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Facts
The assessee filed appeals against reassessment orders for AY 2011-12 to 2015-16. The Revenue submitted that the assessee did not produce required details and the banking transactions remained unexplained. The assessee's primary business was commission income from cheque discounting and diamond assortment.
Held
The Tribunal held that the assessee failed to provide details of credits and payments from bank accounts, despite opportunities. The claim of the bank account being in the wife's name was not supported by documents. The transactions were not business-related and remained unexplained, justifying the addition of unexplained credit.
Key Issues
Whether the unexplained credits in the assessee's bank accounts are to be treated as income from undisclosed sources, and if the assessee's claims regarding business activities and bank accounts are substantiated.
Sections Cited
143(3), 147, 69A
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: Shri T.R. Senthil Kumar & Shri Bijayananda Pruseth
Prakash Bhikhabhai Mehta Income Tax Officer B1/104, L B Park Society, Ward-1(3)(4), Near Panjrapole, Vs Surat Ghoddod Road, Surat-395001, Gujarat PAN: AHZPM6370K (Appellant) (Respondent) Assessee Represented: None Revenue Represented: Shri Mukesh Jain, CIT-DR & Shri Ajay Uke, Sr. D.R. Date of hearing : 12-11-2025 Date of pronouncement : 27-11-2025 आदेश/ORDER PER BENCH:-
These five appeals are filed by the Assessee as against the separate appellate orders all dated 22.05.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment orders passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years 2011-12 to 2015-16. Since common issue to 685//SRT/2025 A.Ys. 2011-12 to 2015-16 Page No 2 Prakash Bhikhabhai Mehta vs. ITO and common grounds are raised by the assessee, the same are disposed of by this common order.
When these appeals are listed for hearing on 10-11-2025, there is a letter dated 07-11-2025 seeking adjournment by Shri Uday P Nanavati that he is unable to attend the hearing fixed on 10-11- 2025 as he was busy in filing Tax Audit work. The Counsel has not represented through Virtual/Hybrid hearing, therefore the adjournment request was rejected and the appeals were adjourned to 12-11-2025. Again the Counsel sought for 15 days time vide letter dated 11-11-2025 but not appeared through Virtual/Hybrid mode, therefore the adjournment request is hereby rejected.
Per contra, Ld. DRs. appearing for the Revenue submitted that the assessee has not produced required details neither before assessing officer nor before the Ld. CIT(A) and the entire banking transactions remain unexplained. Therefore requested to confirm the orders passed by lower authorities. relating to Asst. Year 2011-12 as the lead case. Brief facts of the case is that the assessee is an individual having income from business, being commission income from a cheque discounting and income from diamond assortment. The assessee filed his Return of Income for A.Y. 2011-12 on 03-08- 2012 declaring total income of Rs.1,57,967/-. Information received from Investigation Wing of the Department, that Suspicious Transaction Report that Major transaction in bank account in round figures, inter account fund transfer or inward/outward to 685//SRT/2025 A.Ys. 2011-12 to 2015-16 Page No 3 Prakash Bhikhabhai Mehta vs. ITO RTGS remittances. These transactions do not appear to be business related, as the funds were transferred out on the same day or withdrawn in cash leaving nominal balance at the end of the day. Therefore the assessment was reopened by issuing notice u/s. 148 on 31-03-2018. In response, the assessee filed Return of Income on 30-04-2018 declaring total income of Rs.1,87,870/-. Thereafter notices were issued on various dates and assessment order passed on 28-11-2018 for A.Y. 2011-12 making an addition of Rs.3,62,21,526/- as unaccounted income from undisclosed sources.
Aggrieved against the reassessment order, assessee filed appeal before Ld. CIT(A) who has given four opportunities from 04-02- 2021 to 08-05-2025 and the assessee filed partial submissions. Considering the same, Ld. CIT(A) dismissed the appeal by observing as follows: “6.6 The underlying facts to note from his submissions are that he keeps making submissions according to his own convenience as before ADIT/Inv & AO he never stated that the bank account in the Bank of India is in the name of his wife and those transactions pertains to his wife only. 6.7 Also, to note is that transactions of credit discussed in the assessment order is reported to be relating to the account held in Union Bank of India, Bank of India in the name of the appellant whereas now appellant is trying to confuse it with so called bank a/c in the name of his wife held in Bank of India. Further though he stated to have enclosed the copy of the said bank a/c it is brought on record that he has not enclosed the same. 6.8 Also, the appellant before AO was willingly offering at least 0.05% of total credit in bank account as commission income even in his submission during the appeal proceedings he has been mentioning all through his submission that he has been earning commission income on account of discounting of banking instruments and the amount of Rs.3,56,10,877/- is to be considered as turnover & the profit embedded on it may be treated as income of the assessee and taxed accordingly. However, in the conclusion of his submission he has made his prayer to restrict the addition of Rs.3.62,21,526/- to nil.
to 685//SRT/2025 A.Ys. 2011-12 to 2015-16 Page No 4 Prakash Bhikhabhai Mehta vs. ITO 6.9 Thus the above submission before DDIT, AO and during Appeal proceedings when considered in totality it is clear that the appellant has received credits for which he is not willing to explain the source inspite of giving submitting any ample opportunities. Similarly he is not details/evidence/document as to whom the payments are made or for what purpose such payments are made. Therefore, there is no evidence as to what activity the appellant is engaged into, what would be the income that may be arising out of such activity. 6.10 Thus the entire banking transaction remains unexplained. Considering the fact that there are credits and debits which are unexplained, the AO has judiciously made the addition of Rs.36221526/- as unexplained credit leaving the unexplained debits untouched assuming that the same might be made out of such unexplained credits. Hence the action of AO seems to be logical and reasonable, therefore the grounds of appeal is dismissed and the addition made as unexplained credits is upheld as the same falls within the scope of sec 69A of the IT Act 1961. 6.11 Further the appellant has relied upon various judicial decisions including the jurisdictional judicial decisions, however on careful perusal of the same it is noted that all those relied upon judgments with due respect, are held to be distinct from the facts of the appellant case as in those judgments either due to search or survey or by concrete evidence it is proved that those assessee's were providing accommodation entries/discounting of banking instruments and were only earing the commission income. 6.12 Whereas in the appellants case there is no any evidence or clarity to prove that he has been engaged in any particular activity resulting in a particular nature of income. He has been unwilling to furnish any material evidence to prove his claim inspite of giving ample opportunity. Therefore, with due respect to all those judicial decision relied upon by the appellant, it is held that the same are not applicable to the appellants case. 6.13 Ground 2: Being general in nature does not warrant any separate adjudication.”
Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal:
1. The Learned CIT (A) has failed to appreciate the fact that the assessee was doing business of cheque discounting in spite of stating the said facts from the beginning of the proceedings i.e., Recording statement on oath by ADIT (INV)-2, Surat. The Learned CIT (A) has erred by dismissing the appeal and by upholding the action of the AO to treat the entire credit side of bank amounting to Rs.3,62,21,526 as unaccounted income from undisclosed sources.
2. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. to 685//SRT/2025 A.Ys. 2011-12 to 2015-16 Page No 5 Prakash Bhikhabhai Mehta vs. ITO
We have carefully considered the documents available on record. Assessee has not filed any documents to support its grounds of appeal. Further the assessee taken a new plea before Ld. CIT(A) that the so called bank account is the name of his wife held in Bank of India. However necessary documents are not produced neither before the lower authorities nor before us to adjudicate the same. Thus the Ground raised by the assesse are devoid of merits and the same are liable to be dismissed.
In the result, the appeal filed by the assessee in is dismissed.
ITA Nos. 682 to 685/SRT/2025 relating to Asst. Years 2012-23 to 2015-16. 9. The facts are remain same, except change in the additions made by the assessing officer. Therefore the decision rendered in for A.Y. 2011-12 is squarely applicable for the remaining Asst. Years 2012-13 to 2015-16 in to 685/SRT/2025. Therefore these appeals are also dismissed.
In the result, all the five appeals filed by the Assessee are hereby dismissed.