RAVINDRA SONAJIRAO KSHIRSAGAR,BEED V. ITO, WARD 1(5), AURANGABAD, AURANGABAD

ITA 159/PUN/2025

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The case involves Ravindra Sonajirao Kshirsagar, who did not file a regular return of income for the Assessment Year 2017-18 but was scrutinized due to a significant cash deposit of Rs.25 lakh during the demonetization period. The Income Tax Officer (ITO) made an addition of Rs.19,50,749 to the assessee's income, which was contested. The assessee argued that the cash in hand reported was consistent with his business and personal records. The Commissioner of Income Tax (Appeals) upheld the ITO's decision, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal found merit in the assessee's arguments regarding the cash in hand as of 31.03.2016 and remitted the matter back to the JAO for further examination of the cash transactions and the credit of prepaid taxes.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707034 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 20-01-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S. SADANANDA SINGH
• Assessee Lawyers: DEEPA KHARE
• Keywords: Business income; Presumptive income

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.159/PUN/2025 Assessment Year : 2017-18 Ravindra Sonajirao Kshirsagar, Kshirsagar Banglow, Nagar Road, Opp. Police Head Quarter, Beed – 431 122, Maharashtra PAN: AJLPK8014C Vs. Income Tax Officer, Ward-1(5), Aurangabad Appellant Respondent आदेश / ORDER This appeal at the instance of assessee pertaining to the Assessment Year 2017-18 is directed against the order dated 10.12.2024 of National Faceless Appeal Centre (NFAC) Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Assessment Order dated 27.12.2019 passed u/s.144 of the Act. 2. Brief facts of the case are that assessee is an individual and did not file the regular return of income for A.Y. 2017-18. Based on the information about cash deposit of Rs.25.00 lakh during the demonetization period from 09.11.2016 to 31.12.2017 in the bank account held by the assessee with Gajanan Nagari Shakari Bank Ltd. Beed, case picked up for scrutiny. Valid statutory notices were duly served upon the assessee. Return filed by the assessee in compliance to notice u/s.142(1) of the Act on 28.11.2018 was held to be non est Assessee by : Smt Deepa Khare Revenue by : Shri S.Sadananda Singh, JCIT Date of hearing : 19.06.2025 Date of pronouncement : 07.07.2025 ITA No.159/PUN/2025 Ravindra Sonajirao Kshirsagar 2 return by the ld. Assessing Officer. Thereafter, bank account was examined by ld. AO and accepted the cash in hand mentioned in the income-tax return at Rs.5,49,251/- even though the assessee has claimed the cash in hand at Rs.30,37,349/-. Ld. AO concluded the proceedings u/s.144 of the Act making addition of Rs.19,50,749/- and assessed the income at Rs.33,62,974/-. Aggrieved assessee preferred appeal before ld.CIT(A) but failed to succeed as ld.CIT(A) stated that in the balance sheet as on 31.03.2016 cash and bank balance together are stated at Rs.30,37,349/- and there is no specific entry showing the cash in hand. Cash statement submitted by the assessee was found to be self-serving document to justify the claim without any documentary evidences. 3. Now the assessee is in appeal before this Tribunal assailing the impugned order. 4. Ld. Counsel for the assessee referring to paper book running into 39 pages submitted that the assessee is regularly filing the income-tax returns and also preparing his profit and loss account and balance sheet. She submitted that in the return of income assessee only gives information about proprietary concern M/s. Ravindra Printers and the cash and bank balance appearing in the profit and loss account and balance sheet of sole proprietary concern are mentioned in the column requiring details of profit and loss account and balance sheet items required in “NO ACCOUNT CASE”. She further submitted that assessee also maintains the individual books of account and as per balance sheet as on 31.03.2015 cash in hand is Rs.21,09,188/- and the bank balance are separately mentioned. Similar cash in hand as on 31.03.2016 is ITA No.159/PUN/2025 Ravindra Sonajirao Kshirsagar 3 Rs.30,37,349/- but inadvertently mentioned as cash and balance. She stated that the bank balance in four savings bank accounts are already mentioned separately in the balance sheet. She stated that major source of alleged cash deposit is the opening cash balance as on 01.04.2016 and subsequent withdrawals and other cash transactions. On the strength of these factual details, she stated that the impugned addition is uncalled for. 5. As regards Ground No.2 she stated that the matter needs to be restored to the file of ld. Jurisdictional Assessing Officer for giving the credit of prepaid taxes at Rs.3,22,738/- denied by the AO in the assessment proceedings. 6. On the other hand, Ld. Departmental Representative stated that the assessee did not furnish the requisite details of the personal balance sheet before ld. AO. He stated that the Cash Flow statement has not been filed before the lower authorities. He however raised no objection if the issue is restored to the file of Ld. JAO for afresh adjudication and also to examine the fresh evidence filed by the assessee. 