IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील स.ं /ITA No.849/SRT/2024 Assessment Year: (2017-18)

(Physical Hearing)

The ITO, Vs. Lalit Vanarsibhai Patel, Ward - 3(2)(9). 3/4, Navdurga Nagar Society, Surat Nr. Chowpati Main Road, Nana Varachha - 395006 èथायीलेखासं./जीआइआरसं./PAN/GIR No: CELPP8445K (Appellant) (Respondent)

Appellant by Shri Rasesh Shah, CA Respondent by Shri Mukesh Jain, Sr. DR Date of Hearing 04/02/2025 Date of Pronouncement 30/04/2025 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM:

This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 13.06.2024 by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2017-18.

2. The grounds of appeal raised by the revenue are as under:

“1. Whether on the facts and circumstances and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.1,69,10,000/- made on account of unexplained cash credits within the meaning of section 69A of the Act as the assessee not produced any cogent evidences to prove that the deposits made in the Bank accounts represent the business receipts.

2. Whether on the facts and circumstances of the case and in, the learned CIT(A) has erred in deleting the addition of the unexplained cash deposit made by the Assessing officer u/s. 69A of the Act even though as per the provisions of the said section onus to explain the sources of the such cash deposited in the bank accounts are on the assessee.

3. Whether on the facts and circumstances of the case and in law, the learned CIT(A) has erred in deleting the addition made of Rs.1,03,11,121/- by the AO u/s 68 of the Act on account of failure on the part of the assessee to establish the sources of the repayment of unsecured loans during the year under reference, however, he has not considered that the assessee could not substantiate the sources of the re-payment of said unsecured loan along with supporting evidences at the satisfaction of the AO.

4. On the basis of the facts and circumstances of the case and in law, the Ld.

CIT(A) ought to have upheld the order of the Assessing Officer.

5. It is therefore prayed that the order of Ld. CIT(A) may kindly be set aside that of the Assessing Officer be restored.

6. The appellant craves leave to add, alter, amend and/or withdraw any ground of appeal either before or during the course of hearing of the appeal.”

3. The facts of the case are that the assessee filed his return of income on 06.09.2017 for AY.2017-18, declaring total income of Rs.10,43,560/-. The assessee is a retail dealer of TVS two-wheeler vehicles and had derived income from the said business during the year under consideration. The case was selected for complete scrutiny under CASS. Various notices were served upon the assessee. The Assessing Officer (in short, ‘AO’) also issued a show cause notice dated 17.12.2019 and asked assessee as to why additions of cash deposit of Rs.1,69,10,000/- during demonetization period and repayment of loan of Rs.1,03,11,221/- should not be made to the total income for the subject year. The assessee filed reply dated 20.12.2019, which has not been discussed in the assessment order. The AO has, however, concluded that assessee failed to submit details of cash sales including purchase register, ledger of purchases etc. Therefore, source of cash deposit is not explained and hence, he added Rs.1,69,10,000/- u/s 69A of the Act. As regards the addition of Rs.1,03,11,221/- towards repayment of unsecured loan to various parties, the assessee had submitted that the source was out of credits received against sales. However, the AO added repayment of unsecured loans of Rs.1,03,11,221/- to various parties by observing that source of the repayment has not been explained with documentary evidence. In the result, both the a