Case Law Details
Piyush Bavanjibhai Viradia Vs ITO (ITAT Ahmedabad)
The appeal before the Income Tax Appellate Tribunal, Ahmedabad, arose from an assessment order dated 24.09.2025 passed under Section 147 read with Section 144C(13) of the Income Tax Act, 1961 for Assessment Year 2020–21. The assessee, a Non-Resident Indian, was subjected to additions of ₹1.50 crore on account of unexplained time deposits in an HDFC Bank account and ₹7,26,547 as unexplained credits in a Kotak Mahindra Bank account. These additions were initially proposed in a draft assessment order under Section 144C(1) due to lack of explanation from the assessee, and subsequently confirmed after the Dispute Resolution Panel rejected the assessee’s objections.
Before the DRP, the assessee had explained that the ₹1.50 crore deposits were sourced from funds held in an NRE account where income earned outside India was deposited. Bank statements were submitted to support this claim. However, the DRP rejected these statements on the ground that they were generated from the bank’s website and did not bear official stamp or signature, thereby lacking legal sanctity.
Before the Tribunal, the assessee submitted that being a non-resident based in the USA, it was difficult to obtain authenticated bank statements during earlier proceedings. The assessee now produced duly stamped bank statements obtained from the bank to substantiate the source of deposits.
Regarding the ₹7,26,547 credit in the Kotak Mahindra Bank account, the DRP had noted that the assessee submitted bank statements of an earlier assessment year and treated the credits as interest from the NRE account. However, the assessee clarified before the Tribunal that these credits were actually amounts received from various parties through NEFT transfers, and not interest income. Supporting bank statements were produced to reflect these transactions.
The Tribunal observed that the additions were made primarily because proper documentary evidence was not furnished earlier or facts were not adequately appreciated by the authorities. Considering that the assessee had now produced relevant and authenticated documents, the Tribunal held that the matter required fresh examination.
Accordingly, both issues relating to unexplained deposits and credits were restored to the file of the Assessing Officer. The AO was directed to reappreciate the evidence, provide adequate opportunity of hearing to the assessee, and pass a fresh order in accordance with law. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The present appeal has been filed by the assessee against the order of the Ld. Income Tax Officer, Ward-2, Int. Tax, Ahmedabad (hereinafter referred to as “AO”) dated 24.09.2025 passed under Section 147 r.w.s. 144C(13) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2020-21.
2. Brief facts relating to the case are that the assesse is a Nonresident Indian. Order u/s.147 r.w.s. 144C(13) of the Act was passed by making addition of Rs.1.50 Crores on account of time deposits made in the HDFC Bank account of the assessee the source of which remained unexplained and Rs.7,26,547/- being unexplained credits in Kotak Mahindra bank account of the assessee. Originally a draft order was passed u/s.144C(1) of the Act proposing the said additions noting no explanation being filed by the assessee, in response to the queries raised by the AO for explaining the source of the time deposits and credits in his bank account. The assessee objected to the draft order before the Dispute Resolution Panel (‘DRP’) who, in turn, rejected assessee’s objection and directed the AO to make the additions proposed. Accordingly, the order was passed by making addition on the two counts as noted above.
3. Counsel for the assessee drew our attention to the order of the DRP pointing out that before the DRP, the assessee had contended that the time deposits of Rs.1.50 Crores in its HDFC Bank account had been sourced from the deposits made in his HDFC Bank NRE account where all income earned by the assessee outside India was deposited. The copy of bank statements were also filed to the DRP to substantiate the explanation, but, however, the same were rejected for the reason that the DRP noted the bank accounts statements to be generated from the bank website and not bearing stamp and signature of the bank authorities. The DRP, therefore, found that there was no legal sanctity to these bank account statements. He drew our attention to page no. 9 of the DRP order finding so and, accordingly, rejecting assessee’s explanation of the source of time deposits of Rs. 1.50 Crores from his NRE account.
4. Before us, Ld. Counsel for the assessee contended that the assesse was a non-resident settled in USA and it was logistically difficult for the assessee to procure the statements from the bank itself, since, the bank required authority letter from the assessee and the assessee was unable to procure the same during the pendency of the proceedings before the Revenue authorities. He contended that the said bank statements have now been procured from the bank itself, duly stamped, and the assessee was now in a position to corroborate its explanation with a genuine copy of bank statement of its NRE A/c. Copy of the statement so procured from the bank was placed before us.
5. With respect to the other issue of credit in the Kotak Mahindra Bank account of the assessee of Rs.7,26,547/- remaining unexplained, he drew our attention to the finding of the DRP at page no.17 of the order noting that the assessee had produced bank statement of Kotak Mahindra Bank pertaining to earlier period i.e. A.Y. 2016-17 and the impugned year before us being F.Y. 201920. And that the credit of Rs.7,26,547/- was sourced from interest generated from NRE account as explained by the assessee.
6. Before us, Ld. Counsel for the assessee contended that the fact of the matter was that the credits pertained to amounts received by the assessee from various parties and did not pertain to interest from NRE account. He drew our attention to the copy of the bank statement of Kotak Mahindra Bank placed before us at paper book page no.30 reflecting credits of Rs.7,26,547/- on account of amounts deposited on various dates received by way of NEFT from Bank of Baroda Fortap and NEFT from Mandhana Industries Limited. He contended that correct facts pertaining to the issue had not been appreciated by the authorities below and if given an opportunity, the assessee would explain all the facts relating to the issue to the authorities below.
7. Noting the contentions of the Ld. Counsel for the assessee as above and finding that the additions have been made merely for the reason that the original copy of the bank statement corroborating the assessee’s explanation of source of time deposits in bank was not filed to the DRP or the facts were not properly appreciated by the DRP and the assessee having now procured all the genuine documents, in the interest of justice, we consider it fit to restore the issue back to the file of the AO. The AO is directed to reappreciate the issue, give due opportunity of hearing to the assessee and consider all evidences filed by the assessee and, thereafter, pass order in accordance with law.
8. In the result, appeal filed by the assessee is allowed for statistical purposes.
This Order pronounced on 16/04/2026
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