MOHANKUMAR SHRIRAMSWARUP SAHU,ULHASNAGAR vs. THE INCOME TAX OFFICER, WARD-3(2), KALYAN, KALYAN

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ITA 3525/MUM/2026Status: DisposedITAT Mumbai29 September 2026AY 2016-1715 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee had not been able to effectively substantiate his engagement in any business activity by producing cogent and corroborative evidence. The claim that receipts represented business receipts liable under Section 44AD remained unsubstantiated. Furthermore, the declared turnover of ₹1,09,05,007/- exceeded the threshold of ₹1 crore prescribed for AY 2016-17 under Section 44AD, disentitling the assessee from presumptive taxation. The Tribunal also noted that addition under Section 68 could not be sustained for the entire receipts without examining corresponding credits and withdrawals. Therefore, the matter was restored to the Assessing Officer (AO) for fresh adjudication. The AO is directed to examine the complete bank account, with reference to deposits and withdrawals, and determine the nature and source of transactions. If unexplained funds/investments are found, the AO may consider the unexplained peak amount for taxation under Section 69. The assessee will be afforded an opportunity to present evidence and explanations. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Mohankumar Shriramswarup Sahu, an individual claiming to be engaged in trading school bags, filed an invalid return for Assessment Year 2016-17 due to non-e-verification. The case was reopened under Section 147 based on cash deposits of ₹47,37,676/- in his bank account with M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. (SRMUCS). A search in SRMUCS revealed suspicious deposits and withdrawals. The assessee filed a revised return declaring a turnover of ₹1,09,05,007/- and offered income under Section 44AD. The Assessing Officer (AO) initiated proceedings under Section 147 r.w.s 144, treating cash deposits as unexplained investment under Section 69, as the assessee failed to provide satisfactory evidence for business activity, purchase bills, or VAT/GST registration. The Commissioner of Income Tax Appeals (NFAC) confirmed the addition.

What were the issues?

1. Whether the cash deposits in bank accounts constitute 'investments' within the meaning of Section 69 of the Income Tax Act, 1961, and if the jurisdictional conditions for invoking Section 69 are satisfied (Assessee's contention: No, the CIT(A) erred in confirming the addition without establishing these points). 2. Whether the addition made is beyond the scope of the reasons recorded for reopening, and if there is a nexus between the reasons and the addition (Assessee's contention: No, the CIT(A) erred in confirming the addition beyond the scope). 3. Whether the assessee duly explained the nature and source of cash deposits as business receipts from trading activities with documentary evidence, which the AO failed to disprove (Assessee's contention: Yes, the CIT(A) erred in not appreciating this). 4. Whether the CIT(A) erred in confirming the addition without cogent material to establish that deposits represent income from undisclosed sources, and by relying on generalized findings from third-party searches without a direct nexus (Assessee's contention: Yes). 5. Whether the CIT(A) erred in confirming the addition by considering only credit entries while ignoring corresponding debit entries and withdrawals, adopting a one-sided approach (Assessee's contention: Yes). 6. Whether the CIT(A) erred in confirming the addition based on irrelevant considerations like the absence of VAT registration (Assessee's contention: Yes). 7. Whether the CIT(A) erred in confirming the assessment order under Section 144 r.w.s 147 without appreciating facts, evidence, and submissions (Assessee's contention: Yes). 8. Whether the addition should be restricted to a reasonable profit element if confirmed (Assessee's contention: Yes, without prejudice to the above). The Revenue supported the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 69,Section 132,Section 148,Section 142(1),Section 44AD,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM

For Appellant: Shri Sunil Talreja, Adv, Shri Ashutosh Singh, Sr. DR
Hearing: 29.09.2026

