INCOME TAX OFFICER, WARD-19(2)(2), , MUMBAI V. MORADIYA GEMS LLP, MUMBAI

ITA 6578/MUM/2024

AI Insights

The case involves Moradia Gems LLP, which was accused by the Income Tax Department of receiving unaccounted money amounting to Rs. 4,35,00,000 through shell companies. The Assessing Officer (AO) made an addition under section 69A of the Income Tax Act, 1961, claiming that the assessee failed to explain the source of this money. However, the CIT(A) deleted this addition, and the Tribunal upheld this decision, noting that the money was recorded in the assessee's books as a capital introduction by a partner. The Tribunal also highlighted that the AO did not follow the proper legal procedure and did not provide sufficient evidence to substantiate the claims against the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714530 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Assessment Year: 2014-2015
• Other Referred Cases: M/s Arati Marketing Pvt. Ltd. Vs UOI and Ors, Sumit Jagdishchandra Agrawal Vs Dy.CIT, Rajeev Bansal Vs UOI & Ors, Mamta Lalit Jain Vs ITO, Vaishnodevi Refoils & Solvex Vs PCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAMKOSURI
• Assessee Lawyers: MEET JUMUDIYA
• Keywords: Business income; Reassessment proceedings; Question of law; Unexplained cash credit; Principle of natural justice; Third party statement; Accommodation entries; Deemed to accrue or arise in india; Liquidation; Bogus
• Section: 147; 148; 153A; 68; 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 6578/Mum/2024 (Assessment Year: 2014-15) ITO, Ward – 19(2)(2) 503, 5th Floor, Piramal Chamber, Lalbaug – 400012. Vs. Moradia Gems LLP Unit No. 2, The Jewel Mama Parmanand Marg, Opera House, Mumbai – 400004 PAN/GIR No. AAWFM5039P (Applicant) (Respondent) Assessee by Shri Meet Jumudiya Revenue by Shri Annavaram Kosuri, Sr. AR Date of Hearing 15.07.2025 Date of Pronouncement 04.08.2025 आदेश / ORDER PER SANDEEP GOSAIN, JM: The present appeal has been filed by the revenue challenging the impugned order dt. 17.10.2024 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2014-15. 2. All the grounds raised by the revenue are interrelated and interconnected and relates to challenging the order of Ld. CIT(A) in deleting the entire addition of Rs. Printed from counselvise.com 2 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. 4,35,00,000/- made by AO u/s 69A of the Act. Therefore, we have decided to adjudicate these grounds through the present consolidated order. 3. In this regard DR while relying upon the order of AO submitted that Ld. CIT(A) had wrongly deleted the additions made u/s 69A of the Act, it was submitted that information was received from DDIT(Inv), Kolkata stating that the assessee is ultimate beneficiary and has brought back his unaccounted money through M/s Shreehari Vinimay Pvt Ltd, and various shell companies such as Startree Dealcom Pvt Ltd totaling to Rs. 4,35,00,000/-. It was submitted that the routing of the funds by the above companies having nature of shell companies with no actual business operations and were only involved in providing accommodation entries in the form of share capital liquidation via sale of shares/unsecured loans etc., to the beneficiary concerns and the assessee is one of the beneficiaries who has received the money from these shell companies. It was also submitted that in this regard a detailed investigation was carried out by the Investigation Wing, Kolkata and it was found that these companies have no credit worthiness and no actual business and were only involved in providing accommodation entries. Even the assessee could not prove on record, the bonafide of the share application money received from these shell companies, more particularly when the money was routed Printed from counselvise.com 3 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. through multiple layering of accounts to the accounts of assessee subscribing to the share capital. It was further submitted that assessee failed to discharge the onus cast upon him, and moreover the genuineness, creditworthiness and bonafides of the transactions could not be substantiated or proved to the satisfaction of the assessing officer. 4. Whereas on the contrary, Ld. AR reiterated the same arguments as were raised by him before Ld. CIT(A) and also relied upon the written submissions filed before Ld. CIT(A). The same are reproduced herein below: With reference to above and, in continuation to our earlier various assessment submissions, we have to state & submit as under: First and foremost, it is submitted as follows:- a) Non applicability of Re-assessment Proceedings for AY 2013-14 and 2014-15 by virtue of First Proviso to the section 149(1) of the Act, 1961. The first proviso to sec. 149(1) is reproduced hereunder. \"Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if (a notice under section 148 or section 153A or section 153C could not have been issuedat that time on account of being beyond the time limit specified under theprovisions of clause (b) of sub- section (1) of this section or section 153A or section 153C, as the case may be), as they stood immediately before the commencement ofthe Finance Act, 2021\". A perusal of the said proviso clearly demonstrates that notice u/s. 148 for AY 2021-22 and earlier years could not be validly Printed from counselvise.com 4 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. issued if they are issued beyond the time limit as specified in the provisions prior to the amendment by Finance Act, 2021. As per the un amended provisions, no notice u/s. 148 could have been issued after 31-03- 2021 for the A.Y. 2014-15. M/s. Arati Marketing Pvt. Ltd. Vs UOI and Ors, In a recent decision decided by Hon'ble Calcutta High Court on 09-02-2024, it has been held that notices issued on or after 01-04-2021 u/s. 148 for A.Y. 2013-14 and 2014-15 are barred by limitation u/s. 149(1). It has further been held on page 22 of the Order as under: \"I am inclined to hold that all the impugned notices issued under newly inserted Section 148A(b) of the Income Tax Act, 1961 by Finance Act, 2021, relating to assessment years 2013-14 and 2014-15, which have been issued on or after 1st April, 2021 by extending the time of limitation by the CBDT for issuance of notice under Section 148 of the old Act in exercise of power under Section 3 of TOLA is un authorized in law and all such impugned notices are barred by limitation and that all subsequent proceedings on the basis of the aforesaid impugned notices are not sustainable in law and accordingly the sameare quashed\". 455 ITR 216 (Guj.) Sumit JagdishchandraAgrawalVsDy.CIT In this case Hon'ble Gujarat High Court held as under. \"Reassessment Notice Limitation Law applicable Effect of amendments by Finance Act, 2021- Notice barred by limitation under unamended provisions Notice issued on 30-7-2022 to reopen assessments for 2013-14 and 2014-15-Not valid Income Tax Act, 1961\". 453 ITR 153 (All) Rajeev BansalVs UOI &Ors. In this case Hon'ble Allahabad High Court held as under: \"Reassessment-Notice-Law applicable Effect of amendment to sections 147 to 151 by Finance Act, 2021 and taxation and other laws (relaxation and amendment of certain provisions) Printed from counselvise.com 5 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. act, 2020 CBDT instruction no. 1 of 2022 has no binding force- Income Tax Act, 1961\". Subsequently, the Jurisdictional Assessing Officer not only ignored the request of the assessee LLP to provide balance information, passed an Order u/s. 148A(d) Dated 25.07.2022 making it Fit case for assessment and Notice u/s 148 was also issued on the said date, ignoring all norms of principles of natural justice and directions laid down by CBDT on 11/05/2022 after the Supreme Court order in the case of Ashish Agarwal on 04/05/2022. Finally a notice u/s. 148 dated 27-05-2022 was received and it is submitted that the said notice is also barred by limitation both as per the first proviso to Sec. 149as also the decision of the Hon'ble Supreme Court in the case of AshishAgarwal wherein the Hon'ble Supreme Court has specifically mentioned in the order to this effect. However, thereafter, the assessee LLP filed Return of Income u/s. 148 for total income of NIL. Since the Hon'ble Supreme Court has passed order Dt. 4th May, 2022 in thecase of Union of India &Ors. Vs. AshishAgarwal (Supra) wherein the Hon'bleSupreme Court has held that the notices issued u/s. 148 between the period 01- 04-2021 to 30-06-2021 be deemed as notices issued u/s 148A(b). Further the Hon'ble Apex Court vide Para 8(iv) (Pg 29 of the order) has specifically held as under \"All the defences which may be available to the assessee u/s. 149 and/or which maybe available under the Finance Act, 2021 and in law and whatever rights are available to the assessing officer under the Finance Act, 2021 are kept open and/orshall continue to be available.\" Further the Hon'ble Apex Court vide Para 10(iv) (Pg 33 of the order) has again specifically held as under.- Printed from counselvise.com 6 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. \"All defences which may be available to the assessees including those availableu/s. 149 of the IT Act and all rights and contentions which may be availableto the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available.\" Hon'ble Supreme Court has held that the new law shall operate and all the defences available to assessees under section 149 of the new law and whatever rights are available to the Assessing Officer under the new law shall continue to be available. Sub-section (1) of new section 149 of the Act as amended by the Finance Act, 2021 reads as under- *149 (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) If three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b): (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable totax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year. Provided that no notice under section 148 shall be issued at any time in a casefor the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub- section (1) of this section, asthey stood immediately before the commencement of the Finance Act, 2021. A perusal of the First proviso to section 149(1)(b) clearly states that if a notice u/s. 148 was time barred as per the provisions prior to amendment vide finance Act, 2021 i.e. If a notice is time barred as on 01-04-2021 (as per the old provisions), the same cannot be issued under the new provisions also. Printed from counselvise.com 7 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. Thus it is submitted that under the old provisions, notice could be issued for a maximum period of 6 years from the end of the relevant assessment year i.e. notice for AY 2014-15 could be issued upto 31-03-2021 and not beyond that day. Thus, even for AY under the new law, i.e. amended provisions of section 149, notice 2014-15 cannot be issued on or after 31- 03-2021. Thus we submit that the impugned notice dated 28-07-2022 as issued u/s.148 iscontrary to provisions of first proviso to section 149(1)(b), and clear cutverdict and directions of Hon'ble Supreme Court in its decision Dt. 4th May2022. In view facts, circumstances and judicial decisions as stated above the proceedings initiated u/s. 147 r.w.s. 148 are illegal and ab into void. There are various judicial order passed by several courts thereafter and are relied upon for the same. With this legal submission in mind, the assessee submits the following submissions:- 1. In the present case, it is submitted that the 1\" notice u/s 148 (old) was issued on 24.04.2021, (which is beyond 31.03.2021), by Income tax officer, Ward 19(2)(2), Mumbai. The said notice issued after 31.03.2021 is not valid and therefore the assessment proceedings based on the said notice is also not valid and therefore there should not be any reassessment based on the said 1 notice. 2. It is to be noted that the approval to the said proceedings u/s 151is itself dated 24 April 2021. 3. The assessee firm, without prejudice, filed the return of income under section 148 on 24 May 2021 and then also filed a letter dated 25 May 2021 Seeking reasons for reopening. 4. The ITO. 19 (2)(2), Mumbai provided Reasons for Re-opening vide letter dated 1-9-2021. The said reasons are related to information received from DDIT(Inv), Unit 4 (1), Kolkata Printed from counselvise.com 8 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. through Insight Portal about assessee being ultimate beneficiary for alleged black money amounting to Rs. 4,35,00,000/- brough back from M/s ShreehariVinimay Private Limited during financial year 2013-14 relevant for the assessment year 2014-15. 5. The assessee firm also filed letter dated 15 November 2021 objecting to (a) the reassessment proceedings under section 148 and (b) reasons for reopening provided vide letter dated 1 September 2021. 6. Then, subsequent to the Supreme Court decision in the case of AshishAgarwal, a fresh notice under section 148A(b) was issued on 27th May 2022 with the subject as: \"Subsequent proceedings with reference tosection 148A(b) in consequence to Hon'ble SC order dated 04.05.2022\", 7. The assessee firm replied to the same vide letter dated 10th June 2022 and requested to furnish complete details and documents as prescribed inSupreme Court order and also CBDT instr instructions issued thereafter. 8. Income tax Officer, Ward 19 (2) (2). Mumbai replied with the letter with subject Subsequent proceedings with reference to section 140 8A (B) in consequence to Honorable Supreme Court order dated 4 May 2022 letter, and provided (a) 4 page word document titled as Interim VerificationReport M/s StartreeDealcom Private Limited, and (b) 2 page word document titled as Investigation Report M/s Innocent Deal Trade Pvt Limited. 9. It is submitted that, (without prejudice), then ideally, these are the only two documents on which the entire assessment is based on or should be based on, strictly speaking on interpretation of the Supreme Court order of AshishAgarwal, if at all the assessment can take place. 10. It is submitted that the first word file (titled as Interim Verification Report - M/s StartreeDealcom Private Limited), does not contain any details or information about what is wrongdoing on the part of the assessee firm, IT does not even Printed from counselvise.com 9 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. contain name of assessee firm except on the last page wherein a sum of Rs. 25,00,000 has been simply stated in front of the name of the assessee firm in a table as follows:- There table is followed by a small para as \"Therefore, the information may be shared with the Jurisdictional Aos of the beneficiaries and M/s StartreeDealcomPvt Ltd, to initiate such actions as deemed fit in the interest of revenue as per Income Tax Act, 1961.\" In other words, this is only and only sharing of information and nothing beyond that. As a result, it is submitted that the assessing officer should have verified the same and done its own homework rather than turning this suspicion into confirmation without even an iota of work or evidence in that regard. It is respectfully submitted that it is not the case here and the assessing officer has not done anything atall in this matter. 11. Similarly. It is submitted that second word file also has the same status of that of the first word file which has the name of the assessee firm only in one last line against the amount 3,80,00,000. The information has been in the following format in the table in the word file titled as Investigation Report M/s Innocent Deal Trade Pvt Limited. Here the table as well as the word file ends. There is nothing beyond this table as regards the assessee firm. There is nothing against Source /Intermediary concern, Source Bank, Source A/c No. with the officer, not it is provided to the assessee firm. But, one thing is certain, that the assessee firm has not received any money from anyone except its partner and source of source is not relevant as regards the capital introduction by a partner into a firm especially the first year capital introduction by the partner into a firm. 12.It is submitted that not only there is not even an iota of evidence or any investigation (forget conclusive in-depth investigation) as regards the assessee's involvement in any of these, if any. ITO, Ward 19 (2)(2), Mumbai, has simply not even followed the decision of the Supreme Court in the case of Printed from counselvise.com 10 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. Ashish Agarwal, based on which the reassessment is sought to be done in regards to what has been stated to be followed along with instruction of The Central Board of Direct Taxes. 13.ITO, Ward 19 (2)(2), Mumbai then passed the order under section 148 A (d) on 25th July 2022 making this a fit case u/s 148 for escaping assessment for income of rupees 4,35,00,000. 14. Then the said case was shifted to faceless assessment scheme. Notices under section 142 (1) and 143(2) were received and they were replied to. 15. Coming to the FAO, as well, the law is not followed at all. There is complete lack lustre approach towards assessee as no details are except a same two word file and nothing more. Even though it is stated that an xls file is stated to have been attached to the said notice, it was not attached to the notice. The said fact was brought to the notice of the FAO, however no attention was given to the said observation. It seems that it had not reached the ears of the assessing officer as there was not action on it. 16. There were several other observations and objections raised and pointed out to the assessing officer on those two word documents. However there was no consideration to the same. 17. A show cause notice was issued dated 1st May 2023. It was nothing but Copy paste from the order under section 148 Α. 18. Detailed reply Was submitted on 8th May 2023. 19. However, nothing was Considered and addition of Rs 4,35,00,000 was made under section 69A. 20. It is furthermore submitted that the entire reassessment proceedings are subject to the validity of the said notice as challenged by the assessee. It is submitted that since the reassessment proceedings are time barred, there cannot be any assessment and if any assessment being carried out is Printed from counselvise.com 11 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. invalid ab-initio and hence the entire assessment proceedings are time barred and invalid. Subject to the above legal submissions, the assessee LLP herewith submit the following submissions for your kind consideration. 21.Letter dated 27th May 2022 (DIN: ITBA/COM/F/17/2022- 23/1043208973(1)) was issued by Income Tax Officer, Ward 19(2)(2), Mumbai with subject as \"subsequent proceedings with reference to section 148A(b) in consequence to Hon'ble Supreme Court order dated 4th May 2022. The said letter was received with the following 3 attachments. (a) Case Related Information Detail from Insight Portal with Source PAN Name as StartreeDealcom Private Limited for information value of 25,00,000/-. It has mentioned two other documents as general documents, viz. (i) interim verification report.pdf and (ii) fund trail StartreeDealcom Private limited.xlsx. It is stated that none of the above 2 documents listed above were provided to the assessee. (b) Verification Details from Insight Portal with the Result Value 3,80,00,000/- with Result Type unexplained credit. It only says that it is suspicious transaction. The Description Of The Document as per the Verification Details from Insight Portal itself says it is Verification Report and Information Description states it as Suspicious Transaction. In other words, it is naturally not confirmed a dubious transaction as projected by the assessing officer as well as NFAC. Ithas also listed a document named Investigationinnocent96B docx but it has not been provided to the assessee for its cross examination. (c) Approval u/s 151 dated 23rd April 2021 with the annexure (totaling to 7 pages) which stated income escaping assessment4,35,00,000/- 22. In other words, there is absolutely no 3rd party evidence which can be easily relied upon but the only material which has been relied are reports made by one officer for some other purposes forwarded to another officer. TheANNEXURE which is the part of approval u/s 151 itself states in para 2.that Printed from counselvise.com 12 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. information has been received from DGIT (INV), unit 4 (1) Kolkata tolnsight Portal 23.In para 2 of the said annexure, it is stated that as per information the assesseeMoradiya Gems LLP being ultimate beneficiaries had brought back their unaccounted money amounting to 3,80,00,000/- from M/s ShreehariVinimayPvt Ltd during the financial year 2013-14 relevant to the assessment year under consideration. After this one occurrence, there is no reference or name taken of M/s Shreehari VinimayPvt Ltd at all during the entire annexure. 24. The said annexure talks about so many other companies but, M/s Shreehari VinimayPvt Ltd, who being partner in the said LLP has introduced its capital, does not talk about the company which is partner in the said LLP who has introduced capital into the firm at all. 25. It is stated that information detail talks about information value of 25,00,000/- and verification details talks about result Value of 3,80,00,000/-, mathematical total of whichcomes to 4,15,00,000. However, the approval u/s 151 is for 4,35,00,000/- as income escaping assessment. 26. It is stated that even the said annexure has given 3 breakups, being (a) 3,80,00,000/-, (b) 30 lakhs, and (c) 25 lakhs. 27. Para 2.1 of annexure forming part of approval u/s 151, it is stated M/s Innocent Deal Trade Private Limited has current account No. 1129505500098 in the name of with ICICI Kolkata. M/s Shreehari VinimayPvt Ltd has used this account and other shell companies for a layering of transfer of funds to the real beneficiaries. The very vague and generalized statement with no particular details of even names and therefore it cannot be relied upon. There is no other detailed available for submission of the assessee as it is not provided to the assessee LLP. In the absence of any particular details, the same cannot be relied upon as it does not become part of information and details which the Department is relying upon Printed from counselvise.com 13 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. as held by Supreme Court of India in the case of Union of India v/s Ashish Agarwal on 4th May 2022. 28. Para 3 of Annexure forming part of approval u/s 151, it is stated M/s Timelink Sales Private Limited has current account No. 129605500052 in the name of with ICICI Kolkata. M/s Shreehari Vinimay Pvt Ltd has used this account and other shell companies for a layering of transfer of funds amounting to 30 lakhs to the real beneficiaries. The very vague and generalized statement with no particular details of even names and therefore it cannot be relied upon. There is no other detailed available for submission of the assessee as it is not provided to the assessee LLP. In the absence of any particular details, the same cannot be relied upon as it does not become part of information and details which the Department is relying upon as held by Supreme Court of India in the case of Union of India v/s Ashish Agarwal on 4th May 2022. 29. Para 4 of Annexure forming part of approval u/s 151, it is stated M/s Startree Dealcom Private Limited has current account No. 1295055001127 in the name of with ICICI Kolkata. M/s Shreehari VinimaPvt Ltd has used this account and other shell companies for a layering of transfer of funds amounting to 25 lakhs to the real beneficiaries. The very vague and generalized statement with no particular details of even names and therefore it cannot be relied upon. There is no other detailed available for submission of the assessee as it is not provided to the assessee LLP. In the absence of any particular details, the same cannot be relied upon as it does not become part of information and details which the Department is relying upon as held by Supreme Court of India in the case of Union of India v/s Ashish Agarwal on 4th May 2022. 30. It is submitted that even though the said Annexure is running into 7 pages. there is no creditable information other than a reference of information received from DGIT (INV), unit 1 (1), Kolkata. It is merely an information and nothing more than that. The said information in the nature of mole has been turned into a monster by the assessing officer and has presumed income escapement of 4,35,00,000/-. Printed from counselvise.com 14 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. 31. The assessee's application on 10th June 2022 to the income tax officer yielded no further information being provided even though the said Supreme Court order of AshishAgarwal dated 4th May 2022 specifically held so in para 8 and para 10 of its order. The assessing officer just conveniently choose to ignore the said part of the Supreme Court order and followed only that part which was beneficial to Department reopen the said assessment proceedings and cleverly and clearly ignored the directions given by Supreme Court in its said order in the interest of natural justice to provide All Information And Material to the assessee within 30 days of the said order. 32. In other words, the rights of the assessee had taken away by the assessee as given in the said order of Supreme Court and at the same time the assessing officer is trying to follow the order of the Supreme Courtperfection against the assessee for Leving unjustified income tax, which is not correct the principles of natural justice. 33. This is again the violation of another Supreme Court order in the case of YashpalDhir V/s R. N. Gosain (Civil Appeal No. 4325 of 1992) (Annex-B) wherein court stated that \"Law does not permit a person to both approbate and reprobate. This principle is based on the Doctrine of Election which postulates that no party can accept and reject the same instrument and that \"a person cannot say at one time that a transaction is valid any thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage. \" 34. In the circumstances your kind attention is drawn to the recent ITAT Mumbai bench decision in ITA No. 1626/Mum/2022 in the case of MamtaLalit Jain (Annex-C). In this case too, the re-assessment was initiated on the basis of the report of Deputy Director of Income Tax (investigation) and nothing else. The said decision reads as... \"We further find that the Page 5 of 30 information received from investigation wing by the leaned assessing officer wide letter dated 6 th March 2019 was placed on record by the learned AR before us. Printed from counselvise.com 15 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. On perusal of the said letter, we find that the investigation wing had only mentioned that the learned assessing officer's advice to consider and examine all other relevant details and carry out his own independent enquiry and take necessary action as per law in respect of sale of shares of Gemstone Investments Limited made by the assessee. The said information nowhere gives any mandate/authority to the learned assessing officer to enable him to form a belief that income of the assessee had indeed escaped assessment. It is not in dispute that other than the said letter dated 6 March 2019 received from investigation wing and SEBI order, the learned assessing officer did not have any information or material which would enable him to form a belief that income of the assessee had escaped Assesmentwaranting reopening. Hence d'is made fishing case where opening has been made by the leamer AO to make fishing and roving enquiries which in our considered opinion is not permissible in law. Our view is further fortified by the decision of Honorable jurisdictional High Court in the case of PCIT V/s Rajesh D Nandu (HUF) reported in 261 taxman110 (BOM)(HN)..\" 35 It is submitted that the assessing officer, Ward 19(2)(2), Mumbai by not providing the required information and material not only violated the above stated Supreme Court decisions but also violated by not following Instruction No. 01/1022 dated 11th May 2022 issued by the Central Board Of Direct Taxes (Annex-D). It is stated because the said instruction in their para 7 and 8 has laid down the procedure to be followed by the assessing officer in the reassessment proceedings and has clearly stated that within 30 days, i.e. by 2nd June 2022 the assessing officer shall provide to the assessee is the information and material relied upon for issuance of extended reassessment notices. 36. It is submitted that all is our clear-cut contempt of court, that too Supreme Court and the regulatory authority which is again against Article 141 of the Indian Constitution 1949. (Annex-E) 37. The assessing officer vide letter dated 28th June 2022, (DIN: ITBA/COM/F/17/2022- 23/1043644473(1)), gave copies Printed from counselvise.com 16 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. of (a) a document titled Interim Verification Report, M/s StartreeDealcom Private Limited (4 pages) and (b) Investigation Report M/S Innocent Deal Trade Private Limited (2 pages). 38. Document titled Interim Verification Report, apart from having some unrelated information which is not concerning assessee LLP and/or any way related to partner who has introduced capital into the assessee LLP which is just being Incorporated. The said report itself that with the 1\" client whichis, \"a credible information was received by this office..... And whatever has been stated in the next 4 paragraphs are nothing but unrelated stuff to the assessee LLP. It describes what M/s Star Tree Dealcom Private Limited and some other 13 accounts has done without even taking the name of ShreehariVinimay Private Limited. 39. It also states that the funds are transferred through RTGS, and what is wrong in account being credited through RTGS is not known as it is a permitted instrument for faster and effective fund management introduced by reserve bank of India. It also says that there are many companies with which M/s Star Tree Dealcom Private Limited has dealt with or strike off or database company. What is meant by database company is a matter of imagination as the same word has never been heard before. 40. It is stated that strike off only means that some particular forms an annual returns prescribed by registrar of companies are not filed any time and there are provisions prevailing in the companies act 1956 and companies act 2013 to restore such companies under specific provisions. Just by stating that these companies are strike of does not mean anything incriminating, generally to the company related and specially to the assessee LLP in particular. 41. It is also stated that this report is made with some different purpose and has been shared with assessing officer stating further action to be taken after proper verification. It is also stated that these companies have no fixed assets or business or claimed any expense by way of salary, office expenses etc. It is also stated that 360° profiling and financial Printed from counselvise.com 17 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. analyses of these shell entities shall be shared with assessing officer along with the findings of enquiry that means that this is just an information and further enquiry, and analysis needs to be done. In other words, it cannot be blindly relied upon as what has been done by the assessing officer. It is submitted that 360° profiling and financial analysis as a shared with the assessing officer hasnot been shared with the assessee LLP which is again a violation of the Supreme Court ruling in the case of Union of India v/s Ashish Agrawal. It is hereby requested to provide us the copy of the same for filing our submission there on and also provide us an opportunity to cross examine the persons concerned to let the assessee LLP exercise the right best of upon by another Supreme Court decision in the case of Andaman Timber Industries (Civil Appeal Number 4228 of 2006). (Annex-F) 42. The said document named interim verification report also stated that the number of companies were registered at common address and also used the common email. However, on actual verification from the MCA website exactly opposite is found, in other words all the companies are having different address and different email IDs. 43 It is further stated that if using common address for registering company, then all companies belonging to world- famous Tata group will become bogus companies because they all are registered at one single address of Bombay House Mumbai, which is definitely not the case. So having common address does not imply or implicate any wrongdoing but it is only a presumption, which is premature in nature and therefore it is submitted that cannot be given any consideration. 44. It is stated in the said interim investigation report that a fund trail was prepared and placed on file to the tune of 63 crores approximately. The said report further states that such ultimate beneficiaries were identified on the basis of regular business activities, turnover, fixed assets, regular ITR filing status etc. who brought back their unaccounted money. This again is a futile and use less statement as 63 crores out of 6005 crores as stated on page 1 of the said report is just about Printed from counselvise.com 18 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. 1% of the total volume talked about. In other words, this is like exception and not the rule as 1% sample size is too small to conclude or prove anything. 5. It is stated that the list of the companies are shell/paper entities which were floated for the purpose of providing accommodation entries in the form of bogus unsecured loan, bogus share capital/premium, bogus billing, bogus LTC G/STCG etc. this is at best stated to be a presumption without any basis, any evidence, any confessional statement et cetera et cetera. 46. It is stated that there are 3 tables given on page 3 and 4 of the said report. Serial numbers in the said table stated as 2, 7, 1, 3, 6, 5, and 4. The column like Beneficiary, Pan, Jurisdiction are all striked out and only amount are visible. The total is stated to be 6,43,16,871/-. Same is on the next table on the page, which again has serial number stated as 1, 2, 3, 5, 4, 7, 9, 10. In this table too, Beneficiary, Pan, Jurisdiction are all striked out and only amount are visible. The total is always 1,38,50,000. The 3rd table shows the name of assessee from at serial No. 17 and Rs. 25 lakhs is stated in the amount column. It may be a possibility that someone is on 25 lakhs and that it has invested the same amount somewhere as this does not claim any other information. 47. Document title Investigation Report - it is not known that this investigation was done in whose case and what was the outcome of the said investigation. 48. It is also not known that what was the conclusion of the said investigation. 49. It is also not known that whose confession/statement (if at all any) are being misinterpreted in the present case as there are none provided to the assessee LLP for their submission and opportunity for cross verification. 50. The said investigation report has stated ITD analysis of the company is on the following few unrelated parameters Printed from counselvise.com 19 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. which has been stated as fixed assets, sale, rent paid, profit before tax. Stated that this is the absolutely wrong way of doing financial analysis as it is not considered share capital, net worth of the company, investments of the company etc. as just by comparing fixed assets sales and it is not possible to know the genuineness of the transaction is piecemeal comparison of small and relevant factors are not sufficient enough to conclude anything drastic like this, specially considering any transaction as sham or bogus transaction. It needs to be understood in the proper parlance and then analyze to see whether the said transaction is passing the test of time before passing any character and judgement or doing any character assassination, which please note. It is to the temptation which cannot be resisted to state that M/s Tata Motors Ltd had net loss of few decade ago and was denied a working capital facilities from IDBI and any judgement based on the said parameters leaders to a wrong conclusion. 51. There is a table on page 2 of the said investigation report which has justlisted name of the assessee with PAN and amount of the piece 3,80,00,000. There is no other information, basis, meaningful data justify on conclude any wrongdoing of search you, of the piece 3,80,00,000. It is also submitted that there is no evidence, or even an iota of evidence state that there is any exchange of cash to this effect as it being the most common way of accommodation entries of any nature. 52. It is submitted in respect of the records that these are just the report madeby one officer and to another for further verification. What the assessing officer has done or what officers at NFAC have done is not known to us. 53.It is also stated that there is complete absence of any confessional statement anyone or it has not been provided for submission by the assessee LLP. It is humbly stated at the cost of repetition that since the same are not provided to the assessee, simply there cannot be any alliance put on the said. 54. The stated that of an assessing officer can make any addition of any amount based on just internal note made by a random assessing officer in someother case without any enquiries, verification, inclusive remarks with 3d party Printed from counselvise.com 20 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. evidence and/or any incriminating evidence and statements on oath recorded. 55. It is submitted that there are no 3rd party statement provided to the assessee LLP and hence it can be easily and conclusively stated that there are no statements on which the Department as relying on. 56. There are no details for any exchange of cash between the parties as is the most vital piece of information in such transactions, so to say. 57 It is further stated that there are no 3rd party statements recorded or provided to the assessee to make submission thereupon and to cross examine the said persons. 58. It is again submitted that if these two reports are the only piece of evidence or material on which the Department is relying on to make a such huge addition than, it is submitted, that this addition simply cannot be made as this is just a piece of paper and nothing else: 59. It is very surprising that assessing officer has simply overlooked the fact that this amount is capital introduction by the partner and as per Supreme Court decision in the case of (2018) 96 taxman.com 469 (SC) Supreme Court of India in the case of Principal Commissioner of Income Tax V/s VaishnodeviRefoils&Solvex,. (Annex-G) the firm cannot be penalized for any illegal source or unproven credit as capital introduction by any of the partners. In Other words, in the event of assessing officer not satisfied with any credit or capital introduction by a partner in the firm, then the action should be taken at the end of the partner and not in the hands of firm. 60. Your kind attention is drawn to the decision reported in (2018) 96 taxman.com 469 (SC) Supreme Court of India in the case of Principal Commissioner of Income Tax V/s VaishnodeviRefoils&Solvex, given on July 9, 2018 by Learned judges MrRohintonFaliNariman and Ms. InduMalhotra. This decision was given in response to the special leave petition Printed from counselvise.com 21 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. filed by the revenue against the Gujarat High Court order in the same case reported in (2018) 89 Taxmann.com 80 (Guj) (Annex-H). 61. The above decision has clearly stated that if assessing officer was not convinced about creditworthiness of the partner who had made capital contribution, then enquiries had to be made at end of the partner and not against firm and hence SLP was dismissed. In the above- mentioned case, it is further stated that where assessing officer made addition to the assessee firms' income u/s 68 in respect of capital introduced by one partner of form, in view of the fact that amount received by assessee firm had been duly reflected in books of account maintained by concerned partner and he had also confirmed such contribution, impugned addition was to be deleted. 62.It is stated that the said issue was addressed and settled by the decision of Supreme Court of India in the case of Principal Commissioner of Income Tax V/s VaishnodeviRefoils&Solvex reported in (2018) 96 taxman.com 469 on July 9, 2018. The said decision was delivered by. ShriRohintonFaliNariman& Ms. InduMalhotra. The said matter was the special leave petition filed against the decision of the High Court of Gujarat reported in 89 Taxmann.com 80/253 taxman 135 (Gujarat). 63. In para 8 of the above referred Gujarat High Court order, the High Court observed that. \"in the facts of the present case, when the assessee has furnished the details with regard to the source of the capital introduced in the firm and the concerned partner has confirmed such contribution, the assessee had duly discharged the onus cast upon it. Thereafter, if the assessing officer was not convinced about the creditworthiness of the partner who had made the capital contribution, the enquiry had to be made at the end of the partner and not against the firm. The controversy involved in the present case therefore stands squarely covered by the decision ofthis court in the case of CIT v/s Pankaj Dyestuff Industry (In Income Tax Reference No. 241 of 1993).\" (Annex-1) Printed from counselvise.com 22 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. 64. In para 9 of the above referred Gujarat High Court order, the High Court has dismissed the appeal filed by the Department against the tribunals order giving full relief to the assessee. 65. From the reading of para 6 of the said order, it is understood that CIT appeal, ITAT as well as High Court all have ruled in favour of the assessee and had confirmed that in case the assessing officer had any doubts about the creditworthiness of the partner, he could have referred the matter to the assessing officer of the partner for making necessary verifications at his and. But no adverse inference could be drawn in the case of assessee being the partnership firm for the capital introduced by the firm when the partner had confirmed the capital contribution, and the Supreme Court has dismissed the SLP filed by the Department against the order of the High Court. So, in other words, this is the law of the land is decided by the Supreme Court that there cannot be any addition in the hands of the partnership firm on account of any doubt about creditworthiness of the said partner in case of any capital contribution by the partner when partner confirms that he has made such capital contribution. 66. The assessee, vide their submissions dated 4th July 2022 again challenge the validity of the said reassessment proceedings requested for the details forming part of materials and information relied upon by the assessing officer. However, the assessing officer passed the order u/s 148A (d) making this a fit case for issue of notice u/s 148 and issue of the said notice on 25th July 2022. 67. At the outset, it is stated that the said order u/s 148 A (d) order is passed without application of mind and extracting several bits and pieces from reasons of reopening issued at the time of old notice and annexure formingpart of approval u/s 151. From several letters and notices apart from assessee's submission on various dates. 68. In reply to the said notice u/s 148, the assessee LLP filed the return of income on 10/08/2022. Printed from counselvise.com 23 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. 69. In response to various notices issued from time to time the assessee LLP has made various submissions, the summary of which is as under: Letter seeking 2 complete details as per Supreme Court 70. It seems that the assessing officer at NFAC has not considered the submissions made by the assessee LLP as is evident from the show cause notice dated 1ª May 2023 received. 71. It is stated that during the year assessee from Avenue received 4,50,00,000/- from its partner M/s Shreehari Vinimay Private Limited. It is worthwhile noting that the firm is formed on 12 March 2013 itself. It's a new firm recently constituted. 72. The confirmation duly signed by both the parties, i.e. assessee firm and its partner is duly filed herewith. Kindly also filed enclosed herewith income tax return filed acknowledgement, balance sheet of the company, relevant bank statement highlighting the transaction of capital introduction into the assessee firm. (Annex-J, K, L & M) 73. It is stated that from para 2.1 on 2nd page of the show cause notice till last para of the 4th page of the said show cause notice, everything is copy paste from order u/s 148A(d) dated 25th July 2022. Since all the points mentioned therein are already dealt with in the submission elsewhere and before as well, it is not repeated in detailed here once again. 74. It is stated that what has been stated in these paragraphs, are not relevant or directly related to the assessee firm and/or its partner who has contributed initial capital in the firm. 75. There is no reference of introduction of capital by partner or even its name in the entire show cause notice which please note 76. Last paragraph on page 4 of the said show cause notice reads as \"Subsequently in pursuance to the order of the Hon'ble Supreme Court dated 4 May 2022 In the case of Union of India V/s AshishAgrawal (2022 SCC Online SC 543), the Printed from counselvise.com 24 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. assessee wide DIN & letter number. ITBA/COM/F/17/2022- 23/1043258852 (1) dated 27 may 2022 allowing the assessee 2 weeks time to submit its reply was provided with copy of reasons recorded prior to the issue of the notice.... In respect of this, it is stated that the said letter was never issued to the assessee firm as what was issued to the assessee firm was having DIN & letter number: (ITBA/COM/F/17/202- 23/1043208973 (1)). Now the assessing officer at NFAC has made a mistake and mixed the facts of other case with that of the assessee firm. This is not the only instance of such blunder at 1 of many as stated in the later part of the submission. 77. Last para in.2.1, which happens to be on page 5 of the show cause notice reads as \".... As it is already stated that the other legal consequences on the criminal conspiracy, regarding the transfer of the property in question cannot be an hindrance to the assessment proceedings, the assessee should have complied property. The application of section 50 C of the act is justified as there is a difference of Rs. 9.29.66,000/- between sales consideration and stamp duty valuation as evident from the relevant documents. Being one fourth owner of the said property, the assessee is liable to Rs. 2,32.41.500/- as deemed income u/s 50 C of the income tax act 1961. In the absence of any relevant submission regarding LTCG the was emerged from the sale consideration, 1/4 of the total sales consideration of 5.20.10,000/- should be treated as LTCG as applicable as per the provisions of the act. With respect to this, it is stated that this is again one more example of the blunder by copy pasting or mixing of cases. It is stated that this entire para is irrelevant as there are no sale transactions being discussed here and therefore there is no 50 C, no stamp duty valuation, no capital gain, no deemed income u/s 50 C, and no long-term capital gain as discussed in that para as well. 78. There are 2.4 on page 6 as stated that..... Therefore, based on the about discussion, you have to explain, why 4,35,00,000/- for the assessment year 2014-15 should not be Printed from counselvise.com 25 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. treated as assessed income from other fictitious sources u/s 69 of the income tax act 1961....?\" There, table showing the same figures in a tabular form, which states \"variation in respect to addition as per para 2.4 (i) amounting to 4,35,00,000/- \"AND \"variation in respect to addition as per para 2.4 (ii) amounting to 4,35,00,000/-\". It is stated that there are no para 2.4 (i) and para 2.4(ii) in the show cause notice, which is in another example of carelessness and oversight on the part of NFAC. 79. As far as the firm is concerned, it has received the capital introduction by its partner who is known to the firm since its inception and therefore under any circumstances, it cannot be said that from has any doubts about its partners source of capital introduction. 80. It is stated that the assessee company specifically denied having done any business with Calcutta-based entry operator ShriArun, Khemka. 81. It is stated that the Department has not given any 3rd party information, statement, confirmation, or confession of any nature whatsoever other than their own interim verification report, investigation report, fund trail etc. These are all prepared by income tax department and no 3rd party statements along with any direct or indirect evidence is provided to the assessee for crores verification purposes. 82.IT is stated that what ever is stated in page 15 to 22 of the Assessment order, it came to light for the first time in Assessment order and never before was provided to the assessee firm for its submissions. 83. It is stated that the assessee firm specifically denies any wrongdoings and seek the opportunity to cross verify and cross examine all persons in this connection. It is stated that it'll be absolutely illegal on the part of the Department to provide any more such illicit evidence to prove its point. 84. It is submitted that just because the companies name is struck off from MCA data, it does not mean the company Printed from counselvise.com 26 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. ceased to exist. It does happen many times that some company failed to file required annual returns on MCA website on various grounds. That does not mean the company has also ceased to exist and it becomes shell company or bogus company. One example of an auditor refused to sign the balance sheet of the company and not giving N.O.C to another auditor to do the same can also result into non-of balance sheet or annual returns on MCA site resulting to striking off the companies name. 85. It's a common practice to save money on premises rent or capital value and to register several companies at one common address. This has been the practice of Tata group since inception and just by having number of offices at one common address does not make the company bogus company. 86. In the interest of natural justice, you are requested to follow the Supreme Courtin the case of Andaman Timber industries (Civil Appeal Number 4228 of 2006) and High Court of Bombay in the case of R.W. Promotions Private Limited (ITA No. 1489 of 2013) (Annex-F & N) and provide us the opportunity to cross examination. Submission on 69A Applicability.- 87. Section 69 A of Income Tax Act, 1961 reads as \"Where in any financial year the assessee is found to be the owner of any money, bullion, jewelleryor other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. 88. From the above reading, it is evident that provisions of section 69A can be made applicable when the Printed from counselvise.com 27 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. (i) assessee is found owner of any money, bullion, jewellery or any valuable article and (ii) such asset is not recorded in the books of accounts (iii) of which the assessee offers no explanation about the nature and source of acquisition (iv) or the explanation offered by him, is not satisfactory and in the opinion of the assessing officer. 89. In simple words, it is stated that the assessee is not found owner of any money, bullion, jewellery or any valuable article which are not recorded in the books of accounts. In other words, in the absence of any asset found namely money, bullion, jewellery, any valuable article found, there should not be applicability of section 69A. 90. In simple words, since there is no asset found, the provisions about explanation offered or satisfactory explanation offered is not operative at all. 91. It is stated that in the present case, therefore provisions of section 69 A cannot be made applicable. So kindly delete the addition made to the total income and oblige. So, in a nutshell, (a) the entire assessment needs to be scrapped on account of legality of the issue of assessment originated from the issue of Notice issued after 31.3.2021 for assessment year 2014-15, (b) with prejudice to the above, even if the assessment procedure is held to be legal binding on the assessee firm, based on the AshishAgarwal decision of Supreme Court, it is submitted that assessing officer has not followed the direction given in the said Supreme Court decision and also the guidelines prescribed by CBDT instructions issued thereafter, (3) Capital introduction by a partner cannot be challenged in the hands of the assessee firm in view of the Gujarat High Court decision in the case of VaishnodeviRefoils, confirmed by Supreme Court and reported in (2018) 96 taxmann.com 96 (SC), which needs to be challenged if at all in the hands of the respective partner and not the firm, (d) none of the conditions of section 69 A are fulfilled and (e) various Printed from counselvise.com 28 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. other observations resulting into blunders by the assessing officer, and therefore the seed assessment is invalid AB initio and therefore the entire edition needs to be deleted.\" 5. We have heard the counsels for both the parties, perused the material placed on record, judgements cited before us and also the orders passed by the revenue authorities. From the records, we noticed that the assessee being the LLP had filed its return of income for the year under consideration on 25.09.2014 thereby declaring the income as Nil. However, the AO was in possession of information that the assessee was ultimate beneficiary of an amount of Rs. 4,35,00,000, which was routed from bank accounts of three shell companies i.e M/s. Shreehari Vinimay P Ltd., M/s. Startree Dealcom P Ltd, various shall companies therefore after analysing the financials of these companies, the AO was of the view that the amount of 4,35,00,000 had escaped assessment and thus initiated the proceedings for reassessment u/s 147 of the Act and made addition u/s 69A of the Act. 6. After analysing the entire documents placed on record, we found that the provisions of section 69A of the Act is not attracted in the present case as the provisions of section 69A can only be applied when the assessee is found to be owner of any money etc, which inter alia is not Printed from counselvise.com 29 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. recorded in books of accounts of the assessee. The provisions of section 69A are reproduced here in below: 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the incomeof the assessee for such financial year.\" 7. However, after analysing the balance sheet of the assessee, written submissions we found that the amount of Rs. 4,35,00,000/- question was credited in the name of SVPL in the books of accounts of the assessee and or duly shown in the balance sheet of the assessee. The copy of accounts of SVPL in the books of the assessee as confirmed by SVPL were also filed before the AO. From the copy of accounts, we noticed that the amount was transferred from the bank account of SVPL to the bank account of the assessee maintained with HDFC bank and having A/c. No. 12017630000197 and having closing balance of Rs.1,24,77,528/-. This balance is also appearing in balance sheet of the assessee as on 31st March 2014. Since the above amount is found recorded in the books of accounts of the assessee, therefore, the basic condition for making addition u/s 69A of the Act is not fulfilled. Printed from counselvise.com 30 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. 8. In this regard, no contrary arguments have been put forth before us. We further noticed that even with regard to the change of section under which this addition could have been made is not within the powers and ambit of Ld. CIT(A) as has been held by the Coordinate Bench of ITAT in the case of Smt. Srikar Jayalakshmi, Doshi Vs ITO ITA No. 20/CHNY/2021, and the relevant portion of the said decision is reproduced here in below: \"7. Both the sides have been heard, perused the materials available on record and gone through the orders of authorities below including paper book filed by the assessee. In this case, the Assessing Officer made addition of .6,00,000/- as unexplained credit. However, the Assessing Officer has not mentioned the relevant section under which, the addition was made, but \"unexplained credit\" comes under section 68 of the Act. In the appellate order, in page No. 7, para (v), the Id. CIT(A) has noted that \"However, I am also in agreement with the appellant that the provisions of section 68 are not applicable to the appellant\". Therefore, the Id. CIT(A) treated the addition of.6,00,000/- as unexplained money under section 69A of the Act and confirmed the addition. Section 68 of the Act deals with \"unexplained Credit\" in the books of the assessee and section 69A of the Act deals with \"unexplained money, bullion, jewellery or other valuable article\". Both are entirely different. Though the Assessing Officer has not mentioned the section 68 of the At in his order, the very fact that he calls it \"unexplained credit\" and not \"unexplained money\" as done by the Id. CIT(A), while he invoked section 69A of the Act, it proves that the Assessing Officer invoked section 68 of the Act. I find merit into the contention of the Id. Counsel for the assessee that there is no power conferred upon the Id. CIT(A) to assess a particular item Printed from counselvise.com 31 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. under different provision of the Act what the Assessing Officer had done without giving a specific notice to the assessee regarding such action. I am of the considered view that law does not permit for such change of provision of law. As per section 250 of the Act, the Id. CIT(A) is empowered to make further inquiry as he thinks fit or may direct the Assessing Officer to make further inquiry and report to the Id. CIT(A). As per section 251(1)(a) of the Act, in appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment, but there is no such power provided by the law that Id. CIT(A) could change the provision of law qua the item of which assessment was made. Therefore, in the absence of such power, learned CIT(Appeals) could not have treated the addition made under section 69A of the Act. Therefore, the addition made by the Id. CIT(A) under section 69A of the Act is liable to be deleted.\" 9. On the above legal proposition, as discussed by us above, no contrary judgement or arguments were put forth by the revenue. 10. Apart from above, we are also of the view that the money received by the assessee was on account of capital introduction by SVPL as proved and substantiated it on record by the assessee therefore, in our view the addition if any ought to have been made in the hands of partner i.e. SVPL and not in the hands of the assessee. In this regard we draw strength from the decision of Hon’ble Gujarat High Court in the case of PCIT Vs Vaishnodevi Re-foils and Solvex, ITR No. 846/2017, whereas it was held as under: 5. From the facts as emerging from the record, it appears that during the financial year 2009- 10, Mr.KantilalJayramdas Thakkar, one of the partners of the assessee firm had Printed from counselvise.com 32 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. introduced net capital of Rs. 1,05,46, 160/- in the firm. The Assessing Officer called upon the assessee to prove the source of capital introduced by Mr.KantilalJayramdas Thakkar and show cause as to why such sum should not be treated as cash credit under section 68 of the Act. Before the Assessing Officer, the assessee furnished the contra confirmation of the said partner who was assessed to tax at Ward-2 of Palanpur B.K. Range and was filing the return of income regularly. Copy of acknowledgement receipt of ITR filed by Mr. KantilalJayramdas Thakkar was also furnished along with the audit report of the said financial year to prove that the assessee firm had received the fund from its partner ShriKantilalJayramdas Thakkar, who had also shown in his books of accounts that such amount had been invested by him. The Assessing Officer, however, was of the view that the credit worthiness of the partner who introduced the capital had not been proved by the assessee and made the addition by invoking the provisions of section 68 of the Act. 6. The assessee carried the matter in appeal before the Commissioner (Appeals), who noted that from the audited balance-sheet of the partner in his books of accounts, the investments in the partnership firm were duly reflected. In so far as the source of capital contribution is concerned, the partner had his own capital, secured and unsecured loans besides liability. The Assessing Officer had not given any adverse finding about the said sources and their genuineness. According to the Commissioner (Appeals), in case the Assessing Officer had any doubts about the credit worthiness of the partner, he could have referred the matter to the Assessing Officer of the partner for making necessary verifications at his end. But no adverse inference could be drawn in the case of the assessee being the partnership firm, for the capital introduced by the partner when the partner had confirmed the capital contribution. 7. In revenue's appeal, the Tribunal placed reliance upon the decision of this High Court in Pankaj Dyestuff Industries rendered in Income Tax Reference No.241 of 1993 for the proposition that no addition can be made with regard to the Printed from counselvise.com 33 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. partner's capital introduction in the hands of the partnership firm and dismissed the appeal. 8. In the facts of the present case, when the assessee has furnished the details with regard to the source of the capital introduced in the firm and the concerned partner had confirmed such contribution, the assessee had duly discharged the onus cast upon it. Thereafter, if the Assessing Officer was not convinced about the creditworthiness of the partner who had made the capital contribution, the inquiry had to be made at the end of the partner and not against the firm. The controversy involved in the present case, therefore, stands squarely covered by the decision of this court in the case of Commissioner of Income-tax v. Pankaj Dyestuff Industries, rendered on 6.7.2005 in Income Tax ReferenceNo.241 of 1993. 9. In the above view of the matter, when the Tribunal has merely applied the decision of the jurisdictional High Court to the facts of the case, it cannot be said that the impugned order suffers from any legal infirmity so as to give rise to any question of law, much less, a substantial question of law warranting interference. The appeal, therefore, fails and is, accordingly, summarily dismissed.\" 11. It is important to mention here that the said decision has also been upheld by Hon’ble Supreme Court while dismissing the SLP filed by the revenue and in this regard no contrary arguments or judgements have been referred to by the DR. 12. Even recently, the Coordinate Bench of ITAT Ahmadabad in the case of ITO Vs Samvatt Properties LLP, while lying upon the decision of Hon’ble Supreme Court In the case of Vaishno Devi (supra) has held that in case the creditworthiness of the partners is not proved then in that eventuality the additions if any had to be Printed from counselvise.com 34 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. made in the case of partners and not in the case of the firm. The relevant part of the decision is reproduced here in below: 7. We have given our thoughtful consideration and perused the materials available on record. The Ld. CIT(A) had already extracted Jurisdictional High Court judgment in his order which is extracted at Para 4 above When the Assessing Officer is of the view that creditworthiness of Partners who introduced capital had not been proved in that case, enquiry and additions had to be made in the hands of the Partners and not against Partnership firm. This viewof Gujarat High Court was confirmed by Hon'ble Supreme Court by dismissing the SLP filed by the Revenue reported in 96 taxmann.com 469. Thus the findings arrived by Ld. CIT(A) does not require any interference and further Revenue could not place any materials in support of its ground. 7.1. Respectfully following the Jurisdictional High Court judgment, we do not find any merits in the grounds raised by the Revenue. Thus the appeal filed by the Revenue is liable to be dismissed. 8. In the result, the appeal filed by the Revenue is hereby dismissed.\" 13. The facts discussed and narrated by us above are undisputed as during the assessment as well as appellate proceedings, the assessee had filed and relied upon the copy of partnership dead, copy of bank account of SVPL with ICICI bank and Indian overseas bank for the relevant period, which reflects payments in favour of assessee for an amount of Rs. 4,35,00,000/- is appearing in debit side of this bank account. The said amount is also appearing Printed from counselvise.com 35 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. in credit side of the bank account of the assessee maintained with HDFC. Copies of both bank account of SVPL with ICICI bank and Indian overseas bank and also the copies of bank account of the assessee are already on the record. Therefore, considering the overall facts and legal proposition as discussed by us and also considering the decisions of the Coordinate Bench of ITAT, Hon’ble Gujarat High Court and Hon’ble Supreme Court, we found that no additions could have been made under the above circumstances in the case of assessee. Therefore the same was rightly deleted by Ld. CIT(A). 14. No new facts or circumstances have been placed on record in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, we see no reasons to interfere into or to deviate from the lawful findings so recorded by Ld. CIT(A). Hence, these grounds raised by the revenue stands dismissed. 15. In the result the appeal filed by the revenue stands dismissed. Order pronounced in the open court on 04.08.2025 Sd/- Sd/- (GIRISH AGRAWAL) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 04/08/2025 Printed from counselvise.com 36 ITA No.6578/Mum/2024 Moradiay Gems LLP., Mumbai. KRK, PS आदेश की \bितिलिप अ\u000eेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. \u000eथ / The Respondent. 3. संबंिधत आयकर आयु\u0019 / The CIT(A) 4. आयकर आयु\u0019(अपील) / Concerned CIT 5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण,मु\u0003बई/ DR, ITAT, Mumbai 6. गाड फाईल / Guard file. आदेशानुसार/BY ORDER, स\u000eािपत ित //True Copy// 1. उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु\u0003बई मु\u0003बई मु\u0003बई मु\u0003बई / ITAT, Mumbai Printed from counselvise.com "