KANTILAL PRITHVIRAJ OSWAL,PUNE vs. INCOME TAX OFFICER WARD 6(4), PUNE

PER ASTHA CHANDRA, J.M.:

The appeal filed by the assessee is directed against the order dated 05-03-2024 of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi [“CIT(A)/NFAC”], u/s. 250 of the Income Tax Act, 1961 (the “Act”), pertaining to Assessment Year (“AY”) 2017-18. 2. Briefly stated, the facts of the case are that the assessee is carrying on business of trading and manufacturing of gold and silver ornaments and utensils at Pune in the trade name of “Pruthviraj Joharmal Oswal”. The assessee was also Karta of his HUF in the name of “Kantilal Pruthviraj Oswal, HUF” with his son Amit K. Oswal, who is a parcener and his wife, Smt. Prakashbai Oswal, who is a member. For AY. 2017-18, the assessee e-filed his return of income on 12-10-2017, declaring total income of Rs. 35,35,310/-. The case of the assessee was selected for scrutiny under CASS to verify the issue of “Large increase of capital in a year”. Accordingly, statutory notices u/s. 143(2) and 142(1) of the Act alongwith

2 questionnaire were issued and served upon the assessee, in response to which, the assessee filed the requisite details/documents. From the capital account submitted by the assessee, the Ld. Assessing Officer (“AO”) observed that the opening balance as on 01-04-2016 is Rs. 2,08,90,600/- and closing balance as on 31-03-2017 is Rs. 7,26,32,418/-. Further in capital account, the assessee has reported capital introduction as – (i) addition to stock as per I-Tax scrutiny Rs. 1,64,85,630/- and (ii) gold declared under IDS Rs. 4,10,18,902/-. Accordingly, a show cause notice was issued to the assessee, requesting to explain as to why the capital introduced of Rs. 1,64,85,630/- should not be treated as unexplained credit u/s. 68 of the Act in the absence of any documentary evidences furnished by the assessee. After considering the reply filed by the assessee in response to the said show cause notice and the order of the Settlement Commission, the Ld.AO concluded that the jewellery was belonging to Kantilal Oswal (HUF) and not to Kantilal Oswal (Individual) and therefore, the claim of the assessee that capital introduced of Rs. 1,64,85,630/- in the form of stock is not tenable. The Ld.AO added Rs. 1,64,85,630/- to the income of Rs. 35,35,310/- returned by the assessee as unexplained credit u/s. 68 of the Act and completed the assessment at the assessed income of Rs. 2,00,20,940/- u/s. 143(3) of the Act, vide order dt. 20-12-2019. 3. Aggrieved by the above addition made by the Ld.AO, the assessee preferred an appeal before the Ld.CIT(A)/NFAC. Before the Ld.CIT(A)/NFAC, there was non-compliance of notice(s) of hearing. Relying on the decision of the B.N. Bhattacharjee and Another [118 ITR 461], M/s. of facts in Form-35 and grounds of appeal filed by the assessee, he dismissed the appeal for non-prosecution and endorsed the findings of the Ld.AO by observing as under:

“9.0 On carefully considering the facts and circumstances and assessment order, I find that the impugned jewellery amounting to Rs 1.64.85.630/- belonged to Kantilal Oswal (HUF) and not to Shri Kantilal Oswal (Individual). Therefore, there is no infirmity in the assessment order. Accordingly, the addition made by the AO is confirmed. Therefore, all grounds of appeal fail and hence dismissed.”

“The following grounds are taken without prejudice to each other - On facts and in law, 1] The learned CIT(A) has erred in dismissing the appeal of the assessee ex-parte on the ground that there was non compliance on the part of the assessee to the various notices issued by him and thereby erred in confirming the addition of Rs.1,64,85,630/- made by the learned A.O. 2] The assessee submits that there was a reasonable cause on his part for the non compliance to the notices issued by the learned CIT(A) and accordingly, request for one more opportunity to present his case before the learned CIT(A). 3] The learned CIT(A) erred in confirming the addition of Rs. 1,64,85,630/-on account of introduction of jewellery as capital on the ground that the said addition made by the learned A.O. was justified. 4] The learned CIT(A) failed to appreciate that the capital introduced was in respect of the jewellery declared by Kantilal Oswal HUF before Hon'ble Settlement Commission and hence, the addition made u/s 68 was not warranted and the same may kindly be deleted. 5] The appellant craves leave to add, alter, amend or delete any of the above ground of appeal.”

Order pronounced in the open Court on 23-06-2026 (RAMA KANTA PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER पुणे/Pune; Tadepalli Naga दिन ांक/Dated : 23-06-2026 Naga Murali Mohan Murali Mohan Date: 2026.06.29 10:07:27 +05'30' TNMM

6 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent