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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & Ms. SUCHITRA KAMBLE
(िनधा�रण वष� / Assessment Year : 2017-18) ACIT बनाम/ Ashok Ramulbhaya Anand Circle, Anand Malhotra Vs. Plot No.74, Survey No.31-32, Gotri Sevasi Road, B/h. Akashvan Complex, Vadodara, Gujarat - 390101 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ACFPM7329B (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Rameshwar P Meena, Sr.DR ��यथ� क� ओर से/Respondent by : Shri M. J. Shah, Advocate & Shri Rushin Patel, A.R. Date of Hearing 09/10/2025 Date of Pronouncement 06/01/2026 (आदेश)/ORDER PER ANNAPURNA GUPTA, AM:
The present appeal has been filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”) dated 04.12.2024 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2017-18.
[ACIT vs. Ashok Ramulbhaya Malhotra] A.Y. 2017-18 - 2 – 2. The grounds of appeal raised by the Revenue are as under: i) "On the facts and in the circumstances of the case and in law, the of unexplained capital addition, without appreciating the facts that the balance sheet prepared by the assesse was not reliable and in absence of any valid documentary evidence, the addition made to the capital account of the assessee in the form of deposits made with M/s Honeyvick Enterprises P Ltd., cannot be treated as explained." ii) The appellant craves leaves to add, modify, amend or alter any grounds of appeal at the time of, or before, the hearing of appeal.”
3. The Revenue in the above ground has challenged the order of the Ld.CIT(A) deleting the addition made to the income of the assessee on account of unexplained cash credits u/s.68 of the Act amounting to Rs.2,27,18,959/-. The fact relating to the issue is that during the assessment proceeding the AO noted the assessee to have made large addition to capital during the year since, as per the AO, the assessee had not operated any business during the F.Y. 2015-16 but in the concerned year, he held that the assessee had introduced all the assets in the capital account in the impugned year. The assessee was asked to submit the working of opening capital balance alongwith documentary evidences. In response, the assessee submitted reply, on perusing which the AO found the assessee to have made deposits of Rs.2,27,18,959/- with Honeyvick Enterprises Pvt. Limited and the same was found to have been added in the capital account. No documentary proof regarding the said deposits was submitted by the assessee and, therefore, the AO held the capital addition of Rs.2,27,18,959/- as remaining unexplained and added the same to the income of the assessee u/s.68 of the Act.
During the year under consideration, the assessee has made large capital addition during the year since, the assessee had not operated any business during the F.Y. 2015-16 but in the concerned year, the assessee has introduced all the assets in Capital Account. Hence, during the course of assessment proceedings, the assessee was asked to submit the working of opening Capital Balance alongwith documentary evidences thereof. In response, the assessee has submitted the reply alongwith documentary evidences thereof. On perusal of the same, it is found that the assessee has made deposits of Rs. 2,27,18,959/- with Honeyvick Enterprises Pvt. Limited and the same has been made addition in Capital Account. Further, the assessee has not submitted any documentary proof regarding deposits. Therefore, during the course of assessment proceedings, the assessee was show caused as to why the capital introduction made during the year should not be added as unexplained cash credit u/s. 68 of the Act. In response, the assessee has submitted the documentary evidences in Support of capital introduction made. But, the assessee has not submitted any documentary evidences regarding Deposits with Honeyvick Enterprises Private Limited. Hence, in absence of any cogent evidences, the capital addition of Rs. 2,27,18,959/- remains unexplained. Accordingly, an addition of Rs. 2,27,18,959/- on account of Deposits made with Honeyvick Enterprises Pvt. Ltd. is made as unexplained cash credit u/s. 68 of the Act and added to total income of the assessee. Penalty proceeding u/s. 271AAC(1) is initiated for income deemed u/s. 68 of the I.T. Act.
The Ld. CIT(A) deleted the addition noting the fact that the transaction relating to deposits with M/s Honeywick Enterprise Pvt. Ltd did not pertain to the impugned year at all. His findings in this regard contained at para 9.3.4 of the order as under:
9.3.4. Therefore, on the basis of the sole fact that the impugned amount of addition does not pertain to the assessment year 2017-18, the assessee is entitled to relief, ie, the addition of Rs.2,27,18,959 is deleted. Since relief is allowed on this sole question, other issues brought out by the assesse in his written submissions that the assessee has not made the addition in the correct section of the Act becomes academic in nature.
Ld. DR was unable to controvert the factual finding of the Ld. CIT(A) that the addition of Rs.2.27Crores pertaining to deposits made by the assessee with M/s Honeywick Enterprise Pvt.
In view of the same, we see no reason to disagree with the Ld.CIT(A) that since the transaction in relation to which addition was made in the hands of the assessee did not, as a matter of fact, take place in the impugned year no cause of action arises for making any addition in the hands of the assessee u/s.68 of the Act as unexplained credit. The order of the Ld. CIT(A) is, therefore, confirmed. The ground of appeal raised by the Revenue is dismissed.
In effect, appeal filed by the Revenue is dismissed.
This Order pronounced on 06/01/2026 Sd/- Sd/- (SUCHITRA KAMBLE) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 06/01/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent. 2. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,