Ashish Tilakchandra Bhatt Vs DCIT (ITAT Ahmedabad)
Indexation Mandatory & Cash Deposit Addition Restricted: Ahmedabad ITAT Grants Partial Relief
The Ahmedabad “SMC” Bench of the ITAT partly allowed the appeal of Ashish Tilakchandra Bhatt vs. DCIT, Gandhinagar, ITA No. 1503/Ahd/2025, AY 2012-13, vide order dated 18.12.2025
On the capital gains issue, the Tribunal noted that although the CIT(A) had directed the AO to recompute capital gains as per the DVO’s valuation, no explicit direction was given to allow indexation benefit u/s 48. Observing that indexation is a statutory entitlement in computation of long-term capital gains, and with the Revenue fairly conceding the position, the Tribunal directed the AO to grant full indexation benefit while recomputing the capital gains.
On the addition relating to cash deposits in bank account, the Tribunal examined the cash-flow statement and bank transactions placed on record. It found that substantial cash withdrawals preceded several cash deposits, justifying telescoping to that extent. However, for certain deposits where the source could not be satisfactorily correlated with withdrawals, the Tribunal upheld partial additions. Applying a reasonable and pragmatic approach, the Tribunal confirmed additions aggregating to ₹8.55 lakh and deleted the balance deposits, holding that the AO was not justified in treating the entire cash deposits as unexplained.
Accordingly, the appeal was partly allowed, with indexation directed to be allowed in full and cash deposit addition substantially reduced.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The above appeal has been preferred by the assessee against order passed by the Ld.Commissioner of Income-Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “ld.CIT(A)] dated 14.05.2025 under section 250 of the Income Tax Act, 1961 (“the Act” for short) for the assessment year 2012-13.