आयकर अपीलीय अिधकरण �ायपीठ मुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM I.T.A. No. 3525/Mum/2026 (Assessment Year: 2016-17) Mohankumar Shriramswarup Income Tax Officer, Ward-3(2), Sahu Kalyan 2nd Floor, Rani Mansion, Kalyan Room No.3, Chawl No.1, Sai Vs. Baba Colony, Vithalwadi, Murbad Road, Syndicate, Kalyan- Kalyan-421306 421301 PAN: BQJPS1726D Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assessee by : Shri Sunil Talreja, Adv. : Shri Ashutosh Singh, Sr. DR Revenue by : 15.07.2026 Date of Hearing : 29.09.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: The captioned appeal is preferred by the assessee, against the order of the Commissioner of Income Tax Appeals, National Faceless Appeal Centre (NFAC), Delhi [in short, “the Ld. CIT(A)”], dated 13.02.2026 for the Assessment Year (AY) 2016-17, arises from the assessment order under section 147 r.w.s 144 of the Income Tax Act, 1961 [in short, “the Act”] dated 26.05.2023, passed by Assessment Unit, Income Tax Department [in short, “the Ld. AO”].

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu 2. The grounds of appeal raised by the assessee are as under: “1) The CIT Appeals (NFAC) erred in confirming the addition of ₹1,09,82,524/- made under section 69 of the Act by treating cash deposits in bank accounts as unexplained investment. without establishing that such deposits constitute "investments" within the meaning of section 69 and without satisfying the jurisdictional conditions prescribed therein. 11) The CIT Appeals (NFAC) erred in confirming the addition which is beyond the scope of reasons recorded for reopening, without establishing any nexus between the reasons recorded and the addition made. III) The CIT Appeals (NFAC) failed to appreciate that the appellant had duly explained the nature and source of cash deposits as business receipts arising from trading activities and supported the same with documentary evidences including bank statements, cash flow statement and other material placed on record, which has not been disproved by the Assessing Officer. IV) The CIT Appeals (NFAC) erred in confirming the addition without bringing any cogent material on record to establish that the deposits represent income from undisclosed sources and in relying upon generalized findings arising from search conducted in the case of third parties without establishing any direct nexus with the Appellant. V) The CIT Appeals (NFAC) erred in confirming the addition by considering only the credit entries in the bank accounts while ignoring the corresponding debit entries and withdrawals, thereby adopting a one-sided and legally impermissible approach. VI) The CIT Appeals (NFAC) erred in confirming the addition on the basis of irrelevant considerations such as absence of VAT registration, which has no bearing on determination of income under the Income Tax Act. VII) The CIT Appeals (NFAC) erred in confirming the assessment order passed under section 144 read with section 147 without properly appreciating the facts, evidences and submissions furnished by the appellant. VIII) Without prejudice to the above, The CIT Appeals (NFAC) erred in not restricting the addition to a reasonable profit element embedded in such receipts. IX) The Appeal is time and order. X) The appellant craves leave to add, alter, amend, modify and / or delete any of the grounds raised, on or before the final hearing.”

3.

Brief facts of the case emerging from the facts on records are that the assessee is an individual, claims to carrying on trading business in school bags at Ulhasnagar. The return for the year under consideration was filed u/s 139(1) but 2

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu not e-verified and accordingly was rendered an invalid return as per provisions of the Act. The case of assessee was selected for re-opening assessment u/s 147 on the ground that the assessee had deposited cash to the tune of Rs. 47,37,676/- during the financial year 2015-16 relevant to AY 2016-17 in his bank account maintained with M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. (SRMUCS).

4.

As per assessment order, a search and seizure action u/s 132 of the Act was carried out in the case of M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. (SRMUCS) on 26.05.2017 and it is revealed that huge money was deposited in the bank accounts maintained by the account holders whose creditworthiness were doubtful. The amounts so credited were withdrawn by the depositors through cash withdrawals or transferred to other accounts.

5.

It is further found that the money so transferred were used for remitting in abroad with improper/falsified documentation in the garb imports, payment of custom duty, purchase of bullion or other purchases, transfer to other parties online/RTGS/NEFT and withdrawn by the beneficiaries. The assessee is one of the members of the society having Account No.107304003000241. During the financial year 2015-16, the assessee has deposited Rs.47,37,676/-. In response to notice u/s 148, the assessee filed return declaring turnover of Rs.1,09,05,007/- including the deposits in account maintained with SRMUCS and offered income of Rs.8,72,401/- u/s 44AD on presumptive basis.