7. I have heard the rival contentions and perused the record placed before me. In Ground No.1, the grievance of the assessee is that ld.CIT(A) erred in confirming the action of the AO making addition for unexplained cash deposit u/s.69A of the Act at Rs.19,50,749/-. I observe that the assessee who is an individual runs a business of Printing in the name of M/s. Ravindra Printers. He also has other source of income from running Transport business, share of profit and income from other sources. Business income is declared under the Presumptive Taxation Scheme u/s.44AD of the Act. In the ITA No.159/PUN/2025 Ravindra Sonajirao Kshirsagar 4 income-tax return where the business income is from Presumptive Taxation, assessee is only required to furnish few details like gross receipts, gross profit, expenses, net profit, sundry debtors, sundry creditors, stock in trade and cash balance. In the instant case, assessee who runs the sole proprietary concern has shown the income of M/s. Ravindra Printers under Presumptive Taxation Scheme. Same was the situation for the preceding F.Y. 2015-16. There also, cash in hand in the books of M/s. Ravindra Printers stood at Rs.5,49,251/- and the same was mentioned in the income-tax return. 8. The assessee along with the details mentioned for sole proprietary concern also maintains the individual books of account and prepares the balance sheet and capital account. However, for certain categories of assessee it is not mandatory to furnish the individual balance sheet along with income-tax return. Now in the background of these facts, I note that during the year assessee has deposited cash in the bank account amounting to Rs.25.00 lakh during the demonetization period and assessee with the help of balance sheet as on 31.03.2016 placed at paper book page 18 has stated that the cash in hand in the individual balance sheet amounted to Rs.30,37,349/-. Against this figure in the balance sheet, particulars is mentioned under cash and bank balance. This entry of cash and bank balance and the details of bank balance held with State Bank of India and HDFC and two bank accounts held with Gajanan Nagari Shakari Bank Ltd. Beed having balance at Rs.10,861/- Rs.65,965/- Rs.1,739/- and Rs.23,465/-. It is apparently clear that as on 31.03.2016 in the individual balance sheet cash in hand amounted to ITA No.159/PUN/2025 Ravindra Sonajirao Kshirsagar 5 Rs.30,37,349/-. Now ld.CIT(A) has only taken into consideration the particulars of cash and bank balance but ignored the bank balances stated above and grossly erred in observing that there is no specific entry showing the cash in hand. I also observe that the assessee is regular filing income- tax returns for past many years and income for A.Y. 2015-16 and for A.Y.2016-17 is declared at Rs.14,99,750/- and Rs.16,74,470/- and even for the year under consideration the income is declared at Rs.13,97,230/-. Assessee has also filed the reconciliation of cash in hand as on 31.03.2016 by taking the opening cash in hand as on 01.04.2015 and then arrived at the figure of cash in hand as on 31.03.2016 at Rs.30,37,349/- and details placed at page 30 of the paper book. In the light of above observations, I find force in the contentions of Ld. Counsel for the assessee that assessee has successfully explained that cash in hand as on 01.04.2016 in his individual books of account was at Rs.30,37,349/-. 9. Now the cash transactions from 01.04.2016 to 08.11.2016 still need to be examined so that the source of alleged cash deposit during the demonetization period can be verified. Since these details have not been filed before the lower authorities and the same are essential to examine the issue raised before me, I deem it appropriate to remit back this issue to the file of ld. JAO with a direction that the Cash Flow statement from 01.04.2016 till the date of alleged cash deposit have to be examined but taking into consideration that cash in hand in individual capacity of assessee as on 01.04.2016 at Rs.30,37,349/- stands explained. Needless to say that assessee shall be given reasonable opportunity of hearing and then decide in accordance with law after considering the details ITA No.159/PUN/2025 Ravindra Sonajirao Kshirsagar 6 to be filed by the assessee. Ground No.1 raised by the assessee is allowed for statistical purposes. 10. Ground No. 2 has been raised for not allowing the credit of prepaid taxes at Rs.3,22,738/-. This being factual aspect needs to be examined at the end of ld. JAO along with Form No.26AS showing details of tax deducted at source and other prepaid taxes paid by the assessee. Ld. JAO is directed to carry out this exercise and then decide in accordance with law. Ground No.2 raised by the assessee is allowed for statistical purposes. 11. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on this 07th day of July, 2025. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 07th July, 2025. 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 // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune "