REKHA MANISH KAPADIA ,MUMBAI V. ACIT-CC-8(2), MUMBAI

ITA 280/MUM/2025

AI Insights

The case involves multiple appeals by Manish Kantilal Kapadia and Rekha Manish Kapadia against the orders of the Commissioner of Income-tax (Appeals) concerning the assessment years 2014-15 to 2019-20. The primary issues revolved around the rejection of the books of account and the estimation of income based on the alleged accommodation entries. The Income Tax Appellate Tribunal (ITAT) found that the business activities were not genuine and were used to inflate turnover through paper transactions. The tribunal also noted that the appellants did not provide sufficient documentary evidence to substantiate their claims of genuine business activities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789761 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 16-01-2025
• Other Referred Cases: Shri Anil Kumar vs. ITO, Shri Sanjay Kumar Chaudhary vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UMA SHANKAR PRASAD
• Keywords: Business income; Additional evidence; Corroborative evidences; Unexplained cash credit; Rejection of books of accounts; Bogus purchase; Principle of natural justice; Accommodation entries; Bogus
• Section: 144; 142(1); 132; 153A; 68; 145

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA Nos. 264, 318 to 322/MUM/2025 Assessment Years: 2014-15 to 2019-2020 Manish Kantilal Kapadia, 301-B Pleasant Park, CHSL, Pedder Road, Mumbai-400026. Vs. ACIT-CC-8(2), Room No. 658, 6th floor, Aayakar Bhavan, Mumbai-400020. PAN NO. AAPPK 5676 H Appellant Respondent ITA Nos. 263, 280 to 284/MUM/2025 Assessment Years: 2014-15 to 2019-2020 Rekha Manish Kapadia 301-B Pleasant Park, CHSL, Pedder Road, Mumbai-400026. Vs. ACIT-CC-8(2), Room No. 658, 6th floor, Aayakar Bhavan, Mumbai-400020. PAN NO. AAPPK 5677 G Appellant Respondent Assessee by : None Revenue by : Mr. Uma Shankar Prasad, CIT-DR Date of Hearing : 06/11/2025 Date of pronouncement : 26/11/2025 Printed from counselvise.com PER BENCH These appeals by the captioned assessee(s) arise from separate but contemporaneous orders passed by the Learned Commissioner of Income-tax (Appeals) Ld. CIT(A)”], pertaining to assessment years 2014 respectively. Inasmuch as the issues involved in all these appeals are common, they were heard together, and are being disposed of by this consolidated order for the sake of convenience interest of procedural uniformity 2. We shall first adv Kapadia for assessment year 2014 lead matter. It was fairly agreed by both the parties that the adjudication in the said appeal would, disposal of the remaini and circumstances being substantially identical, barring variations in the quantum of additions. 2.1 The grounds raised by the in appeal for assessment year 2014 1. Against Addition of Rs. 2.63 Crores including Interest of1,65,49,942 Rs.4.10 Lakhs Whether on the facts and circumstances of the case and in law, the Learned Commiss estimated the income of the appellant @ 3% for total turnover of Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 ORDER These appeals by the captioned assessee(s) arise from separate but contemporaneous orders passed by the Learned Commissioner tax (Appeals)–50, Mumbai [hereinafter referred to as “the Ld. CIT(A)”], pertaining to assessment years 2014- respectively. Inasmuch as the issues involved in all these appeals are common, they were heard together, and are being disposed of by this consolidated order for the sake of convenience interest of procedural uniformity. We shall first advert to the appeal of Smt. Rekha Manish for assessment year 2014-15, which was taken up as the lead matter. It was fairly agreed by both the parties that the adjudication in the said appeal would, mutatis mutandis disposal of the remaining appeals as well, as the underlying facts and circumstances being substantially identical, barring variations in the quantum of additions. The grounds raised by the assessee in Rekha Manish Kapadia in appeal for assessment year 2014-15 are reproduced as under: Against Addition of Rs. 2.63 Crores including Interest of1,65,49,942 Rs.4.10 Lakhs Whether on the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeal) has wrongly estimated the income of the appellant @ 3% for total turnover of Manish Kantilal Kapadia & Rekha Manish Kapadia 2 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 These appeals by the captioned assessee(s) arise from separate but contemporaneous orders passed by the Learned Commissioner 50, Mumbai [hereinafter referred to as “the -15 to 2019-20, respectively. Inasmuch as the issues involved in all these appeals are common, they were heard together, and are being disposed of by this consolidated order for the sake of convenience and in the Smt. Rekha Manish 15, which was taken up as the lead matter. It was fairly agreed by both the parties that the mutatis mutandis, govern the ng appeals as well, as the underlying facts and circumstances being substantially identical, barring variations in Rekha Manish Kapadia 15 are reproduced as under: Against Addition of Rs. 2.63 Crores including Interest Whether on the facts and circumstances of the case and in law, the ioner of Income Tax (Appeal) has wrongly estimated the income of the appellant @ 3% for total turnover of Printed from counselvise.com Purchase and Sales as reported in profit and loss account, prepared from Audited Book of Accounts amounting to Rs.51,78,40,543/ though the alleged tur Group Companies' was Rs.12,81,11,995/ year, which is against the natural justice. Further Ld CIT(A) has wrongly confirmed the Interest Income of 4,10,010/- added by DCIT as operational inco 2. Whether on the facts and circumstances of the case and in la the Learned Commissioner of Income Tax (Appeal) has erre in allowing the appeal partly on assumption bases and not or facts. 3. Whether on the facts and circumstances of the case and in la learned Commissioner of Income Tax (Appeal) has erred upholding the action of learned assessing officer of treating the business activities as accommodation entry without appreciating the submission / documentary evidence provide to prove the genuineness of all the Audited purchase and sale submitted by appellant. 4. Whether on the facts and circumstances of the case and in la the learned Commissioner of income Tax (Appeal) has erred not allowing the assessee's appeal for disapproving the learn Assessi officer's view of rejecting the Books appellant by invoking the provision of sectior 145 (3) of the income tax Act, 1961. 5. The Learned Commissioner of Income Tax (Appeal) has again erred in allowing the respondent made an add 2,75,000/-/- Balance Sheet of the appellant prepared from the books of accounts which were rejected u/s 145(3) of the Act. The said loan was availed from my husband Manish Kapadia [(PAN which was received and credited in Books of Accounts prior 01.04.2013 and is also appearing in the books of accounts in my husband Manish Kapadia as Loans 3. Briefly stated, facts of the case are that assessment year, the assessee was proprietor of M/s RM Textiles. The assessee claimed to have been engaged in the trading of textile products. A search u/s 132 of the Income ‘the Act’) was carried out on 06.11.2019 at the Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 Purchase and Sales as reported in profit and loss account, prepared from Audited Book of Accounts amounting to Rs.51,78,40,543/ though the alleged turnover of Sales and Purchase with 'One World Group Companies' was Rs.12,81,11,995/-, during the captioned year, which is against the natural justice. Further Ld CIT(A) has wrongly confirmed the Interest Income of added by DCIT as operational income. Whether on the facts and circumstances of the case and in la the Learned Commissioner of Income Tax (Appeal) has erre in allowing the appeal partly on assumption bases and not or facts. Whether on the facts and circumstances of the case and in la learned Commissioner of Income Tax (Appeal) has erred upholding the action of learned assessing officer of treating the business activities as accommodation entry without appreciating the submission / documentary evidence provide to prove the ess of all the Audited purchase and sale submitted by Whether on the facts and circumstances of the case and in la the learned Commissioner of income Tax (Appeal) has erred not allowing the assessee's appeal for disapproving the learn Assessi officer's view of rejecting the Books of Accounts and Income of appellant by invoking the provision of sectior 145 (3) of the income tax Act, 1961. The Learned Commissioner of Income Tax (Appeal) has again erred in allowing the respondent made an addition u/s. 68 of Rs. in respect of unsecured loan appearing in audited Balance Sheet of the appellant prepared from the books of accounts which were rejected u/s 145(3) of the Act. The said loan was availed from my husband Manish Kapadia [(PAN: AAPPK5676H)] which was received and credited in Books of Accounts prior 01.04.2013 and is also appearing in the books of accounts in my husband Manish Kapadia as Loans & Advances. Briefly stated, facts of the case are that during relevant the assessee was proprietor of M/s RM Textiles. The assessee claimed to have been engaged in the trading of textile . A search u/s 132 of the Income-tax Act, 1961 (in short ‘the Act’) was carried out on 06.11.2019 at the premises of a “ Manish Kantilal Kapadia & Rekha Manish Kapadia 3 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 Purchase and Sales as reported in profit and loss account, prepared from Audited Book of Accounts amounting to Rs.51,78,40,543/ nover of Sales and Purchase with 'One World , during the captioned Further Ld CIT(A) has wrongly confirmed the Interest Income of Whether on the facts and circumstances of the case and in la the Learned Commissioner of Income Tax (Appeal) has erre in allowing the appeal partly on assumption bases and not or facts. Whether on the facts and circumstances of the case and in la the learned Commissioner of Income Tax (Appeal) has erred upholding the action of learned assessing officer of treating the business activities as accommodation entry without appreciating the submission / documentary evidence provide to prove the ess of all the Audited purchase and sale submitted by Whether on the facts and circumstances of the case and in la the learned Commissioner of income Tax (Appeal) has erred not allowing the assessee's appeal for disapproving the learn Assessing and Income of appellant by invoking the provision of sectior 145 (3) of the income The Learned Commissioner of Income Tax (Appeal) has again ition u/s. 68 of Rs. in respect of unsecured loan appearing in audited Balance Sheet of the appellant prepared from the books of accounts which were rejected u/s 145(3) of the Act. The said loan was : AAPPK5676H)] which was received and credited in Books of Accounts prior 01.04.2013 and is also appearing in the books of accounts in my during relevant the assessee was proprietor of M/s RM Textiles. The assessee claimed to have been engaged in the trading of textile tax Act, 1961 (in short premises of a “One Printed from counselvise.com World Group” entities along with residential and office premises of the assessee. 3.1 Pursuant to the said search action, a notice under section 153A of the Act was issued on 24.03.2021. In response thereto, the assessee filed her return of income on 23.0 income of ₹8,61,740/ of the Act was issued and served on 24.01.2021, followed by multiple statutory notices under section 142(1) calling for explanations and supporting evidences, parti allegedly bogus purchase and sales transactions unearthed during the search. 3.2 As the assessee did not furnish any response to the aforementioned notices, the Assessing Officer issued a final show cause notice dated 14.09.2021 requ why the assessment should not be framed ex parte. In the continued absence of compliance, the Assessing Officer proceeded to complete the assessment section 144 of the Act on 28.09.2021, d at ₹2,66,61,017/-. 3.3 In the assessment, the Assessing Officer held that the transactions recorded by the assessee represented accommodation entries in respect of bogus purchases and sales. Invoking section 145(3) of the Act, he rejected the books of account and, treating the Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 entities along with residential and office premises of Pursuant to the said search action, a notice under section 153A of the Act was issued on 24.03.2021. In response thereto, the assessee filed her return of income on 23.03.2021 declaring a total 8,61,740/-. Subsequently, a notice under section 143(2) of the Act was issued and served on 24.01.2021, followed by multiple statutory notices under section 142(1) calling for explanations and supporting evidences, particularly concerning the allegedly bogus purchase and sales transactions unearthed during As the assessee did not furnish any response to the aforementioned notices, the Assessing Officer issued a final show cause notice dated 14.09.2021 requiring the assessee to explain why the assessment should not be framed ex parte. In the continued absence of compliance, the Assessing Officer proceeded to complete the assessment ex parte under section 153A read with section 144 of the Act on 28.09.2021, determining the total income In the assessment, the Assessing Officer held that the transactions recorded by the assessee represented accommodation entries in respect of bogus purchases and sales. Invoking section e rejected the books of account and, treating the Manish Kantilal Kapadia & Rekha Manish Kapadia 4 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 entities along with residential and office premises of Pursuant to the said search action, a notice under section 153A of the Act was issued on 24.03.2021. In response thereto, the 3.2021 declaring a total . Subsequently, a notice under section 143(2) of the Act was issued and served on 24.01.2021, followed by multiple statutory notices under section 142(1) calling for cularly concerning the allegedly bogus purchase and sales transactions unearthed during As the assessee did not furnish any response to the aforementioned notices, the Assessing Officer issued a final show- iring the assessee to explain why the assessment should not be framed ex parte. In the continued absence of compliance, the Assessing Officer proceeded under section 153A read with etermining the total income In the assessment, the Assessing Officer held that the transactions recorded by the assessee represented accommodation entries in respect of bogus purchases and sales. Invoking section e rejected the books of account and, treating the Printed from counselvise.com assessee as an entry operator, estimated commission income at 5% of the declared turnover of addition of ₹2,58,92,027/ addition of ₹2,75,000/ unsecured loan reflected in the books as unexplained cash credit. 4. Before the Ld. CIT(A), the assessee contended that complete books of account pertaining to the textile business had indeed been produced, though the same were not duly considered by the Assessing Officer. It was submitted that the assessee had been engaged in the business of textile trading since 2010 with the assistance of her husband. However, owing to serious health issues faced by her husband from financial year 2013 operational control of the business was handed over to one Shri Hemendra Kapadia, a family acquaintance who was already active in textile trading. According to the assessee, Shri Kapadia managed the business under the existing trade name, upon assuring her husband a monthly return of approximately permitting the continued use of the proprietorship concerns belonging to the assessee, her husband, and their HUF. 4.1 It was further submitted tha conducted in the case of the One World Group entities and Shri Hemendra Kapadia, a search was also executed at the assessee’s premises. During the search of One World Group companies, the Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 assessee as an entry operator, estimated commission income at 5% of the declared turnover of ₹51,78,40,543/-, resulting in an 2,58,92,027/-. The Assessing Officer further made an ,75,000/- under section 68 of the Act, treating the unsecured loan reflected in the books as unexplained cash credit. Before the Ld. CIT(A), the assessee contended that complete books of account pertaining to the textile business had indeed been d, though the same were not duly considered by the Assessing Officer. It was submitted that the assessee had been engaged in the business of textile trading since 2010 with the assistance of her husband. However, owing to serious health issues husband from financial year 2013-14 onwards, the operational control of the business was handed over to one Shri Hemendra Kapadia, a family acquaintance who was already active in textile trading. According to the assessee, Shri Kapadia managed s under the existing trade name, upon assuring her husband a monthly return of approximately ₹ permitting the continued use of the proprietorship concerns belonging to the assessee, her husband, and their HUF. It was further submitted that, simultaneous with the search conducted in the case of the One World Group entities and Shri Hemendra Kapadia, a search was also executed at the assessee’s premises. During the search of One World Group companies, the Manish Kantilal Kapadia & Rekha Manish Kapadia 5 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 assessee as an entry operator, estimated commission income at 5% , resulting in an . The Assessing Officer further made an under section 68 of the Act, treating the unsecured loan reflected in the books as unexplained cash credit. Before the Ld. CIT(A), the assessee contended that complete books of account pertaining to the textile business had indeed been d, though the same were not duly considered by the Assessing Officer. It was submitted that the assessee had been engaged in the business of textile trading since 2010 with the assistance of her husband. However, owing to serious health issues 14 onwards, the operational control of the business was handed over to one Shri Hemendra Kapadia, a family acquaintance who was already active in textile trading. According to the assessee, Shri Kapadia managed s under the existing trade name, upon assuring her ₹1,20,000/- for permitting the continued use of the proprietorship concerns belonging to the assessee, her husband, and their HUF. t, simultaneous with the search conducted in the case of the One World Group entities and Shri Hemendra Kapadia, a search was also executed at the assessee’s premises. During the search of One World Group companies, the Printed from counselvise.com statement of Shri Urvil Jani, Direct oath, wherein he admitted that the group had artificially inflated its turnover by engaging in paper transactions with entities owned or controlled by Shri Hemendra Kapadia, including the assessee’s concern. 