" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 2289/AHD/2025 (Assessment Year: 2017-18) Aatmiya Indane Gf-8, Keshav Complex, Gidc Cross Road, Makarpura Road, Maneja, Vadodara-390010, Gujarat [PAN : ABGFA7495L] Vs. The ITO, Ward-1(2)(1) Vadodara-390007 (Appellant) .. (Respondent) Appellant represented by : Shri Sanket Bakshi, AR Respondent represented by: Shree Veerbadram Vislavath, Sr.DR Date of Hearing 02.07.2026 Date of Pronouncement 17 .07.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT: - This appeal has been filed by the Assessee against the order dated 18.09.2025 passed by the Ld. Commissioner of Income Tax (Appeals) ADDL/JCIT (A)-4, Chennai (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2017-18. 2. The assessee has raised following grounds of appeal:- “1. The learned Commissioner of Income Tax Appeals, NFAC [\"the CIT(A)\"] and the learned Income Tax Officer, Ward 1(1)(1), Vadodara (\"the AO\") erred in law and in fact determining an amount of Rs.4,03,973/- as unexplained and making addition u/s. 69A of the Income Tax Act, 1961 (\"the Act\") 2. The learned CIT (A) and the learned AO erred in fact and in law in computing a revised total income only on the basis of assumption without considering the cash withdrawals made by the Appellant which were subsequently deposited by the appellant. Printed from counselvise.com ITA No. 2289/AHD/2025 AY 2017-18 Aatmiya Indane Vs. The ITO - 2– 3. The learned CIT(A) and the learned AO erred in fact and in law in considering the amount of cash deposited in the bank account as Rs.2,18,80,989/- as against Rs.2,18,08,989/- thereby increasing the addition by Rs. 72,000/-. 4. Without prejudice to the above, the learned CIT(A) and the learned AO erred in fact and in law in computing total income by considering only the gross deposits and not net deposits after considering output VAT and Deposits of cash withdrawal. Other Grounds 5. The learned CIT(A) and the learned AO erred in fact and in law in initiating penalty proceedings u/s 271AAC of the Act. 6. The learned CIT(A) and the learned AO erred in fact and in law initiating penalty proceedings u/s 271B of the Act. 7. The learned CIT(A) and the learned AO erred in fact and in Law in charging interest u/s 234A of the Act. 8. The learned CIT(A) and the learned AO erred in fact and in Law in charging interest u/s 234B of the Act. 9. The learned CIT(A) and the learned AO erred in fact and in Law in charging interest u/s 234C of the Act. 10. The Appellant craves the right to add, to alter, to substitute, delete or modify all or any of the above grounds of Appeal.” 3. The brief facts of the case are that assessee is a Partnership Firm having PAN ABGFA7495L engaged in the business of distribution LPG cylinders at GF-8 Keshav Complex, GIDC Cross Road Makarpura Road, Maneja, Vadodara-390010, Gujarat, India. The Appellant for the year under consideration has filed the return of income u/s. 139(1) of the Act. The assessee was in receipt of notice u/s 143(2) dated 13.08.2018 and notice u/s 142(1) dated 13.08.2019 directing assessee to submit the details of cash deposits in bank account of the firm held with Central Bank of India amounting to Rs.2,16,16,479/- during FY 2016-17 which included cash deposit of Rs.43,19,575/-during the demonetization period. Printed from counselvise.com ITA No. 2289/AHD/2025 AY 2017-18 Aatmiya Indane Vs. The ITO - 3– The assessee in regard to the notice submitted that the cash deposit pertained to the sales made from LPG Cylinders during the year under consideration wherein majority of the sales was in cash. Furthermore, the assessee also submitted the copy of the VAT returns in order to establish the nature of the business activities carried out by the assessee. The Assessing Officer during the course of Assessment Proceedings verified the VAT returns and the Cash Deposits made to the bank account of the assessee and computed that the difference of the VAT return and Cash Deposits to the bank account being Rs.9,16,626/- (Rs.2,18,08,969-Rs.2,08,92,363). Furthermore from the said difference an amount of Rs.199,800/- considered as explained however an amount of Rs.122,000/- was deducted from the total income and an addition of Rs.7,94,626/- was made to the total income therefore increasing the total income to Rs.8,24,430/- 4. Aggrieved by the Assessment Order, the assessee filed an appeal before the Ld.CIT(A), who partly allowed the appeal of the assessee by observing as follows: “…The assessee is engaged in distribution of LPG cylinder of