TaxTMI 
TaxTMI 
2026 (1) TMI 1042
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....ing the provisions of Section 69A of the Act, total income of the assessee was computed at Rs. 3,35,82,930/-. 3. Arguments heard. File perused. Case of the Department 4. As per case of the department-appellant, vide letter dated 12.02.2020, specific information was received from the office of DDIT (Investigation-III), Jaipur, that the assessee had failed to explain the source of total credits of Rs. 3,18,41,574/- in his bank account IDBI Bank. Said amount included cash deposit of Rs. 15,90,000/-. 5. A notice u/s 148 of the Act was issued to the assessee after recording the reasons that income chargeable to tax had escaped assessment. Subsequently, in terms of judgment by Hon'ble Apex Court in case titled as Union of India vs. Ashish Agarwal, 2022 SCC Online SC 543, notice was served upon the assessee electronically on 27.05.2022, but, the assessee did not file any explanation. That is how, order u/s 148A(d) of the Act was passed explaining reasons for reopening of the case. Notice u/s 148 of the Act then came to be issued to the assessee on 22.07.2022. Version of the assessee 6. In his reply, dated 11.02.2023, the assessee put forth following version as regards....
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....iption of the issues involved: Initiation of Proceeding is not based on specific information. Sir, you have said that in this case specific information has been received from the office of the DDIT (INV)- III Jaipur vide letter no. 3462 dated 12/02/2020 wherein after making enquiries with the assessee it has been informed that the assessee has failed to explain the source of total credit of Rs. 31841574/- in his bank account for the year Including the cash deposit of Rs. 1590000/-. It is very much surprising to note that the investigation was conducting enquiries up to 24/02/2021 by the DDIT(Copy of the notice is enclosed) while you are initiating on the basis of information received on 12/02/2020. Thus, the basis of specific information is not correct. However, you are enquiring about the source of deposit as per the following chart A/C Number Cash deposit in Bank Total credit during the FY 2013-14 106104000060543 Rs. 1590000 Rs. 31841574/- While going through the description of the showcase notice, we are of the view that you have not gone into the details submitted from time to time and issued the show cause notice abruptly i....
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....24. 20.03.2013 By Account payee cheque 50000 Paid Rs. 25000/- towards labour charges on 20.03.2013 and Rs. 13000/- towards advertisement expenses on 21.03.2013 and Rs. 7190 towards telephone and mobile expenss Rs. 8322/- towards power and electricity expenses. We are enclosing herewith copies of account of Trade creditors in the books of M/s Pansari gems International showing the payment details. (Paper Book Page no-46-71). We are also enclosing Bank book of Pansari, Gems international for your ready reference., in which you would find that firm needed the funds for carrying its business activities. Funds were transferred to Bank accounts by the partner to honor the cheques issued by the firm. (Annexure-A) The confirmation of M/s Pansari Gems International is enclosed at Paper Book Page no-89-90 Amount Paid through cheques to Pansari Gems Corporation in AY 2013-14(more than Rs. 10000/-) Out of IDBI Savings bank A/c No. 106104000060543 of Manav Pansari to Pansari Gems Corporation) A/c No-106102000032124 S. No. Date Particulars Amount paid Amount received Purpose for which funds were utiliz....
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....he copy of Confirmation of Vinayak Gems Inc. is enclosed at Paper book page No-87 From the above details you would find that the main purpose of withdrawing from partnership firms and depositing in his partnership firm's was only for business purpose. Confirmations of all the deposits in saving Bank account (by account payee cheques) is enclosed. (Paper Book Page no-86-95) (Above 10000/-) S. No. Name of party Confirmation Remark/Name 1. Jaipur emporium International Will be submitted in 2 days Amount of interest received on unsecured loan 2 Vinayak Gems Enclosed Partner of M/s Vinayak Gems 3. Pansari Gems Corporation Enclosed Partner of M/s pansari Gems Corporation 4 Pansari Gems International Enclosed Partner in M/s Pansari gems International 5 Puneet Rawat Enclosed Interest received on unsecured loan 6 Ispat Sangrah Will be submitted in 2 days Interest and principal amount received on unsecured loan given 7. LIC of India LIC maturity credited in account LIC matured 8 Rohit Goyal Will be submitted in 2 days Unsecured loan 9. Deepa Agarwal Will be s....
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....reditor has to be paid in time. He has only done so. He has paid immediately to the creditors of firm after transferring the cheques to firms, which is already stated above in charts. For the business having such turnover, he has to maintain cash in personal capacity also to meet immediate need of the hour. However, he has redeposited his personal cash balance in his savings bank account and then transferred to the firm where it is needed. The copy of cash book submitted earlier also reveals that, he was having sufficient cash balance in hand after his personal drawing, which was redeposited in Bank for transferring cheques to firms in which he was partner. We have also submitted the details for the cheques given to firms after depositing cash which were immediately used for business purpose of the firms in the below table. This accounting practice is followed by him in regular manner in earlier years and which was accepted by the assessing authority In the earlier assessment u/s 147 for AY 2012-13, he has done the same type of accounting practice and his returned income was accepted and no additions were made. We are enclosing the copy of the No....
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.... at the conclusion that the assessee had failed to explain credit transaction amounting to Rs. 3,18,41,574/- including cash deposit amounting to Rs. 15,90,000/-. In this regard, the Assessing Officer recorded following reasons at page 17 to 19 of the assessment order:- "The assessee is an individual and filed his Return of Income u/s 148 of the Act on 16.01.2023 declaring total income of Rs. 17,41,360/-. The assessee in his ITR has disclosed Income from Business and Income (interest received from firm and salary) from Other Sources. The assessee is a partner in 3(three) Firms namely Pansari Gems International, Pansari Gems Corporation and Vinayak Gems Inc. These 3 firms are involved in manufacturing and trading activities of Precious and semi-precious stones. The notices mentioned supra were issued to the assessee through ITBA Portal and the same were delivered to the registered e-mail of the assessee. In response to these notices the assessee furnished Computation of Income, Form-26AS, Balance Sheet and stated that there is no P & L A/c made in the books of the assessee and no tax audit has been done for the A. Υ. 2013-14. The assessee also furni....
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....cash withdrawn is deposited in cash part by part without any expense which is abnormal. 7. On perusal of the Ledger Accounts of M/s Pansari Gems International and M/s Pansari Gems Corporation it is seen that the Opening Balance of these two firms as on 01.04.2012 was Rs. 18,73,428.72 and 80,40,003.09 respectively. As for example in spite of having enough fund, on 03.04.2012 an amount of Rs. 2,00,000/- was credited in the SB account of the assessee from M/s Pansari Gem International and the same was transferred out to M/s Pansari Gem Corporation on the same day i.e. fund was transferred from the needy firm. Hence not accepted. 8. The assessee vide show cause notice was asked to explain the credit transaction in his savings bank account. But, in the tabular form the assessee has only explained the debit transactions relating to his partnership firms which are related to the business of the partnership firm. Hence, not acceptable. In view of the above facts and circumstances of the case total credit transaction in his savings bank account amounting to Rs. 3,18,41,574/- including cash deposit amounting to Rs. 15,90,000/-, remained unexplained by the assessee ....