MRS. LALITA RAMESH PORWAL,LONAVLA V. ITO WARD-9(5), PUNE

ITA 3023/PUN/2025

AI Insights

The case involves Mrs. Lalita Ramesh Porwal, who appealed against the addition of .90 lakh to her income for the Assessment Year 2017-18, which was alleged to be unexplained money deposited during the demonetization period. The Assessing Officer had doubted the genuineness of the assessee's claim that the cash in hand from a closed business was used for the deposit, especially after observing a transfer of 20.00 lakh to her daughter shortly after the deposit. The CIT(A) upheld the addition, finding insufficient evidence linking the cash withdrawals and deposits. The Tribunal, however, noted that the Assessing Officer had previously accepted similar financial statements for A.Y. 2016-17 without making any additions, and thus remanded the issue for further verification.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831874 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 09-12-2025
• Other Referred Cases: Sunanda Sanjay Chandaliya vs ITO, Ward-1(3), Aurangabad, Kamlesh Kantilal Bhandari vs ITO, Ward-1, Ahmednagar, Mrs. Usha Narayan Chaware vs ITO, Ward-4(5), Pune, Lalit R Jagawat HUF vs DCIT, 23(2), Shri Shail Jayesh Shah vs Income Tax Officer Ward-20(3)(3), Mumbai, Smt. Krishna Agarwal vs The ITO, Ward-1, Pali
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHASHANK OJHA VIRTUAL
• Assessee Lawyers: DIPESH PORWAL
• Keywords: Set aside; Assessment record

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.3023/PUN/2025 Assessment Year : 2017-18 Mrs. Lalita Ramesh Porwal, Survey No.21, Bungalow No.11, Pradhan Park, Lonavla-410401 Maharashtra PAN : AAQPP9517P Vs. Income Tax Officer, Ward-9(5), Pune Appellant Respondent आदेश / ORDER The captioned appeal at the instance of assessee pertaining to the Assessment Year 2017-18 is directed against the order dated 10.10.2025 of Addl./JCIT(A), Bengaluru passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Assessment Order dated 30.12.2019 passed u/s.143(3) of the Act. 2. Assessee has raised as many as 16 grounds of appeal which are mostly repetitive in nature and are not in accordance with Income Tax Appellate Tribunal Rules, 1963. However, the issue raised in all these grounds of appeal revolves around the addition of ₹19.90 lakh made by the Assessing Officer for unexplained money deposited in the bank account during the demonetization period. 3. Brief facts of the case are that the assessee is an individual and senior citizen and declared income of ₹2,24,960 in the Assessee by : Shri Dipesh Porwal Revenue by : Shri Shashank Ojha (virtual) Date of hearing : 12.01.2026 Date of pronouncement : 22.01.2026 Printed from counselvise.com ITA No.3023/PUN/2025 Mrs. Lalita Ramesh Porwal 2 return filed for A.Y. 2017-18 furnished on 06.02.2018. After the case being selected for Limited Scrutiny under CASS for examining source of cash deposit during the demonetization period valid statutory notices were served upon the assessee and has been asked to explain the source of cash deposit of ₹19.90 lakh. Assessee during the course of proceedings furnished the computation of income and balance sheet for A.Y. 2014-15 and A.Y. 2017-18. Profit and loss account for A.Y. 2016-17 and 2017-18 as well as copies of order passed by the Sales Tax Department showing that the Registration Certificate granted to M/s. Porwal and Sons had been cancelled on 31.01.2014. It was also claimed that after the close of the business on 31.01.2014 assessee had cash in hand of ₹21,51,528 as on 31.03.2014 and also cash in hand of ₹20,11,317 as on 31.03.2016 which has been utilised for making the alleged cash deposit in the bank account held with Central Bank of India. Ld. Assessing Officer on due consideration of these details noted that the assessee after depositing the alleged cash in her bank account has immediately transferred the funds amounting to ₹20.00 lakh to her daughter on 17.11.2016 and therefore ld. Assessing Officer doubted the genuineness of the claim of the assessee that cash in hand was kept for almost 2 ½ years prior to deposit in the bank account and concluded the assessment making addition of ₹19.90 lakh in the hands of assessee and assessed income at ₹22,14,960. 4. Aggrieved assessee preferred appeal before ld.CIT(A) but even though some details were furnished but as per ld.CIT(A) assessee failed to establish a clear link between the cash allegedly withdrawn in January 2014 and the cash deposited in November 2016 as there is no continuous cash flow statement or Printed from counselvise.com ITA No.3023/PUN/2025 Mrs. Lalita Ramesh Porwal 3 cash book covering the intervening period. Ld.CIT(A) affirmed the addition made by the Assessing Officer Aggrieved assessee is now in appeal before this Tribunal. 5. Ld. Counsel for the assessee vehemently argued referring to paper book running into 83 pages and has stated that the assessee was carrying on the business in the name of M/s. Porwal and sons and the said business has been closed on 31.01.2014 and as per capital account of Porwal and Sons assessee had capital balance of ₹38,22,841.13. He further submitted that the case of the assessee also selected for scrutiny for immediately preceding A.Y. 2016-17 and the same was concluded u/s.143(3) of the Act on 20.12.2018 and during the course of such assessment proceedings assessee has furnished the balance sheet and profit and loss account for A.Yrs. 2013- 14, 2014-15 and 2015-16 and also has furnished balance sheet as on 31.03.2016 exhibiting cash in hand at ₹20,17,317. He further submitted that the source of cash deposit has been duly explained. Further, with regard to the gap of 2 ½ years between such return filed and the alleged cash deposit referred and relied on the following decisions : “1. Sunanda Sanjay Chandaliya vs ITO, Ward-1(3), Aurangabad by the Income Tax Appellate Tribunal SMC bench, Pune decided on 02.05.2019. 2. Kamlesh Kantilal Bhandari vs ITO, Ward-1, Ahmednagar by the Income Tax Appellate Tribunal SMC bench, Pune decided 29.07.2016 on 3. Mrs. Usha Narayan Chaware vs ITO, Ward-4(5), Pune ITA No. 377/PUN/2022 by the Income Tax Appellate Tribunal SMC bench, Pune decided on 24/02/2023 4. Lalit R Jagawat HUF vs DCIT, 23(2), by the Income Tax Appellate Tribunal 'A' bench, Mumbai decided on 01/07/2025 Printed from counselvise.com ITA No.3023/PUN/2025 Mrs. Lalita Ramesh Porwal 4 5. Shri Shail Jayesh Shah vs Income Tax Officer Ward-20(3)(3). Mumbai, decided on 02/01/2023 6. Smt. Krishna Agarwal vs The ITO, Ward-1, Pali by the Income Tax Appellate Tribunal Jodhpur Bench decided on 12/08/2021” 5. On the other hand, ld. Departmental Representative supported the order of ld.CIT(A). 6. I have heard the rival contentions and perused the record placed before me. I observe that the assessee is aggrieved with the addition for explained cash deposit of ₹19.90 lakh. There is no dispute to the fact that prior to the alleged cash deposit there is no immediate cash withdrawal by the assessee during the year from her bank account. Assessee is also not having any regular business and sale of goods to explain such cash deposit. The only source stated by the ld. Counsel for the assessee before this Tribunal is that assessee was having cash in hand of ₹20,17,317 as on 31.03.2016 which was brought forward after the closed business of M/s. Porwal and Sons on 31.01.2014 and such cash in hand was left with the assessee in her sole proprietary concern. Admittedly gap of 2 ½ years could not be well explained by the assessee, however, one important fact brought to my notice is that the assessee has been subjected to the scrutiny assessment for A.Y. 2016-17 and assessee has participated in this proceedings and the assessment has been framed on 10.12.2018 u/s.143(3) of the Act making Nil addition in the hands of assessee. Certain details which were called for by the Assessing Officer during such assessment proceedings for A.Y. 2016-17 were duly furnished which included the financial statements for A.Yrs. 2013-14 to 2015-16 as well as individual balance sheet of the assessee as on 31.03.2016. If this claim of ld. Counsel for the assessee is correct then this information Printed from counselvise.com ITA No.3023/PUN/2025 Mrs. Lalita Ramesh Porwal 5 about the assessee having cash in hand of ₹20,17,317 as on 31.03.2016 was very much in the knowledge of the Assessing Officer before concluding of the assessment proceedings on 10.12.1018 and there being no addition made by the Assessing Officer in A.Y. 2016017 then the claim of the assessee has merit that it has accumulated funds from the past which were not deposited in the bank account and kept in hand. However, this claim of the assessee needs verification. It is therefore deemed fit to remand the issue to the file of Assessing Officer. Ld. Assessing Officer in the set aside proceedings shall examine the assessment records for A.Y. 2016-17 and if these details of the asssessee’s balance sheet as on 31.03.2016 are found placed therein as has been placed before us at paper book 51, he shall consider such details and decided the issue denovo. 7. So far as the decisions referred and relied on by the ld. Counsel for the assessee are concerned, I find that the cases mentioned at Sl. No.1 and 2 are for the assessment years prior to 2017-18 therefore not applicable because the reason for scrutiny is on account of cash deposited during the demonetization period. So far as the decision in the case of Mrs. Usha Narayan Chaware VS. ITO is concerned, the source of cash deposit was from sale of agricultural land which has been accepted by the Assessing Officer. In case of Lalit R. Jagawat HUF Vs. DCIT, the source of cash deposit was through cash sales and the books of account were accepted by the Assessing Officer and therefore not applicable in the present case. In the case of Shri Shail Jayesh Shah Vs. ITO assessee had opening balance as on 01.04.2016 duly explained before the Assessing Officer through documentary evidence and the facts are also not similar to the present assessee’s case. In the case of Smt. Krishna Printed from counselvise.com ITA No.3023/PUN/2025 Mrs. Lalita Ramesh Porwal 6 Agarwal Vs ITO the assessee successfully explained the source of cash deposit from the cash withdrawals made in the past which is not the case in the present assessee. Therefore, the decisions relied on by ld. Counsel for the assessee will not help the assessee in the instant case. Even otherwise, I have already restored the issue to the file of Assessing Officer for the limited purpose of verification of closing cash balance as on 31.03.2016 appearing in the assessment records of the assessee for A.Y. 2016-17 available with ld. Assessing Officer. Finding of ld.CIT(A) is set aside and Grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on this 22nd day of January, 2026. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 22nd January, 2026. Satish आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब\u0014च, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune Printed from counselvise.com "