Kanubhai Ambalal Patel Vs ITO (ITAT Ahmedabad)
In Kanubhai Ambalal Patel Vs ITO, the appeal before the Income Tax Appellate Tribunal (ITAT), Ahmedabad arose from an order of the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre, dated 22.08.2025 for Assessment Year 2016–17. The assessee challenged both the validity of reassessment proceedings under Sections 147/148 of the Income-tax Act, 1961, and the addition of ₹78,29,905 made under Section 69 on account of unexplained cash deposits.
The assessee had originally filed a return declaring income of ₹3,41,140. The case was reopened based on information from the Investigation Wing indicating substantial cash deposits in a bank account maintained with Shree Renuka Mata Multi State Urban Co-operative Credit Society Ltd. During reassessment, the Assessing Officer found that cash deposits of ₹78,29,905 had been made during the relevant financial year. The assessee explained that the account was opened at the request of society officials and was used by unknown third parties for routing funds. He claimed he merely lent his account and was to receive a commission of about 0.1%, though no commission was actually received.
The Assessing Officer rejected the explanation due to lack of supporting evidence such as identity of depositors, beneficiaries, or affidavits. Consequently, the entire amount was treated as unexplained investment under Section 69. The CIT(A) upheld both the reopening and the addition, observing that tangible material existed to justify reassessment and that the assessee failed to substantiate his claims. It was held that in the absence of evidence regarding identity, creditworthiness, and genuineness of transactions, the addition was justified.
