JADAV JEWELLERS PVT. LTD.,CHENNAI vs. ITO, CORPORATE WARD-2(3), CHENNAI

आयकर अपीलीय अिधकरण, ‘सी’ �ायपीठ, चे�ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI �ी एबी टी. वक�, �ाियक सद� एवं सु�ी पदमावती यस, लेखा सद� के सम� BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND MS. PADMAVATHY.S, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2911/Chny/2025 िनधा�रण वष� /Assessment Year: 2013-14

Jadav Jewellers Pvt. Ltd., The Income Tax Officer, 136, NSC Bose Road, Vs. Corporate Ward-2(3), Sowcarpet, Chennai. Chennai – 600 079. PAN: AACCJ 7560P (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� की ओर से/ Appellant by : Mr. D. Anand, Advocate ��थ� की ओर से /Respondent by : Ms. R. Anitha, Addl. CIT सुनवाई की तारीख/Date of Hearing : 10.02.2026 घोषणा की तारीख /Date of Pronouncement : 16.02.2026 आदेश / O R D E R PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 20.08.2025 for Assessment Year (AY) 2013-14. The assessee raised the following ground of appeal: “1. The order of the Learned CIT(A) is wrong, erroneous and violative of the principles of natural justice. 2. The order of the Learned CIT(A) is erroneous in law and on facts in upholding the validity of the reassessment proceedings initiated under section 147 of the Income Tax Act, 1961, without appreciating that the AO had no reason to believe that income had escaped assessment and that the

ITA No.2911/Chny/2025 Jadav Jewellers Pvt. Ltd. :- 2 -: reopening was based on borrowed satisfaction and mere information received from another officer without any independent application of mind. 3. The Learned CIT(A) erred in holding that the reassessment was validly initiated under section 148 of the Act, without appreciating that the original assessment had been completed under Section 143(3) of the Act and there was no failure on the part of the Appellant to disclose fully and truly all material facts necessary for assessment, and therefore the reopening beyond four years was bad in law and void ab initio. 4. The order of the Learned CIT(A) is contrary to law in upholding the assessment order, even though the AO had failed to provide the Appellant with copies of the alleged information, investigation report received from the Investigation Wing, which formed the basis of reopening by the AO. 5. The Learned CIT(A) erred in confirming the addition of Rs. 1,48,00,000/- under Section 68 of the Act as unexplained cash credit, without appreciating that no such sum was received by the Appellant during the year under consideration and that the alleged amounts did not appear as credits in the books of accounts. 6. The Learned CIT(A) erred in not directing the AO to grant due credit for the taxes paid under the Vivad Se Vishwas Scheme, 2020, and for the advance tax and self-assessment tax already paid by the Appellant. 7. The Learned CIT(A) erred in upholding the reassessment order even though the AO had not afforded an opportunity of personal hearing through video conferencing as requested by the Appellant, in contravention of the Faceless Assessment Scheme and Section 144B of the Act. 8. The Learned CIT(A) failed to appreciate that the Assessing Officer's findings were based merely on conjectures and surmises, without any supporting material or enquiry to establish that the Appellant received any unexplained cash credits during the relevant AY. For these and such other grounds as may be urged at the time of hearing, the Appellant prays that the order of the Learned CIT(A) be quashed and the additions/disallowances made therein be deleted in full.” 2. The assessee is a private company and filed a return of income for A.Y 2013-14 on 29.09.2013 declaring total income of Rs.11,87,410/-. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The assessment u/s. 143(3) of the Act was completed vide order dated 30.03.2016 where an addition of Rs. 14,48,50,000/- was added to the income of the assessee. The assessee preferred an appeal before the CIT(A).

ITA No.2911/Chny/2025 Jadav Jewellers Pvt. Ltd. :- 3 -: Subsequently, the assessee filed an application under Vivad-se-Vishwas Scheme, 2020 (VSVS) to settle the dispute with the Department by filing Form-1. The PCIT accepted the application and issued Form-3. The assessee also paid the disputes taxes. The AO passed an order u/s.154 deleting the addition made on the ground that the assessee has declared the income under VSVS. Subsequently, the assessee's case was reopened u/s. 147 by issue of notice u/s. 148 of the Act on 20.08.2019. The assessee filed return of income requested for reasons for reopening the assessment vide letter dated 24.09.2019. In the reasons recorded, the A.O has stated that information has been received from DCIT, Central Circle, in pursuant to a search under email dated 15.06.2016 asserting that the assessee has entered into bogus accommodation entries from the following entities: i. Dhanus Technologies Pvt. Ltd. – Rs. 10,00,000/- ii. Arnav Corporation Pvt. Ltd. – Rs. 78,00,000/- iii. Empower India Pvt. Ltd. – Rs. 60,00,000/- 3. The assessee filed detailed objections to the reasons stating that no such amounts were received by the assessee during the year under consideration. The A.O disposed off the objections rejecting the submissions of the assessee vide order dated 31.08.2021. The assessee also submitted various details during the course of reassessment proceedings to demonstrate that no such amount was received as alleged by the A.O. The A.O completed the assessment by making an addition of Rs.1,48,00,000/- towards accommodation entries in the name of the above listed parties. The relevant findings of the A.O in this regard are extracted below: “Notice u/s 142(1) of Income Tax Act, 1961 were issued on 08-02-2021 and 30-07-2021 to the assessee through ITBA portal. In response to notices issued u/s 142(1) the assessee has submit the written response. "The has inform that, it can be verified therein that he had not received any funds from Arnav Corporation and Empower India Ltd. during F.Y. 2012-13 relating to A.Y. 2013-14. He had received a sum of Rs. 1,40,00,000/- from Dhanus Technologies P Ltd. during F.Y. 2012-13, which has already been added to the returned income during original assessment proceedings.

ITA No.2911/Chny/2025 Jadav Jewellers Pvt. Ltd. :- 4 -:

The assessee himself in his reply has admitted that he had received Rs.1,40,00,000/- from M/s Dhanush Technologies Pvt. Ltd. during F.Y. 2012-13. An assessment order u/s 143(3) was passed on 30-03-2016 adding to Rs. 14,48,50,000/- to the income of the assessee. On perusal of assessment order u/s 143(3), adding amount Rs. 70,00,000/- in the income of the assessee out of total adding Rs. 14,48,50,000/-, which is assessee had received from Dhanush Technologies Pvt. Ltd. as share capital. Whereas, the truth is that during the financial year 2012-13, the assessee company had received Rs. 10,00,000/- as share capital from M/s Dhanush Technologies Pvt. Ltd. also, which was left to be added to the income of the assessee company at the time of assessment proceedings u/s 143(3). During the assessment proceedings 143(3), the assessee had also refused to receive the added amount. Thereafter, in the assessment order dated 30-03-2016 was passed u/s 143(3) with the addition of Rs. 14,48,50,000/- of share capital received by assessee company, and it was accepted by it in its reply dated 15-02-2021. Assessee also stated in this reply that it has opted settlement under the Vivad se Vishwas scheme 2019. But the share capital received by the assessee, amount of Rs. 10,00,000/- was left to be added to the income of the assessee at the time of assessment proceedings u/s 143(3). Apart from this, the assessee had also received Rs. 78,00,000/- from M/s Arnav Corporation Pvt. Ltd. and Rs. 60,00,000/- received from M/s Empower India Ltd. as share capital. Assessee is refusing to accept above share capitals of Rs 78,00,000/- and 60,00,000/- in current assessment proceedings just as the assessee company refused to receive the said amount of share capital of Rs 14,48,50,000/- from different companies during the course of the assessment proceedings under section 143(3). But after the assessment order was passed, it accepted the amount received and opted for a settlement under Vivad se Vishwas Scheme-2019 with respect to additions made u/s 143(3). Similarly, the assessee company is again refusing to receive the share capital as detailed below which was not declared by the assessee in its income tax return also. M/s Dhanus Technologies Pvt. Ltd: Rs. 10,00,000/- M/s Arnav Corporation Pvt. Ltd : Rs. 78,00,000/- M/s Empower India Ltd. : Rs. 60,00,000/- In the scenario the above amount are hereby treated as unexplained cash credits of the assessee company u/s 68 of the I.T. Act, 1961, and added in the income of the assessee company. In addition to this, penalty u/s 271(1)(C) of the Income Tax Act 1961, is also initiated for concealment of income separately. (Rs. 1,48,00,000/-)

ITA No.2911/Chny/2025 Jadav Jewellers Pvt. Ltd. :- 5 -: sustained since the assessee has not received any funds from the said parties during the Financial year relevant to A.Y 2013-14. The assessee further submitted that a sum of Rs. 1,40,00,000/- is received from Dhanus Technologies Pvt. Ltd. which is already been added to the income returned in the same is settled through VSVS by the assessee. Accordingly, the assessee submitted that no addition is warranted. The CIT(A) rejected the submissions of the assessee stating that the assessee failed to furnish vital information about the transitions and accordingly upheld the addition made by the A.O. The assessee is in appeal before the Tribunal against the order of the CIT(A).

ITA No.2911/Chny/2025 Jadav Jewellers Pvt. Ltd. :- 6 -: accommodation entries towards share application has already been considering during the original proceedings and is settled by the assessee through VSVS. The Ld. AR argued that the A.O in the reasons recorded (page 49 of paper book) has stated the receipt from the same parties as income escaping assessment which is factually incorrect. The Ld. AR further argued that the A.O failed to dispose of the objections and after repeated follow up disposed of the same after issue of show cause notice (page 63 & 64 of paper book. The Ld. AR also argued that the A.O after disposing of the objection on 31.08.2021 within three days completed the assessment u/s. 147 of the Act on 03.09.2021 which goes to prove that there was not been any application of mind on the part of the A.O. The Ld. AR drew our attention to the finding of the CIT(A) stating that the AO has not commented on funds received from Arnav Corporation and Empower India, to submit that the same is factually incorrect since the A.O has considered the submissions with regard to these companies during the course of assessment proceedings but did not make an addition after considering the submission that the funds from these parties were not received during the year under consideration.(page 37 of paper book).

ITA No.2911/Chny/2025 Jadav Jewellers Pvt. Ltd. :- 7 -: CIT(A) cannot be faulted with. Accordingly, the ld. DR supported the orders of the lower authorities.

ITA No.2911/Chny/2025 Jadav Jewellers Pvt. Ltd. :- 8 -: mind did not make the addition towards these two parties. From these facts it is also clear that CIT(A)'s observations regarding Arnav Corporation Pvt. Ltd and Empower India Pvt. Ltd not being considered by the AO, in our view is factually incorrect. With regard to Dhanus Technologies Pvt. Ltd., we notice that the total amount from the said party is Rs.1,40,00,000 out of which Rs.1,38,00,000 is reflected in the share capital and the balance Rs.2,00,000 is reflected as share application money pending allotment as per the statement of accounts as of 31.03.2013 (page 19 of paper book). Further the AO during the original assessment proceedings has considered an amount of Rs.1,38,00,000 against Dhanus Technologies Pvt. Ltd and while completing the assessment made an addition of Rs.78,00,000/-. Therefore the findings of the AO during the reassessment proceedings that a sum of Rs.10,00,000 is omitted to be considered during original proceedings is factually not correct. In any case subsection (3) of section 5 provides that every order passed under sub-section (1), determining the amount payable under VSVS, shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any other proceeding under the Income-tax Act. From the perusal of the facts elaborated herein it is clear that the matter of alleged bogus share capital received by the assessee is concluded by payment of the tax by the assessee on the additions made and the assessee has received the relevant forms under VSVS settling the impugned issue. It is also clear that the AO while reopening the assessment has considered the same matter of alleged bogus share capital and has stated that the reopening is for the purpose of enhancement of the addition. Therefore we are unable to appreciate the argument of the ld DR that the reopening is based on fresh information and in our considered view protection under subsection (3) of section 5 of VSVS is applicable to the present case. Accordingly we hold that the addition made by the AO towards alleged bogus share capital received by the assessee in the

ITA No.2911/Chny/2025 Jadav Jewellers Pvt. Ltd. :- 9 -: reassessment proceedings cannot be sustained and the AO is directed to delete the impugned addition.

Order pronounced on 16th day of February, 2026 at Chennai.

Sd/- Sd/- (एबी टी. वक�) (पदमावती यस) (ABY. T. Varkey) (Padmavathy.S) लेखा सद�य /Accountant Member �याियक सद�य / Judicial Member चे�नई/Chennai, �दनांक/Dated: 16th February, 2026. EDN, Sr. P.S आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकर आयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF