SANJAY SIVABHAGWAN KEYAL,SURAT V. ITO, WARD-2(3)(4), SURAT

ITA 636/SRT/2025

AI Insights

The case involves Sanjay Sivabhagwan Keyal, the appellant, who contested the reassessment of his income for the assessment year 2009-10 by the Income Tax Officer (ITO), Ward 2(3)(4), Surat. The reassessment was based on discrepancies noted between the cash deposits in the appellant's bank account and the income declared in his tax return. The ITO issued a notice under section 148 of the Income-tax Act, 1961, after discovering that the appellant had deposited cash totaling Rs. 13,49,835 during the relevant financial year, which was inconsistent with his declared income. The Tribunal dismissed the appellant's appeal, supporting the ITO's findings and the additions made to his income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782906 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 31-05-2025
• Other Referred Cases: ITO v. Lakhmani Mewal Das, Bir Bahadur Singh Sijwani, Smt Sapna Chauhan, Ashish Natvarlal Vashi, Hashmukhbhai B Patel, ACIT v. Rajesh Jhaveri Stock Brokers (P)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J.K. CHANDNANI
• Assessee Lawyers: RASESH
• Keywords: Difference of opinion; Change of opinion; Reassessment proceedings; Unexplained cash credit; Tangible material
• Section: 147; 148; 144; 142(1); 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH “SMC” SURAT BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 636/SRT/2025 Assessment Year: 2009-2010 Sanjay Sivabhagwan Keyal Flat No.304, 3rd Floor, Vatika Township, Near Model, Township, Parvat Patia Surat - 395010. Vs. ITO, Ward – 2(3)(4), Room No.613, Aaaykar Bhavan, Majura Gate, Surat - 395002. PAN NO. ADSPK 6097N Appellant Respondent Assessee by : Mr. Rasesh, CA Revenue by : Shri J.K. Chandnani, Sr. DR Date of Hearing : 09/10/2025 Date of pronouncement : 30/10/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 28/03/2025 passed by the learned additional/joint Commissioner of income-tax (Appeals)-11, Delhi [hereafter shall be referred as Ld. CIT(A)] for assessment year 2009-10, raising following grounds: “1. On the facts and circumstances of the case as well as law on the subject, assessing officer has erred in issuing notice u/s. 148 and passing assessment order u/s.144 r.w.s. 147 of the Act. Printed from counselvise.com 2. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in partly conf officer by sustaining addition of Rs. 13,49,835/ 13,91,940/- u/s. 69A on account of unexplained cash credit. 3. It is prayed that the assessment framed u/s. 144 r.w.s. 147 may be quashed and / or addition made by the assessing officer may please be deleted.” 2. Briefly stated, record, are that the assessee filed his return of income for the assessment year under consideration on 29.03.2010. Subsequently, upon verification of the Annual Information Return (AIR), the learned Assessing Officer discerned that during the financial year 2008-09, relevant to the assessment year in question, the assessee had deposited cash aggregating to account maintained with Axis Bank. The source of such cash deposit, however, appeared inconsistent with the particulars disclosed in the return of income. 2.1 Being so satisfied, the Assessing Officer recorded reasons to believe that income chargeable to tax had escaped assessment and, accordingly, issued notice under section 148 1961 (hereinafter referred to as served upon the assessee. In response, the assessee intimated that the original return filed be treated as one filed in response to the notice under section 148 of the A Sanjay Sivabhagwan Keyal 2. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in partly confirming the action of the assessing officer by sustaining addition of Rs. 13,49,835/- out of total addition of Rs. u/s. 69A on account of unexplained cash credit. 3. It is prayed that the assessment framed u/s. 144 r.w.s. 147 may ed and / or addition made by the assessing officer may please be the facts of the case, as emerging from the record, are that the assessee filed his return of income for the assessment year under consideration on 29.03.2010. Subsequently, upon verification of the Annual Information Return (AIR), the fficer discerned that during the financial year 09, relevant to the assessment year in question, the assessee had deposited cash aggregating to ₹13,49,835/- in a savings bank account maintained with Axis Bank. The source of such cash appeared inconsistent with the particulars disclosed in the return of income. Being so satisfied, the Assessing Officer recorded reasons to believe that income chargeable to tax had escaped assessment and, accordingly, issued notice under section 148 of the Income 1961 (hereinafter referred to as “the Act”) on 31.03.2016, duly served upon the assessee. In response, the assessee intimated that the original return filed be treated as one filed in response to the notice under section 148 of the Act. ITA No. 636/SRT/2025 2 Sanjay Sivabhagwan Keyal 2. On the facts and circumstances of the case as well as law on the subject, irming the action of the assessing out of total addition of Rs. u/s. 69A on account of unexplained cash credit. 3. It is prayed that the assessment framed u/s. 144 r.w.s. 147 may please ed and / or addition made by the assessing officer may please be the facts of the case, as emerging from the record, are that the assessee filed his return of income for the assessment year under consideration on 29.03.2010. Subsequently, upon verification of the Annual Information Return (AIR), the fficer discerned that during the financial year 09, relevant to the assessment year in question, the assessee in a savings bank account maintained with Axis Bank. The source of such cash appeared inconsistent with the particulars Being so satisfied, the Assessing Officer recorded reasons to believe that income chargeable to tax had escaped assessment and, of the Income-tax Act, ) on 31.03.2016, duly served upon the assessee. In response, the assessee intimated that the original return filed be treated as one filed in response to the Printed from counselvise.com 2.2 During the reassessment proceedings, the Assessing Officer, invoking his statutory powers under section 133(6) of the Act, procured the bank statement directly from the Axis Bank. It was noticed there from that the aggregate of credit entries appea the said account amounted to under section 142(1) were issued to the assessee calling upon him to explain the nature and source of the said deposits; however, the assessee chose not to respond. A final show cause noti 10.08.2016 also met with no compliance. The Assessing Officer, therefore, was constrained to complete the reassessment under section 147 read with section 144 of the Act on 30.09.2016, bringing to tax the entire cash deposit of unexplained credits. 3. In appeal, the assessee contended before the learned Commissioner of Income received the statutory notices, and therefore could not respond. The assessee challenged validity of the reassessm the savings bank account in question had been duly considered while filing the return. The assessee submitted that he was regularly assessed since A.Y. 2006 provisions of section 44AF, and it was submitted that c were made by the assessee out of cash sales of his regular business activity of trading of laser dyed textile, opening cash balance and cash withdrawals made during the year. It was submitted that Sanjay Sivabhagwan Keyal During the reassessment proceedings, the Assessing Officer, invoking his statutory powers under section 133(6) of the Act, procured the bank statement directly from the Axis Bank. It was from that the aggregate of credit entries appea the said account amounted to ₹13,91,936/-. Repeated notices under section 142(1) were issued to the assessee calling upon him to explain the nature and source of the said deposits; however, the assessee chose not to respond. A final show cause noti 10.08.2016 also met with no compliance. The Assessing Officer, therefore, was constrained to complete the reassessment under section 147 read with section 144 of the Act on 30.09.2016, bringing to tax the entire cash deposit of ₹13,91,936/ In appeal, the assessee contended before the learned Commissioner of Income-tax (Appeals) [“Ld. CIT(A)”] that he had not received the statutory notices, and therefore could not respond. The assessee challenged validity of the reassessment on the ground that the savings bank account in question had been duly considered while filing the return. The assessee submitted that he was regularly assessed since A.Y. 2006-07 under presumptive provisions of section 44AF, and it was submitted that c were made by the assessee out of cash sales of his regular business activity of trading of laser dyed textile, opening cash balance and cash withdrawals made during the year. It was submitted that ITA No. 636/SRT/2025 3 Sanjay Sivabhagwan Keyal During the reassessment proceedings, the Assessing Officer, invoking his statutory powers under section 133(6) of the Act, procured the bank statement directly from the Axis Bank. It was from that the aggregate of credit entries appearing in . Repeated notices under section 142(1) were issued to the assessee calling upon him to explain the nature and source of the said deposits; however, the assessee chose not to respond. A final show cause notice dated 10.08.2016 also met with no compliance. The Assessing Officer, therefore, was constrained to complete the reassessment under section 147 read with section 144 of the Act on 30.09.2016, 13,91,936/- as In appeal, the assessee contended before the learned tax (Appeals) [“Ld. CIT(A)”] that he had not received the statutory notices, and therefore could not respond. The ent on the ground that the savings bank account in question had been duly considered while filing the return. The assessee submitted that he was 07 under presumptive provisions of section 44AF, and it was submitted that cash deposits were made by the assessee out of cash sales of his regular business activity of trading of laser dyed textile, opening cash balance and cash withdrawals made during the year. It was submitted that Printed from counselvise.com learned Assessing Officer only considered the failed to considered cash withdrawals made from the same bank account. The assessee further explained that he had deposited Rs. 13,49,835/-and not Officer. He further submitted that cash depos comprised of ₹ 7,93,652/ activity, ₹ 5,56,183/ of ₹ 12,80,400/-during the year 3.1. The learned CIT(A) sought a remand report. The Assessing Officer, in his report, rejected the assessee’s explanation observing that (i) the gross sales of deposits of ₹13,91,936/ absent any demonstrated necessity or specific purpose or nexus, could not be accepted. 