ANIL SHIVAJI JADHAV,RATNAGIRI V. INCOME TAX OFFICER, RATNAGIRI

ITA 2266/PUN/2024

AI Insights

The case involves Anil Shivaji Jadhav, the appellant, who contested the additions and disallowances made by the Income Tax Officer (ITO) in the reassessment for the assessment year 2011-12. The ITO had reopened the assessment based on information about contract receipts and made various additions and disallowances, which were partly upheld by the CIT(A). The main legal issues revolved around the validity of the reassessment proceedings and the appropriateness of the additions and disallowances made. The Tribunal dismissed the challenge to the validity of the reassessment but allowed some relief by estimating the net profit and directing a re-verification of certain deductions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772174 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: misc
• Other Referred Cases: Jurisdictional Mumbai High Court
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY DHIVARE
• Assessee Lawyers: PRAMOD S. SHINGTE
• Keywords: Depreciation; Validity of assessment
• Section: 148; 143(3); 142(1)

Judgement Text

" आयकर अपीलीय अधिकरण \"एस एम सी\" न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL \"SMC\" BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.2266/PUN/2024 धििाारण वर्ा / Assessment Year: 2011-12 Anil Shivaji Jadhav H.No. 325 Ghanekunt, Lote, Khed, Ratnagiri- 415722 Maharashtra PAN-ACUPJ8781B Vs ITO, Ward 1 Ratnagiri Appellant Respondent Assessee by : Shri Pramod S. Shingte Revenue by : Shri Sanjay Dhivare, Addl. CIT Date of hearing : 13.08.2025 Date of pronouncement : 29.08.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER :- This appeal at the instance of the assessee is directed against the order passed by Ld. CIT(A) NFAC, Delhi dated 18.07.2024 u/s 250 of the Income Tax Act, 1961 and is arising out of assessment order passed u/s 143(3) r.w.s 147 dated 28.11.2018. 2. Assessee has raised following grounds of appeal:- 1) On the facts and circumstances of the case and in law the CITIA), erred in not accepting the contention of the appellant that as held by the Jurisdictional Mumbai High Court, no other addition is valid if there is no addition in the assessment order on the ground on account of which the assessment is re-opened. The appellant prays that it be held accordingly. 2) On the facts and circumstances of the case and in the CITIA), NFAC erred in holding the following additions/disallowance made by the AO in the assessment order: a. 10% of the total expenses (ie, medical expenses stall, petrol and diesel expenses) Printed from counselvise.com 2 ITA No.2266/PUN/2024 b. Deduction under Chapter VIA of Rs. 1,00,000/- c. Deduction under Section 24(b) of Rs. 36,413/- being interest on housing loan. d. Interest on cc, Interest on Loan e.15% of the total salary (Le. Wages and Bonus) debited by the appellant to his Profit and Loss Account on an adhoc basis. The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing. 3. Assessee has raised various grounds of appeal but they are mainly on following 2 grounds:- 1. Legal issue challenging the validity of assessment proceedings. 2. Against the various additions/disallowances at Rs. 24,07,708/- 4. Brief facts of the case are that the assessee is an individual and did not file the regular return for A.Y. 2011-12. Based on the information about contract receipts of Rs.1,23,86,692/-, notice u/s 148 followed by notices 143(2) and 142(1) of the Act have been served upon the assessee. The assessee has filed the return in response to notice u/s 148 of the Act and declared income of Rs.8,86,680/- Thereafter Ld. Assessing Officer (AO) during the course of assessment proceedings examined the details filed by the assessee but was not satisfied to the full extent because of incomplete information. Ld. AO concluded the assessment proceedings making certain disallowance of various investments including depreciation/denial of deduction under Chapter VI-A of the Act at Rs.1,00,000/- and also addition for unexplained increase in capital at Rs.8,21,641/- Ld. AO made total addition of Rs.24,07,708/- and assessed the income at Rs.32,94,390/- Aggrieved assessee preferred appeal before Ld. CIT(A) and partly succeeded as the addition for increase in capital at Rs.8,21,641/- and disallowance of depreciation at Printed from counselvise.com 3 ITA No.2266/PUN/2024 Rs.2,25,435/- was deleted and remaining addition of Rs.13,60,632/- has been confirmed. Now the assessee is in appeal before this Tribunal. Ld. Counsel for the assessee stated that if the income is estimated on the gross turn over, no other disallowances are required to be made. He also submitted that for the deduction claimed under chapter VI-A directions may be given to the AO for carrying out necessary verification. 5. I have heard rival contentions and perused the records placed before me. First I will take up the legal issue raised by assessee challenging the validity of re-assessment proceedings. I notice that the assessee has not filed regular return of income and the information available with the AO about the contract receipts of Rs.1,23,86,692/- by the assessee is also correct. The assessee has furnished the return in response to notice u/s 148. Therefore the reasons recorded by the AO for escapement of income is valid and also the additions made in the assessment order are having the nexus with the reasons recorded for re-opening. I therefore dismiss the grounds raised by the assessee challenging the validity of re-assessment proceedings. 6. Now I take up the issue of disallowance/additions of Rs.13,60,632/- which comprises of following- (i) Disallowance of various expenses amounting to Rs.12,24,219/- deduction under Chapter VIA of Rs.1,00,000/- towards repayment of Housing Loan at Rs.58,816/- out of Tuition Fees at Rs. 45,000/- and Rs.36,413/- for the interest paid on Housing Loan deductible u/s 24(b) of the Income Tax Act. Printed from counselvise.com 4 ITA No.2266/PUN/2024 7. Considering the submissions of the assessee, addition/disallowance towards deduction under Chapter VI-A of Rs.1,00,000/- and u/s 24(b) at Rs.36,413/-, the matter is restored to the file of Ld. Jurisdictional Assessing Officer (JAO) for conducting the verification for which assessee shall provide the necessary details and if found to be correct then deduction may be allowed under Chapter VI-A and section 24(b) and if not then Ld. (Assessing Officer) AO can decide in accordance with law. 8. Now the remaining dispute is regarding disallowance of 12,24,219/- I find that the disallowance made by AO is on an ad hoc basis but it is also an admitted fact that assessee has failed to provide the necessary details before Ld. AO to carry out necessary verification. In the given circumstances the only way is to estimate the net profit on gross turnover of the assessee because there is no dispute about the correctness of gross turnover of the assessee. Therefore I estimate the net profit for the year at Rs.11,50,000/- as against Rs. 10,23,090.12 declared by the assessee and direct the AO to delete the disallowance of expenses. Assessed gets relief of Rs.1097309.12. Grounds of appeal raised by the assessee are allowed as per terms indicated herein above. 9. In the result appeal of the assessee is partly allowed for statistical purposes. Order pronounced on this 29th day of August, 2025. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 29th August, 2025. Neeta Printed from counselvise.com 5 ITA No.2266/PUN/2024 आिेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. धवभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, \"SMC\" बेंच, पुणे / DR, ITAT, \"SMC\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. Printed from counselvise.com 6 ITA No.2266/PUN/2024 S.No. Details Date Remarks 1. Draft dictated on 21.08.2025 P.S. 2. Draft placed before author 25.08.2025 P.S. 3. Draft proposed & placed before the Second Member .08.2025 J.M. 4. Draft discussed/approved by Second Member .08.2025 J.M. 5. Approved Draft comes to the Sr. PS/PS .08.2025 P.S. 6. Kept for pronouncement on .08.2025 P.S. 7. Date of uploading of Order .08.2025 P.S. 8. File sent to Bench Clerk .08.2025 P.S. 9. Date on which the file goes to the Head Clerk .08.2025 10. Date on which file goes to the A.R. .08.2025 11. Date of Despatch of order .08.2025 Printed from counselvise.com "