VIJAY KUMAR JAIN,UJJAIN vs. ASSESSING OFFICER, UJJAIN

Per Paresh M Joshi, J.M.:

This is an Appeal filed by the Assessee under section 253 of

the income tax Act 1961,[ hereinafter referred to as the Act

for the sake of brevity] before this tribunal as and by way of

a second appeal. The Assessee is aggrieved by the order

bearing No:-ITBA/NFAC/S/250/2024-25/1074178587(1)

dated 07.03.2025 passed by the Ld. CIT (A) u/s 250 of the

Act, which is hereinafter referred to as the “Impugned

order”. The Relevant Assessment year is 2014-15 and the corresponding previous year period is from 01.04.2013 to

31.03.2014.

2.1 That as and by way of an Assessment order made u/s

147 rws 144B of the Act, the total income of the Assessee

was computed and assessed at Rs. 43,10,835/-. The return

of Income filed u/s 148 was at Rs. 5, 18,298/-. The

addition of Rs. 39,00,000/- was made u/s 68 of the act as

unexplained credit. [Deduction under chapter VI was at Rs.

1, 07,463/-]. The aforesaid assessment order bears number:

- ITBA/AST/S/147/2021-22/1041324417(1) and that the

same is dated 23.03.2022 which is hereinafter referred to as

the “Impugned Assessment Order”.

2.2 The assessee is an individual and partner in M/s. Navkar

Jewellery and Diamon & M/s Navkar Real Infra. The

assessee filed a return of income on 04.11.2014 declaring

the total income of Rs.4,10,840/- for the AY 2014-15. The

assessment was completed u/s 143(3) of the I.T. Act at the

total income of Rs.4,10,840/-. On perusal of the assessment records, it was found that assessee received unsecured loan

of Rs.21,00,000/- from shri Jaya Kishan, Rs.5,00,000/-

from Smt. Sapna Garg and Rs. 13,00,000/- from Mr.

Prakash Garg & Mrs. Seema Garg. The assessee had not

disclosed fully or truly all the material facts for his

assessment. Accordingly, the assessee's case for the instance

year has been reopened u/s 147 of the Income Tax Act

( hereinafter referred to as 'Act') by the then Jurisdictional

Assessing Officer, after recording reasons for the reopening

and taking the necessary approval from the competent

authority and as such Notice u/s 148 of the Act was issued

to assessee on 30.03.2020 which was duly served on the

assessee, requiring the assessee to furnish the return of

income in response to notice u/s 148 of the Act.

2.3 In response to the said notice, assessee filed his return

of income on 11.05.2021 declaring the total income at Rs.

4,10,840/-. Subsequently, a notice u/s 143(2) of the Act was

issued to assessee on 09.07.2021. Reason for reopening was

also provided to the assessee.

2.4 Notices u/s 142(1) of the act dated 01.12.2021 was

issued to the assesse in response to which the assesse

submitted part reply. A fresh notice dated 28.12.2021 u/s

142(1) was issued which was not complied with. Thereafter

a fresh notice u/s 142(1) of the act was issued on

18.02.2022 wherein following was averred:

Prakash Garg and Smt. Seema Garg, and the genuineness of

transaction of Rs 13,00,000/- carried out with them by you

during the year under consideration.

Please explain Genuineness of the transactions and

creditworthiness of Jaya Kishan.

Garg, her creditworthiness and genuineness of loan of Rs

5,00,000/- for the year under consideration.

You are required to comply with this notice issued u/s 142(1)

of the Act within the time period stipulated. Kindly note that

non compliance may lead to completion of the assessment in your case u/s 144 of the Income tax Act, 1961 and

assessment shall be done on the material.

2.5 That it is recorded in the “Impugned Assessment

Order” that the aforesaid notice dated 18.02.2022 whereby

the assesse was asked to furnish the documentary evidence

to establish credit worthiness and the genuineness of the

above said transactions totaling to Rs.39 lakh but to no

avail. Though the assessee replied on 12.03.2022 and

submitted the details but the assessee again failed to furnish

the details as called for i.e. assessee could not establish the

identity and credit worthiness of the persons from whom

the assessee had taken unsecured loan.

2.6 The Assessee had received Rs. 21 lakh from Jaya Kishan

which was not proved to be genuine and so also the sources

of Jaya Kishan Rs. 7 lakh and Rs. 14 lakh were deposited in

the cash of Jaya Kishan account. The assesse received Rs. 5

lakh from smt. Sapna w/o Krishna Gopal Garg and bank

statement revealed of cash deposit of Rs. 5 lakh. The assesse

had also received Rs. 13 lakh from Prakash Garg and Mrs Seema Garg wherein cash of Rs. 5 lakh and 8 lakh were

deposited in their account as revealed from the bank

statement.

2.7 The Assessee failed to prove identity, genuineness of

transaction and credit worthiness of the above parties.

2.8 The Ld. AO in the Impugned Assessment Order has

recorded that “Ample opportunities were given to the

assessee to explain and justify the source of income

through various notices via ITBA Portal. However, the

assessee has not submitted any satisfactory response to

the notices issued. Therefore, the Source of undisclosed

income amounting to Rs. 39,00,000/- remained

unexplained.”

2.9 That the Assessee being aggrieved by the aforesaid

“Impugned Assessment order” prefers the first appeal u/s

246 A of the Act before the Ld. CIT (A) who by the

“Impugned Order” has dismissed the first appeal of the

assesse on the grounds and reasons stated therein. The core

grounds and reasons for the dismissal of the first appeal was

as under:- 5.1 During the faceless appellate proceedings, several notices were issued to the appellant, and it was seen that the emails were all delivered. The chart given below shows the details of the notices issued: S.N. Date of Notice Date of Date Status Remarks issued hearing 1 16.11.2022 Mail delivered Issued enablement of communication window:The appellant filed response on 17.11.2022 and 10.02.2023 2 20.06.2024 26.06.2024 Mail delivered Notice was sent through ITBA in response to which the appellant filed response on 26.06.2024

3 19.02.2025 24.02.2025 Mail delivered Notice was sent through ITBA to which the appellant remained uncompiled till

d)In view of the facts mentioned above and after taking into consideration the assessment order and the reply of the appellant, since, the appellant has not justified the transaction of unsecured loan taken from the parties even at the time of appellate proceedings and even at the time of assessment proceedings, hence, in absence of supporting documentary evidences, the unsecured loan received from the parties remained unexplained and in these facts and circumstances, I am constrained to be in agreement with the finding of the Assessing Officer and hold that the appellant is unable to substantiate his claims and is not able to controvert the assessment order. The addition made by the Assessing Officer amounting to Rs. 39,00,000/- on account of unexplained credit u/s 68 of the Act is therefore confirmed. 5.4 The appellant has not been able to defend the grounds raised. Hence, grounds raised are rejected. 6. In the result, the appeal is dismissed.”

3.1 The hearing in the matter took place before this Tribunal

on 15.04.2026 when the Ld. AR for & on the behalf of the Assessee appeared before us & interalia contended that the

“Impugned Order” is bad in law, illegal and not proper. It

therefore deserves to be set aside. It was submitted that the

Ld. CIT (A) had given total three opportunities however for 3rd opportunity no reply was filed. First two opportunities as

recorded in para 5.1 (Supra) were availed off by filing

responses. The core issue is of “unsecured loan”. In so far

as Prakash Garg and Seema Garg are concerned who had

paid 13 lakh out of Rs. 39 lakh of the unsecured loan

they reside outside India. Hence details are not available,

in so far as Jaya Kishan is concerned who had advanced

the loan of Rs. 21 lakh the full and complete details

could not be furnished as at the material time he was in

the hospital. In so far as Mrs. Sapna is concerned she is

not contactable. Per contra Ld. DR for and on behalf of the

Revenue contended that the Revenue has no objection if the

additional evidence is to be filed by the Assessee before the

Ld. AO as the Ld. AR has submitted that all the required

information with documents, material etc. would now be

filed before the Ld. AO for due inquiry and verification of all the unsecured loans transaction of Rs. 39 lakh from the

parties aforesaid if this tribunal gives one last opportunity in

this regard. The hearing was closed then.

4.1 We have to decide the legality, validity and proprietary of the

“impugned order” basis records of the case & the rival

submission canvassed before us.

4.2 We have carefully perused the records of the case and have

heard the submissions.

4.3 We basis records of the case & after hearing & further

upon examining the rival contentions of the Ld. AR and Ld.

DR canvassed before us, are of the considered opinion that

in the “Impugned Assessment Order” enough opportunity

was given to assessee and so also in the “Impugned Order”.

The Assessee cannot make grievance about lack of

opportunity or partial responses before both the lower

authorities. However basis statement made by the Ld. AR

that last opportunity be given to the Assessee before the Ld.

AO which would be final opportunity to produce all material,

documents, evidences etc. in support of plea of unsecured

loans which are all genuine. The assessee would establish

identity, genuineness of transaction and credit worthiness of

the parties now before Ld. AO for sure. We therefore deem

fit to set aside the Impugned Order and remand the case

back to the file of Ld. AO on De novo basis, who shall now

pass a speaking and well-reasoned order basis merits of the

case. We however admonish and caution the assessee that

this type of attitude shows sloth and inefficiency which this

tribunal does not appreciate.

4.4 In view of the above, we set aside the Impugned Order

and remand the case back to the file of Ld. AO on De novo

basis with a direction to Ld. AO to provide one more

opportunity as last and final one. The assessee will not seek

any adjournment on any flimsy ground.

Order 5

5.1 In the result the “Impugned order” is set aside as and by

way of remand back to the file of the Ld. AO on De novo basis

with direction as aforesaid.

5.2 The appeal of the assessee is allowed for statistical

purpose.

Pronounced in open court on 24.04.2026.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore Dated : 24/04/2026 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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