ANKUSH KUMAR JAIN,JHALAWAR V. ITO, JHALAWAR

ITA 167/JPR/2025

AI Insights

The case revolves around a protective addition of Rs. 9,72,62,630 made to the income of Ankush Kumar Jain for the assessment year 2017-18, based on a cash transaction purportedly for the purchase of gold. The transaction was allegedly linked to the assessee through the statement of Sh. Mohit Garg during search proceedings under section 132(4) of the Income Tax Act. The Assessing Officer made a protective addition under section 144 read with section 69 of the Act, which was later upheld by the CIT(A). However, the Tribunal set aside this order, emphasizing the lack of direct evidence connecting the assessee to the transaction beyond the statement of Sh. Mohit Garg.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779572 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 07-02-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALKA GAUTAM; THROUGH V.C
• Assessee Lawyers: RAJENDRA SISODIA
• Keywords: Set aside
• Section: 148; 144; 143(3); 69

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B-Bench” JAIPUR Jh xxu xks;y] ys[kk lnL; ,oa Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI GAGAN GOYAL, AM& SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No.167/JPR/2025 fu/kZkj.k o\"kZ@Assessment Year : 2017-18 Ankush Kumar Jain Main Market, Aklera, Jhalawar. cuke Vs. The ITO, Jhalawar. LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No. AULPJ0858N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby :Sh. Rajendra Sisodia, Adv. jktLo dh vksjls@Revenue by: Mrs. Alka Gautam, CIT-DR (through V.C.) lquokbZ dh rkjh[k@Date of Hearing : 14/10/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 15/10/2025 vkns'k@ORDER PER: NARINDER KUMAR, JUDICIALMEMBER . Appellant-assessee is feeling dissatisfied with the order dated 11.12.2024, passed by Learned CIT(A), NFAC, Delhi whereby his appeal challenging assessment order dated 31.05.2023, relating to the assessment year 2017-18, making addition of Rs. 9,72,62,630/-, on protective basis, has been dismissed, and the assessment order has been sustained. 2. Arguments heard. File perused. Printed from counselvise.com 2 ITA No. 167/JPR/2025 Ankush Kumar Jain, Jhalawar. First the Facts 3. As is available from the assessment order, as per information available to the department, appellant-assessee, having PAN no. AULPJ0858N, paid a sum of Rs. 9,70,00,000/- to Shri Mohit Garg, in cash, for purchase of gold, but the said transaction was not inconsonance with his return of income. Above said Shri Mohit Garg was examined u/s 132(4) of the Act in the course of search proceedings, wherein he is stated to have admitted receipt of the above said amount from the assessee-appellant, in cash for purchase of gold. That is how, a notice u/s 148 of the Act was issued to the assessee on 27.07.2022, it being a case of escapement of income from assessment . Said notice was followed by other intimation letters, notices u/s 142(1), 143(2) of the Act, and show cause notice dated 08.05.2023. In response, the assessee furnished voter’s information, bank details, and bank statements, and thereby he claimed that the person named as Sh. Ankush Kumar Jain was some other person, whose name resembled his name. Printed from counselvise.com 3 ITA No. 167/JPR/2025 Ankush Kumar Jain, Jhalawar. 4. The department confronted the assessee with his PAN and presented that the transaction pertained to him. Accordingly, the assessee was called upon to establish nature and source of Rs. 9.70 Cr. referred to above. The assessee submitted reply to the show cause notice dated 08.05.2023. However, the assessee could not explain the source of cash payment of said amount. 5. Ultimately, the Assessing Officer passed assessment order u/s 144 of the Act, and by resorting to provisions of section 69 of the Act, and mainly relying the evidence of PAN which belonged to the assessee made a protective addition of the said amount. 6. It may be mentioned here that in the assessment order, the Assessing Officer observed that the substantive addition had already been made in the case of Shri Mohit Garg, and that the protective addition was being made in the assessment order against the assessee-appellant, to protect the interest of Revenue. Matter comes up before Ld. CIT(A) 7. When the matter came up in appeal, Learned CIT(A) dismissed the same, while taking into consideration that the PAN AULPJ0858N belonged to Printed from counselvise.com 4 ITA No. 167/JPR/2025 Ankush Kumar Jain, Jhalawar. the assessee-appellant, as disclosed by Sh. Mohit Garg in his statement recorded u/s 132(4) of the Act, in the course of search proceedings; that the assessee-appellant had not provided details of source of said investment; and also that during assessment proceedings the fact of purchase of gold was not disputed by the assessee. Contentions before this Appellate Tribunal 8. Ld. AR for the appellant has submitted that the protective addition made against the assessee, simply on the ground that his PAN was disclosed by Sh. Mohit Garg in his statement u/s 132(4) of the Act, in the course of search proceedings, deserves to be set aside, as the department failed to connect the said transaction of Rs. 9.70 Cr. with the assessee-appellant. 