ACIT-24(1), MUMBAI, PIRAMAL CHAMBER vs. ARVIND SHANTILAL SHAH, ANDHERI WEST

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ITA 5904/MUM/2024Status: DisposedITAT Mumbai28 September 2026AY 2017-187 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s deletion of the addition of ₹37,48,735. The Tribunal found that the assessment order lacked crucial particulars regarding the alleged transactions, such as the specific scrips traded, dates, volumes, the concerns through which the transactions were purportedly carried out, and how the sum of ₹37,48,735 was derived. More importantly, the assessment order failed to present material demonstrating that the assessee was the owner of any unrecorded money within the meaning of Section 69A. The Tribunal agreed with the CIT(A) that the AO had not discharged the initial burden of proof by providing credible material to establish that the alleged transactions had taken place. The assessee's request for particulars was deemed relevant, and the absence of these particulars in the assessment order was considered material. The Tribunal noted a similar issue in the assessee's own case for AY 2015-16, where the Tribunal had upheld the deletion due to the AO's failure to furnish transaction particulars. Therefore, the Tribunal found no infirmity in the CIT(A)'s order.

What were the facts?

The Revenue appealed the CIT(A)'s order dated 25.09.2024, which deleted an addition of ₹37,48,735 made by the Assessing Officer (AO) under Section 69A of the Income-tax Act, 1961. The AO alleged that the assessee, Arvind Shantilal Shah, engaged in share transactions through entities controlled by Shri Jignesh Shah, and that the amount represented unexplained money. The AO's case was based on information from the Insight portal suggesting Shri Jignesh Shah's entities provided accommodation entries. The assessee denied these transactions, requested specific details of the alleged transactions and entities, and provided his share profit-and-loss statement and bank statements. The CIT(A) found the assessment order lacked specific details about the transactions and failed to establish the assessee's ownership of unexplained money.

What were the issues?

1. Whether the material on record established that the assessee entered into the alleged share transactions through concerns controlled by Shri Jignesh Shah, warranting an addition under Section 69A of the Income-tax Act, 1961? Assessee's contentions: The assessee denied dealing with Choice Equity Broking Pvt. Ltd. or any other concern controlled by Shri Jignesh Shah. He repeatedly requested the AO to identify the specific concerns, scrips, dates, quantities, and the basis for calculating the amount of ₹37,48,735. He argued that without these particulars, he could not meaningfully explain transactions he denied. The assessee contended that the AO had not discharged the initial burden of providing credible material to establish the alleged transactions or that the assessee owned unexplained money. Revenue's contentions: The Revenue's grievance was against the deletion of the addition. The assessment order indicated that the transactions were not reflected in the assessee's share profit-and-loss account, and the assessee had not provided a satisfactory explanation or supporting evidence. The Revenue appears to have relied on the information from the Insight portal and the absence of these alleged transactions in the assessee's accounts.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH

For Appellant: Shri Rakesh Joshi (Virtual
For Respondent: Ms. Jayshgree Thakur
Hearing: 28/09/2026Pronounced: 28/09/2026

आदेश / O R D E R PER AMIT SHUKLA (J.M): This appeal has been preferred by the Revenue against the order dated 25.09.2024 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for Assessment Year 2017–18. The Revenue’s grievance is against the deletion of an addition of ₹37,48,735, made by the Assessing Officer under section 69A

2 ITA No.5904/Mum/2024 Arvind Shantilal Shah of the Income-tax Act, 1961 (“the Act”), on the allegation that the assessee had entered into share transactions through concerns controlled by Shri Jignesh Shah. The question for consideration is whether the material brought on record established that the assessee had entered into the alleged transactions and that the amount added represented unexplained money owned by him.

2.

The assessment order records that the case was reopened on the basis of information available on the Insight portal under the high-risk information segment. The information alleged that Shri Jignesh Shah was managing or controlling concerns which were not carrying on genuine business activity and were engaged in providing accommodation entries. It was further alleged that the assessee had entered into fictitious transactions amounting to ₹37,48,735 through concerns associated with Shri Jignesh Shah. In the reassessment proceedings, the assessee furnished a reply along with the share profit-and-loss statement and bank statement for the relevant financial year. He denied having dealt with Choice Equity Broking Pvt. Ltd. or any other concern controlled by Shri Jignesh Shah and asked the Assessing Officer to identify the concerns, specify the transactions attributed to him and furnish the particulars on which the allegation was founded.

3 ITA No.5904/Mum/2024 Arvind Shantilal Shah 3. The assessment order further records that the assessee reiterated this request in response to the show-cause notice. He disputed the allegation that share transactions amounting to ₹37,48,735 had been omitted from his accounts and stated that the share transactions undertaken by him had been disclosed. During the video-conference hearing, the assessee’s representative furnished a list of the companies through which the assessee had undertaken share transactions and explained that the concerns of Shri Jignesh Shah did not appear in that list. The Assessing Officer noted the share- trading income and gains disclosed by the assessee, but treated the alleged transactions with the concerns associated with Shri Jignesh Shah as unexplained, principally because they were not reflected in the share profit-and-loss account and because, in the Assessing Officer’s view, the assessee had not furnished a satisfactory explanation or supporting evidence.

4.

The learned CIT(A), on examining the assessment order and the assessee’s replies, noted that the assessee had denied having dealt with Choice Equity Broking Pvt. Ltd. or any other concern controlled by Shri Jignesh Shah and had repeatedly asked the Assessing Officer to identify the concerns and furnish particulars of the transactions allegedly aggregating to ₹37,48,735. The assessment order, however, did not specify the concerns involved, the scrips traded, the dates or

4 ITA No.5904/Mum/2024 Arvind Shantilal Shah quantities of the transactions, or the basis on which the amount had been worked out. It also did not refer to any inquiry undertaken to verify the information received or to any statement, document or other material corroborating the alleged dealings. The learned CIT(A) thus found that, although the information could have prompted further inquiry, the assessment order did not show how it had been verified or connected with the assessee.

5.

The learned CIT(A) further observed that the addition rested on the alleged omission of the transactions from the assessee’s share profit-and-loss account and his failure to explain their source, even though the transactions had not first been identified or supported by material furnished to him. Since the assessee had specifically sought the particulars necessary to answer the allegation, he could not reasonably be expected to explain transactions which he had denied and which had not been specified. The learned CIT(A) accordingly held that the Assessing Officer had not discharged the initial burden of providing credible material to establish that the alleged transactions had taken place; nor did the assessment order establish that the assessee owned unexplained money within the meaning of section 69A. On that basis, the addition of ₹37,48,735 was deleted.

5 ITA No.5904/Mum/2024 Arvind Shantilal Shah 6. We have considered the material on record and the findings of the learned CIT(A). Those findings are borne out by the assessment order itself. While the information available to the Assessing Officer could have warranted further inquiry, the assessment order does not disclose the particulars of the dealings attributed to the assessee. It does not identify the relevant scrips, the dates or volume of trading, the concerns through which the transactions were allegedly carried out, or the manner in which the sum of ₹37,48,735 was derived. More fundamentally, it does not set out material demonstrating that the assessee was found to be the owner of any unrecorded money within the meaning of section 69A. The amount appears to have been added as the value of alleged transactions, without establishing the transaction trail or the connection between those transactions and any unexplained money owned by the assessee. The absence of a transaction from the assessee’s accounts, by itself, could not establish the foundational facts for an addition under section 69A when the transaction itself had not first been identified and supported by evidence.

7.

The assessee’s request for particulars was directly relevant to the allegation made against him. He denied dealings with the concerns said to be associated with Shri Jignesh Shah and called upon the Assessing Officer to specify the concerns and transactions in question. In these circumstances, the

6 ITA No.5904/Mum/2024 Arvind Shantilal Shah absence of those particulars from the assessment order is material. Without knowing which transaction was alleged, the assessee could not meaningfully explain its nature, source or treatment in his accounts. The learned CIT(A) was, therefore, justified in holding that the onus could not be shifted to the assessee without first confronting him with credible material showing that the alleged transactions had taken place. The assessment order does not indicate that this essential step was taken.

8.

We also note that, in the assessee’s own case for Assessment Year 2015–16, the Tribunal, by its order dated 10.02.2025 in ITA No. 5903/Mum/2024, considered an addition made on materially similar allegations concerning transactions said to have been entered into with concerns controlled by Shri Jignesh Shah. The Tribunal upheld the deletion after noting that the Assessing Officer had not furnished the particulars of the alleged transactions or the material relied upon to support the addition. The circumstances recorded by the learned CIT(A) in the present year disclose the same evidentiary deficiency. On the facts before us, we see no reason to take a different view.

9.

In view of the foregoing, we find no infirmity in the order of the learned CIT(A) deleting the addition of ₹37,48,735 made

7 ITA No.5904/Mum/2024 Arvind Shantilal Shah under section 69A of the Act. The effective ground raised by the Revenue is dismissed.

10.

In the result, the appeal filed by the Revenue is dismissed.

Order pronounced on 28th September, 2026.

Sd/- Sd/- (G.M. DOSS) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 28/09/2026 KARUNA, sr.ps

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

(Asstt. Registrar) ITAT, Mumbai

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