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Facts
The assessee failed to file a return of income for AY 2012-13. The AO received information that a proprietary concern, M/s Neelay Packers and Movers, had significant cash deposits in its bank account, and the assessee was allegedly involved in these transactions. The AO reopened the assessment under Section 147 of the Income Tax Act.
Held
The Tribunal held that the reopening proceedings were valid as they were based on tangible material. The Tribunal also noted that the assessee had failed to explain the source of cash deposits, despite several opportunities. However, considering the principles of natural justice and substantial justice, the matter was restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the reassessment proceedings under Section 147 were validly initiated based on the information received and the statement recorded. Whether the assessee has discharged the onus to explain the source of cash deposits.
Sections Cited
147, 144, 139, 148, 142(1), 151, 69A, 131
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
ORDER PER OM PRAKASH KANT, AM
This appeal has been preferred by the assessee against the order dated 31.01.2025 passed by the Ld. Commissioner of Income- tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2012-13, raising following grounds:
The Learned Commissioner of Income Tax (Appeals) (NFAC) on the facts and in the circumstances of the case and in law erred in confirming the action of the assessing officer in passing the order u/s 144 r.w.s.147 of the Income Tax Act assessing total income at Rs.2,86,80,200
The Learned Commissioner of Income Tax (Appeals) (NFAC) The Learned Commissioner of Income Tax (Appeals) (NFAC) The Learned Commissioner of Income Tax (Appeals) (NFAC) on the facts and in the circumstanc on the facts and in the circumstances of the case and in law es of the case and in law erred in confirming the additions made of Rs. 2,86,80,200/- erred in confirming the additions made of Rs. 2,86,80,200/ erred in confirming the additions made of Rs. 2,86,80,200/ under section 69A of the Act by the Assessing Officer. under section 69A of the Act by the Assessing Officer. under section 69A of the Act by the Assessing Officer.
The Learned Commissioner of Income Tax (Appeals) (NFAC) The Learned Commissioner of Income Tax (Appeals) (NFAC) The Learned Commissioner of Income Tax (Appeals) (NFAC) on the facts and in the circumstances of the case and in law on the facts and in the circumstances of the case and in la on the facts and in the circumstances of the case and in la erred in not appreciating the facts narrated by the erred in not appreciating the facts narrated by the erred in not appreciating the facts narrated by the Assessing Officer in the Assessment order and also not Assessing Officer in the Assessment order and also not Assessing Officer in the Assessment order and also not appreciating the facts and submissions made during the appreciating the facts and submissions made during the appreciating the facts and submissions made during the course of appellate proceedings in a proper perspective, course of appellate proceedings in a proper perspective, course of appellate proceedings in a proper perspective, ignoring ignoring the the facts facts that that cash cash deposits deposi ts made made of of Rs.2,86.80,200 in the bank account of Jitendra K Palan Rs.2,86.80,200 in the bank account of Jitendra K Palan Rs.2,86.80,200 in the bank account of Jitendra K Palan and not in the bank account of the appellant and not in the bank account of the appellant 4. The Learned Commissioner of Income Tax (Appeals) (NFAC) The Learned Commissioner of Income Tax (Appeals) (NFAC) The Learned Commissioner of Income Tax (Appeals) (NFAC) on the facts and in the circumstances of the case and in on the facts and in the circumstances of the case and in on the facts and in the circumstances of the case and in law, failed to appreciate the law, failed to appreciate the fact that an identical issue fact that an identical issue arose in the appellant's own case on the same set of facts arose in the appellant's own case on the same set of facts arose in the appellant's own case on the same set of facts for A.Y.2013 for A.Y.2013-14 and while completing the assessment for 14 and while completing the assessment for A.Y. 2013 A.Y. 2013-14, after considering the same facts, the 14, after considering the same facts, the assessing officer has not made such additions in the assessing officer has not made such additions in the assessing officer has not made such additions in the appella appellant's own case. 2. Before us, the Ld. counsel for the assessee Before us, the Ld. counsel for the assessee Before us, the Ld. counsel for the assessee also filed an additional ground, which is reproduced as under: which is reproduced as under:
In the facts and circumstances of the case and in law, the Ld. In the facts and circumstances of the case and in law, the Ld. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in sustaining the Commissioner of Income Tax (Appeals) has erred in sustaining the Commissioner of Income Tax (Appeals) has erred in sustaining the action of the Ld. Assessing Officer who erred in re ion of the Ld. Assessing Officer who erred in re-opening the ion of the Ld. Assessing Officer who erred in re assessment under section 147 merely based on un assessment under section 147 merely based on un-corroborated & corroborated & un-confronted statements of third party without there being any confronted statements of third party without there being any confronted statements of third party without there being any tangible material to form any belief about escapement of taxable tangible material to form any belief about escapement of taxable tangible material to form any belief about escapement of taxable income of the Appellant for the relevant Assessment Year. ome of the Appellant for the relevant Assessment Year. ome of the Appellant for the relevant Assessment Year. Reopening in absence of any 'tangible material' is bad in the eyes of Reopening in absence of any 'tangible material' is bad in the eyes of Reopening in absence of any 'tangible material' is bad in the eyes of law as held by Hon'ble Supreme Court in the case of CIT vs. law as held by Hon'ble Supreme Court in the case of CIT vs. law as held by Hon'ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd. [2010] 320 Kelvinator of India Ltd. [2010] 320 ITR 561 (SC) 3. Briefly stated, fac Briefly stated, facts of the case are that assessee ts of the case are that assessee did not file his return of income under section 139 of the Income-tax Act, 1961 his return of income under section 139 of the Income his return of income under section 139 of the Income (hereinafter “the Act”) for the assessment year 2012–13. The (hereinafter “the Act”) for the assessment year 2012 (hereinafter “the Act”) for the assessment year 2012 Assessing Officer received an i Assessing Officer received an information from the office of the Dy. nformation from the office of the Dy. Director of Income-tax (Investigation) that a proprietary concern, tax (Investigation) that a proprietary concern, tax (Investigation) that a proprietary concern, M/s Neelay Packers and Movers, in the name of one Shri Jitendra , in the name of one Shri Jitendra M/s Neelay Packers and Movers K. Palan, was engaged in the business of logistic services like was engaged in the business of logistic services like was engaged in the business of logistic services like relocating, moving of housing effects etc and relocating, moving of housing effects etc and current bank account current bank account of said firm reflected cash deposits aggregating to ₹ ₹2,86,80,220/–. of said firm reflected cash deposits aggregating to In his statement recorded under section 131 of the Act on In his statement recorded under section 131 of the Act on In his statement recorded under section 131 of the Act on 11.02.2019, Shri Jitendra K. Palan categorically admitted that 11.02.2019, Shri Jitendra K. Palan categorically admitted that 11.02.2019, Shri Jitendra K. Palan categorically admitted that nearly 92% of the said cash deposits were mad nearly 92% of the said cash deposits were made by the assessee, e by the assessee, Shri Jatin Harish Sotta, and that such amounts were immediately Shri Jatin Harish Sotta, and that such amounts were immediately Shri Jatin Harish Sotta, and that such amounts were immediately transferred through RTGS to concerns, namely M/s Mahendra transferred through RTGS to concerns, namely transferred through RTGS to concerns, namely International and M/s D.D.M. Impex M/s D.D.M. Impex, owned by the assessee. , owned by the assessee.
3.1 Based on the said tangible information, the Assessin Based on the said tangible information, the Assessin Based on the said tangible information, the Assessing Officer recorded reasons to believe that income chargeable to tax had recorded reasons to believe that income chargeable to tax had recorded reasons to believe that income chargeable to tax had escaped assessment, and accordingly issued notice under section escaped assessment, and accordingly issued notice under section escaped assessment, and accordingly issued notice under section 148 on 31.03.2019. No return was filed in response, nor were 148 on 31.03.2019. No return was filed in response, nor were 148 on 31.03.2019. No return was filed in response, nor were repeated notices issued under section 142(1) es issued under section 142(1) on on 24.06.2019, 17.07.2019, 23.10.2019 and 12.11.2019 were 17.07.2019, 23.10.2019 and 12.11.2019 were complied with. In complied with. In absence of any explanation for the cash deposits, assessment was absence of any explanation for the cash deposits, assessment was absence of any explanation for the cash deposits, assessment was completed ex parte under section 144 read with section 147 of the under section 144 read with section 147 of the under section 144 read with section 147 of the Act, making addition of ₹2,86,80,200/–. Act, making addition of 3.2 The assessee carri The assessee carried the matter in appeal. However, despite ed the matter in appeal. However, despite several statutory opportunities, no material evidence was produced several statutory opportunities, no material evidence was produced several statutory opportunities, no material evidence was produced to rebut the findings of the Assessing Officer. The Ld. CIT(A), to rebut the findings of the Assessing Officer. The Ld. CIT(A), to rebut the findings of the Assessing Officer. The Ld. CIT(A), therefore, confirmed the addition, holding med the addition, holding inter inter-alia that the assessee had failed to discharge the primary onus of explaining the to discharge the primary onus of explaining the to discharge the primary onus of explaining the nature and source of deposits which had, in fact, travelled to his nature and source of deposits which had, in fact, travelled to his nature and source of deposits which had, in fact, travelled to his own concerns. The relevant finding of ld CIT(A) is reproduced The relevant finding of ld CIT(A) is reproduced The relevant finding of ld CIT(A) is reproduced as under :
“5.1. The order of the Ld. AO passed u/s 144 r.w.s. 147 dated 5.1. The order of the Ld. AO passed u/s 144 r.w.s. 147 dated 5.1. The order of the Ld. AO passed u/s 144 r.w.s. 147 dated 05.12.2019 as well as the grounds of appeal and statement of 05.12.2019 as well as the grounds of appeal and statement of 05.12.2019 as well as the grounds of appeal and statement of facts and written submission filed by the appellant has been facts and written submission filed by the appellant has been facts and written submission filed by the appellant has been carefully considered. In essence, all the substantial grounds taken carefully considered. In essence, all the substantial grounds taken carefully considered. In essence, all the substantial grounds taken by the appellant relate to the action of the Ld. AO regarding by the appellant relate to the action of the Ld. AO regarding by the appellant relate to the action of the Ld. AO regarding addition of Rs.2,86,80,200/ tion of Rs.2,86,80,200/- on account of cash deposit. on account of cash deposit. 5.2 During the course of appellate proceedings, the appellant 5.2 During the course of appellate proceedings, the appellant 5.2 During the course of appellate proceedings, the appellant assessee assessee assessee was was was given given given several several several opportunities opportunities opportunities vide vide notice vide notice notice of of of hearing/letter dated 17.10.2023, 27.10.2023, 06.11.2023 and hearing/letter dated 17.10.2023, 27.10.2023, 06.11.2023 and hearing/letter dated 17.10.2023, 27.10.2023, 06.11.2023 and 13.12.2024 to represent t 13.12.2024 to represent the case by uploading written submission he case by uploading written submission along with supporting document(s) if any. Appellant has submitted along with supporting document(s) if any. Appellant has submitted along with supporting document(s) if any. Appellant has submitted some details three times, which is not related to strengthening the some details three times, which is not related to strengthening the some details three times, which is not related to strengthening the grounds of appeal. However, the appellant did not avail the grounds of appeal. However, the appellant did not avail the grounds of appeal. However, the appellant did not avail the opportunities to count opportunities to counter the findings of the Ld. AO and hence er the findings of the Ld. AO and hence appellant's reluctancy to comply to the notices leads to the appellant's reluctancy to comply to the notices leads to the appellant's reluctancy to comply to the notices leads to the presumption that he has either nothing to explain in this regard or presumption that he has either nothing to explain in this regard or presumption that he has either nothing to explain in this regard or is not interested to continue the appellate proceeding and thus has is not interested to continue the appellate proceeding and thus has is not interested to continue the appellate proceeding and thus has no objection at pre no objection at present regarding addition made by the Ld. AO in sent regarding addition made by the Ld. AO in the impugned assessment order. The reason for the addition was the impugned assessment order. The reason for the addition was the impugned assessment order. The reason for the addition was specifically mentioned in detail in the assessment order but the specifically mentioned in detail in the assessment order but the specifically mentioned in detail in the assessment order but the appellant failed to upload any evidence or submission in support appellant failed to upload any evidence or submission in support appellant failed to upload any evidence or submission in support of the grounds of of the grounds of appeal. 5.3 It is the well 5.3 It is the well-settled dictum of law "VIGILENTIBUS, NO settled dictum of law "VIGILENTIBUS, NO DORMENTIBUS, JURA SUBVENIUNT" which means the law will DORMENTIBUS, JURA SUBVENIUNT" which means the law will DORMENTIBUS, JURA SUBVENIUNT" which means the law will help only those who are vigilant. Law will not assist those who are help only those who are vigilant. Law will not assist those who are help only those who are vigilant. Law will not assist those who are careless of his/her right. In order to claim once right she/he mu careless of his/her right. In order to claim once right she/he mu careless of his/her right. In order to claim once right she/he must be watchful of his/her rights. Only those persons, who are be watchful of his/her rights. Only those persons, who are be watchful of his/her rights. Only those persons, who are watchful and careful of using his/her rights, are eligible for the watchful and careful of using his/her rights, are eligible for the watchful and careful of using his/her rights, are eligible for the benefits of the law. Law confers rights on persons who are vigilant benefits of the law. Law confers rights on persons who are vigilant benefits of the law. Law confers rights on persons who are vigilant of their rights. In this connection, the various judicious of their rights. In this connection, the various judicious of their rights. In this connection, the various judicious decisions of the Hon'ble Courts may be cited. In the case of the Estate of Late the Hon'ble Courts may be cited. In the case of the Estate of Late the Hon'ble Courts may be cited. In the case of the Estate of Late Tukojirao Holkar vs Commissioner of Wealth Tax (1997) (223 ITA Tukojirao Holkar vs Commissioner of Wealth Tax (1997) (223 ITA Tukojirao Holkar vs Commissioner of Wealth Tax (1997) (223 ITA 480 MP) the Hon'ble M.P. High Court held that, "If the party, at 480 MP) the Hon'ble M.P. High Court held that, "If the party, at 480 MP) the Hon'ble M.P. High Court held that, "If the party, at whose instance the reference is made, fails to a whose instance the reference is made, fails to appear at the ppear at the hearing, or fails in taking steps for preparation of the paper books hearing, or fails in taking steps for preparation of the paper books hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to so as to enable hearing of the reference, the court is not bound to so as to enable hearing of the reference, the court is not bound to answer the reference." Similarly, Hon'ble Punjab & Haryana High answer the reference." Similarly, Hon'ble Punjab & Haryana High answer the reference." Similarly, Hon'ble Punjab & Haryana High Court in the case of New Dewan Oil Mills V Court in the case of New Dewan Oil Mills Vs. CIT reported in s. CIT reported in (2008) 296ITR495 (P&H) had returned the reference unanswered, (2008) 296ITR495 (P&H) had returned the reference unanswered, (2008) 296ITR495 (P&H) had returned the reference unanswered, since the assessee remained absent and there was no assistance since the assessee remained absent and there was no assistance since the assessee remained absent and there was no assistance from the assessee. In the case of CIT vs B. N. Bhattacharya. (118 from the assessee. In the case of CIT vs B. N. Bhattacharya. (118 from the assessee. In the case of CIT vs B. N. Bhattacharya. (118 ITR 461) (Pages 477, 478), the Hon'ble Supreme ITR 461) (Pages 477, 478), the Hon'ble Supreme Court held that Court held that "appeal does not mean, the mere filing of the memo of the appeal "appeal does not mean, the mere filing of the memo of the appeal "appeal does not mean, the mere filing of the memo of the appeal but effectively pursuing the same". The Hon'ble Delhi High Court in but effectively pursuing the same". The Hon'ble Delhi High Court in but effectively pursuing the same". The Hon'ble Delhi High Court in the case of CIT vs Gold Leaf Capital Corporation Ltd on the case of CIT vs Gold Leaf Capital Corporation Ltd on the case of CIT vs Gold Leaf Capital Corporation Ltd on 02.09.2011 in of 2009 held that a negli 02.09.2011 in of 2009 held that a negligent appellant gent appellant should not be given many opportunities just because the quantum should not be given many opportunities just because the quantum should not be given many opportunities just because the quantum of the amount involved is high. The necessary course of action is to of the amount involved is high. The necessary course of action is to of the amount involved is high. The necessary course of action is to draw an adverse inference, otherwise, it would amount to giving a draw an adverse inference, otherwise, it would amount to giving a draw an adverse inference, otherwise, it would amount to giving a premium to the appellant for his negligenc premium to the appellant for his negligence. When the appellant is e. When the appellant is non-cooperative, it can safely be concluded that the appellant did cooperative, it can safely be concluded that the appellant did cooperative, it can safely be concluded that the appellant did not want to adduce evidence as it would expose the falsity and not want to adduce evidence as it would expose the falsity and not want to adduce evidence as it would expose the falsity and non-genuineness of his claim. The Hon'ble ITAT, Delhi in the case genuineness of his claim. The Hon'ble ITAT, Delhi in the case genuineness of his claim. The Hon'ble ITAT, Delhi in the case of Whirlpool India Ltd vs DCIT (ITA of Whirlpool India Ltd vs DCIT (ITA No.2006/Del/ 2011 dated No.2006/Del/ 2011 dated 19.12.2011) has dismissed the appeal for non 19.12.2011) has dismissed the appeal for non-attending hearing attending hearing inferring that the appellant is not effectively pursuing the appeal. inferring that the appellant is not effectively pursuing the appeal. inferring that the appellant is not effectively pursuing the appeal. 5.4 In this regard, the decision of the Hon'ble High Court of 5.4 In this regard, the decision of the Hon'ble High Court of 5.4 In this regard, the decision of the Hon'ble High Court of Mumbai in the case of M/S Chemipol vs Mumbai in the case of M/S Chemipol vs Union of India, Central Union of India, Central Excise Appeal No.62 of 2009 may further be referred to wherein Excise Appeal No.62 of 2009 may further be referred to wherein Excise Appeal No.62 of 2009 may further be referred to wherein the Hon'ble Court clearly held that every court, judicial Body or the Hon'ble Court clearly held that every court, judicial Body or the Hon'ble Court clearly held that every court, judicial Body or Authority, which has a duty to decide a case between two parties, Authority, which has a duty to decide a case between two parties, Authority, which has a duty to decide a case between two parties, inherently possesses the power to di inherently possesses the power to dismiss the case in default. smiss the case in default. 5.5 On merits also, the appellant has no case. The main ground 5.5 On merits also, the appellant has no case. The main ground 5.5 On merits also, the appellant has no case. The main ground taken by the appellant relates to addition of Rs.2,86,80,200/ taken by the appellant relates to addition of Rs.2,86,80,200/ taken by the appellant relates to addition of Rs.2,86,80,200/- on account of cash depositof the I.T. Act, 1961. It is seen from the account of cash depositof the I.T. Act, 1961. It is seen from the account of cash depositof the I.T. Act, 1961. It is seen from the assessment order that the appellan assessment order that the appellant had not filed return of income t had not filed return of income for AY 2012-13 though he had made cash deposits to the tune of 13 though he had made cash deposits to the tune of 13 though he had made cash deposits to the tune of Rs.2,86,80,200/ Rs.2,86,80,200/- in his current Bank account maintained during in his current Bank account maintained during the FY 2011- -12. In view of the same the case was reopened by 12. In view of the same the case was reopened by issuing notice u/s 148 of the Act an issuing notice u/s 148 of the Act and in response to the said notice d in response to the said notice the appellant had not filed return of income for AY 2012 the appellant had not filed return of income for AY 2012 the appellant had not filed return of income for AY 2012-
13. During the course of assessment proceedings, the Ld. AO observed During the course of assessment proceedings, the Ld. AO observed During the course of assessment proceedings, the Ld. AO observed that that that the the the appellant appellant appellant had had had deposited deposited deposited cash cash cash amounting amounting amounting to to to Rs.2,86,80,200/ Rs.2,86,80,200/- in his bank account during FY 2011 Y 2011-12 but did not file return of income for the subject assessment year. Further, not file return of income for the subject assessment year. Further, not file return of income for the subject assessment year. Further, the appellant did not comply with the notice issued by the Ld. AO the appellant did not comply with the notice issued by the Ld. AO the appellant did not comply with the notice issued by the Ld. AO on several occasions during assessment proceedings and in on several occasions during assessment proceedings and in on several occasions during assessment proceedings and in absence of proper explanation regarding nature absence of proper explanation regarding nature & source of cash & source of cash deposit amounting to Rs.2,86,80,200/ deposit amounting to Rs.2,86,80,200/-, the Ld. AO added back , the Ld. AO added back the entire amount as cash deposit. the entire amount as cash deposit.
6. During the course of appellate proceeding, the appellant failed 6. During the course of appellate proceeding, the appellant failed 6. During the course of appellate proceeding, the appellant failed to explain the grounds taken against the issues. The reason for to explain the grounds taken against the issues. The reason for to explain the grounds taken against the issues. The reason for addition was clearly mentioned in the assessment order. However, s clearly mentioned in the assessment order. However, s clearly mentioned in the assessment order. However, the appellant made no effort to counter the findings of the Ld. AO the appellant made no effort to counter the findings of the Ld. AO the appellant made no effort to counter the findings of the Ld. AO either by uploading relevant document(s) or explaining the matter either by uploading relevant document(s) or explaining the matter either by uploading relevant document(s) or explaining the matter in detail and chose to remain silent about the issue. It is seen from in detail and chose to remain silent about the issue. It is seen from in detail and chose to remain silent about the issue. It is seen from the assessment order that the appellant failed to respond against the assessment order that the appellant failed to respond against the assessment order that the appellant failed to respond against the opportunities given by the Ld. AO to explain the nature and the opportunities given by the Ld. AO to explain the nature and the opportunities given by the Ld. AO to explain the nature and source of cash deposit during FY 2011 source of cash deposit during FY 2011-12 and accordingly 12 and accordingly assessment was completed as best judgement as u/s 144 r.w.s. assessment was completed as best judgement as u/s 144 r.w.s. assessment was completed as best judgement as u/s 144 r.w.s. 147 of the I.T. Act, 1961. It is seen from the impugned order that the I.T. Act, 1961. It is seen from the impugned order that the I.T. Act, 1961. It is seen from the impugned order that the the the appellant appellant appellant was was was provided provided provided several several several opportunities opportunities opportunities during during during assessment proceedings by issuing notice u/s 142(1) dated assessment proceedings by issuing notice u/s 142(1) dated assessment proceedings by issuing notice u/s 142(1) dated 17.07.2019, 23.10.2019 and 12.11.2019 and a final show cause 17.07.2019, 23.10.2019 and 12.11.2019 and a final show cause 17.07.2019, 23.10.2019 and 12.11.2019 and a final show cause notice dated 20.11.20 notice dated 20.11.2019, however, he never complied with those 19, however, he never complied with those notices. During the course of appellate proceedings also, the notices. During the course of appellate proceedings also, the notices. During the course of appellate proceedings also, the appellant did not come forward to explain the nature and source of appellant did not come forward to explain the nature and source of appellant did not come forward to explain the nature and source of cash deposit in spite of several opportunities being provided to cash deposit in spite of several opportunities being provided to cash deposit in spite of several opportunities being provided to him. 6.1 In view of 6.1 In view of this, I find no reason to interfere into the order of the this, I find no reason to interfere into the order of the Ld. AO and the same is upheld accordingly. Therefore, all the Ld. AO and the same is upheld accordingly. Therefore, all the Ld. AO and the same is upheld accordingly. Therefore, all the substantial grounds taken by the appellant substantial grounds taken by the appellant are dismissed. dismissed.”
Before us, the Ld. counsel for the assessee has filed a Pape Before us, the Ld. counsel for the assessee has filed a Pape Before us, the Ld. counsel for the assessee has filed a Paper Book containing pages 1 to 58, containing statement of Sh. Jitendra ing pages 1 to 58, containing statement of Sh. Jitendra ing pages 1 to 58, containing statement of Sh. Jitendra K. Palan recorded under section 131 of the Act. K. Palan recorded under section 131 of the Act.
On the contrary, the Ld. Departmental Representative (DR) On the contrary, the Ld. Departmental Representative (DR) On the contrary, the Ld. Departmental Representative (DR) filed a copy of the assessment order in the case of Jitendra K. Palan filed a copy of the assessment order in the case of Jitendra K. Palan filed a copy of the assessment order in the case of Jitendra K. Palan for the assessment year 2012 ear 2012-13.
As far as additional ground raised by the assessee is As far as additional ground raised by the assessee is As far as additional ground raised by the assessee is concerned, same being in the nature of purely legal ground , going same being in the nature of purely legal ground , going same being in the nature of purely legal ground , going to root of matter and not requiring investigation of fresh facts, to root of matter and not requiring investigation of fresh facts, to root of matter and not requiring investigation of fresh facts, admitted for adjudication. admitted for adjudication.
We have heard rival We have heard rival submission of the parties in respect to t submission of the parties in respect to the additional ground challenged. additional ground challenged. We find that assessee has not filed We find that assessee has not filed any copy of the reasons recorded before us and the Ld. counsel for any copy of the reasons recorded before us and the Ld. counsel for any copy of the reasons recorded before us and the Ld. counsel for the assessee only referred to the extract of the reasons recorded as the assessee only referred to the extract of the reasons recorded the assessee only referred to the extract of the reasons recorded reproduced by the Assessing Officer in the assessment order. Said d by the Assessing Officer in the assessment order. Said d by the Assessing Officer in the assessment order. Said extract is reproduced as under: extract is reproduced as under:
“Information has been received from office of Deputy Director of Information has been received from office of Deputy Director of Information has been received from office of Deputy Director of Income Tax (Investigation), Unit Income Tax (Investigation), Unit-5(1), Mumbai vide letter No. 5(1), Mumbai vide letter No. DDIT(Inv)/Unit DDIT(Inv)/Unit-5(1)/Sharing 5(1)/Sharing of of Info/Jitendra/2018-19 Info/Jitendra/2018 dated 15.03.2019 received in this office through designated e 15.03.2019 received in this office through designated e 15.03.2019 received in this office through designated e-mail on 22.03.2019 regarding a above said assessee is running a 019 regarding a above said assessee is running a 019 regarding a above said assessee is running a proprictorship concern M/s Neelay Packers and Movers in which he proprictorship concern M/s Neelay Packers and Movers in which he proprictorship concern M/s Neelay Packers and Movers in which he is engaged in the business of logistic service like relocating, moving is engaged in the business of logistic service like relocating, moving is engaged in the business of logistic service like relocating, moving of house effects. The assessec, Jatin Harishn Sotta, had operated of house effects. The assessec, Jatin Harishn Sotta, had operated of house effects. The assessec, Jatin Harishn Sotta, had operated the bank current account of Jitendra K. Palan and credited the ank current account of Jitendra K. Palan and credited the ank current account of Jitendra K. Palan and credited the same with 92% cash deposit which is to ihe tune of Rs. same with 92% cash deposit which is to ihe tune of Rs. same with 92% cash deposit which is to ihe tune of Rs. 2,86,80,200/ 2,86,80,200/ - during F.Y. 2011-12. Further, the credit by means of 12. Further, the credit by means of cash deposit were immediately transferred through RTGS to M/s cash deposit were immediately transferred through RTGS to M/s cash deposit were immediately transferred through RTGS to M/s Mahendra Inte Mahendra International and M/s D.D.M Implex during the F.Y 2012 rnational and M/s D.D.M Implex during the F.Y 2012- 13. Since the assessee is a non 13. Since the assessee is a non-filer, the source of these cash filer, the source of these cash deposits remain unexplained. deposits remain unexplained. Accordingly, the case was reopened u/s 147 of the IT Act 1961 Accordingly, the case was reopened u/s 147 of the IT Act 1961 Accordingly, the case was reopened u/s 147 of the IT Act 1961 after taking necessary approval u/s 151(1) of the after taking necessary approval u/s 151(1) of the I.T. Act 1961. I.T. Act 1961. Notice u/s 148 of the IT. Act 1961 dated 31.03.2019 was issued Notice u/s 148 of the IT. Act 1961 dated 31.03.2019 was issued Notice u/s 148 of the IT. Act 1961 dated 31.03.2019 was issued to the assessee. assessee.” 7.1 We find that the Dy. Director of Income e find that the Dy. Director of Income-tax (Investigation) tax (Investigation) while recording statement u/s 131 of the Act in the case of Jitendra while recording statement u/s 131 of the Act in the case of Jitendra while recording statement u/s 131 of the Act in the case of Jitendra K. Palan observed deposit K. Palan observed deposits of cash amounting to Rs.2,86,80,200/ Rs.2,86,80,200/- in current bank account of his propriety concern in current bank account of his propriety concern. The Dy. Director . The Dy. Director of Income-tax (Investigation) recorded statement of Shri Jitendra K. tax (Investigation) recorded statement of Shri Jitendra K. tax (Investigation) recorded statement of Shri Jitendra K. Palan on 11.02.2019 wherein Palan on 11.02.2019 wherein sh Shri Jitendra K. Palan Shri Jitendra K. Palan stated that bank account was operated was operated at the instance of Shri Jatin Harish the instance of Shri Jatin Harish Sotta. He further stated that he allowed to operate the bank Sotta. He further stated that he allowed to operate the bank Sotta. He further stated that he allowed to operate the bank account to provide accommodation account to provide accommodation entries to other person at the to other person at the instance of Shri Jatin Harish Sotta. In response to question No. 16 instance of Shri Jatin Harish Sotta. In response to question No. 16 instance of Shri Jatin Harish Sotta. In response to question No. 16 available on Paper Book page 16 and answer to question No. 16 Paper Book page 16 and answer to question No. 16 Paper Book page 16 and answer to question No. 16 Shri Jitendra K. Palan admitted that Shri Jatin Harish Sotta used ndra K. Palan admitted that Shri Jatin Harish Sotta used ndra K. Palan admitted that Shri Jatin Harish Sotta used his current account his current account for deposits. In question No. 20 also Shri deposits. In question No. 20 also Shri Jitendra K. Palan admitted Jitendra K. Palan admitted that said current account was used for said current account was used for deposit of cash belonging to Jatin Harish Sotta proprietor of deposit of cash belonging to Jatin Harish Sotta proprietor of deposit of cash belonging to Jatin Harish Sotta proprietor of Mahendra International. Further in question No. 23 also he Mahendra International. Further in question No. 23 also he Mahendra International. Further in question No. 23 also he admitted that cash deposits in current account admitted that cash deposits in current account were were belonging to Mr. Jatin Harish Sotta. For ready r Mr. Jatin Harish Sotta. For ready reference, said statement of Shri said statement of Shri Jidentra K. Palan enclosed in paper book enclosed in paper book is reproduced as under: is reproduced as under:
“Q.1 Please identify yourself and produce the photocopy of your Q.1 Please identify yourself and produce the photocopy of your Q.1 Please identify yourself and produce the photocopy of your identity card. Please confirm that the oath has been administered to identity card. Please confirm that the oath has been administered to identity card. Please confirm that the oath has been administered to you and also confirm that you and also confirm that you have been explained the you have been explained the consequences of giving false statement under Oath? consequences of giving false statement under Oath? Ans I am Jitendra Karamshi Palan, S/o Shri Karamshi Palan, aged Ans I am Jitendra Karamshi Palan, S/o Shri Karamshi Palan, aged Ans I am Jitendra Karamshi Palan, S/o Shri Karamshi Palan, aged 45 years, currently residing at E 45 years, currently residing at E-406, Pinewood, Vasant Garden, 406, Pinewood, Vasant Garden, Swapna Nogari (Noar Tara Singh Garden) Mulund (W Swapna Nogari (Noar Tara Singh Garden) Mulund (W Swapna Nogari (Noar Tara Singh Garden) Mulund (West), Mumbai 400080. I confirm that the oath has been administered to me. 400080. I confirm that the oath has been administered to me. 400080. I confirm that the oath has been administered to me. Q.2 I am now showing you the relevant provisions of Indian Penal Q.2 I am now showing you the relevant provisions of Indian Penal Q.2 I am now showing you the relevant provisions of Indian Penal Code, 1860, the chapter X of the code provides for punishment "of Code, 1860, the chapter X of the code provides for punishment "of Code, 1860, the chapter X of the code provides for punishment "of contempt's of the lawful authority of public servan contempt's of the lawful authority of public servants". For the sake ts". For the sake of your understanding, the text of section 181 and 177 of the code of your understanding, the text of section 181 and 177 of the code of your understanding, the text of section 181 and 177 of the code are reproduced herein asunder: are reproduced herein asunder: A. "181. False statement on or affirmation to public servant or A. "181. False statement on or affirmation to public servant or A. "181. False statement on or affirmation to public servant or person authorised to administer an eath or affirmation. Wheaver, person authorised to administer an eath or affirmation. Wheaver, person authorised to administer an eath or affirmation. Wheaver, being legally bound by an oath [or affirmation) to state the truth on lly bound by an oath [or affirmation) to state the truth on lly bound by an oath [or affirmation) to state the truth on any subject to any public servant or other servant or other person any subject to any public servant or other servant or other person any subject to any public servant or other servant or other person as aforesaid, touching the subject, any belleve to be true, shall be as aforesaid, touching the subject, any belleve to be true, shall be as aforesaid, touching the subject, any belleve to be true, shall be punished with Imprisonment of either description for a term punished with Imprisonment of either description for a term punished with Imprisonment of either description for a term which may extend to three years, and also be liable to fine. may extend to three years, and also be liable to fine.
8. 177. Furnishing false information, Whoever, being legally bound 8. 177. Furnishing false information, Whoever, being legally bound 8. 177. Furnishing false information, Whoever, being legally bound to furnish information on any subject to any public servant, as to furnish information on any subject to any public servant, as to furnish information on any subject to any public servant, as furnishes, as true, information on the subject which he knows o furnishes, as true, information on the subject which he knows o furnishes, as true, information on the subject which he knows or has reason to believe to be false, shall be punished with simple has reason to believe to be false, shall be punished with simple has reason to believe to be false, shall be punished with simple Imprisonment for a term which may extend to six months, or with Imprisonment for a term which may extend to six months, or with Imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. fine which may extend to one thousand rupees, or with both. fine which may extend to one thousand rupees, or with both. C. Or, if the information, which of the commission of an offence, C. Or, if the information, which of the commission of an offence, C. Or, if the information, which of the commission of an offence, or is required for the purpose of preventing the commission of an offence, required for the purpose of preventing the commission of an offence, required for the purpose of preventing the commission of an offence, or in order to the apprehension of an offender, with imprisonment of or in order to the apprehension of an offender, with imprisonment of or in order to the apprehension of an offender, with imprisonment of either description for a term which may extend to two years, or with either description for a term which may extend to two years, or with either description for a term which may extend to two years, or with fine, or with both". fine, or with both". D. Further, I am also D. Further, I am also showing you the provisions of section 277A of showing you the provisions of section 277A of the Income Tax Act, 1961, which provides that in case any person the Income Tax Act, 1961, which provides that in case any person the Income Tax Act, 1961, which provides that in case any person willfully and with intent to enable the second person to evade the willfully and with intent to enable the second person to evade the willfully and with intent to enable the second person to evade the imposable taxes makes any statement which is false and which the imposable taxes makes any statement which is false and which the imposable taxes makes any statement which is false and which the first person knows to be false, he shall be punishable with rigorous knows to be false, he shall be punishable with rigorous knows to be false, he shall be punishable with rigorous imprisonment for a minimum term of three months which may imprisonment for a minimum term of three months which may imprisonment for a minimum term of three months which may extend to three years and with fine. For the sake of your clear extend to three years and with fine. For the sake of your clear extend to three years and with fine. For the sake of your clear understanding, the text of section 277A of the Act is reproduced understanding, the text of section 277A of the Act is reproduced understanding, the text of section 277A of the Act is reproduced herein as under: der: E. "277A. Falsification of books of account or document, etc. E. "277A. Falsification of books of account or document, etc. E. "277A. Falsification of books of account or document, etc.- If any person (hereafter in this section referred to as the first person) person (hereafter in this section referred to as the first person) person (hereafter in this section referred to as the first person) willfully and with intent to enable any other person (hereafter in willfully and with intent to enable any other person (hereafter in willfully and with intent to enable any other person (hereafter in this section referred to as the second person) this section referred to as the second person) to evade any tax or to evade any tax or interest or penalty chargeable and imposable under this Act, makes interest or penalty chargeable and imposable under this Act, makes interest or penalty chargeable and imposable under this Act, makes or causes to be made any entry or statement which is false and or causes to be made any entry or statement which is false and or causes to be made any entry or statement which is false and which the first person either knows to be false or does not believe to which the first person either knows to be false or does not believe to which the first person either knows to be false or does not believe to be true, in any books of account or be true, in any books of account or other document relevant to or other document relevant to or useful in any proceedings against the first person or the second useful in any proceedings against the first person or the second useful in any proceedings against the first person or the second person, under this Act, the first person shall be punishable with person, under this Act, the first person shall be punishable with person, under this Act, the first person shall be punishable with rigorous imprisonment for a term which shall not be less than three rigorous imprisonment for a term which shall not be less than three rigorous imprisonment for a term which shall not be less than three months but which may exten months but which may extend to three years and with fine. d to three years and with fine. F. Explanation. For the purposes of establishing the charge under F. Explanation. For the purposes of establishing the charge under F. Explanation. For the purposes of establishing the charge under this section, it shall not be necessary to prove that the second this section, it shall not be necessary to prove that the second this section, it shall not be necessary to prove that the second person has actually evaded any tax, penalty or interest chargeable person has actually evaded any tax, penalty or interest chargeable person has actually evaded any tax, penalty or interest chargeable or imposable under this Ac or imposable under this Act" G. Please confirm that the consequences of giving false statement on G. Please confirm that the consequences of giving false statement on G. Please confirm that the consequences of giving false statement on oath have been tuly explained to you in the light of above mentioned oath have been tuly explained to you in the light of above mentioned oath have been tuly explained to you in the light of above mentioned sections of Indian Penal Code, 1860 and Income Tax Act, 1961 and sections of Indian Penal Code, 1860 and Income Tax Act, 1961 and sections of Indian Penal Code, 1860 and Income Tax Act, 1961 and that you have been made aware that appropriate act that you have been made aware that appropriate act that you have been made aware that appropriate action may be attracted against you in case of violation of above provisions of law attracted against you in case of violation of above provisions of law attracted against you in case of violation of above provisions of law of the land.
Ans. Yes, I do confirm that the penal provisions for giving false Ans. Yes, I do confirm that the penal provisions for giving false Ans. Yes, I do confirm that the penal provisions for giving false statement on oath have been explained to me. Further, I also statement on oath have been explained to me. Further, I also statement on oath have been explained to me. Further, I also confirm having seen and understood confirm having seen and understood the above cited provisions. the above cited provisions. However, I would like to reiterate that what I am stating is my However, I would like to reiterate that what I am stating is my However, I would like to reiterate that what I am stating is my truthful and correct statement only. truthful and correct statement only. Q.3 Please confirm that you can read, write and understand English Q.3 Please confirm that you can read, write and understand English Q.3 Please confirm that you can read, write and understand English language. In which language would you like your statement to language. In which language would you like your statement to language. In which language would you like your statement to be recorded. Ans. Yes, I confirm that I can read, write and understand English Ans. Yes, I confirm that I can read, write and understand English Ans. Yes, I confirm that I can read, write and understand English language. I would like my statement to be recorded in English language. I would like my statement to be recorded in English language. I would like my statement to be recorded in English Language. Q.4 Please state your educational qualifications and the details of Q.4 Please state your educational qualifications and the details of Q.4 Please state your educational qualifications and the details of your employment. Also furnish your m your employment. Also furnish your mobile number and email id. obile number and email id. Ans. Sir, I am 10th class passed. Presently, I am Proprietor in M/s Ans. Sir, I am 10th class passed. Presently, I am Proprietor in M/s Ans. Sir, I am 10th class passed. Presently, I am Proprietor in M/s Neelay Packers and Movers having its registered office at E Neelay Packers and Movers having its registered office at E Neelay Packers and Movers having its registered office at E-406, Pinewood, Vasant Garden, Swapna Nagari (Near Tara Singh Pinewood, Vasant Garden, Swapna Nagari (Near Tara Singh Pinewood, Vasant Garden, Swapna Nagari (Near Tara Singh Garden) Mulund (West), Mumbai 400 080. M Garden) Mulund (West), Mumbai 400 080. My contact detail is y contact detail is 876762627288108516272 876762627288108516272 876762627288108516272 and and and email email email id id id is is is neelaypackers@gmail.com. neelaypackers@gmail.com. Q.5 Please state the details of your family members and their Q.5 Please state the details of your family members and their Q.5 Please state the details of your family members and their source of income. source of income. Ans. Sir, my family details are as under: Ans. Sir, my family details are as under:
Sr. Name Relationship Age (yrs) Educational Educational Source of No. Qualification Qualification income/profession 1. Purnima Wife 34 12th Pass House Wife Jitendra Palan 2. Neelay Son 11 Studying Studying in Student in Jitendra std. 6th Palan Q 6. What is your PAN number and slate whether you regularly file What is your PAN number and slate whether you regularly file What is your PAN number and slate whether you regularly file return of Income? Income? Ans. My PAN number is AABPP08158. Snce my mcome is beiow My PAN number is AABPP08158. Snce my mcome is beiow My PAN number is AABPP08158. Snce my mcome is beiow taxable Bit, I do not me return of income. My inst relum of teome taxable Bit, I do not me return of income. My inst relum of teome taxable Bit, I do not me return of income. My inst relum of teome was filed for A.Y. 2009 was filed for A.Y. 2009-2010
Q.7 Please eeplain the nature of business under proprietary concern Please eeplain the nature of business under proprietary concern Please eeplain the nature of business under proprietary concern Mis. Moolay Packers and Move Mis. Moolay Packers and Movers. Ans. 1am engaged in Household shiling work under proprietary Ans. 1am engaged in Household shiling work under proprietary Ans. 1am engaged in Household shiling work under proprietary concern M/s. Neelay concern M/s. Neelay Packers and Movers, Q.8 Since when are you engaged in this business? Q.8 Since when are you engaged in this business? Ans. 1 am engaged in this business from F.Y. 2010 Ans. 1 am engaged in this business from F.Y. 2010-11. 11. •Q.9. As you have stated that last return of •Q.9. As you have stated that last return of income was filed for AY income was filed for AY 2009-10, what was your source of income till that F.Y. 2008 10, what was your source of income till that F.Y. 2008 10, what was your source of income till that F.Y. 2008-2009. Ans. I was employed as a supervisor with M/s. Pralap Packers and I was employed as a supervisor with M/s. Pralap Packers and I was employed as a supervisor with M/s. Pralap Packers and Movers, proprietary concern of Shri Karamshi Palan. The firm was Movers, proprietary concern of Shri Karamshi Palan. The firm was Movers, proprietary concern of Shri Karamshi Palan. The firm was engaged in household shifting work. engaged in household shifting work. Due to family dispute, I left the Due to family dispute, I left the job in Pratap Packers and Movers and started new proprietary job in Pratap Packers and Movers and started new proprietary job in Pratap Packers and Movers and started new proprietary concern under name M/s. Neelay Packers and Movers. concern under name M/s. Neelay Packers and Movers. concern under name M/s. Neelay Packers and Movers. Q.10 In what capacity you are recording this statement? Q.10 In what capacity you are recording this statement? Q.10 In what capacity you are recording this statement? Ans. Sir, I am recording this statement as a Sir, I am recording this statement as a proprietor of M/s proprietor of M/s Neelay Packers and Movers. Neelay Packers and Movers. Q.11 Please state have you invested any capital while starting the Q.11 Please state have you invested any capital while starting the Q.11 Please state have you invested any capital while starting the new business new business under name M/s Neelay Packers and Movers. under name M/s Neelay Packers and Movers. Ans. No sir, I have not made any capital investment while starting No sir, I have not made any capital investment while starting No sir, I have not made any capital investment while starting the firm. Q 12. Please explain the process of work undertaken in M/s Neelay explain the process of work undertaken in M/s Neelay explain the process of work undertaken in M/s Neelay Packers and Movers. Movers. Ans. I get contract for household shifling work through Just I get contract for household shifling work through Just Dial. I get contract for household shifling work through Just After contact is made, After contact is made, visit the party and finalize the contract of visit the party and finalize the contract of household shifting work. No agreement for such household shifting work. No agreement for such contract is made. I contract is made. I contact daily labourers and transporter to get the work done. contact daily labourers and transporter to get the work done. contact daily labourers and transporter to get the work done. After completing completing completing the the the shifting shifting shifting work work work cash cash cash is is is received. received. received. Daily Daily Daily labourer are paid cash of Re 700 per day. Transactions are paid y. Transactions are paid form Rs. 1500 1500 to Rs 2000 0.13 Please give the deta 0.13 Please give the details of all the bank accounts accounts operated by you. Ans I have Current Bank Ans I have Current Bank with Bank of India Mulund Branch with Bank of India Mulund Branch Account No. 000920110000389 and 000920110000389 and OD (Over Draft) (Over Draft) Account with Bank of of of India. India. India. Muland Muland Muland Branch Branch Branch Mumbai Mumbai Mumbai Account Account Account по по по 00002011000071147 00002011000071147.
0.14 From this address, what other concerne are being operated 0.14 From this address, what other concerne are being operated 0.14 From this address, what other concerne are being operated and give detail detail of nature of business of all the concerns of nature of business of all the concerns operating/running from this premise? operating/running from this premise? Ans Sir no other entities (Proprietor ship, partnership, LLP, no other entities (Proprietor ship, partnership, LLP, no other entities (Proprietor ship, partnership, LLP, Company, HUF, etc) a Company, HUF, etc) are running from address E-406 Pin 406 Pinewood Vasant Garden, Sapna Nagari (Near Tara Vasant Garden, Sapna Nagari (Near Tara 学 Singh Garden) Mulund Singh Garden) Mulund (West). Mumbai 400 080 except Mrs Neelay Packers and Movers (West). Mumbai 400 080 except Mrs Neelay Packers and Movers (West). Mumbai 400 080 except Mrs Neelay Packers and Movers Q.15 Have you ever deposited cash in your current account with Q.15 Have you ever deposited cash in your current account with Q.15 Have you ever deposited cash in your current account with Bank of India Mulund West Branch. Bank of India Mulund West Branch. Ans/Yes sir. I Ans/Yes sir. I have deposited cash in my current account have deposited cash in my current account 006920110000369 with Bank of India Mulund west branch. 006920110000369 with Bank of India Mulund west branch. 006920110000369 with Bank of India Mulund west branch. Q.16. What amount you have deposited in your current account Q.16. What amount you have deposited in your current account Q.16. What amount you have deposited in your current account 006920110000369 with Bank of India Mulund west branch out of 006920110000369 with Bank of India Mulund west branch out of 006920110000369 with Bank of India Mulund west branch out of your business income from Mis Neelay your business income from Mis Neelay Packers and Movers from Packers and Movers from F.Y. 2010-11 onwards. 11 onwards. Ans. The cash received from household shifting work after making Ans. The cash received from household shifting work after making Ans. The cash received from household shifting work after making payment to daily labourers and transporter maximum sum balance payment to daily labourers and transporter maximum sum balance payment to daily labourers and transporter maximum sum balance per contract Rs. 400/ per contract Rs. 400/- remains which is used for my household remains which is used for my household expense. However I h expense. However I have allowed one of my coaching class friend coaching class friend (Haribhai classes at Mulund (Haribhai classes at Mulund - now closed) Shri Jatin Sotta to use now closed) Shri Jatin Sotta to use my current account with Bank of India in F.Y. 2011 my current account with Bank of India in F.Y. 2011 my current account with Bank of India in F.Y. 2011-12 as he promised me to get housing loan. My account was used by him till promised me to get housing loan. My account was used by him till promised me to get housing loan. My account was used by him till F.Y. 2012-13.
Q.17 Who is Mr. Jatin Sotta. Give his complete address (residence o is Mr. Jatin Sotta. Give his complete address (residence o is Mr. Jatin Sotta. Give his complete address (residence and office) with contact details. and office) with contact details. Ans. Mr. Jatin Sotta, staying in premise at Devidayal Road, Mulund Ans. Mr. Jatin Sotta, staying in premise at Devidayal Road, Mulund Ans. Mr. Jatin Sotta, staying in premise at Devidayal Road, Mulund West, Mumbai Presently the premise is in redevelopment hence his West, Mumbai Presently the premise is in redevelopment hence his West, Mumbai Presently the premise is in redevelopment hence his whereabouts not known. He is whereabouts not known. He is proprietor of Mahendra International oprietor of Mahendra International He is in impart export business. His contact no is 9819474777 He is in impart export business. His contact no is 9819474777 He is in impart export business. His contact no is 9819474777 Q.18 Who deposited cash in current account 006920110000369 Q.18 Who deposited cash in current account 006920110000369 Q.18 Who deposited cash in current account 006920110000369 with Bank of India Mulund west branch Mumbai? with Bank of India Mulund west branch Mumbai? Ans I along with Mr. Jatin Sotla use to deposit cash i Ans I along with Mr. Jatin Sotla use to deposit cash i Ans I along with Mr. Jatin Sotla use to deposit cash in the current account 006920110000369. Once the cash is deposited he used to account 006920110000369. Once the cash is deposited he used to account 006920110000369. Once the cash is deposited he used to take signed cheque from me and visil Oriental Bank of Commerce, take signed cheque from me and visil Oriental Bank of Commerce, take signed cheque from me and visil Oriental Bank of Commerce, Masjid Bunder, Murnbal to remit/deposit same. Masjid Bunder, Murnbal to remit/deposit same.
Q.19 Please give the bank account detail of Mahendra International, Q.19 Please give the bank account detail of Mahendra International, Q.19 Please give the bank account detail of Mahendra International, Prop. JatinSotta with Oriental Bank of Commerce, Masjid Bunder, rop. JatinSotta with Oriental Bank of Commerce, Masjid Bunder, rop. JatinSotta with Oriental Bank of Commerce, Masjid Bunder, Mumbai. Ans. I don't know the bank account of Mahendra International, Ans. I don't know the bank account of Mahendra International, Ans. I don't know the bank account of Mahendra International, Prop. Jatin Sotta with Oriental Bank of Commerce, Masjid Bunder, Prop. Jatin Sotta with Oriental Bank of Commerce, Masjid Bunder, Prop. Jatin Sotta with Oriental Bank of Commerce, Masjid Bunder, Mumbai. As I have visited twice to deposit cheque with Jal Mumbai. As I have visited twice to deposit cheque with Jal Mumbai. As I have visited twice to deposit cheque with Jalin Solla, I know the bank. know the bank. Q.20 Other than Mr. Jatin Sotta, to whom you have allowed to use Q.20 Other than Mr. Jatin Sotta, to whom you have allowed to use Q.20 Other than Mr. Jatin Sotta, to whom you have allowed to use your current bank account at Mulund west branch. your current bank account at Mulund west branch. Ans. I have not allowed anybody else for using my current account Ans. I have not allowed anybody else for using my current account Ans. I have not allowed anybody else for using my current account 006920110000369 with Bank of India, Mulund west b 006920110000369 with Bank of India, Mulund west b 006920110000369 with Bank of India, Mulund west branch for depositing high value cash. Cash belonging to Jatin Sotta, prop of depositing high value cash. Cash belonging to Jatin Sotta, prop of depositing high value cash. Cash belonging to Jatin Sotta, prop of Mahendra International was deposited during FY 2011 Mahendra International was deposited during FY 2011 Mahendra International was deposited during FY 2011-12 and FY 2012-13. Q.21 From perusal of bank statement of current account Q.21 From perusal of bank statement of current account Q.21 From perusal of bank statement of current account 006920110000369, Bank of India Mulund west branch, it 006920110000369, Bank of India Mulund west branch, it 006920110000369, Bank of India Mulund west branch, it is seen that cash deposited is withdrawn on same day by two other firms that cash deposited is withdrawn on same day by two other firms that cash deposited is withdrawn on same day by two other firms viz. Shakti Enterprises and D.D.M. Impex. Please give details of said viz. Shakti Enterprises and D.D.M. Impex. Please give details of said viz. Shakti Enterprises and D.D.M. Impex. Please give details of said parties. Ans. As stated above Jatin Sotta deposited cash in my bank Ans. As stated above Jatin Sotta deposited cash in my bank Ans. As stated above Jatin Sotta deposited cash in my bank account in my presence. After depositing the account in my presence. After depositing the cash, I use to sign the cash, I use to sign the cheque prepared by him. I have no idea about Shakti Enterprises cheque prepared by him. I have no idea about Shakti Enterprises cheque prepared by him. I have no idea about Shakti Enterprises and D. D. M. Impex. It may be his concerns only. and D. D. M. Impex. It may be his concerns only. Q.22 Please state how much cash has been deposited by you and Q.22 Please state how much cash has been deposited by you and Q.22 Please state how much cash has been deposited by you and Jatin Sotta in current account 006920110000369 with Bank Jatin Sotta in current account 006920110000369 with Bank Jatin Sotta in current account 006920110000369 with Bank of India, Mulund west branch, Mumbai. India, Mulund west branch, Mumbai. Ans. Cash totaling more than Rs. 2.5 crores was deposited by me Ans. Cash totaling more than Rs. 2.5 crores was deposited by me Ans. Cash totaling more than Rs. 2.5 crores was deposited by me and Jatin Sotta in current account 006920110000369 with Bank of and Jatin Sotta in current account 006920110000369 with Bank of and Jatin Sotta in current account 006920110000369 with Bank of India, Mulund west branch, Mumbai. India, Mulund west branch, Mumbai. Q.23 Please state again to whom did the cash which you .23 Please state again to whom did the cash which you .23 Please state again to whom did the cash which you deposited in current account 006920110000389 with Bank of India, Mutund in current account 006920110000389 with Bank of India, Mutund in current account 006920110000389 with Bank of India, Mutund west branch, Mumbat along with Mr. Jatin Sotta belong to. west branch, Mumbat along with Mr. Jatin Sotta belong to. west branch, Mumbat along with Mr. Jatin Sotta belong to. Ant Sir, I apain confirm that the cash deposited in current account Ant Sir, I apain confirm that the cash deposited in current account Ant Sir, I apain confirm that the cash deposited in current account 006970110000369 with Bank of India, Mulund west branch, 006970110000369 with Bank of India, Mulund west branch, 006970110000369 with Bank of India, Mulund west branch, Mumbai belonged to Mr Jatin Sotta mbai belonged to Mr Jatin Sotta Q.24 Please state whether any cash belonging to you or other party Q.24 Please state whether any cash belonging to you or other party Q.24 Please state whether any cash belonging to you or other party has been deposited by you in bank account other than current has been deposited by you in bank account other than current has been deposited by you in bank account other than current account 006920110000369 with Bank of India, Mulund west in account 006920110000369 with Bank of India, Mulund west in account 006920110000369 with Bank of India, Mulund west in India. Ans. I state on oath that such Ans. I state on oath that such transaction are not done by me in any transaction are not done by me in any other bank account. I have only one current account 1.8 other bank account. I have only one current account 1.8 other bank account. I have only one current account 1.8 006920110000369 with Bank of India, Mulund west branch, 006920110000369 with Bank of India, Mulund west branch, 006920110000369 with Bank of India, Mulund west branch, Mumbai in which cash is deposited in my presence by Jatin Sotta. Mumbai in which cash is deposited in my presence by Jatin Sotta. Mumbai in which cash is deposited in my presence by Jatin Sotta. My other account is overdraft account me My other account is overdraft account mentioned above. No such ntioned above. No such transaction is made in overdraft account. transaction is made in overdraft account. Q.25 Please state how much commission did you received in each Q.25 Please state how much commission did you received in each Q.25 Please state how much commission did you received in each cash deposit transaction from Jatin Sotta. cash deposit transaction from Jatin Sotta. Ans. I have not received any commission from him. I have just Ans. I have not received any commission from him. I have just Ans. I have not received any commission from him. I have just allowed him to use by c allowed him to use by current account i.e. 006920110000369 with urrent account i.e. 006920110000369 with Bank of India, Mulund west branch, Mumbai as he promised me to Bank of India, Mulund west branch, Mumbai as he promised me to Bank of India, Mulund west branch, Mumbai as he promised me to help me getting loan. help me getting loan. Q.26 Please state why the cash deposited in your current account Q.26 Please state why the cash deposited in your current account Q.26 Please state why the cash deposited in your current account 006920110000369 with Bank of India, Mulund west branch, 006920110000369 with Bank of India, Mulund west branch, 006920110000369 with Bank of India, Mulund west branch, Mumbai should not be brought to tax in your hand. ould not be brought to tax in your hand. Ans. Sir, I already stated on oath that the cash deposited in my Ans. Sir, I already stated on oath that the cash deposited in my Ans. Sir, I already stated on oath that the cash deposited in my current account is belonging to Jatin Sotta. He used to contact me on current account is belonging to Jatin Sotta. He used to contact me on current account is belonging to Jatin Sotta. He used to contact me on my mobile no. 9920943816 whenever he wanted to deposit his my mobile no. 9920943816 whenever he wanted to deposit his my mobile no. 9920943816 whenever he wanted to deposit his cash in my current ac cash in my current account 006920110000369 with Bank of India, count 006920110000369 with Bank of India, Mulund west branch, Mumbai. I will give the information/ Mulund west branch, Mumbai. I will give the information/ Mulund west branch, Mumbai. I will give the information/ whereabouts of Jatin Sotta within three days. whereabouts of Jatin Sotta within three days. The recording of statement of Shri Jitendra Palan is temporarily The recording of statement of Shri Jitendra Palan is temporarily The recording of statement of Shri Jitendra Palan is temporarily concluded for the day at 5.00 P.M on 11/02/201 concluded for the day at 5.00 P.M on 11/02/2019 on the request of 9 on the request of the assessee and he is allowed to take rest. Further, recording of the assessee and he is allowed to take rest. Further, recording of the assessee and he is allowed to take rest. Further, recording of statement will resume tomorrow statement will resume tomorrow on 18/02/2019. Whatever stated above is true and correct to the best of my Whatever stated above is true and correct to the best of my Whatever stated above is true and correct to the best of my knowledge and belief. The above statement is given by me knowledge and belief. The above statement is given by me knowledge and belief. The above statement is given by me voluntarily, without any force, threat, coercion, any inducement, voluntarily, without any force, threat, coercion, any inducement, voluntarily, without any force, threat, coercion, any inducement, promise, or any other undue influence. I further affirm that oath promise, or any other undue influence. I further affirm that oath promise, or any other undue influence. I further affirm that oath was administered to me before recording the statement. Further I was administered to me before recording the statement. Further I was administered to me before recording the statement. Further I declare that I have read & understood the above recorded declare that I have read & understood the above recorded declare that I have read & understood the above recorded statement and I confirm that it has been correctly recorded and as atement and I confirm that it has been correctly recorded and as atement and I confirm that it has been correctly recorded and as such, the contents of the same are such, the contents of the same are binding on me.” 7.2 It is sina que non sina que non that the Assessing Officer must have a that the Assessing Officer must have a reason to believe that income chargeable to tax has escaped that income chargeable to tax has escaped that income chargeable to tax has escaped assessment; such b assessment; such belief must be based on tangible, credible elief must be based on tangible, credible material and not on conjecture or suspicion. The material before the material and not on conjecture or suspicion. The material before the material and not on conjecture or suspicion. The material before the AO in this case — a contemporaneous communication from the a contemporaneous communication from the Investigation Wing coupled with a sworn statement recorded under Investigation Wing coupled with a sworn statement recorded under Investigation Wing coupled with a sworn statement recorded under section 131 — is of a character that goes well beyond idle suspicion. character that goes well beyond idle suspicion. The statement of Shri Jitendra K. Palan is explicit that substantial The statement of Shri Jitendra K. Palan is explicit that substantial The statement of Shri Jitendra K. Palan is explicit that substantial cash deposits in his account were made on behalf of, and at the cash deposits in his account were made on behalf of, and at the cash deposits in his account were made on behalf of, and at the instance of, the assessee and were thereafter routed to entities instance of, the assessee and were thereafter routed to entities instance of, the assessee and were thereafter routed to entities belonging to the assessee. Such a nexus between the deposits and to the assessee. Such a nexus between the deposits and to the assessee. Such a nexus between the deposits and the assessee is a cogent and relevant material on which a belief may the assessee is a cogent and relevant material on which a belief may the assessee is a cogent and relevant material on which a belief may legitimately be founded. In short, the AO’s subjective belief was legitimately be founded. In short, the AO’s subjective belief was legitimately be founded. In short, the AO’s subjective belief was supported by objective, tangible data and hence the reopening supported by objective, tangible data and hence the reopening supported by objective, tangible data and hence the reopening complies with the statutory test. plies with the statutory test.
7.3 Statements recorded under section 131, given on oath before Statements recorded under section 131, given on oath before Statements recorded under section 131, given on oath before an authorised officer, an authorised officer, carry substantial evidentiary weight. an authorised officer, carry substantial evidentiary weight. carry substantial evidentiary weight. Admissions in such statements Admissions in such statements — particularly those admitting that particularly those admitting that an account was used at the instan an account was used at the instance of another person and that ce of another person and that cash deposited belonged to that person cash deposited belonged to that person — are relevant and reliable are relevant and reliable leads for reopening of assessment reopening of assessment. The statement of Shri Jitendra . The statement of Shri Jitendra K. Palan identifies the assessee as the source and the beneficiary of K. Palan identifies the assessee as the source and the beneficiary of K. Palan identifies the assessee as the source and the beneficiary of the disputed receipts; the disputed receipts; it therefore constitutes logical and cogent it therefore constitutes logical and cogent material to trace the origin and application of funds. Reliance on material to trace the origin and application of funds. Reliance on material to trace the origin and application of funds. Reliance on such a statement for forming such a statement for forming reasons to believe reasons to believe is legally sustainable.
7.4 A reopening founded on mere parroting of an investigational A reopening founded on mere parroting of an investigational A reopening founded on mere parroting of an investigational conclusion — without independent application of mind by the AO without independent application of mind by the AO — without independent application of mind by the AO gives rise to the objection of borrowed satisfaction. That is not this gives rise to the objection of borrowed satisfaction. That is not this gives rise to the objection of borrowed satisfaction. That is not this case. The record shows (a) receipt of information from the case. The record shows (a) receipt of information from the case. The record shows (a) receipt of information from the Investigation Wing; (b) verification of bank entries; and (c) Investigation Wing; (b) verification of bank entries; and (c) Investigation Wing; (b) verification of bank entries; and (c) reproduction of relevant portions of the statement of the third tion of relevant portions of the statement of the third tion of relevant portions of the statement of the third-party account-holder. The AO did not simply adopt a template; he applied holder. The AO did not simply adopt a template; he applied holder. The AO did not simply adopt a template; he applied the material to the facts of the assessee (bank trail showing the material to the facts of the assessee (bank trail showing the material to the facts of the assessee (bank trail showing transfers to the assessee’s concerns) and recorded reasons transfers to the assessee’s concerns) and recorded reasons transfers to the assessee’s concerns) and recorded reasons accordingly. Thus, the AO’s belief was his own, informed by ingly. Thus, the AO’s belief was his own, informed by ingly. Thus, the AO’s belief was his own, informed by admissible material, and cannot be characterised as borrowed admissible material, and cannot be characterised as borrowed admissible material, and cannot be characterised as borrowed satisfaction.
7.5 In view of aforesaid discussion, w In view of aforesaid discussion, we reject the arguments of the reject the arguments of the Ld. counsel for the assessee and uphold the reassessment Ld. counsel for the assessee and uphold the reassessment Ld. counsel for the assessee and uphold the reassessment proceedings.
As far as addition on merit is concerned, As far as addition on merit is concerned, the Ld. counsel for the Ld. counsel for the assessee submitted that cash was deposited in the account the assessee submitted that cash was deposited in the account the assessee submitted that cash was deposited in the account belonging to sh Jitendra K. belonging to sh Jitendra K. Palan and addition has been made in Palan and addition has been made in the hands of the said person. The assessee was not in position to the hands of the said person. The assessee was not in position to the hands of the said person. The assessee was not in position to explain the source of said cash deposit, therefore no addition in the explain the source of said cash deposit, therefore no addition in the explain the source of said cash deposit, therefore no addition in the hands of assessee is warranted. The Ld. counsel referred to hands of assessee is warranted. The Ld. counsel referred to hands of assessee is warranted. The Ld. counsel referred to information sent by th information sent by the Dy. Director of Income-tax (Investigation) to tax (Investigation) to the Assessing Officer along with copy of the statement of Shri the Assessing Officer along with copy of the statement of Shri the Assessing Officer along with copy of the statement of Shri Jitendra K. Palan, which is available on Paper Book page 9 to 19. Jitendra K. Palan, which is available on Paper Book page 9 to 19. Jitendra K. Palan, which is available on Paper Book page 9 to 19.
The Ld. counsel for the assessee also referred to the reassessment The Ld. counsel for the assessee also referred to the reassessment The Ld. counsel for the assessee also referred to the reassessment proceedings of subsequent assessment year 2013 of subsequent assessment year 2013-14 in respect of 14 in respect of similar deposit made in the subsequent assessment year and similar deposit made in the subsequent assessment year and similar deposit made in the subsequent assessment year and submitted that in subsequent year, no addition has been made. submitted that in subsequent year, no addition has been made. submitted that in subsequent year, no addition has been made.
8.1 We find that assessee find that assessee didn’t explain the sources of deposits the sources of deposits either before the Ld. Assessing Officer or before the Ld. CIT(A) e Ld. Assessing Officer or before the Ld. CIT(A) e Ld. Assessing Officer or before the Ld. CIT(A). From the statement of Shri Jitendra K. Palan reproduced above it is the statement of Shri Jitendra K. Palan reproduced above the statement of Shri Jitendra K. Palan reproduced above that the deposits of ₹2,86,80,200/–, though made in the evident that the deposits of , though made in the account of Shri Jitendra K. Palan, account of Shri Jitendra K. Palan, most of it ultimately landed in ultimately landed in the bank account of the assessee and the bank account of the assessee and were directly traceable to the were directly traceable to the assessee, as they were transferred to the assessee’s concerns. Once assessee, as they were transferred to the assessee’s concerns. Once assessee, as they were transferred to the assessee’s concerns. Once the nexus is established, the burden squarely lay on the assessee to the nexus is established, the burden squarely lay on the assessee to the nexus is established, the burden squarely lay on the assessee to explain the nature and source explain the nature and source of the said deposits. The assessee, of the said deposits. The assessee, however, neither before the Assessing Officer nor before the CIT(A), however, neither before the Assessing Officer nor before the CIT(A), however, neither before the Assessing Officer nor before the CIT(A), nor even before us, has brought any material to discharge this nor even before us, has brought any material to discharge this nor even before us, has brought any material to discharge this burden. The assessee cannot run away by way of making argument The assessee cannot run away by way of making argument The assessee cannot run away by way of making argument that it was the onus of S that it was the onus of Shri Jitendra K. Palan to explain the deposit hri Jitendra K. Palan to explain the deposit in his current account and addition has been made by the in his current account and addition has been made by the in his current account and addition has been made by the Assessing Officer in his case and therefore, no addition is warranted Assessing Officer in his case and therefore, no addition is warranted Assessing Officer in his case and therefore, no addition is warranted in the case of the assessee. in the case of the assessee. Mere plea that the account belonged to Mere plea that the account belonged to Shri Jitendra K. Palan is of no avail, since the evidence clearly Palan is of no avail, since the evidence clearly Palan is of no avail, since the evidence clearly demonstrates that the monies belonged to and enured to the benefit demonstrates that the monies belonged to and enured to the benefit demonstrates that the monies belonged to and enured to the benefit of the assessee. No documentary evidence o documentary evidences have have been filed in support of the ultimate source of ultimate source of credit appearing in the books of credit appearing in the books of the assessee, which are which are generated due to cash deposits in the cash deposits in the current account of Jitendra K. Palan current account of Jitendra K. Palan.
8.2 We are also unable to accept the contention that, since no We are also unable to accept the contention that, since no We are also unable to accept the contention that, since no addition was made in the subsequent year, consistency demands addition was made in the subsequent year, consistency demands addition was made in the subsequent year, consistency demands deletion in the present year. deletion in the present year. Orders passed in other assessment ed in other assessment years cannot be mechanically plugged in as a shield in the present years cannot be mechanically plugged in as a shield in the present years cannot be mechanically plugged in as a shield in the present year. Each assessment year is a distinct unit governed by facts and year. Each assessment year is a distinct unit governed by facts and year. Each assessment year is a distinct unit governed by facts and material available for that year. The invocation of a subsequent material available for that year. The invocation of a subsequent material available for that year. The invocation of a subsequent acceptance in a later year cannot acceptance in a later year cannot, without more, disentitle the , without more, disentitle the Revenue from pursuing a legitimate claim in an earlier year where Revenue from pursuing a legitimate claim in an earlier year where Revenue from pursuing a legitimate claim in an earlier year where cogent material existed. cogent material existed. It is a trite law, as enunciated by the It is a trite law, as enunciated by the Hon’ble Supreme Court in Hon’ble Supreme Court in Distributors (Baroda) Pvt. Ltd. v. Union of Distributors (Baroda) Pvt. Ltd. v. Union of India [155 ITR 120 (SC)], [155 ITR 120 (SC)], that there is no heroism in perpetuating that there is no heroism in perpetuating an error; each assessment year is a separate unit, and the principle an error; each assessment year is a separate unit, and the principle an error; each assessment year is a separate unit, and the principle of consistency cannot override substantive justice where tangible of consistency cannot override substantive justice where tangible of consistency cannot override substantive justice where tangible material establishes taxability. material establishes taxability.
8.3 The assessee’s failure to file the regula The assessee’s failure to file the regular return for the year r return for the year under consideration, coupled with repeated non under consideration, coupled with repeated non-compliance with compliance with appearance to explain the notices under section 142 and non notices under section 142 and non-appearance to explain the crucial issue, is material. The law permits the drawing of an adverse crucial issue, is material. The law permits the drawing of an adverse crucial issue, is material. The law permits the drawing of an adverse inference where a taxpayer, despite being inference where a taxpayer, despite being afforded opportunities, afforded opportunities, wilfully refrains from disclosing material facts or producing wilfully refrains from disclosing material facts or producing wilfully refrains from disclosing material facts or producing evidence. Non-cooperation in the face of clear documentary leads cooperation in the face of clear documentary leads cooperation in the face of clear documentary leads weakens the assessee’s case and strengthens the reasonableness of weakens the assessee’s case and strengthens the reasonableness of weakens the assessee’s case and strengthens the reasonableness of the AO’s conclusion.
8.4 Having upheld the validity of reassessment and noting the Having upheld the validity of reassessment and noting the Having upheld the validity of reassessment and noting the cogent material relied upon by the AO, we are mindful of basic cogent material relied upon by the AO, we are mindful of basic cogent material relied upon by the AO, we are mindful of basic tenets of natural justice and the principle that adjudication should tenets of natural justice and the principle that adjudication should tenets of natural justice and the principle that adjudication should aim at substantial justice rather than mere technical victory. aim at substantial justice rather than mere technical victory. aim at substantial justice rather than mere technical victory. Nonetheless, considering the plea of the assessee that one further etheless, considering the plea of the assessee that one further etheless, considering the plea of the assessee that one further opportunity be afforded to adduce evidence explaining the sources opportunity be afforded to adduce evidence explaining the opportunity be afforded to adduce evidence explaining the of cash deposits, which have of cash deposits, which have directly or indirectly, ultimately landed ultimately landed in the bank account of the assessee, in the bank account of the assessee, and bearing in min and bearing in mind the principle that substantial justice must prevail over technicalities, principle that substantial justice must prevail over technicalities, principle that substantial justice must prevail over technicalities, we are inclined to restore the matter to the file of the Ld. CIT(A). The we are inclined to restore the matter to the file of the Ld. CIT(A). The we are inclined to restore the matter to the file of the Ld. CIT(A). The assessee shall be at liberty to place all supporting documents to assessee shall be at liberty to place all supporting documents to assessee shall be at liberty to place all supporting documents to substantiate his explanation regardi substantiate his explanation regarding the source of cash deposits. source of cash deposits. The assessee shall also produce sh The assessee shall also produce sh Jitendra K. Palan Jitendra K. Palan before the lower authorities so as to identification of cash deposits pertaining lower authorities so as to identification of cash deposits pertaining lower authorities so as to identification of cash deposits pertaining to assessee can be correctly carried out. T to assessee can be correctly carried out. The Ld. Ld. CIT(A) shall adjudicate the issue afresh in a adjudicate the issue afresh in accordance with law after ccordance with law after carrying out all necessary enquiry as deemed fit but after affording due out all necessary enquiry as deemed fit but after out all necessary enquiry as deemed fit but after opportunity to the assessee opportunity to the assessee of being heard.
8.5 The grounds of appeal of the assessee on the merit are The grounds of appeal of the assessee on the merit are The grounds of appeal of the assessee on the merit are accordingly allowed for statistical purposes. accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is partly allowed for result, the appeal of the assessee is partly allowed for result, the appeal of the assessee is partly allowed for statistical purposes. statistical purposes.
Order pronounced in the open Court on ounced in the open Court on 22/09/2025. /09/2025.