Tushar Jayantibhai Thakkar Vs ITO (ITAT Ahmedabad)
Section 69A: ITAT Deletes ₹13.53 Lakh Additions After Considering Confirmation, Bank Statements and Ledger Records
Documented Explanations Support Deletion of Additions
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has deleted additions aggregating to ₹13,52,771 under Section 69A, after considering documentary evidence explaining disputed bank credits and a confirmation denying an alleged financial transaction.
The dispute involved ₹2 lakh attributed to a transaction with Khavda Finance Ltd. and ₹11,52,771 in bank receipts from family members, friends and a government relief payment.
The Tribunal found that relevant ledger records and bank statements had already been produced before the Revenue authorities. It also noted that the confirmation from Khavda Finance Ltd., stating that no financial transaction had occurred with the assessee, remained undisputed by the Revenue.
Case Details
The decision was delivered in Tushar Jayantibhai Thakkar v. ITO, Ward-1, Patan, ITA No. 28/Ahd/2026, concerning Assessment Year 2021-22.
The order was pronounced on 16 October 2026 by Vice-President Dr. B.R.R. Kumar, sitting on the Ahmedabad SMC Bench.
The appeal challenged the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, dated 22 December 2025, which had confirmed the disputed additions.
The assessee also questioned the validity of reopening. However, the Tribunal granted relief by deleting the additions on the evidence before it, without separately adjudicating the reopening objection in its operative reasoning.
Search Information Leads to Reassessment
Reassessment proceedings originated from information emerging from a search in the case of Khavda Finance Ltd. and connected persons.
Relying on material gathered during the search, the Assessing Officer added ₹2 lakh concerning an alleged transaction between the assessee and the company.
A further addition of ₹11,52,771 was made for bank credits treated as unexplained. Both amounts were assessed under Section 69A.
The CIT(A) sustained the additions, leading the assessee to approach the Tribunal with explanations and supporting records.
Company Confirmation Denies Alleged Transaction
The assessee denied having undertaken the alleged financial transaction with Khavda Finance Ltd.
He furnished a signed confirmation issued by the company, expressly stating that it had no financial transaction with him.
The Tribunal recorded that this fact had not been disputed by the Revenue.
The confirmation was therefore material to the assessee’s challenge against the ₹2 lakh addition, which had originated from information concerning the searched entity.
Bank Credits Explained Through Individual Sources
For the remaining ₹11,52,771, the assessee furnished a detailed reconciliation identifying the persons from whom the money was received and the nature of the receipts.
An amount of ₹2,84,000 was received from his wife, Nidhiben Thakkar. The supporting material included ledger records, the relevant bank statement and identification proof.
Another ₹61,009 was received from his brother, Chirag Thakkar, which the assessee explained as money received against amounts previously given during the year. Ledger records, bank entries and identification documents were furnished.
The assessee also provided medical records concerning his brother as part of the supporting submission.
Repayments and Personal Financial Assistance Identified
The assessee explained that ₹4,13,550 received from Jigneshkumar N. Thakkar, a friend and colleague, represented repayment of money advanced for personal needs during the COVID-19 period.
Supporting documents included the ledger, bank statement, PAN particulars and a transaction confirmation.
A further ₹3,68,000 was received from Navinchandra Thakkar, the father of a friend, for the assessee’s personal requirements. PAN particulars and a confirmation were submitted.
The smaller receipts comprised ₹5,000 from Umesh, described as assistance for personal needs, and ₹10,000 from Sita Ram Meena, described as repayment of an earlier advance.
Relevant banking particulars and ledger records, wherever specified, supported these explanations.
Government Relief Receipt Included in Disputed Credits
The reconciliation also included ₹11,212 received as COVID-19 Krishi Rahat from the Government.
The assessee claimed that this amount was exempt under Section 10(10BC) and furnished the relevant bank statement entry.
This was an explanation advanced by the assessee. The Tribunal did not separately analyse the statutory conditions of that exemption; it deleted the disputed additions after considering the supporting records collectively.
Tribunal Accepts Supporting Records
After examining the submissions and paper book, the Tribunal found that the assessee had furnished the relevant ledger copies and bank statements identifying the receipts.
It specifically noted that these records had already been produced before the CIT(A) and the Revenue authorities.
Considering the documented explanations and the undisputed company confirmation, the Tribunal held that the additions were unwarranted.
The decision rested on the evidence explaining the particular transactions, rather than merely the fact that money had moved through bank accounts.
Final Outcome
The Tribunal deleted both the ₹2 lakh addition and the ₹11,52,771 addition under Section 69A. The assessee’s appeal was allowed.
The ruling demonstrates the importance of examining transaction-specific confirmations, ledger entries and banking records when deciding whether disputed receipts remain unexplained.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “CIT(A)” for short), dated 22.12.2025 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act” for short], for Assessment Year (AY) 2021-22.
2. The assessee has taken following grounds of appeal:-
“1. The Id. CIT(A), NFAC has grievously erred in law and on facts in upholding the order of A.O. dated 27/03/2025 passed u/s. 147 in as much as that conditions for re-opening as per section are not fulfilled rendering the re-assessment proceeding as bad in law and void ab initio.
2. He has erred in law and on facts in upholding the order of A.O. making addition of Rs. 2,00,000/- u/s. 69A and Rs. 11,52,771/- as un- explained credit entry in the bank account u/s. 69A without properly considering and appreciating the submission made during assessment proceedings.
3. He has erred in law and on facts in upholding the addition of Rs. 2 lakhs made u/s. 69A as un-explained money without appreciating the submission made along with supporting evidence, denying the transaction with Khavda Finance Limited submitted to be base less incorrect in contravention of provisions of the Income Tax Act and Principle of Natural Justice.
4. He has erred in law and on facts in upholding the addition of Rs. 11,52,771/- made u/s. 69A as un-explained credit entry in bank account without appreciating the explanation of the assessee.”
3. The brief facts of the case are that, in assessee’s case, the reassessment was initiated on the basis of information emanating from a search conducted in the case of M/s Khavda Finance Ltd. and its connected persons. The Assessing Officer, relying upon the material gathered during the search, made an addition of Rs.2,00,000/- on account of an alleged transaction with M/s. Khavda Finance Ltd. and a further addition of Rs.11,52,771/- in respect of certain bank credits treated as unexplained. The Ld. CIT(A) confirmed the additions.
4. During the hearing, the assessee had denied the alleged transaction with M/s. Khavda Finance Ltd. and had furnished supporting material in this regard. In respect of the bank credits, explanations along with supporting documents were also furnished. The assessee submitted a signed letter of confirmation issued by M/s. Khavda Finance Ltd., saying that the assessee had no financial transaction with them, the fact of which has not been disputed by the Revenue.
5. With regard to the addition of Rs.11,52,771/-, the assessee submitted synopsis as under:-
| Sr. No. | Name | Amount Received (INR) | Relation |
|---|---|---|---|
| 1 | Nidhiben Thakkar | 2,84,000/- | Wife of an assessee |
| 2 | Chirag Thakkar | 61,009/- | Brother of assessee |
| 3 | Jigneshkumar N Thakkar | 4,13,550/- | Friend/Colleague of assessee |
| 4 | Navinchandra Thakkar | 3,68,000/- | Father of Friend/Colleague of assessee |
| 5 | Umesh | 5,000/- | Friend/Colleague of assessee |
| 6 | Sita Ram Meena | 10,000/- | Friend/Colleague of assessee |
| 7 | Covid-19 Krishi Rahat | 11,212/- | Exempt income under section 10(10BC) |
| Total | 11,52,771/- |
2.2.1. Rs.2,84,000/- received by an assesseee from Nidhiben Thakkar a wife of an assessee. A copy of Ledger and relevant portion of bank statement containing amount received by an assesseee with narration and copy of ID proof are enclosed herewith in Annexure -13
2.2.2. Rs.61,009/- received by an assesseee from Chirag Thakkar a Brother of an assessee on account of amount given by assessee during the year. A copy of Ledger and relevant portion of bank statement containing amount received by an assesseee with narration and copy of ID proof are enclosed herewith in Annexure -14. Brother of assesseee is suffering from a severe disease of GNE Myopathy. copy of report of the same is also enclosed herewith.
2.2.3. Rs.4,13,550/- received from the Jigneshkumar who is Friend/colleague of an assessee which received back during year. Amount of Rs.4,13,550/- is returned back by Jigneshkumar to an assessee in good kind against amount given to him for his personal need during the COVID-19 Period. A copy of Ledger, relevant portion of bank statement containing amount received by an assesseee with clear narration, Copy of PAN Card and Copy of Balance/ Transactions confirmation by Mr. Jigneshkumar is enclosed herewith in Annexure – 15.
2.2.4. Rs.3,68,000/- received from Mr. Navinchandra Thakkar who is father of friend of an assessee. An Assessee has received an amount for his personal need. Copy of PAN Card and Copy of Balance/Transactions confirmation by Mr. Navinchandra Thakkar is enclosed herewith in Annexure -16.
2.2.5. A Small amount of Rs.5,000/- is received from Mr.Umesh who is a colleague/friend of an assessee for the purpose of personal need of an assessee. a copy of Ledger and relevant portion of bank statement containing amount received by an assesseee with narration are enclosed herewith in Annexure – 17
2.2.6. A small amount of Rs.10,000/- received from Sita Ram Meena who is a colleague/friend of an assessee, He has returned back an amount given by an assesseee on 29-10-2020 for the purpose of personal need. relevant portion of bank statement containing amount received by an assesseee with narration are enclosed herewith in Annexure-18
2.2.7. Rs.11,212/- is received from Government as Krishi Rahat during COVID-19 period which is exempt under section 10(10BC) of The Income Tax Act 1961, relevant portion of Bank statement is enclosed herewith in Annexure-19.”
6. Having considered the rival submissions and on perusal of the material available on record, it is found that the assessee has placed relevant ledger copy and the bank statement containing the amounts received by the assessee, as has been produced before the Ld. CIT(A), by way of paper-book. Since the impugned transactions were entered through the bank account and evidence for which was already produced before the Revenue Authorities, no addition on this account is warranted.
7. In view of the above, the additions of Rs.2,00,000/- and Rs.11,52,771/- made under section 69A of the Act are deleted.
8. In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on 16.10.2026.