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu 6. Ld. AO has allowed various opportunities to substantiate the nature and source of the alleged cash deposits; however, the assessee has neither submitted any details called for vide notice u/s 142(1) nor any documentary evidence with respect to show-cause notice. Further, during the video conference which were arranged on 16.05.2023 and notice u/s 142(1) dated 09.05.2023, the assessee was requested to furnish necessary details but there was no compliance by the assessee. During the video conference on 16.05.2023 at 3pm, Auditor Shri Manish Mulchandani submitted that the details have been just uploaded at 3pm on 16.05.2023, which includes assessee’s bank statement with various banks, copy of income computation, copy of cash flow statement, a few sales bills and copy of monthly summary of sale register. A written reply stating that assessee during the year engaged in the trading of bags and he had filed his return u/s 44AD disclosing income of Rs.8,72,401/-, 8% of total turnover.

7.

Further, the assessee also furnished summary of cash deposit and withdrawal. The Ld. AO was not convinced with the submissions of the assessee keeping in mind the allegations against the society leading to search action that the society had allowed huge cash deposit in the bank account of its account holders, whose creditworthiness are doubted at the pre-search, post-search as well as at assessment stage enquiry in respect of account holders in whose accounts substantial cash deposits were made. Most of them were either untraceable or persons of no/very low means.

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu 8. Ld. AO further discussed the modus operandi of the SRMUCS and then held that the conduct of assessee’s transaction through bank account with SRMUCCS is identical to other assessees and further, the case of assessee for AYs 2016-17 and 2017-18 was also re-opened u/s 147 on the same issue and the entire cash deposit of the assessee has been held to be disallowable u/s 69 of the Act as the assessee was failed to furnish relevant details. The assessee’s submission that he was engaged in the trading of bags and the entire cash deposit in his account represented cash sale and cash withdrawal represented purchases, however, the assessee failed to prove that he was actually engaged in the business activity of whatsoever trading goods. The assessee submitted some copies of sale bills in the name of RK Traders, the copy of the same has been enclosed in the assessment order.

9.

On perusal of the bill, it was observed that the bill produced before the Ld. AO to establish the business activity is in handwriting and manufactured one, the bills did not include VAT registration or any other registration number by law and the purchasers are also not found in any of the bills. In substance, the assessee’s submission to have trading in bag business was not accepted by the Ld. AO. It is also noted that the assessee did not produce any purchase bill in the entire submissions. On perusal of the bank statement of the assessee also, the Ld. AO was not convinced for the reason that the assessee was unable to produce any substantial evidence showing bank transactions for payment/receipt in the nature of business. The Ld. AO also doubted the business of assessee who had made a 5

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu turnover of Rs.1 crore entirely in cash without any single transaction of payment through banking channel to any other business entity. The Ld. AO also doubted the books of accounts of the assessee, observing that the assessee has received some payments from debtors, however, the entire ledger of the assessee did not show any transaction with sundry creditors which shows that the ledger accounts have been created purposefully to make submissions before the Ld. AO. The issue was, thereafter, discussed at length and the Ld. AO has drawn a conclusion that the entire submissions made by the assessee are not supported with proper corroborative evidence. The evidences are created one and, therefore, the transaction cannot be treated to be genuine. He further observed that even the statement and narration in the bank account does not give impression that such transactions are done by a business entity. The Ld. AO invoked provisions of section 69 of the Act and, accordingly, added the amount of Rs.1,01,15,145/- to the income of assessee.

10.

