GAJENDRA CHANDRA SINGH,RANCHI vs. DCIT,CIRCLE 1,RANCHI, RANCHI

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER AND SMT. RAJANI GUDURI, JUDICIAL MEMBER I.T.A. No. 316/RAN/2025 (Assessment Year: 2012-13) (Physical Hearing) Gajendra Chandra Singh, A.C.I.T., Bapsi, Opposite St. Xavier School, Ranchi. Vs. Doranda, Ranchi-834002 (Jharkhand) PAN No. AFZPS 8456 E Appellant/ Assessee Respondent/ Revenue

I.T.A. No. 63/RAN/2026 (Assessment Year: 2013-14) Gajendra Chandra Singh, D.C.I.T., Bapsi, Oppsoite St. Xavier School, Circle-1, Vs. Doranda, Ranchi-834002 (Jharkhand) Ranchi. PAN No. AFZPS 8456 E Appellant/ Assessee Respondent/ Revenue

Assessee represented by Shri Deepak Kumar Patel, Advocate & Shri Harilal Patel, Advocate. Department represented by Shri Sandipan Khan, Sr.DR Date of hearing 05/10/2026 Date of pronouncement 14/10/2026 O R D E R PER: BENCH 1. These are the appeals filed by the assessee directed against the separate orders of the National Faceless Appeal Centre (NFAC), Delhi, [in short, the ld. CIT(A)] dated 25/08/2025 and 09/01/2026 for the Assessment Years (AY) 2012-13 and 2013-14 respectively. Since both the appeals have common facts and grounds, therefore, with the consent of parties, both were clubbed and heard together and being decided by this common order. As a lead case, we

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal take up ITA No. 316/Ran/2025 for the A.Y. 2012-13, wherein the assessee has raised following grounds of appeal: "1. For that the reassessment on the basis of letter of Director of Investigation without any tangible material and verification/enquiry by the AO is unjustified and illegal. 2. For that the addition U/s 69A is unjustified as the sources of deposits in the bank account is explained and accepted by the AO as sale proceeds of shares. 3. For that the learned CIT(A) as also the Learned AO failed to appreciate that there is no escapement of income. 4. For that other grounds shall be urged at the time of hearing. 5. For that the Appellate order dated 25/08/2025 passed on the basis of notice of hearing issued on 18/01/2021 without giving any further notice as required U/s 282 & Rule 127 is against the principle of natural justice." 2. Facts of the case, in brief, are that the assessee Shri Gajendra Chandra Singh, a company, has filed his original return of income for the A.Y. 2012-13 on 30/08/2012 declaring a total income at NIL. Subsequently, some information was received by the Assessing Officer from the Directorate of Income Tax (Investigation), Unit-1, Ranchi that in the assessee's bank account, huge amount of deposits by way of clearing was found which was not commensurate with his regular income. On perusal of the ITD system, the Assessing Officer has observed as under:

The Assessing Officer noted in the assessment order that a letter was issued to the State Bank of India, PBB Ranchi, Main Road, Ranchi requesting to furnish transaction statements of the bank accounts. Details received from the bank

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal confirm the information. Analysis of the deposits in the bank account of the assessee is as under:

The mode of the receipt in the said bank account was found to be transfer/clearing. On perusal of the State bank of India, Personal Banking Branch, Main Road, Ranchi revealed that the assessee was having an account number as O.D. A/c No. 31675559709 in which debit balance (-) ₹ 2,14,01,533/- was shown as on 18/03/2011. It was found that the account pertained to housing loan which was availed in the F.Y. 2010-11. The mentioned account was closed by making payment of ₹ 2,07,57,698/- including interest on 30/03/2012. It was found that the money required for closing down in the loan account was transferred from A/c No. 10028112744 (as produced above). Accordingly, notice under Section 148 of the Income Tax Act, 1961 (in short, the Act) dated 31/03/2019 was issued to the assessee after getting approval from the ld. PCIT, Ranchi under Section 151(1) of the Act. In response to the notice u/s 148 of the Act, the assessee filed a letter dated 11/04/2019 seeking to supply the certified copy of reasons recorded in this case. The same was provided to the assessee. Subsequently, a notice under Section 143(2) of the Act dated 21/09/2019 was issued and served on the assessee. Further notice under Section 142(1) of the Act was also issued to the

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal assessee vide notice dated 13/08/2019, the compliance of which was required on 20/08/2019. When the assessee did not comply to the statutory notice, the Assessing Officer provided another opportunity vide notice dated 21/10/2019 alongwith questionnaire. Again, the assessee did not comply. Finally, in response to the notice under Section 142(1) of the Act dated 16/11/2019, the assessee filed details of RRS Shares & Stock Brokers Pvt. Ltd. Further during the assessment proceedings, the assessee was requested to produce the source of deposit in his bank account No. 10028112744. In response to that, the assessee submitted that the money deposited/credited in his bank account was out of share transactions done by him. The assessee in support of his claim, produced a scrip-wise client-wise details alongwith contract note. From perusal of it, the Assessing Officer has stated in the assessment order that the claim made by the assessee was found to be prima facie true. From perusal of the Annexure (closing balance of shares) to the balance sheet of the preceeding year, it was found by the Assessing Officer that the assessee was in possession of shares which he sold during F.Y. 2010-11. The assessee was, therefore, asked to furnish the source of investment in the said shares. In this regard, the ld. Authorised Representative of the assessee furnished that the assessee belonged to the royal family of Nayagarh, Orissa. It was further claimed by the assessee that all these shares have been dematerialized during F.Y. 2009-10 and 2010-11. Closing stock of shares as on 31/03/2011 was produced by the ld. Authorised Representative of the assessee, was found to have been duly reflected. The Assessing Officer has noted in the assessment order that on perusal of the submission of the assessee, it was noticed that he

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal had been regularly purchasing and selling shares. It was also found that the assessee does not have any other occupation other than the share transaction and investment by way of future and option. Accordingly, the assessee was asked to produce the books of account, however, the ld. Authorised Representative admitted that the assessee does not maintain any books of account and relied totally upon the contract notes issued by the broker to calculate his income. Further, the Assessing Officer has noted that the bank account of the assessee revealed that almost all the receipts have been made through the transactions done in the share market. Considering the volume regularity and intensity of the trade, the transaction entered into by the assessee cannot qualify to be called as 'Income from Other sources'. The Assessing Officer, thus, considered this income as income from business and profession. The assessee during the assessment year under consideration, has not shown any purchase of sales/turnover in the return under Part A-P&L (Schedule meant for Profit & Loss account including no account case). Schedule BP of his ITR shows that he has shown NIL profit from business and profession other than speculative business and a profit of ₹ 4,27,259/- from speculative business. The Assessing Officer, on perusal of records and submissions made by the assessee, found it evident that the assessee is engaged in the business of trading of shares but has not disclosed this amount aggregating to ₹ 2,83,44,250/- in his return of income filed before the department for the assessment year under consideration. The Assessing Officer, therefore, held that it is a failure on the part of the assessee to disclose a true, fair and a clear picture of his state of affairs/accounts to the department

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal which was necessary. The assessee is found to be the owner of money and such money was not found to have been recorded in his 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 that money and the explanation offered by him is not found to be satisfactory and therefore, the Assessing Officer treated this sum of ₹ 2,83,44,250/- as undisclosed income for the F.Y. 2011-12 relevant to the A.Y. 2012-13 under Section 69A of the Act and initiated penalty proceedings under Section 271(1)(c) read with section 274 of the Act. 3. Aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the ld. CIT(A), who vide the impugned order dated 25/08/2025, dismissed the appeal of the assessee and confirmed the addition made by the Assessing Officer both on legal ground as well as on merit of the case on the ground that the appellant's contention that all transactions were disclosed in the original return of income is not borne out from the record. The original return did not disclose any particulars of the substantial bank deposits of ₹ 2.83 crores. Mere disclosure of certain speculative gains or losses does not amount to full and true disclosure of primary facts relating to the deposits. The burden was on the assessee to make a true and full disclosure of all material facts necessary for the assessee. However, the appellant has failed to discharge its burden. The appellant's contention that the reassessment made under Section 147 was based on change of opinion was also not acceptable because there was no scrutiny assessment originally and the return was only processed under Section 143(1) of the Act. The ld. CIT(A) while passing the

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal impugned order, placed reliance on the decisions of the Hon'ble Supreme Court in the case of CIT Vs. Durga Prasad More and Sumati Dayal Vs CIT and justified the action of the Assessing Officer to add the same amount of ₹ 2,83,44,250/- under Section 69A of the Act. 4. Further aggrieved by the order of the ld. CIT(A), the appellant is in appeal before this Tribunal. 5. During the appellate proceedings before us, it was submitted that the reassessment was done by the Assessing Officer under Section 147 of the Act only on the basis of letter of Directorate of Investigation without having any tangible material and enquiries made by the Assessing Officer was unjustified and illegal in this case. Further it was submitted that the addition under Section 69A of the Act was not justified as the source of deposits in the bank account is fully explained and accepted by the Assessing Officer as sale proceed of shares. The assessee has also made a written submission as under: "1. That the initiation of Reassessment proceeding on the basis of information received from director of investigation, without making any enquiry or verification of facts is against the law and unjustified. 2. That the learned AO as also learned CIT(A) failed to appreciate that the Appellant has disclosed all the facts in his return and has not concealed any income. 3. That even if the assessment is completed u/s 143(1), the same cannot be reopened without proper reason to believe. It needs deep verification of information received. Re opening cannot be for roving enquiry as held by Gujarat High Court in the case of PCIT Vs Manzil Dinesh Kumar Shah reported in 406 ITR at page 326. 4. That the Appellant had income from long term and short-term capital gains and payment received from share broker is credited in the bank account.

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal 5. That the learned AO, while passing the order u/s 143(3)/147, has verified the source of fund deposited in bank account as out of shares transaction as mentioned at SL. No. 4 of page 2 of the Assessment order. 6. That at SL. No. 6 of page 3 of the order, the AO mentioned that "The bank account of the assessee revealed that all the receipts have been made through the transactions done in the share market". 7. That when source of deposits in bank through clearing is accepted by AO, the addition made by AO and confirmed by the learned CIT(A) as unexplained money u/s 69 A is illegal and bad in law. 8. That in A.Y. 2011-12, same issue was examined by the AO and after verification of sources of deposits, no adverse view was taken. 9. That the Re-opening of assessment without application of mind and verification/ enquiry before issue of notice is unjustified. 10. That when all the entries in the bank account are verified as out of sale proceeds of shares and that too by bank transfers, addition u/s 69 A is unwarranted and liable to be deleted. 11. That the levy of interest on assessed income is against the Judgement of the jurisdictional High Court. 6. The Ld. Counsel for the assessee also submitted a copy of ledger of share broker, copy of bank account No. 10028112744 through which the entire transaction was routed to substantiate the genuineness of the transaction. The assessee's counsel also drew our attention towards the provisions of the Act provided under Section 69A of the Act and submitted that the addition under Section 69A of the Act can only be made when the assessee was found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or other 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 that money, bullion, jewellery or other valuable article or the explanation

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. However, it was submitted that in the case of the assessee that all the transactions have been made through banking channels and the Assessing Officer did not find any discrepancy in the bank transactions or in the share transactions. Simply because, the assessee is not maintaining the books of account, the addition cannot be made under Section 69A of the Act as the assessee has produced each and every transaction by way of ledger accounts and the Assessing Officer has already made verification of the source of that deposit, no adverse view can be taken by the lower authorities. 7. The ld. Sr. DR, on the other hand, supported the orders of the lower authorities. 8. We have considered the rival submissions. On the ground No. 1 that the reassessment proceedings was done on the basis of letter of Director of Investigation without any tangible material and verification and inquiry by the Assessing Officer is concerned, it is found that the Assessing Officer has recorded in para 3 of the assessment order about the information received from the Directorate of Investigation, Unit-1, Ranchi wherein it was found that in the assessee's bank account, huge deposits were made either by way of transfer or by way of clearing. The case was reopened by the Assessing Officer on that information. Thus, it cannot be said that there was no tangible information in the possession of the Assessing Officer to initiate the reassessment proceedings under Section 147 of the Act as has been held in

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal several cases by the Hon'ble Supreme Court that the sufficiency of material is not important but there has to be some tangible material on the basis of which the reassessment proceedings can be initiated. Here in the present case, the information was sufficient to support with the reassessment proceedings and therefore, this ground raised by the assessee is rejected. 9. Now coming to the merit of the case, the assessee has submitted that the assessee had, during the assessment year under consideration, income from long term and short-term capital gains and whatever payments were received from the share brokers were credited in the bank account of the assessee. It was further submitted that the Assessing Officer himself in the assessment order has stated that all the receipts have come through the share transactions done in the share market and have been credited in the bank account of the appellant. It was also submitted by the assessee that in the A.Y. 2011-12, same issue was examined by the Assessing Officer and after verification of source of deposits, no adverse view was taken by the Assessing Officer. We find that the Assessing Officer in the impugned assessment order has stated that on perusal of records/submission of the assessee, it is evident that the assessee is engaged in the business of trading of shares. It was also mentioned in the assessment order that the bank account of the assessee revealed that almost all the receipts have been made through the transactions done in the share market. It was also found that the assessee had been regularly purchasing and selling shares and the assessee does not have any other occupation other than the share transaction and investment by way of future & option. Thus, we find that

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal when all the transactions have been made through the banking channels and the Assessing Officer has not brought out any discrepancy on record that the transactions in shares have been made out of books or from any other sources, the addition of ₹ 2,83,44,250/- cannot be made under Section 69A of the Act as unexplained money. It is also found from the record that the assessee had submitted entire transactions made with the broker RRS Shares & Stock Brokers Pvt. Ltd. and the bank statement through which the share transactions were made, have been produced before the Assessing Officer and the Assessing Officer did not find any discrepancy in that. Thus, in absence of that, the addition made under Section 69A of the Act cannot be sustained and hence, deleted. In the result, this appeal of the assessee is partly allowed. 10. Now we take ITA No. 63/Ran/2026 for the A.Y. 2013-14. Since the grounds of appeal and the facts and circumstances of this appeal is identical to the facts and circumstances of ITA No. 316/Ran/2025 for the A.Y. 2012-13, therefore, our finding given in ITA No. 316/Ran/2025 for the A.Y. 2012-13 shall apply mutatis mutandis in this appeal also. 11. In the result, both the appeals of the assessee are partly allowed. Order pronounced in open court on 14/10/2026.

Sd/- Sd/- (RAJANI GUDURI) (RATNESH NANDAN SAHAY) JUDICIAL MEMBER ACCOUNTANT MEMBER Ranchi, Dated: 14/10/2026 *Ranjan Copy to: 1. Assessee

I.T.A. No. 316/RAN/2025 Gajendra Chandra Singh Vs ACIT & One Anr Appeal 2. Revenue 3. CIT 4. DR By order 5. Guard File

Sr. Private Secretary, ITAT, Ranchi