VINOD HIRALAL JAIN,THANE vs. ITO, THANE

In various grounds of appeal, the assessee has agitated the addition of Rs.27,14,000/- as Unexplained Money under Section 69A which has been affirmed by the ld.CIT(A). It is submitted that the addition was upheld without properly considering the explanations and evidences submitted by him. The ld. CIT(A) failed to appreciate that the credit card payments were made towards the purchase of electronic goods for resale as evident from the credit card statements submitted which clearly showed purchases from reputed electronic stores like Croma, Vijay Sales, and Kohinoor Tele Video Pvt. Ltd. The appellant also provided an explanation regarding his family background in the electronics business and his temporary independent business venture, which was wrongly ignored while deciding the appeal. The CIT(A) did not consider the fact that the Income Tax Return for subsequent years was filed and accepted without any discrepancies, further proving the appellant's bona fide conduct. He erred in ignoring his repeated submissions regarding technical issues faced while trying to file the ITR in response to the notice under section 148. He provided explanations along with supporting documents, which were unjustly disregarded.

Facts of the case are that as per the available information during the relevant year, the assessee had paid against credit card bills to the tune of Rs.27,14,000/- He did not file return of income for the Page 3 year under consideration. During assessment proceedings, the assessee was asked to furnish ITR and point wise reply as also Certificate of Sthapana issued by Nagar Nigam, copy of Sales Tax Department Registration but he could not furnish it. It was observed by the AO that the assessee always submitted ITRs used for Salary Income, and had never disclosed any business income which was contrary to his claim of business carried on. Based on this specific information the case was reopened by issuance notice u/s 148 of the Act and completed assessment making addition of Rs.27,14,000/- on account of unexplained money u/s 69A of the Act.

In the subsequent appeal, the ld.CIT(A) the assessee made a detailed submission inter alia stating that he tried to file the Income Tax Return for the A.Y. 2013-14 in response to notice u/s 148 but couldn't find any option on the New income tax portal for uploading the xml of earlier year. He paid the credit card bill from his business receipts from the new business of buying and selling of electronic household appliances in the financial year in the name and style of Vinod Enterprises as a proprietor. It was claimed that he bought the goods from well known shops and made the payment way credit card so and got special discounts on the products and then sold those products to customers at nominal margin of around 5-10%. He was doing this Page 4 businesses from home only. He didn't apply for Sthapna as he was doing this business from his home only and Sthapna is not compulsory applicable for the business which is running from home and not having any employees. Assessee made the transaction in the FY 2012-13 and it's almost 9 years when assesse received the notice to produce the sales and purchase bills which was very difficult to maintain after closing the business. The ld.CIT(A) observed that though the claim of the appellant was that he started business of buying and selling of electronic household appliances in the name and style of Vinod Enterprises as a proprietor during the year under consideration and he purchased goods from various entity and sold them to the clients directly, he failed to furnish Sales Tax Registration and Sthapna from Nagar Nigam which is compulsory for starting business. The appellant has also failed to furnish copy of purchase/sales bills & vouchers before the AO as well as appeal proceedings. Keeping in view the facts of the case of the appellant of the present year vis-a-vis the preceding year, clubbed with the fact that the appellant has failed to furnish any documentary evidence which could substantiate the claim of the appellant of doing business during the year, he held the payments of credit cards were not explained. Accordingly, the addition made by the AO of Rs.27,14,000/- u/s 69A of the Act was upheld. Page 5

Before us, the ld.DR supported the orders of authorities below while the ld.AR contested the order on the ground that the ld.CIT(A) did not accord adequate opportunity of hearing to him to explain the matter with supporting evidences. He did not appreciate the submissions made in proper perspective. It was therefore, requested to the Bench that the matter may be sent back to him for proper consideration of the all material facts of the case after allowing adequate opportunity of hearing in the matter. The ld.DR did not oppose the request of the assessee.

On careful consideration of all the relevant facts of the case we are of the view that the grounds and the submissions made by the assessee who appears to be a man of average means have been brushed aside by both the authorities below without appreciating the contentions made and the documents submitted. Therefore, the scales of justice demand that the matter should be revisited at the level of ld. CIT(A). Accordingly, the matter is remanded back to him for de novo adjudication while applying the principles of natural justice after affording due opportunity of being heard to the assessee. Page 6

In the result, appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open court on 07/05/2025. NARENDER KUMAR CHOUDHRY (न्यायिक सदस्य /JUDICIAL MEMBER) Place: मुंबई/Mumbai दिनांक / Date 07.05.2025 Lubhna Shaikh / Steno PRABHASH SHANKAR (लेखाकार सदस्य/ACCOUNTANT MEMBER) आदेश की प्रतिलिपि अग्रेषित/