HEMANT SURENDRA JAIN,MUMBAI vs. ITO WARD 16(3)(1), MUMBAI

आदेश / ORDER

PER SANDEEP GOSAIN, JUDICIAL MEMBER: This appeal is filed by the Assessee against the order of Ld. THE CIT (APPEALS)-ADDLJCIT (A)-3 BENGALURU dated 24-Oct- 2025 for the Assessment Year 2001-02.

The following grounds are reproduced below:

“1 The Ld ADDL/JCIT(A) has erred and was not just and proper on the facts of the case and in law confirming the validity of issuance of notice u/s 148 by the Income Tax Officer, Mumbai, without having proper authority jurisdiction. and 2 The Ld ADDL/JCIT(A) has erred and was not just and proper on the facts of the case and in law in upholding the validity of notice u/s 147 rws 148 and in turn confirming the assessment order passed by the Ld Assessing Officer, Mumbai.

3 The Ld ADDL/JCIT (A) has erred and was not just and proper on the facts of the case and in law in confirming the invoking provisions of section 69A of the Act to the Addition. 4 The Ld ADDL/JCIT(A) has erred and was not just and proper on the facts of case and in law the in confirming the addition of Rs.15,16,616/-Income-tax Act. u/s 69A ”

5.1. Ground No. 1 & 2: The reopening is bad and Law and Assessment Order passed by the AO is without any jurisdiction: A. Assessment Order is without jurisdiction 5.1.1. The Appellant has challenged the jurisdiction of the Assessing officer in Mumbai stating that he had furnished the original return of income from Surat and has been carrying out his business from Surat in the name and style of his Proprietorship concern named Alpha Exports. The Appellant made a business deal with Shri Yogesh J. Mehata in Mumbai, after which Shri Yogesh J Mehata has filed a criminal case against the Appellant and he appeared before the Metropolitan Court Mumbai. Before the Metropolitan Court Mumbai, the Appellant, on oath gave the residential address of Mumbai which is 419-B, Panchratna, M.P Marg, Opera House, Mumbai-400004. 5.1.2. Therefore, the AO in the assessment Order has rejected the plea of the Appellant regarding challenging the jurisdiction. The relevant excerpt of the Assessment Order is reproduced hereinunder. 6. So far as the jurisdiction of the assessing officer over the assossee is concerned, it may be mentioned that the definition of the assessee in section 2(7) of the Act says that every person in respect of whom any procceding under this Act has been taken for the assessment of his income", every person who is deemed to be assessee under the provisions of the Act and "every person who is deemed to be an assessee in default under any provisions of this Act. The assessing officer has been defined u/s. 2(7A) of the Act as ACIT, ADIT, ITO who is vested with the relevant jurisdiction by virtue of directions of orders issued under sub-section (1) of sub section (2) of section 120 or any other provisions of this Act. Here it may be mentioned that the undersigned is having the jurisdiction over the address of the assessee at 419-B, Panchratna, Mama Parmanand Marg. Opera House, Mumbai 400 004 and Hemantkumar Jain is the assessee falling in the jurisdiction of the assessing officer in view of the above definition. The jurisdiction is fixed considering various factors like territorial area, person or class of persons, incomes or classes of incomes, or. cases or classes of cases as per the provisions of section 120(3) of the Act". In the present case the assessing officer holds the jurisdiction over the assessee in view of the territorial area assigned to him in which the assessee is functioning. Further more in view of provisions of section 124(1)(a), if the assessee carries on business or profession from different places, the assessing officer decides the jurisdiction over the assessee if the principal place of business situated within the area falling under his jurisdiction. In the case of the assessee as can be seen from the return of income for the assessment year 2001-02 the assessee is having the sources of income as business and other sources. The major source of income is business which assessee is carrying out from the address at Mumbai referred to earlier proceedings. Besides this as per the provisions of section 124(3)(a) "no person shall be entitled to call in question the jurisdiction of an assessing officer after the expiry of one month from the date of which he was served with a notice u/s. 142(1) etc. provided he has filed his return of income. In this case it is worth mentioning that the assessee has failed to file his return of income in response to notice u/s 148 nor he has raised any objection for assessing his income by the assessing officer in Mumbai. In addition to this as per the provisions of section 293 even no suit shall be brought in a Civil Court to set aside or modify any order made under this Act. 7. It will not be out of place to mention here that in the case of [Gokaraju Rangaraju v. State of AP, AIR 1981 SC 1473). It was observed that only because of the fact that an authority is later declared to be not in accordance with the provisions of law and therefore order passed is invalid, it cannot be contended that the croers etc passed by such an authority without it defacto assume final authority are void. This is so because defacto. doctrine in such a situation and the acts of the authorities defacto verified by them even this scope of their assume final authority, in the interest of public or third person and not for their own benefit which generally as valid and binding as if their were the acts of authorities. 8 The object of enactment of section 124(5) was that no assessee can claim a basic right of being assessed by one officer rather than another. The earmarking of the jurisdiction to officers vis-à-vis assessee has two principal objects (1) that of causing least inconvenience and harassment to the assessee and (2) to maximize organizational advantage and convenience to the officers of revenue. The non, obstante class at the beginning of section 5 to sub section 5 of section 124 is very vide and makes it clear that it is intended as saving provision against technical objections and disputes that may be raised in view of the other sub sections. Thus it is very clear that the assessing officer was very much within his jurisdiction under the bonafide belief that assessee is having business transactions carried out from the territorial jurisdiction falling within the area assigned to him. Therefore, the notice u/s. 148 was issued rightly and thus gets support from the Act in view of the above argument. 5.1.3. The Appellant has further relied on various case laws challenging the jurisdiction of the AO: a. Hon'ble ITAT CUTTACK in the case of Sekhar Kumar Goneka Vs ACIT (64) SOT 170. b. Hon'ble ITAT Amritsar in the case of Mrs. Amina Rasool Vs Income Tax Officer at 161 TTJ 405. c. Hon'ble Rajasthan HC in the case of CIT Vs Poonam Chand Surana at 221 Taxman 151. 5.1.4. The contention of the Appellant and the case laws on which the Appellant has relied is duly perused. On perusal of the case History noting of the Appellant's PAN jurisdiction, it is seen that the latter's PAN was transferred to the Mumbai Jurisdiction as the residential address of the Appellant as per PAN Data base is of Grant Road Mumbai, the relevant excerpt of the same is reproduced hereinunder:

