PADAM KUMAR GOYAL,TONK vs. ITO WARD-TONK, INCOME TAX DEPARTMENT, TONK

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR MkWa- ,l-lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 581/JPR/2024 fu/kZkj.k o"kZ@Assessment Years : 2012-13 Sh. Padam Kumar Goyal cuke The ITO, Patel Nagar, Deoli, Vs. Ward, Tonk. Tonk. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AZXPG9347C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Nikhilesh Kataria (C.A) jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 22/08/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 27/08/2024 vkns'k@ ORDER

PER: RATHOD KAMLESH JAYANTBHAI, AM The present appeal is arising out of order of Learned Commissioner of Income Tax (Appeals)-4, Jaipur [hereinafter referred to as “CIT(A)”] passed on 29.02.2024 which relates to assessment year 2012-13. That order of ld. CIT(A) is arising because the assessee has challenged the order passed u/s 144 r.w.s. 147 of the Income Tax Act, 1961 ( for short “Act”) for the

2 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO assessment year 2012-13 passed by the ITO, Ward, Tonk [ for short ld. AO].

3 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO maintained by the assessee with ICICI, Nasirabad (a/c No.175605000037) in the name of his proprietary concern M/s Gautam Trading, Jaipur Road, Industrial Area Kekdi, cash deposits totaling to Rs. 3.70 crores & credit by RTGS to the tune of Rs. 36 lacs were made during F.Y. 2011-12. The cash deposits were deliberately kept below Rs. 50,000/- to avoid mentioning PAN. Summons u/s 131 of the Act was also issued to assessee by the Investigation Wing. During the course of investigation which was not complied with by the assessee. He also did not produce any books of account before the ADIT (Inv) to explain the source of these deposits made in his bank account. As such, prima facie, the source of deposits remained unexplained. Taking into consideration the above facts and material evidence and also the fact that no regular return of income was filed by the assessee for the year under consideration, proceeding u/s 147 was initiated and notice u/s 148 was issued on 29.3.2018 after recording reasons and getting approval of the competent authority. The notice issued u/s. 148 was served on assessee. In response to notice u/s 148, he filed return of income on 2.6.2018

4 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO declaring total income of Rs. 83,250/- from other sources. Reasons for issue of notice u/s 148 were also supplied to assessee vide letter dated 26.6.2018. 3.1 Notices u/s 143(2) and 142(1) were issued on 13.8.2018 fixing the date of hearing on 28.8.2018. The assessee attended on 28.8.2018 without any detail and documents required by the ld. AO. Ld. AO recorded his statement, in that statement, he explained that now-a-days he is doing business of courier agency from which he earns income of Rs. 7000/- to 8000/- per month. He also admitted that, in past, he had been working with a marble businessman in Kishangarh town for 1 and half year. However, he did not explain the name and where about of the businessman. He also expressed his inability to explain the nature of transactions done in the above current account. However, he replied that this account was operated by him on the instructions of some other parties and the entire amount belongs to them. He further explained that the amount deposited was withdrawn by him and was returned back to the beneficiary parties. For this adjustment, he was given some commission. However, on asking to give the name and address of the parties, he showed his

5 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO inability and requested for some time. However, therefore, neither assessee appeared nor filed any explanation and details about the beneficiaries. 3.2 Based on that noncompliance on the part of the assessee, a show cause notice was issued on 10.12.2018 to the assessee asking the assessee that the transaction which he has under taken in the bank account for which the detailed explanation of the credit entries were required. In the absence of any explanation about the details of the credit, why the entire receipt in the bank account amounting to Rs. 4.06 crore (Rs. 3.70 crore plus 0.36 crore) should not be treated as turnover of the business of the assessee concern M/s Gautam Trading and accordingly the profit @ 8% should not be estimated as income. There is no reply to the said show cause notice and ultimately the assessment order was passed, estimating the profit @ 8% and thereby income was estimated for Rs. 32,48,000/- in this case. Thus, the assessment order was passed in the case of the assessee u/s 144 of the Act on 18.12.2018. 4. Aggrieved from that order of the assessment, assessee preferred an appeal before the ld. CIT(A). Based the grounds so taken and the submission so made by the assessee, the appeal of

6 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO the assessee was decided on 29.02.2024 and the relevant finding of the ld. CIT(A) reads as under : “Issue of validity of notice u/s 148 of the Act:- (ii) From the record, I find that on the basis of information brought on record, the AO found that the appellant has cash deposits of Rs. 3.70 crores and credit by RTGS to the tune of Rs. 36 lacs in his current account No. 175605000037 maintained with ICICI, Nasirabad in the name of his proprietary concern, M/s Gautam Trading, Jaipur Road, Industrial Area, Kekdi. The AO also found that the appellant did not comply with the summons u/s 131 issued by the ADIT(Inv), Udaipur for verification of the cash deposits and did not produce books of account to explain the source of the cash deposits and credits in the current account maintained in the name of proprietary concern. After analyzing the information and after forming a belief that income chargeable to tax had escaped assessment on account of failure of the appellant to furnish return of income and to explain the cash deposits, the Id. AO initiated proceedings u/s 147 after recording reasons and after getting the approval of the competent authority. Notice u/s 148 was issued on 29.03.2018 and in compliance thereto, the appellant filed return declaring total income of Rs. 83,250/-. Thereupon, the reasons for initiating proceedings u/s 147 were provided to the appellant, vide letter dated 26/6/2018.

(iii) During the appellate proceedings, in the written submission filed, the appellant has stated that the re-assessment proceedings are bad in law in absence of "reason to believe" and incorrect facts recorded by the AO while issuing notice u/s 148 and change in stand in reassessment proceedings. The appellant has stated that in the reasons recorded, the appellant is stated to be doing business of purchases from farmers and sales to wholesellers in the name and style of M/s Gautam Trading whereas in the assessment order, the AO has made discussion about the cash deposits and credits in the current account of the appellant. It is further stated that it is a case of borrowed satisfaction as the AO has relied upon the report of the Investigation Wing and did not cause any inquiry himself. The Id AR has cited the decision of ITO, Ward 3(1)(1) Rajkot Vs. Girish Kumar Mohanlal Puruswani (ITA No 405/Rjt/2006) and Sanjay Kumar Garg V. ACIT (2012) 66 DTR 281) to support his case.

7 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO

(iv) In this regard, it is seen as per information received from ADIT Invi Udaipur the appellant was doing some business and had made huge cash deposits totaling to Rs.3.70 crores in his current account maintained by with ICICI Bank, Nasirabad in the name of his proprietary concern. The ADIT(Inv), Udaipur had issued summons u/s 131 to the appellant at his Kekri address and Deoli address, but these remained uncomplied with. The appellant did not produce books of account to explain the source of cash deposits made in his bank account. After analyzing this information, the AO found that the appellant did not file any return of income, from which verification could be made. Since there was no explanation with regard to the source of cash deposits, he formed a belief that income chargeable to tax had escaped assessment within the meaning of Sec. 147. Accordingly, reasons were recorded for initiating the proceedings and approval of the competent authority was obtained prior to issue of notice u/s 148. On these facts, there is no infirmity in the action of the Id AO in initiating the proceedings as the information received from Investigation received constitutes new and tangible material for initiating the re- assessment proceedings and the AO had initiated the proceedings after proper analysis of the information and after recording reasons. Further approval of the competent authority was also obtained before issuing the notice u/s 148.

(v) In the case of Nova Promoters & Finlease P. Ltd (2012) 342 ITR 169 (Delhi), the Hon'ble Delhi High Court held that prima facie belief of AO is enough that income escaped assessment is enough at the stage of reopening and merits of the matter are not relevant.

In the case of Peass Industrial Engineers (P) Ltd (2016) Taxmann.com 106 (Gujarat), it was held on the basis of tangible material in the form of specific information received from Investigation Wing regarding bogus transactions, re- opening u/s 147 is justified.

