LATE SHRI RAMANAND TAPARIA TH/LH CHANDADEVI TAPARIA ,INDORE vs. NATIONAL FACELESS ASSESSMENT CENTREQ, DELHI

the order bearing Number ITBA/NFAC/S/250/2024- 25/1073834816(1) dated 28.02.2025 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the Page 1 of 31

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 “Impugned order”. The relevant Assessment Year is 2013-14 and the corresponding previous year period is from 01.04.2012 to 31.03.2013.

2.2 That the assessee filed its return of income for the Assessment Year 2013-14 on 16.09.2021declaring therein the total income at Rs.5,02,550/-.

2.3 That the case of the assessee was reopened u/s 147 of the Income Tax Act 1961 after taking the approval of the appropriate authority.

2.4 That thereafter accordingly a notice u/s 148 of the Act was issued to the assessee on 31.03.2021 to file his return of income.

2.5 That in response to the aforesaid notice u/s 148 of the Act the assessee herein filed the return of income for the year declaring therein the total income at Rs.2,71,730/-.

2.6 Thereafter a notice u/s 143(2) of the Act was issued to the assessee too.

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 2.7 The department of Income Tax had information that the assessee had made the payment of premium on the purchase of multiple Insurance policies and mutual funds of Rs.23,66,799/- during the financial year 2012-13 relevant to the assessment year 2013-14 which was more than his income and the same was not disclosed in the return of income. Further that the assessee declared short term capital gain of Rs.2,30,820/- which was declared NIL by the return filed in response to the notice u/s 148 of the Act.

2.8 That the Ld. A.O in order to complete the assessment proceedings issued a notice u/s 142(1) of the Act on 15.11.2021 and vide the same notice the assessee herein was also requested to explain as to why the “undisclosed income” as per the reasons recorded as above should not be added to the total income and why the penalty proceedings for the concealment of the income/ furnishing of the inaccurate particulars of income u/s 271(1)(c) of the Act be not initiated.

2.9 That in response to the same the assessee made his submission on 30.11.2021. vide the same the assessee raised objection to the proceedings initiated u/s 147 of the Act. The Page 3 of 31

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 objection of the assessee was duly disposed by this office letter dated 05.01.2022. Since the ample time has been passed disposing the objection of the assessee, the assessee has not offered any explanation as requested vide notice us 142(1) dated 15.11.2021. Considering the non-compliance of the assesse and time barring nature of the assessment proceedings, A.O had to proceed to finalize the proceedings as per details available.

2.10 That therefore the Draft assessment order was prepared and addition was proposed on account of unexplained investment to the amount of Rs 23,66,799/- and addition for STCG of Rs. 2,30,820/- Accordingly a show cause notice seeking objection to the proposed addition / compliance by 25.03.2022 was issued as well as shared through e-proceeding account. Meanwhile A.O received submission from the assessee dated 23.03.2022.

Relevant portion of the same is as under:-

"The assessee is an insurance agent and derives income from commission received from various insurance companies and interest Income the assessee takes various policies After the maturity or even before the maturity the payments are received from the insurance companies and the same amount is invested in the new policies". Assessee also provided receipt of the various investments”.

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 2.11 That the Ld. A.O in the assessment order has recorded as under:-

“I have carefully read the submission made by the assessee. The assessee stated that the source of investment is the income from commission and income from various insurance policies. However on perusal of return of income filed by the assessee in response to the notice u/s 148 it is seen the assessee declared total income of Rs 2,71,730, and income from other sources is 203030. the income of the assessee is not sufficient enough to make such huge investment. Further the assessee has reflected proprietor's capital at Nil.

It is also seen in A,Y 2014-15 the assessee made investment of Rs 16,61,195/ while declaring total income Rs 2,14,070/- only. The assessee is following the same trend of making investment without proper source of investment As the source of invest is not justifies by the submission of the assessee. Hence, I proceed to make addition as proposed in DAO”.

2.12 That the Ld. A.O has observed and held as under in the assessment order:-

“6 During the year under consideration the assessee made payment of various policies purchased to the amount of Rs. 17,89,508/-. In addition to this the assessee has also made investments in various Mutual funds through SIP amounting to Rs.81,000/- for F.Y. 2012-13 It is also noted that the assessee has made investments in shares as well. Assessee has also purchased shares of Rs.4,96,291/-during F.Y. 2012-13. Thus, the assessee has made total investment of Rs.23,66,799/- in F.Y. 2012-13 .on perusal of return for F.Y. 2012-13 the assessee has reflected proprietor's capital at Nil.

Addition u/s 69: Rs 23,66,799/-

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15

Total income as per return of income Rs 2,71,730/- Addition as discussed in para 7 above Rs 23,66,799/- Addition as discussed in para 8 above Rs. 2,30,820/- Total Income Assessed Rs 28,69,349/- 2.13 That the aforesaid assessment order of Ld. A.O bears No.

ITBA/AST/S/147/2021-22/ 1041887100 (1) and that the same is dated 29.03.2022 which is hereinafter referred to as the “impugned assessment order” for sake of brevity. The total income of the assessee was computed and assessed at Rs.28,69,349/- exigible to tax which is described in details as aforesaid.

2.14 That the assessee being aggrieved by the aforesaid “impugned assessment order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “impugned order” has dismissed the 1st appeal of the assessee on the Page 6 of 31

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 grounds and reasons stated therein. The core grounds and reasons are listed as “A” & “B” as under:-

(A). 6. Decision:

I have carefully perused/considered the appellate documents, submissions filed, and order passed by Ld.JAO for appellate years for AY 2013-14 and AY 2014-15.

For both the appellate years AY 2013-14 and AY 2014-15, assessments were reopened after recording of reasons and obtaining approval of the competent authority. Notices under section 148 were issued and return were filed. Notices under section u/s. 143(2) and 142(1) were issued. The appellant submitted qua the nature and source of the investment in policies of Rs.23,66,799 in AY 2013-14 and of Rs. 16,61,195, that monies source was out of commission income and income from settlement and premature settlement of various policies. The finding of fact returned by the Ld.JAO in AY 2013-14 was-

“6 During the year under consideration the assessee made payment of various policies purchased to the amount of Rs 17,89,508/-. In addition to this the Assessee has also made investments in various Mutual funds through SIP amounting toRs.81,000/- for F.Y. 2012-13 it is also noted that the assessee has madeinvestments in shares as well. Assessee has also purchased shares of Rs.4,96,291/-during F.Y. 2012-13. Thus, the assessee has made total investment ofRs.23,66,799/- in F.Y. 2012-13 on perusal of return for F.Y. 2012-13 the assessee has reflected proprietor's capital at Nil”.

“7. The assessee grossly failed to explain the source of investment. Therefore entire investment of Rs Rs.23,66,799/- is treated as unexplained investment and the same is added to the total income of the assessee u/s 69 of the Act. Penalty proceedings u/s 271(1)(c) is also initiated separately for concealment of particulars of income as mentioned above”.

Further an addition of Rs.2,30,820 of STCG was also made to income which was Shown as NIL in ROI. It may be noted that the appellant has accepted the said addition and same has not been agitated before FAA.

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 Similarly in AY 2014-15 Ld.JAO has made addition as follows-

“6. During the year under consideration the assessee made payment of various policies purchased to the amount of Rs 1532195-,In addition to this the assessee has also made investments in various Mutual funds through SIP amounting to Rs.s.1,29,000/- for F.Y. 2013-14 Thus, the assessee has made total investment ofRs16,61,195//-in F.Y. 2013-14”.

“7. The assessee grossly failed to explain the source of investment. Therefore entire investment of Rs16,61,195/- is treated as unexplained investment and the same is added to the total income of the assessee u/s 69 of the Act. Penalty proceedings u/s 271(1)(c) is also initiated separately for concealment of particulars of income as mentioned above”.

Perusal of form 35 shows that Grounds of Appeal are same for both the appeals and hence decided together. It may also be noted that an affidavit has been filed dated 19/10/2024, regarding the death of appellant and intimation of LR i.e. deponent Chanda Devi Taparia to the Ld.JAO. The appellate proceedings are therefore continued in hands of LR as per affidavit.

(B) Ground of Appeal Three, Four and Five are regarding the assertion that evidence was not considered and that transactions are genuine.

Dismissed, as even where a transaction is genuine in the sense that it physically occurred, the assessee must prove that the funds used are fully accounted for by disclosed sources. If the quantum of investment far exceeds known sources of income and the assessee cannot reconcile it, Section 69 allows the AO to treat it as unexplained investment. In this case, the assessee's capital and returned income simply do not match the outlays on policies, mutual funds etc.

