KETAN ANAND JADHAV ,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 26(2), MUMBAI , KAUTILYA BHAVAN

Instant appeal of the assessee was filed against the order of theLearned National Faceless Appeal Centre (NFAC), Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2017-18, date of order20.09.2023.The impugned order was emanated from the order of the Learned Assistant Commissioner of Income-tax, Circle-26(2), Mumbai (in short, ‘the A.O.’) passed under section 143(3)of the Act ,date of order29/12/2019.

“1. The Ld. CIT(A)/NFAC erred in confirming the additions to the extent ofRs.16,43,5007- made by Ld. AO, treating cash deposited in the bank account as unexplained cash credit under section 68 of the Income-tax Act.

4. On merits, the Appellant denies its liability to the levy of penal interest under sections 234A, 234B and 234C. Hence, the interest levied may be directed to be deleted.” The appellant craves leave to add amend alter or delete any of the above grounds of appeal

.”

2. The brief facts of the case are that the assessment was completed with an addition amount of Rs.49,50,548/- including the cash deposit during the demonetization period amounting to Rs.16,43,500/-. The aggrieved assessee filed an appeal before the ld. CIT(A). The ld.CIT(A) partly allowed the appeal of the assessee and sustained the addition only amount to Rs.16,43,500/- under section 68 of the Act. Being aggrieved on the appeal order, the assessee filed an appeal before us.

3. The ld.AR first invited our attention to assessment order para 5.2 which is reproduced as under: - Name of the First Last repayment Total party repayment date Repayment date Sarjerao Jadhav 05.09.2018 01.10.2016 5,00,000 Ansar Ali Arfan 10.04.2016 01.10.2016 5,36,563 Ali Shaikh Kisahore Jadav 15,04.2016 20.09.2016 2,00,000 Dinkar Solat 20.04.2016 1.10.2016 3,56,000 Swapnil Jadhav Details not Details not 3,00,000 available available Out of above total repayment, Rs. 11.43,5007- has been deposited in bank on 13.11.2016. It is beyond reasonable comprehension how the assessee received repayment much prior to demonetisation period but never chose to deposit even a single rupee in his bank account. The assessee has not offered any reasonable explanation as to why such amount en-cash has been retained by him for such long duration and why he chose to deposit the same only after the demonetisation was announced. Therefore, it appears to be a convenient cook up in order toexpiain the source of deposits. Hence, the said amount is added to total income of the assessee by invoking provisions of section 68 of the IT Act, 1961.

Without prejudice, provisions of section 271 DA of the Act are to be invoked for violation of section 269STof the Act. A separate reference is made to the respective Assessing Officers of the said parties to invoke provisions of section 269ST in their case."

4 /Mum/2024 Ketan Anand Jadhav S.No. Name Issue/ balance of loan 1 Sarjerao Jadhav 29/08/2016 2 Kishore Jadhav, B/f from earlier year 01/04/2015 3 Dinkar Solat 17/06/2016 4 Ansar Ali Arfan Ali ShaikhB/f from earlier year 30/03/2016 5 Swapnil JadavB/f from earlier year Multiple transactions

5 /Mum/2024 Ketan Anand Jadhav forward from earlier years. Both the assessing and appellate authority have not adjudicated the issue in thoughtful manner. In our considered view, we remit this issue to the file of the ld.AO to verify the loan debtors’ amount to Rs.16,43,500/-. Further, the AO is directed to verify the cash transaction of the assessee with the loan debtors, which the assessee deposited in the bank account. Needless to say, theassessee should get a reasonable opportunity of hearing in set aside assessment proceeding and the documents or evidence needs to be filed in his support, should be allowed to file during the set aside proceeding.