SARDAR SHIVAJI VARPE,KOLHAPUR V. INCOME TAX OFFICER, KOLHAPUR

ITA 1103/PUN/2025

AI Insights

The case involves Sardar Shivaji Varpe, a distributor of Britannia Biscuits, who appealed against the order of the Commissioner of Income Tax (Appeals) confirming an addition of Rs. 10,16,290 to his income for the assessment year 2017-18. This addition represented cash deposits made during the demonetization period in India. The assessee argued that these deposits were from his business turnover and had already been accounted for in his profit and loss statements. However, both the Assessing Officer and the CIT(A) rejected these claims due to insufficient evidence proving the source of the cash on the demonetization day. The Tribunal, after reviewing the submissions and evidence, upheld the addition, agreeing with the lower authorities' findings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669051 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SONAL L SONKAVDE
• Assessee Lawyers: PRAMOD S SHINGTE
• Section: 147

Judgement Text

" आयकर अपीलीय अिधकरण ”एस एम सी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1103/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year: 2017-18 Sardar Shivaji Varpe, Sablewadi, Karveer, Kolhapur – 416101. Maharashtra. V s The Income Tax Officer, Ward-1, Kolhapur. PAN: AAOPW9523E Appellant/ Assessee Respondent / Revenue Assessee by Shri Pramod S Shingte – AR Revenue by Smt Sonal L Sonkavde – Addl.CIT(DR) Date of hearing 03/06/2025 Date of pronouncement 23/06/2025 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.2017-18 dated 25.09.2024 emanating from the Assessment Order under section 147 r.w.s 144B of the I.T.Act, 1961, dated 20.04.2023. The assessee has raised the following grounds of appeal : ITA No.1103/PUN/2025 [A] 2 “On the facts and circumstances of the case and in law the CIT(A), NFAC erred in confirming the addition made by the Income Tax Officer, NaFAC (hereinafter referred to as the TTO) of Rs. 10,16,290/- representing cash deposits by the appellant during demonetization. The appellant submits as under: 1. The source of the cash deposit being out of his turnover from business of wholesale distributorship of Britannia Biscuits in the rural area of five talukas of Kolhapur district which is the regular feature of his business from year to year, no addition is called for in respect of such cash deposits. 2. The proceeds being from sale of Britannia Biscuits and such sales having already been credited to the profit and loss account addition of the cash deposits amounts to double addition of the same income and hence the same is required to be deleted. The appellant prays that the ITO be directed to delete the addition. 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.” Submission of ld.AR : 2. Ld.AR for the Assessee filed a paper book. The ld.AR explained that Assessee is a Distributor of Britania Industries Limited. Ld.AR further submitted that Assessee’s nature of business is such that there are cash receipts. Assessee explained source of cash during the assessment proceeding to the Assessing Officer(AO). However, AO made addition of Rs.10,16,290/-. Ld.CIT(A) has confirmed this addition. Ld.AR submitted that even in earlier years there have been cash deposits. Ld.AR invited our attention to the Chart showing cash deposits in F.Y.2015-16 and ITA No.1103/PUN/2025 [A] 3 F.Y.2016-17. Ld.AR submitted that Cash deposited in F.Y.2015-16 & F.Y.2016-17 was Rs.1,33,86,735/- and Rs.1,57,34,595/- respectively. Therefore, ld.AR requested that no addition is called for. Submission of ld.DR : 3. ld.DR for the Revenue relied on the order of the Assessing Officer and ld.CIT(A). Ld.DR submitted that Assessee had never produced cash book to demonstrate availability of cash on 08.11.2016 i.e.the Demonetization Day. Even in the paper book, Assessee has not filed cash book. Findings & Analysis : 4. We have heard both the parties and perused the material placed before us. In this case, Assessee had filed Return of Income on 29.09.2017 declaring total income of Rs.6,67,250/-. A notice u/s.148 was issued on 14.07.2022. During the Assessment Proceedings, various notices were issued. In the assessment order, it is noted that Assessee has deposited Rs.10,16,290/- in cash in the bank account between the period 10.11.2016 to 28.12.2016 in SBN Notes i.e.Demonetized Notes. The Assessing Officer after ITA No.1103/PUN/2025 [A] 4 considering the submission of the assessee made addition of Rs.10,16,290/-. Aggrieved by the assessment order, Assessee filed appeal before the ld.CIT(A) who confirmed the addition. 4.1 Aggrieved by the order of the ld.CIT(A), Assessee has filed appeal before this Tribunal. 5. Assessee has been appointed as Distributor by Britania Industries Limited and Britania Diary Private Limited vide agreement dated 15.11.2013. The said agreement is at page no.1 – 10 at the paper book. As per the said agreement, the Assessee is Authorized Wholesaler for sale of companies bakery and dairy products. Thus, Assessee is an Authorised Wholesale Merchant. Assessee submitted during the assessment proceedings in reply to the Assessing Officer’s question that the cash deposited during Demonetization pertains to his business of distributorship. Even during the hearing before us, the ld.AR submitted that the cash of Rs.10,16,290/- deposited during Demonetization is received from customers during the business of the assessee. However, it is noted that no cash book has been produced by the Assessee before the Assessing Officer. It is also noted that no cash book has been produced by the assessee even before us. Assessee has not proved ITA No.1103/PUN/2025 [A] 5 that Assessee was having cash of Rs.10,16,290/- in the Demonetized Currency on 08.11.2016 i.e.Demonetization Day. Nowhere in the assessee’s submission assessee has established having cash of Rs.10,16,290/- on 08.11.2016. After the mid-night of 08.11.2016, no one was allowed to accept the Demonetized Currency. We have already mentioned that Assessee is an Authorized Wholesaler. It means, Assessee is not selling the Britania’s Products to retail customers. Since assessee is an Authorised Wholesaler, Assessee’s customers will be the retail shop owners. We have already mentioned that Assessee has not demonstrated before us, nor before AO by producing the cash book that Assessee was having Rs.10,16,290/- in Demonetized Currency on 08.11.2016(Opening Balance of 09.11.2016). Assessee has not even filed copy of sales register to demonstrate cash sales. In the paper book, assessee has filed copy of agreement with Britania Industries, GST and VAT Certificates, Cash Deposit details, Chart showing cash deposits in three years, copy of Bank Statement of Bank of Maharashtra, copy of RBL Bank Ledger Account, copy of RBL Bank Current Account Statement, copy of Purchase Register, copy of Audit Report, copy of Balance Sheet and Profit and Loss Account, copy of ITR filed, VAT Return. Thus, no cash book was filed and no sales register was produced. ITA No.1103/PUN/2025 [A] 6 6. It is also noted that the Assessee has revised its VAT Return in 14/2/2018 for the period “October 2016 to December 2016” and “July 2016 to September 2016”. 7. In these facts and circumstances of the case, since assessee failed to demonstrate availability of Rs.10,16,290/- in demonetized currency in the cash book, and for all the reasons discussed in earlier paragraphs, we uphold the addition of Rs.10,16,290/-. Accordingly, grounds of appeal raised by the assessee are dismissed. 8. In the result, appeal of the assessee is dismissed. Order pronounced in the open Court on 23 June, 2025. Sd/- Sd/- VINAY BHAMORE Dr.DIPAK P.RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 23 June, 2025/ SGR आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “एस एम सी” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. ITA No.1103/PUN/2025 [A] 7 आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. "