ARJUN BHAGARAM PARMAR,RATNAGIRI V. WARD-1, RATNAGIRI, RATNAGIRI

ITA 115/PUN/2025

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The case involves Arjun Bhagaram Parmar, an individual engaged in the business of mobile sales and repairs, who appealed against the additions made to his income for the assessment year 2017-18. The Income Tax Officer (ITO) had made additions to the assessee's income based on unexplained cash deposits and estimated profits from business transactions during the demonetization period. The assessee contested these additions, which were upheld by the CIT(A). The Tribunal, after reviewing the submissions and evidence, partly allowed the appeal, reducing the assessed income significantly by accepting the business nature of the bank transactions and rejecting the separate addition for cash deposits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774554 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 15-01-2025
• Other Referred Cases: Collector, Land Acquisition vs. Master Katiji and Others, Inder Singh Vs State of Madhya Pradesh
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANOJ TRIPATHI
• Keywords: Business income; TDS; FORM 26AS
• Section: 144; 142(1); 44AD

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.115/PUN/2025 धििाारण वर्ा / Assessment Year: 2017-2018 Arjun Bhagaram Parmar, Room No. 11, Swar Vihar, Garah Sankulan Sarang, Khend, Tal-Chiplun, Ratnagiri-415605 Maharashtra PAN-AYQPM4825M Vs Ward-1, Ratnagiri Appellant Respondent Assessee by : None Revenue by : Shri Manoj Tripathi (through virtual) Date of hearing : 09.09.2025 Date of pronouncement : 12.09.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER :- This appeal at the instance of the assessee is directed against the order of Ld. CIT(A) NFAC, Delhi dated 26.04.2022 framed u/s 250 of the Income Tax Act, 1961 which is arising out of assessment order u/s 144 of the Act dated 19.12.2019 framed by Ld. ITO Ward-3, Ratnagiri. 1. When the case called for none appeared on behalf of the assessee. In the past on two occasions on 16.06.2025 and 14.07.2025 CA Poker Ram appeared. However on the remaining days of hearing fixed on 03.03.2025, 26.03.2025, 07.05.2025 and 25.08.2025 and today i.e. 09.09.2025 none appeared. However assessee has filed the Paper Book and written submissions. I therefore proceed to adjudicate with Printed from counselvise.com 2 ITA No.115/PUN/2025 the assistance of Ld. Departmental Representative (DR) and available records ex-parte que assessee. 2. Registry has informed that the appeal is time barred by 930 days. Condonation application alongwith affidavit has been filed by the assessee which indicates that the delay has arised due to the dependancy of the assessee on the Tax Consultant/authorized representative for filing the appeal. Considering the fact that assessee resides in remote rural area at Tehsil Chiplun, District-Ratnagiri and also considering the facts of the case, I find that the delay is not intentional and assessee had not gained from delaying the appeal. In the interest of justice and taking guidance from the judgement of the Hon’ble Apex Court in the case of Collector, Land Acquisition vs. Master Katiji and Others(1987) 167 ITR 471(SC) (Supreme Court) and in the case of Inder Singh Vs State of Madhya Pradesh judgement dated 21.03.2025 (2025) INSC 382) I hereby condone the delay of 930 days and admit the appeal for adjudication. 3. Brief facts of the case are that the assessee is an individual. Ld. Assessing Officer (AO) based on the information about large cash deposit during demonetization period from 09.11.2016 to 30.12.2016, observe that the assessee has not filed return of income for A.Y. 2017-18. Ld. AO issued notice u/s 142(1) of the Act to the assessee to file return of income. Even though the notice was duly served but the assessee neither submitted the return nor submitted any reply. Ld. AO proceeded for best judgement assessment. A final show cause notice was issued to which assessee filed application on 12.12.2019 electronically stating that assessee runs a business of mobile sale and repair in the name of M/s Gaytri Mobile and also possesses a shop Act License and Vat registration certificate. He also Printed from counselvise.com 3 ITA No.115/PUN/2025 submitted that all purchases are made from Vat registered dealers and payment made through cheque. Sample copies of purchases and sale invoices were filed. However in absence of the cash book, Ld. A.O. concluded the proceedings making two additions. Firstly for unexplained cash deposit of Rs. 4,23,000/- during demonetization period. Secondly estimated net profit @ 10% of the total credit/cash entries in Bank except cash deposit in Specified Bank Notes (SBN) at Rs. 4,23,000/- and applied the 10% profit rate on the remaining credit of Rs. 93,44,102/- making an addition of Rs. 9,34,410/- assessing income at Rs. 93,44,410/- 4. Aggrieved assessee preferred appeal before Ld. CIT(A) but failed to succeed. Aggrieved assessee is now in appeal before this Tribunal challenging the addition of Rs. 13,57,410/- Ld. Departmental Representative (DR) vehemently argued supporting the order of Ld. CIT(A). 