Indian Oil Corporation and had deposited cash during demonetisation period. It is seen that the total cash deposited during FY 2016-17 was Rs.2,16,16,479 out of which Rs. 43,19,575 was deposited during the period between 08.11.2026 to 30.12.2016. The assessee has shown sales of Rs. 2,14,77,016/-during the FY in it's ITR and VAT sales of Rs.2,08,92,363/- during the same year. On perusal of the bank account of the assessee, it is seen that the total credits to the bank account is Rs. 2,18,80,989/- out of which cash entries are Rs.2,16,16,479. The assessee itself has stated in it's submissions during assessment proceedings that Rs.2,64,510 pertains to sales and the remaining amount of Rs.2,16,16,479 is cash deposit. Hence, on perusal of the books of accounts of the assessee and the above financials, it can be ascertained that the total sales of the assessee cannot Printed from counselvise.com ITA No. 2289/AHD/2025 AY 2017-18 Aatmiya Indane Vs. The ITO - 4– exceed Rs. 2,18,80,989/- and the total sales, which the assessee has offered to tax is only Rs. 2,14,77,016/-. The AO in the assessment order has already considered the expenses incurred by the assessee such as installation charges, deposit cylinders, administrative it cylinders, a charges while finalising the assessment. The addition should be u/s 69A of the Act because the Section is applicable when the assessee is found to be the owner of assets which are not recorded in his books of accounts. The assessee has furnished books of accounts but it is clear that the assessee should have accounted sources of income to justify it's cash deposits irrespective of whether it has maintained books of accounts or not. VAT sales can give an indication but since, all the sales may not get covered under VAT, it would not be the final yardstick to assess the unaccounted income of the assessee. Therefore, the excess credits in the bank account compared to the sales shown in ITR (Rs. 2,18,80,989/- Rs. 2,14,77,016/- 4,03,973) is the unaccounted income of the assessee. The AO is directed to recompute the total income of the assessee based on the above calculation. Based on the above discussions, the ground of the assessee is partly allowed…” 5. The Ld. Counsel for the assessee submitted that Ld. CIT(A) without considering the submissions of the assessee in proper perspective merely considered that the difference of the cash deposited to the bank account and the turnover as reported in the ITR as the unexplained. Therefore, an amount of Rs.4,03,973/- was determined as unexplained u/s. 69A of the Act. It was further submitted that the Ld.CIT(A) has not duly considered the submissions made by the assessee in proper perspective. The assessee has also submitted cash deposit statement which is as follows: Printed from counselvise.com ITA No. 2289/AHD/2025 AY 2017-18 Aatmiya Indane Vs. The ITO - 5– 6. Heard the argument of both the parties and perused the material available on record. 6. We have heard the rival submissions and perused the material available on record. We find that the learned CIT(A) sustained the addition of Rs.4,03,973/- merely on the basis of the difference between the bank credits and the turnover Printed from counselvise.com ITA No. 2289/AHD/2025 AY 2017-18 Aatmiya Indane Vs. The ITO - 6– disclosed in the return of income, without properly appreciating the assessee's explanation that the cash deposits represented business receipts and redeposit of earlier cash withdrawals. We further observe that there is also an apparent discrepancy in the figure of cash deposits considered by the lower authorities. In the absence of any material to establish that the impugned amount represented unexplained money within the meaning of section 69A of the Act, the addition is not sustainable. Accordingly, we direct the Assessing Officer to delete the addition of Rs.4,03,973/-. Consequently, the grounds raised by the assessee are allowed. 8. In the result, the appeal filed by the assessee is allowed. The order pronounced in the open Court on 17.07.2026. Sd/- Sd/- Sd/- Sd/- (RAHUL CHAUDHARY) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 17.07.2026 आदेश की Ůितिलिप अŤेिषत / Copy of the Order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent. 3. संबंिधतआयकरआयुƅ/ Concerned CIT 4. आयकरआयुƅ(अपील) /The CIT(A)- 5. िवभागीयŮितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाडŊफाईल /Guard file. आदेशानुसार/ BY ORDER, True Copy सहायकपंजीकार (Dy./Asstt. Registrar) आयकरअपीलीयअिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "