S K TRADING COMPANY,MUMBAI vs. INCOME TAX OFFICER, WARD - 42(1)(5), MUMBAI

आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The above captioned appeals emanating from the appellate orders of even date have been preferred by the assessee pertaining to assessment orders passed u/s. 143(3) r.w.s. 147 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] as passed by the Learned

P a g e | 2 ITA No. 7614, 7615 7616/Mum/2025 A.Ys. 2013-14, 2014-15 & 2015-16 SK Trading Company, Mumbai Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] for Assessment Years 2013-14, 2014-15 and 2015-16.Since the issues involved are common, the facts being identical, barring figurative variations and also that these appeals were heard together, they are being taken up for adjudication vide this composite order for the sake of brevity. We take up appeal for the AY 2013-14 first as the Lead case.

P a g e | 3 ITA No. 7614, 7615 7616/Mum/2025 A.Ys. 2013-14, 2014-15 & 2015-16 SK Trading Company, Mumbai accounts in Mumbai Branch of Shri Renukamata Multi State Co-operative Urban Credit Society Limited. The basis, that huge amount was received from parties holding their accounts in Mumbai Branch of Shri Renukamata Multi State Co-operative Urban Credit Society Limited, on which the appellant’s case was reopened are the details available at the time of scrutiny assessment and hence there was no failure on the part of appellant which alludes to reopening of appellant’s case. 1.3 Under the facts and in law, learned CIT(A) failed to appreciate the fact that the learned A.O has reopened appellant’s case based on information which does not lead to formation of belief for escapement of income as well as the reasons recorded has no nexus or live link with the escapement of income of the appellant. 1.4 Under the facts and in law, leamed CTT(A) failed to appreciate the fact that learned A.O. has reopened appellant’s case based on borrowed satisfaction and without having done any further enquiry. 1.5 Under the facts and in circumstances, the learned CIT(A) failed to appreciate the fact that no corroborative evidence was found against the appellant in the search and seizure proceedings carried out in the case of Shri Renuka Mata Multi State Cooperative Urban Credit Society Limited. 2. Under the facts and in law, the learned CIT(A) erred in dismissing the appeal filed by the appellant and confirming the addition made by the Assessing officer (hereinafter referred to as “learned A.O.”) of Rs.2,93,00,000/-, being the aggregate amount credited in the bank account of the appellant from the parties holding their account in Shri Renukamata Multi State Co-operative Urban Credit Society Limited, under section 68 of the Income Tax Act, 1961 (the Act). 2.1 Under the facts and in law, the learned CIT(A) is erred in passing the order without giving reasonable opportunity of hearing and making submission. 2.2 Under the facts and in law, the order passed by learned CIT(A) is in violation of the principle of natural justice and equity. 2.3 Under the facts and in law, the learned CIT(A) erred in confirming the addition made by the learned AO on the basis of Information received from the Deputy Director of Income Tax (Inv.), Unit-1(4), Mumbai, which was not

P a g e | 4 ITA No. 7614, 7615 7616/Mum/2025 A.Ys. 2013-14, 2014-15 & 2015-16 SK Trading Company, Mumbai made available to the appellant for rebuttal or giving the appellant due opportunity to cross examine the same. Such addition is against the principle of natural justice and hence is bad in law. 2.4 Under the facts and in law, the learned CIT(A) erred in assuming that the appellant is not in possession of any details/documents to substantiate his claim. 2.5 Under the facts and in law, the learned CIT(A) erred in confirming the assessment made by the learned A.O. under section 143(3) r.w.s 147 of the Act though the same was arbitrary and assumption and presumption of the learned A.O. 2.6Under the facts and in circumstances, the learned CTT(A) failed to appreciate the fact that the amount credited in bank account was part of appellant’s amount receivable from debtors for the year which has the amount had been duly offered to tax in the return of income filed or the amount receivable from funds lent. Thus, the addition of credits received in bank account results into double taxation of same income. 2.7 Under the facts and in law, the addition is made merely on the basis of presumption, surmises and conjecture of the learned A.O. since there is no conclusive evidence that the cash deposited in the bank account of the members of the Shri Renuka Mata Multi State Cooperative Urban Credit Society Limited was routed back to the appellant through different layers of banking channel. 2.8 Under the facts and in law, the learned CIT(A) erred in confirming the taxation of cash deposit found in the account of the members of Shri Renuka Mata Multi State Cooperative Urban Credit Society Limited in the hands of the appellant instead of the members in whose accounts cash deposited were made.

P a g e | 5 ITA No. 7614, 7615 7616/Mum/2025 A.Ys. 2013-14, 2014-15 & 2015-16 SK Trading Company, Mumbai received from the Investigation Wing of the Department, the case was reopened. As per the information, during the course search and seizure proceedings u/s. 132 of the Act in the case of Shri Renukamata Multi State Co-operative Urban Credit Society Limited on 26.05.2017, the society had been receiving substantial cash deposits into the accounts held by its members, and it was gathered that these account holder could not be traced at the addresses given to the society or were persons of very low means who were not at all involved in any business activity. As per the information, an amount of Rs. 2,93,00,000/- had been credited in bank account of the assessee, M/s. S.K.Trading Co. bearing A/c. No. 20079801921 held with Bank of Maharashtra, Kandivali, Mumbai, received from a few parties holding their accounts at the Mumbai Branch of Shri Renukamata Multi State Co-operative Urban Credit Society Ltd. In the account of these persons, substantial amount of cash deposits were made in various years in spite of these account holders being persons of no means and transfer of high amounts from their account were made which did not commensurate with their financial standing. Therefore, it was observed that the assessee’s own money was routed through different layers in its bank account to the tune of Rs. 2,93,00,000/- . In response to the notice issued u/s 148 of the Act, the assessee filed the return of income declaring total income of

P a g e | 6 ITA No. 7614, 7615 7616/Mum/2025 A.Ys. 2013-14, 2014-15 & 2015-16 SK Trading Company, Mumbai Rs. 42,21,550/-.In the course of assessment proceedings, the assessee was directed to furnish various details i.e. all the books of accounts and documents viz. purchase and sales bills/ ledgers/ transportation bills / bank statements/ cash book / bank book and other details. In response, the assessee did not comply despite of giving more than a sufficient opportunities nor attended personally. Considering the fact that during the proceedings, the assessee failed to substantiate with evidences and neither produced the books of account as called for through summon u/s. 131 of the Act nor complied to any of term of the notices issued, the entire sum of Rs. 2,93,00,000/- received in the bank account of assessee was taxed in the hand of the assessee as cash credit u/s. 68 of the Act determining the total assessed income of Rs 4,26,24,500/-.

P a g e | 7 ITA No. 7614, 7615 7616/Mum/2025 A.Ys. 2013-14, 2014-15 & 2015-16 SK Trading Company, Mumbai assessee made by the AO u/s 68 of the Act was upheld dismissing the appeal.

P a g e | 8 ITA No. 7614, 7615 7616/Mum/2025 A.Ys. 2013-14, 2014-15 & 2015-16 SK Trading Company, Mumbai before us that the assessee may be accorded one more opportunity and this request which was not objected by the ld.DR, in such a scenario, we are of the opinion that the scales of justice demand that the matter should be verified and revisited at the level of the ld.CIT(A) and accordingly, we are of the considered view that the matter should be remanded back to him for de novo adjudication by him while applying the principles of natural justice after affording sufficient opportunity of being heard to the assessee.The ground of appeal is therefore, allowed for statistical purposes.

ITA No. 7615/MUM/2025(AY 2014-15)

P a g e | 9 ITA No. 7614, 7615 7616/Mum/2025 A.Ys. 2013-14, 2014-15 & 2015-16 SK Trading Company, Mumbai 9. The decision rendered in ITA No.7614/Mum/2025 in para 6 above, applies mutatis mutandis to the facts of the instant appeal as well which is therefore, allowed for statistical purposes.

ITA No. 7616/MUM/2025(AY 2015-16) 10. All the grounds are identical as in appeal for AY 2013-14.The addition made during the year based on the same information amounted to Rs. Rs.46,90,29,343/-credited in bank account of the assessee as cash credit u/s. 68 of the Act on account of non compliance by the assesee. In the subsequent appeal before the ld.CIT(A), the assessee made a request for admission of certain additional evidences under Rule 46A. However, he rejected it observing the assessment was done in ex parte manner as the failed to properly comply with the notice and before him, the assessee could not make out a case as none of the conditions laid down in the above Rule were satisfied and there was no justifiable reasons for non compliance before the AO. Accordingly, he upheld the addition and dismissed the appeal.

P a g e | 10 ITA No. 7614, 7615 7616/Mum/2025 A.Ys. 2013-14, 2014-15 & 2015-16 SK Trading Company, Mumbai 12. In the final summing up, ITA Nos.7614/7615 and 7616/Mum/2025 are allowed for statistical purposes.

Order pronounced in the open court on 16.07.2026.

Sd/- Sd/- [Justice (Retd.)C. V. BHADANG] ( PRABHASH SHANKAR) PRESIDENT ACCOUNTANT MEMBER

Place: म ुंबई/Mumbai दिन ुंक /Date 16.07.2026 Lubhna Shaikh / Steno

आदेश की प्रतितलतप अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant प्रत्यर्थी / The Respondent. 2. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविवनवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अतधकरण/ ITAT, Bench, Mumbai.