(vi) What is to be seen at the stage of recording the reasons is existence of belief based on faithful appreciation of material which has live link to an income escaping assessment, but not the established fact of escapement of income by detailed investigation or legal analysis. In other words, at the point of time of initiating the reassessment proceedings, existence, and not adequacy of reasons, is

8 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO material. This view is supported by the decision in case of Rajesh Jhaveri Stock Brokers (P) Ltd. 291 ITR 500 (SC), CARTIER SHIPPING CO. LTD. 40 DTR 459 (Mumbai Trib), Praful Chunilal Patel 148 CTR (Guj.). The sufficiency of reasons cannot be looked into by courts and there must be recording of prima facie belief has also been held in cases of Raymond woollen mills 236 ITR 34 (SC), Phool Chand Bjaranglal 203 ITR 456 (SC), KR Sadayappan 63 ITR 219 (SC). In case of Multi Screen Media (P) Ltd. 324 ITR 54 (Bom) the Bombay High Court after considering the decision in case of CIT vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) has observed as under:

"where the AO purports to exercise power under s.147 within a period of four years from the end of the relevant assessment year, the condition precedent to the exercise of the power is the existence of a reason to believe that any income chargeable to tax has escaped assessment. The expression "reason to believe must obviously be that of a prudent person and it is on the basis of the reasons recorded by the AD that the question as to whether there was a reason to believe that income has escaped assessment, has to be determined At the same time, the sufficiency of the reasons for reapening an assessment does not fall for determination at the stage of a reopening of assessment. When the Court is concerned with a challenge to a notice under s.148, the issue is not as to whether it can be conclusively demonstrated that income had escaped assessment, but whether as a matter of fact, there was a reason to believe that this was so, to justify a recourse to the power under s.147."

(vii) The requirement, thus for reopening of assessment, is "reasonable belief. This expression is not synonymous with Assessing Officer having finally ascertained the fact by any legal evidence or conclusion. In this context, the Supreme Court in the case of Rajesh Jhaveri Stock Brokers Private Limited [Supra] had observed as under :-

"Section 147 authorizes and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had

9 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Delhi High Court in Central Provinces Manganese Ore Co. Ltd. v. ITO (1991 (191) ITR 662), for initiation of action under section 147 (a) [as the provision stood at the relevant time) fulfillment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. in other words, at the initiation stage, what is required is reason to believe, but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction (see ITO U Selected Dalurband Coal Co. Pvt. Ltd. [1996 (217) ITR 597 (SC)); Raymond Woollen Mills Ltd.. ITO (236) ITR 34 (SC]

In the case of Raymond Woollen Mills Limited v. Income Tax Officer & Ors. [Supra), the Apex Court held and observed as under:

"In this case, we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority,

10 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO The appellant will be entitled to take all the points before the assessing authority. The appeals are dismissed. There will be no order as to costs. 12. Lastly, it is well settled that the validity of the notice of reopening would be judged on the basis of reasons recorded by the Assessing Officer for issuance of such notice. It would not be permissible for the Assessing Officer to improve upon such reasons or to rely upon some extraneous material to support his action. Reference in this respect can be made to the decision of this Court in the case of Aayojan Developers. Income-tax Officer, reported in (2011) 335 ITR 234 (Gujj."

(viii) It is to be noted that the AO had material before him for formation of reasonable belief of escapement which had live nexus with the material in his possession for assuming the valid jurisdiction for reopening u/s. 147. There is difference between reason to believe and reason to suspect. The former is based on some tangible material which has some nexus on the basis of which a prudent person can have a belief whereas in latter case there would be no tangible material at all.

(ix) The reliance placed by the Id A/R on the decision of ITAT Delhi Bench in the case of Sanjay Kumar Garg Vs. ACIT (2012) 66 DTR 281 is not found to be applicable as in that case, validity of second notice vis-à-vis pendency of proceedings was challenged. The reliance pleaced on the case of Shri Girish Kumar Mohanlal Puraswani (supra) is also not applicable in the present case as in that case, re-opening was held to be for verification of the affairs whereas in the present case, the proceedings were initiated after analyzing the information received from Investigation. Wing and forming a belief that the income has escaped assessment as the appellant was a non-filer and the cash deposits were not explained despite sufficient opportunities given by way of issuance and service of summons by Inv. Wing.

(x) The appellant could have challenged the reasons of reopening by filing of objections before the Id. AO and if not satisfied with the order disposing objection then he could go before the Hon'ble High Court in Writ Petition as per the judgement of Hon'ble Supreme Court in the case of GKN Drivesharfta (India) Ltd. [2003] 259 ITR 19 and the judgement of Hon'ble Gujarat High Court in the case of Garden

11 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO Finance Limited reported in 268 ITR 48. Extract from the Judgement of Hon'ble Gujarat High Court in the case of Garden Finance Limited [268 ITR 48) is as under:

“12. What the Supreme Court has now done in the GKN's case (supra) is not to whittle down the principle laid down by the Constitution Bench of the Apex Court in Calcutta Discount Co. Ltd.'s case (supra) but to require the assessee first to lodge preliminary objection before the Assessing Officer who is bound to decide the preliminary objections to issuance of the re- assessment notice by passing a speaking order and, therefore, if such order on the preliminary objections is still against the assessee, the assessee will get an opportunity to challenge the same by filing a writ petition so that he does not have to wait till completion of the re-assessment proceedings which would have entailed the liability to pay tax and interest on re-assessment and also to go through the gamut of appeal, second appeal before Income-tax Appellate Tribunal and then reference/tax appeal to the High Court." ………….. 15. The upshot of the above discussion is that while the GKN's case (supra) does not purport to divest the Court of its constitutional power to issue a writ of prohibition or any other appropriate writ in a fit case to restrain the assessing authority from proceeding with the notice under section 148, the GKN's case (supra) does lay down that ordinarily the procedure to be followed would be as indicated in the GKN case, that is, after receiving reasons, the assessee shall lodge his preliminary objections before the Assessing Officer against the notice for reassessment and the Assessing Officer will decide the objections by a speaking order so that an aggrieved assessee can challenge the order in a writ petition. (xi) As per the judgement of Hon'ble Supreme Court in the case of GKN Drivesharfts (India) Ltd. [2003] 259 ITR 19 and the judgement of Hon'ble Gujarat High Court in the case of Garden Finance Limited reported in 268 ITR 48 challenge to the reassessment proceedings is to be done in two stages (i) challenging the reasons of reopening and (ii) challenging the assessment order. Appellant's challenge to the order of the assessing officer rejecting the objections against the reasons of reopening and appellant's challenge to the assessment

12 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO order are two separate proceedings. In the present case the appellant has not filed objections against the reopening before the learned assessing officer and in view of the above facts the appellant did not exercise the statutory remedy and thus the same is prime facie barred by limitation. (xii) Considering the facts of the case and the case laws cited, the proceedings initiated u/s 147 are held to be valid and appeal of the appellant on this count is dismissed. Issue of validity on merits of addition in the assessment order:- (xiii) It was found that in current bank account maintained by the assessee with ICICI, Nasirabad (a/c No.175605000037) in the name of his proprietory concern M/s Gautam Trading, Jaipur Road, Industrial Area Kekdi, cash deposits totaling to Rs. 3.70 crores & credit by RTGS to the tune of Rs. 36 lacs were made during the F.Y. 2011-12. The cash deposits were deliberately kept below Rs. 50,000/- to avoid PAN. Summons u/s 131 of the IT Act was also issued to assessee by the Inv. Wing during the course of investigation which was not complied with. (xiv) From the record, I find that during the course of assessment proceedings, statement of the appellant was recorded on 28/08/2018. In the statements, he explained that now-a-days he is doing business of courier agency from which he carns income of Rs. 7000/- to 8000/- per month. He also admitted that, in past, he had been working with a marble businessman in Kishangarh town for 1 and half year. However, he did not explain the name and where about of the businessman. He was asked to explain the source of cash deposits and credit by way of RTGS in his bank account, but the appellant failed to offer satisfactory explanation in respect of the same. He replied that this account was operated by him on the instructions of some other parties and entire amount belongs to them. He further explained that amount deposited was withdrawn by him and was returned back to the beneficiary parties. For this adjustment, he was given some commission. However, on asking to give the name and addresses of the parties, he showed his inability and requested for some time. However, thereafter, neither he appeared nor filed any explanation and detail about the beneficiaries. Vide show-cause notice dated 10/12/2018, the appellant was once again required to furnish explanation regarding the cash deposits and credit entries and also to state why the entire receipts in his bank account should not be treated as his turnover and NP rate of 8% should not be applied thereon.

13 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO The detailed show cause notice has been extracted in the assessment order which shows all the facts in detail and that a clear opportunity was provided to the appellant. This shows cause notice failed to evoke any response from the appellant and, therefore, the AO proceeded to complete the assessment u/s 144 of the Act by treating the entire cash deposit and credit entries of Rs. 4.06 crores (Rs.3.70 crore + 0.36 crore) and applying NP rate of 8% thereon. Thus, an addition of Rs. 32,48,000/- was made. (xv) The Id. A/R of the appellant, vide written submission filed during appellate proceedings, has stated that in his statement recorded during assessment proceedings, the appellant explained that cash was deposited in his bank account on behalf of other parties and he used to withdraw the money in cash and then handed it over to the persons on whose behalf the amount was deposited. According to the Id. A/R, the appellant was only a facilitator in withdrawal of amount, for which he was getting commission of Rs. 100/- per lac. He also stated that he did not remember anything else and had no control over the depositors or beneficiaries. The Id A/R stated that the decision of ITAT. Jaipur in the case of ACIT Vs. Kusum Devi Vijayvargia, Prakash Vijayvargia and Sudarshna Somani in ITA No. 9448945, 907 to 908 and 933,934 & 935/2015 dated 30/11/2013 is applicable in this case, wherein instead of applying GP rate, commission of Rs. 300 per lac on the cash deposits found credited in their bank account. (xvi) On due consideration, I find that in the case of Smt. Kusum Devi Vijayvargia and Ors. cited by the Id A/R, while explaining the cash deposits below the threshold limit, the appellant stated that their bank accounts were used by marble traders of Kishangarh to bring in cash against unrecorded sales in their books of account. The cash was deposited by purchaser parties in different part of the country and the same was withdrawn and handed over to the respective marble traders and for this activity they used to pay commission. to them. It is further noticed that the said appellants (ie. Kusum Devi Vijayvarigia and Ors) had give complete details of marble traders with their addresses to the Investigation Wing and based on the information given by these appellants, the Department took action against the marble traders. It is on the basis of these specific and admitted facts that income was directed to be assessed as commission instead of business income by applying GP rate of 8%.

14 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO (xvii) However, in the case of the present appellant, the position is entirely different. First of all, the cash deposits and credit entries by way of RTGS amounting to Rs. 4.06 crores were found in the current bank account of the appellant. When he is found to the owner of the bank account, it is his duty to explain the same with supporting evidences. The appellant failed to explain the source of deposits with supporting evidences. As held by the Hon'ble Supreme Court in the case of Chuharmal Vs/ CIT (1988) 172 ITR 0250 observed that "....when the question is whether any person is owner of anything of which he is shown to be in possession, the onus of proving that he is not the owner is on the person who affirm that he is not the owner. Since the appellant was found to be the maintaining the current account with the ICICI Bank having cash deposits and credits of over Rs. 4.09 crore, it was his duty to explain the same with supporting evidences. In cases relied upon by the appellant (supra), the assesses concerned had given the complete details regarding the cash deposits by furnishing the names and addresses of the traders, nature of the trade, reasons for depositing the cash etc. and on the basis of information provided, department took action in the case of the marble traders as mentioned in the order of the ITAT. In the case of the appellant, there was total non-compliance to the summons issued by the Investigation Wing and during the course of assessment proceedings also, the appellate did not provide the details as to the nature of trade, names and address of the parties who deposited the cash and the names and address of the parties to whom the cash withdrawn from the bank account was given. As per various provisions in the income tax act the onus is on the assessee to explain the source of cash found deposited and credits in the bank account. In case the assessce furnishes an explanation the same should be satisfactory as per the assessing authority and in this regard the assessee is required to submit the explanation with verifiable details. In view of these facts, the cases relied upon by the appellant cannot be held to be fully applicable to the facts of the instant case. (xviii) As per facts on record, during the course of inquiry by Investigation Wing, summons u/s 131 were duly sent to the appellant at his Kekri address and Deoli address, but he failed to make compliance. During the course of assessment proceedings, the appellant was specifically required to explain the deposits with supporting evidences, but he failed to furnish necessary details of parties with their addresses and copies of bank statements etc to support his claim that the cash

15 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO was deposited by some other parties, which were later on withdrawn and given back to them. The appellant did not specify the nature of trade, names of the parties and their complete addresses etc. as was done in the cases of Kusum Vijayvargia & Ors cited by the Ild A/R in his written submission. (xix) The appellant has made a request in the appellate proceedings to demand that the matter to the assessing authority. The appellant did not furnish such details for admission of additional evidence as per Rule 46A and in such situation, the request to remand the case is not acceptable. The appellant is required to substantiate his request for remand along with relevant additional evidences and along with the reasoning as to why such evidences could not be furnished before the assessing officer and the same can be admitted only if found admissible as per the law. As held by the Hon'ble Supreme Court in the case of K. Chainnathampan (2007) 292 ITR 682 (SC), the onus of proving the source of deposit primarily rests on the person in whose name the deposit appears in various banks. (xx) In the facts of the case, on consideration of the submissions of the appellant, without accepting the submissions of the appellant, it is hereby observed that even though the appellant as per his own claim was personally involved in the withdrawal of the cash from his bank account and handing over the same to the people on whose behalf the appellant was working, however the appellant has taken a convenient stand in the statement recorded before the learned assessing officer by not divulging and not disclosing the names and addresses etcetera of the parties on whose behalf the appellant was working and was getting commission income. Such a statement on such a stand by the appellant is not acceptable as it cannot be believed that he did not remember any details of such parties with whom he was regularly meeting and visiting and interacting. In view of this discussion, the statement given by the appellant cannot be treated as bonafide. The appellant also made a submission that he would provide the details of the parties in few days however till date such details have not been provided. This renders the statement also to be incomplete and unreliable. The statement is hereby discarded. The assessment had to be made as per best judgement. This shows a deliberate action on part of the appellant to protect the money laundering parties on whose behalf the appellant has claimed that he was working, in case he was actually working so. Thus, the story narrated by the appellant is found to be not acceptable.

16 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO (xxi) In such a situation, when the appellant failed to divulge any information regarding the nature of trade, name of the parties, who had deposited the cash and to whom the cash were returned back, their identity and addresses etc., the AO was left with no other alternative except the treat the cash deposits as unexplained. The assessment has been made as per the best judgement u/s 144 of the Act. The as per the facts of the case the credits in the account of the appellant has been withdrawn regularly. Having regard to the fact the cash was found deposited by various business concerns, viz., M/s Hyderabad Kavuri Hills, M/s SRN Infrastructures, M/s Balaji Trading Co etc., the AO has adopted a reasonable approach and treated the deposits as turnover of the appellant and applied a net profit rate of 8% thereon. This gets support from section 44AD of the Act. Despite specific requirement and sufficient opportunities given, the appellant failed to explain the cash deposits and credit entries with supporting evidences to substantiate the claim made in his statement recorded during assessment proceedings. Even during appellate proceedings, the appellant could not furnish evidences and details, such as, nature of the trade, as names and address of the parties who are stated to have deposited cash in the bank account and the names and address of the parties to whom the cash withdrawn from the bank account was given. The narrative provided by the appellant regarding the transactions has already been rejected in the earlier part of this order. In the light of discussion made above, the addition made by the AO is confirmed. In view of the above discussion, the appeal of the appellant on this count is dismissed.

(xxii) Further, the appellant has stated that the appellant reserved his right to add or amend or alter the grounds of appeal. However the appellant has not added or altered any of the above mentioned grounds of appeal. Accordingly such mention by the appellant in its ground is treated as general in nature, not needing any specific adjudication and is accordingly treated as disposed off. 5. In the result, the appeal of the appellant is dismissed.”

17 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO has preferred the present appeal challenging legality of the proceedings as well as addition made in his case. To support the grounds so taken by the assessee, the ld. AR for the assessee has submitted his written submission and the same is reads as under:- “Brief Facts: The assessee is a courier delivery person and during the year under consideration, the AO, on the basis of information received from investigation wing, DDIT (Inv.)-I, Udaipur found that the assessee had a current account in the name of Gautam Trading Company in which a cash of Rs.3.70 crores and RTGS of Rs.36 lacs was deposited. On the basis of report of investigation wing through letter no.531 dt.11- 2-2013, reassessment proceedings were initiated in the case of the assessee by issuing notice on dt.29-3-2018 after recording of reasons. The assessee filed its return of income declaring income of Rs.83250/- showing other income. During the course ofreassessment proceedings, statement of the assessee was also recorded in which he explained that the cash was deposited in his bank account all over India on behalf of other parties and after confirmation by those parties he used to withdraw the cash and then hand it over to them on whose behalf the amount was deposited.As such he only acted as facilitator in withdrawal of amount and in no way any purchases or sales took place.He was only getting commission of Rs.100/- per lac and he did not remember anything else being an old matter and he having no control over the depositor or beneficiaries. However rejectingthe submissions of the assessee, the ld. AO proceeded to make assessment by treating the same trading turnover and applied GP rate @8%. Thus an addition of Rs.3248000/- was made to the total income of the assessee. The ld. CIT(A) also sustained the addition. Now the assessee has filed this appeal. Our Submission: 1.1.1 Directly covered by the decision of hon’ble Jaipur ITAT in similar matters: It is submitted that the present controversy is directly covered by the decision of Hon’ble Jaipur bench in the case of ACIT vs. Kusum Devi Vijayvargiya in ITA no.944 & 945/JP/2015 dt.30-11-2023 (Encl.1) in which in similar circumstances commission of Rs.300/- per lacs was

18 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO directed to be assessed. In that case also the assessees acted as beneficiaries and cash deposits were made by the third parties in their bank accounts and the ld. AO applied GP rate treating the cash deposited in bank account as trading turnover. The ld. CIT(A) held that only commission income of Rs.225/- per lacs may be charged. The hon’ble ITAT upheld charging of commission income but directed to apply commission income of Rs.300/- per lacs instead of Rs.225/- per lacs as held by the ld. CIT(A). The concluding para 14.5 at page 49 of the order read as under: 14.5 The ld.CIT(A) noted that there is no basis to swing in the position from taxing commission on the transaction facilitated by the appellant to estimating gross profit as marble trader. The ld. CIT(A) also noted that none of the corroborative factors that were inquired into through remand report proceeding support such imaginary action of the ld. AO. In the remand report the ld. AO admit that the assessee neither have any establishment nor infrastructure to conduct business of marble trading. The relevant part of the remand report is also persuaded and the relevant part is reproduced here in below : “7. In the first part of assessment order, assessees are termed as facility provider on the basis of their submission. They claimed that they were getting commission on the amount of deposits made by the customers of beneficiaries Kishangarh in their bank accounts and handed over amount after making withdrawal to the beneficiaries. In the later part of assessment order they were treated as marble traders as gross profit on turnover in their bank accounts was applied for the reasons that they have not made available details as discussed in the fore going para-6. Smt. Kusum Devi Vijayvargiya a) Assessee is not registered with sales tax department and not filed Sales tax return. b) Assessee is not registered with Central Excise and not filed excise Return. c) Assessee has not shown Debtors and creditors. d) Assessee has no Purchase and Sales account. e) Assessee has no depreciable assets. f) No books of accounts maintained. g) Assessee has no SSI registration number.

19 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO h) Assessee has no power connection.” Thus, considering the above aspect of the matter the swing from charging commission to charge the GP as marble trader has no basis and are contrary to the facts already on record. Considering all these aspects of the case discussed here in above we find no infirmity in the finding of facts that the income of the assessee be taxed on commission,however, as regards the ld. CIT(A) contention of allowing 25 % from the commission income estimated has no basis or proof that has been argued by the ld. AR of the assessee and therefore, we see no reason to consider the claim of the 25 % as allowable and therefore, the same is not be considered as expenses in the absence of any details or evidence. In terms of this observations the appeal of the revenue in ITA No. 944/JP/2015 stands partly allowed. The facts and circumstances being the same, a commission income of Rs.300/- may please be directed to be assessed following the direct order of Hon’ble Jaipur ITAT. The facts and circumstances have been discussed in detail in subsequent paragraphs. 1.1.2 Remand report may be called upon from the ld. AO on above aspects: Thoughfrom the assessment order itself it is clear that there is nothing on record to suggest of any trading activities but still if your goodself are not satisfied on the submission, we request your goodself to call upon the remand report from the ld. AO on the above aspects so as to ascertain that whether the assessee was indulged in any trading activities. This would be in true spirit of the decision of Hon’ble Jaipur ITAT having binding precedent over the jurisdiction of the assessee. 1.2.1 Reassessment proceedings bad in law: At the outset it is submitted that the proceedings itself are bad in law in as much as the absence of reason to believe and other reasons which have been discussed herein below: 1.2.1.1 Incorrect finding of facts recorded by the ld. AO while issuing of notice u/s 148 – change in stand in reassessment proceedings – no evidence of trading in marble: In the reasons recorded a copy of which is enclosed herewith (Encl.2) it would be seen that the ld. AO recorded findings that in Gautam Trading the purchases were made from farmers and sales were made to various whole sellers. The relevant part of which is reproduced hereinbelow: “Informed that in M/s Gautam Trading, Jaipur Road, Industrial Area, Kekdipurchases were made from farmers and sales were made to various wholesellers. A bank account……”

20 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO However this finding of fact recorded by the ld. AO is baseless and without any evidence on record either with the investigation wing or the ld. AO. This is clear from the show cause notice dt.10-12-2018, the contents of which have been reproduced in the assessment order at page 7. The para 4 of the notice read as under: “The above said account is your current account in the name of M/s Gautam Trading. Jaipur Road, Industrial Area. Opp. RIICO Area, Kekri, Distti, Ajmer Perusal of this bank account, prima facie, shows that cash been deposited from different part of the country by different parties and thereafter either the cash has been withdrawn of paid or other parties through RTGS/NEFT. Since your account is current accout in the name of your concern M/s Gautam Trading and there are several transactions which also show that payment have been received from different parties including business concerns and payment through cheque/ RTGS has also been made to trading concerns, there are sufficient reasons to suspect or believe that you were indulged in business activities.” Thus the ld. AO suddenly changed stand from purchases from farmers to deposit at various places. This change in stand clearly proves that there is no evidence with the ld. AO regarding any trading activities either with the ld. AO or the investigation wing Even till completion of the assessment not a single evidence was brought on record to support the allegation of trading done by the assessee In such circumstances, the reasons recorded itself were baseless and consequently the reason to believe was also without foundation and hence the entire proceedings needed to be quashed. 1.2.1.2 Action taken by the ld. AO after 5 years despite investigation wing report being on record: As would be noted from the perusal of the assessment order that even the report of investigation was received on 11-2-2013 itself and notice for reassessment was issued on 29-3-2018. This delay in taking action has not been explained by the ld. AO in the assessment order and that give rise to doubt on the entire proceedings itself as delay in the action caused evidences hard to be collected either by the assessee or the department. 1.2.1.3 No independent finding or enquiry by the ld. AO: It is pertinent to note that in the present case the reassessment proceedings have been initiated only on the basis of findings of the investigation wing and there is no independent finding or enquiry by the AO to reach to conclusion

21 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO that some income has escaped assessment. Importantly, it has been written in the assessment itself that the complete enquiries were made by the investigation wing only and the ld. AO only relied upon the same. Thus this is a clear case of borrowed satisfaction which is not permissible as per law. Therefore, the entire reassessment proceedings are bad in law and on facts of the present case. 1.3.1 Assessee merely withdrawn the cash deposited and handed over to the parties to whom belonged to: As already submitted that the assessee was only acting as a facilitator in making payments to the parties. Parties at Kishangarh and other places got deposited cash in his bank account all over India. He used to withdraw the same and hand it over to those parties on whose behalf it was deposited. As such there was no trading activities and only commission income of Rs.100/- per lac was earned by the assessee. 1.3.1 Clearly stated in the statement recorded u/s 131: It is submitted that the statement of the assessee was recorded by the ld. AO on 28-8- 2018 as has been reproduced in the assessment order at AO page 3 onwards. In the statement it has clearly been stated that he only earned commission income. iz’u: vkids ifjokj ds dkSu&dkSu yksXk gS] vkSj vki dh vk; dk lzksr gS\ mRrj: esjs ifjokj es esjs ekrkth&firkth] esjh iRuh o ,d yMdk gSA lHkh उपरो� of.kZr edku jgsrs gS tks fd fdjk;s dk gSA vkt dy eS dwfj;j ckVus dk dke djrk gwW] nsoyh es ftlls eq>s ekfld : 7000@& ls 8000@& rd dekbZ gks tkrh gSA blds vykok esjk vk; dk dksbZ lzksr ugh gSA dwfj;j dk dke 3 o"kksZ ls dj jgk gWwA iz’u: dqfj;j dk dke ls igys vki D;k dke djrs Fks \ mRrj: dqfj;j ds dke ls iwoZ eSus ,d Dyhfud xqjfer MsVy] nsoyh ds ikl rhu o"kksZ rd dke fd;k FkkA ;Wgk eq>s cktkj dk dke] cSd dk dke ] rFkk jftLVªkj dk dke djrk Fkk] eq>s ;gkW #i;s 6000@& ls :Ik;s 7000@& feyrs FksA bl igys eSu fd’kuxn es ,d ekcZy O;olk;h ds ;gkW yxHkx 01 o"kZ ls 1 o"kZ 6 ekg rd dke fd;k FkkA iz’u: D;k vkius lHkh cSad ds dS’k] uxn tek djokrs gS] vxj gkW rks bldk lzksr D;kk Fkk \ mRrj: tks eSus dksbZ dS’k cSad es tek ugh djk;k gS] eq>s dqN ;kn ugh gS esjs cSd vadkmV es fofHkUu ikfV;ksa d iSls tek gksrs Fks] ftUgs eSa 2&3 fnukas ckn fudky dj ikfV;ks dks iqu% yksVk nsrk FkkA bl dk;Z ds fy;s eq>s oksa eq>s dqN deh’ku feyrk Fkk] ;s deh’ku eq>s :Ik;s ,d yk[k ij ek= 100 :i;s feyrh Fkh] QeZ eS xkSre VªfMax flQZ uke ek= QeZ FkkA

22 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO iz’u: d`Ik;k ;s crkb;s fd mijksDr of.kZr cSad xfr fof/k;ksa vki fdl cSad esa djrs Fksa \ ;s dkSu lh QeZ Fkh ftuds fy;s vki dke djrs Fks \ mRrj: tks eS ;s dke vkbZ lh vkbZ lh vkbZ cSad ulhjkckn esa djrk Fkk] eSa fd’kux< ls ulhjkckn cSad ls iSls fudyokrk Fkk vkSj fd’kux< ls tkdj fofHkUUk ikfV;ksa dks tkdj ns nsrk Fkk] tks esjs vdkmaV esa tek djokrh FkhA ;s dkSu lh QeZ Fkh eq>s ;kn ugh D;ksafd dkQh le; gks x;k gSA vki eq>s 5&10 fnuksa dk le; nhft;sae Sa vkidksa QeZ ds ckjs esa crk nwxakA (AO page 3 onwards) From the reading of above questions and answers of the assessee thereon, it is clear that the assessee had only earned commission income and no trading ever was done by the assessee. 1.3.2.1Onus shifted to the ld. AO – no evidence or facts to disprove statement of the assessee: It is submitted that in its statement the assessee has fully explained the manner in which the income has been earned by him. It is also notable that the ld. AO could not find any unexplained investments or unexplained expenditure despite making such huge assessment. After statement of the assessee, it was the onus on the ld. AO to disprove the statement of the assessee but absolutely no contrary facts were brought on record by the ld. AO. 1.3.2.2 Explanation of the Assessee Not Found False — The AO Could Not Refer a Single Evidence of Trading in Marble: It is further notable that in the entire assessment order there is even no whisper about the statement being incorrect or false and rather the statement is supported with corroborative and circumstantial evidences. Thus the statement given by the assessee has to be accepted as there is no material with the department to disprove the statement of the assessee. There is not a single slip or noting with the department so as to suggest that the assessee was doing any trading in marble. 1.3.2.3 Statement to be treated as correct unless rebutted with evidence: We may also point out that contents of the statement has not been found to be false with the evidence. The misstatement in the statement can bring criminal liabilities on the person giving false statement and as such it carries evidentiary value in case no contrary evidence is brought on record. As the ld. AO failed to bring anything contrary to the statement, the content of the statement has to be taken as correct. 1.3.3 Nothing on record to suggest that any trading of marble ever done by the assessee: We may also submit that the ld. AO could not bring even a single piece of evidence to prove if any trading was done by the assessee so as to treat the bank deposit as the turnover of the

23 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO assessee. Even the entire circumstances clearly indicate that by far no trading in marble could have been done by the assessee and the ld. AO proceeded merely on its own assumptions and presumptions without any supporting evidences on record. In these circumstances the complete addition was bad in law. 1.3.4 No resources for the assessee to have engaged in the trading of marbles: We may submit that there are no resources with the assessee to have engaged in the trading of marble. Some of the notable facts which were before the ld. AO also are as follows: - No establishment or infrastructure to carry on business of marble trading - Not registered with sales tax department - Not registered with excise department - No depreciable assets with the assessee - No books of accounts maintained - No SSI registration - Assessee a mere courier delivery person - No unexplained investment found In above situation, it is beyond comprehension that the assessee could have done any trading in marble 1.3.5 No history of the assessee – no comparison available to apply g.p. rate: We may submit that in the present case the assessee is earning from courier work and that too a meagre Rs.7000/- per month. In the relevant period also he was just working as a small earning employee. There is absolutely no history of the assessee to trade in marbles and therefore, the findings of the ld. AO is unreasonable and unjustified. 1.4.1 Totality of facts and circumstances indicate the assessee might have earned commission income only: It is submitted that though the complete details of the deposit in the bank may not be available but considering the statement of the assessee, still only addition on account of commission income could be made. This is clear from the facts and circumstances of the case which are being discussed in detail herein after.There are many case laws supporting the proposition that question of human probabilities is on the factor to be considered while dealing in the tax matters: Jaya Agarwal vs. ITO 302 CTR 241 (Del)(Encl.3) 8. We find it difficult to accept the approach and findings recorded for several reasons. The brief order does not examine and consider the entire explanation and material on record as withdrawal of Rs. 2,00,000 in cash was undisputed. Naturally, the huge withdrawal was for a purpose and objective. From the beginning the explanation given was that withdrawal was to pay earnest money

24 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO for purchase of immovable property, which deal did not fructify. Explanation given was not fanciful and sham story. It was perfectly plausible and should be accepted, unless there was justification and ground to hold to the contrary. Delay of some months in redeposit of part amount is the sole and only reason to disbelieve the appellant. Persons can behave differently even when placed in similar situations. Due regard and latitude to human conduct and behaviour has to be given and accepted when we consider validity and truthfulness of an explanation. One should not consider and reject an explanation as concocted and contrived by applying prudent man’s behaviour test. Principle of preponderance of probability as a test is to be applied and is sufficient to discharge onus. Probability means likelihood of anything to be true. Probability refers to appearance of truth or likelihood of being realised which any statement or event bears in light of the present evidence (Murray’s English Dictionary). Evidence can be oral and cannot be discarded on this ground. Assessment order and the appellate orders fall foul and have disregarded the preponderance of probability test.(Encl.3) Other judgements on similar proposition Sumati Dayal vs. CIT 224 ITR 801 (SC) (Encl.4) CIT vs. Durga Prasad More 82 ITR 540 (SC)(Encl.5) In the present case, it is beyond human probabilities that without any sources and infrastructure the assessee could have done trading activities and hence the addition made by the ld. AO is bad in law 1.4.2 No contrary finding of the ld. AO – no new source of income can be brought for taxation: In the entire order, there is not a single line which contradict the declaration made by the assessee with regard to his source of income. The ld. AO nowhere alleged that the source of income declared by the assessee is incorrect or falsely declared. Once the ld. AO came to conclusion that the source of income of the assessee is small work income while accepting the other income declared by the assessee then it is inconceivable that the assessee was indulged in trading activities and the taxing trading income is contrary to his own assessment of other income of the assessee. 1.5.1 Ld. AO himself initiated penalty for non-maintenance of books of accounts – no possibility of any details after lapse of 5 years: It is pertinent to note that no books of accounts or records have been maintained by the assessee. Even the ld. AO has also initiated penalty proceedings for non-maintenance of books of accounts. In such circumstances expecting the assessee to submit the details after the lapse of five years is not imaginable. Therefore, merely because the

25 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO assessee could not submit the details do not change the character of the income earned by him. 1.5.2 Assessment of income declared by the assessee made by the ld. AO: It is very important to note that the ld. AO himself has accepted the income declared by the assessee in its assessment order. During the year under consideration the assessee declared income of Rs.83250/- from wage earning and the ld. AO duly assessed the same on the last page of the assessment order. Therefore, without finding any other source of income, there was no reason to assess trading income without any evidence on record. Therefore, considering the above facts and circumstances, clear evidence on record and also considering the aspect of human probabilities, trading addition could not have been made and without prejudice only commission income could be taxed and not the gross profit 1.6.1Case laws on similar issue: It is submitted that there are various judgements in which it has been held that in the circumstances as in the case of the assessee, only the commission income can be assessed. Some of the judgements have been highlighted herein below: Income Tax Officer vs. Girishkumar Mohanlal Puruswani ITA no.405-407/RJT/2016 dt.31-1-2023(Encl.6) “7.2. On identical issue of Shroff business, the Co-ordinate Bench of this Tribunal in the case of Anirudh J. Solanki in ITA No. 454/Rjt/2018 held as follows: “6.2. ….. The Co-ordinate Bench of the Tribunal dated 04.02.2022 in ITA No. 193/Rjt/2016 on identical facts and dismissed the revenue’s appeal as follows: 6. We have gone through the relevant records and impugned order. The question before us is whether cash depositing in aggregate amount of Rs.5,88,43,806/- made in his A/c. No.015305002632 belongs to the Ceramic Industries/Tiles Manufacturing Companies of Morbi who are the clients of ShaileshbhaiMarvania or not. In this case, assessee is working as a shroff and as per CIT(A) it is not a disputed fact. The shroff acts as a channel between two parties. It is apparent from the bank account in question that the cash were deposited and withdrawn from time to time. During the proceedings, the assessee recorded his statement and categorically explained the nature of transaction that he is getting a commission at Rs.0.25 paise on transaction of Rs. one lakh. In our considered opinion, in such a case, all deposits in the bank account cannot be treated as income of the assessee. During the

26 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO assessment proceedings, the learned AO came to know that assessee is working as shroff which means commission agent. After going through the bank statement, it was revealed that cash deposited and withdrawals were made regularly during the year under consideration. We do not find any ambiguity in the order passed by the learned CIT(A) and he has rightly directed the learned AO to compute the commission income @ 0.25 paise per lakh deposited in the bank account. 6.3. Further the Ld. Counsel drawn our attention to the Jurisdictional High Court Judgment in the case of Shree Sidhnath Enterprise vs. ACIT reported in [2016] 71 taxmann.com 55 wherein Hon’ble High Court held as follows: 14. It may be noted that in the affidavit-in-reply filed by the respondent, it is the case of the respondent that the petitioner is engaged in the business of cheque discounting and shroff. The firm charges commission for cheque discounting facility provided to its customers. The firm receives cash from the beneficiary and gives cheque in lieu thereof. The cheque is drawn in favour of the beneficiary. For arranging this transaction, the firm charges commission. Reference has been made in the reply to instances where the petitioner has received cash from parties and has issued cheques in lieu thereof which were deposited by such parties in its account and the cheques were cleared at Rajkot. Based on this, the Assessing Officer had stated that she had reason to believe that income chargeable to tax has escaped assessment on account of the failure on the part of the petitioner to disclose fully and truly all material facts. Thus, while it is the case of the respondent that it is the business of the petitioner to accept cash and issue cheques in lieu thereof, it is also the case of the respondent on the basis of the instances cited in the affidavit, that the cash deposits received by the petitioner are in the nature of undisclosed income, despite it being the specific case of the respondent that the petitioner had issued cheques in lieu of cash received by it which had been encashed by the concerned party by depositing the same in its bank account. It may be noted that it is not the case of the respondent that the beneficiary after encashing such amount had returned the same to the petitioner nor has any material been unearthed in this regard. Insofar as the petitioner is considered, as stated in the affidavit-in-reply, it is its business to receive cash and issue cheques in lieu thereof for which it charges commission. Under the circumstances, in the absence of any material to show that the cash in respect of which the cheque had been issued travelled back to the petitioner, one fails to understand as to how such amount may be said to be the undisclosed income of the petitioner. Under the circumstances, on the facts as recorded in the

27 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO reasons as well as in the affidavit- in-reply, in the opinion of this court, the Assessing Officer could not have formed the belief that income chargeable to tax has escaped assessment. 6.4. The Ld. Counsel further drawn our attention to the decision of the Coordinate Bench of this Tribunal in the case of Sidhnath Enterprise in ITA No. 374/Rjt/2017 dated 29.06.2022 wherein held as follows: 7. We have gone through the order of the ld. CIT(A) and find no infirmity in the same. The ld. CIT(A) has deleted the addition on account of cash deposits of Rs. 224.53,23,993/-. In the back account of the assessee. Noting that identical issue had come up before the Hon’ble Gujarat High Court in the case of the assessee itself in a writ petition filed by the assessee against reopening of the case for A.Y. 2008-09 and the Hon’ble High Court had noted the fact that the assessee being in the business of Shroff, the cash deposits related to its business and did not represent any unaccounted income of the assessee. Ld. CIT(A), we find also took note of the fact that reopening resorted by the A.O. for the impugned year also subsequent to passing of the assessment order was dropped by him taking note of the decision of the Hon’ble Gujarat High Court. 8. Moreover even Assessment Year 2006-07, the ITAT found no merit in the reopening resorted to in that year also for an identical reason following the decision of the Hon’ble Gujarat High Court in the case of the assessee. Therefore, it is clear that the issue of cash deposits in the bank account of the assessee has been examined exhaustively at various levels and no merit has been found in the contention of the revenue that it represented by any undisclosed income of the assessee. Noting the fact that the assessee into business of Shroff and earned only commission on the mandatory transactions carried out by it, the cash deposits representing money belonging to his customers. 9. In view of the above, we see no reason to interfere in the order of the Ld. CIT(A) deleting the addition made of cash deposits amounting to Rs. 224.53,23,993/-. The grounds of the appeal raised by the revenue is dismissed. 8. We have given our thoughtful consideration and perused the materials available on record. It is seen from the Co-ordinate Bench Judgment in the case of Samir Kamruddin Makhani, the Co-ordinate Bench held that even though the assessee is doing the activity of Shroff without obtaining any license from Competent Authority but what is mandated under the provisions of the Income Tax Act is to tax income of the assessee, whether it was from legal or illegal source.

28 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO Therefore the principles for determining the income will remain the same even the source of income is illegal in nature as held by the Hon’ble High Court of Madras in the case of CIT vs. K. Thangamani. Thus the Co-ordinate Bench held that after considering the facts in totality it was held that the assessee was acting as money transfer agent on behalf of the parties engaged in ceramic manufactures. Accordingly allowed the assessee’s appeal and dismissed the Revenue’s appeal. 8. We have given our thoughtful consideration and perused the materialsavailable on record. It is seen from the Co-ordinate Bench Judgment in thecase of Samir Kamruddin Makhani, the Co-ordinate Bench held that eventhough the assessee is doing the activity of Shroff without obtaining anylicense from Competent Authority but what is mandated under theprovisions of the Income Tax Act is to tax income of the assessee, whetherit was from legal or illegal source. Therefore the principles for determiningthe income will remain the same even the source of income is illegal innature as held by the Hon’ble High Court of Madras in the case of CIT vs.K. Thangamani. Thus the Co-ordinate Bench held that after consideringthe facts in totality it was held that the assessee was acting as moneytransfer agent on behalf of the parties engaged in ceramic manufactures.Accordingly allowed the assessee’s appeal and dismissed the Revenue’sappeal. 8.1. It is further seen in assessee own case in ITA No. 193/Rjt/2016 relating to the Assessment Year 2006-07, the Co-ordinate Bench of this Tribunal dismissed the Revenue appeal by holding “during the assessment proceedings, the assessee recorded his statement and categorically explained the nature of transaction that he is getting commission at Rs. 0.25 paise on transaction of Rs. 1 lakh. Therefore the cash deposit in the bank account cannot be treated as the income of the assessee. It was further observed that cash deposits and withdrawals were made regularly during the year under consideration. Therefore the Co-ordinate Bench of this Tribunal held that no ambiguity in the order passed by the Ld. CIT(A) and he has rightly directed the Assessing Officer to compute the commission income at 0.25 per lakh deposited in the bank account of the assessee. 8.2. It is appropriate to follow the ruling of the Jurisdictional High Court in the case of Shree Sidhnath Enterprise (cited supra), it is the business to receive cash and issue cheques in lieu thereof for which the assessee charges commission amount. In the absence of any material to show that the cash in respect of which the cheque had been issued travelled back to the assessee, one fails to understand as to how such amount may be said to be the

29 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO undisclosed income of the assessee and the Assessing Officer could not have charged the same as escaped assessment under the provisions of Income Tax Act. 7.3. Thus the grounds raised by the Revenue are devoid of merits and the same is hereby rejected. 8. In the result, the appeal filed by the Revenue is hereby dismissed. Sanjay Kumar Garg vs. ACIT 134 ITD 82 (Del) (Tri) (Encl.7) 48. We have heard both the parties and gone through the material available on record. During the course of survey operations, statement of the assessee was recorded wherein it has been categorically admitted that no purchase and sale activities are undertaken in the names of firms. The assessee was using the firms for the purpose of providing sale bills for which he was collecting commission. The assessee was depositing cash in the bank accounts of the dummy firms as well as his own firms through which he was carrying out accommodation entry business. At the time of survey no evidence was found to suggest that the assessee was engaged in real commission business. No other source of income was also found. It is also the case of AO that the assessee was carrying on business of entry provider. The assessments were reopened for this purpose only. The learned CIT(A) has given a finding of fact that the assessee was engaged in the business of providing accommodation entries and, therefore, the amounts deposited in the accounts of dummy concerns were to be treated as total receipts on which commission was to be determined. Therefore, we are in agreement with the view of the learned CIT(A) that only commission can be determined on the deposits made in the bank accounts of the dummy concerns. Therefore, we do not find any infirmity in the order passed by the learned CIT(A) that the amount deposited in the account of dummy concerns cannot be treated as income of the assessee. Therefore, the learned CIT(A), in our considered opinion, is justified in treating the cash deposited in various bank accounts controlled and operated by the assessee as the turnover of the accommodation entry business and commission income has to be estimated thereon. -Other case laws: DCIT vs. Siddhartha Enterprises ITA No. 374/Rjt/2017 dt.29-6- 2022 (Encl.8) Manoj Aggarwal vs. DCIT 113 ITD 377 (Del) (Tri) (Encl.9)

30 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO Therefore considering the totality of the facts and circumstances the addition made are unsustainable in the eyes of the law and hence the same deserves to be deleted. Alternatively and without prejudice to above, only commission income can be charged in such circumstances and as held by the hon’ble Jaipur ITAT, an amount @Rs.300/- per lac can be assessed as commission income”

31 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO with the oral arguments advanced at the time of hearing of the present appeal. The brief fact is arise from the order of the lower authorities are that in this case based on the information received from the DDIT(Inv)-I, Udaipur vide his letter No. 532 dated 11.02.2013 that the assessee in current bank account maintained with ICICI, Nasirabad (a/c No.175605000037) in the name of his proprietary concern M/s Gautam Trading, Jaipur Road, Industrial Area Kekdi, cash deposits totaling to Rs. 3.70 crores was made & credit by RTGS to the tune of Rs. 36 lacs were made during the F.Y. 2011-12. It was also noted that the cash deposits were deliberately kept below Rs. 50,000/- to avoid mentioning PAN. Summons u/s 131 of the IT Act was also issued to assessee by the Investigation Wing. During the course of investigation, the assessee did not comply with it and not provided any information in relation to the transaction undertaken by him. He also did not produce any books of account before the ADIT (Inv) to explain the source of these deposits made in his bank account. As such, prima facie, the source of deposits remained unexplained. Taking into consideration the above facts and

32 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO material evidence and the fact that no regular return of income was filed by the assessee for the year under consideration, proceeding u/s 147 was initiated and notice u/s 148 was issued on 29.3.2018 after recording reasons and getting approval of the competent authority. The notice was served to the assessee. In response to notice u/s 148, he filed return of income on 2.6.2018 declaring total income of Rs. 83,250/- from other sources. Reasons for issue of notice u/s 148 were also supplied to him vide letter dated 26.6.2018. In the assessment proceeding the assessee attended on 28.8.2018 without any details and documents required. Therefore, his statement was recorded. In that statement, he explained that now-a-days he is doing business of courier agency from which he earns income of Rs. 7000/- to 8000/- per month. He also admitted that, in past, he had been working with a marble businessman in Kishangarh town for one and half year. However, he did not explain the name and where about of the businessman for which he has undertaken the transactions. He also expressed his inability to explain the nature of transactions done in the above current account. However, he replied that this account was

33 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO operated by him on the instructions of some other parties and the entire amount belongs to them. He further explained that the amount deposited was withdrawn by him and was returned back to the beneficiary parties. For this adjustment, he was given some commission. However, on asking to give the name and address of the parties, he showed his inability and requested for some time. However, therefore, neither assessee appeared nor filed any explanation and details about the beneficiaries. Considering that non compliance on the part of the assessee, ld. AO treated the entire receipt in the bank account amounting to Rs. 4.06 crore (Rs. 3.70 crore plus 0.36 crore) as turnover of the business of the assessee concern M/s Gautam Trading. He further estimated profit @ 8% which comes to Rs. 32,48,000/-. Accordingly the assessment was completed as per provision of section 144 of the Act. 9. The assessee preferred the appeal before the ld. CIT(A) who confirmed the finding recorded by the assessing officer. Before us the ld. AR of the assessee submitted that the similar issue was decided in bunch of 19 cases in the case of ASStt.CIT vs. Smt.

34 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO Kusum Devi in ITA no. 944 & 945/JP/2015 (supra), wherein the Bench has held as under:- “13. We have heard the rival contentions and perused the material placed on record. In these bunch of appeal the Hon’ble Jurisdictional High Court has quashed the order of the ITAT in the first round and directed to decide the issue based on the material available on record. Therefore, both the parties were given sufficient time and opportunity to advanced the evidences or argument in support of their claim. But both the parties though agreed before the High Court to provide the details has not placed on record any further information / evidences and therefore, we do not have any option but to decide the issue based on the material available on record. The bench in the first found given the following directions : 2.12 In our view, the matter requires a deeper and a coordinated examination by the authorities at the higher level to bring the correct facts on record which should conclusively establish that either the assessee is the owner of the money found deposited in her bank accounts as claimed by the AO or the assessee is merely a facilitator and earns commission income as claimed by the assessee. Accordingly, we set-aside the matter to the file of the ld CIT(A) to examine the matter afresh with the following directions: (1) the assessee shall provide all the requisite details in terms of names and address and other requisite particulars of the depositors as well as of the beneficiaries; (2) the assessee has to explain the nature and source of the transactions in terms of deposits and establish the necessary linkage between the deposits and the subsequent withdrawals to various individual beneficiaries; (3) The ld CIT(A) shall call for the records maintained by the Investigation Wing in respect of the survey proceedings and confront the same to the assessee to provide her a suitable opportunity; (4) The beneficiaries to be confronted with the details submitted by the asssessee and call for their confirmation and/or personal appearances and/or coordinate with their respective CITs/Assessing officers; and

35 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO (5) Needles to say, both the parties shall be provided suitable opportunity and they shall equally cooperate and shall submit necessary explanation/information/documents as available and required by the ld CIT(A).

13.1 Thus, the bench has set aside the order of the ld. CIT(A) to establish that either the assessee is the owner of the money found deposited in her bank accounts as claimed by the AO or the assessee is merely a facilitator and earns commission income as claimed by the assessee. To decide the said issue based on the material already on record the bench has considered it fit to decide the issue which was sent back for a decision of the ld. AO has not been decided on the basis of the material placed on record and the arguments advanced before us. As argued by the revenue in the earlier round and based on that bench noted that the matter requires a deeper and a coordinated examination by the authorities at the higher level to bring the correct facts on record which should conclusively establish that either the assessee is the owner of the money found deposited in her bank accounts as claimed or the assessee is merely a facilitator and earns commission income. The revenue has not placed on record any subsequent factural report on the action taken after the survey carried out at the premises of the assessee. Therefore, the bench has not reason to look at the arguments of the revenue that the matter requires further examination. Even the ld. AR of the assessee that based on the survey the revenue has already taken against many of the marble traders and they have surrendered the profit this important information is not shared by the revenue. Thus, this plea of the revenue in absence of the proof has no merits. As the assessment was reopened to tax the commission income as per the reasons record the same is thus now dealt with by the bench based on the further questions / enquiry posed by the bench. 13.2 The earlier question posed and our findings based on the records available before us are as under: Issue posed. (1) “the assessee shall provide all the requisite details in terms of names and address and other requisite particulars of the depositors as well as of the beneficiaries;” At page 5 of the assessment order in compliance to the notice dated 02.09.2013 the ld. AO recorded that

36 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO “In compliance she has stated that complete details of marble traders with address were furnished in the Investigation Wing.”