3.2. Upon consideration, the Ld. CIT(A) dismissed the challenge both to the validity of reassessment and to the addition on merits. Hence, the present appeal befo 4. Before us the learned counsel for the assessee filed paperbook containing pages 1 judicial precedents relied upon. 5. The Ground Nos proceeding challenged by the assessee. Sanjay Sivabhagwan Keyal learned Assessing Officer only considered the cash deposits but he failed to considered cash withdrawals made from the same bank The assessee further explained that he had deposited Rs. and not ₹ 13,91,460/- as claimed by the Assessing Officer. He further submitted that cash deposited of 7,93,652/-on account of cash sales of his business -was re-deposited out of the withdrawal made during the year. The learned CIT(A) sought a remand report. The Assessing Officer, in his report, rejected the assessee’s explanation observing that (i) the gross sales of ₹8,35,652/- declared could not justify 13,91,936/-, and (ii) the redeposit of withdrawn absent any demonstrated necessity or specific purpose or nexus, could not be accepted. Upon consideration, the Ld. CIT(A) dismissed the challenge both to the validity of reassessment and to the addition on merits. Hence, the present appeal before us. Before us the learned counsel for the assessee filed paperbook containing pages 1-30 and also filed a judicial precedents relied upon. s.1 and 3 of the appeal pertain to reassessment proceeding challenged by the assessee. The learned counsel for the ITA No. 636/SRT/2025 4 Sanjay Sivabhagwan Keyal cash deposits but he failed to considered cash withdrawals made from the same bank The assessee further explained that he had deposited Rs. as claimed by the Assessing of ₹ 13,49,835/- on account of cash sales of his business deposited out of the withdrawal made The learned CIT(A) sought a remand report. The Assessing Officer, in his report, rejected the assessee’s explanation observing declared could not justify , and (ii) the redeposit of withdrawn cash, absent any demonstrated necessity or specific purpose or nexus, Upon consideration, the Ld. CIT(A) dismissed the challenge both to the validity of reassessment and to the addition on merits. Before us the learned counsel for the assessee filed a a compilation of to reassessment The learned counsel for the Printed from counselvise.com assessee, while assailing the reassessment, contended that the same was a mere change of opinion and devoid of any live nexus between the material relied upon and the forma Reliance was placed upon the decision of the Hon’ble Supreme Court in ITO v. Lakhmani Mewal Das learned counsel also relied on decisions of Tribunal in the case of Bir Bahadur Singh Sij taxmann.com 366, Smt Sapna Chauhan ( ITA No. 137 & 138/Ag/2018) ; Ashish natvarlal Vashi I ITA No. 3522/AHD/2016) and Hashmukhbhai B Patel (ITA No. 193/SRT/2019. 5.1 The learned Departmental Representative, per contra, supported the orders Assessing Officer had tangible material, namely AIR information, duly verified with the return of income, on the basis of which he had formed a bona fide belief that income had escaped assessment. Reliance was placed upon Ltd. [(2007) 291 ITR 500 (SC)] material relevant to the case of the assessee and on that basis he has formed a requisite belief, and therefore, the reassessment have been validly initiated in the case of the assessee. 5.2 We have heard rival submission of the parties and perused the relevant material on record. Before us the assessee has not filed copy of the reasons recorded and referred only to the observation of Sanjay Sivabhagwan Keyal assessee, while assailing the reassessment, contended that the same was a mere change of opinion and devoid of any live nexus between the material relied upon and the forma Reliance was placed upon the decision of the Hon’ble Supreme ITO v. Lakhmani Mewal Das [(1976) 103 ITR 437 (SC)]. learned counsel also relied on decisions of the coordinate bench of ribunal in the case of Bir Bahadur Singh Sijwani ( 2015) 53 taxmann.com 366, Smt Sapna Chauhan ( ITA No. 137 & 138/Ag/2018) ; Ashish natvarlal Vashi I ITA No. 3522/AHD/2016) and Hashmukhbhai B Patel (ITA No. 193/SRT/2019. The learned Departmental Representative, per contra, supported the orders of the lower authorities, contending that the Assessing Officer had tangible material, namely AIR information, duly verified with the return of income, on the basis of which he had formed a bona fide belief that income had escaped assessment. placed upon ACIT v. Rajesh Jhaveri Stock Brokers (P) [(2007) 291 ITR 500 (SC)] and submitted that there was a material relevant to the case of the assessee and on that basis he has formed a requisite belief, and therefore, the reassessment have validly initiated in the case of the assessee. We have heard rival submission of the parties and perused the relevant material on record. Before us the assessee has not filed copy of the reasons recorded and referred only to the observation of ITA No. 636/SRT/2025 5 Sanjay Sivabhagwan Keyal assessee, while assailing the reassessment, contended that the same was a mere change of opinion and devoid of any live nexus between the material relied upon and the formation of belief. Reliance was placed upon the decision of the Hon’ble Supreme [(1976) 103 ITR 437 (SC)]. The the coordinate bench of wani ( 2015) 53 taxmann.com 366, Smt Sapna Chauhan ( ITA No. 137 & 138/Ag/2018) ; Ashish natvarlal Vashi I ITA No. 3522/AHD/2016) and Hashmukhbhai B Patel (ITA No. 193/SRT/2019. The learned Departmental Representative, per contra, of the lower authorities, contending that the Assessing Officer had tangible material, namely AIR information, duly verified with the return of income, on the basis of which he had formed a bona fide belief that income had escaped assessment. ACIT v. Rajesh Jhaveri Stock Brokers (P) nd submitted that there was a material relevant to the case of the assessee and on that basis he has formed a requisite belief, and therefore, the reassessment have We have heard rival submission of the parties and perused the relevant material on record. Before us the assessee has not filed copy of the reasons recorded and referred only to the observation of Printed from counselvise.com the Assessing Officer regarding the reopening. CIT(A) has rejected the contention of the assessee observing as under: “(a) First ground of appeal is regarding addition and assessment at Rs. 13,91,940/-. The appellant submitted that the appellant of income declaring income at Rs. 1,46,260/ 10. The appellant is engaged in the business of textile trading during the year under consideration. The Ld. AO has erred in only considering the credits of the bank account and adding the same to the total income of the appellant. He ought to have considered cash withdrawals made from the bank account of the appellant while making an addition. This is in view of the fact that the appellant had made a total cash de 13,49,835/- during Asstt. Year 2009 withdrawal of Rs. 12,80,400/ that each and every cash withdrawals has a corresponding cash deposition and the same ought to be income declared by the appellant. It is respectfully submitted that cash deposition made by the appellant in his savings bank account was out of cash sales made by the appellant from his regular b textiles trading during the year under consideration. made by the appellant also includes cash generated out of business activities carried out by him during earlier years and various cash withdrawals made by him during the also submitted the summary of cash book which is reproduced as under: Particulars Opening cash Balance as on 01.04.2008 Add Cash sales receipts Cash withdrawals from bank a/c Total cash flow Less Cash deposit into bank account Cash purchase of goods Cash expenses Personal withdrawal Sanjay Sivabhagwan Keyal essing Officer regarding the reopening. We find that Ld. CIT(A) has rejected the contention of the assessee observing as (a) First ground of appeal is regarding addition and assessment at Rs. . The appellant submitted that the appellant had filed his return of income declaring income at Rs. 1,46,260/- on 29.03.2010 for A.Y. 2009 10. The appellant is engaged in the business of textile trading during the year under consideration. The Ld. AO has erred in only considering the ank account and adding the same to the total income of the appellant. He ought to have considered cash withdrawals made from the bank account of the appellant while making an addition. This is in view of the fact that the appellant had made a total cash de during Asstt. Year 2009-10 and had made a total cash withdrawal of Rs. 12,80,400/- during Asstt. Year 2009-10. It is also evident that each and every cash withdrawals has a corresponding cash deposition and the same ought to be considered before making any addition to the total income declared by the appellant. It is respectfully submitted that cash deposition made by the appellant in his savings bank account was out of cash sales made by the appellant from his regular business a textiles trading during the year under consideration. The cash deposition appellant also includes cash generated out of business activities carried out by him during earlier years and various cash withdrawals made by him during the Asstt. Year 2009 also submitted the summary of cash book which is reproduced as under: Particulars Amount (Rs.) Opening cash Balance as on 01.04.2008 51,360 Cash sales receipts 7,93,652 Cash withdrawals from bank a/c 1,28,04,00 Total cash flow 21,25,412 Cash deposit into bank account 13,49,835 Cash purchase of goods 5,02,392 Cash expenses 88,532 Personal withdrawal 1,20,000 ITA No. 636/SRT/2025 6 Sanjay Sivabhagwan Keyal We find that Ld. CIT(A) has rejected the contention of the assessee observing as (a) First ground of appeal is regarding addition and assessment at Rs. had filed his return on 29.03.2010 for A.Y. 2009- 10. The appellant is engaged in the business of textile trading during the year under consideration. The Ld. AO has erred in only considering the ank account and adding the same to the total income of the appellant. He ought to have considered cash withdrawals made from the bank account of the appellant while making an addition. This is in view of the fact that the appellant had made a total cash deposition of Rs. 10 and had made a total cash 10. It is also evident that each and every cash withdrawals has a corresponding cash deposition considered before making any addition to the total income declared by the appellant. It is respectfully submitted that cash deposition made by the appellant in his savings bank account was out of siness activities of The cash deposition appellant also includes cash generated out of business activities carried out by him during earlier years and various cash Asstt. Year 2009-10. The appellant also submitted the summary of cash book which is reproduced as under: Amount 51,360 7,93,652 1,28,04,00 21,25,412 13,49,835 5,02,392 88,532 1,20,000 Printed from counselvise.com Total Cash Flow Closing cash balance as on 31.03.2009 From the above facts it can be concluded that no income has escaped assessment and that the appellant had duly considered the above received cash sales receipts while filing his original return of income for Asstt. Year 2009-10. The AO as per assessment order the assessment for the year under assessment, the assessee was given an opportunity to clarify the position with regard to deposit of cash amounts in the savings bank account. From the statement of bank accoun 070010100261920 maintained with Axis Bank, Surat, it is noticed that there were substantial cash transactions in the above said bank account, which is not at all disclosed to the Department. Almost all the entries were of 'Cash Deposits'. On verifica cash has been deposited on various dates and the said amount has been withdrawn either by cash withdrawal through ATM or through transfer or by clearing. However, the sources of cash deposits are not verifiab assessee has not furnished any details in this regard despite repeated opportunities being afforded to the assessee. The cash deposits as appearing in the above said bank account were reported in the AIR information. The source of the credits is the assessee either in the return of income or during the course of assessment proceedings. The explanation of the appellant and material available on records have been considered and I am of the opinion that the facts st appellant are not sufficient. Hence, this explanation made by the appellant do not prove the genuineness and creditworthiness of the transaction. The appellant has also quoted the judicial judgments in support, but on verification, it is found different. Therefore, ground no. 1 of the appellant is dismissed. 5.3 It is observed that the Assessing Officer acted upon specific information emanating from the Annual Information Return furnished by the Axis Bank, indicating cash deposits by the assessee inconsistent with the income declared. Upon verification of the return, such inconsistency was confirmed. The material thus Sanjay Sivabhagwan Keyal Total Cash Flow 20,60,759 Closing cash balance as on 31.03.2009 64,653 the above facts it can be concluded that no income has escaped assessment and that the appellant had duly considered the above received cash sales receipts while filing his original return of income for Asstt. Year The AO as per assessment order stated that it is clear that before re the assessment for the year under assessment, the assessee was given an opportunity to clarify the position with regard to deposit of cash amounts in the savings bank account. From the statement of bank accoun 070010100261920 maintained with Axis Bank, Surat, it is noticed that there were substantial cash transactions in the above said bank account, which is not at all disclosed to the Department. Almost all the entries were of 'Cash Deposits'. On verification of the bank statement, it is observed that cash has been deposited on various dates and the said amount has been withdrawn either by cash withdrawal through ATM or through transfer or by clearing. However, the sources of cash deposits are not verifiab assessee has not furnished any details in this regard despite repeated opportunities being afforded to the assessee. The cash deposits as appearing in the above said bank account were reported in the AIR information. The source of the credits is neither explained nor disclosed by the assessee either in the return of income or during the course of assessment proceedings. The explanation of the appellant and material available on records have been considered and I am of the opinion that the facts st appellant are not sufficient. Hence, this explanation made by the appellant not prove the genuineness and creditworthiness of the transaction. The appellant has also quoted the judicial judgments in support, but on verification, it is found that the facts of the case under consideration are different. Therefore, ground no. 1 of the appellant is dismissed. It is observed that the Assessing Officer acted upon specific information emanating from the Annual Information Return e Axis Bank, indicating cash deposits by the assessee inconsistent with the income declared. Upon verification of the return, such inconsistency was confirmed. The material thus ITA No. 636/SRT/2025 7 Sanjay Sivabhagwan Keyal 20,60,759 64,653 the above facts it can be concluded that no income has escaped assessment and that the appellant had duly considered the above received cash sales receipts while filing his original return of income for Asstt. Year stated that it is clear that before re-opening the assessment for the year under assessment, the assessee was given an opportunity to clarify the position with regard to deposit of cash amounts in the savings bank account. From the statement of bank account No. 070010100261920 maintained with Axis Bank, Surat, it is noticed that there were substantial cash transactions in the above said bank account, which is not at all disclosed to the Department. Almost all the entries were tion of the bank statement, it is observed that cash has been deposited on various dates and the said amount has been withdrawn either by cash withdrawal through ATM or through transfer or by clearing. However, the sources of cash deposits are not verifiable as the assessee has not furnished any details in this regard despite repeated opportunities being afforded to the assessee. The cash deposits as appearing in the above said bank account were reported in the AIR neither explained nor disclosed by the assessee either in the return of income or during the course of The explanation of the appellant and material available on records have been considered and I am of the opinion that the facts stated by the appellant are not sufficient. Hence, this explanation made by the appellant not prove the genuineness and creditworthiness of the transaction. The appellant has also quoted the judicial judgments in support, but on that the facts of the case under consideration are different. Therefore, ground no. 1 of the appellant is dismissed.” It is observed that the Assessing Officer acted upon specific information emanating from the Annual Information Return e Axis Bank, indicating cash deposits by the assessee inconsistent with the income declared. Upon verification of the return, such inconsistency was confirmed. The material thus Printed from counselvise.com constituted tangible evidence justifying the formation of belief of escapement of income. It is trite law that at the stage of recording reasons, the Assessing Officer is not required to establish escapement conclusively; it suffices if there exists a rational connection or live link between the material and the belief formed. The ratio of Lakhmani Mewal Das before us, rather fortifies the validity of the reopening. We are thus constrained to observe that the plea of the assessee that the reopening was based on a mere change of opinion stands bereft merit. The ratio in the other decision of the coordinate bench cited by the assessee are also considered validly initiated. 5.4 In the circumstances, we uphold the finding of the learned CIT(A) and hold that the reassessm initiated. Grounds Nos. 1 and 3 of the appeal are dismissed. 6. The ground No. two of The Ld. CIT(A) has rejected the contention of the assessee observing as under: “c) The next ground Bank account. The appellant submitted that the actual cash deposit was Rs. 13,49,835/- and not Rs. 13,91,936/ regard, it is found that the AO obtained a copy of Bank st Bank, Surat by issuing notice u/s 133(6) of the Act. Hence, the difference comes to Rs. 42,101/ statement and tally the amount of cash deposits whether the actua is Rs. 13,49,835/- Sanjay Sivabhagwan Keyal constituted tangible evidence justifying the formation of belief of of income. It is trite law that at the stage of recording reasons, the Assessing Officer is not required to establish escapement conclusively; it suffices if there exists a rational connection or live link between the material and the belief formed. Lakhmani Mewal Das (supra), when applied to the facts before us, rather fortifies the validity of the reopening. We are thus constrained to observe that the plea of the assessee that the reopening was based on a mere change of opinion stands bereft The ratio in the other decision of the coordinate bench cited by the assessee are also considered but the reassessment In the circumstances, we uphold the finding of the learned CIT(A) and hold that the reassessment proceedings were validly initiated. Grounds Nos. 1 and 3 of the appeal are dismissed. The ground No. two of the appeal relates to addition The Ld. CIT(A) has rejected the contention of the assessee observing “c) The next ground of appeal is regarding the amount of cash deposits in Bank account. The appellant submitted that the actual cash deposit was Rs. and not Rs. 13,91,936/-as alleged by the Ld. AO. In this regard, it is found that the AO obtained a copy of Bank st Bank, Surat by issuing notice u/s 133(6) of the Act. Hence, the difference comes to Rs. 42,101/-. In this regard, the AO is directed to verify this statement and tally the amount of cash deposits whether the actua or Rs. 13,91,936/- and allow relief to the tune of Rs. ITA No. 636/SRT/2025 8 Sanjay Sivabhagwan Keyal constituted tangible evidence justifying the formation of belief of of income. It is trite law that at the stage of recording reasons, the Assessing Officer is not required to establish escapement conclusively; it suffices if there exists a rational connection or live link between the material and the belief formed. (supra), when applied to the facts before us, rather fortifies the validity of the reopening. We are thus constrained to observe that the plea of the assessee that the reopening was based on a mere change of opinion stands bereft of The ratio in the other decision of the coordinate bench cited the reassessment has been In the circumstances, we uphold the finding of the learned ent proceedings were validly initiated. Grounds Nos. 1 and 3 of the appeal are dismissed. the appeal relates to addition on merit. The Ld. CIT(A) has rejected the contention of the assessee observing of appeal is regarding the amount of cash deposits in Bank account. The appellant submitted that the actual cash deposit was Rs. as alleged by the Ld. AO. In this regard, it is found that the AO obtained a copy of Bank statement of Axis Bank, Surat by issuing notice u/s 133(6) of the Act. Hence, the difference . In this regard, the AO is directed to verify this statement and tally the amount of cash deposits whether the actual amount and allow relief to the tune of Rs. Printed from counselvise.com 42,101/- if found correct. Grounds of appeal on this ground is allowed subject to verification.” 6.1 We have perused the relevant material on record and the submission of the parties on the issue in ourselves unable to accede to the plea of the assessee. the bank statement of the assessee 27 to 30. For ready reference said statement of bank is reproduced as under: Sanjay Sivabhagwan Keyal if found correct. Grounds of appeal on this ground is allowed subject to verification.” e have perused the relevant material on record and the submission of the parties on the issue in dispute, ourselves unable to accede to the plea of the assessee. the bank statement of the assessee is available on paperbook page For ready reference said statement of bank is reproduced ITA No. 636/SRT/2025 9 Sanjay Sivabhagwan Keyal if found correct. Grounds of appeal on this ground is allowed e have perused the relevant material on record and the ispute, but we find ourselves unable to accede to the plea of the assessee.. The copy of available on paperbook page For ready reference said statement of bank is reproduced Printed from counselvise.com Sanjay Sivabhagwan Keyal ITA No. 636/SRT/2025 10 Sanjay Sivabhagwan Keyal Printed from counselvise.com Sanjay Sivabhagwan Keyal ITA No. 636/SRT/2025 11 Sanjay Sivabhagwan Keyal Printed from counselvise.com Sanjay Sivabhagwan Keyal ITA No. 636/SRT/2025 12 Sanjay Sivabhagwan Keyal Printed from counselvise.com 6.2 The pattern revealed by the bank statement is most telling. The deposits are made in small denominations, ranging between ₹1,000 and ₹40,000, on numerous occasions throughout the year, and are followed almost immediately corresponding withdrawals through the Automated Teller Machine located at “Millennium Textile.” Such a rhythmic and mechanical sequence of deposits and withdrawals bears the unmistakable imprint of a circuitous transaction and militates against the conduct expected of a genuine trading concern. The conduct of maintaining a savings account, as opposed to a current account which a prudent trader would normally employ for business operations, further erodes the credibility of the explanation tendered. 6.3 The Section 68, by its very design, casts an initial and imperative duty upon the assessee to explain, with cogent evidence, the nature and source of any sum found credited in his books or accounts. This duty is not a matter of form but of substance. The law, in its wisdom, presumes nothing in favour of the taxpayer where unrecorded cash flows are discerned; rather, it demands from him a candid and verifiable explanation consistent with ordinary human conduct and commercial probability. 6.4 In this connection, one may the Hon’ble Supreme Court in Sanjay Sivabhagwan Keyal The pattern revealed by the bank statement is most telling. The deposits are made in small denominations, ranging between 40,000, on numerous occasions throughout the year, and are followed almost immediately — within a day or two nding withdrawals through the Automated Teller Machine located at “Millennium Textile.” Such a rhythmic and mechanical sequence of deposits and withdrawals bears the unmistakable imprint of a circuitous transaction and militates against the d of a genuine trading concern. The conduct of maintaining a savings account, as opposed to a current account which a prudent trader would normally employ for business operations, further erodes the credibility of the explanation 68, by its very design, casts an initial and imperative duty upon the assessee to explain, with cogent evidence, the nature and source of any sum found credited in his books or accounts. This duty is not a matter of form but of substance. The wisdom, presumes nothing in favour of the taxpayer where unrecorded cash flows are discerned; rather, it demands from him a candid and verifiable explanation consistent with ordinary human conduct and commercial probability. In this connection, one may profitably refer to the exposition of the Hon’ble Supreme Court in CIT v. P. Mohankala ITA No. 636/SRT/2025 13 Sanjay Sivabhagwan Keyal The pattern revealed by the bank statement is most telling. The deposits are made in small denominations, ranging between 40,000, on numerous occasions throughout the year, within a day or two — by nding withdrawals through the Automated Teller Machine located at “Millennium Textile.” Such a rhythmic and mechanical sequence of deposits and withdrawals bears the unmistakable imprint of a circuitous transaction and militates against the d of a genuine trading concern. The conduct of maintaining a savings account, as opposed to a current account which a prudent trader would normally employ for business operations, further erodes the credibility of the explanation 68, by its very design, casts an initial and imperative duty upon the assessee to explain, with cogent evidence, the nature and source of any sum found credited in his books or accounts. This duty is not a matter of form but of substance. The wisdom, presumes nothing in favour of the taxpayer where unrecorded cash flows are discerned; rather, it demands from him a candid and verifiable explanation consistent with ordinary human conduct and commercial probability. profitably refer to the exposition of [(2007) 291 ITR Printed from counselvise.com 278 (SC)], wherein it was held that the expression “the assessee offers no explanation or the explanation offered is not satisfactory in the opinion of the Assessing Officer” vests in the authority a quasi judicial discretion, to be exercised upon objective material. Likewise, in Sumati Dayal v. CIT Court enjoined that matters of apparent probability must be weighed not upon mechanical proof but upon the test of human conduct and surrounding circumstances. Applying those salutary principles, we find that the explanation of the assessee cash deposits were derived from cash sales and withdrawals neither supported by any contemporaneous documentary evidence nor reconcilable with the pattern of banking transactions. 6.5 It is therefore incumbent upon the assessee the indulgence of the statute, to discharge the burden cast upon him by law. A mere assertion, unsupported satisfy the judicial conscience of this Tribunal. The explanation tendered is self-serving and fails to inspire confidence, being at variance with the realities of trade and the cadence of normal mercantile practice. We are constrained transactions appear contrived to create a façade of business circulation where, in truth, none has been demonstrated. 6.6 The doctrine of presumption cannot operate in aid of one who has chosen to remain silent in the face of statutory Sanjay Sivabhagwan Keyal 278 (SC)], wherein it was held that the expression “the assessee offers no explanation or the explanation offered is not satisfactory in the Assessing Officer” vests in the authority a quasi judicial discretion, to be exercised upon objective material. Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], the Apex Court enjoined that matters of apparent probability must be upon mechanical proof but upon the test of human conduct and surrounding circumstances. Applying those salutary principles, we find that the explanation of the assessee cash deposits were derived from cash sales and withdrawals ported by any contemporaneous documentary evidence nor reconcilable with the pattern of banking transactions. incumbent upon the assessee, as one invoking the indulgence of the statute, to discharge the burden cast upon re assertion, unsupported by records, cannot satisfy the judicial conscience of this Tribunal. The explanation serving and fails to inspire confidence, being at variance with the realities of trade and the cadence of normal mercantile practice. We are constrained to observe that the transactions appear contrived to create a façade of business circulation where, in truth, none has been demonstrated. The doctrine of presumption cannot operate in aid of one who has chosen to remain silent in the face of statutory ITA No. 636/SRT/2025 14 Sanjay Sivabhagwan Keyal 278 (SC)], wherein it was held that the expression “the assessee offers no explanation or the explanation offered is not satisfactory in the Assessing Officer” vests in the authority a quasi- judicial discretion, to be exercised upon objective material. [(1995) 214 ITR 801 (SC)], the Apex Court enjoined that matters of apparent probability must be upon mechanical proof but upon the test of human conduct and surrounding circumstances. Applying those salutary principles, we find that the explanation of the assessee — that the cash deposits were derived from cash sales and withdrawals — is ported by any contemporaneous documentary evidence nor reconcilable with the pattern of banking transactions. , as one invoking the indulgence of the statute, to discharge the burden cast upon by records, cannot satisfy the judicial conscience of this Tribunal. The explanation serving and fails to inspire confidence, being at variance with the realities of trade and the cadence of normal to observe that the transactions appear contrived to create a façade of business circulation where, in truth, none has been demonstrated. The doctrine of presumption cannot operate in aid of one who has chosen to remain silent in the face of statutory notices and Printed from counselvise.com who, having had ample opportunity, failed to produce a scintilla of corroboration. The conscience of this Tribunal cannot but reject an explanation resting on conjecture and convenience. We therefore uphold the finding of the learned Commission sustaining the addition. The assessee accordingly dismissed. 7. In the result, the appeal of the assessee is dismissed. Order pronounced 30/10/2025. Sd/ (SANDEEP GOSAIN JUDICIAL MEMBER Dated: 30/10/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Surat 5. Guard file. //True Copy// Sanjay Sivabhagwan Keyal who, having had ample opportunity, failed to produce a scintilla of corroboration. The conscience of this Tribunal cannot but reject an explanation resting on conjecture and convenience. We therefore uphold the finding of the learned Commissioner (Appeals) in sustaining the addition. The Ground No. 2 of the accordingly dismissed. In the result, the appeal of the assessee is dismissed. Order pronounced under Rule 34(4) of the ITAT Rules Sd/- Sd/ (SANDEEP GOSAIN) (OM PRAKASH JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Surat ITA No. 636/SRT/2025 15 Sanjay Sivabhagwan Keyal who, having had ample opportunity, failed to produce a scintilla of corroboration. The conscience of this Tribunal cannot but reject an explanation resting on conjecture and convenience. We therefore er (Appeals) in of the appeal of the In the result, the appeal of the assessee is dismissed. under Rule 34(4) of the ITAT Rules on Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Surat Printed from counselvise.com "