ITAT Upholds Rs 7.23 Crore Addition Over Unexplained Bank Credits and Unreconciled Financial Discrepancies:

The Mumbai Bench ‘E’ of the Income Tax Appellate Tribunal (ITAT) has dismissed an appeal filed by Hammer Plus Jewellery Pvt. Ltd. for the assessment year 2018-19, upholding an addition of Rs 7.23 crore made by the Income Tax Department over unexplained bank credits.

The Tribunal upheld the decision of the National Faceless Appeal Centre (NFAC), which had confirmed the addition of Rs 7,23,18,982 under Section 69A of the Income Tax Act, 1961. The addition was made by the Assessing Officer in an assessment order dated March 23, 2024, passed under Sections 147 and 144B of the Act.

The tax authorities found that the company’s explanations did not match the figures reported in its balance sheet. The discrepancies between the amounts credited to its bank account and the corresponding trade receivables were also not reconciled. Further, the company failed to provide independent third-party evidence to establish that it was carrying on genuine business activities or to counter the allegation that it was a paper company.

The ITAT noted that the company had neither appeared for the hearing on September 23, 2026, nor filed an application seeking adjournment. Earlier notices sent through registered post had also received no response. The Tribunal therefore decided the appeal in the company’s absence, based on the material available on record.

After examining the available material and the findings of the lower authorities, the Tribunal held that the company had failed to provide sufficient documentary evidence to explain the discrepancies or challenge the adverse findings. It found no reason to interfere with the NFAC’s order and accordingly dismissed the appeal.

However, the Tribunal clarified that the company could seek recall of the ex parte order in accordance with law if it demonstrates sufficient cause for its non-appearance.