4.2 The assessee contended that the entire addition made by the Assessing Officer rested exclusively upon the statements of Shri Urvil Jani and Shri Hemendra Kapadia, without affording the assessee any meaningful opportunity of rebuttal. It was further urged that the swo explaining the arrangement under which Shri Kapadia was permitted to run the business in return for fixed monthly profits, was disregarded without cogent reasons. 4.3 Without prejudice, it was also argued that, even business was treated as an accommodation rate of commission could not reasonably exceed 0.05% to 0.5 paisa on turnover. 4.4 The Ld. CIT(A), after considering the assessment order, the submissions of the assessee, and the m course of search, noted that the assessee’s proprietary concern, M/s R M Textiles, as well as related concerns of her husband, had substantial transactions with entities of the One World Group. During the search on both the asse Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 statement of Shri Urvil Jani, Director of the group, was recorded on oath, wherein he admitted that the group had artificially inflated its turnover by engaging in paper transactions with entities owned or controlled by Shri Hemendra Kapadia, including the assessee’s e contended that the entire addition made by the Assessing Officer rested exclusively upon the statements of Shri Urvil Jani and Shri Hemendra Kapadia, without affording the assessee any meaningful opportunity of rebuttal. It was further urged that the sworn statement of the assessee’s husband, explaining the arrangement under which Shri Kapadia was permitted to run the business in return for fixed monthly profits, was disregarded without cogent reasons. Without prejudice, it was also argued that, even business was treated as an accommodation-entry operation, the rate of commission could not reasonably exceed 0.05% to 0.5 paisa The Ld. CIT(A), after considering the assessment order, the submissions of the assessee, and the material gathered during the course of search, noted that the assessee’s proprietary concern, M/s R M Textiles, as well as related concerns of her husband, had substantial transactions with entities of the One World Group. During the search on both the assessee and her husband, no Manish Kantilal Kapadia & Rekha Manish Kapadia 6 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 or of the group, was recorded on oath, wherein he admitted that the group had artificially inflated its turnover by engaging in paper transactions with entities owned or controlled by Shri Hemendra Kapadia, including the assessee’s e contended that the entire addition made by the Assessing Officer rested exclusively upon the statements of Shri Urvil Jani and Shri Hemendra Kapadia, without affording the assessee any meaningful opportunity of rebuttal. It was further rn statement of the assessee’s husband, explaining the arrangement under which Shri Kapadia was permitted to run the business in return for fixed monthly profits, Without prejudice, it was also argued that, even assuming the entry operation, the rate of commission could not reasonably exceed 0.05% to 0.5 paisa The Ld. CIT(A), after considering the assessment order, the aterial gathered during the course of search, noted that the assessee’s proprietary concern, M/s R M Textiles, as well as related concerns of her husband, had substantial transactions with entities of the One World Group. ssee and her husband, no Printed from counselvise.com documentary evidence supporting actual business activity records of stock, transportation, delivery, or party and sales details—was found. On the contrary, statements recorded under section 132(4) from the ass Kapadia, and from Shri Hemendra Kapadia established that the business concerns were effectively controlled and managed by Shri Hemendra Kapadia, and that the transactions reflected in the books were merely accommodation entries of goods. 4.5 The Ld. CIT(A) further observed that these admissions stood corroborated by the statement of Shri Urvil Jani, Director of the One World Group, who confirmed that the group had used entities managed by Shri Hemend concern, for inflating purchases and sales through paper transactions. In light of these consistent findings, the Ld. CIT(A) held that the books of account maintained by the assessee were unreliable and had been rightly Act. 4.6 Regarding the turnover disclosed by the assessee, the Ld. CIT(A) noted that although only part of the sales pertained to One World Group entities, the assessee had not produced any evidence to substantiate the genuineness of the remaining transactions with non-group parties. In the absence of such evidence, and Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 documentary evidence supporting actual business activity records of stock, transportation, delivery, or party was found. On the contrary, statements recorded under section 132(4) from the assessee’s husband, Shri Manish Kapadia, and from Shri Hemendra Kapadia established that the business concerns were effectively controlled and managed by Shri Hemendra Kapadia, and that the transactions reflected in the books were merely accommodation entries without any genuine movement The Ld. CIT(A) further observed that these admissions stood corroborated by the statement of Shri Urvil Jani, Director of the One World Group, who confirmed that the group had used entities managed by Shri Hemendra Kapadia, including the assessee’s concern, for inflating purchases and sales through paper transactions. In light of these consistent findings, the Ld. CIT(A) held that the books of account maintained by the assessee were unreliable and had been rightly rejected under section 145(3) of the Regarding the turnover disclosed by the assessee, the Ld. CIT(A) noted that although only part of the sales pertained to One World Group entities, the assessee had not produced any evidence genuineness of the remaining transactions with group parties. In the absence of such evidence, and Manish Kantilal Kapadia & Rekha Manish Kapadia 7 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 documentary evidence supporting actual business activity—such as records of stock, transportation, delivery, or party-wise purchase was found. On the contrary, statements recorded essee’s husband, Shri Manish Kapadia, and from Shri Hemendra Kapadia established that the business concerns were effectively controlled and managed by Shri Hemendra Kapadia, and that the transactions reflected in the books without any genuine movement The Ld. CIT(A) further observed that these admissions stood corroborated by the statement of Shri Urvil Jani, Director of the One World Group, who confirmed that the group had used entities ra Kapadia, including the assessee’s concern, for inflating purchases and sales through paper transactions. In light of these consistent findings, the Ld. CIT(A) held that the books of account maintained by the assessee were rejected under section 145(3) of the Regarding the turnover disclosed by the assessee, the Ld. CIT(A) noted that although only part of the sales pertained to One World Group entities, the assessee had not produced any evidence genuineness of the remaining transactions with group parties. In the absence of such evidence, and Printed from counselvise.com considering the admitted modus operandi of Shri Hemendra Kapadia, he held that the entire turnover was liable to be treated as arising from accommodatio 4.7 On the issue of the rate of commission, the Assessing Officer had applied 5%. The Ld. CIT(A), after examining the judicial precedents relied upon by the assessee the Delhi Bench of the Tribunal in the case of ITO—considered a commission rate of 3% to be fair and reasonable. Accordingly, while upholding the rejection of books and the estimation of commission on the total turnover of restricted the applicable rate to 3%, granti assessee. 4.8 The relevant finding of the Ld. CIT(A) is reproduced as under: “8. I have considered the assessment order, submission of the appellant and facts available on record in this case. A search u/s 132 of the IT Act was One World Group entities. During the search, it was found that M/s R M Textiles, a proprietary concern of the appellant, had major transactions with the One World Group entities. A search was also conducted on Shri appellant, who is the proprietor of M/s R K Impex and M/s R K Traders. These concerns also had significant transactions with One World Group entities. During the search, a statement of Shri Manish Kapadia was recorded u/s 13 statement, it was stated that he was not involved in any actual business transactions with any of the One World Group entities and all the business activities of M/s R K Traders, M/s R K Impex and M/s R M Textiles were managed a Hemendra Kapadia. Further, no documentary evidence regarding the purchases and sales were found with Shri Manish Kapadia. Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 considering the admitted modus operandi of Shri Hemendra Kapadia, he held that the entire turnover was liable to be treated as arising from accommodation entries. On the issue of the rate of commission, the Assessing Officer had applied 5%. The Ld. CIT(A), after examining the judicial precedents relied upon by the assessee—particularly the decision of the Delhi Bench of the Tribunal in the case of Shri Anil Kumar v. considered a commission rate of 3% to be fair and reasonable. Accordingly, while upholding the rejection of books and the estimation of commission on the total turnover of ₹ restricted the applicable rate to 3%, granting partial relief to the The relevant finding of the Ld. CIT(A) is reproduced as under: 8. I have considered the assessment order, submission of the appellant and facts available on record in this case. A search u/s 132 of the IT Act was conducted on the appellant along with the One World Group entities. During the search, it was found that M/s R M Textiles, a proprietary concern of the appellant, had major transactions with the One World Group entities. A search was also conducted on Shri Manish Kapadia, husband of the appellant, who is the proprietor of M/s R K Impex and M/s R K Traders. These concerns also had significant transactions with One World Group entities. During the search, a statement of Shri Manish Kapadia was recorded u/s 132(4) of the IT Act. In this statement, it was stated that he was not involved in any actual business transactions with any of the One World Group entities and all the business activities of M/s R K Traders, M/s R K Impex and M/s R M Textiles were managed and controlled by Shri Hemendra Kapadia. Further, no documentary evidence regarding the purchases and sales were found with Shri Manish Kapadia. Manish Kantilal Kapadia & Rekha Manish Kapadia 8 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 considering the admitted modus operandi of Shri Hemendra Kapadia, he held that the entire turnover was liable to be treated as On the issue of the rate of commission, the Assessing Officer had applied 5%. The Ld. CIT(A), after examining the judicial particularly the decision of Shri Anil Kumar v. considered a commission rate of 3% to be fair and reasonable. Accordingly, while upholding the rejection of books and the ₹51.78 crore, he ng partial relief to the The relevant finding of the Ld. CIT(A) is reproduced as under: 8. I have considered the assessment order, submission of the appellant and facts available on record in this case. A search u/s conducted on the appellant along with the One World Group entities. During the search, it was found that M/s R M Textiles, a proprietary concern of the appellant, had major transactions with the One World Group entities. A search Manish Kapadia, husband of the appellant, who is the proprietor of M/s R K Impex and M/s R K Traders. These concerns also had significant transactions with One World Group entities. During the search, a statement of Shri 2(4) of the IT Act. In this statement, it was stated that he was not involved in any actual business transactions with any of the One World Group entities and all the business activities of M/s R K Traders, M/s R K Impex nd controlled by Shri Hemendra Kapadia. Further, no documentary evidence regarding the purchases and sales were found with Shri Manish Kapadia. Printed from counselvise.com 8.2 During the search, the statement of Shri Hemendra Kapadia was also recorded u/s 132(4) of the IT Act, wherei that there was no actual delivery of goods to One World concerns. Only bills were provided to them whenever they demanded the same. Thus, Shri Hemendra Kapadia has admitted in this statement recorded u/s 132(4) of the IT Act that the entiti K Traders, M/s R K Impex, and M/s R M Textiles were controlled and managed by him and he was engaged in providing accommodation entries in the form of bogus purchase and sale bills without any actual supply of goods. 8.3 During the search on One W Urvil A. Jani, director of One World Group entities, was recorded u/s 132(4) of the IT Act on 08.11.2019. In this statement, Shri Urvil Jani has confirmed the statement given by Shri Hemendra Kapadia. It is further admitte and controlled by Shri Hemendra Kapadia to inflate purchases and sales. There was no actual movement of goods and only billing was done. Thus, Shri Urvil Jani has accepted the fact that One World Group entities have ente sales transactions with the entities controlled and managed by Shri Hemendra Kapadia. 8.4 From the above facts unearthed during the search conducted on the appellant and on One World Group, it is evident that the proprietary con managed by Shri Hemendra Kapadia. In this concern, no actual business activity was carried out and all the transactions shown in the books of account are paper transactions. 8.5 In the assessment order, the assessment, the appellant has submitted the basic documents like the copy of the return of income, computation of income and financials. The appellant has not furnished the details like party wise purchase and sales, documen goods, proof of delivery, address of place for delivery of goods etc. It is further noted that in the absence of these details, the AO could not carry out independent inquiries regarding the purchases and sales shown by the app is an undisputed fact that the appellant has not carried out any actual business transactions and has provided only accommodation entries. The AO held that the books of accounts maintained are incorrect and hen AO rejected the books of accounts as per the provisions of section 145(3) of the IT Act and estimated the commission income @5% on total turnover shown of Rs.51,78,40,543/ Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 8.2 During the search, the statement of Shri Hemendra Kapadia was also recorded u/s 132(4) of the IT Act, wherein he has stated that there was no actual delivery of goods to One World concerns. Only bills were provided to them whenever they demanded the same. Thus, Shri Hemendra Kapadia has admitted in this statement recorded u/s 132(4) of the IT Act that the entiti K Traders, M/s R K Impex, and M/s R M Textiles were controlled and managed by him and he was engaged in providing accommodation entries in the form of bogus purchase and sale bills without any actual supply of goods. 8.3 During the search on One World Group, the statement of Shri Urvil A. Jani, director of One World Group entities, was recorded u/s 132(4) of the IT Act on 08.11.2019. In this statement, Shri Urvil Jani has confirmed the statement given by Shri Hemendra Kapadia. It is further admitted that he has used the entities run and controlled by Shri Hemendra Kapadia to inflate purchases and sales. There was no actual movement of goods and only billing was done. Thus, Shri Urvil Jani has accepted the fact that One World Group entities have entered into bogus purchase and sales transactions with the entities controlled and managed by Shri Hemendra Kapadia. 8.4 From the above facts unearthed during the search conducted on the appellant and on One World Group, it is evident that the proprietary concern of the appellant was totally controlled and managed by Shri Hemendra Kapadia. In this concern, no actual business activity was carried out and all the transactions shown in the books of account are paper transactions. 8.5 In the assessment order, the AO noted that at the fag end of assessment, the appellant has submitted the basic documents like the copy of the return of income, computation of income and financials. The appellant has not furnished the details like party wise purchase and sales, documents showing transportation of goods, proof of delivery, address of place for delivery of goods etc. It is further noted that in the absence of these details, the AO could not carry out independent inquiries regarding the purchases and sales shown by the appellant. As per the findings of the search, it is an undisputed fact that the appellant has not carried out any actual business transactions and has provided only accommodation entries. The AO held that the books of accounts maintained are incorrect and hence, unreliable. Accordingly, the AO rejected the books of accounts as per the provisions of section 145(3) of the IT Act and estimated the commission income @5% on total turnover shown of Rs.51,78,40,543/-. Manish Kantilal Kapadia & Rekha Manish Kapadia 9 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 8.2 During the search, the statement of Shri Hemendra Kapadia n he has stated that there was no actual delivery of goods to One World concerns. Only bills were provided to them whenever they demanded the same. Thus, Shri Hemendra Kapadia has admitted in this statement recorded u/s 132(4) of the IT Act that the entities M/s R K Traders, M/s R K Impex, and M/s R M Textiles were controlled and managed by him and he was engaged in providing accommodation entries in the form of bogus purchase and sale orld Group, the statement of Shri Urvil A. Jani, director of One World Group entities, was recorded u/s 132(4) of the IT Act on 08.11.2019. In this statement, Shri Urvil Jani has confirmed the statement given by Shri Hemendra d that he has used the entities run and controlled by Shri Hemendra Kapadia to inflate purchases and sales. There was no actual movement of goods and only billing was done. Thus, Shri Urvil Jani has accepted the fact that red into bogus purchase and sales transactions with the entities controlled and managed by 8.4 From the above facts unearthed during the search conducted on the appellant and on One World Group, it is evident that the cern of the appellant was totally controlled and managed by Shri Hemendra Kapadia. In this concern, no actual business activity was carried out and all the transactions shown AO noted that at the fag end of assessment, the appellant has submitted the basic documents like the copy of the return of income, computation of income and financials. The appellant has not furnished the details like party- ts showing transportation of goods, proof of delivery, address of place for delivery of goods etc. It is further noted that in the absence of these details, the AO could not carry out independent inquiries regarding the purchases and ellant. As per the findings of the search, it is an undisputed fact that the appellant has not carried out any actual business transactions and has provided only accommodation entries. The AO held that the books of accounts ce, unreliable. Accordingly, the AO rejected the books of accounts as per the provisions of section 145(3) of the IT Act and estimated the commission income @5% on Printed from counselvise.com 8.6 During the appeal proceedings, several notice were issued to the appellant. In response to these notices, the appellant has filed a submission dated 21.12.2023 as reproduced above. In this submission, the appellant contended that she was engaged in textile trading business since 2010 wit of her husband. However, due to health issues faced by her husband, the responsibility of running the business activity was handed over to Shri Hemendra Kapadia. Thus, there is no dispute on the facts unearthed during the search that the p concern of the appellant (M/s RM Textiles) was controlled and managed by Shri Hemendra Kapadia. The appellant has admitted that her business was entirely managed and controlled by Shri Hemendra Kapadia. 8.7 The appellant further contended that d consideration, out of total sales shown of Rs.26,87,14,833/ sales with the One World Group entities are of Rs. 12,72,10,096/ only. Further, there is no purchase made from One World Group entities. However, the AO assessed the co total purchases and sales of Rs.51,78,40,543/ contended that the estimation of commission @5% is on the higher side. For the same, the appellant has relied on decisions of the Hon'ble ITAT. 8.8 From the submissions of the appellant has not disputed the fact that the turnover shown with the One World Group entities is bogus. The only contention is regarding the estimation of commission on other transactions with non-One World Group entities commission on such transactions. 8.9 Regarding the remaining purchase and sales with the other parties, the appellant's contention is that the same are genuine and hence, no commission income can be estimated on such transactions. In the year under consideration, the appellant has shown total sale of Rs.26,87,14,833/ 12,72,10,096/ entities. However, the appellant has not furnished any documentary evidence to est and sales shown are from genuine business activity. It is an admitted fact that the activities of the proprietary concern of the appellant have been controlled and managed by Shri Hemendra Kapadia. No documentary evi activity and stock was found during the search. In the statement recorded during the search u/s 132(4) of the IT Act, Shri Hemendra Kapadia has admitted that he has not carried out any actual purchase and sale transaction. T Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 8.6 During the appeal proceedings, several notices for hearing were issued to the appellant. In response to these notices, the appellant has filed a submission dated 21.12.2023 as reproduced above. In this submission, the appellant contended that she was engaged in textile trading business since 2010 with the assistance of her husband. However, due to health issues faced by her husband, the responsibility of running the business activity was handed over to Shri Hemendra Kapadia. Thus, there is no dispute on the facts unearthed during the search that the p concern of the appellant (M/s RM Textiles) was controlled and managed by Shri Hemendra Kapadia. The appellant has admitted that her business was entirely managed and controlled by Shri Hemendra Kapadia. 8.7 The appellant further contended that during the year under consideration, out of total sales shown of Rs.26,87,14,833/ sales with the One World Group entities are of Rs. 12,72,10,096/ only. Further, there is no purchase made from One World Group entities. However, the AO assessed the commission income on total purchases and sales of Rs.51,78,40,543/-. It is further contended that the estimation of commission @5% is on the higher side. For the same, the appellant has relied on decisions of the 8.8 From the submissions of the appellant, it is evident that the appellant has not disputed the fact that the turnover shown with the One World Group entities is bogus. The only contention is regarding the estimation of commission on other transactions with One World Group entities and rate of percentage of commission on such transactions. 8.9 Regarding the remaining purchase and sales with the other parties, the appellant's contention is that the same are genuine and hence, no commission income can be estimated on such . In the year under consideration, the appellant has shown total sale of Rs.26,87,14,833/-, out of which sales of Rs. 12,72,10,096/- is shown with other than One World Group entities. However, the appellant has not furnished any documentary evidence to establish the fact that the other purchase and sales shown are from genuine business activity. It is an admitted fact that the activities of the proprietary concern of the appellant have been controlled and managed by Shri Hemendra Kapadia. No documentary evidence regarding actual business activity and stock was found during the search. In the statement recorded during the search u/s 132(4) of the IT Act, Shri Hemendra Kapadia has admitted that he has not carried out any actual purchase and sale transaction. Thus, as per the admission Manish Kantilal Kapadia & Rekha Manish Kapadia 10 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 s for hearing were issued to the appellant. In response to these notices, the appellant has filed a submission dated 21.12.2023 as reproduced above. In this submission, the appellant contended that she was h the assistance of her husband. However, due to health issues faced by her husband, the responsibility of running the business activity was handed over to Shri Hemendra Kapadia. Thus, there is no dispute on the facts unearthed during the search that the proprietary concern of the appellant (M/s RM Textiles) was controlled and managed by Shri Hemendra Kapadia. The appellant has admitted that her business was entirely managed and controlled by Shri uring the year under consideration, out of total sales shown of Rs.26,87,14,833/-, the sales with the One World Group entities are of Rs. 12,72,10,096/- only. Further, there is no purchase made from One World Group mmission income on . It is further contended that the estimation of commission @5% is on the higher side. For the same, the appellant has relied on decisions of the appellant, it is evident that the appellant has not disputed the fact that the turnover shown with the One World Group entities is bogus. The only contention is regarding the estimation of commission on other transactions with and rate of percentage of 8.9 Regarding the remaining purchase and sales with the other parties, the appellant's contention is that the same are genuine and hence, no commission income can be estimated on such . In the year under consideration, the appellant has , out of which sales of Rs. is shown with other than One World Group entities. However, the appellant has not furnished any ablish the fact that the other purchase and sales shown are from genuine business activity. It is an admitted fact that the activities of the proprietary concern of the appellant have been controlled and managed by Shri Hemendra dence regarding actual business activity and stock was found during the search. In the statement recorded during the search u/s 132(4) of the IT Act, Shri Hemendra Kapadia has admitted that he has not carried out any hus, as per the admission Printed from counselvise.com of Hemendra Kapadia and findings of the search, there was no actual business activity carried out by the appellant's concern. Further, during the assessment proceedings as well as during the appeal proceedings, despite giving seve appellant has not furnished any documentary evidence to establish the fact that any genuine business activity has been carried out by the appellant's concern. Therefore, the contention of the appellant deserves to be rejected. 8.10 As there is a specific finding unearthed during the search that the appellant has not carried out any genuine business activity and was involved in providing bogus purchase and sale bills, the books of accounts maintained by the appellant are incorrect and rejected as per the provisions of section 145(3) of the IT Act. Accordingly, I upheld the decision of the AO rejecting the books of accounts and estimating the commission on the total turnover. 8.11 Now comi estimation of income, the AO has estimated the commission @5%, whereas the appellant has contended that the commission is to be estimated @0.05% to 0.2%. To support her contention, the appellant has relied on (ITAT Delhi) and decision in the case of Sanjay Kumar Chaudhary vs ACIT, (ITAT Surat). I have perused the decisions relied upon by the appellant. It is seen that the Honorable Delhi ITAT, in the case of Shri Anil Kuma the decision of the CIT(Appeals) in estimating the commission @3%. This decision is relevant and applicable in the facts of the case of the appellant. The other decision of the Hon'ble ITAT, Surat in the case of Shri. Sanjay Kumar Chaudhary is in the context of different set of facts. The issue involved is the import of rough and cut polished diamonds and hence, this decision is not applicable in the facts of the appellant. Therefore, following the decision of the case of Shri Anil Kumar vs. ITO, which is also relied upon by the appellant, I direct the AO to adopt the rate of commission @3% on the total turnover of Rs.51,78,40,543/ appeal on this ground is PART 5. We have carefully considered the rival submissions advanced on behalf of the parties and have perused the material placed on record. The controversy that falls for adjudication pertains to the Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 of Hemendra Kapadia and findings of the search, there was no actual business activity carried out by the appellant's concern. Further, during the assessment proceedings as well as during the appeal proceedings, despite giving several opportunities, the appellant has not furnished any documentary evidence to establish the fact that any genuine business activity has been carried out by the appellant's concern. Therefore, the contention of the appellant deserves to be rejected. s there is a specific finding unearthed during the search that the appellant has not carried out any genuine business activity and was involved in providing bogus purchase and sale bills, the books of accounts maintained by the appellant are incorrect and hence, unreliable. Therefore, the same are to be rejected as per the provisions of section 145(3) of the IT Act. Accordingly, I upheld the decision of the AO rejecting the books of accounts and estimating the commission on the total turnover. 8.11 Now coming to the rate of commission to be charged for estimation of income, the AO has estimated the commission @5%, whereas the appellant has contended that the commission is to be estimated @0.05% to 0.2%. To support her contention, the appellant has relied on the decision of Shri Anil Kumar vs ITO (ITAT Delhi) and decision in the case of Sanjay Kumar Chaudhary vs ACIT, (ITAT Surat). I have perused the decisions relied upon by the appellant. It is seen that the Honorable Delhi ITAT, in the case of Shri Anil Kumar vs ITO (ITA NO 6002/DEL/2017), has upheld the decision of the CIT(Appeals) in estimating the commission @3%. This decision is relevant and applicable in the facts of the case of the appellant. The other decision of the Hon'ble ITAT, Surat in the Shri. Sanjay Kumar Chaudhary is in the context of different set of facts. The issue involved is the import of rough and cut polished diamonds and hence, this decision is not applicable in the facts of the appellant. Therefore, following the decision of the Hon'ble ITAT Delhi in the case of Shri Anil Kumar vs. ITO, which is also relied upon by the appellant, I direct the AO to adopt the rate of commission @3% on the total turnover of Rs.51,78,40,543/- instead of 5%. Accordingly, appeal on this ground is PARTIALLY ALLOWED.” We have carefully considered the rival submissions advanced on behalf of the parties and have perused the material placed on record. The controversy that falls for adjudication pertains to the Manish Kantilal Kapadia & Rekha Manish Kapadia 11 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 of Hemendra Kapadia and findings of the search, there was no actual business activity carried out by the appellant's concern. Further, during the assessment proceedings as well as during the ral opportunities, the appellant has not furnished any documentary evidence to establish the fact that any genuine business activity has been carried out by the appellant's concern. Therefore, the contention of s there is a specific finding unearthed during the search that the appellant has not carried out any genuine business activity and was involved in providing bogus purchase and sale bills, the books of accounts maintained by the appellant are hence, unreliable. Therefore, the same are to be rejected as per the provisions of section 145(3) of the IT Act. Accordingly, I upheld the decision of the AO rejecting the books of accounts and estimating the commission on the total turnover. ng to the rate of commission to be charged for estimation of income, the AO has estimated the commission @5%, whereas the appellant has contended that the commission is to be estimated @0.05% to 0.2%. To support her contention, the the decision of Shri Anil Kumar vs ITO (ITAT Delhi) and decision in the case of Sanjay Kumar Chaudhary vs ACIT, (ITAT Surat). I have perused the decisions relied upon by the appellant. It is seen that the Honorable Delhi ITAT, in the case r vs ITO (ITA NO 6002/DEL/2017), has upheld the decision of the CIT(Appeals) in estimating the commission @3%. This decision is relevant and applicable in the facts of the case of the appellant. The other decision of the Hon'ble ITAT, Surat in the Shri. Sanjay Kumar Chaudhary is in the context of different set of facts. The issue involved is the import of rough and cut polished diamonds and hence, this decision is not applicable in Hon'ble ITAT Delhi in the case of Shri Anil Kumar vs. ITO, which is also relied upon by the appellant, I direct the AO to adopt the rate of commission @3% on instead of 5%. Accordingly, We have carefully considered the rival submissions advanced on behalf of the parties and have perused the material placed on record. The controversy that falls for adjudication pertains to the Printed from counselvise.com rejection of the books of account and the commission income on the footing that the textile ostensibly carried on by the assessee was, in substance, nothing more than a conduit for accommodation entries. 5.1 Before us, the learned counsel for the assessee entire operations were, in fact, conceived, directed, and executed by Shri Hemendra Kapadia, and that any commission attributable to the impugned transactions ought, if at all, to have been brought to tax in his hands and not in the hands o however, belies the foundation of such a plea. The assessee has not produced before the Assessing Officer or before the Ld. CIT(A) any contemporaneous documentary evidence purchase and sales registers, d records, or other primary documents of genuine trading activity. The few ledger extracts eventually filed were tendered only at the eleventh hour, leaving no opportunity for meaningful verification; and significantly, no application seeking admission of additional evidence was preferred before the Ld. CIT(A). 5.2 In the absence of even the rudiments of proof supporting the claim that actual trading in textile goods was undertaken during the relevant year, the assessee’s contention cannot be accepted. The Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 rejection of the books of account and the consequent estimation of commission income on the footing that the textile- ostensibly carried on by the assessee was, in substance, nothing more than a conduit for accommodation entries. Before us, the learned counsel for the assessee entire operations were, in fact, conceived, directed, and executed by Shri Hemendra Kapadia, and that any commission attributable to the impugned transactions ought, if at all, to have been brought to tax in his hands and not in the hands of the assessee. The record, however, belies the foundation of such a plea. The assessee has not produced before the Assessing Officer or before the Ld. CIT(A) any contemporaneous documentary evidence—whether in the nature of purchase and sales registers, delivery challans, transportation records, or other primary documents—to substantiate the existence of genuine trading activity. The few ledger extracts eventually filed were tendered only at the eleventh hour, leaving no opportunity for tion; and significantly, no application seeking admission of additional evidence was preferred before the Ld. In the absence of even the rudiments of proof supporting the claim that actual trading in textile goods was undertaken during evant year, the assessee’s contention cannot be accepted. The Manish Kantilal Kapadia & Rekha Manish Kapadia 12 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 consequent estimation of -trading activity ostensibly carried on by the assessee was, in substance, nothing Before us, the learned counsel for the assessee urged that the entire operations were, in fact, conceived, directed, and executed by Shri Hemendra Kapadia, and that any commission attributable to the impugned transactions ought, if at all, to have been brought to f the assessee. The record, however, belies the foundation of such a plea. The assessee has not produced before the Assessing Officer or before the Ld. CIT(A) any whether in the nature of elivery challans, transportation to substantiate the existence of genuine trading activity. The few ledger extracts eventually filed were tendered only at the eleventh hour, leaving no opportunity for tion; and significantly, no application seeking admission of additional evidence was preferred before the Ld. In the absence of even the rudiments of proof supporting the claim that actual trading in textile goods was undertaken during evant year, the assessee’s contention cannot be accepted. The Printed from counselvise.com finding that the alleged transactions bore the character of accommodation entries thus stands on firm factual foundation. 5.3 The further grievance that the interest income of has been treated as part of the operational income also merits no acceptance. The assessee herself has disclosed such amount as interest income; the Assessing Officer has merely brought it to tax in accordance with its true character. No infirmity, factual or le attaches to the approach adopted by the lower authority. 5.4 Upon a comprehensive consideration of the submissions and the evidence—or the conspicuous want thereof in the conclusions arrived at by the Ld. CIT(A). The rejection of t books of account and the estimation of commission income have been rightly upheld. 5.5 In the result, Ground Nos. 1 to 4 raised by the assessee stand dismissed. 6. In Ground No. 5, the assessee challenges the addition of ₹2,75,000/– made under section 6 unsecured loan reflected in her audited balance sheet. It is the assessee’s case that the amount in question represents a loan advanced by her husband, Shri Manish Kapadia, and that the said sum stood credited in her books, as Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 finding that the alleged transactions bore the character of accommodation entries thus stands on firm factual foundation. The further grievance that the interest income of en treated as part of the operational income also merits no acceptance. The assessee herself has disclosed such amount as interest income; the Assessing Officer has merely brought it to tax in accordance with its true character. No infirmity, factual or le attaches to the approach adopted by the lower authority. Upon a comprehensive consideration of the submissions and or the conspicuous want thereof—we discern no error in the conclusions arrived at by the Ld. CIT(A). The rejection of t books of account and the estimation of commission income have Ground Nos. 1 to 4 raised by the assessee In Ground No. 5, the assessee challenges the addition of made under section 68 of the Act in respect of an unsecured loan reflected in her audited balance sheet. It is the assessee’s case that the amount in question represents a loan advanced by her husband, Shri Manish Kapadia, and that the said sum stood credited in her books, as well as correspondingly Manish Kantilal Kapadia & Rekha Manish Kapadia 13 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 finding that the alleged transactions bore the character of accommodation entries thus stands on firm factual foundation. The further grievance that the interest income of ₹4,10,010/- en treated as part of the operational income also merits no acceptance. The assessee herself has disclosed such amount as interest income; the Assessing Officer has merely brought it to tax in accordance with its true character. No infirmity, factual or legal, attaches to the approach adopted by the lower authority. Upon a comprehensive consideration of the submissions and we discern no error in the conclusions arrived at by the Ld. CIT(A). The rejection of the books of account and the estimation of commission income have Ground Nos. 1 to 4 raised by the assessee In Ground No. 5, the assessee challenges the addition of 8 of the Act in respect of an unsecured loan reflected in her audited balance sheet. It is the assessee’s case that the amount in question represents a loan advanced by her husband, Shri Manish Kapadia, and that the said well as correspondingly Printed from counselvise.com recorded as a loan and advance in the books of Shri Manish Kapadia, well prior to 01.04.2013. 6.1 In principle, if the credit pertains to a period preceding 01.04.2013, the same cannot be brought to tax as an unexplained cash credit in the assessment year under consideration. However, the assessee has not produced any contemporaneous documentary evidence—such as bank statements, confirmations, or supporting ledger entries—to substantiate the factum and timing of the loan. In the absence of such material, the matter cannot be conclusively adjudicated at this stage. 6.2 In the interests of justice, therefore, we consider it appropriate to remit this issue to the file of the Assessing Officer. The assessee shall be afforded an opportuni including bank statements and supporting records, to establish that the loan was received prior to 01.04.2013. The Assessing Officer shall examine the same and adjudicate the issue afresh in accordance with law. Ground statistical purposes. 7. As regards the remaining appeals for the assessment years 2015-16 to 2019-20, the sole issue relates to rejection of books of account and estimation of commission income. The facts and circumstances being identical, our findings rendered in relation to assessment year 2014 Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 recorded as a loan and advance in the books of Shri Manish Kapadia, well prior to 01.04.2013. In principle, if the credit pertains to a period preceding 01.04.2013, the same cannot be brought to tax as an unexplained t in the assessment year under consideration. However, the assessee has not produced any contemporaneous documentary such as bank statements, confirmations, or supporting to substantiate the factum and timing of the loan. In ence of such material, the matter cannot be conclusively adjudicated at this stage. In the interests of justice, therefore, we consider it appropriate to remit this issue to the file of the Assessing Officer. The assessee shall be afforded an opportunity to furnish all necessary evidence, including bank statements and supporting records, to establish that the loan was received prior to 01.04.2013. The Assessing Officer shall examine the same and adjudicate the issue afresh in accordance with law. Ground No. 5 is, accordingly, allowed for As regards the remaining appeals for the assessment years 20, the sole issue relates to rejection of books of account and estimation of commission income. The facts and nces being identical, our findings rendered in relation to assessment year 2014-15 shall apply mutatis mutandis Manish Kantilal Kapadia & Rekha Manish Kapadia 14 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 recorded as a loan and advance in the books of Shri Manish In principle, if the credit pertains to a period preceding 01.04.2013, the same cannot be brought to tax as an unexplained t in the assessment year under consideration. However, the assessee has not produced any contemporaneous documentary such as bank statements, confirmations, or supporting to substantiate the factum and timing of the loan. In ence of such material, the matter cannot be conclusively In the interests of justice, therefore, we consider it appropriate to remit this issue to the file of the Assessing Officer. The assessee ty to furnish all necessary evidence, including bank statements and supporting records, to establish that the loan was received prior to 01.04.2013. The Assessing Officer shall examine the same and adjudicate the issue afresh in No. 5 is, accordingly, allowed for As regards the remaining appeals for the assessment years 20, the sole issue relates to rejection of books of account and estimation of commission income. The facts and nces being identical, our findings rendered in relation to mutatis mutandis to the Printed from counselvise.com corresponding grounds in those years. The said grounds are disposed of accordingly. 8. Now we take up the appeals in the case of Mr. for assessment year 2014 assessee are reproduced as under: 1. Whether on the facts and circumstances of the case and in2,24,77,726 law, the Learned Commissioner of Income Tax (Appeal) has wrongly estima for total turnover of Purchase and Sales as reported in profit and loss account, prepared from Audited Book of Accounts amounting to Rs.69,49,11,846/ though the alleged turnover of Sales and Purchase with 'One World Gro Rs.12,81,11,995/ natural justice. Further Ld CIT(A) has wrongly confirmed the Interest Income of 6,61,315/- added by DCIT as operational income 2. Whether on the facts and circumstances of the Learned Commissioner of Income Tax (Appeal) has erred in allowing the appeal partly on assumption bases and not on facts 3. Whether on the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appe upholding the action of learned assessing officer of treating all the business activities as accommodation entry without the submission / documentary genuineness of all the Audited purchase and s appellant 4. Whether on the facts and circumstances of the case and in la the learned Commissioner of income Tax (Appeal) has erred not allowing the assessee's appeal for disapproving the learn Assessing officer's view of rejecting the Bo appellant by invoking the provision of sectior 145 (3) of the income tax Act, 1961. 5. The Learned Commissioner of Income Tax (Appeal has aga erred in allowing the respondent made an addition u/s. 68 of Rs. 53,28,330/- Balance Sheet of the appellant prepared from the books of accounts Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 corresponding grounds in those years. The said grounds are disposed of accordingly. Now we take up the appeals in the case of Mr. Manish Kapadia for assessment year 2014-15. The relevant grounds raised by the assessee are reproduced as under: Whether on the facts and circumstances of the case and in2,24,77,726 law, the Learned Commissioner of Income Tax (Appeal) has wrongly estimated the income of the appellant @ 3% for total turnover of Purchase and Sales as reported in profit and loss account, prepared from Audited Book of Accounts amounting to Rs.69,49,11,846/ though the alleged turnover of Sales and Purchase with 'One World Group Companies' was Rs.12,81,11,995/-, during the captioned year, which is against the natural justice. Further Ld CIT(A) has wrongly confirmed the Interest Income of added by DCIT as operational income 2. Whether on the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeal) has erred in allowing the appeal partly on assumption bases and not on facts 3. Whether on the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) has erred in upholding the action of learned assessing officer of treating all the business activities as accommodation entry without the submission / documentary evidence provided to prove the genuineness of all the Audited purchase and sales submitted by Whether on the facts and circumstances of the case and in la the learned Commissioner of income Tax (Appeal) has erred not allowing the assessee's appeal for disapproving the learn Assessing officer's view of rejecting the Books of Accounts and Income of appellant by invoking the provision of sectior 145 (3) of the income tax Act, 1961. The Learned Commissioner of Income Tax (Appeal has aga erred in allowing the respondent made an addition u/s. 68 of Rs. in respect of unsecured loan appearing in audited Balance Sheet of the appellant prepared from the books of accounts Manish Kantilal Kapadia & Rekha Manish Kapadia 15 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 corresponding grounds in those years. The said grounds are Manish Kapadia 15. The relevant grounds raised by the Whether on the facts and circumstances of the case and in2,24,77,726 law, the Learned Commissioner of Income Tax ted the income of the appellant @ 3% for total turnover of Purchase and Sales as reported in profit and loss account, prepared from Audited Book of Accounts amounting to Rs.69,49,11,846/ though the alleged turnover of Sales and up Companies' was , during the captioned year, which is against the Further Ld CIT(A) has wrongly confirmed the Interest Income of the case and in law, the Learned Commissioner of Income Tax (Appeal) has erred in allowing the appeal partly on assumption bases and not on facts 3. Whether on the facts and circumstances of the case and in law al) has erred in upholding the action of learned assessing officer of treating all the business activities as accommodation entry without appreciating evidence provided to prove the ales submitted by Whether on the facts and circumstances of the case and in la the learned Commissioner of income Tax (Appeal) has erred not allowing the assessee's appeal for disapproving the learn Assessing oks of Accounts and Income of appellant by invoking the provision of sectior 145 (3) of the income The Learned Commissioner of Income Tax (Appeal has aga erred in allowing the respondent made an addition u/s. 68 of Rs. ect of unsecured loan appearing in audited Balance Sheet of the appellant prepared from the books of accounts Printed from counselvise.com which were rejected u/s 145(3) of the Act The said loan was availed from Shri. Gurucharan Bhandari [(PAN: ADAPC0247Q) (Address: 260 Building No.2 were received a credited in Books of Accounts prior 8.1 The ground No. 1 to 4 of the appeal are identical to the grounds raised in the case of Rekha Manish Kapadia and therefore, same are decided muta 8.2 The ground No. 5 of the appeal relation to addition u/s 68 of Rs.53,28,330/- in respect of unsecured loan received from Gurucharan Bhandari which credited in the books of accounts of ground prior to 01.03. 8.3 As identical issue 2014-15 has been restored back to the file of the Assessing Officer for deciding afresh after considering the submission and documentary evidence of the assessee that said loan was receiv prior to 01.04.2013. Accordingly, this ground of the appeal is also allowed for statistical purposes. 8.4 The grounds raised in other assessment year 2019-2020 in the case of Mr. Manish Kapadia grounds raised in assess amount and therefore, respectfully following our find assessment year 2014 mutandis. Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 which were rejected u/s 145(3) of the Act The said loan was availed from Shri. Gurucharan Bhandari [(PAN: ADAPC0247Q) (Address: 260 Building No.2 A.P.M market Vashi New Mumbai 400705)] which were received a credited in Books of Accounts prior 01.04.2013 The ground No. 1 to 4 of the appeal are identical to the grounds raised in the case of Rekha Manish Kapadia and therefore, same are decided mutatis mutandis. The ground No. 5 of the appeal relation to addition u/s 68 of in respect of unsecured loan received from Gurucharan Bhandari which is claimed to have credited in the books of accounts of ground prior to 01.03. s identical issue in the case Rekha Manish Kapadia for AY has been restored back to the file of the Assessing Officer for deciding afresh after considering the submission and documentary evidence of the assessee that said loan was receiv prior to 01.04.2013. Accordingly, this ground of the appeal is also allowed for statistical purposes. The grounds raised in other assessment years from 2015 2020 in the case of Mr. Manish Kapadia are raised in assessment year 2014-15 except change of the amount and therefore, respectfully following our find assessment year 2014-15, the grounds are decided mutatis Manish Kantilal Kapadia & Rekha Manish Kapadia 16 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 which were rejected u/s 145(3) of the Act The said loan was availed from Shri. Gurucharan Bhandari [(PAN: ADAPC0247Q) (Address: A.P.M market Vashi New Mumbai 400705)] which 01.04.2013 The ground No. 1 to 4 of the appeal are identical to the grounds raised in the case of Rekha Manish Kapadia and therefore, The ground No. 5 of the appeal relation to addition u/s 68 of in respect of unsecured loan received from is claimed to have received or credited in the books of accounts of ground prior to 01.03.2013. in the case Rekha Manish Kapadia for AY has been restored back to the file of the Assessing Officer for deciding afresh after considering the submission and documentary evidence of the assessee that said loan was received prior to 01.04.2013. Accordingly, this ground of the appeal is also from 2015-16 to are identical to 15 except change of the amount and therefore, respectfully following our finding in he grounds are decided mutatis Printed from counselvise.com 9. In the result, all the appeals for statistical purposes Order pronounced in the open Sd/- (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 26/11/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Manish Kantilal Kapadia ITA Nos. 264, 318 to 322/MUM/2025 In the result, all the appeals for AY 2014-15 are purposes whereas other appeals are dismissed. ounced in the open Court on 26/11/2025. Sd/ (RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Manish Kantilal Kapadia & Rekha Manish Kapadia 17 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 15 are allowed partly whereas other appeals are dismissed. /11/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "