SUKETU RAMESH JHAVERI,MUMBAI V. INCOME TAX OFFICER, PIRAMAL CHAMBER MUMBAI

ITA 5441/MUM/2024

AI Insights

The case involves Suketu Ramesh Jhaveri, the appellant, who filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, which was passed under section 250 of the Income Tax Act, 1961. The appeal was initially against the assessment order passed by the National e-Assessment Centre, Delhi, which added Rs.20,85,79,000 as undisclosed money under section 69A of the Act. The assessee had declared income from house property and business totaling Rs.5,99,180, with a gross turnover of Rs.25,11,420 and a net profit of Rs.4,47,984. The primary contention was the inability to explain the source of funds amounting to Rs.20,85,79,000 during the assessment proceedings. The CIT(A) confirmed the addition after the assessee failed to comply with notices. The Tribunal admitted additional evidence and remitted the matter for fresh adjudication.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633163 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: misc
• Other Referred Cases: CIT-IV v. Text Hundred India (P) Ltd [(2013) 351 ITR 57 (Del)]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIARUN KANTI DATTA
• Assessee Lawyers: FENIL BHATT
• Keywords: Business income; Opportunity of being heard; Additional evidence; Reasonable cause; Corroborative evidences; Source of fund
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G”, MUMBAI BEFORESHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND MS. PADMAVATHY S., ACCOUNTANT MEMBER ITA No.5441/Mum/2024 (Assessment year: 2018-19) Suketu Ramesh Jhaveri Room No.11, 2nd Floor, Nagindas Mansion, AG Road, Opera House, Mumbai-400 004 PAN: AEEPJ6573K vs Income Tax Officer 19(3)(1), Mumbai Piramal Chamber, Mumbai APPELLANT RESPONDENT Assessee by : Shri Fenil Bhatt Respondent by : ShriArun Kanti Datta- CIT DR. Date of hearing : 09/06/2025 Date of pronouncement : 12/06/2025 O R D E R Per Anikesh Banerjee (JM) : Instant appeal of the assessee was filed against the order of the National Faceless Appeal Centre (NFAC), Delhi *in short, ‘Ld.CIT(A)+ passed under section 250 of the Income Tax Act, 1961 (in short, ‘the Act’) date of order 29/08/2024 for A.Y. 2018-19. The impugned order was emanated from the order of the National e-Assessment Centre, Delhi passed under section 143(3) read with section 144B of the Act, date of order 21/04/2021. 2 ITA No. 5441/Mum/2024 Suketu Ramesh Jhaveri 2. The brief facts are that the assessee, in his individual capacity, filed his return of income declaring income under the head, ‘Income from house property’ and ‘Income from business or profession’ totaling Rs.5,99,180/-. The assessee declared gross turnover of business of Rs.25,11,420/- from which net profit was declared at Rs.4,47,984/-. During the assessment proceedings, the Ld.AO found that the assessee has made transactions in different bank accounts under the proprietorship name and the total transaction so made was Rs.20,85,79,000/- . During the assessment proceedings, the assessee declared that the assessee is the beneficiary of such money against payment of commission of a sum of Rs.2,01,995/- which was considered as part of his business receipts. Inspite of the repeated queries, finally, the Ld.AO asked the assessee to explain the source of fund, but assessee was unable to explain the source of receipts of Rs.20,85,79,000/-. Accordingly, the Ld.AO framed the assessment order with an addition of Rs.20,85,79,000/- as his undisclosed money under section 69A of the Act. The aggrieved assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) issued notice but the assessee was unable to comply with the notices, as recorded by the Ld.CIT(A). Finally, the appeal order was passed and the addition was confirmed. Being aggrieved on the appeal order, the assessee filed an appeal before us. 3. The Ld. AR filed a paper book comprising pages 1 to 365, which has been taken on record. The Ld. AR drew our attention to paragraph 6.6.3 of the assessment order at page 5, the relevant extract of which reads as under:- “6.6.3 Therefore, the Circumstantial and factual evidences are to be relied upon. In the instant case, the circumstantial evidences are broadly bifurcated as under: 3 ITA No. 5441/Mum/2024 Suketu Ramesh Jhaveri 1.In the return of income for the assessment year 2018-19 the business of the assessee is declared as trading of chemicals. 2. The assessee has neither furnished name, address/ledgers of parties nor any details were provided in respect of parties from whom cheque/RTGS/NEFT is received or deposited in the various account of the assessee, which is owned by the assessee for the year under consideration. The assessee has submitted bank books which were not substantiated by supporting evidences. 3. All the circumstantial evidences prove that the deposits in the bank account of the assessee are over and above his normal course of business and the same is not disclosed in the regular books of accounts.” It is noted that the assessee failed to submit the requisite details as called for by the Ld. AO. The assessee raised this issue before the Ld. CIT(A), who granted a reasonable opportunity to furnish the necessary documents. Notice was issued by the Ld. CIT(A) on 12/07/2024, fixing the hearing on 18/07/2024. The assessee filed an adjournment application, stating that the concerned employee was unavailable, and sought additional time to produce the required documents. A copy of the adjournment request is available at page 195 of the APB. 4. During the course of arguments, the Ld. AR submitted that an application under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1962 was filed seeking admission of additional evidence before the Tribunal. It was prayed that the matter be restored to the file of the Ld. CIT(A) for fresh adjudication after taking into consideration the said additional evidence. The additional documents are compiled at pages 200 to 338 of the APB. 5. In support of this contention, the Ld. AR placed reliance on the decision of the Hon’ble Delhi High Court in the case of CIT-IV v. Text Hundred India (P) Ltd. 4 ITA No. 5441/Mum/2024 Suketu Ramesh Jhaveri [(2013) 351 ITR 57 (Del)], particularly paragraph 13 of the judgment, which is reproduced below: - “13. The aforesaid case law clearly lays down a neat principle of law that discretion lies with the Tribunal to admit additional evidence in the interest of justice once the Tribunal affirms the opinion that doing so would be necessary for proper adjudication of the matter. This can be done even when application is filed by one of the parties to the appeal and it need not to be a suo motu action of the Tribunal. The aforesaid rule is made enabling the Tribunal to admit the additional evidence in its discretion if the Tribunal holds the view that such additional evidence would be necessary to do substantial justice in the matter. It is well-settled that the procedure is handmade of justice and justice should not be allowed to be choked only because of some inadvertent error or omission on the part of one of the parties to lead evidence at the appropriate stage. Once it is found that the party intending to lead evidence before the Tribunal for the first time was prevented by sufficient cause to lead such an evidence and that this evidence would have material bearing on the issue which needs to be decided by the Tribunal and ends of justice demand admission of such an evidence, the Tribunal can pass an order to that effect.” 6. The Ld. DR, in response, supported the orders passed by the revenue authorities and contended that sufficient opportunity had already been afforded to the assessee at earlier stages. However, the Ld. DR did not raise any strong objection to the admission of additional evidence at this stage. 7. We have considered the rival submissions and perused the material available on record. In our considered view, the documents now sought to be placed on record are relevant to the assessee's contention and go to the root of the matter. Although the Ld. CIT(A) issued notice dated 12/07/2024 and fixed the hearing on 18/07/2024, the assessee was prevented by reasonable cause from 5 ITA No. 5441/Mum/2024 Suketu Ramesh Jhaveri producing the documents on that date, as evidenced by the adjournment request placed at page 195 of the APB.We also respectfully rely on the judgment of the Hon’ble Delhi High Court (supra), which clearly affirms the Tribunal’s discretionary power to admit additional evidence in the interest of justice when the party was prevented by sufficient cause from producing it earlier and where such evidence has material relevance to the issue at hand. Accordingly, we admit the additional evidence filed by the assessee and remit the matter to the file of the Ld. CIT(A) for de novo adjudication after taking the same into consideration. We make it clear that we are not expressing any opinion on the merits of the case so as to avoid prejudicing the outcome of the remanded proceedings. It is further directed that the assessee be granted a reasonable opportunity of being heard. If the assessee seeks to file any further documentary evidence before the Ld. CIT(A), the same shall be permitted in accordance with law. On the other hand, the assessee is expected to act diligently and extend full cooperation during the remanded proceedings. 8. In the result, the appeal of the assessee bearing ITA No.5441/Mum/2024 is allowed. Order pronounced in the open court on 12th day of June 2025. Sd/- sd/- (MS. PADMAVATHY S) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,दिन ांक/Dated: 12/06/2025 Pavanan 6 ITA No. 5441/Mum/2024 Suketu Ramesh Jhaveri Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai "