KISHOR VITTHAL KOLHE,JALGAON V. DCIT-CIRCLE-1, JALGAON, JALGAON

ITA 1876/PUN/2025

AI Insights

The case involves Kishor Vitthal Kolhe, an individual engaged in the business of a travel agency and petrol pump, who appealed against the order of the CIT(A) / NFAC, Delhi, which confirmed the addition of Rs.64,94,250 made by the Assessing Officer under section 68 read with section 115BBE of the Income Tax Act, 1961. The addition was based on unexplained cash deposits during the demonetization period. The Tribunal found that while the Assessing Officer's concerns about the sudden increase in cash and continuous withdrawals were valid, the assessee's business activities, particularly as a petroleum dealer, could account for some of the cash deposits. Consequently, the Tribunal reduced the addition to Rs.32,47,125.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 828920 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Pune
• Assessment Year: misc
• Appeal Filed On: 05-08-2025
• Other Referred Cases: PCIT vs. Tripati Proteins (P.) Ltd., CIT vs. Vishal Exports Overseas Ltd., PCIT vs. Agson Global (P) Ltd., Abhijit Vivek Swami vs. ACIT, Mohit Sukhija vs. NFAC, Balwinder Kumar vs. ITO, Raj Kumar Dhab Wasti Ram vs. ITO, ACIT vs. Ramlal Jewellers, NECX (P) Ltd. Vs. ITO, Anantpur Kalpana vs. ITO, ACIT vs. M/s. Hirapanna Jewellers, M/s. Singhal Exim Pvt. Ltd. Vs. ITO, S.Balaji Mech Tech (P) Ltd. Vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIDYA RATNA KISHORE
• Assessee Lawyers: VINAY KAWADIA THROUGH VIRTUAL
• Keywords: Unexplained cash credit
• Section: 142(1); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.1876/PUN/2025 Assessment year : 2017-18 Kishor Vitthal Kolhe 31, Durgeshwari, Pratap Nagar, Ring Road, Jalgaon – 425001 Vs. DCIT, Circle – 1, Jalgaon PAN: ABFPK9778H (Appellant) (Respondent) Assessee by : Shri Vinay Kawadia (through virtual) Department by : Shri Vidya Ratna Kishore Date of hearing : 18-12-2025 Date of pronouncement : 14-01-2026 O R D E R PER R.K. PANDA, V.P: This appeal filed by the assessee is directed against the order dated 26.06.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2017-18. 2. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.64,94,250/- made by the Assessing Officer u/s 68 r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 3. Facts of the case, in brief, are that the assesse is an individual and engaged in the business of travel agency and petrol pump in the name and style of Shree Printed from counselvise.com 2 ITA No.1876/PUN/2025 Durga Tours & Travels and Shree Durga Petroleum. He filed his return of income on 07.11.2017 declaring total income of Rs.13,39,310/-. The return was processed u/s 143(1) of the Act. Subsequently the case was selected for scrutiny under CASS. Accordingly statutory notice u/s 143(2) of the Act was issued and served on the assessee. Thereafter, the Assessing Officer issued notice u/s 142(1) of the Act along with a questionnaire in response to which the assessee filed the details from time to time. 4. During the course of assessment proceedings the Assessing Officer noted that the assessee during the demonetization period has deposited cash amounting to Rs.2,60,27,680/-. He noted that the cash in hand as on 01.04.2016 was Rs.1,02,80,708/-. However, there was sudden increase in the cash in hand as on 08.11.2016 at Rs.1,67,74,958/-. He further noted that there was continuous withdrawal of cash from the bank account. According to him, if there was sufficient cash in hand, there was no need on the part of the assessee for such cash withdrawals. Further, the assessee has not given separate receipts from the petrol pump and the travel agency. He, therefore, issued a show cause notice asking the assessee to furnish certain details justifying the cash deposited during the demonetization period. 5. So far as the query raised by the Assessing Officer regarding the explanation for withdrawing huge cash when there was sufficient cash available in the books is Printed from counselvise.com 3 ITA No.1876/PUN/2025 concerned, it was submitted that since the assessee has availed loans from the bank, for its repayment and for the maintenance of buses, there was withdrawal of cash from the bank. So far as the query raised by the Assessing Officer regarding the vehicle-wise receipts in each trip is concerned, it was submitted that the same is not possible to maintain vehicle-wise receipts and expenditure. So far as the query raised by the Assessing Officer regarding sudden increase / decrease in cash receipts is concerned, it was submitted that during the year 2015-16 there were two buses and in March two more buses have been purchased and during the year 2016-17 there were seven buses, hence, the travel receipts were increased as compared to the year 2015-16. It was also explained by the assessee that the old currency notes were used for purchase of petrol and diesel and hence there is sudden surge in sales during the said period. 6. However, the Assessing Officer was not satisfied with the explanation given by the assessee. He noted that the assessee was showing cash in hand which is quite high. Further, there is an increase in cash in hand from 01.04.2016 to 08.11.2016. At the same time, there are instances of continuous withdrawals from the bank account. In view of the above discussion and rejecting the various explanations given by the assessee and applying the provisions of section 68 of the Act, the Assessing Officer made addition of Rs.64,94,250/- being the difference between the cash balance as on 01.04.2016 and the cash balance as on 08.11.2016 by observing as under: Printed from counselvise.com 4 ITA No.1876/PUN/2025 7. In appeal the Ld. CIT(A) / NFAC upheld the action of the Assessing Officer by observing as under: Printed from counselvise.com 5 ITA No.1876/PUN/2025 Printed from counselvise.com 6 ITA No.1876/PUN/2025 Printed from counselvise.com 7 ITA No.1876/PUN/2025 8. Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal. Printed from counselvise.com 8 ITA No.1876/PUN/2025 9. The Ld. Counsel for the assessee submitted that the assessee is maintaining day-to-day stock records and cash books which were produced before the Assessing Officer. No defects whatsoever were found by the Assessing Officer and there were no objections raised by the Assessing Officer regarding purchases and sales. Referring to the following decisions, he submitted that the addition made by the Assessing Officer u/s 68 of the Act by treating the sale proceeds credited to the Profit and Loss Account as unexplained cash credit cannot be sustained: i) PCIT vs. Tripati Proteins (P.) Ltd. (2024) 165 taxmann.com 175 (Guj) ii) CIT vs. Vishal Exports Overseas Ltd. (Tax Appeal No.2471 of 2009) iii) PCIT vs. Agson Global (P) Ltd. 441 ITR 550 (Del) iv) Abhijit Vivek Swami vs. ACIT vide ITA No.319/PUN/2023 v) Mohit Sukhija vs. NFAC (2025) 175 taxmann.com 94 (Del) vi) Balwinder Kumar vs. ITO vide ITA No.256/ASR/2022 vii) Raj Kumar Dhab Wasti Ram vs. ITO vide ITA No.195/ASR/2022 viii) ACIT vs. Ramlal Jewellers vide ITA No.1600/Mum/2023 order dated 26.07.2023 ix) NECX (P) Ltd. Vs. ITO (2022) 145 taxmann.com 232 (Hyd) x) Anantpur Kalpana vs. ITO (2022) 138 taxmann.com 141 (Bangalore) xi) ACIT vs. M/s. Hirapanna Jewellers (2021) 128 taxmann.com 291 (Visakhapatnam-Trib.) xii) M/s. Singhal Exim Pvt. Ltd. Vs. ITO vide ITA No.6520/Del/2018 (Del) xiii) S.Balaji Mech Tech (P) Ltd. Vs. ITO (2025) 170 taxmann.com 639 (Del) Printed from counselvise.com 9 ITA No.1876/PUN/2025 10. He accordingly submitted that the addition made by the Assessing Officer and sustained by the Ld. CIT(A) / NFAC should be deleted being not sustainable in law. 11. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. He submitted that the assessee has made huge deposit of cash in the bank account during the demonetization period. The Assessing Officer was very liberal in restricting the addition amount being the difference between the cash balance as on 08.11.2016 and the opening cash balance as on 01.04.2016. Since the Ld. CIT(A) / NFAC has already passed a speaking order by allowing certain relief, therefore, the same being in accordance with law, should be upheld and the grounds raised by the assessee be dismissed. 12. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case made addition of Rs.64,94,250/- being the difference between the cash balance as on 08.11.2016 and 01.04.2016 out of the total cash deposit of Rs.2,60,27,680/- during the demonetization period treating the same as unexplained cash credit. We find the Ld. CIT(A) / NFAC substantially sustained the addition made by the Assessing Officer, the reasons of which have already been reproduced in the preceding Printed from counselvise.com 10 ITA No.1876/PUN/2025 paragraphs. It is the submission of the Ld. Counsel for the assessee that when the books of account are audited and the assessee has produced the daily cash book, stock register and no defects were pointed out by the Assessing Officer and the sales which have been recorded in the books of account have been accepted, in that case, the Assessing Officer cannot invoke the provisions of section 68 of the Act by treating the sale proceeds credited to the Profit and Loss Account as unexplained cash credit. 13. We do not find much force in the above arguments of the Ld. Counsel for the assessee. The Assessing Officer has given a categorical finding that the assessee could not substantiate with justifiable reasons regarding the necessity of withdrawal of cash from the bank when it was having huge cash balances in its books of account. Further, the assessee did not submit the vehicle-wise receipts or trip-wise expenditure. Therefore, the submission of the Ld. Counsel for the assessee that the Assessing Officer has not rejected or doubted the same cannot be accepted. The various decisions relied on by the Ld. Counsel for the assessee are distinguishable and not applicable to the facts of the present case. However, we find the assessee, apart from doing travel agency business, was also the dealer of petroleum products and such dealers were allowed to accept the specified bank notes during the demonetization period. Therefore, the possibility of some deposits out of such cash received cannot be ruled out. Considering the totality of the facts of the case and in the interest of justice, we are of the considered opinion Printed from counselvise.com 11 ITA No.1876/PUN/2025 that addition of Rs.32,47,125/- being 50% of the total addition made by the Assessing Officer under the facts and circumstances of the case will meet the ends of justice. We hold and direct accordingly. The grounds raised by the assessee are accordingly partly allowed. 14. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open Court on 14th January, 2026. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 14th January, 2026 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Printed from counselvise.com 12 ITA No.1876/PUN/2025 S.No. Details Date Initials Designation 1 Draft dictated on 12.01.2026 Sr. PS/PS 2 Draft placed before author 13.01.2026 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Office Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order Printed from counselvise.com "