It is further noticed that the deposits as well as withdrawals appearing in these bank accounts have not been accounted for in the books of account and not been considered in return of income. In the situation, in order to determine the income attributable to these bank transactions, the assessee vide questionnaire dated 02.09.2013 was asked the following specific questions:- i) Party-wise details of deposits made in all the bank accounts with name and address of the beneficiaries. ii) Assessment year wise total amount of deposit in each bank account. In compliance she has stated that complete details of marble traders with addresses were furnished in Investigation Wing. Further, the assessee has submitted neither bank statements nor names and addresses of the beneficiaries with details of deposits party wise and assessment year wise to the undersigned. Therefore, bank statements were called from the bank authorities by issue of notices u/s 133(6) of the I.T. Act and copies of the same were also made available to the assessee. Thus, bench noted that the revenue could not counter the above submission of the assessee in this proceeding and therefore, we are of the view that what the ld. AR arguing before us that based on the information given by the assessee revenue has already taken action against the marble traders and therefore, we found force in the arguments that the assessee is merely facility provider and she should be charged for the commission income. 2) “explain the nature and source of the transactions in terms of deposits and establish the necessary linkage between the deposits and the subsequent withdrawals to various individual beneficiaries” As discussed here in above in response to issue no 1 that the assessee has furnished the required information to the investigation wing and this aspect of the fact has not been doubted by the revenue by way of filling any evidence. Thus, we are left with no option but to accept the facts already on record. Thus, we find force in the arguments of the ld. AR that based on the information given by the assessee revenue has already taken action against the marble traders

37 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO and therefore, we found force in the arguments that the assessee is merely facility provider and she should be charged for the commission income and thus the assessee has provided linkage of sale of marble traders and based on these information some of the marble traders have surrendered the profit as argued by the ld. AR of the assessee. The revenue could not controvert the averments of the ld. AR of the assessee. Therefore, in the absence of the controverted evidence placed on record by the revenue we accept the averment of the assessee which is also found recorded in the order of the assessment. Issue posed. 3) The ld CIT(A) shall call for the records maintained by the Investigation Wing in respect of the survey proceedings and confront the same to the assessee to provide her a suitable opportunity; & 4) The beneficiaries to be confronted with the details submitted by the assessee and call for their confirmation and/or personal appearances and/or coordinate with their respective CITs/Assessing officers; Even though there was direction of the bench the revenue has not placed on record the report or the records of the investigation wing. Therefore, we believe that the assessee has already provided the information which she possessed and revenue (Investigation wing) was satisfied with the information submitted by the assessee. Based on the above facts discussed the question framed by the ITAT and the evidence adduced by the both the parties our finding were recorded here in above. 14. Now, since these questions are decided in favour of the assessee. Now we deal with the finding of the ld. CIT(A) to decide whether the grounds so raised by the revenue has any merits or not. All the grounds raised by the revenue are related to the fact whether the assessee is marble trader or not. If she is a marble trader then what is the estimation of the profit done by the ld. AO is correct or not. If the assessee is not a marble trader then the commission income estimated by the ld. CIT(A) is proper or not. In the light of these aspect of the matter we have persuaded the material placed on records and the finding of the ld. CIT(A). 14.1 The finding of the ld. CIT(A) starts with the statement recorded by the survey team where in the assessee has categorically confirmed that her bank accounts were used by marble traders to bring cash

38 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO against unrecorded sales in their books of accounts. The cash deposited by other parties based in the different parts of the country was withdrawn and handed over to the marble traders and for this activity they used to pay him commission. The revenue has not placed any contrary material to the finding so recorded which is based on the statement of the assessee. The assessee has argued that she has not maintained any books of accounts and the consequential penalty for non maintenance of books of account has been confirmed to the assessee as emerges from the records. Thus, there is no books of account maintained by the assessee and the finding of the ld. CIT(A) is not controverted. The details of the marble traders were given to the survey team [ investigation wing of the revenue] [ para 2.4 of the ld. CIT(A) ].The ld. AO took cognizance to the details contained in the report which was received from the ADIT/DDIT. As the assessee has already submitted the available and required information the assessee could not furnish the further details which the revenue could not controvert that the assessee has not provided the details to the Investigation wing. 14.2 It is not disputed that the assessment was reopened to tax the commission income on the transactions facilitated by the appellant for the marble traders of Kishangarh. This aspect of the reasons recorded by the revenue has not been controverted. Therefore, considering the decision of the apex court in the case of Sun Engineering [ 198 ITR 97(SC)] while assessing the income of the assessee reasons recorded are to be considered. 14.3 The bench also noted that in the case of Prakash Chand Vijayvargiya and Shri Manoj Kumar Agarwal for A. Y. 2009-10 the assessment orders has been placed on record wherein the commission income is determined on the same set of facts and Shri Prakash Chand Vijayvargiya is the husband of the assessee. The bench also noted from the order of the ld. CIT(A) that the intention of assessing the commission income from the transactions facilitated by the assessee like persons is established from the fact that only commission income was taxed in case of Shri Prakash Chand Vijayvargiya and Shri Majorkumar Agarwal for A. Y. 2009-10 and that action of the AO was ratified by the PCIT (Central) in rejecting the reopening proposal submitted in March 2015. The relevant part of the remand report is reproduced in the order of the ld. CIT(A) at page 12. Thus, considering the decision of the apex court in the case of Radhasoami Satsang,

39 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO Saomi ... vs Commissioner Of Income Tax the court has decided as under : Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. On these reasonings in the absence of any material change justifying the Revenue to take a different view of the matter- and if there was not change it was in support of the assessee- we do not think the question should have been reopened and contrary to what had been decided by the Com- missioner of Income-Tax in the earlier proceedings, a different and contradictory stand should have been taken. We are, therefore, of the view that these appeals should be allowed and the question should be answered in the affirmative, namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was enti- tled to exemption under ss. 11 and 12 of the Income Tax Act of 1961.

Thus, the revenue has not substantiated why the view taken on those cases of the same group should not apply in these cases as there is no change in the fact of those case with that of the case of the assessee. 14.4 The ld. CIT(A) while deciding the appeal of the assessee has dealt with the two-remand report of the assessing officer on of March 2015 and another of August 2015. The non disputed facts emergeis that the assessee admitted that bank accounts were opened, wherein different parties at different places deposited the money, in turn at Kishangarh, the money was withdrawn and after charging commission, which was ranging from Rs. 100 to Rs. 300 per lac and the remaining amount was given back to the persons as advised by the depositors. The ld. CIT(A) noted that the assessee reminded that the ld. AO himself agreed to these facts in the first half of the assessment order that the money was deposited by different Marble Traders were given back to them after withdrawing from the bank. 14.5 The ld.CIT(A) noted that there is no basis to swing in the position from taxing commission on the transaction facilitated by the appellant to estimating gross profit as marble trader. The ld. CIT(A)

40 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO also noted that none of the corroborative factors that were inquired into through remand report proceeding support such imaginary action of the ld. AO. In the remand report the ld. AO admit that the assessee neither have any establishment nor infrastructure to conduct business of marble trading. The relevant part of the remand report is also persuaded and the relevant part is reproduced here in below : “7. In the first part of assessment order, assessees are termed as facility provider on the basis of their submission. They claimed that they were getting commission on the amount of deposits made by the customers of beneficiaries Kishangarh in their bank accounts and handed over amount after making withdrawal to the beneficiaries. In the later part of assessment order they were treated as marble traders as gross profit on turnover in their bank accounts was applied for the reasons that they have not made available details as discussed in the fore going para-6. Smt. Kusum Devi Vijayvargiya- a) Assessee is not registered with sales tax department and not filed Sales tax return. b) Assessee is not registered with Central Excise and not filed excise Return. c) Assessee has not shown Debtors and creditors. d) Assessee has no Purchase and Sales account. e) Assessee has no depreciable assets. f) No books of accounts maintained. g) Assessee has no SSI registration number. h) Assessee has no power connection.”

Thus, considering the above aspect of the matter the swing from charging commission to charge the GP as marble trader has no basis and are contrary to the facts already on record. Considering all these aspects of the case discussed here in above we find no infirmity in the finding of facts that the income of the assessee be taxed on commission, however, as regards the ld. CIT(A) contention of allowing 25 % from the commission income estimated has no basis or proof that

41 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO has been argued by the ld. AR of the assessee and therefore, we see no reason to consider the claim of the 25 % as allowable and therefore, the same is not be considered as expenses in the absence of any details or evidence. In terms of this observations the appeal of the revenue in ITA No. 944/JP/2015 stands partly allowed.”

We have perused the above finding of the Coordinate Bench in the above case. The fact of the case referred are similar to the facts of the case on hand. In that case co-ordinate bench decided the profit portion @ Rs. 300 per 1,00,000 deposited in the bank account as income of the assessee. The revenue was asked whether the order of ITAT challenged before our High Court and in that connection any direction is passed or not. The DR did not have any information on the issue and therefore, on being consistent on the view already adopted to the finding we direct the ld. AO and to consider the commission @ 300 per one lac based on turnover that has been determined by the ld. AO. Since the order of the ld. AO ex-parte, the Assessing Officer will finally determine the exact turnover of and any other income of

42 ITA No. 581/JPR/2024 Sh. Padam Kumar Goyal vs. ITO the assessee as per records available with him. Based on these observations the appeal of the assessee is allowed for statistical purposes.

In the result the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 27/08/2024. Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksM deys'k t;UrHkkbZ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 27/08/2024. *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Sh. Padam Kumar Goyal, Tonk. 2. izR;FkhZ@ The Respondent- ITO, Ward, Tonk. 3. vk;dj vk;qDr@ CIT 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. xkMZ QkbZy@ Guard File { ITA No. 581/JPR/2024}

vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत