevant books of account, bank statements, and ITR were submitted to the lower authorities, but this contention was rejected.
Held
The Income Tax Appellate Tribunal held that the lower authorities' finding that the assessee failed to substantiate his claim was incorrect. It noted that the assessee had provided sufficient evidence, including HUF bank statements and ITR, proving the cash was deposited in the HUF's account. Therefore, the addition made to the assessee's income was not justified and was directed to be deleted.
Key Issues
Whether the lower authorities were justified in making an addition for unexplained cash deposit under Section 69A in the assessee's personal assessment, despite the assessee's claim and submission of evidence that the bank account belonged to his HUF.
Sections Cited
250, 69A
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA
(िनधा�रण वष� / Assessment Year : 2012-13) बनाम/ Pushpakant Punjalal The Income Tax Officer Chokshi Ward 1(3)(1), Petlad Vs. Prop: Chokshi Punjalal Somchand & Sons, Jawahar Road, Cambay, Anand – 388620, Gujarat �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AGTPS8836P (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri M K Patel, Advocate ��यथ� क� ओर से/Respondent by : Shri Nitin Kulkarni, Sr. DR Date of Hearing 18/08/2025 Date of Pronouncement 26/08/2025 O R D E R The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi dated 21.02.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2012-13.
The grounds raised in the appeal by the assessee are as under:
“1. The Learned Commissioner of Income Tax (Appeals) erred in holding that the appellant had not provided any evidences of cash deposit like books of accounts, purchase and sale of jewellery made by the HUF and further erred in holding that Punjalal Chokshi vs. ITO] A.Y. 2012-13 - 2 – it cannot be construed that the appellant had shown cash deposit of the turnover of HUF 2. The Learned Commissioner of Income Tax (Appeals) erred in not giving proper opportunity to the appellant for further submission.
The Learned Commissioner of Income Tax (Appeals) erred in rejecting the submissions made by the appellant before the Assessing Officer.
The Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.9,23,000/- u/s 69A being cash deposit made in the bank account with Abhyudayu Co- Operative Bank Ltd., out of sales effected by the firm of the HUF and further erred in not considering the detailed submissions made before the Assessing Officer.
5. The appellant craves the right to add to or alter, amend, substitute, delete or modify all or any of the above grounds of appeal
.”
3. The solitary issue in the present appeal relates to the addition made to the income of the assessee on account of cash allegedly found deposited in the bank account of the assessee amounting to Rs.9,23,000/-, the source of which, remained unexplained. The addition was made to the income of the assessee as unexplained money / cash deposited in Bank u/s.69A of the Act, in the absence of any evidence filed by the assessee before the AO substantiating the source of cash deposited.
4. The contention of the Ld. Counsel for the assessee before me was that the assessee had consistently stated the bank account in which the cash was found deposited to be not of the assessee but of the HUF of the assessee. But both the authorities below had rejected the contention as being unsubstantiated. Ld.Counsel for the assessee pointed out that this finding of the Revenue authorities was far from truth. He contended that the assessee had pointed out that the bank account so noted by the AO as Punjalal Chokshi vs. ITO] A.Y. 2012-13 - 3 – belonging to the assessee was Account No.070021100009825 maintained with Abhyudayu Co-Op. Bank Ltd and belonged to the HUF of the assessee. To substantiate his aforesaid claim the assessee had provided the bank statement in which the cash was deposited alongwith the bank books and cash books of the HUF. The assesse, it was contended, had explained that the Bank had inadvertently linked his PAN with the said bank account, since he was the Karta of his HUF. Both himself and his HUF were engaged in the business of retail trading of gold and silver jewellery ornaments. The cash deposited in HUF account was pointed out to the AO as having been accounted for in the business carried out by the HUF and profit of the said business returned to tax. Copy of the Income Tax Return of the HUF was also filed to the AO. Ld. Counsel for the assessee pointed out that these documents were also filed to the Ld.CIT(A). Ld. Counsel for the assessee contended, therefore, that the assessee had substantiated his claim of the impugned bank account where the cash was found deposited as belonging to HUF of the assessee and the authorities below had incorrectly recorded the fact that the assessee had not substantiated his explanation. He drew my attention to both the assessment order and the Ld. CIT(A)’s order where the fact of the assessee having adduced evidence of cash deposited in the bank account of the HUF was filed.
Ld. DR though was unable to controvert the contention of the Ld. Counsel for the assessee as above on facts. However, he supported the orders of the authorities below.
Punjalal Chokshi vs. ITO] A.Y. 2012-13 - 4 – 6. In the light of the above arguments made before me and on going through the orders of the authorities below, I hold that the addition made to the income of the assessee on account of cash found deposited in his alleged bank account amounting to Rs.9,23,000/- is not justified on facts alone. Though, both the authorities recorded the assessee’s contention that the bank account did not belong to the assessee but its HUF, they have made and confirmed the addition on the basis that the assessee had failed to substantiate his explanation with evidence. However, it was brought to my notices from the orders of the authorities below itself that the assessee had filed evidence to substantiate its explanation, having furnished the bank statement of the HUF where the cash was found deposited, the copy of the bank book and cash book of the HUF and also ITR of the HUF returning income from transactions recorded in the bank of the HUF, was filed. Both the CIT(A) and the AO have not pointed out as to how the aforestated evidences were not sufficient for demonstrating that the bank account, in which cash was found deposited by the AO, was not of the assessee but its HUF. Therefore, with regard to the finding of the Ld.CIT(A)/AO, that the assessee had not been able to substantiate its explanation of the bank account being that of the HUF, I find the same to be incorrect. Further, the assessee having furnished all possible evidences to the authorities below and no infirmity being pointed out in the same, there is no reason to disbelieve the assessee’s explanation that the cash noted to be deposited in the bank account was not deposited in the assessee’s bank account but that in the bank account of the HUF of the assessee.
Punjalal Chokshi vs. ITO] A.Y. 2012-13 - 5 – 7. In the light of the same, I hold that there was no basis at all for making addition of alleged unexplained cash deposited in the bank account of the assessee amounting to Rs.9,23,000/-. The addition so made is, therefore, directed to be deleted.
In the result, the appeal filed by the assessee is allowed.
This Order pronounced on 26/08/2025
Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad; Dated 26/08/2025 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. 2. ��यथ� / The Respondent. संबंिधत आयकर आयु� / Concerned CIT 3. आयकर आयु�(अपील) / The CIT(A)- 4. 5. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,