Ketankumar Thakorbhai Patel Vs ITO (ITAT Ahmedabad)
The appeal before the Income Tax Appellate Tribunal, Ahmedabad challenged the order dated 30.09.2025 passed by the Additional/Joint Commissioner of Income Tax (Appeals), Agra for Assessment Year 2011–12. The assessee contested the confirmation of several additions made by the Assessing Officer and sustained by the appellate authority.
The assessee had initially not filed a return of income for the relevant assessment year. Based on information received through the Annual Information Return (AIR), the department found that the assessee had sold an immovable property for ₹37,33,200 registered at the Sub-Registrar Office, Anand on 05.08.2010. Since no return had been filed, the case was reopened after recording reasons and obtaining approval. A notice under Section 148 was issued on 27.03.2018 and served on the assessee.
In response, the assessee filed a return on 13.12.2018 declaring income of ₹1,47,950 and reporting short-term capital gains. The assessee calculated short-term capital gains by considering full consideration of ₹18,66,750 after reducing cost of acquisition of ₹12,97,375 and cost of improvement of ₹3,50,000. After examining the submissions, the Assessing Officer concluded that the assessee had earned short-term capital gains of ₹11,38,750 as against ₹2,19,375 declared by the assessee. The difference of ₹9,19,375 was treated as additional income and added to the returned income.
The Assessing Officer also disallowed the assessee’s claim of deduction of ₹75,000 under Section 80C of the Income Tax Act on the ground that the assessee had not produced receipts supporting the claim and that the claim appeared to be based on guesswork. Further, an addition of ₹5,10,000 was made under Section 69A in respect of cash deposits in the assessee’s bank account.
Aggrieved by the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). The appellate authority dismissed the appeal and upheld the additions made by the Assessing Officer.
Before the Tribunal, the assessee’s authorised representative submitted that the appellate authority had not considered the additional evidence submitted by the assessee during the appellate proceedings. It was argued that these documents were relevant for deciding the issues raised in the appeal and that failure to consider them was contrary to the principles of natural justice. The representative therefore requested that the matter be remanded to the Assessing Officer for proper verification of the additional evidence and reconsideration of the issues.
The departmental representative relied on the assessment order and the order of the Commissioner (Appeals).
After hearing both parties and examining the material available on record, the Tribunal observed that the Commissioner (Appeals) had not considered the additional evidence submitted by the assessee. The Tribunal held that it would be appropriate to remand the matter to the Assessing Officer for proper verification of the documents and details and for adjudication of the issues in accordance with the provisions of the Income Tax Act. The Tribunal also directed that the assessee be given an opportunity of hearing in accordance with the principles of natural justice.
Accordingly, the Tribunal set aside the matter to the file of the Assessing Officer for verification and fresh adjudication. The appeal was partly allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This is an appeal filed against the order dated 30-092025 passed by Addl/JCIT(A), Agra for assessment year 2011-12.
2. The grounds of appeal are as under:-
“1. The Learned CIT-Appeals, (NFAC) has erred in law and facts in confirming the addition of Rs. 9,19,375/- out of short term capital gain as the same has been added in the returned income without application of mind.
2. The Learned CIT-Appeals, (NFAC) has erred in law and facts in confirming the addition of Rs. 75,000/- claimed as deduction under section 80C of the Income Tax Act, 1961. The fact that the receipts are available with the appellant and the same may be allowed as deduction.
3. The Learned CIT-Appeals, (NFAC) has erred in law and facts in confirming the addition of cash deposit of Rs. 5,10,000/-into the bank account were out of explained source and hence the same may be allowed and be deleted now.
4. The Learned CIT-Appeals, (NFAC) has rejected the admission of additional evidences under Rule 46A which are relevant in deciding the appeal which is against the principle of natural justice.
5. The order passed by the Learned CIT-Appeals, (NFAC) has erroneous as there were three grounds of appeal and all the grounds were separate. However, at the time of passing the order the Learned CIT-Appeals, (NFAC) has not mentioned all the grounds and confirmed the addition in one ground only without any mention of submission by the appellant with regard to other 2 grounds.
A rectification request has been filed on 15.11.2025 having reference number 571355800151125.
6. Your appellant prays to add, amend, alter, modify or delete any grounds of appeal at the time of hearing.”
3. The assessee did not file return of income for the year under consideration. As per the AIR information, it was seen that the assessee had sold immoveable property at Rs. 37,33,200/- registered in Sub-registrar Office, Anand on 05-082010 and did not file his return of income for the relevant assessment year i.e. A.Y. 2011-12. After recording the reasons for reopening the case and availing prior permission, the assessee’s case was reopened. Notice u/s. 148 was issued on 2703-2018 which was duly served upon the assessee. In response to the notice, the assessee filed return of income on 13-12-2018 declaring income of Rs. 1,47,950/- and offered the same under the head capital gains being short term capital gain on full consideration of Rs. 18,66,750/- reducing the cost of acquisition of Rs. 12,97,375/- and cost of improvement of Rs.3,50,000/-. The assessee furnished its submissions and after taking cognizance of the same, the Assessing Officer held that the assessee had earned the short term capital gain of Rs. 11,38,750/- as against the short term capital gain offered by the assessee that of Rs. 2,19,375/-. Therefore, the difference of Rs. 9,19,375/- was added to the assessee’s income as on money. In regard to assessee’s claim u/s. 80C of the Act, the Assessing Officer made disallowance of Rs. 75,000/- thereby observing that the assessee has not shown the receipts supporting the said claim and it is only a guess work. The Assessing Officer also made addition of Rs. 5,10,000/- respect of cash deposits in bank account u/s. 69A of the Act.
4. The assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
5. The ld. A.R. submitted that the CIT(A) has not considered the details filed before the appellate authority being the additional evidences and therefore the matter may be remand back to the file of the Assessing Officer for proper verification of the details and adjudicate the matter accordingly.
6. The ld. D.R. relied upon the assessment order and the order of the CIT(A).
7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(A) has not considered the additional evidence submitted by the assessee. Therefore, it will be appropriate to remand back this matter to the Assessing Officer for proper verification of these documents/details and adjudicate the issues as per Income Tax Act. The assessee be given opportunity of hearing by following principles of natural justice.
8. In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 03-03-2026
