UDAY GHANSHYAM NAIK ,MUMBAI vs. ITO CIRCLE 42(1)(1), MUMBAI

Act disregarding the categorical finding by the learned ITO in the egarding the categorical finding by the learned ITO in the egarding the categorical finding by the learned ITO in the Remand Report that the details of the alleged unexplained loans Remand Report that the details of the alleged unexplained loans Remand Report that the details of the alleged unexplained loans were test checked and found to be correct. were test checked and found to be correct. (1.2) On the facts and circumstances and in law, the learned NFAC (1.2) On the facts and circumstances and in law, the learned NFAC (1.2) On the facts and circumstances and in law, the learned NFAC failed to appreciate tha failed to appreciate that the Appellant had completely discharged t the Appellant had completely discharged the initial onus and satisfied the learned ITO in substantiating the the initial onus and satisfied the learned ITO in substantiating the the initial onus and satisfied the learned ITO in substantiating the genuineness of the alleged unexplained cash credits and hence, it genuineness of the alleged unexplained cash credits and hence, it genuineness of the alleged unexplained cash credits and hence, it ought to have been deleted. ought to have been deleted. (1.3) Without prejudice to the above, on the facts (1.3) Without prejudice to the above, on the facts (1.3) Without prejudice to the above, on the facts and circumstances, completely disregarding the categorical finding and circumstances, completely disregarding the categorical finding and circumstances, completely disregarding the categorical finding and conclusion in Remand Report dated 08/01/2024, the learned conclusion in Remand Report dated 08/01/2024, the learned conclusion in Remand Report dated 08/01/2024, the learned NFAC, inter-alia, erred in holding that the alleged unexplained alia, erred in holding that the alleged unexplained alia, erred in holding that the alleged unexplained cash cash cash credits credits credits were were were not not not satisfactorily satisfactorily satisfactorily explained explained explained their their their creditworthiness and genuineness of the transactions merely hiness and genuineness of the transactions merely hiness and genuineness of the transactions merely alleging that the Appellant failed to give details of the source of alleging that the Appellant failed to give details of the source of alleging that the Appellant failed to give details of the source of lending. (1.4) Without prejudice to the main contention, the learned NFAC (1.4) Without prejudice to the main contention, the learned NFAC (1.4) Without prejudice to the main contention, the learned NFAC ought to have appreciated before confirming the alleged additio ought to have appreciated before confirming the alleged additio ought to have appreciated before confirming the alleged addition that the learned ITO had failed in his duties before making any that the learned ITO had failed in his duties before making any that the learned ITO had failed in his duties before making any addition as such because during the impugned assessment addition as such because during the impugned assessment addition as such because during the impugned assessment proceedings the Appellant hadcategorically requested, vide letter proceedings the Appellant hadcategorically requested, vide letter proceedings the Appellant hadcategorically requested, vide letter dated 08/03/2021 to the learned ITO to issue notice u/s. 133(6) dated 08/03/2021 to the learned ITO to issue notice u/s. 133(6) dated 08/03/2021 to the learned ITO to issue notice u/s. 133(6) to the respective lenders. he respective lenders. (1.5) Without prejudice to the main contention that the initial onus (1.5) Without prejudice to the main contention that the initial onus (1.5) Without prejudice to the main contention that the initial onus was discharged by the Appellant, with reference to the was discharged by the Appellant, with reference to the was discharged by the Appellant, with reference to the explanation recorded at para f' in page no. 3 of the impugned explanation recorded at para f' in page no. 3 of the impugned explanation recorded at para f' in page no. 3 of the impugned appellate order, the learned NFAC failed to app appellate order, the learned NFAC failed to appreciate that the reciate that the Appellant was not given fair/sufficient & proper opportunity to Appellant was not given fair/sufficient & proper opportunity to Appellant was not given fair/sufficient & proper opportunity to submit the requisite details and explanation i.r.t. the Show submit the requisite details and explanation i.r.t. the Show submit the requisite details and explanation i.r.t. the Show- cause Notice dated 24/09/2021 as it was issued calling upon to submit Notice dated 24/09/2021 as it was issued calling upon to submit Notice dated 24/09/2021 as it was issued calling upon to submit and explain the details by the date 27/09/2 and explain the details by the date 27/09/2021 which was, 021 which was, apparently, insufficient time and hence, in these circumstances it apparently, insufficient time and hence, in these circumstances it apparently, insufficient time and hence, in these circumstances it was necessary to submit additional details, documents and was necessary to submit additional details, documents and was necessary to submit additional details, documents and explanations during the appellate proceedings. explanations during the appellate proceedings. (1.6) On the facts and circumstances and in law, the Appellant (1.6) On the facts and circumstances and in law, the Appellant (1.6) On the facts and circumstances and in law, the Appellant prays that the alleged addition of Rs.4,18,82,630/ that the alleged addition of Rs.4,18,82,630/- u/s. 68 of the u/s. 68 of the Act may be deleted mainly because the learned ITO has Act may be deleted mainly because the learned ITO has Act may be deleted mainly because the learned ITO has considered the details, documents and explanation and found to considered the details, documents and explanation and found to considered the details, documents and explanation and found to be correct in the Remand Proceedings. be correct in the Remand Proceedings. (2) ADDITION OF RS. 20,68,736/ (2) ADDITION OF RS. 20,68,736/- BEING GROSS AGRICULTURE GROSS AGRICULTURE RECEIPT AS UNEXPLAINED CASH CREDIT U/S. 68 RECEIPT AS UNEXPLAINED CASH CREDIT U/S. 68-

Sri Uday Ghanshyam Naik 4 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025

(2.1) On the facts and circumstances, the learned NFAC erred in (2.1) On the facts and circumstances, the learned NFAC erred in (2.1) On the facts and circumstances, the learned NFAC erred in confirming the alleged amount of gross agricultural receipts as confirming the alleged amount of gross agricultural receipts as confirming the alleged amount of gross agricultural receipts as unexplained credit u/s. 68 of the Act without appreciating that th unexplained credit u/s. 68 of the Act without appreciating that th unexplained credit u/s. 68 of the Act without appreciating that the Appellant had dully explained with reference to the details and Appellant had dully explained with reference to the details and Appellant had dully explained with reference to the details and documents in support and substantiated the agricultural receipts documents in support and substantiated the agricultural receipts documents in support and substantiated the agricultural receipts during the year under consideration. during the year under consideration. (2.2) On the facts and circumstances the Appellant prays that the (2.2) On the facts and circumstances the Appellant prays that the (2.2) On the facts and circumstances the Appellant prays that the claim of the Appellant claim of the Appellant may be accepted and the alleged addition of may be accepted and the alleged addition of Rs. 20,68,736/ Rs. 20,68,736/- may be deleted and accepted as exempted may be deleted and accepted as exempted agricultural receipts. agricultural receipts. (3) ADDITION OF RS. 12,09,809/ (3) ADDITION OF RS. 12,09,809/- BEING EXPENDITURE ON BEING EXPENDITURE ON AGRICULTURAL ACTIVITIES AS UNEXPLAINED CASH CREDIT AGRICULTURAL ACTIVITIES AS UNEXPLAINED CASH CREDIT AGRICULTURAL ACTIVITIES AS UNEXPLAINED CASH CREDIT U/S. 69C – (3.1) On the fact (3.1) On the facts and circumstances, the learned NFAC erred in s and circumstances, the learned NFAC erred in confirming the disallowance of the expenditure of Rs. 12,09,809/ confirming the disallowance of the expenditure of Rs. 12,09,809/ confirming the disallowance of the expenditure of Rs. 12,09,809/- which were incurred & claimed in performing agricultural activities which were incurred & claimed in performing agricultural activities which were incurred & claimed in performing agricultural activities disregarding the categorical finding by the learned ITO in the disregarding the categorical finding by the learned ITO in the disregarding the categorical finding by the learned ITO in the Remand proce Remand proceedings. (3.2) On the facts and circumstances, the learned NFAC perversely (3.2) On the facts and circumstances, the learned NFAC perversely (3.2) On the facts and circumstances, the learned NFAC perversely erred in confirming the alleged addition conveniently ignoring the erred in confirming the alleged addition conveniently ignoring the erred in confirming the alleged addition conveniently ignoring the categorical recording & finding of the learned ITO in Remand categorical recording & finding of the learned ITO in Remand categorical recording & finding of the learned ITO in Remand Proceedings that the Appellant had submitted the relev Proceedings that the Appellant had submitted the relev Proceedings that the Appellant had submitted the relevant details and the same were test checked and found to be correct. and the same were test checked and found to be correct. and the same were test checked and found to be correct. (3.3) On the facts and circumstances, the Appellant prays that the (3.3) On the facts and circumstances, the Appellant prays that the (3.3) On the facts and circumstances, the Appellant prays that the alleged addition/disallowance may be deleted/allowed & oblige. alleged addition/disallowance may be deleted/allowed & oblige. alleged addition/disallowance may be deleted/allowed & oblige. (4) ADDITION OF RS.20,000/ (4) ADDITION OF RS.20,000/- OUT OF ORIGINAL ADDITION OF OUT OF ORIGINAL ADDITION OF 8,42,94,769/7 AS UNEXPLAINED EXPENDITURE U/S. 69C 42,94,769/7 AS UNEXPLAINED EXPENDITURE U/S. 69C – 42,94,769/7 AS UNEXPLAINED EXPENDITURE U/S. 69C (4.1) On the facts and circumstances and in law, the learned NFAC (4.1) On the facts and circumstances and in law, the learned NFAC (4.1) On the facts and circumstances and in law, the learned NFAC erred in confirming the alleged of Rs. 20,000/ erred in confirming the alleged of Rs. 20,000/- as deemed income as deemed income by virtue of the section 60 of the Act holding it as forming part of by virtue of the section 60 of the Act holding it as forming part of by virtue of the section 60 of the Act holding it as forming part of the matured policy amount of Rs.80,000/ tured policy amount of Rs.80,000/- pertaining to the pertaining to the Appellant's daughter Pooja Naik merely because the amount of Appellant's daughter Pooja Naik merely because the amount of Appellant's daughter Pooja Naik merely because the amount of premium was paid by the Appellant, premium was paid by the Appellant, (4.2) On the facts and circumstances and in law, the Appellant (4.2) On the facts and circumstances and in law, the Appellant (4.2) On the facts and circumstances and in law, the Appellant prays that the alleged addition of Rs.20,000 prays that the alleged addition of Rs.20,000/- as deemed income as deemed income by virtue of section 60 of the Act may be deleted as it was by virtue of section 60 of the Act may be deleted as it was by virtue of section 60 of the Act may be deleted as it was uncalled and unjustified. Revenue’s Ground Revenue’s Ground Sri Uday Ghanshyam Naik 5 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025

2. On the facts and circumstances of the case and in law, the Ld. 2. On the facts and circumstances of the case and in law, the Ld. 2. On the facts and circumstances of the case and in law, the Ld. CIT (A) is erred in deleting the addition of Rs. 8,42,74,769/ CIT (A) is erred in deleting the addition of Rs. 8,42,74,769/ CIT (A) is erred in deleting the addition of Rs. 8,42,74,769/- by merely relying on the report of the AO without examining the fact elying on the report of the AO without examining the fact elying on the report of the AO without examining the fact that sources of the re that sources of the re-payment of loan/ advances were never payment of loan/ advances were never examined during remund proceeding. examined during remund proceeding.

3.1 The assessee, being a partner in several partnership firms The assessee, being a partner in several partnership firms The assessee, being a partner in several partnership firms engaged in construction activity, is also the sole proprietor of M/s engaged in construction activity, is also the sole proprietor of engaged in construction activity, is also the sole proprietor of G.N. Construction, which is likewise engaged in real estate , which is likewise engaged in real estate , which is likewise engaged in real estate development. During the scrutiny proceedings, the Assessing development. During the scrutiny proceedings, the Assessing development. During the scrutiny proceedings, the Assessing Officer Officer Officer (“AO”) (“AO”) (“AO”) noticed noticed noticed unsecured unsecured unsecured loans loans loans aggregating aggregating aggregating to to to ₹4,18,82,630/– received during the year. The assessee merely received during the year. The assessee merely received during the year. The assessee merely furnished confirmations of accounts wi furnished confirmations of accounts without any cogent evidence thout any cogent evidence substantiating the identity, creditworthiness, and genuineness of substantiating the identity, creditworthiness, and genuineness of substantiating the identity, creditworthiness, and genuineness of Sri Uday Ghanshyam Naik 6 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025 the creditors. The AO therefore treated the said loans as the creditors. The AO therefore treated the said loans as the creditors. The AO therefore treated the said loans as unexplained cash credits within the meaning of Section 68 of the unexplained cash credits within the meaning of Section 68 of the unexplained cash credits within the meaning of Section 68 of the Act.

3.2 The AO further made addition of The AO further made addition of ₹8,42,94,776/ 8,42,94,776/– representing squared-off loans during the year, and another addition of off loans during the year, and another addition of off loans during the year, and another addition of ₹20,68,736/– on account of alleged agricultural receipts, observing on account of alleged agricultural receipts, observing on account of alleged agricultural receipts, observing that the assessee had failed to substantiate the claim of having that the assessee had failed to substantiate the claim of having that the assessee had failed to substantiate the claim of having earned earned agricultural agricultural income. income. The The agricultural agri cultural expenses expenses of of ₹12,09,809/– were also disallowed as unexplained expenditure were also disallowed as unexplained expenditure were also disallowed as unexplained expenditure under Section 69C. Accordingly, the total income of the assessee under Section 69C. Accordingly, the total income of the assessee under Section 69C. Accordingly, the total income of the assessee was assessed at ₹15,59,67,710/ 15,59,67,710/– under Section 143(3) of the Act under Section 143(3) of the Act vide order dated 29.09.2021. vide order dated 29.09.2021.

4.1 Nevertheless, the Ld. CIT(A), in the exercise of her discretion, Nevertheless, the Ld. CIT(A), in the exercise of her discretion, Nevertheless, the Ld. CIT(A), in the exercise of her discretion, transmitted the said documents to the AO for verification. The AO, transmitted the said documents to the AO for verification. The AO, transmitted the said documents to the AO for verification. The AO, however, conducted only a perfunctory and partial inquiry on a however, conducted only a perfunctory and partial inq however, conducted only a perfunctory and partial inq test-check basis and submitted a brief remand report. Relying upon check basis and submitted a brief remand report. Relying upon check basis and submitted a brief remand report. Relying upon this limited verification, the Ld. CIT(A) upheld the addition of this limited verification, the Ld. CIT(A) upheld the addition of this limited verification, the Ld. CIT(A) upheld the addition of Sri Uday Ghanshyam Naik 7 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025 ₹4,18,82,630/– under Section 68, observing that the lenders were under Section 68, observing that the lenders were under Section 68, observing that the lenders were bereft of financial capacity, that the transactio bereft of financial capacity, that the transactions were devoid of any ns were devoid of any commercial rationale, and that no interest had been paid thereon. commercial rationale, and that no interest had been paid thereon. commercial rationale, and that no interest had been paid thereon. Reliance was placed upon the judgment of the Hon’ble Supreme Reliance was placed upon the judgment of the Hon’ble Supreme Reliance was placed upon the judgment of the Hon’ble Supreme Court in Principal CIT (Central) Principal CIT (Central)-1 v. NRA Iron & Steel (P.) Ltd. 1 v. NRA Iron & Steel (P.) Ltd. [Civil Appeal No. 2463 of 2019, dated 05.0 Appeal No. 2463 of 2019, dated 05.03.2019], wherein the apex 3.2019], wherein the apex court reiterated that the onus lies squarely upon the assessee to court reiterated that the onus lies squarely upon the assessee to court reiterated that the onus lies squarely upon the assessee to establish the identity and creditworthiness of the creditor and the establish the identity and creditworthiness of the creditor and the establish the identity and creditworthiness of the creditor and the genuineness of the transaction. genuineness of the transaction. The relevant finding of ld CIT(A) is The relevant finding of ld CIT(A) is reproduced as under: under:

“However, on perusal of the evidences detailed above, it is However, on perusal of the evidences detailed above, it is However, on perusal of the evidences detailed above, it is observed that the income in ROI showed by these Loan observed that the income in ROI showed by these Loan observed that the income in ROI showed by these Loan providers is much less in comparison to the amount of loan providers is much less in comparison to the amount of loan providers is much less in comparison to the amount of loan provided by them. It raises a concern as to how a person can provided by them. It raises a concern as to how a person can provided by them. It raises a concern as to how a person can afford to lend the signi afford to lend the significant huge amount of his income unless ficant huge amount of his income unless it is the business of the person to lend the money. However, on it is the business of the person to lend the money. However, on it is the business of the person to lend the money. However, on perusal of confirmation of these accounts, submitted by the perusal of confirmation of these accounts, submitted by the perusal of confirmation of these accounts, submitted by the appellant, it is observed that no interest was paid on these appellant, it is observed that no interest was paid on these appellant, it is observed that no interest was paid on these loans. Therefore, it further ra loans. Therefore, it further raises a genuine concern as to why ises a genuine concern as to why any person would provide loan of significant amount in any person would provide loan of significant amount in any person would provide loan of significant amount in comparison to his/her income that too without charging any comparison to his/her income that too without charging any comparison to his/her income that too without charging any interest. Thus, the appellant has failed to justify the interest. Thus, the appellant has failed to justify the interest. Thus, the appellant has failed to justify the creditworthiness and financial capacity of the credit creditworthiness and financial capacity of the creditor and the or and the motive of the loan providers. Even the genuineness of these motive of the loan providers. Even the genuineness of these motive of the loan providers. Even the genuineness of these loans is not proved satisfactorily. loans is not proved satisfactorily. Even then the appellant has failed to submit any evidence for Even then the appellant has failed to submit any evidence for Even then the appellant has failed to submit any evidence for explaining the financial capacity of the creditors/ loan explaining the financial capacity of the creditors/ loan explaining the financial capacity of the creditors/ loan providers neither did he provi providers neither did he provide any details regarding interest de any details regarding interest paid on these loans nor could justify the nature of the amount paid on these loans nor could justify the nature of the amount paid on these loans nor could justify the nature of the amount named unsecured loans. It is noted that during the appeal named unsecured loans. It is noted that during the appeal named unsecured loans. It is noted that during the appeal proceedings, vide letter dated 08.12.2023, the appellant was proceedings, vide letter dated 08.12.2023, the appellant was proceedings, vide letter dated 08.12.2023, the appellant was specifically asked to give details of so specifically asked to give details of source of income of these urce of income of these creditors, also the details of TDS deducted and deposited in creditors, also the details of TDS deducted and deposited in creditors, also the details of TDS deducted and deposited in Govt. account on the interest payments to these creditors were Govt. account on the interest payments to these creditors were Govt. account on the interest payments to these creditors were called for. The appellant was asked to furnish these details on called for. The appellant was asked to furnish these details on called for. The appellant was asked to furnish these details on the basis of its TDS return and the bank acc the basis of its TDS return and the bank account statement ount statement

Sri Uday Ghanshyam Naik 8 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025 reflecting the payment of interest to these parties. The reflecting the payment of interest to these parties. The reflecting the payment of interest to these parties. The appellant has failed to provide any of these details called for appellant has failed to provide any of these details called for appellant has failed to provide any of these details called for during the appeal proceedings. Thus, the onus of proof has not during the appeal proceedings. Thus, the onus of proof has not during the appeal proceedings. Thus, the onus of proof has not been discharged by the appellant. Under section 68, it is been discharged by the appellant. Under section 68, it is been discharged by the appellant. Under section 68, it is primary onus of the assessee to prove the identity, primary onus of the assessee to prove the identity, primary onus of the assessee to prove the identity, creditworthiness and the genuineness of the transaction with creditworthiness and the genuineness of the transaction with creditworthiness and the genuineness of the transaction with the cash creditors claimed by him. In this case, the appellant the cash creditors claimed by him. In this case, the appellant the cash creditors claimed by him. In this case, the appellant has failed to prove satisfactorily the creditworthiness and has failed to prove satisfactorily the creditworthiness and has failed to prove satisfactorily the creditworthiness and genuineness of the genuineness of the transactions in respect of these parties/ transactions in respect of these parties/ creditors. 5.4 Further observations related to parties are as under: 5.4 Further observations related to parties are as under: 5.4 Further observations related to parties are as under: i. D.K. Enterprises: The Audit Report classified it as unsecured i. D.K. Enterprises: The Audit Report classified it as unsecured i. D.K. Enterprises: The Audit Report classified it as unsecured loan. Now the amount received as loan has been claimed as loan. Now the amount received as loan has been claimed as loan. Now the amount received as loan has been claimed as Sale Agreement receip Sale Agreement receipt. No clarification is on record from the t. No clarification is on record from the Tax Auditor. Genuineness not proved. Tax Auditor. Genuineness not proved. ii Harlalka Traders Pvt. Ltd. The appellant himself is disputing ii Harlalka Traders Pvt. Ltd. The appellant himself is disputing ii Harlalka Traders Pvt. Ltd. The appellant himself is disputing the amount mentioned in the ledger account of the party in his the amount mentioned in the ledger account of the party in his the amount mentioned in the ledger account of the party in his books. Further, the ITR reflects income of Rs. 1, books. Further, the ITR reflects income of Rs. 1,06,930/ 06,930/- only not sufficient to explain the creditworthiness. not sufficient to explain the creditworthiness. iii. Hum Developers Pvt. Ltd.: The ITR reflects Nil income. No iii. Hum Developers Pvt. Ltd.: The ITR reflects Nil income. No iii. Hum Developers Pvt. Ltd.: The ITR reflects Nil income. No interest has been paid to the creditor. Creditworthiness and interest has been paid to the creditor. Creditworthiness and interest has been paid to the creditor. Creditworthiness and genuineness not proved. genuineness not proved. iv. J. Tex: No interest payments to the indivi iv. J. Tex: No interest payments to the individual. No ITR filed. dual. No ITR filed. v. Kishor Vishnu Bhoir: No interest payment to this individual. v. Kishor Vishnu Bhoir: No interest payment to this individual. v. Kishor Vishnu Bhoir: No interest payment to this individual. The bank account balances show that they are very low and The bank account balances show that they are very low and The bank account balances show that they are very low and the account appears to be a conduit. No source of income the account appears to be a conduit. No source of income the account appears to be a conduit. No source of income given. given. given. The The The ITR ITR ITR gives gives gives a a a very very very nominal nominal nominal income. income. income. The The The creditworthiness and genuineness not proved. thiness and genuineness not proved. vi. Kishor Vishnu Bhoir HUF: No interest payment to this HUF. vi. Kishor Vishnu Bhoir HUF: No interest payment to this HUF. vi. Kishor Vishnu Bhoir HUF: No interest payment to this HUF. The bank account The bank account balances show that they are very low and balances show that they are very low and the account appears to be a conduit. The Karta has separately the account appears to be a conduit. The Karta has separately the account appears to be a conduit. The Karta has separately given loan. No source of income given. given loan. No source of income given. The ITR gives a very The ITR gives a very nominal income. The creditworthiness and genuineness not nominal income. The creditworthiness and genuineness not nominal income. The creditworthiness and genuineness not proved. vii. Mayur Gangadhar Mhatre: No interest payment to this vii. Mayur Gangadhar Mhatre: No interest payment to this vii. Mayur Gangadhar Mhatre: No interest payment to this individual. The bank individual. The bank account balances show that they are account balances show that they are very low and the account appears to be a conduit. No so very low and the account appears to be a conduit. No so very low and the account appears to be a conduit. No source of income given. The ITR gives a very nominal income. The income given. The ITR gives a very nominal income. The income given. The ITR gives a very nominal income. The creditworthiness and genuineness not proved.DIME creditworthiness and genuineness not proved.DIME

Sri Uday Ghanshyam Naik 9 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025 viii. Meena Manish Shah: No interest payment to this viii. Meena Manish Shah: No interest payment to this viii. Meena Manish Shah: No interest payment to this individual. The bank account balances show that they are individual. The bank account balances show that they are individual. The bank account balances show that they are very low and the account appears t very low and the account appears to be a conduit. No source of o be a conduit. No source of income given. The ITR gives a very nominal income. The income given. The ITR gives a very nominal income. The income given. The ITR gives a very nominal income. The creditworthiness and genuineness not proved. creditworthiness and genuineness not proved. ix. Panbai Tokershi Dedha: No interest payment to this ix. Panbai Tokershi Dedha: No interest payment to this ix. Panbai Tokershi Dedha: No interest payment to this individual. The bank account balances show that they are individual. The bank account balances show that they are individual. The bank account balances show that they are very low and th very low and the account appears to be a conduit. No source of e account appears to be a conduit. No source of income given. The ITR gives a very nominal income. The income given. The ITR gives a very nominal income. The income given. The ITR gives a very nominal income. The creditworthiness and genuineness not proved. creditworthiness and genuineness not proved. x. Pooja Uday Naik: No interest payment to this individual who x. Pooja Uday Naik: No interest payment to this individual who x. Pooja Uday Naik: No interest payment to this individual who is the daughter of the assessee. The bank acc is the daughter of the assessee. The bank account balances ount balances show that they are very low and the account appears to be a show that they are very low and the account appears to be a show that they are very low and the account appears to be a conduit. No source of income given. No ITR filed. The conduit. No source of income given. No ITR filed. The conduit. No source of income given. No ITR filed. The creditworthiness and genuineness not proved. creditworthiness and genuineness not proved. xi. Pravin Gangadhar Mhatre: No interest payment to this xi. Pravin Gangadhar Mhatre: No interest payment to this xi. Pravin Gangadhar Mhatre: No interest payment to this individual. The bank accou individual. The bank account balances show that they are nt balances show that they are very low and the account appears to be a conduit. No source of very low and the account appears to be a conduit. No source of very low and the account appears to be a conduit. No source of income given. The ITR gives a very nominal income. The income given. The ITR gives a very nominal income. The income given. The ITR gives a very nominal income. The creditworthiness and genuineness not proved. creditworthiness and genuineness not proved. xii. Priya Ratanshi Vora: No interest payment to this xii. Priya Ratanshi Vora: No interest payment to this xii. Priya Ratanshi Vora: No interest payment to this individual. The bank account balances show that they are al. The bank account balances show that they are al. The bank account balances show that they are very low and the account appears to be a conduit. No source of very low and the account appears to be a conduit. No source of very low and the account appears to be a conduit. No source of income given. The ITR gives a very nominal income. The income given. The ITR gives a very nominal income. The income given. The ITR gives a very nominal income. The creditworthiness and genuineness not proved. creditworthiness and genuineness not proved. xiii. Rashmi Dinesh Patil: No bank account g xiii. Rashmi Dinesh Patil: No bank account given. the account iven. the account appears to be a conduit. No source of income given. The ITR appears to be a conduit. No source of income given. The ITR appears to be a conduit. No source of income given. The ITR gives a very nominal income as compared to the loan amount. gives a very nominal income as compared to the loan amount. gives a very nominal income as compared to the loan amount. The creditworthiness and genuineness not proved. The creditworthiness and genuineness not proved. xiv. Sameer Malik: No interest payment to this individual. The xiv. Sameer Malik: No interest payment to this individual. The xiv. Sameer Malik: No interest payment to this individual. The bank account balances show that they are very low and the ccount balances show that they are very low and the ccount balances show that they are very low and the account appears to be a conduit. No source of income given. account appears to be a conduit. No source of income given. account appears to be a conduit. No source of income given. The ITR gives a very nominal income as compared to the loan The ITR gives a very nominal income as compared to the loan The ITR gives a very nominal income as compared to the loan amount. The creditworthiness and genuineness not proved. amount. The creditworthiness and genuineness not proved. amount. The creditworthiness and genuineness not proved. xv. Sequera Fabrics: No int xv. Sequera Fabrics: No interest payment to this individual. No erest payment to this individual. No source of income given. No ITR furnished. The creditworthiness source of income given. No ITR furnished. The creditworthiness source of income given. No ITR furnished. The creditworthiness and genuineness not proved. and genuineness not proved. xvi. Sunny Sanjay Dhangar: No interest payment to this xvi. Sunny Sanjay Dhangar: No interest payment to this xvi. Sunny Sanjay Dhangar: No interest payment to this individual. The bank account balances show that they are individual. The bank account balances show that they are individual. The bank account balances show that they are very low and the very low and the account appears to be a conduit. No source of account appears to be a conduit. No source of Sri Uday Ghanshyam Naik 10 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025 income given. The ITR gives a very nominal income as income given. The ITR gives a very nominal income as income given. The ITR gives a very nominal income as compared to the loan amount. The creditworthiness and compared to the loan amount. The creditworthiness and compared to the loan amount. The creditworthiness and genuineness not not proved. genuineness not not proved. xvii. Yasshodip Naik: No interest payment to this individual. xvii. Yasshodip Naik: No interest payment to this individual. xvii. Yasshodip Naik: No interest payment to this individual. The amount o The amount of credit balance is more than one crore. The bank f credit balance is more than one crore. The bank account balances show that they are very low and the account account balances show that they are very low and the account account balances show that they are very low and the account appears to be a conduit. No source of income given. The ITR appears to be a conduit. No source of income given. The ITR appears to be a conduit. No source of income given. The ITR gives a very nominal income as compared to the loan balance gives a very nominal income as compared to the loan balance gives a very nominal income as compared to the loan balance amount. The creditworthin amount. The creditworthiness and genuineness not proved. ess and genuineness not proved. xviii. Yogita Niloba Naik: No interest payment to this xviii. Yogita Niloba Naik: No interest payment to this xviii. Yogita Niloba Naik: No interest payment to this individual. No source of income given. The genuineness not individual. No source of income given. The genuineness not individual. No source of income given. The genuineness not proved. xix. Rajendra Sharma: No interest payment to this individual. xix. Rajendra Sharma: No interest payment to this individual. xix. Rajendra Sharma: No interest payment to this individual. No source of income given. The genuinene No source of income given. The genuineness not proved. ss not proved. xx. Arif Lalani: No interest payment to this individual. The xx. Arif Lalani: No interest payment to this individual. The xx. Arif Lalani: No interest payment to this individual. The amount of credit balance is more than 55 Lacs. The bank amount of credit balance is more than 55 Lacs. The bank amount of credit balance is more than 55 Lacs. The bank account balances show that they are very low and the account account balances show that they are very low and the account account balances show that they are very low and the account appears to be a conduit. No source of income given. The ITR appears to be a conduit. No source of income given. The ITR appears to be a conduit. No source of income given. The ITR gives a very nominal income as compared to the loan balance es a very nominal income as compared to the loan balance es a very nominal income as compared to the loan balance amount. The creditworthiness and genuineness not proved. amount. The creditworthiness and genuineness not proved. amount. The creditworthiness and genuineness not proved. xxi. Bhakti U Naik: No interest payment to this individual. The xxi. Bhakti U Naik: No interest payment to this individual. The xxi. Bhakti U Naik: No interest payment to this individual. The amount of credit balance is more than 94 Lacs. The bank amount of credit balance is more than 94 Lacs. The bank amount of credit balance is more than 94 Lacs. The bank account balances show account balances show that they are very low and the account that they are very low and the account appears to be a conduit. No source of income given. The ITR appears to be a conduit. No source of income given. The ITR appears to be a conduit. No source of income given. The ITR gives Nil income as compared to the loan balance amount. The gives Nil income as compared to the loan balance amount. The gives Nil income as compared to the loan balance amount. The creditworthiness and genuineness not proved. creditworthiness and genuineness not proved. xxii. Chhabra Associates: No interest payment to th xxii. Chhabra Associates: No interest payment to this creditor. is creditor. No ITR furnished. No source of income given. The explanation No ITR furnished. No source of income given. The explanation No ITR furnished. No source of income given. The explanation furnished by the appellant in his reply dated 12.12.2023 is furnished by the appellant in his reply dated 12.12.2023 is furnished by the appellant in his reply dated 12.12.2023 is not matching with its ledger accounts and Tax Auditor's not matching with its ledger accounts and Tax Auditor's not matching with its ledger accounts and Tax Auditor's Report. The amount of loan is not reflecting as an opening Report. The amount of loan is not reflecting as an opening Report. The amount of loan is not reflecting as an opening balance. The creditworthiness and genuineness not proved. . The creditworthiness and genuineness not proved. . The creditworthiness and genuineness not proved. xxiii. Dinesh H. Patil: No interest payment to this creditor. No xxiii. Dinesh H. Patil: No interest payment to this creditor. No xxiii. Dinesh H. Patil: No interest payment to this creditor. No source of income given. The ITR gives a very nominal income source of income given. The ITR gives a very nominal income source of income given. The ITR gives a very nominal income as compared to the loan balance amount. The creditworthiness as compared to the loan balance amount. The creditworthiness as compared to the loan balance amount. The creditworthiness and genuineness not and genuineness not proved. xxiv. Asanjo Amber: The assessee has only submitted death xxiv. Asanjo Amber: The assessee has only submitted death xxiv. Asanjo Amber: The assessee has only submitted death certificate. No other details submitted. The creditworthiness certificate. No other details submitted. The creditworthiness certificate. No other details submitted. The creditworthiness and genuineness not proved. and genuineness not proved.

Sri Uday Ghanshyam Naik 11 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025 xxv. Adilon Synthetics Pvt. Ltd. No confirmation of account xxv. Adilon Synthetics Pvt. Ltd. No confirmation of account xxv. Adilon Synthetics Pvt. Ltd. No confirmation of account furnished. The letter issued by the ass furnished. The letter issued by the assessee is self serving essee is self serving and not acknowledged by the creditor. The creditworthiness and not acknowledged by the creditor. The creditworthiness and not acknowledged by the creditor. The creditworthiness and genuineness not proved. and genuineness not proved. xxvi. Anjali S. Malik: No confirmation of account furnished. No xxvi. Anjali S. Malik: No confirmation of account furnished. No xxvi. Anjali S. Malik: No confirmation of account furnished. No bank statement provided. No interest payment reflected. The bank statement provided. No interest payment reflected. The bank statement provided. No interest payment reflected. The creditworthiness and ge creditworthiness and genuineness not proved. xxv. Gautam Silk Mills: No confirmation of account furnished. xxv. Gautam Silk Mills: No confirmation of account furnished. xxv. Gautam Silk Mills: No confirmation of account furnished. The letter issued by the assessee is self serving and not The letter issued by the assessee is self serving and not The letter issued by the assessee is self serving and not acknowledged by the creditor. The creditworthiness and acknowledged by the creditor. The creditworthiness and acknowledged by the creditor. The creditworthiness and genuineness not proved. genuineness not proved. xxvi. Osaka Synthetics Pvt. Ltd.: N xxvi. Osaka Synthetics Pvt. Ltd.: No confirmation of account o confirmation of account furnished. The letter issued by the assessee is self serving furnished. The letter issued by the assessee is self serving furnished. The letter issued by the assessee is self serving and not acknowledged by the creditor. The creditworthiness and not acknowledged by the creditor. The creditworthiness and not acknowledged by the creditor. The creditworthiness and genuineness not proved. and genuineness not proved. xxvii. Rahul Dyeing & Printing Pvt Ltd.: No confirmation of xxvii. Rahul Dyeing & Printing Pvt Ltd.: No confirmation of xxvii. Rahul Dyeing & Printing Pvt Ltd.: No confirmation of account furnished. The account furnished. The letter issued by the assessee is self letter issued by the assessee is self serving serving serving and and and not not not acknowledged acknowledged acknowledged by by by the the the creditor. creditor. creditor. The The The creditworthiness and genuineness not proved. creditworthiness and genuineness not proved. xxviii. xxviii. xxviii. Roshan Roshan Roshan Maloo: Maloo: Maloo: No No No documents documents documents furnished. furnished. furnished. No No No confirmation of account. The identity creditworthiness and confirmation of account. The identity creditworthiness and confirmation of account. The identity creditworthiness and genuineness no genuineness not proved. Considering the above facts, I am of the considered opinion Considering the above facts, I am of the considered opinion Considering the above facts, I am of the considered opinion that the assessee appellant has failed to satisfactorily explain that the assessee appellant has failed to satisfactorily explain that the assessee appellant has failed to satisfactorily explain / / / justify justify justify with with with documentary documentary documentary evidence, evidence, evidence, the the the identity, identity, identity, creditworthiness and genuineness of the transactions in creditworthiness and genuineness of the transactions in creditworthiness and genuineness of the transactions in respect of all respect of all the creditors discussed above. Therefore, the the creditors discussed above. Therefore, the Assessing Officer was justified in making the addition of Rs. Assessing Officer was justified in making the addition of Rs. Assessing Officer was justified in making the addition of Rs. 4,18,82,630/ 4,18,82,630/- u/s 68 of the I.T. Act. 5.5 In the case of Principal Commissioner of Income 5.5 In the case of Principal Commissioner of Income 5.5 In the case of Principal Commissioner of Income-tax (Central)-1 v.NRA Iron & Steel (P.) Ltd. in CIVIL APP 1 v.NRA Iron & Steel (P.) Ltd. in CIVIL APPEAL NO. 1 v.NRA Iron & Steel (P.) Ltd. in CIVIL APPEAL NO. 2463 OF 2019 on MARCH 5, 2019 the Hon'ble Soupreme Court 2463 OF 2019 on MARCH 5, 2019 the Hon'ble Soupreme Court 2463 OF 2019 on MARCH 5, 2019 the Hon'ble Soupreme Court held that:  "As per settled law, the onus is on the assessee to "As per settled law, the onus is on the assessee to "As per settled law, the onus is on the assessee to establish by cogent evidence the genuineness of the establish by cogent evidence the genuineness of the establish by cogent evidence the genuineness of the transaction, and creditworthiness of the investors under transaction, and creditworthiness of the investors under transaction, and creditworthiness of the investors under section 68. section 68.  The ass The assessee is expected to establish to the satisfaction essee is expected to establish to the satisfaction of the Assessing Officer: of the Assessing Officer:

Sri Uday Ghanshyam Naik 12 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025

 Proof of identity of the creditors; Proof of identity of the creditors;  Capacity of creditors to advance money; and Capacity of creditors to advance money; and  Genuineness of transaction" Genuineness of transaction" With respect to the issue of genuineness of transaction, it is for With respect to the issue of genuineness of transaction, it is for With respect to the issue of genuineness of transaction, it is for the assessee to prove by cogent and credible evidence, that assessee to prove by cogent and credible evidence, that assessee to prove by cogent and credible evidence, that the the the investments investments investments made made made in in in share share share capital capital capital are are are genuine genuine genuine borrowings, since the facts are exclusively within the borrowings, since the facts are exclusively within the borrowings, since the facts are exclusively within the assessee's knowledge. Merely, proving the identity of the assessee's knowledge. Merely, proving the identity of the assessee's knowledge. Merely, proving the identity of the investors does not discharge the onus investors does not discharge the onus of the assessee, if the of the assessee, if the capacity or credit capacity or credit-worthiness has not been established." worthiness has not been established." In the case of C.V Ravi v. Income In the case of C.V Ravi v. Income-tax Officer Assessing Officer tax Officer Assessing Officer held that said loan received by assessee was bogus and, held that said loan received by assessee was bogus and, held that said loan received by assessee was bogus and, accordingly, made additions under section 68 to income accordingly, made additions under section 68 to income accordingly, made additions under section 68 to income of assesse. High Court also held that since assessee had failed assesse. High Court also held that since assessee had failed assesse. High Court also held that since assessee had failed to produce any confirmation from said alleged creditor ARC or to produce any confirmation from said alleged creditor ARC or to produce any confirmation from said alleged creditor ARC or produce its owner in person for cross produce its owner in person for cross-examination and also examination and also failed to establish identity of creditor and genuineness of failed to establish identity of creditor and genuineness of failed to establish identity of creditor and genuineness of alleged loan transaction, impugned additions under section 68 an transaction, impugned additions under section 68 an transaction, impugned additions under section 68 was justified and The Hon'ble SUPREME COURT OF INDIA * in was justified and The Hon'ble SUPREME COURT OF INDIA * in was justified and The Hon'ble SUPREME COURT OF INDIA * in SLP TO APPEAL (C) NO (S). 11083 OF 2021 ON JULY 26, 2021 SLP TO APPEAL (C) NO (S). 11083 OF 2021 ON JULY 26, 2021 SLP TO APPEAL (C) NO (S). 11083 OF 2021 ON JULY 26, 2021 DISMISSED THE SAID SLP AGAINST THE ORDER OF THE DISMISSED THE SAID SLP AGAINST THE ORDER OF THE DISMISSED THE SAID SLP AGAINST THE ORDER OF THE High court in the ABOVE CASE. High court in the ABOVE CASE. In view of the above, the grounds of appeal of the appellant the above, the grounds of appeal of the appellant the above, the grounds of appeal of the appellant regarding addition addition of Rs.41,18,82630/- are dismissed.” are dismissed.” 4.2 The assessee is in appeal against sustaining of the The assessee is in appeal against sustaining of the The assessee is in appeal against sustaining of the above addition.

4.3 In regard to the squared In regard to the squared-off loans, the Ld. CIT(A) granted off loans, the Ld. CIT(A) granted partial relief, sustaining the addition only to the extent of ₹20,000/– partial relief, sustaining the addition only to the extent of partial relief, sustaining the addition only to the extent of in the case of Pooja Uday Naik Pooja Uday Naik. The Revenue is in appeal against the The Revenue is in appeal against the said deletion whereas the assessee is in appeal as against said deletion whereas the assessee is in appeal as said deletion whereas the assessee is in appeal as sustaining the disallowance in respect of Pooja Udai Naik. The sustaining the disallowance in respect of Pooja Udai Naik. The sustaining the disallowance in respect of Pooja Udai Naik. The relevant finding of the Ld. CIT(A) is reproduced as under: relevant finding of the Ld. CIT(A) is reproduced as under: relevant finding of the Ld. CIT(A) is reproduced as under:

“5.6 Addition u/s 69C of Rs. 8,42,94,769/ 5.6 Addition u/s 69C of Rs. 8,42,94,769/-: I have gone through : I have gone through the assessment order, the submissions of the appellant and the assessment order, the submissions of the appellant and the assessment order, the submissions of the appellant and Sri Uday Ghanshyam Naik 13 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025 remand report in this case. After scrutinizing the evidences and and report in this case. After scrutinizing the evidences and and report in this case. After scrutinizing the evidences and considering the Remand Report, I have found the claim in ground considering the Remand Report, I have found the claim in ground considering the Remand Report, I have found the claim in ground no. 2 pertaining to addition u/s 69C of Rs. 8,42,94,769/ no. 2 pertaining to addition u/s 69C of Rs. 8,42,94,769/ no. 2 pertaining to addition u/s 69C of Rs. 8,42,94,769/- of the appellant is allowable in the case except in the Pooja Udai Naik. appellant is allowable in the case except in the Pooja Udai Naik. appellant is allowable in the case except in the Pooja Udai Naik. In case of Pooja Udai Naik, as per the remand report the In case of Pooja Udai Naik, as per the remand report the In case of Pooja Udai Naik, as per the remand report the appellant has stated that the premium paid by the appellant appellant has stated that the premium paid by the appellant appellant has stated that the premium paid by the appellant himself towards the policy of his daughter Pooja Udai Naik and himself towards the policy of his daughter Pooja Udai Naik and himself towards the policy of his daughter Pooja Udai Naik and also the maturity amount had been received by the appellant also the maturity amount had been received by the appellant also the maturity amount had been received by the appellant himself. Such m himself. Such maturity amount shall be the deemed income of the aturity amount shall be the deemed income of the appellant by the virtue of section 60. Therefore, the maturity appellant by the virtue of section 60. Therefore, the maturity appellant by the virtue of section 60. Therefore, the maturity amount cannot be treated as loan and eventually the payment amount cannot be treated as loan and eventually the payment amount cannot be treated as loan and eventually the payment cannot be allowed as repayment. In the view of the above, out of cannot be allowed as repayment. In the view of the above, out of cannot be allowed as repayment. In the view of the above, out of is allowed remaining 20,000/- 8,42,94,769/ 8,42,94,769/- Rs. 8,42,74,769/- is allowed remaining 20,000 is disallowed.” disallowed.” 4.4 As to the alleged agricultural income, the Ld. CIT(A) confirmed As to the alleged agricultural income, the Ld. CIT(A) confirmed As to the alleged agricultural income, the Ld. CIT(A) confirmed the disallowance, holding that the assessee had produced neither the disallowance, holding that the assessee had produced neither the disallowance, holding that the assessee had produced neither evidence of ownership nor proof of cultivation or sale, and thus the evidence of ownership nor proof of cultivation or sale, and thus evidence of ownership nor proof of cultivation or sale, and thus claim was wholly unsubstantiated. claim was wholly unsubstantiated. The Ld. CIT(A) upheld the The Ld. CIT(A) upheld the disallowance observing as under : disallowance observing as under :

“6.2 During the various notices the appellant was asked to 6.2 During the various notices the appellant was asked to 6.2 During the various notices the appellant was asked to submit the evidence/documents regarding this agricultural submit the evidence/documents regarding this agricultural submit the evidence/documents regarding this agricultural income. The appellant submitted tables f income. The appellant submitted tables for income and or income and expenditure calculation and some evidence expenditure from expenditure calculation and some evidence expenditure from expenditure calculation and some evidence expenditure from agricultural but did not any evidence establishing receipt of agricultural but did not any evidence establishing receipt of agricultural but did not any evidence establishing receipt of agricultural income. agricultural income. As described above that the appellant had shown agricultural As described above that the appellant had shown agricultural As described above that the appellant had shown agricultural income in his return the addition was m income in his return the addition was made due to non ade due to non-providing of evidences wherein in the remand report the recommendation of evidences wherein in the remand report the recommendation of evidences wherein in the remand report the recommendation are associated with the cash credit. The Assessing Officer has are associated with the cash credit. The Assessing Officer has are associated with the cash credit. The Assessing Officer has not even bothered to be correct on the facts and has not applied not even bothered to be correct on the facts and has not applied not even bothered to be correct on the facts and has not applied his mind at all. Further, it is mentioned his mind at all. Further, it is mentioned in the remand report that in the remand report that the appellant has also stated them as loan taken. This reflects the appellant has also stated them as loan taken. This reflects the appellant has also stated them as loan taken. This reflects the contradictions in the nature of money which is shown as the contradictions in the nature of money which is shown as the contradictions in the nature of money which is shown as agricultural in ROI and loan taken in remand report. agricultural in ROI and loan taken in remand report. The appellant has merely submitted two purchase bills The appellant has merely submitted two purchase bills The appellant has merely submitted two purchase bills related to expenses to justify the agricultural income. No details of the land expenses to justify the agricultural income. No details of the land expenses to justify the agricultural income. No details of the land records in his ownership, the status of irrigation in the land, the records in his ownership, the status of irrigation in the land, the records in his ownership, the status of irrigation in the land, the details of crop production certified by the Govt. Authorities has details of crop production certified by the Govt. Authorities has details of crop production certified by the Govt. Authorities has Sri Uday Ghanshyam Naik 14 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025 not been submitted. Therefore, the claim i not been submitted. Therefore, the claim is not entertainable. The s not entertainable. The appellant submits that he has made sales to the street vendors appellant submits that he has made sales to the street vendors appellant submits that he has made sales to the street vendors and therefore, no documentary proof is available in the and therefore, no documentary proof is available in the and therefore, no documentary proof is available in the unorganized market. No details of transportation, labour etc. or unorganized market. No details of transportation, labour etc. or unorganized market. No details of transportation, labour etc. or the persons making payments, mode of payment re the persons making payments, mode of payment re the persons making payments, mode of payment received has been submitted. The sale proceeds of Rs. 20,68,736/ been submitted. The sale proceeds of Rs. 20,68,736/ been submitted. The sale proceeds of Rs. 20,68,736/- are claimed exempt and the explanation is not acceptable. It is the claimed exempt and the explanation is not acceptable. It is the claimed exempt and the explanation is not acceptable. It is the onus of the assessee to prove that the income has actually been onus of the assessee to prove that the income has actually been onus of the assessee to prove that the income has actually been earned and that it falls into exempt category. This onus has earned and that it falls into exempt category. This onus has earned and that it falls into exempt category. This onus has not been discharged. It is further noted that principle of res judicata been discharged. It is further noted that principle of res judicata been discharged. It is further noted that principle of res judicata does not apply to the Income Tax proceedings. Every assessment does not apply to the Income Tax proceedings. Every assessment does not apply to the Income Tax proceedings. Every assessment year is new and facts are to be ascertained for each year. In year is new and facts are to be ascertained for each year. In year is new and facts are to be ascertained for each year. In view of the above facts, the addition of Rs. 20,68,736/ view of the above facts, the addition of Rs. 20,68,736/ view of the above facts, the addition of Rs. 20,68,736/- made by the Assessing Officer is confirmed. the Assessing Officer is confirmed.” 4.5 Further, regarding the agriculture expenses amounting to Further, regarding the agriculture expenses amounting to Further, regarding the agriculture expenses amounting to Rs.12,09,809/- the Ld. CIT(A) upheld in view of the Ld. CIT(A) upheld in view of the Ld. CIT(A) upheld in view of no evidence submitted by the assessee observing as under: submitted by the assessee observing as under:

“6.3 The assessee has claimed agricultural 6.3 The assessee has claimed agricultural expenses amounting expenses amounting to 12,09,809/ to 12,09,809/-. As per assessment order: "4.5 Further the agricultural expenses incurred by the assessee "4.5 Further the agricultural expenses incurred by the assessee "4.5 Further the agricultural expenses incurred by the assessee amounting to Rs. 12,09,809/ amounting to Rs. 12,09,809/- is added to the total income of the is added to the total income of the assessee under section 69C of the Act as unexplained assessee under section 69C of the Act as unexplained assessee under section 69C of the Act as unexplained expenditure. P expenditure. Penalty proceedings under section 271AAC(1) of the enalty proceedings under section 271AAC(1) of the Act are initiated separately." Act are initiated separately." During the various notices the appellant was asked to submit the During the various notices the appellant was asked to submit the During the various notices the appellant was asked to submit the evidence/documents regarding these agricultural expenses. The evidence/documents regarding these agricultural expenses. The evidence/documents regarding these agricultural expenses. The appellant appellant appellant submitted submitted submitted tables tables tables for for for income income income and and and expenditure expend expend calculation and some evidence of expenditure from agricultural calculation and some evidence of expenditure from agricultural calculation and some evidence of expenditure from agricultural out of which only the bill of Rs. 98,570/ out of which only the bill of Rs. 98,570/- and bill of Rs. 46, 610/ and bill of Rs. 46, 610/- had been verified by the Assessing officer in its remand report had been verified by the Assessing officer in its remand report had been verified by the Assessing officer in its remand report dated 08.01.2024. In its remand report the Assessing o dated 08.01.2024. In its remand report the Assessing o dated 08.01.2024. In its remand report the Assessing officer has stated that these two bills are pertaining to the expenses born on stated that these two bills are pertaining to the expenses born on stated that these two bills are pertaining to the expenses born on agricultural work. However, in this case the appellant was agricultural work. However, in this case the appellant was agricultural work. However, in this case the appellant was unable to provide any proof of agricultural income therefore, the unable to provide any proof of agricultural income therefore, the unable to provide any proof of agricultural income therefore, the expense can not be allowed. Also, the bills are self expense can not be allowed. Also, the bills are self serving and serving and not verifiable. not verifiable. In the view of the above fact and discussion, the ground of In the view of the above fact and discussion, the ground of In the view of the above fact and discussion, the ground of appeal No. 3 is dismissed and the addition of Rs. 12,09,809/ appeal No. 3 is dismissed and the addition of Rs. 12,09,809/ appeal No. 3 is dismissed and the addition of Rs. 12,09,809/- made by the Assessing Officer made by the Assessing Officer is confirmed.”

Sri Uday Ghanshyam Naik 15 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025

5.1 We are constrained to observe that the AO, in his We are constrained to observe that the AO, in his We are constrained to observe that the AO, in his remand exercise, examined the evidences only on a cursory and selective exercise, examined the evidences only on a cursory and selective exercise, examined the evidences only on a cursory and selective basis, leaving large tracts of the record unverified. Having regard to basis, leaving large tracts of the record unverified. Having regard to basis, leaving large tracts of the record unverified. Having regard to the magnitude of the transactions and the nature of the sums the magnitude of the transactions and the nature of the sums the magnitude of the transactions and the nature of the sums involved, such a partial inquiry cannot be regarded as adequate involved, such a partial inquiry cannot be regarded involved, such a partial inquiry cannot be regarded compliance either with the letter or the spirit of the law. compliance either with the letter or the spirit of the law. compliance either with the letter or the spirit of the law.

5.2 It is well settled, as laid down by the Hon’ble Supreme Court It is well settled, as laid down by the Hon’ble Supreme Court It is well settled, as laid down by the Hon’ble Supreme Court in CIT v. Orissa Corporation (P.) Ltd. CIT v. Orissa Corporation (P.) Ltd. [(1986) 159 ITR 78 (SC)] and [(1986) 159 ITR 78 (SC)] and reaffirmed in NRA Iron & Steel (P.) Ltd. (supra) NRA Iron & Steel (P.) Ltd. (supra), that the burden of , that the burden of proof under Section 68 is an initial and substantive obligation cast proof under Section 68 is an initial and substantive obligation cast proof under Section 68 is an initial and substantive obligation cast upon the assessee. It is incumbent upon the assessee to discharge upon the assessee. It is incumbent upon the assessee to discharge upon the assessee. It is incumbent upon the assessee to discharge this onus by producing unimpeachable evidence establishing the this onus by producing unimpeachable evidence establishing the this onus by producing unimpeachable evidence establishing the identity of the creditor, the financi identity of the creditor, the financial capacity to advance the loan, al capacity to advance the loan, and the genuineness of the transaction. Mere furnishing of and the genuineness of the transaction. Mere furnishing of and the genuineness of the transaction. Mere furnishing of confirmations or copies of returns does not suffice; the test of confirmations or copies of returns does not suffice; the test of confirmations or copies of returns does not suffice; the test of credibility must be satisfied by independent corroboration. credibility must be satisfied by independent corroboration. credibility must be satisfied by independent corroboration.

Sri Uday Ghanshyam Naik 16 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025 5.3 In the present case, the assessee’s In the present case, the assessee’s evidences fall short of the evidences fall short of the statutory standard, while the Ld. CIT(A) has proceeded to partly statutory standard, while the Ld. CIT(A) has proceeded to partly statutory standard, while the Ld. CIT(A) has proceeded to partly affirm and partly delete the additions on a foundation that is affirm and partly delete the additions on a foundation that is affirm and partly delete the additions on a foundation that is factually incomplete and procedurally infirm. We are therefore factually incomplete and procedurally infirm. We are therefore factually incomplete and procedurally infirm. We are therefore persuaded to hold that the ends of s persuaded to hold that the ends of substantial justice would best be ubstantial justice would best be served if the matter is restored to the file of the AO for de novo served if the matter is restored to the file of the AO for served if the matter is restored to the file of the AO for adjudication, upon comprehensive verification of each loan adjudication, upon comprehensive verification of each loan adjudication, upon comprehensive verification of each loan transaction.

5.4 Accordingly, the impugned findings of the Ld. CIT(A) on the Accordingly, the impugned findings of the Ld. CIT(A) on the Accordingly, the impugned findings of the Ld. CIT(A) on the additions made under additions made under Sections 68 and 69C are set aside, and the Sections 68 and 69C are set aside, and the AO is directed to examine the matter afresh, after affording due AO is directed to examine the matter afresh, after affording due AO is directed to examine the matter afresh, after affording due opportunity to the assessee to adduce all relevant material in opportunity to the assessee to adduce all relevant material in opportunity to the assessee to adduce all relevant material in support of his contentions. support of his contentions.

Sri Uday Ghanshyam Naik 17 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025

(1) On the facts and circumstances and in law, the Respondent (1) On the facts and circumstances and in law, the Respondent (1) On the facts and circumstances and in law, the Respondent- Appellant raises an issue before the Hon'ble ITAT, Mumbai as to pellant raises an issue before the Hon'ble ITAT, Mumbai as to pellant raises an issue before the Hon'ble ITAT, Mumbai as to whether the DCIT whether the DCIT-42(1)(1), Mumbai who is Appellant in the ITA 42(1)(1), Mumbai who is Appellant in the has locus No. 989/Mum/2025 has locus-standi to file any appeal as such standi to file any appeal as such against own finding in the REMAND REPORT. against own finding in the REMAND REPORT. (2) Without prejudice to the (2) Without prejudice to the above, on the facts and circumstances above, on the facts and circumstances & in law, whether Revenue was justified in appealing against its & in law, whether Revenue was justified in appealing against its & in law, whether Revenue was justified in appealing against its own findings, particularly, when the learned CIT(A) at para 5.6 at own findings, particularly, when the learned CIT(A) at para 5.6 at own findings, particularly, when the learned CIT(A) at para 5.6 at page no. 52 has deleted the alleged addition of Rs. 8,42,74,769/ page no. 52 has deleted the alleged addition of Rs. 8,42,74,769/ page no. 52 has deleted the alleged addition of Rs. 8,42,74,769/- out of the total of out of the total of Rs.8,42,94,769/- after the categorical finding " after the categorical finding " After scrutinizing the evidences and considering the Remand After scrutinizing the evidences and considering the Remand After scrutinizing the evidences and considering the Remand Report, I have found the claim in ground 2 pertaining to addition Report, I have found the claim in ground 2 pertaining to addition Report, I have found the claim in ground 2 pertaining to addition u/s. 69C of Rs.8,42,94,769/ u/s. 69C of Rs.8,42,94,769/- of the appellant is allowable....". of the appellant is allowable....". (3) On the facts (3) On the facts and circumstances and law, thus, whether the and circumstances and law, thus, whether the Revenue could file any appeal before the Hon'ble ITAT as such, Revenue could file any appeal before the Hon'ble ITAT as such, Revenue could file any appeal before the Hon'ble ITAT as such, particularly, when the Respondent particularly, when the Respondent-Appellant had completely Appellant had completely discharged his onus to substantiate the genuineness of the discharged his onus to substantiate the genuineness of the discharged his onus to substantiate the genuineness of the alleged transactions that too alleged transactions that too, particularly, when there was no , particularly, when there was no adverse finding in the remand proceeding and CIT(A), as well. adverse finding in the remand proceeding and CIT(A), as well. adverse finding in the remand proceeding and CIT(A), as well. (4) On the facts and circumstances and in law, however, it is (4) On the facts and circumstances and in law, however, it is (4) On the facts and circumstances and in law, however, it is prayed that the Revenue's appeal may be dismissed as prayed that the Revenue's appeal may be dismissed as prayed that the Revenue's appeal may be dismissed as infructuous & & oblige. 8.1 In cross-objection ground NO. 1, the assessee has raised the objection ground NO. 1, the assessee has raised the objection ground NO. 1, the assessee has raised the issue that once the Assessing Officer has accepted the loans as issue that once the Assessing Officer has accepted the loans as issue that once the Assessing Officer has accepted the loans as genuine in his remand report he genuine in his remand report he does not have any does not have any locus standi to file appeal.

8.2 We have heard rival submissions of the parties We have heard rival submissions of the parties We have heard rival submissions of the parties on the issue. In our opinion, the assessee assessee has neither followed the due process has neither followed the due process

Sri Uday Ghanshyam Naik 18 1098 & CO No. 73 , 1098 & CO No. 73/MUM/2025 under Rule 46A of the Rules under Rule 46A of the Rules nor the Assessing Officer has the Assessing Officer has examined all the evidences properly and left the matter only to the all the evidences properly and left the matter only to the all the evidences properly and left the matter only to the wisdom of the ld CIT(A). The cross-objections rais objections raised by the assessee, contending that the AO having accepted certain assessee, contending that the AO having accepted certain assessee, contending that the AO having accepted certain transactions in remand was thereby precluded from filing an transactions in remand was thereby precluded from filing an transactions in remand was thereby precluded from filing an appeal, are devoid of merit. The remand proceedings were merely appeal, are devoid of merit. The remand proceedings were merely appeal, are devoid of merit. The remand proceedings were merely exploratory and did not culminate in any binding or conclusive exploratory and did not culminate in any binding or conclusive exploratory and did not culminate in any binding or conclusive finding. The statutory right of appeal conferred upon the Revenue nding. The statutory right of appeal conferred upon the Revenue nding. The statutory right of appeal conferred upon the Revenue cannot be abridged on the strength of an interim administrative cannot be abridged on the strength of an interim administrative cannot be abridged on the strength of an interim administrative report. In view of our decision remitting the entire matter to the AO In view of our decision remitting the entire matter to the AO In view of our decision remitting the entire matter to the AO for de novo examination, the cross examination, the cross-objections of the asses objections of the assessee have become purely academic and become purely academic and are accordingly dismissed. dismissed.