DADASO BHAUSO DESAI,HATKANANGALE , KOLHAPUR V. INCOME TAX OFFICER, ICHALKARANJI

ITA 2612/PUN/2025

AI Insights

The case involves Dadaso Bhauso Desai, who appealed against the order of the Commissioner of Income Tax (Appeals) confirming the addition of cash deposits as unexplained income. The Assessing Officer initially alleged that the assessee had deposited Rs.87,15,000 in total, which was contested by the assessee stating the actual deposits were Rs.28,55,950 from his kirana shop business. The Tribunal found that the Assessing Officer had incorrectly included fixed deposits as unexplained income and had not properly considered the assessee's submissions regarding the nature of the deposits.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841943 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 04-11-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJITESH KUMAR MEENA
• Assessee Lawyers: PRAMOD S SHINGTE
• Keywords: Business income; Competent authority
• Section: 147; 144

Judgement Text

" आयकर अपीलीय अधिकरण ”एस एम सी” न्यायपीठ पुणे में। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपऩल सं. / ITA No.2612/PUN/2025 निर्धारण वषा / Assessment Year: 2013-14 Dadaso Bhauso Desai, Desai Lane Peth Vadgaon, Hatkanangale, Kolhapur – 416112 Vs Income Tax Officer, Ichalkaranji. PAN:ANLPD9057G Appellant/ Assessee Respondent /Revenue Assessee by Shri Pramod S Shingte Revenue by Shri Ajitesh Kumar Meena – Addl.CIT Date of hearing 27/01/2026 Date of pronouncement 23/02/2026 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the Assessee against the order of Ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 for the A.Y.2013-14 dated 11.09.2025 emanating from the Assessment Order passed under section 147 read with section 144 read with section 144B of the I.T.Act, 1961 dated 23.09.2021. The Assessee has raised following grounds of appeal : Printed from counselvise.com ITA No.2612/PUN/2025 [A] 2 “1. On the facts and circumstances of the case and in law the Ld. CIT(A), NFAC, erred in treating all cash deposits by the appellant in his bank account as representing his turnover not accepting the submission of the appellant that his actual turnover is far less than such deposita. 2. On the facts and circumstances of the case and in law the Ld. CIT(A), NFAC, erred in confirming the addition of entire cash deposits as being from unexplained source not accepting the contention of the appellant that majority of the cash deposits being from business turnover only income component therein needs to be taxed. 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.” Findings & Analysis : 2. We have heard both the parties and perused the records. 2.1 In this case, as per the assessment order, the assessee has not filed its return of income for the A.Y. 2013-14.As per AIMS and CIB data available on ITBA system, the assessee has made cash deposits of Rs. 46,99,400/- in a Saving Bank Account maintained with Ratnakar Bank limited Peth Vadgaon Maharashtra and cash deposits aggregating of Rs. 40,15,600/- in his account maintained with Bank of India, Peth Vadgaon Maharashtra and Ratnakar Bank Limited Peth Vadgaon during the F.Y. 2012-13 relevant to A.Y. 2013-14. However, the assessee has not filed his return of income. Thus, it is alleged in the assessment order that Assessee has deposited cash of Rs.87,15,000/- in the bank accounts. Printed from counselvise.com ITA No.2612/PUN/2025 [A] 3 3. Based on the said allegations, notice u/s.148 was issued on 04.03.2020. It is alleged that Assessee has not filed any Return of Income in response to notice u/s.148 of the Act. 4. On perusal of the Assessment Order, it is observed that Assessee had filed a reply during assessment proceedings along with copy of the bank statements. Assessee had submitted that Assessee is running a kirana shop and cash deposits are from the kirana shop. It has been specifically mentioned by the Assessee that total cash deposits during the year were only Rs.28,55,950/-. Therefore, it was mentioned by the Assessee that the allegation that Assessee has deposited Rs.87,15,000/- is incorrect. 4.1 The Assessing Officer verified the facts and noted that the cash deposits in the saving bank account was only Rs.28,55,950/-. Assessing Officer further noted that there were two fixed deposits totaling Rs.8,00,000/- in Ratnakar Bank Limited made on 30.05.012 and 10.09.2012. Therefore, Assessing Officer made an addition of Rs.36,55,950/- under section 69A of the Act. 5. Aggrieved by the assessment order, Assessee filed appeal before the ld.CIT(A) who confirmed the Assessment Order. Printed from counselvise.com ITA No.2612/PUN/2025 [A] 4 5.1 However, on reading the ld.CIT(A)‟s order, it seems that ld.CIT(A) has not considered the submission of the assessee properly as at some places ld.CIT(A) has referred Assessee as Company, whereas, Assessee is an Individual. Aggrieved by the ld.CIT(A)‟s order, Assessee has filed appeal before this Tribunal. 6. We have already mentioned above that notice u/s.148 has been issued alleging that Assessee had made cash deposits of Rs.87,15,000/-. However, admittedly, Assessee has made cash deposits in savings bank account of Rs.28,55,950/-. There are fixed deposits of Rs.8,00,000/-. Therefore, the allegation made in the notice u/s.148 regarding escarpment of income of Rs.87,15,000/- is factually incorrect and during assessment proceedings, Assessing Officer has accepted it. This also shows that there was no application of mind before issuing notice u/s.148 by the Assessing Officer and by the approving authority. The Assessing Officer and the approving authority has merely relied on AIMS Data. The Assessing Officer has not bothered to obtain copy of the bank statements from the Banks mentioned in the AIMS Data, before issuing notice u/s.148 of the Act. Printed from counselvise.com ITA No.2612/PUN/2025 [A] 5 7. The Assessing Officer has added Rs.8,00,000/- which were fixed deposits kept in Ratnakar Bank. We have verified and noted that said fixed deposits have been sourced from the earlier cash deposits. Thus, Rs.8,00,000/- have been considered twice, once while calculating the cash deposits and another independently under the Head „Fixed Deposits‟. In these facts and circumstances of the case, we direct the Assessing Officer to delete the addition of Rs.8,00,000/- made in the assessment order on account of fixed deposits. 8. There were cash deposits of Rs.28,55,950/- in the saving bank accounts maintained with Ratnakar Bank and Bank of India. 9. During the assessment proceedings, Assessee had submitted that Assessee is running a kirana shop. Assessee had filed copy of license issued by the Competent Authority to demonstrate that Assessee is running a kirana shop. Only the profit of the business can be taxed and not the entire receipts. 10. In this case, Assessing Officer has taxed entire receipts. In these facts and circumstances of the case, we consider 8% as profit of the business and accordingly, direct Assessing Officer to add only Printed from counselvise.com ITA No.2612/PUN/2025 [A] 6 8% of Rs.28,55,950/- i.e. Rs.2,28,476/-. Since it has been sourced out of business income, it should be taxed at normal rate and not under section 115BBE. 11. In the result, appeal of the assessee is partly allowed. Order pronounced in the open Court on 23 February, 2026. Sd/- Sd/- VINAY BHAMORE Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पपणे / Pune; ददिधंक / Dated : 23 Feb, 2026/ SGR आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : 1. अपऩलधर्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. नवभधगऩयप्रनिनिनर्, आयकरअपऩलऩयअनर्करण, “एस एम सऩ” बेंच, पपणे / DR, ITAT, “SMC” Bench, Pune. 6. गधर्ाफ़धइल / Guard File. आदेशधिपसधर / BY ORDER, / / TRUE COPY / / सहधयक रनिस्ट्रधर /Assistant Registrar आयकर अपऩलऩय अनर्करण, पपणे/ITAT, Pune. Printed from counselvise.com "