AADINATH GEMS & JEWELLERS P.LTD,MUMBAI V. ITO 5(1)(1), MUMBAI

ITA 3121/MUM/2015

AI Insights

The case involves M/s. Aadinath Gems & Jewellers Pvt. Ltd., which appealed against the order of the CIT(A) pertaining to the assessment year 2010-11. The primary issues in the appeal were the additions of Rs. 6,40,000 and Rs. 70,00,000 under section 68 of the Income Tax Act, 1961, as unexplained cash credits. The AO had questioned the genuineness of these transactions and the capacity of the investors due to the nature of the cash deposits. The ITAT admitted additional evidence in the form of affidavits from the investors, which were not previously submitted, and directed the AO to verify these documents.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793372 (ITAT-MUMBAI)
• Duration Of Justice: 10 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 25-05-2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEYAQAT ALI AAFAQUI; AR
• Assessee Lawyers: K. GOPAL; NEHA PARANJPE; ARS
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Unexplained cash credit
• Section: 68; 133(6)

Judgement Text

" | आयकर अपीलीय अिधकरण ा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 3121/Mum/2015 Assessment Year: 2010-11 M/s. Aadinath Gems & Jewellers Pvt. Ltd. 64B, Office No. 5 2nd Floor Raja Bahadur Bansilal Building J.S.S. Road Mumbai - 400004 [PAN: AAGCA0512L] Vs ITO – 5(1)(1), Mumbai अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri K. Gopal and Ms. Neha Paranjpe, A/Rs Revenue by : Shri Leyaqat Ali Aafaqui, Sr. A/R सुनवाई की तारीख/Date of Hearing : 17/09/2025 घोषणा की तारीख /Date of Pronouncement: 22/09/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order of the ld. CIT(A) – 10, Mumbai [hereinafter the ‘ld. CIT(A)’] dated 20/03/2014 pertaining to AY 2010-11. 2. At this point, it would be pertinent to mention that the date of order appears to be a typographical error because the date of hearing of the appeal is 19/03/2015, therefore, the order cannot be dated 20/03/2014. Be that as it may, the assessee has raised seven substantive grounds of appeal but at the time of hearing, the assessee did not press Ground Nos. 5, 6 & 7 and, therefore, the same are dismissed as not pressed. Printed from counselvise.com I.T.A. No. 3121/Mum/2015 2 3. The remaining substantive grounds relate to the addition of Rs. 6,40,000/- and Rs. 70,00,000/- u/s 68 of the Act as unexplained cash credit. 4. Representatives were heard at length. Case records of the carefully perused and the relevant documentary evidence brought on record which are duly considered in the light of Rule 18(6) of the ITAT Rule, 1963. 5. Briefly stated facts of the case are that the assessee filed its return of income on 25/09/2010 declaring total income at Rs. 1,50,270/-. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. The assessee is trading in diamonds while scrutinizing the return of income, the AO noticed that the assessee has raised share application money of Rs. 70,00,000/- and share premium is shown at Rs. 6,40,000/-. 5.1. Insofar as the share application money of Rs. 6,40,000/- is concerned, evidence on record show that it was received during FY 2007-08 pertaining to AY 2008-09. This fact has also been accepted by the AO on paragraph 5 of his order. Since this amount pertains to FY 2007-08 relevant to AY 2008-09, the same cannot be considered u/s 68 of the Act for the assessment year under consideration. Therefore, it is directed to be deleted. 5.2. Insofar as, share application money of Rs. 70,00,000/-, which was received during the year under consideration, the assessee as accepted share application money from the following parties:- Printed from counselvise.com I.T.A. No. 3121/Mum/2015 3 6. The AO issued notice u/s 133(6) of the Act to the share investors at the address given. Four notices were returned by the postal authority. The same was brought to the notice of the assessee. The assessee was also asked to produce the share investors. The assessee showed its inability to produce the shares investors as all the share investors are at Raipur. The assessee furnished details sought in the notice u/s 133(6) of the Act of each party. The AO has extracted the details on pages 5 to 9 Printed from counselvise.com I.T.A. No. 3121/Mum/2015 4 of the assessment order and in the case of each investor, the AO observed that the party has deposited cash either on the date of transfer to the assessee or earlier. This led to the AO to question the genuineness of the transactions and the capacity of the investors. 7. Before us, the assessee filed affidavits of all the investors who have categorically explained the sources. The ld. D/R had strongly objected for the admission of these additional evidence stating that after a lapse of several years, the assessee is filing these additional evidence without explaining any cogent reason for not filing them before the authorities below. The ld. Counsel vehemently stated that he has pointed out during the course of assessment proceedings itself that each investor has sufficient cash balance in their respective books to make the impugned investments in the shares of the assessee company. The ld. Counsel stated that the affidavits are filed only to emphasize the fact that each investor had enough cash in hand available with them to make the investment in the shares of the company. 8. Since the affidavits go to the root of the matter, in the interest of justice, we deem it fit to admit them, however, at the same time, we are of the considered opinion that the contents of the affidavit needs to be thoroughly examined by the preliminary officer i.e., the AO. Therefore, we restore this issue to the file of the AO. The assessee is directed to furnish the copy of the affidavits before the AO and the AO is directed to get the contents verified by due process of law but after affording reasonable and adequate opportunity of being heard to the assessee. With these directions, the issue relating to the addition of Rs. 70,00,000/- is set aside to the file of the AO. Printed from counselvise.com I.T.A. No. 3121/Mum/2015 5 9. In the result, appeal of the assessee is allowed in part for statistical purposes. Order pronounced in the Court on 22nd September, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 22/09/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0015ितिलिप अ\u001aेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. \u0015 थ / The Respondent 3. संबंिधत आयकर आयु\" / Concerned Pr. CIT 4. आयकर आयु\" ) अपील ( / The CIT(A)- 5. िवभागीय \u0015ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड& फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai Printed from counselvise.com "