MR. MANISH HOLARAM RANGLANI,NANDURBAR V. ACIT DHULE CIRCLE, DHULE

ITA 1738/PUN/2025

AI Insights

The case involves Mr. Manish Holaram Ranglani, a wholesale trader, who appealed against the additions made to his income by the Assessing Officer (AO) and upheld by the Commissioner of Income Tax (Appeals) [CIT(A)]. The additions were made following the cash deposits during the demonetization period in India, which were alleged to be in specified bank notes. The Tribunal examined the evidence, including a bank certificate detailing the denominations of the deposited notes, and found that the deposits were not in the specified bank notes but in other denominations. The Tribunal also noted that the book results were not disputed by the AO or CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789994 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 18-07-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UODOL RAJ SINGH
• Assessee Lawyers: BHUVANESH KANKANI
• Keywords: Additional evidence; Corroborative evidences
• Section: 143(3); 142(1); 68

Judgement Text

" आयकर अपीलीय अधिकरण \"ए\" न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL \"A\" BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1738/PUN/2025 धििाारण वर्ा / Assessment Year: 2017-18 Mr. Manish Holaram Ranglani, Plot No. 84 Ganpati Nagar, Taloda Road, Nandurbar- 425412 Maharashtra PAN-AVAPR7426G Vs. ACIT Dhule Circle अपीलार्थी / Appellant प्रत्यर्थी/Respondent Assessee by: Shri Bhuvanesh Kankani Department by: Shri Uodol Raj Singh, DR Date of hearing: 13-11-2025 Date of Pronouncement: 26-11-2025 आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER:- This appeal at the instance of assessee is directed against the order passed by Ld. CIT(A) NFAC, Delhi u/s 250 of the Income-tax Act, 1961 dated 08.07.2025 which is arising out of assessment order passed u/s 143(3) dated 11.12.2019 of the Income Tax Act, 1961. 2. Assessee has raised following grounds of appeal:- 1. On facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that the assessment so completed by making addition of Rs. 1,72,64,254/- by the Ld. AO and that upheld by Ld. CIT(A) is by non-application of mind and also by non-perusing the documents & explanation available on record. Accordingly, the addition so made be kindly deleted and the Appellant be granted just and proper relief in this respect. 2. On facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that the addition of Rs.1,72,64,254/ so made by Ld. AO and that upheld by Ld. CIT(A) u/s 68 of the Act is incorrect and not in accordance with the relevant provision of the Act. Accordingly, the additions so made be kindly deleted and the Appellant be granted just and proper relief in this respect. Printed from counselvise.com 2 ITA No.1738/PUN/2025 3. On the facts and circumstances prevailing in the case and as per provisions and scheme of the Income-tax Act, 1961 ('the Act') it be held that the observation recorded by the Ld. AD as upheld by Ld. CIT(A) that Appellant has deposited Rs.1,72,64,254/- In demonetized currency (l.e., Specified bank notes, 'SBN') is Incorrect and contrary to the proof submitted by the Appellant. Accordingly, the addition so made only on this ground of depositing SBN be kindly deleted and the Appellant be granted just and proper relief in this respect. 4. On the facts and circumstances prevailing in the case and as per provisions and scheme of the Income-tax Act, 1961 ('the Act') Appellant be kindly allowed to produce additional evidence, if required, in the interest of justice. 5. The appellant prays to be allowed to add, amend, modify, rectify, delete, ratse any grounds of appeal at the time of hearing. 3. Brief facts of the case are that assessee is an individual engaged in the wholesale trading of food grains, pulses and other essential commodities. Return of income for A.Y. 2017- 18 e-filed on 26.10.2017 declaring total income of Rs. 10,30,740/- The case selected for limited scrutiny under CASS to examine the cash deposits during the year. Valid notice u/s 143(2) and 142(1) of the Act duly served upon the Assessee. Ld. Assessing Officer (AO) observed that during the demonetization period from 19.11.2016 to 31.12.2016 the assessee has deposited cash of Rs. 2,49,50,000/- During the course of assessment proceedings assessee placed a copy of Cash Book showing that the cash in hand as on 18.11.2016 is Rs. 76,85,746/- Ld. AO accepted the sales of alleged cash deposit to the extent of Rs. 76,85,746/- and for the remaining sum, due absence of proper supporting evidence, Ld. AO concluded the assessment proceedings making addition of Rs. 1,72,64,254/- and assessed income at Rs. 1,82,94,990/- 4. Aggrieved assessee preferred appeal before Ld. CIT(A) contending that the alleged sum is not in the form of specified Bank Notes and they are either in the denomination of Rs. 100/- or the new currency issued by the Government of the denomination of Rs. 2,000/- Certificate from State Bank of India dated 17.12.2019 also placed. However, Ld. CIT(A) dismissed the appeal and confirmed the action of the Printed from counselvise.com 3 ITA No.1738/PUN/2025 Assessing Officer (AO) stating that there is a lack of legally compliant evidence to rely concerning the nature of currency tendered and absence of third party validations. 5. Aggrieved assessee is now in appeal before this Tribunal. The Ld. Counsel for the assessee took us through relevant Documents filed in the Paper Book running in 406 pages which includes the Audited Financial Statements, VAT audit returns for current year and preceding year, Bank Certificate for cash deposit during demonetization period. Assessee also filed a legal Paper Book citing eleven decisions and Paper Book running into 165 pages. Assessee has also filed a letter dated 14.11.2025 stating that various documents including the certificate of currency deposited during demonetization period issued by State Bank of India has been submitted before Ld. CIT(A) much prior to the date of remand report. A copy of E- proceedings, response acknowledgement dated 26.11.2022 is also furnished. Ld. Counsel for the assessee has also submitted that the alleged cash deposits is not in specified Bank Notes. The comparative cash deposit during the same months in the preceding financial year is more than the present financial year. He submitted that the Books of Accounts have been duly audited and have not been rejected by the AO and the source of cash sales is duly explained by the assessee. 6. On the other hand Ld. Departmental Representative (DR) vehemently argued supporting the order of Ld. CIT(A) and stated that if any new evidence is filed before this Hon’ble Tribunal then the same may please be restored to the file of lower authorities for necessary verification. 6. We have heard rival contentions and perused the record placed before us. We observe that the assessee carries on the Printed from counselvise.com 4 ITA No.1738/PUN/2025 business of wholesale trading under sole proprietorship concern M/s Ranglani and Company. Gross turnover for the year under appeal is approx. 15.67 Crores. Assessee mainly deals in the trading of Gutkha, Pan Masala, Chewing Tobacco and Jarda. Books of Accounts are audited and Tax Audit Report as well as Vat Audit report stands filed. The issue in dispute is regarding the source of cash deposits of Rs. 1,72,64,254/- during demonetization period which in view of the lower authorities remain unexplained. We observe that on going through the cash deposits during the very same period i.e. October to December during the F.Y. 2015-16 the cash sale amounts to Rs. 5,73,70,000/- whereas the cash deposit during the year under consideration during the third quarter is Rs. 4,01,50,000/- This shows that the assessee is consistently depositing cash in Bank from the cash sales and the amount of cash deposit during third quarter in F.Y. 2016- 17 is less than the cash deposit in third quarter during the F.Y. 2015-16. We also observe that Ld. AO as well as CIT(A) has not disputed the book results. 7. So far as the source of cash deposits is concerned, we note that out of total cash deposit during demonetization period of Rs. 2,49,50,000/- Ld. AO has accepted the source of cash of Rs. 76,85,746/- being the opening balance as on 08.11.2016 appearing in the cash book of assessee. So far as the remaining amount is concerned, the observation of the AO is that the alleged cash deposit is in the specified bank notes. Before us the assessee has filed the copy of Bank Certificate dated 13.12.2019 providing the details of denomination of notes with number of pieces for the cash deposits during the demonetization period. The certificate is reproduced below for the sake of evidence:- Printed from counselvise.com 5 ITA No.1738/PUN/2025 8. The above referred certificate issued by SBI has been duly placed before Ld. CIT(A) and the assessee has certified the above certificate to be a true copy and therefore authenticity and correctness of the above referred Bank Certificate is not in dispute. From the perusal of the above Bank Certificate we notice that from 21.11.2016 to 31.12.2016 the cash deposits are cited in the denomination of Rs. 100/- or newly issued currency of Rs. 2000/- note. The initial deposit on 15.11.2016 of Rs. 70,00,000/- in the denomination of specified Bank Notes of Rs. 1000/- and Rs. 500/- are accepted to be from the opening cash in hand available with the assessee as on 08.11.2016. 9. We therefore under the given facts and circumstances and the evidences put forth before us find that the alleged cash deposit is not in the specified Bank notes and the source of such cash deposits is from regular cash sales. Finding of Ld. CIT(A) is reversed and all the effective grounds of appeal raised by the assessee are allowed. 10. In the result appeal of the assessee is allowed as per terms indicated herein above. Order pronounced on this 26th day of November, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; ददिांक /Dated: 26th November, 2025. Neeta Printed from counselvise.com 6 ITA No.1738/PUN/2025 आदेश 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, \"A\" बेंच, पुणे / DR, ITAT, \"A\" Bench, Pune 5. गार्ा फाइल / Guard File. आदेशािुसार / BY ORDER, Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे /ITAT, Pune. Printed from counselvise.com "