Dismissed, as it is the duty of aggrieved party to bring evidence on record so that judicious decision could have been taken either by the Ld. JAO or in appellate proceedings. It is not clear how the buildup is happening before each of the events. Even in cash books there are cash deposits which are unexplained, though the ledgers and other details have been filed. No clear explanation has been provided for cash deposits and investment made.

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 Section 69 deals with the treatment of unexplained investments as income that has not been disclosed or accounted for by the taxpayer. According to Section 69, if the appellant has made any investments in the previous year which are 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 the investments or the explanation offered by him is not satisfactory, the value of the investments may be deemed to be the income of the assessee of such previous year.

The main features of Section 69 are:

 The section applies to any investments made by the assessee, such as purchase of property, shares, jewellery, etc.

 The section does not require the existence of any books of account. Even if the assessee maintains books of account, the section will apply if the investments are not recorded in them.

 The section does not specify any method of valuation of the investments. The value of the investments may be determined by the Assessing Officer based on the fair market value or the cost of acquisition, whichever is higher.

 The section does not require any proof of mens rea (guilty mind) or intention to evade tax. The mere fact that the investments are unexplained or unsatisfactorily explained is sufficient to invoke the section.

 The section does not provide any guideline or limit on the discretionary power of the Assessing Officer in making the addition. The Assessing Officer must act judiciously and reasonably and not arbitrarily or capriciously.

 The burden of proof lies on the assessee to establish the nature and source of the investments. The assessee must produce credible and reliable evidence to support his explanation.

 The section does not bar the application of any other provision of the Act, such as Section 68 (cash credits), Section 69A (unexplained money), Section 69B (undisclosed investments), Section 69C (unexplained expenditure), or Page 9 of 31

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 Section 69D (amount borrowed or repaid on hundi). The Assessing Officer can make additions under any of these sections, if applicable, in addition to Section 69.

The burden of proof lies on the assessee to prove the identity, creditworthiness, and genuineness of the transaction. A mere payment through banking channels does not establish genuineness of the transaction, as per Supreme Court precedents [e.g., CIT vs. P. Mohanakala (2007) 291 ITR 278 (SC)].

Appeal for AY 2013-14 and AY 2014-15 are dismissed”.

2.15 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in the Form No.36 against the “impugned order” which are as under:-

“1. The Ld. CIT(A) NFAC has erred in upholding the re-opening of assessment u/s 147. The re-opening is bad in law and hence the assessment be annulled.

2. The Ld. CIT(A) NFAC has erred in upholding the addition of Rs. 23,66,799/- on account of investment in the insurance policies and mutual funds and shares without considering the evidences filed and submissions made. Complete details were filed about these investments before the lower authorities which have not been considered.

3. The Ld. CIT(A) NFAC has erred in upholding the addition of Rs. 23,66,799/- with the short remark that the burden of proof lies on the assessee to prove the identity, creditworthiness and genuineness of the transactions. The Ld. CIT(A) NFAC did not consider the details filed before him. The addition may please be deleted.

4. The Ld. CIT(A) NFAC has erred in maintaining the addition of Rs. 2,30,820/- for STCG. The addition may please be deleted.

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15

3.2 Ld. AR then submitted to this tribunal that the assessee is an individual. The assessee has an insurance agency. He generally takes insurance policies and reinvest the amount back in to the insurance policies, upon maturity and so also upon breaking the same before the expiry of the terms of the policies. The assessee makes the payment of premium amount against the respective policies through banking channels as and by way of cheques only. [Herein source of money deposited in bank of assessee assumes importance]. He is an insurance agent

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 too and in this regard he has furnished both to the Ld. A.O & Ld.

CIT(A) all the necessary details. The income of the assessee is a meager amount only. The assessee has his own insurance policies which are multiple in the nature of the few insurance companies besides investment in “mutual funds” and the “shares”. The Ld. A.O adverse observation against the assessee is that the assessee has low income vis-a-vs corresponding investments. In this regard the Ld. AR invited our attention to pages 21A to 25 which are the details of the insurance policy’s from 01.04.2012 to 31.03.2014. On page 25 details of investment made in the mutual fund from 01.04.2012 to 31.03.2014 are stated besides the details of shares (01.04.2012 to 31.03.2014).

Our attention was invited to page 26 which is a ledger account of the assessee for financial year 2013-14 for “Baroda Piooner Mutual Fund”. Page 27 is leger account of the assessee for financial year 2011-12. Next our attention was invited to page 28 of the paper book which is a ledger account of the assessee for financial year 2012-13 in respect of “Aviva Life Insurance Company”. Our attention was invited to paper book page 29 which is a ledger account of the assessee for financial year 2012-

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 13 in respect of “Bajaj Alliance Life Insurance Company”.

The Ld. AR also invited our attention to paper book page 20 to 21 which is a letter/reply dated 15.03.2022 to the Ld. A.O. The contents of the said letter were highlighted particularly from 1 to 8 therein. Our attention was further invited to page 31 of the paper book which is a ledger account of the assessee for Financial Year 2012-13 in respect of “UTI Mutual Fund”. It was stated that the transactions therein are from banking channels through cheques. Our attention was invited to page 14 of the paper book which is a ledger account of the assessee for financial year 2012 to 2013 “in respect of shares” purchased and shares sold. The net profit is shown.

3.3 Per contra Ld. DR appearing for and on behalf of the revenue has placed reliance on the order of Ld. A.O and that of the Ld. CIT(A) and has contended that there are no serious infirmities therein hence this tribunal should not set aside the “impugned order”. In brief Ld. DR supported the “impugned assessment order” and “impugned order” of lower authorities.

3.4 In the rejoinder argument Ld. AR submitted that he would file a brief submission establishing co-relation with paper book

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 pages filed during the day which was filed later and placed on record. The Ld. DR has no objection to this filing.

3.5 We observe and note from the rejoinder submission filed on 06.11.2015 (supra) the following is avered therein:-

(i) The assessee is an individual doing the business of insurance agent and derives income from “commission” and “interest income”.

(ii) The returns have been filed showing the total income of Rs.5,02,550/- for Assessment Year 2013-14 and Rs.2,14,070/- for Assessment Year 2014-15.

(iii) The returns were processed u/s 143(1) of the Act.

(iv) Notice(s) u/s 148 of the Act was issued on ground that the assessee has made payments of premium for purchase of multiple insurance policies and mutual funds which are unexplained.

(v) It was submitted before the Ld. A.O that the assessee is an “insurance agent” and gets the commission on the payment of premium of insurance at the rate of 25% to 30% for the first year and about 5% for the subsequent years. The assessee had taken numerous policies in the Page 14 of 31

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 earlier years and so also during the year as “investments” to get a commission. Some of the policies are either matured during the year or were surrendered during the year and the payments have been received through the banking channel. The amounts paid for the policies were all disclosed in the balance sheet of various years.

(vi) From the balance sheet for Assessment Year 2012-13 it would be seen that the total investment in the various policies were to the tune of Rs.94,00,000/- and the investments in the shares and mutual funds were Rs.1,74,000/-.

(vii) The Ld. A.O without considering the details filed and the evidences produced made the addition of Rs.23,66,799/- for the Assessment Year 2013-14 and Rs.16,61,195/- for the Assessment Year 2014-15 on the ground that the assessee had received the commission and the income of the assessee is not sufficient to make such a huge investment. The Ld. CIT(A) has dismissed the appeal with small remark that the assessee is required to prove identity, creditworthiness and genuineness of the Page 15 of 31

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 transactions and the assessee has to establish the nature and source of the investment with credible evidence.

(viii) In above factual back drop laid down the Ld. AR has contended that the payments for insurance premium have been made as an investments and for “getting the commission”. The “commission income” has been shown as credited in the P&L account. During the relevant period the assessee has also pre-maturedly encashed some of the policies or has received the payments on maturity.

(ix) In regard to (viii) above a complete chart was submitted before the Ld. A.O. Copies of the account of various insurance companies maintained by the assessee in his books of accounts were too submitted showing the actual payments made/received through cheques. The bank statements showing the amounts received and the amount invested in the such policies was also filed. Even the copy of cash book was also filed before the Ld. A.O.

