PEEJAY BUILDERS PVT. LTD,MUMBAI vs. AO, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H (SMC)” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI ANIKESH BANERJEE (JUDICIAL MEMBER) ITA No. 1241/MUM/2026 Assessment Year : 2016-17 Peejay Builders Pvt. Ltd. AO Ward 2(2)(3), Mumbai 20 Rajabahadur Mansion Vs. Maharashtra - 400020 Balal Doshi Marg Fort, Mumbai - 400023 PAN NO. AABCP 9397 F Appellant Respondent

: Shri Nikunj Parekh, CA Assessee by Revenue by : Shri Pravin Salunkhe, (SR. DR) : 20/04/2026 Date of Hearing Date of : 28/04/2026 pronouncement ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 10.05.2023, passed by the Learned Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for Assessment Year (in short ‘A.Y’) 2016-17, whereby the addition of Rs. 12,17,280/- made under Section 68 of the Income-

Peejay Builders Pvt. Ltd. Peejay Builders Pvt. Ltd. Vs. AO Ward 2 2(2)(3), Mumbai, ITA Nos. 1241/MUM/2026 ITA Nos. 1241/MUM/2026

tax Act, 1961 (in short “the Act”) has been confirmed. The relevant tax Act, 1961 (in short “the Act”) has been confirmed. The relev tax Act, 1961 (in short “the Act”) has been confirmed. The relev grounds raised are reproduced as under: grounds raised are reproduced as under:

“Ground no. 1: That on the facts and circumstances of the case and in That on the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax Appeals has erred in law, the Learned Commissioner of Income Tax Appeals has erred in law, the Learned Commissioner of Income Tax Appeals has erred in confirming the addition of Rs. 12,17,280 made by the Learned confirming the addition of Rs. 12,17,280 made by the Learned confirming the addition of Rs. 12,17,280 made by the Learned Assessing Officer on account of alleged unexplained cash credit us 68 of er on account of alleged unexplained cash credit us 68 of er on account of alleged unexplained cash credit us 68 of the Income tax Act, 1961. the Income tax Act, 1961. Ground no. 2: That the Learned Assessing Officer erred in law in not That the Learned Assessing Officer erred in law in not applying the settled principle of peak credit theory, despite the fact that applying the settled principle of peak credit theory, despite the fact that applying the settled principle of peak credit theory, despite the fact that the bank account reflected the bank account reflected frequent deposits and withdrawals, resulting frequent deposits and withdrawals, resulting in multiple taxation of the same alleged cash. In various judicial in multiple taxation of the same alleged cash. In various judicial in multiple taxation of the same alleged cash. In various judicial pronouncement it has held that peak cash negative during the year pronouncement it has held that peak cash negative during the year pronouncement it has held that peak cash negative during the year should be added. should be added. Ground no. 3: That even otherwise, without prejudice, assuming but That even otherwise, without prejudice, assumin not admitting that the cash deposits were not fully explained, the not admitting that the cash deposits were not fully explained, the not admitting that the cash deposits were not fully explained, the addition ought to have been restricted only to the peak cash negative, if addition ought to have been restricted only to the peak cash negative, if addition ought to have been restricted only to the peak cash negative, if any, and not the entire amount worked out on the basis of incorrect any, and not the entire amount worked out on the basis of incorrect any, and not the entire amount worked out on the basis of incorrect negative cash balance. negative cash balance. Ground no. 4: That the addition made and sustained is based on the addition made and sustained is based on presumptions, surmises, and hypothetical assumptions, without any presumptions, surmises, and hypothetical assumptions, without any presumptions, surmises, and hypothetical assumptions, without any corroborative evidence to establish that the appellant had introduced corroborative evidence to establish that the appellant had introduced corroborative evidence to establish that the appellant had introduced unaccounted money. unaccounted money. Ground no. 5: That the Learned CIT A has also erred in law and on That the Learned CIT A has also erred in l facts in upholding the addition without appreciating the factual errors in facts in upholding the addition without appreciating the factual errors in facts in upholding the addition without appreciating the factual errors in cash balance computation and the settled judicial position relating to cash balance computation and the settled judicial position relating to cash balance computation and the settled judicial position relating to peak cash negative there were 3 instances where the cash was negative peak cash negative there were 3 instances where the cash was negative peak cash negative there were 3 instances where the cash was negative Rs 5,02,280 Rs 1,15,000 & Rs 6 Rs 5,02,280 Rs 1,15,000 & Rs 6,00,000. Out of which only Rs 6,00,000 ,00,000. Out of which only Rs 6,00,000 should be applied using peak cash negative. should be applied using peak cash negative. Ground no. 6: That the appellant denies its liability to interest charged That the appellant denies its liability to interest charged us 234A, 2348, and 234C, which is purely consequential in nature. us 234A, 2348, and 234C, which is purely consequential in nature. us 234A, 2348, and 234C, which is purely consequential in nature.”

Peejay Builders Pvt. Ltd. Peejay Builders Pvt. Ltd. Vs. AO Ward 3 2(2)(3), Mumbai, ITA Nos. 1241/MUM/2026 ITA Nos. 1241/MUM/2026

appeal. In support of the prayer for condonation, reliance was appeal. In support of the prayer for condonation, reliance was appeal. In support of the prayer for condonation, reliance was placed upon a sworn affidavit of Shri Ghewarchand Jogani, Director placed upon a sworn affidavit of Shri Ghewarchand Jogani, Director placed upon a sworn affidavit of Shri Ghewarchand Jogani, Director of the assessee company, explaining that the delay was occasioned e assessee company, explaining that the delay was occasioned e assessee company, explaining that the delay was occasioned due to serious medical ailments, including cardiac issues and due to serious medical ailments, including cardiac issues and due to serious medical ailments, including cardiac issues and restricted mobility, which incapacitated him from attending to the restricted mobility, which incapacitated him from attending to the restricted mobility, which incapacitated him from attending to the affairs of the company and pursuing appellate remedies within the affairs of the company and pursuing appellate remedies within the affairs of the company and pursuing appellate remedies within the prescribed period. It was further averred that the delay was neither prescribed period. It was further averred that the delay was neither prescribed period. It was further averred that the delay was neither deliberate nor intentional, and that immediate steps were taken deliberate nor intentional, and that immediate steps were taken deliberate nor intentional, and that immediate steps were taken upon improvement in health. upon improvement in health. The relevant part of elevant part of affidavit is reproduced hereunder: reproduced hereunder:

“….That I am a senior citizen and during the relevant period I was “….That I am a senior citizen and during the relevant period I was “….That I am a senior citizen and during the relevant period I was suffering from serious knee suffering from serious knee-related medical problems as well as cardiac related medical problems as well as cardiac ailments, for which I was under continuous medical treatment and ailments, for which I was under continuous medical treatment and ailments, for which I was under continuous medical treatment and medical advice. That due to the aforesaid health co That due to the aforesaid health conditions, I was advised restricted nditions, I was advised restricted physical movement and was unable to attend to the day physical movement and was unable to attend to the day physical movement and was unable to attend to the day-to-day affairs of the company, including coordination with tax consultants and taking of the company, including coordination with tax consultants and taking of the company, including coordination with tax consultants and taking timely steps for filing the appeal before this Hon’ble Tribunal. timely steps for filing the appeal before this Hon’ble Tribunal. timely steps for filing the appeal before this Hon’ble Tribunal. That on account That on account of my prolonged medical condition, the appellate of my prolonged medical condition, the appellate remedy could not be pursued within the prescribed time, resulting in the remedy could not be pursued within the prescribed time, resulting in the remedy could not be pursued within the prescribed time, resulting in the aforesaid delay. aforesaid delay. That immediately upon improvement in my health condition and upon That immediately upon improvement in my health condition and upon That immediately upon improvement in my health condition and upon becoming aware of the appellate remedy, necessary becoming aware of the appellate remedy, necessary steps were taken to steps were taken to file the present appeal without any further delay. file the present appeal without any further delay. That the delay has occurred due to bona fide and unavoidable That the delay has occurred due to bona fide and unavoidable That the delay has occurred due to bona fide and unavoidable circumstances and there was no intention whatsoever to delay the filing circumstances and there was no intention whatsoever to delay the filing circumstances and there was no intention whatsoever to delay the filing of the appeal or to disregard the provisions of la of the appeal or to disregard the provisions of law. That the appeal involves substantial questions of law and fact, and if That the appeal involves substantial questions of law and fact, and if That the appeal involves substantial questions of law and fact, and if the delay is not condoned, the appellant company shall suffer the delay is not condoned, the appellant company shall suffer the delay is not condoned, the appellant company shall suffer

Peejay Builders Pvt. Ltd. Peejay Builders Pvt. Ltd. Vs. AO Ward 4 2(2)(3), Mumbai, ITA Nos. 1241/MUM/2026 ITA Nos. 1241/MUM/2026

irreparable loss and hardship, whereas no prejudice shall be caused the irreparable loss and hardship, whereas no prejudice shall be caused the irreparable loss and hardship, whereas no prejudice shall be caused the Revenue if the delay is condoned Revenue if the delay is condoned.”

Peejay Builders Pvt. Ltd. Peejay Builders Pvt. Ltd. Vs. AO Ward 5 2(2)(3), Mumbai, ITA Nos. 1241/MUM/2026 ITA Nos. 1241/MUM/2026

response/written submissions in spi response/written submissions in spite of eleven notices were issued to te of eleven notices were issued to the appellant. The notices u/s 250 the Act was issued to the appellant the appellant. The notices u/s 250 the Act was issued to the appellant the appellant. The notices u/s 250 the Act was issued to the appellant on 29/05/2019 requiring compliance on 04/06/2019, on 11/06/2019 on 29/05/2019 requiring compliance on 04/06/2019, on 11/06/2019 on 29/05/2019 requiring compliance on 04/06/2019, on 11/06/2019 requiring compliance on 19/06/2019, on 27/06/2019 requiring requiring compliance on 19/06/2019, on 27/06/2019 requiring requiring compliance on 19/06/2019, on 27/06/2019 requiring compliance on 09/07/2019, compliance on 09/07/2019, on 19/07/2019 requiring compliance on on 19/07/2019 requiring compliance on 30/07/2019, on 01/08/2019 requiring compliance on 07/08/2019, on 30/07/2019, on 01/08/2019 requiring compliance on 07/08/2019, on 30/07/2019, on 01/08/2019 requiring compliance on 07/08/2019, on 18/09/2019 requiring compliance on 26/09/2019, on 03/10/2019 18/09/2019 requiring compliance on 26/09/2019, on 03/10/2019 18/09/2019 requiring compliance on 26/09/2019, on 03/10/2019 requiring compliance on 16/10/2019, on 26/02/2020 requiring requiring compliance on 16/10/2019, on 26/02/2020 requiring requiring compliance on 16/10/2019, on 26/02/2020 requiring compliance on 04/03/2020, on 13 compliance on 04/03/2020, on 13/08/2020 requiring compliance on /08/2020 requiring compliance on 28/08/2020, on 27/01/2021 requiring compliance on 11/02/2021. 28/08/2020, on 27/01/2021 requiring compliance on 11/02/2021. 28/08/2020, on 27/01/2021 requiring compliance on 11/02/2021. However, no reply/submissions were uploaded in this office. The case However, no reply/submissions were uploaded in this office. The case However, no reply/submissions were uploaded in this office. The case was again fixed for hearing by issuing notice u/s 250 on 28/04/2023 was again fixed for hearing by issuing notice u/s 250 on 28/04/2023 was again fixed for hearing by issuing notice u/s 250 on 28/04/2023 requiring compliance on requiring compliance on 08/05/2023 and again there is no response as 08/05/2023 and again there is no response as yet. 5.3 I have carefully gone through the grounds of appeal, facts of the 5.3 I have carefully gone through the grounds of appeal, facts of the 5.3 I have carefully gone through the grounds of appeal, facts of the case, assessment order passed by the AO. Through ground no. 1 and 2 case, assessment order passed by the AO. Through ground no. 1 and 2 case, assessment order passed by the AO. Through ground no. 1 and 2 of appeal, the appellant has challenged the addition of Rs.12,17,280 of appeal, the appellant has challenged the addition of Rs.12,17,280 of appeal, the appellant has challenged the addition of Rs.12,17,280/- on account of unexplained cash credit u/s 68 of the Act. on account of unexplained cash credit u/s 68 of the Act. on account of unexplained cash credit u/s 68 of the Act. 5.4 It is an admitted fact that during the course of assessment 5.4 It is an admitted fact that during the course of assessment 5.4 It is an admitted fact that during the course of assessment proceedings assessee was asked to prove the source of above cash proceedings assessee was asked to prove the source of above cash proceedings assessee was asked to prove the source of above cash deposit which the assessee failed to submit. Hence, AO made deposit which the assessee failed to submit. Hence, AO made deposit which the assessee failed to submit. Hence, AO made addition of Rs. 12,17,280/ of Rs. 12,17,280/- under section 68 of the IT Act. 5.5 A.O. has made the impugned addition as per Para 5.5 A.O. has made the impugned addition as per Para 5.5 A.O. has made the impugned addition as per Para-3 of the assessment order reproduced in the preceding para after duly analyzing assessment order reproduced in the preceding para after duly analyzing assessment order reproduced in the preceding para after duly analyzing the cash deposit and withdrawal in the bank account of the appel the cash deposit and withdrawal in the bank account of the appel the cash deposit and withdrawal in the bank account of the appellant. Onus was on the appellant to prove Onus was on the appellant to prove source of the cash deposit reflected source of the cash deposit reflected in the bank account during the year, but the appellant failed to do so. As in the bank account during the year, but the appellant failed to do so. As in the bank account during the year, but the appellant failed to do so. As pointed out above, appellant was non compliant all along during the pointed out above, appellant was non compliant all along during the pointed out above, appellant was non compliant all along during the appellate proceedings as nothing ha appellate proceedings as nothing has been filed by the appellant to s been filed by the appellant to substantiate its ground of appeal and rebut the finding of the A.O. substantiate its ground of appeal and rebut the finding of the A.O. substantiate its ground of appeal and rebut the finding of the A.O. 5.6 Therefore, in view of the elaborate discussion/analysis and 5.6 Therefore, in view of the elaborate discussion/analysis and 5.6 Therefore, in view of the elaborate discussion/analysis and conclusion of the A.O. in the Assessment order, and in absence of any conclusion of the A.O. in the Assessment order, and in absence of any conclusion of the A.O. in the Assessment order, and in absence of any response received fro response received from the appellant, I find no reason to interfere in the m the appellant, I find no reason to interfere in the finding of the A.O. Appellant has not submitted anything either during finding of the A.O. Appellant has not submitted anything either during finding of the A.O. Appellant has not submitted anything either during the assessment proceedings or appellate proceedings to substantiate the assessment proceedings or appellate proceedings to substantiate the assessment proceedings or appellate proceedings to substantiate and prove source of the cash deposit of Rs. 12,17,280/ and prove source of the cash deposit of Rs. 12,17,280/ and prove source of the cash deposit of Rs. 12,17,280/- in its bank account. Hence, A.O. has rightly added Rs. 12,17,280/ account. Hence, A.O. has rightly added Rs. 12,17,280/ account. Hence, A.O. has rightly added Rs. 12,17,280/- being unexplained cash credit as cash deposit reflected in the bank account of unexplained cash credit as cash deposit reflected in the bank account of unexplained cash credit as cash deposit reflected in the bank account of the appellant u/s 68 of the Act. the appellant u/s 68 of the Act.

Peejay Builders Pvt. Ltd. Peejay Builders Pvt. Ltd. Vs. AO Ward 6 2(2)(3), Mumbai, ITA Nos. 1241/MUM/2026 ITA Nos. 1241/MUM/2026

5.7 Further, the Hon’ble Apex Court in Kale Khan Mohammad Hanif Vs Further, the Hon’ble Apex Court in Kale Khan Mohammad Hanif Vs Further, the Hon’ble Apex Court in Kale Khan Mohammad Hanif Vs Commissioner of I Commissioner of Income-Tax, M.P and Bhopal in 50 ITR 1 (SC) held that Tax, M.P and Bhopal in 50 ITR 1 (SC) held that “it is well established that the onus of proving the source of a sum of “it is well established that the onus of proving the source of a sum of “it is well established that the onus of proving the source of a sum of money found to have been received by the assessee is on him. If he money found to have been received by the assessee is on him. If he money found to have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that th disputes liability for tax, it is for him to show either that th disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the not income or that if it was, it was exempt from taxation under the not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Income Tax provisions of the Act. In the absence of such proof, the Income Tax provisions of the Act. In the absence of such proof, the Income Tax Officer is entitled to treat it as taxable income.” (A. Govindarajulu Officer is entitled to treat it as taxable income.” (A. Govindarajulu Officer is entitled to treat it as taxable income.” (A. Govindarajulu Mudaliar v. Commissioner of Income Mudaliar v. Commissioner of Income-tax 34 ITR 807 SC). ax 34 ITR 807 SC). 5.8 In view of the above discussion, I have no reasons to interfere with In view of the above discussion, I have no reasons to interfere with In view of the above discussion, I have no reasons to interfere with the conclusion of the A.O. Thus the addition of Rs. 12,17,280/ the conclusion of the A.O. Thus the addition of Rs. 12,17,280/ the conclusion of the A.O. Thus the addition of Rs. 12,17,280/- made u/s 68 of the Act on account of unexplained cash deposit reflected in the u/s 68 of the Act on account of unexplained cash deposit reflected in the u/s 68 of the Act on account of unexplained cash deposit reflected in the bank account of the appellant is upheld and bank account of the appellant is upheld and Ground no. 1 and 2 of the Ground no. 1 and 2 of the appeal on these issue are dismissed. appeal on these issue are dismissed.” 5. Before us, the assessee has reiterated that the very Before us, the assessee has reiterated that the very Before us, the assessee has reiterated that the very circumstances which led to the delay in filing the present appeal, circumstances which led to the delay in filing the present appeal, circumstances which led to the delay in filing the present appeal, namely, the serious medical condition of its Director, also namely, the serious medical condition of its Director, also namely, the serious medical condition of its Director, also contributed to the inability to respond to the notices issued during ted to the inability to respond to the notices issued during ted to the inability to respond to the notices issued during the appellate proceedings. It has been contended that the addition the appellate proceedings. It has been contended that the addition the appellate proceedings. It has been contended that the addition has been sustained without affording an effective opportunity of has been sustained without affording an effective opportunity of has been sustained without affording an effective opportunity of being heard and without proper appreciation of the material which being heard and without proper appreciation of the material whi being heard and without proper appreciation of the material whi the assessee seeks to place on record. the assessee seeks to place on record.

Peejay Builders Pvt. Ltd. Peejay Builders Pvt. Ltd. Vs. AO Ward 7 2(2)(3), Mumbai, ITA Nos. 1241/MUM/2026 ITA Nos. 1241/MUM/2026

consequences entail confirmation of addition without examination ail confirmation of addition without examination ail confirmation of addition without examination on merits. In such circumstances, and in the interest of In such circumstances, and in the interest of In such circumstances, and in the interest of substantial justice, we deem it appropriate to set aside the substantial justice, we deem it appropriate to set aside the substantial justice, we deem it appropriate to set aside the impugned order of the learned CIT(A) and restore the matter to his impugned order of the learned CIT(A) and restore the matter to his impugned order of the learned CIT(A) and restore the matter to his file for fresh adjudi file for fresh adjudication. The learned CIT(A) shall afford the cation. The learned CIT(A) shall afford the assessee one effective and final opportunity of being heard, consider assessee one effective and final opportunity of being heard, consider assessee one effective and final opportunity of being heard, consider such material as may be placed on record, and thereafter pass a such material as may be placed on record, and thereafter pass a such material as may be placed on record, and thereafter pass a reasoned and speaking order in accordance with law. The assessee reasoned and speaking order in accordance with law. reasoned and speaking order in accordance with law. is, however, directed to extend full cooperation and ensure strict directed to extend full cooperation and ensure strict directed to extend full cooperation and ensure strict compliance with all notices and directions that may be issued in the compliance with all notices and directions that may be issued in the compliance with all notices and directions that may be issued in the course of the set-aside proceedings, failing which the learned CIT(A) aside proceedings, failing which the learned CIT(A) aside proceedings, failing which the learned CIT(A) shall be at liberty to proceed in accordance with law. shall be at liberty to proceed in accordance with law. shall be at liberty to proceed in accordance with law.

In the result appeal filed by the Assessee is allowed for 7. In the result appeal filed by the Assessee is In the result appeal filed by the Assessee is statistical purposes.

Order pronounced in the open Court on unced in the open Court on 28/04/2026. /04/2026.

Sd/- - Sd/ Sd/- (ANIKESH BANERJEE) (ANIKESH BANERJEE (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 28/04/2026 Ankit, P.S.

Peejay Builders Pvt. Ltd. Peejay Builders Pvt. Ltd. Vs. AO Ward 8 2(2)(3), Mumbai, ITA Nos. 1241/MUM/2026 ITA Nos. 1241/MUM/2026

Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, BY ORDER, //True Copy//

(Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai