YASHPAL KISHORSINH CHAUHAN,RAJKOT vs. COMMISSIONER OF INCOMETAX APPEALS, RAJKOT

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ITA 674/RJT/2025Status: HeardITAT Rajkot24 December 2025AY 2013-20144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee had not complied with notices issued by the Assessing Officer and the CIT(Appeals) for submitting documents and attending hearings. The Tribunal observed that the assessee had been negligent in pursuing the case before the lower authorities. In the interest of justice, and to provide one more opportunity to the assessee to explain the case, the Tribunal directed the assessee to deposit a cost of Rs. 2,000/- with the Prime Minister's Relief Fund within 10 days. The Tribunal set aside the orders of the lower authorities and remitted the matter back to the Assessing Officer for fresh adjudication on merit, after giving the assessee a due opportunity of being heard. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Yashpal Kishorsinh Chauhan, filed an appeal against the order of the CIT(Appeals) for Assessment Year 2013-14. The Assessing Officer (AO) had made an addition of Rs. 70,00,000/- under Section 69A of the Income Tax Act, 1961, treating it as unexplained money. The AO's action stemmed from financial transactions amounting to Rs. 70,00,000/- with M/s Shri Renuka Mata Multi State Urban Co-Operative Credit Society Ltd., which the AO found not commensurate with the assessee's declared income. The assessee claimed this was a contra entry from another Axis Bank account and provided bank statements, ledger accounts, audit reports, and other documents. However, the AO found these insufficient. The CIT(Appeals) dismissed the assessee's appeal, noting the lack of supporting documentary evidence for the contra entry claim and upholding the AO's addition. The assessee then appealed to the ITAT.

What were the issues?

1. Whether the addition of Rs. 70,00,000/- made by the AO under Section 69A of the Income Tax Act, 1961, as unexplained money, is justified, considering the assessee's claim that it was a contra entry from another bank account and not a cash deposit. Assessee's contention: The addition is bad in law and fact as the amount of Rs. 70,00,000/- was merely a contra entry representing a transfer from another Axis Bank account, not a cash deposit. The assessee submitted bank statements, ledger accounts, audit reports, and other supporting documents to substantiate this claim. Revenue's contention: The revenue relied on the orders of the lower authorities, particularly the CIT(Appeals), who found the assessee's submissions and provided documents insufficient to prove the nature of the credit as a contra entry. The CIT(Appeals) held that the lack of independently verifiable evidence of the source of credit made it taxable as unaccounted income under Section 69A.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 69A,Section 271(1)(c),Section 271(1)(B),Section 234(A),Section 234(B)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT

Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA

For Appellant: Shri Fenil H. Mehta, Ld. AR
For Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR
Hearing: 18/12/2025Pronounced: 24/12/2025

आयकरअपीलसं./ITA No. 674/RJT/2025 Assessment Year: (2013-14) Yashpal Kishorsinh Chauhan Vs. CIT(Appeals), Rajkot-360001 D.K. Enterprise 14 Sadgurunagar Kuvadva Road 360003 �ायीलेखासं./जीआइआरसं./PAN/GIR No.: AEFPC5211G (Appellant) (Respondent) : Shri Fenil H. Mehta, Ld. AR Appellant by Respondent by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Date of Hearing : 18/12/2025 Date of Pronouncement : 24/12/2025 आदेश / O R D E R Per, Dinesh Mohan Sinha, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2013-14, is directed against the order passed by the Learned Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi [in short “the Ld. CIT(A)/NFAC”], dated 04.07.2025, which in turn arises out of an assessment order passed by Assessing Officer (in short ‘the AO”) u/s 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), vide order dated 20.05.2023.

2.

Grounds of appeal

raised by the assesse, are as follows: “1. The grounds of appeal mentioned here under are without prejudice to one another.

2. The learned A.O. has eared in law as well as facts of the case in making addition of Rs.7000000/- even when your appellant clearly submit that this was only contra entry not cash deposition it was transferred from is another axis bank account and for that copy of bank statement, copy of ledger a/c of all banks from his books of accounts, audit report, copies of accounts but without considering facts of the case and without making Yashpal K. Chauhan any separate inquiry from his side made huge addition of Rs.7000000/- which is totally bad on facts as also in law and therefore it is herewith challenged in your honor's court.

3. The entire order in this aspects being wholly unwarranted on facts as also in law and it deserved to be quest and please be quest. The A.O. may please be directed to delete all the additions.

4.

The learned A.O. erred in initiating penalty proceedings u/s 271(1)(c) of the income tax act 1961.

5.

The learned A.O. also erred initiating penalty proceedings u/s 271(1)(B) of the income tax act 1961.

6. The learned A.O. erred in charging interest u/s 234(A) and 234(B) of the income tax act 1961.”

3.

Brief facts of the case are that the appellant is an individual and had filed his return of income for A.Y. 2013-14 declaring total income at Rs. 40,220/-. The case of the appellant was selected on the issue that the appellant had entered into financial transactions with M/s Shri Renuka Mata Multi State Urban Co- Operative Credit Society Ltd. amounting to Rs.70,00,000/-. However, the same was not commensurate with the above mentioned transactions totalling to Rs.70,00,000/-. Accordingly, notices u/s 148 and u/s 142(1) of the I.T. Act, 1961 were issued to the appellant, the appellant had filed his reply partly wherein it was mentioned that the appellant was doing business of gold & silver bars as a bullion merchant in the name of M/s D.K. Enterprises, Rajkot. The appellant stated that during the year under consideration, the assessee had done financial transaction of Rs.70,00,000/- with M/s Renuka Mata Multi State Urban Co- operative Credit Society Ltd., which is only contra entry not cash deposition, it was transferred from his another axis bank accounts. The appellant furnished copy of acknowledgement of ITR, Profit & Loss a/c statement, Balance sheet, computation of income, Form 26AS and audit report in support of its claim. The reply of the appellant was considered but not found acceptable by the AO as the appellant had not furnished any supporting documentary evidence in support of his claim. In view of the same, the AO had made the addition of Rs. 70,00,000/- Page 2 of Yashpal K. Chauhan towards variation under unexplained money u/s 69A of the I.T. Act, 1961 and assessed total income at Rs. 70,40,220/-.

5. That the assessee filed an appeal against the order of the AO, before the Ld.CIT(A). That the Ld.CIT(A) dismissed the appeal of the assessee, observing as follows:

“6.3 The appellant has not provided any submissions during the present appeal proceedings. There is no document provided to support his stand that the entry of Rs. 70,00,000/- in his account with Renuka Mata Multi-State Urban Coop Credit Society was a contra entry from his other bank account. No independently verifiable evidence of source of credit of Rs. 70,00,000/- in the co-op credit society account has been provided, either before the AO or during the present appeal proceedings. When the nature and source of a credit in a co-op society account is not provided, the same is rightly taxable as unaccounted income u/s 69A. The appellant has not provided any material during the appeal proceedings, on the basis of which I can interfere with or differ from the conclusion drawn by the AO in this regard. Hence the action of the AO in making an addition of Rs. 70,00,000/- u/s 69A is hereby upheld. Grounds no. 1 and 2 are dismissed. 6.4 Grounds no. 4 and 5 are premature as they relate to initiation of penalty proceedings. Ground no. 6 is consequential. 7.0 In the result, the appeal is dismissed.”

6.

That the assessee filed an appeal against the impugned order of the Ld.CIT(A), before this Tribunal.

7.

During the course of hearing, the Ld.AR of the assesse submitted that the Ld.AR of the assessee prayed that one more opportunity may kindly be given to the assessee to explain the case before the lower authorities.

8.

On the other hand, the Ld.DR for the revenue relied on the order of the Ld.CIT(A).

9.

We have heard both the parties and perused the material available on record. We note that the notices dated 02.01.2025, 21.02.2025, 21.03.2025, and 09.06.2025 have been issued by the Ld.CIT(A) to submission the documents in Page 3 of Yashpal K. Chauhan support of the case. Since, the appellant did not comply with terms of notice. We further note that the assessee has not made the compliance with the notices for hearing issued by the Ld. AO. We note that the assessee has not gave due care and attention to the notice issued by the lower authorities and remain negligent in pursuing the case before the AO as well as Ld.CIT(A), for this non-cooperative attitude in pursuing the case. We direct the assessee to deposit a cost of Rs.2000/- , and the same is to be deposited with Prime Minster Relief fund (Government of India), within 10 days from today, and the receipt is to be submitted with the Registrar of this Tribunal. Keeping in view, and in the interest of justice, we grant an opportunity to the assessee to present his case before the AO. We set aside the order of lower authority and remit the matter back to the file of the AO for fresh adjudication on merit after giving due opportunity to the assessee of being heard., in accordance with law.

10.

In the result, appeal of the assessee, is allowed for statistical purpose.

Order is pronounced in the open court on 24/12/2025.

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