9. It may be mentioned here that in the course of arguments, we asked Ld. DR for the department to apprise the Bench of the status of the assessment order passed against Sh. Mohit Garg, by making substantive addition against him. 10. As per information provided by Ld. DR for the department, the assessment qua Sh. Mohit Garg, for the assessment year 2017-18 was completed u/s 143(3) of the Act, vide assessment order dated 30.12.2018; appeal No. 10538/2018 came to be dismissed by Learned CIT(A)-26, New Printed from counselvise.com 5 ITA No. 167/JPR/2025 Ankush Kumar Jain, Jhalawar. Delhi, and thereupon said assessee filed ITA No. 244/Del.2025, ITAT B Bench, Delhi Benches Delhi; and further that vide order dated 04.06.2025 came to be disposed of with direction for restoration of the appeal before Learned CIT(A), NFAC, for afresh decision. As submitted on behalf of the department, on restoration said appeal is still pending before Learned CIT(A). 11. As noticed above, from the very beginning, it is case of the department that on the basis of information regarding about said transaction of Rs. 9.70 Cr. i.e. its payment to Sh. Mohit Garg, in cash, by the assessee- Sh. Ankush Kumar Jain, proceedings were initiated by way of issuance of notice u/s 148 of the Act to the assessee on 27.07.2022. 12. Further, it is case of the department that search proceedings were conducted as regards, Sh. Mohit Garg. In his statement recorded u/s 132(4) of the Act Sh. Mohit Garg is stated to have disclosed payment of the said amount to him by Shri Ankush Kumar Jain, having above said PAN , in cash, for purchase of gold. 13. On the other hand, from very beginning, the assessee-appellant has been contesting proceedings and the allegation leveled against him, by claiming that this is a case of mistaken identity. Printed from counselvise.com 6 ITA No. 167/JPR/2025 Ankush Kumar Jain, Jhalawar. 14. It is true that the assessee-appellant has not denied that the above said PAN pertains to him. In support of his plea, the assessee admittedly submitted voter’s information, bank details and bank statements. It was for the department to prove that such and such incriminating material was seized from Shri Mohit Garg, which revealed PAN of the present assessee or any other details pertaining to him, so as to connect him with the subject transaction of payment for purchase of gold. No books of accounts of Shri Mohit Garg have been made available to establish payment of the abovesaid amount to him by the assessee. There is also nothing to suggest as to what was the stock available with Shri Mohit Garg; as to how much stock was purchased on any order from the assessee; and as to on which date any such supply was made by him to the assessee. It is significant to note that in the assessment order, there is no reference as to from which incriminating material, other than the statement recorded u/s 132(4) of the Act, it transpired that the person who made said payment to Sh. Mohit Garg in cash was having such and such PAN number of the assessee. Printed from counselvise.com 7 ITA No. 167/JPR/2025 Ankush Kumar Jain, Jhalawar. Fact remains that there is sole statement of Sh. Mohit Garg under section 132(4) of the Act. In absence of any corroborative evidence in the form of any document pertaining PAN of the assessee, said payment could not be connected to the assessee so as to call upon him to furnish nature and source of the transaction. 15. It is well settled that in case of doubt as to which person amongst the two liable, parallel assessments against each of them are permissible and framing of alternative assessment is also permissible. A protective assessment has as much finality as an ordinary assessment, and it cannot be disturbed except on the grounds to assail an ordinary assessment. 16. In the given facts and circumstances, when no incriminating material in support of the statement of Sh. Mohit Garg recorded during search proceedings against him, has been brought to our notice either in the assessment order or the impugned order passed by learned CIT(A) or during pendency of present appeal, it is difficult to rely on the sole statement of Sh. Mohit Garg that it is the assessee who had paid him said amount in cash for purchase of gold. Printed from counselvise.com 8 ITA No. 167/JPR/2025 Ankush Kumar Jain, Jhalawar. 17. In view of the above discussion and findings, the impugned order passed by Learned CIT(A), affirming assessment order vide which only a protective addition was made, deserves to be set aside. Result 18. As a result, this appeal is allowed and the impugned order passed by Learned CIT(A) is hereby set aside. File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 15/10/2025. Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 15/10/2025 *Santosh vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Ankush Kumar Jain, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Jhalawar. 3. vk;djvk;qDr@ Theld CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZQkbZy@ Guard File ITA No. 167/JPR/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar Printed from counselvise.com "