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Facts
The assessee, an individual named Bimal Kumar Drolia (Prop. Sumon Enterprise), deposited ₹58,14,000 in a PNB savings account for AY 2009-10. A reassessment notice under Section 148 was issued, leading to an assessment order under Section 147/143(3) and an income assessment of ₹59,69,530/-. The assessee repeatedly changed his explanations for the cash source, initially claiming it was operated by a CA for a commission, then as sales proceeds, and later filing a cheating complaint against the CA, but failed to substantiate the source with documentary evidence.
Held
The Tribunal dismissed the assessee's appeal, confirming the addition of unexplained cash deposits. It ruled that the notice under Section 148 was validly issued and the additional ground challenging its timeliness was dismissed as 'not pressed'. The Tribunal rejected the 'peak credit' argument due to the assessee's failure to establish correlation of withdrawals and deposits. Citing *Buniyad Chemicals Ltd.*, the Tribunal emphasized the assessee's obligation to explain credits, stating that Section 68 applies even if books of account are claimed not to be maintained.
Key Issues
1. Whether the addition of ₹58,14,000 as unexplained cash deposits in the bank account was justified. 2. Whether the reassessment notice issued under Section 148 was time-barred. 3. Whether the 'peak credit' theory should be applied for the cash deposits. 4. Whether Section 68 of the Income Tax Act, 1961, is applicable when the assessee claims not to have maintained books of account.
Sections Cited
2(12A), 34 (of 1922 Act), 68, 131, 142(1), 143(2), 143(3), 147, 147(b), 147(6), 148, 148(1), 149, 250, 44AA, 44AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: SRI PRADIP KUMAR CHOUBEY & SRI RAKESH MISHRA
order
: 18-July-2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2009-10 dated 22.12.2023, which has been passed against the assessment order u/s 147/143(3) of the Act, dated 10.11.2016.
The assessee is in appeal before the Tribunal raising the following grounds of appeal:
The appellant prey honours to kindly allow admission of following ground as additional ground. The ground was raised before Ld. CIT(A), NFAC also and otherwise in view of the Honourable Supreme Court order in the matter of NTPC vs CIT (1998) 229 ITR 383(SC) legal ground can be raised before appellate authority.
Notice under section 148 was served to the appellant on 02.04.2016, and since the notice is time barred the assessment proceedings carried out are without jurisdiction, bad in law and are liable to be quashed.”
3. Brief facts of the case are that the assessee is an individual. Information regarding huge cash deposit in saving bank account No. 3185002100021034 of Punjab National Bank, Lenin Sarani Branch, Kolkata on different dates from 03.03.2009 to 13.03.2009, was received from D.D.I.T(Inv) Unit-2(3), Kolkata. The account is in the name of Sumon Enterprise, Prop. Bimal Kumar Drolia. Therefore, a notice u/s 148 of the Act was issued on 29.03.2016, requiring the assessee to submit a true and correct return of income. In response to this, the assessee requested to treat the earlier return filed as return filed in response to notice u/s 148 of the Act. Thereafter, notices u/s 143(2) and 142(1) of the Act dated 13.05.2016 and 06.09.2016, respectively along with several letters were also issued and served upon the assessee to prove with direct evidence the claim of cash deposits made out of sales. In response, the assessee filed only date-wise sales details in plain paper and did not substantiate it with documentary evidence, which was not accepted by the Assessing Officer (hereinafter referred to as Ld. Page 2 of 19 Page 6 of 19 Page 7 of 19 Page 10 of 19 Page 13 of 19 Page 14 of 19
Ground No. 2 is general in nature and does not require any separate adjudication.