(x) The details/papers submitted are as under:-

S.No. Details of papers AY 2013-14 AY 2014-15 1 Copies of Page 12 to 14 Page 11 to 15 computation, P&L account and balance

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 sheet 2 Chart showing details Page 22 to 24 Page 21 to 24 of policies taken and maturity payment received 3 Copy of accounts Page 28 to 30 Page 27 to 29 showing details of investment made in various insurance companies. 4 Details of bank Page 33 to 52 Page 31 to 55 account along with bank book 5 Copy of cash book Page 53 to 59 Page 56 to 62

(xi) The Final conclusion and submission drawn by the Ld. AR are as follows:- (a) Source of investment in the new policy and mutual fund have been fully explained with evidence of policy numbers and bank details. (b) The Ld. A.O has not looked in to these evidences and explanations. The Ld. A.O has without any investigation and without pointing out any defect in the explanation has made the addition simply with the reasoning that the income is not sufficient to make such a huge investments. The lower authorities failed to appreciate the fact that there are investments on which the “commission” is earned. All the transactions are recorded in the books and payments are made through

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 banking channel. Complete details of policies on which the payment is received has been filed. Thus there is no question of any unexplained investment and provision of Section 69/69A are not attracted. The transaction of investments in mutual funds and shares are shown in the books. The profit on sale of shares is Rs.9653/- and on mutual funds Rs.22,756/- which has offered as income (Page 14 of paper book).

4.1 We now have to decide the legality, validity and the proprietery of the “impugned order” basis records of the case and rival contentions canvassed before us.

4.2 We have carefully perused the records of the case as presented to this Tribunal by both the Ld. AR & the Ld. DR to determine the legality, validity of the “impugned order” basis law and by following the due process.

4.3 We basis records of the case and after hearing and upon examining the contentions are of the considered view that both the Ld. AR and Ld. DR have made their respective contentions for and against the “impugned order”.

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 4.4 We observe and note that the Ld. A.O in the “impugned assessment order” has held as follows:-

“I have carefully read the submission made by the assessee. The assessee state that the source of investment is the income from commission and income from various insurance policies. However on the perusal of return of income filed by the assessee in response to the notice u/s 148 it is seen that the assessee has declared total income of Rs.2,71,730/- and income from other source is Rs.2,03,030/-, the income of the assessee is not sufficient enough to make such huge investment. Further the assessee has reflected Propritor’s Capital at NIL”

In the brief and in the sum and substance the income of the assessee is meagre vis-à-vis his investment.

4.5 The Ld. A.O in the “impugned assessment order” has held as under:-

“During the year under consideration, the assessee made payment of various policies purchased to the amount of Rs.17,89,508/-.

“In addition to this the assessee has also made investment in various mutual funds through SIP amounting to Rs.81,000/- for the Financial Year 2012-13”.

“It is also noted that the assessee has made investments in shares as well. Assessee has also purchased shares of Rs.4,96,291/- during Financial Year 2012-13”

“Thus the assessee has made total investment of Rs.23,66,799/- in Financial Year 2012-13”.

“On perusal of return for Financial Year 2012-13 the assessee has reflected Propritor’s capital at NIL”

“The assessee grossly failed to explain the sources of investment”

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 “Therefore entire investment of Rs.23,66,799/- is treated as unexplained investment and the same is added to the total income of the assessee u/s 69 of the Act” Basis above the Ld. A.O has made addition of Rs.23,66,799/- u/s 69 of the Act.

4.6 In this regard we notice and observe that the Ld. CIT(A) in the “impugned order” with regard to following core grounds raised by the assessee in first appeal has held as under which we repeat herein as below:-

3. The Ld. AO has erred in making the addition of Rs. 25,97,619/- 4. The necessary proofs and evidences were furnished before the AO which was not considered and as such the additions made is bad in law. 5. The transaction is genuine and all the indgreints are in existence. The additions have been made which are bad in law The core finding and grounds of “ impugned order” of Ld.

CIT(A) are already reproduced by us in para 2.14 (A) & (B)

(supra).

4.7 We observe and note basis paper book page 14 which is P&L account of the assessee in column “Direct Income” figure of Rs.10,22,549.73/- is mentioned. Sources of this amount are as follows:-

Commission from TATA AG 83,163.76

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 Commission from Aviva LIC 1,38,185.00 Commission from LIC 1,75,463.59 Dividend received 3,242.05 Interest on Bank S/B 9,914.96 Intt. On FDR 75,420.79 Intt. Recd. on LIC Pension Plan 24,000 Intt. Recd. On loan 93,694.00 Misc Commission 236.41 Profit on Ag. Land sold 2,30,820.00 Profit on Mutual Fund 9,653.17 Profit on sales of share 22,756.00 Rent received 1,56,000.00 Total 10,22,549.73

We basis above observe and note that “sources of income (Direct Income)” are as and by way of commission income, dividend income, interest income, interest on loan, profit on agriculture land sold, profit on mutual fund, profit on shares sales of shares received etc. aggregating to Rs.10,22,549.73/- [(Direct expenses Rs.4,76,426.19) (page 14 of paper book)].

Basis paper book (page 12) which is the computation of total income the amount mentioned therein is Rs.5,02,551/-

[Business income Rs.3,19,080/- Property income Rs.1,04,033/- Income from other sources Rs.2,03,030/- Total Rs.6,26,143/-

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 Less Deductions 80C,80D,80TTA Rs. 1,23,592/- Total income Rs.5,02,551/- Note: The aforesaid amount subject to personal drawings is available for investment].

4.8 In the above factual backdrop para 4.7 (supra) the Ld. A.O has observed and identified that the assessee has made payment of various policies purchased to the extent of the amounts of Rs.17,89,508/-. In addition to this the assessee has also made investments in various mutual funds through SIP amounting to Rs.81,000/- for Financial Year 2012-13. The assessee has purchased shares of Rs.4,96,291/- for financial year 2012-13.

Aggregate amount of total investment comes to Rs.23,66,799/- for Financial Year 2012-13. Perusal of the return for Financial Year 2012-13 shows that the assessee capital as NIL. The Ld. A.O in the “impugned assessment order” has observed and held that “the assessee grossly failed to explain the source of investment therefore entire investment of Rs.23,66,799/- is treated as unexplained investment and the same is added to the total income of the assessee u/s 69 of the Act”.

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 4.9 We observe and note that on page 33 of paper book which is one page document only the Account No, Name and address of Bank and the Name of account holder is stated which is as under:-

S.No A/c. No. Name & Address of the Name of A/c. bank Holder 1 043010100061524 AXIS BANK MAIN SELF BRANCH 2 0568010100057169 AXIS BANK SAYAJI SELF BRANCH 3 04041570003380 HDFC BANK VIJAY SELF NAGAR BRANCH 4 0136177045006 HSBC BANK RACE SELF COURSE ROAD BR 5 51030961628 SBBJ, KIBE SELF COMPOUND BRANCH 6 029270100004792 BOB VIJAYNAGAR SELF

Save and except aforesaid the copies of bank statements of above accounts are conspicuously absent.

4.10 We have also perused the reply of the assessee dated 30.11.2021 page 15 of paper book and finds that save and except furnishing papers and documents mentioned therein no linkage and nexus is established as to how the payments together with sources for aforesaid additions made by the Ld. A.O have been Page 23 of 31

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 made. Sources of money in the bank must be explained.

Banking channel transaction perse does not establish the “sources”.

In this regard we gainfully refer to the provision of Section 69 of the Act which we reproduce as below:-

Unexplained investments.

Keeping in view the above section and it’s material ingredients whereby the burden is casted upon the assessee to offer an explanation about the nature and source of investments.

4.11 We however observe and hold basis submissions made in the hearing including the rejoinder submissions which we have recorded in the record of hearing at para 3 to 3.5 (supra) that for the purpose of the computation of the income exigible to tax what is required in law is that the assessee should offer an plausible explanation about the nature and source of the investments. In the instant case in respect of addition made of Rs.23,66,799/- no Page 24 of 31

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 explanation which can be called a “satisfactory one” is offered even before us with regard to the nature and source of investments. As observed by us (supra) the assessee’s direct income is Rs.5,02,551/- without taking in to consideration personal drawings. As against this figure of Rs.5,02,551/- the investment is Rs.23,66,799/- as computed and assessed for which the explanation offered is income from insurance commission as the assessee is insurance agent too. Basis page 14 of paper book para 4.7 (supra) we have enumerated assessee’s direct income sources which too is in commensurate with his investments (supra). Hence by taking in to consideration both his “Direct sources of Income” (page 14 of paper book) and so also “Direct expenses” of Rs.4,76,426.19 (page 14 of paper book) that the assessee has not furnished “capital account details”. The assessee is “silent” on “capital account details” even before us too. The assessee has furnished “Profit & Loss Account, Balance Sheet” but has not given “Capital Account details”. Further the assessee on page 33 of paper book has simply stated the Account No, the Name and address of bank and the name of account holder but has not enclosed bank

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 statements of nearly 6 banks before us and not before the lower authorities i.e. Ld. A.O & Ld. CIT(A). Basis of fund inflow and fund outflow from banking statements are not there. Sources are not explained how and from where the funds came. Needless to state bank statements establish the fund inflow and fund outflow and its sources along with suitable explanation of assessee on the sources. The “sources” of deposit by way of cash and cheque are stated therein too in such bank statements, this exercise however was not done by the assessee. With regard to policies which the assessee has claimed to have purchased save and except the policy number no “sufficient and other material particulars” about the policies and its source of purchase are stated basis paper book pages 21A to 25. Further “no material and sufficient particulars” are stated about shares too (Page 25 of paper book). Basis paper book page 16 we observe and notice that the assessee has stated “All the major withdrawals and deposits for aforesaid years are either deposit of cash in bank accounts or withdrawing cash from bank accounts” . In this regard we hold that assessee is silent on “nature and sources”.

Basis paper book pages 27 to 31 we observe that these are ledger

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 account of various insurance companies maintained by the assessee in his books of accounts however relevant extracts of “insurance companies statements” are not provided, similar is the position with regard to pages 34 to 59. The assessee has not expressly stated in replies to the lower authorities which policy was purchased in the year under consideration, what was its value and sources of money in purchasing such policies and so is the case of pre-encashment/surrender of policy. In brief no satisfactory explanation in law with regard to “nature and source of investments” (supra) is offered as by of explanation which could be considered as plausible to the satisfaction of the authorities below. We hold that mere submitting papers, documents without explaining the “sources” of money for the investments is not a sufficient exercise in law. The explanation so offered must have direct linkage and nexus to the papers, documents, material so submitted and said linkage and nexus should be clearly spelt out with regard to sources of money. In the instant case this exercise is not done to the satisfaction of the authorities below and lower authorities in passing their respective “impugned assessment order” and Page 27 of 31

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 “impugned order”. An empirical analysis done objectively, systematically and easily verifiable keeping in mind context have not been done so in the instant appeal to convince this tribunal, despite request made in this behalf at fag end of hearing at the rejoinder stage. Even the Ld. CIT(A) in the “impugned order” at page 10 has held that Dismissed, as it is the duty of aggrieved party to bring evidence on record so that judicious decision could have been taken either by the Ld. JAO or in appellate proceedings. It is not clear how the buildup is happening before each of the events. Even in cash books there are cash deposits which are unexplained, though the ledgers and other details have been filed. No clear explanation has been provided for cash deposits and investment made. To repeat and to reiterate mere filing of papers, documents, material without any correlation with investment so made is not sufficient in law more so ever with no explanation on sources. Merely stating that the transactions are through banking channel and investment is explained is also not sufficient exercise in law (Page 21 of paper book). On Page 15 of paper book it is noticed by us that as discussed earlier too by us

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 what is stated is “5 The list of all bank accounts in the name of assessee mentioning account number and name of bank is enclosed in prescribed format”. What prescribed format under which section, rule sub rule the assessee is speaking about is not spelt out besides no bank statement of various banks where the assessee is having account are enclosed. In brief this tribunal too is not convinced by the assessee’s stand at this stage of second appeal with regard to unexplained investment which are identified by the authorities below. The latest rejoinder filed at the fag end of hearing. However keeping in mind the ends of justice requires that one more and last opportunity be given to the assessee to offer a suitable explanation before the Ld. A.O so that he can adjudge and adjudicate the case afresh on denovo basis. The assessee is directed to file all material information particulars, documents establishing nexus between investment and its sources to full and complete satisfaction of the Ld. A.O.

All documents in order to adjudge and adjudicate the income of the assessee on real time basis be filed so that the Ld. A.O can pass a suitable “speaking and reasoned order”.

Late Ramanand Tapadia Through L/H Chanda Devi Tapadia &261/Ind/2025 - A.Ys.2013-14 & 2014-15 5. Order 5.1 In the premises drawn up by us as aforesaid we set aside the “impugned order” and remand the case back to the Ld. A.O on denovo basis.

5.2 In result appeal of the assessee is allowed for statistical purpose.

(Assessment Year 2014-15)

Since the facts and circumstances are almost identical and similar this appeal too was heard simultaneously and disposed off by this order mutadis mutandis.

5.4 Finally in result both the appeals are allowed for statistical purpose.

Order pronounced in open court on 21.11.2025.