5.1.5. Further on perusal of the Ld. CIT(A)-48, Mumbai Order dated 10/02/2016, in Appeal No. CIT(A)-48/I.T-473/DCCC-13/2013-14, for A.Y 2011-12, the Appellant has admitted the fact that the office premise at 419-B, Panchratna, M.P Marg, Opera House, Mumbai-400004 was occupied by the Appellant till 2005. The relevant excerpt of the Ld. CIT(A)'s Order is reproduced hereinunder. 2.3 I have carefully gone through the assessment order, submission made by the appellant, the remand report of the AO and material available on record. In the present case, there was a search action u/s. 132(1) of the Act at the premises, ie. 413-8, Pancharatna. Opera House, Mumbai on 20/10/2010. The warrant of authorization was issued in the name of Shri Hemant Jain, the appellant, proprietor of M's Alpha Enterprises. The search was conducted in relation with a group called Mis Asian Star Co. Ltd. At the time of search, the said premises were not occupied by the appellant. The appellant submits that his father Shri Surendra Jain was called telephonically by the member of a search party and was requested to be present at the premises. It is submitted that the appellant had closed his business in 2005 and the said office was in occupation of Mr. Viivii Vagoji Thakore at the time of search. Cash of Rs.25,73,000/-was found at the said premises which belonged to Mr VV Thakore and this fact was duly confirmed by Mr. Thakore at the time of recording his statement. 5.1.6. Therefore, on perusal of the same it is seen that the Appellant was carrying out his business from the Mumbai address at 419-B, Panchratna, M.P Marg, Opera House, Mumbai-400004, till 2005. Thus the plea of the Appellant challenging the jurisdiction of the AO is devoid of facts and not maintainable on merits. B. Reopening is bad in Law: 5.1.7. The Appellant has further u/s 147 was not justified as reasons to believe were not recorded by the AO. The contentions of the Appellant duly considered. It is observed that the case of the Appellant was reopened u/s 147 of the Act by issuance of notice u/s 148 of the Act dated 28/03/2008. 5.1.8. The Appellant has contended that the reopening is bad in law because the name of the party from which diamonds were purchased and the payment were not made was not undisclosed. Besides, there was neither unaccounted nor accounted financial transaction with the said party. In this regard it is stated that the case of Appellant was reopened u/s 147 on a credible information that is a court case before the Metropolitan Magistrate Mumbai in which the Appellant was accused of having taken possession of diamonds worth Rs 15 lacs and not making payment for the same. Based on the same the AO derived his satisfaction that the Appellant was in possession of unaccounted diamonds worth Rs 15 lacs. As per the provisions of the Act, in Order to assume jurisdiction under section 147 where assessment has been made under sub-section (3) of section 143, two conditions are required to be satisfied which are as under: 1. The Assessing Officer must have reason to believe that the income chargeable to tax has escaped assessment; 1. Such escapement occurred by reason of failure on the part of the assessee either (a) to make a return of income under section 139 or in response to the notice issued under sub-section (1) of section 142 or section 148 or (b) to disclose fully and truly all the material facts necessary for his assessment for that purpose. 5.1.9. In the extant case both the conditions have been fulfilled by the AO. The word 'information' in section 147 means 'instruction or knowledge derived from the external source concerning the facts or particulars or as to the law relating to a matter bearing on the assessment. Even an anonymous information though is information from unknown authorship but nonetheless, it constitutes information. The real issue to be looked into is the nature of the information, whether the same is a mere gossip, suspicion or rumour. If it is none of these, but a discovery of fresh facts or of new and important matters not present at the time of the assessment, which appears to be credible to an honest and rational mind leading to a scrutiny of facts indicating incorrect allowance of the expense, such disclosure would constitute information as contemplated in clause (b) of section 147. 5.1.10. The AO was having certain on which, he formed his satisfaction for reopening the extant case. The decision to reopen the assessment based on the material cannot be dubbed as a mere fishing or roving inquiry. The expression 'reason to believe' appearing in section 147 suggests that if the AO acts as a reasonable and prudent man on the basis of the information secured by him that there is a case for reopening, then section 147 can well be pressed into service and the assessments be reopened. In his reasons to believe the AO has clearly demonstrated link between the tangible material and the formation of the belief or the reason to believe that the income has escaped assessment. 5.1.11. The reasons recorded has nexus to the subjective opinion formed by the AO regarding the escapement of the income. Having regard to the materials on record it cannot be said that there is a total non-application of mind on the part of the Assessing Officer while recording the reasons for reopening of the assessment. It also cannot be said that his conclusion was merely based on the observations of audit. The Assessing Officer has applied his mind to the same. The Assessing Officer has not merely concluded without verifying the facts that it is a fit case for reopening of the assessment. While recording the reasons for the belief formed, it is sufficient that the AO has cause or justification to know or suppose that the income had escaped assessment. It is also well settled that the sufficiency and adequacy of the reasons which have led to the formation of a belief by the Assessing Officer that the income has escaped the assessment cannot be examined by any court. 5.1.12. If there is tangible material showing escapement of income, the same would be sufficient for reopening the assessment. It is not necessary that the Income Tax Officer should hold a quasi-judicial inquiry before acting under section 147. It is enough if he on the information received believes in good faith that the assessee's profits have escaped assessment or have been assessed at a low rate.

5.1.13. Reliance is placed on the following decisions: 1. Sonia Gandhi vs. Assistant Commissioner of Income-tax, Circle- 52(1) [2018] [Delhi] 97 taxmann.com 150 2. Etiam Emedia Ltd. vs. Income-tax Officer-2(2) [2019] 101 taxmann.com 231 (Madhya Pradesh) [19-12-2018] 3. Empee Holdings Ltd. vs. Deputy Commissioner of Income-tax, Company Circle II(I), Chennai [2019] 109 taxmann.com 10 (Madras) [07- 06-2019] 4. Radhika Roy vs. Deputy Commissioner of Income-tax, Circle-18(1), New Delhi [2019] 106 taxmann.com 210 (Delhi - Trib.) [14-06-2019]

speaking for the court held that the note put up by the Audit to the effect that the assessment ought to have been made on the reconstituted firm for the entire income of the two periods and therefore the Income-tax Officer committed an error, was instruction or knowledge derived from an external source and would constitute 'information'. 5.1.17. In Vushist Bhargava v. Income-tax Officer, Salary Circle, New Delhi 99 ITR 148., a Bench of the Delhi High Court held that when subsequent to the en assessment the Ministry of Law and the Revenue Audit pointed out that as a question of fact the payment of interest by the petitioner was made to his own account in the Provident Fund and as a question of law the money so paid did not vest in the Government but continued to belong to the petitioner and therefore, the income of the petitioner had escaped assessment, it would be 'information' available to the Income-tax Officer. 5.1.18. Besides, Hon'ble Supreme Court in the case of ITO vs. Kasturbhai Lalbhai reported in 109 ITR 537, has held that the intimation which the Income-tax Officer received from the audit department would constitute "information" within the meaning of section 147(b). Hon'ble Supreme Court in the case of CIT vs. P.V.S. Beedies (P.) Ltd. reported in 237 ITR 13, has held that audit party had merely pointed out a fact which had been overlooked by Assessing Officer and this was not a case of information on a question of law. Reopening of case u/s 147(b) on basis of factual information given by internal audit party was valid in law.

5.1.19 In the present case, the reasons for the reopening were recorded by the AO though extracting the information received from Ld CIT(A) and the order of the Metropolitan Magistrate, Mumbai against the Appellant. He has further verified that the issue under consideration was never examined by the AO as no scrutiny assessment under section 143(3) of the Act was carried out in the case of the Appellant. In this regard, reliance is placed on the decisions of Hon'ble Supreme Court in favour of Revenue in the case of Zuari Estate Development And on Investment Company Limited 373 ITR 661 and Rajesh Jhaveri Stock Broker Private Limited 291 ITR 500. Similarly, Hon'ble Delhi High court in the case of Indu Lata Rangwala vs. DCIT reported in 286 CTR 474, held that where initial return of income is processed u/s 143(1), it is not necessary in such a case for Assessing Officer to come across some fresh tangible material to form 'reasons to believe' that An income has escaped assessment. In the present case, there is a specific information available with the authorities. The reasons to believe had been properly understood bra by the authorities and there was material on the basis of which, notice was issued. 5.1.20. In view of the facts mentioned above, the grounds of appeal are hereby dismissed.

5.2. Ground No. 3 & 4: Addition of Rs. 15,16,616/- made section 69A of the Act: 5.2.1. The Appellant has further contested addition of Rs. 15,16,616/- made by the AO under the provisions of section 69A of the Income tax Act, 1961 stating that there is no purchase of diamonds from Shri Yogesh J Mehata and that the Appellant was never in the possession of the alleged diamonds. The Appellant has thus denied any liability towards Shri Yogesh J Mehata. The relevant excerpt of the Appellant's submission in this regard is reproduced hereinunder. 28. Now it is submitted that the Ld Assessing officer had knowingly twisted the matter and resorted to half of the denial made by the assessee. The denial of liability by the assessee is not SOLE but coupled with the fact that the PURCHASE is also DENIED. Thus the liability to pay is denied for the reason that there was no such purchase and therefore there was no liability. The whole of the story as placed by the said Shri Yogesh Mehta is cooked and built and is not real. The assessee had never accepted the purchase and in turn the liability. This fact is very clearly mentioned in the affidavit in reply enclosed to the appeal memo at page 33 at para 8 & 9. The Ld Assessing Officer had this not true and the assessee had denied the purchases itself and therefore there is no question of possession of the said alleged diamonds. 5.2.2. Therefore, the Appellant vide hearing notice dated 03/09/2025 Was asked to explain the following: 1. Furnish copy of the assessment passed under section 143(3) r.w.s 147 of the Income tax Act, 1961 for the A.Y 2001-02. 2. Furnish the return of income, P&L account, Balance sheet, Audit Report for A.Y 2000-01, 2001-02. 3. You have stated that with respect to purchase of diamond worth fifteen lakhs there was a dispute before the Metropolitan Magistrate furnish the current status of the same. 4. With respect to your contention that the AO does not have jurisdiction over you it is stated that the notice was issued to you at your PAN address. Further till A.Y 2001-02 no retum of income was filed by you which could establish the fact that you were assessed in Surat. Moreover, the court case was also filed in Mumbai Jurisdiction which leaves little doubt that you were carrying business from Mumbai. In view of the same, explain why your contentions on the AO not having jurisdiction over your case been dismissed. 5.2.3. In response to the same the Appellant has submitted as under: A desired, the following details are submitted: 01. Point 1 of the Notices The copy of the Assessment Order passed by the ITO, Ward 16 (3) (1), Mumbai on 24/12/2018 u/s 143(3) r.w.n. 147 of the Act is enclosed herewith as per (ANN-A). 02. Point 2 of the Notice: The following documents as desired are being submitted as under: a) The copy of RETURN OF INCOME for the AY 2001-02. (ANN-B). b) The copy of Annual Statements for the AY 2001-02 (ANN-C). c) The Account of the Assensee was not under audit for the year therefore, no such report is being submitted. 03. Point 3 of the Notice: The current status of the CASE is PENDING. The copy of the Latest hearing as per online records of the Court is enclosed herewith as per (ANN-D). 04. Point 4 of the Notices AT the outset, it is submitted that The Return of Income in SARAL FORM for the AY 2001-02 has been filed on 31/10/2001 vide Ack No 9677. The copy of the Return duly acknowledged with the SRAL of JCIT-Range-5. SURAT is enclosed herewith as per (ANN-E) Thus, the observation of your honour that the Return of Income for AY 2001-02 is not filed is not correct. The Assessee had continuously filed his return of Income for the AY 2001- 02, 2002-03, 2003-04, 2004-05, 2005-06 & 2006-07 with SURAT Jurisdiction and from AY 2007-08 onwards with PALI (RAJ) Jurisdiction. The copy of SARAL FORM (ITR) duly having Receipt SEAL of the respective jurisdictional Income TaxDepartment for the AY 2003-04 to 2007-08 is enclosed herewith as per (ANN-F). The Copy of the ACK of the returns filed in next years is enclosed herewith as per (ANN-G). Case in MUMBAI: In the case of Income Tax proceedings, the jurisdiction of the Assessee is decided as per the Orders issued u/s 120 for assigning the respective Territorial Jurisdiction. The case filed at the Mumbai Civil/Criminal Courts do not decide the Jurisdiction of the Income Tax cases. In The case of the Assessee, the Assessee had filed his return of Income for the AY 2001-02 with the Assessing Officer at Range-5, SURAT. Thereafter, the Assessee changed his address to his Native at PALI (Raj) and continued to file his Return of Income with the jurisdiction at PALI. As of Today, the JURISDICTION of the Assessee lies with ITO, PALI (Raj). The screen Print from the Portal, displaying the Jurisdiction details of the Assessee, is enclosed herewith as per (ANN-H). The copy of the Return of Income filed with SURAT and PALI jurisdiction for the AY 2001-02 is already enclosed as per (ANN-I). In the matter, the assessee relies on the following JUDICIAL PRONOUNCEMENTS: PCIT VS ROHIT BAID 175 Taxmann.com 820 (Calcutta-HC) (ANN-J). Whether notice under section 148 issued by an Assessing Officer not vested with jurisdiction as per PAN jurisdiction renders reassessment proceedings void Held ves Whether CBDT Instruction No. 1/2011, being an administrative guideline for equitable distribution of workload amony, Assessing Officer, does not confer or override statutory Jurisdiction under section 120-Held, yes POONAM SEN VS ITO 176 Taxmann.com 910 (LUCK-T) (ANN-K). IT: Where Ito. Bareilly issued notice under section 148 to assesse based on AIR information regarding purchase of residential land in bareilly, but he was not designated Assessing Officer of assessee more mention of a assesse, mere mention of... Notice issued was beyond his jurisdictional competence and therefor non-est in law

5.2.4. Therefore, considering the Appellant's VC request, VC in the instant case has been scheduled on 07/10/2025 and the intimation for the same was duly given to the Appellant vide notice dated 06/10/2025 and on the scheduled day, the Appellant AR appeared at the fag end of the VC when only 2 minutes of the allotted time remained and requested for an adjournment. Thereafter, again the VC was rescheduled on 08/10/2025, wherein neither the Appellant nor his Authorised Representation appeared. It is thus presumed that the Appellant does not have anything further to submit on this issue under consideration in this appeal. 5.2.5. Further, on perusal of the judgment of the Hon'ble Bombay High Court of Bombay in the case involving the Appellant under the Negotiable Instruments Act, 1881, in case status mentioned above in para 5.2.3, it is noticed that the trial Court that is the court of Metropolitan Magistrate, Mumbai had decided against the Appellant and sentenced him which proves that the Appellant did purchase the diamond from Shri Yogesh J Mehata and did not make payment for the same. The Hon'ble Bombay High Court, on application made by the Appellant against the order of the lower court has merely suspended the sentence given by the lower court as interim relief on the grounds of probable settlement between the parties. The relevant excerpt of the said Order is reproduced hereinunder:

5.2.6. The Appellant has not provided the judgement of the Metropolitan Magistrate Court sentencing him for not honouring payment for purchase of diamonds from Shri Yogesh J Mehata. It is pertinent to revisit the decision of the Hon'ble Bombay High Court in the Criminal Writ Petition No 1440 of 2007 filed by the Appellant which is reproduced in the preceding paras of this Appellate Order. It is noted that the Appellant had filed case against Shri Yogesh J Mehata of having allegedly stealing a blank cheque signed by the Appellant from his possession of the Appellant which got dishonoured against which Shri Yogesh J Mehata filed a case against the Appellant under section 138 of the Negotiable Instruments Act, 1881. The Hon'ble Bombay High Court in Criminal Writ Petition No 1440 of 2007 clearly mentions the fact that the Metropolitan Magistrate got an enquiry conducted under section 156(3) of the Cr. PC from the local Police over the issue of cheque theft. Upon completion of the Investigation as per the report of the Sr Inspector of Police, the cheque bearing no 037378 from current account no 210320741 was drawn in favour of Shri Yogesh J Mehata by the Appellant which got dishonoured. The relevant excerpt from Criminal Writ Petition No 1440 of 2007 is reproduced orice again for continuity and emphasis: B.H Marlapalle, J. Heard Mr. Kadam, the learned Counsel for the petitioner who has filed CC No. 67. Misc./2001 for the offences punishable under Sections 379, 420, 467, 468 and 471 of IPC against the respondent No. 2. The learned Se Metropolitan Magistrate at the first instance had ordered an inquiry under Section 156(3) of Cr. P.C and on completion of the investigation the Senior Inspector of Police, Dr. D.B Marg Police Station submitted his report dated 14.11.2002 The subject-matter of the petitioner's complaint was the theft of cheque bearing No. 037378 from the Current Account No. 210320741. It was al-leged that the said cheque was blank and was signed by the complainant and it was stolen or by any other illegal means taken possession by the respondent No. 2-accused. The police on inquiry in their report stated that the said cheque was drawn in favour of the respondent No. 2 and it was subsequently dishonoured and the respondent No. 2 filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 after issuing the statutory notice and the said complaint came to be registered as CC No. 250.SS/2001. The notice issued against the present petitioner who is impleaded as the accused in the said case was received by him and he appeared in the said case on 25.4.2001 The case has been subse- quently transferred to the Court of the learned Metropolitan Magistrate, 40th Court and re-registered as CC. No. 359.S/2002. The next date was given as 17.1.2003 and the petitioner lodged the complaint against the respondent No. 2 ion 18.5.2001 ad 2. This report submitted by the Senior P.1 has been accepted by the Trial Court and the learned Metropolitan Magistrate by his order dated 17.10.2005 held that the petitioner had filed the complaint with an intention to give a setback to the proceedings filed under Section 138 of the Negotiable Instruments Act. 3. The petitioner, therefore, had approached the Sessions Court in Criminal Revision Application No. 1565 of 2005 and the same has been dismissed. Hence this petition. 5.2.7. Thus, the lower court has found the Appellant guilty of purchasing diamonds without making payment for the same. Since, the Appellant did have the diamonds in his possession therefore the AO has rightly taxed it under section 69A of the Act. 5.2.8. Section 69A of the Act deals with money etc. owned by the assessee and found in possession including in the bank accounts of the assessee which has remained unexplained. Section 69A-Unexplained Money "Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the 4 Assessing] Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." 5.2.9. The expression "nature and source" used in this section should be understood to mean requirement of identification of source and its genuineness. To explain "Nature" it would require the Appellant to explain what is description of investment or expenditure, period and the manner in which it was done. To explain the source, it would require the Appellant to explain the corpus or fund from where investment or expenditure has been met. Further, for invoking deeming provisions under Section 69A of the Act, there should be clearly identifiable asset or unexplained money. 5.2.10. It is amply proved beyond doubt that the Appellant is in possession of diamonds worth more than Rs 15 lacs. The Appellant has also denied recording the same in his books as sales so the question of making GP based addition on sales of the same does not arise. The GP addition can only be made if the Appellant owns that the diamonds were used as stock in trade and eventually sold. In the Instant case no such proof of sales having been made of the said diamonds have been furnished or owned by the Appellant. In view of the same the addition made by the AO of Rs. 15,16,616/- made under the provisions of section 69A of the Act is hereby upheld and the grounds of appeal are dismissed. 5.2.11. In the result, the appeal is dismissed.

Order pronounced in the open court on 30.04.2026

Sd/- Sd/- PRABHASH SHANKAR SANDEEP GOSAIN ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 30.04.2026 RY. Sr. P.S.

Copy to:

HEMANT SURENDRA JAIN, 44, SOJATIYA BAS PALI , PLAI , 1 RAJASTHAN, PALI-306401, RAJASTHAN ITO WARD 16(3)(1), ROOM 223, AAYAKAR BHAVAN, 2 M.K.ROAD. NEW MARINE LINES, MUMBAI- 400020, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE