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Case Details: Hiralal Vijawat v. ACIT/DCIT - [2025] 178 taxmann.com 640 (Jaipur - Trib.)

Judiciary and Counsel Details

Dr. S. Seethalakshmi, Judicial Member
Rathod Kamlesh Jayantbhai, Accountant Member

Facts of the Case

The assessee was engaged in the wholesale and retail sale of cloth, sarees, etc. A survey action was conducted under Section 133A in the case of the assessee. During the survey, the survey team conducted physical verification and inventory of stock and cash. While doing so, it was noticed that the same were not matched with the regular books of account of the assessee. Some incriminating documents were also found during the survey proceedings.

Upon reviewing these incriminating documents, it was noted that various transactions related to cash payments made to debtors and investments in the construction of the shop were not recorded in the regular books of account of the assessee. The assessee, in his statement recorded during survey proceedings, admitted that he was unable to provide any explanation regarding transactions/discrepancies and offered a total undisclosed income of Rs. 70 lakhs under various heads. The assessee had included this offered income of Rs. 70 lakhs while filing his return of income for the relevant year and paid tax at the normal rate thereon.

The Assessing Officer (AO) noted that as the unaccounted/unexplained cash payment to debtors, investment made in the construction of the shop, excess cash and excess stock were covered under sections 69, 69A and 69B, respectively; therefore, tax should be charged as per the provision of section 115BBE. On appeal, CIT(A) treated excess stock as business income, but confirmed section 69/69A treatment for the balance. The aggrieved assessee filed the instant appeal before the Tribunal.

ITAT held

The Jaipur Tribunal held that the assessee had provided a list of debtors and parties for the investment in the construction of the shop. There was no finding by AO or CIT(A) that those parties were not regular customers of the assessee for debtors, and thereby the amount given to debtors was generated from business.

Furthermore, during the survey, the assessee specifically declared that the source of income disclosed was business income, and there was no rebuttal to this fact. The assessee, while surrendering the income in response to two questions, specifically stated that the source is from business income, and the same has already been accepted by accepting the returned income.

Hence, the entire surrendered amount was to be treated as business income, rather than as unexplained investments, under sections 69, 69A, and 69B.

List of Cases Reviewed

Kim Pharma (P.) Ltd. v. CIT [2013] 35 taxmann.com 456/216 Taxman 153 (Punjab & Haryana)
Shiv Shakti Enterprise v. Pr. CIT [2023] 157 taxmann.com 492 (Ahmedabad – Trib.)
Fakir Mohmed Haji Hasan v. CIT [2002] 120 Taxman 11 (Gujarat)/[2001] 247 ITR 290 (Gujarat)
Rajeev Jain v. PCIT(Central) [IT Appeal No. 644(JP) OF 2024, dated 29-08-2024 ]
Svetlana Gorodinskaia v. ACIT [IT Appeal No. 202(Chd) of 2023 dated 24-05-2024 ]
Rajesh Kumar Bajaj v. ACIT [IT Appeal No. 16(Ind)2019, dated 09-03-2020 ] (para 9) Distinguished.

List of Cases Referred to

J.K. Synthetics Ltd. v. CTO 1994 taxmann.com 370 (SC) (para 4)
Gursahai Saigal v. CIT [1963] 48 ITR 1(SC) (para 4)
India United Mills Ltd. v. CEPT [1955] 27 ITR 20 (SC). (para 4)
CIT v. Mahaliram Ramjidas [1940] 8 ITR 442 (PC) (para 4)
Smt. Rekha Shekhawat v. Pr.CIT (2022) 219 TTJ (JP) 761 (para 6)
Pr. CIT v. Bajargan Traders [2017] 86 taxmann.com 295/[2024] 466 ITR 397 (Rajasthan) (para 6)
Nikhaar Fashions v. ACIT [IT Appeal No. 1020(JPR) of2024), dated 21-11-2024 (para 6)
Parshavnath Buildestate (P.) Limited v. ACIT [IT Appeal No. 1357 (JPR) of 2024,dated 19-3-2025] (para 6)
Alok Vijawat v. PCIT (Udaipur) [IT Appeal No. 605(JP) of 2024, dated 13-12-2024] (para 6)
Bharat Associates v. ACIT [IT Appeal No. 1293 (jpr.) of 2024,dated 17-4-2025] (para 6)
Kim Pharma (P.) Ltd. v. CIT [2013] 35 taxmann.com 456/216 Taxman 153 (Punjab & Haryana) (para 8)
Shiv Shakti Enterprise v. Pr. CIT [2023] 157 taxmann.com 492 (Ahmedabad – Trib.) (para 8)
Fakir Mohmed Haji Hasan v. CIT [2002] 120 Taxman 11 (Gujarat)/[2001] 247 ITR 290 (Gujarat) (para 8)
Rajeev Jain v. PCIT(Central) [IT Appeal No. 644(JP) OF 2024, dated 29-08-2024 ] (para 8)
Svetlana Gorodinskaia v. ACIT [IT Appeal No. 202(Chd) of 2023 dated 24-05-2024 ] (para 8)
Rajesh Kumar Bajaj v. ACIT [IT Appeal No. 16(Ind)2019, dated 09-03-2020 ] (para 8).