DEV PRAKASH NIHALANI,AHMEDABAD vs. THE ITO, WARD-1, INTL. TAXN., AHMEDABAD
Facts
The assessee, a non-resident engaged in textile business in UAE, purchased property in India for Rs. 30 lakhs without filing a return. Following a notice under section 148A, the AO made an addition of Rs. 25 lakhs as unexplained income deposited in the assessee's NRI account. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal held that the assessee had provided documentary evidence, specifically a tax invoice and bank statements, proving the withdrawal of 150,000 AED from their UAE business account and its subsequent remittance to India. This established the source of the funds.
Key Issues
Whether the addition of Rs. 25 lakhs as unexplained income is justified when the assessee has provided evidence of its source from foreign business income.
Sections Cited
147, 144B, 148A, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “ D ” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI T.R.SENTHIL KUMAR
PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER:
This appeal is filed by the assessee as against the appellate order dated 19/08/2024 passed by the Commissioner of Income Tax (Appeals)-Ahmedabad-13 [hereinafter referred to as “CIT(A)”] arising out of the reassessment order passed u/s.147 rw.s.144B of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) relating to the Assessment Year (AY) 2015-16.
The Registry has noted that there is a delay of 28 days in filing the appeal. The delay is hereby condoned.
ITA No.2005/Ahd/2024 Dev Prakash Nihalani vs. ITO Asst.Year - 2015-16 - 2 -
The brief facts of the case are that the assessee is an individual and non-resident engaged in the business of textiles at U.A.E. since 1985. The assessee has various deposits in NRI account and all the funds were transferred from his foreign account to the NRI account in India. The assessee has purchased an immovable property at Bopal for a consideration of Rs.30 lakhs and the assessee having not filed any return of income, notice u/s.148A(b) of the Act was issued on 20/03/2022. The assessee has not replied to the notice, therefore, order u/s.148A(d) of the Act passed on 29/03/2022 and a notice u/s.148 of the Act was issued on 31/03/2022. In response thereto, the assessee filed partial information thereby the Assessing Officer (AO) made addition of Rs.25 lakhs deposited in assessee’s NRI account as unexplained income.
Aggrieved by the reassessment order, the assessee filed appeal before the Ld. CIT(A). During the course of appellate proceedings, the assessee filed additional evidences, namely, cash withdrawal of 150,000 AED on 27/09/2014 from the business income earned in Dubai and later repatriated to India through AL Rostamani Exchange LLC.
4.1. The Ld. CIT(A) called for a remand report from the AO, wherein the AO informed that there is no corresponding debit entry in the UAE bank account of the assessee. Thus, the AO contended that the source of remittance received to the tune of Rs.25 lakhs is not supported with any corroborative documentary evidences. Based on this report, the Ld. CIT(A) dismissed the
ITA No.2005/Ahd/2024 Dev Prakash Nihalani vs. ITO Asst.Year - 2015-16 - 3 -
appeal filed by the assessee and confirmed the addition made by the AO.
Aggrieved, against the order of ld.CIT(A), the assessee is in appeal before us raising following Grounds of Appeal:
“1. The learned Commissioner of Income Tax Appeals has erred in facts and in law in rejecting the transfer of Rs.25,00,000/- in own bank account from own business account in UAE that was also from explained sources. He ought to have accepted the facts that the assessee has explained the source of income and it is not out of un-explained income. 2. The petitioner craves to add, alter or amend the Ground of Appeal on or before final hearing of the appeal.”
The Ld.Counsel appearing for the assessee submitted that the tax invoice raised by AL Rostamani International Exchange LLC, wherein 150,570.00 AED was deposited on 27/09/2014 which was credited in the assessee’s bank account with Bank of Baroda of Rs.25 lakhs on 27/09/2014. The assessee also produced before us the business account at Abu Dhabi with Bank of Baroda bearing account No. 90060400000012, wherein cash debit of 150,000 AED by the assessee, which was remitted through AL Rostamani International Exchange LLC. Thus, the Ld. Counsel submitted that the addition made by the AO is unwarranted and liable to be deleted.
Per contra, Ld. Sr.DR appearing for the Revenue supported the order passed by the lower authorities and requested to sustain the same.
ITA No.2005/Ahd/2024 Dev Prakash Nihalani vs. ITO Asst.Year - 2015-16 - 4 -
We have given our thoughtful consideration and perused the materials available on record. The business account held by the assessee at UAE with Bank of Baroda clearly shows that the withdrawal of 150,000 AED on 27/09/2014 which was remitted through AL Rostamani International Exchange LLC on 27/09/2014 which was received by the assessee in his bank account with Bank of Baroda, Iskcon Circle, Gujarat. Thus, the source of cash was proved by the assessee, therefore, the addition made by the AO is liable to be deleted.
In the result, the appeal filed by the assessee is allowed. This Order pronounced in Open Court on 26 /03/2026
Sd/- Sd/- ( DR. BRR KUMAR ) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER
Ahmedabad; Dated 26/03/2026
T.C. NAIR, Sr. PS
Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The Concerned CIT 4. The CIT(A)-Ahmedabad-13 The / DR, ITAT, Ahmedabad 5. 6. Guard file. BY ORDER, स�ािपत �ित //True Copy// (Dy./Asstt.Registrar) ITAT, Ahmedabad
