MEHULKUMAR RAMABHAI CHAUDHARI,GANDHINAGAR vs. THE ITO, WARD-1, GANDHINAGAR

1383/Ahd/2024 2013-14 Mehulkumar Ramabhai Chaudhari E-215, GIDC Sector-25 Gandhinagar – 382 026 (Gujarat) PAN: AIUPC 2604 G (Assessee) The ITO Ward-1 Udyog Bhawan Sector-11 Gandhinagar-382 010

The brief facts of the case as extracted from the assessment order are that the assessee filed his return of income for the year under consideration, i.e. AY 2014-15 on 04/03/2015 declaring total income of Rs.2,34,970/-. Thereafter, the AO got the information that the assessee has deposited a cash of Rs.45,46,467/- during the year under consideration in Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. On the basis of such information, the AO initiated enquiry and issued notices u/s. 133(6) of the Act and u/s.131 of the Act, which were returned ‘unserved’. In view of this, the AO formed the belief that the income of the assessee for the year under consideration had escaped assessment. He, therefore, re-opened the assessment u/s.147 of the Act by issuing notice u/s.148 of the Act on 31/03/2021. In response to the said notice, the assessee did not file any return of income u/s.147 of the Act. Even the subsequent notices issued by the ITA Nos.1383 to 1386/Ahd/2024 Mehulkumar Ramabhai Chaudhari Asst. Years : 2013-14 to 2016-17

Aggrieved by the said addition made by the AO, the assessee preferred the appeal before the Ld. CIT(A). Before the Ld. CIT(A), it was submitted that though the assessee had complied with the notice of the AO dated 20/03/2022 vide letter dated 23/03/2023, however, the AO failed to consider the submissions of the assessee, while passing the impugned assessment order u/s.144 of the Act. It was also contended that the re-opening of the assessment u/s.147 of the Act was bad in law as the AO had not supplied the reasons recorded for re-opening of the assessment. Further, it was pleaded that the assessee had categorically mentioned that the said account with Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. was used by one Shri Natvarbhai Becharbhai Patel on assessee’s name. He had done business of trading in agricultural submersible pumps which were sold to agricultrists and sale proceeds were deposited by him in the said account. It was also explained that Shri Natvarbhai B. Patel was friend of the father of the assessee and that he was in the business of share of submersible pumps in Maharashtra State. That the assessee was a young boy and studying in college in the year-2012 and was not much aware about the implications of opening of account by Shri Natvarbhai B. Patel in his name and doing of the business in his name of sale of submersible pumps in Maharashtra. That when the assessee received

Being aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us.

We have heard the rival contentions of the Ld. Representatives of the parties and gone through the record. The Ld. Counsel for the assessee has demonstrated that the deposits in the alleged account with Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. were small deposits done all over the State of Maharashtra by different persons. He has further demonstrated that it is not a case, where there was any lump sum deposit of any amount. He, in this respect, explained that submersible pumps were soled/supplied by Shri Natvarbhai B. Patel to various agriculturists at various remote places in the State of Maharashtra, who in turn deposited the sale proceeds in ITA Nos.1383 to 1386/Ahd/2024 Mehulkumar Ramabhai Chaudhari Asst. Years : 2013-14 to 2016-17

The Ld. DR, on the other hand, has relied upon the findings of the lower authorities.

We have considered the rival contentions. The Ld. Counsel for the assessee has also taken legal pleas that this was not a case of simply information coming to the AO of the alleged deposits by the assessee in Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. He, in this respect, has stated that, in fact, a search action was carried out in the case of Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd, wherein, it was found that various persons had deposited amounts in their accounts running with Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. and that on the basis of said information, the re-opening of the assessment was done in the case of the assessee. He, in this respect, has submitted that as the provisions relating to assessment pursuant to search and seizure action

1. In this case, the assessee has, from the accounts, shown that various small amount on different dates were performed deposits in the account of the assessee with Shri Renuka Mata Multi State Urban Co- operative Credit Society Ltd. Though, it is the case of the assessee that the said account was used by one Shri Natvarlbhai Becharbhai Patel for deposit of business receipts relating to his business of trading in submersible pumps, however, the fact on the file is that the said account was in the name of the assessee and the assessee has failed to produce on file any reliable evidence to show that the said account belonged to any person other than the assessee. However, as demonstrated by the assessee, the said account was used for deposit of sale proceeds of ITA Nos.1383 to 1386/Ahd/2024 Mehulkumar Ramabhai Chaudhari Asst. Years : 2013-14 to 2016-17

With the above observations, the appeal of the assessee in ITA No.1384/Ahd/2024 for AY 2014-15 is hereby treated as partly allowed.

Now, we take up remaining Assessee’s appeals in ITA Nos.1383, 1385 and 1386/Ahd/2024 for AYs 2013-14, 2015-16 and 2016-17 respectively.

The facts and issues involved in all these appeals are identical except the amount of deposits with Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. There was a deposit of an amount of Rs.29,13,108/- in the AY 2013-14, of Rs.40,78,467/- in AY 2015-16 and of Rs.51,65,100/- in AY 2016-17. In view of our findings given above, the addition is restricted to 8% of the corresponding amounts being the profit element involved in respect of the aforesaid deposits.

1. So far as the legal issues taken by the assessee are concerned, since we have decided the issue on merits and, hence, at this juncture, we are ITA Nos.1383 to 1386/Ahd/2024 Mehulkumar Ramabhai Chaudhari Asst. Years : 2013-14 to 2016-17

In the result, all the four appeals of the assessee are hereby partly allowed. Order pronounced in the Open Court on 15/12/2025. (Annapurna Gupta ) Accountant Member िदनांक/Dated 15/12/2025

अपीलाथ# / The Appellant 2. $थ# / The Respondent. 3. संबंिधत आयकर आयु% / Concerned CIT 4. आयकर आयु% ) अपील ( / The CIT(A)-(NFAC), Delhi 5. िवभागीय ितिनिध , अिधकरण