5. I have heard Ld. DR and perused the record placed before me. The assessment in the case of assessee has been completed u/s 144 of the Act for the A.Y. 2017-18 making addition of Rs. 13,57,410/- which includes addition for unexplained cash deposit during demonetization period at Rs. 4,23,000/- and addition for estimated profits @ 10% on the remaining credits in the bank found to be from business transactions. In the paper book filed by the assessee which is running in 72 pages assessee has filed various details including financial statement purchases/sale bills, registration certificate, computation of income, Tax Challan, Form 26AS and other details but it seems that assessee has not furnished the return of income for A.Y. 2017-18 even though assessee has claimed to have Printed from counselvise.com 4 ITA No.115/PUN/2025 paid self assessment tax of Rs. 93,700/- and there is a TDS of Rs. 158/- and the income from business is declared under presumptive profits u/s 44AD of the Act Rs. 7,64,159/-, loss from house property at Rs. 79,278/- and deduction under Chapter VIA at Rs. 37,407/-. But all these details remained to be submitted due to non filing of income tax return. Ld. AO has observed that the assessee has not filed return of income. I also observe that during the assessment proceedings assessee has successfully demonstrated that he is engaged in business of sale of mobile and mobile repairing and that the transaction proceeds are vat registered deals and payments made through bank channel. Assessee has also furnished the copies of registration certificate under shop Act and vat Act. However since assessee has declared income on presumptive basis regular books including cash book were not required to be maintained and for this reason for non furnishing of cash book the impugned additions have been made by the AO. 6. I find that Ld. AO on one hand has accepted the credits in the Bank during the year at Rs. 93,44,102/- as business receipts but for the cash deposits in the very same bank again during demonetization period has not been accepted it as business receipts without making reference to any other material found against the assessee. 7. After going through the Paper Book and going through the bank statement of Vijaya Bank purchases/sale bills, I am satisfied that the total credits in the bank, their cheque/cash book are a part of the business receipts and Ld. AO erred in making separate addition for cash deposit of Rs. 4,23,000/- Now so far as estimated profits is concerned Printed from counselvise.com 5 ITA No.115/PUN/2025 I find that the gross receipts as per the Bank transaction referred by Ld. AO, the same amounts to Rs. 97,66,102/- (9,34,410+4,23,000/-) and as per section 44AD the applicable net profit rate in the case where books of accounts are not maintained is @ of 8% and applying the same on gross receipts of Rs. 97,66,102/-, the net profit is calculated at Rs. 7,81,368/- In other words as against the total assessed income at Rs. 13,57,410/-, the income for the year from business will amount to Rs. 7,81,368/- So far as the claim of assessee made in the computation of income for loss from House property as well as deduction under Chapter VIA the same will not be considered as the assessee has not furnished the income tax return and further assessee failed to furnish the return u/s 142(1) of the Act. However, Ld. AO after calculating tax liability on the income computed in the proceeding para referred (supra) at Rs. 7,81,368/-, Ld. AO after necessary verification shall allow the tax credit of self assessment tax appearing under the PAN of the assessee for A.Y. 2017-18 which is claimed to have been deposited at Rs. 93,900/- on 07.02.2020 vide Challan No. 079075. Grounds of appeal raised by the assessee are partly allowed as per terms indicated herein above. 8. In the result appeal of the assessee is partly allowed as per terms indicated herein above. Order pronounced on this 12th day of September, 2025. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER Printed from counselvise.com 6 ITA No.115/PUN/2025 पुणे/ Pune; दििांक / Dated: 12th September, 2025. Neeta 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, Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. Printed from counselvise.com "