Being aggrieved with the aforesaid finding by the Ld. AO, assessee preferred an appeal before the Ld. CIT(A). However, the Ld. CIT(A) vide the impugned order before us had dismissed the appeal of assessee after considering the submissions of assessee under the following observations:

“7. I have carefully considered the impugned assessment order dated 26/05/2023 passed u/s 147 r.w.s 1448, the grounds of appeal raised by the assessee, his written submissions along with documents filed during assessment and appellate proceedings, the judicial precedents cited by both sides, and the entire material available on record. 8. Section 69 of the Act provides that where in any financial year the assessee has made investments which are not recorded in the books of account, if any, maintained by 6

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu him, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. The provision casts a strict onus on the assessee to satisfactorily explain the nature and source of investments, particularly unrecorded cash deposits, failing which deeming provisions are attracted. 9. RTM The Hon'ble Supreme Court in the case of Kale Khan Mohammad Hanif vs. CIT (1963) 50 ITR 1 (SC) authoritatively held: If an assessee fails to prove satisfactorily the source and nature of certain amount received during the accounting year, the Assessing Officer is entitled to draw the inference that the receipts are of an assessable nature. 10. This ruling squarely applies to the instant case, where despite multiple opportunities including notices u/s 142(1) dated 20/01/2023, 11/04/2023 and 09/05/2023, show cause notices dated 02/05/2023 and 17/05/2023, and video conferences on 16/05/2023 and 24/05/2023, the assessee failed to discharge the onus. 11. The Hon'ble Supreme Court in CIT v. Daulat Ram Rawatmull (1973) 87 ITR 349 (SC) further clarified: The onus of proof is on the assessee to show from what source he received the amount and what was the nature of that amount... If the explanation given by the assessee is found to be not correct, the Assessing Officer is entitled to hold that it is the income of the assessee. These precedents confirm the Assessing Officer's entitlement to treat unexplained deposits as income u/s 69 upon assessee's failure to prove source. The assessee's claim of Rs. 1,09,05,007/-turnover from bag trading under section 44AD, supported by bank statements, self-prepared cash flow, monthly sales summary, 12-13 sample bills of M.K. Traders, and shop license of Shubham Bag House (dated 15/01/2013), lacks credibility on multiple counts. The sales bills bear no TIN/VAT numbers mandatory for traders exceeding threshold limits, indicating fabrication. The shop license name mismatch (Shubham Bag House vs. M.K. Traders) and absence of VAT/GST registration despite Rs. 1 crore turnover belie genuine business. No purchase bills were furnished despite repeated demands and assessee's admission during 24/05/2023 hearing of inability to trace them, rendering cash flow self-serving without creditor/third-party corroboration. Bank accounts, predominantly savings in nature, show no regular business inflows/outflows but peak deposits/withdrawals aligning with Shri Renuka Mata Society's search findings of dubious cash cycling by low-credit holders. 12. The assessee's reliance on Hon'ble Supreme Court in CIT v. M/s. Century Textiles & Industries Ltd. (1993) 203 ITR 1 (SC) is distinguished as that involved verified industrial credits/debits with vouchers/books; here, documents are rudimentary and inconsistent, failing section 69 threshold. Sporadic low ITR filings (e.g., Rs. 1.5-1.8 lakh GTI prior years) contradict Rs. 1 crore business claim. Peak Rs. 47,37,676/- deposit in searched hawala-linked society post-reopening triggers adverse inference, unmet by denial without evidence. 13. The Shri Renuka Mata search u/s 132 (26/05/2017) revealed modus operandi of huge cash deposits by untraceable/low-means holders, routed/withdrawn suspiciously mirroring assessee's pattern sans creditworthiness proof. No contemporaneous books, quantitative purchase-sales matching, or trade association payments exist. Assessing

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu Officer rightly invoked section 69 after holistic scrutiny, deeming Rs. 1,01,15,145/- as unexplained investment added to total income at Rs. 1,09,82,524/-. 14. The assessee's explanations being unsatisfactory and unsubstantiated, Assessing Officer's findings under section 69 are upheld. Addition of Rs. 1,01,15,145/- and total income determination stand confirmed. 15. In the result, the appeal filed by the assessee is dismissed.”

12.

Before us, the Ld. Counsel of the assessee submitted that the assessee was in the business of bags in the name and style of M/s. RK Traders. It is submitted that the business held as shop establishment license dated 15.01.2013, issued by the Municipal Corporation having jurisdiction over the assessee’s establishment located at Ulhasnagar. The assessee furnished bank statement of all accounts, cash flow-statement, monthly sales summaries, sample sale bills, purchase details and the shop establishment license, explaining that the deposits represented the very business receipts already returned in section 148 and corresponding withdrawals which were applied towards the purchases. Ld. AR further submitted that re-computation of assessee’s income was done taking the income of assessee declared. In response to notice u/s 148 at the rate of 8% of total cash receipts + the total amount of cash deposits by the assessee in the bank account. Such addition is found to be arbitrary and against the mandate of section 69 of the Act, wherein the assessee declared income based on working u/s 44AD at the rate of 8% has been considered and, further the entire turnover was also added. Therefore, the addition of same amount was made twice. Another contention raised by the Ld. AR was that the application u/s 69 was misplaced as the

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu assessee has already declared the turnover at the rate of 8% of the total receipts in the bank account which is extracted by the Ld. AO. Thereafter, the turnover which was the foundation of such income at the rate of 8% was also treated to be unexplained investment of the assessee. Accordingly, the Ld. AO has re- characterized the turnover of assessee as fresh investment based on entries in the bank statement of the assessee, whereas the bank passbook is not books of account is a settled principle of law, the judgment of Hon’ble Bombay High Court in the case of CIT vs. Bhaichand H. Gandhi, 141 ITR 67 (Bom.). Therefore, the application u/s 69 was mechanical without appreciating the facts properly and thus cannot sustain.

13.

It is further submitted that the deposits in bank account are duly explained by the assessee on the basis of documents and cash-flow statements for which the assessee has furnished reconciled cash-flow statement, monthly sales summaries, sample bills and purchase particulars, demonstrating that the cash deposits represent the very business turnover already returned in section 148 and the corresponding withdrawals of Rs.70,27,120/- were applied to purchase. The Ld. AO has only considered the credit entries in the bank statement while had ignored the corresponding debits which is not in accordance with the accepted accounting practices. It is further submitted that the assessee had established license in the name of M.K. Traders and the trading activities are continuously engaged in the name and style of Shubham Bag House starting from financial year 2014-15 onwards. The change in trading name of the same proprietary 9

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu concern, at the same premises under the same PAN cannot be treated as a discrepancy of identity.

14.

Regarding VAT, it is submitted that VAT registration has no statutory power on the year of chargeability of business income and cannot by itself discredit an otherwise consistent return filing history or a documented cash-flow reconciliation. Further, without prejudice, it is submitted that the profit estimation at 8% as returned in response to notice u/s 148 should be accepted, as according to settled law, the taxability is confined to profit element embedded in the receipts and not the entire receipt. It is further submitted that while the assessee has computed 8% u/s 44AD, there is no obligation on the assessee to explain each individual cash-deposit entry unless the entry has no nexus with the declared gross receipts. It is accordingly, submitted that the profit may be estimated at 8% of the deposit treated as turnover consistent with the rate already written by the assessee in response to notice u/s 148 on the reconciliation set out above.

15.

Per contra, Ld. DR vehemently supported the orders of Revenue Authorities.

16.

We have considered the rival submissions, perused the material available on record and the case laws relied upon by the parties. At the outset, we find that the assessee has originally filed his return declaring total income at Rs.2,89,500/- u/s 44AD. However, the said return was invalidated for want of e-verification 10

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu which could not be done by the assessee within the prescribed time. Further, when the proceedings u/s 147 was initiated, the assessee submitted a fresh return in response to notice u/s 148 declaring total income at the rate of 8% of total declared turnover of Rs.1,09,05,007/-. When the issue has been raised by the Ld. AO to explain the nature and source of receipts in the assessee’s bank account, it is submitted that the entire receipt pertains to assessee’s business of sale of bags in the name of Shubham Bag House. However, the assessee has furnished certain sample bills and purchase particulars but was unable to furnish the purchase bills before the Ld. AO. The assessee has furnished a reconciliation statement in summary manner before the Ld. AO as well as Ld. CIT(A) which is furnished hereunder:

17.

The assessee also relied on various decisions stating that once the assessee had declared his income u/s 44AD on presumptive basis at the rate of 8%, the assessee is not required to explain each and every individual cash deposit entry unless such entry has no nexus with the declared gross receipts. The contention of assessee may be accepted, however, the explanation furnished by the assessee 11

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu before the authorities below are in summary manner without furnishing details of the entire sale proceeds and there were no submissions regarding purchases made by the assessee even the sale bill produced before the Ld. AO was doubted which could not be explained by the assessee.

18.

On perusal of the order of Ld. CIT(A), it is found that the assessee has not offered any explanation about the nature and source of investments, therefore, in absence of any plausible explanation, the investment has been deemed to be the income of assessee for such financial year. The Ld. CIT(A) further noted that there was a mismatch in the name of assessee’s trading name on the bills and the shop license of Shubham Bag House, thus, lacks credibility on multiple counts. The assessee’s turnover is even Rs. 1 crore, therefore, the assessee is liable to have a registration under VAT /GST but the same was not furnished by the assessee. Further, the assessee was unable to furnish purchase bills despite repeated demands and further, the assessee shows his inability to trace them rendering cash-flow self-serving without creditor/third-party corroboration. The Ld. CIT(A) further relied on the decision of Hon’ble Apex Court in the case of CIT vs. M/s. Century Textiles & Industries Ltd. (1993) 203 ITR 1(SC) distinguishing that the case relied upon involves verified industrial credits/debits with vouchers/books where in the present case, the documents are rudimentary and inconsistent, thus falls within the ambit of section 69 of the Act. Further, the modus operandi of M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. (SRMUCS) attached with the case of assessee, the averments 12

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu of the assessee remain doubtful and, therefore, the Ld. AO has rightly invoked provisions of section 69 after holistic scrutiny.

19.

In the backdrop of the aforesaid facts, circumstances and judicial precedents, we find that the assessee has not been able to effectively substantiate his engagement in any business activity by producing cogent and corroborative evidence. Accordingly, the claim of the assessee that the receipts in question represented business receipts liable to be considered under the presumptive provisions of section 44AD of the Act remains unsubstantiated. Further, the declared turnover of Rs.1,09,05,007 exceeds the threshold u/s 44AD of Rs. 1 crore, as prescribed for the relevant AY 2016-17, therefore, the assessee would not be entitled to compute his income on presumptive basis under the provisions of section 44AD of the Act.

20.

Further, considering the nature of the transactions reflected in the assessee’s bank account, the addition under section 68 of the Act cannot, in our view, be sustained in respect of the entire receipts without examining the corresponding credits and withdrawals in the bank account.

21.

We, therefore, deem it appropriate to restore the matter to the file of the Ld. AO for fresh adjudication. The Ld. AO shall examine the complete bank account of the assessee, with reference to the corresponding deposits and withdrawals, and determine the nature and source of the transactions. If, upon such examination, the assessee is unable to satisfactorily explain the nature and 13

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu source of the unexplained funds/investment and the same is found to represent an investment not recorded in the books, the AO may consider the unexplained peak amount, so determined for taxation in accordance with the provisions of section 69 of the Act.

22.

Needless to state, the assessee shall be afforded adequate opportunity of being heard and shall be at liberty to furnish such evidence and explanations as may be considered relevant.

23.

In view of such observations, the matter is restored back to the file of Ld. AO for fresh adjudication, as directed hereinabove.

24.

In result, the appeal of assessee stands allowed for statistical purposes.

Order pronounced in the open court on 29-09-2026.

Sd/- Sd/- (ARUN KHODPIA) (AMIT SHUKLA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated : 29-09-2026. Ankit K., Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

ITA No. 3525/Mum/2026 Mohankumar Shriramswarup Sahu

(Dy./Asstt. Registrar) ITAT, Mumbai

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