SHRI KUNAL PRAKASH PANCHMUKH,PUNE V. ITO, WARD-9(5), PUNE, PUNE

ITA 102/PUN/2025

AI Insights

The case involves Shri Kunal Prakash Panchmukh, who appealed against the order of the CIT(A)/NFAC, which arose from an assessment order under section 144 of the Income Tax Act for the Assessment Year 2017-18. The primary issue was the addition of Rs.11,18,500 as unexplained cash deposits in two bank accounts and a post office, attributed to the period of demonetization. The assessee argued that these deposits were from accumulated past savings and business income, which was below the taxable limit. The Tribunal considered the nature of the assessee's business, the deposits made during the demonetization period, and the income declared in the tax returns.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474165 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANOJ TRIPATHI
• Assessee Lawyers: B.C. MALAKAR
• Keywords: Business income
• Section: 144; 44AD; 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.102/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year : 2017-18 Shri Kunal Prakash Panchmukh, Boys Bunglow, M.G. Road, Lonavala Maval, Pune- 410401. PAN : BNWPP2588J Vs. ITO, Ward-9(5), Pune. Appellant Respondent आदेश / ORDER PER MANISH BORAD, AM: This appeal filed at the instance of assessee is directed against the order of Ld. CIT(A)/NFAC dated 18.11.2024 which is arising out of the assessment order u/s 144 of the Act for Assessment Year 2017-18 framed on 21.12.2019 by the ITO, Ward-9(5), Pune. 2. At the outset, Ld. Counsel for the assessee requested for not pressing ground of appeal nos.1 and 2 challenging the validity of Assessee by : Shri B. C. Malakar Revenue by : Shri Manoj Tripathi Date of hearing : 19.03.2025 Date of pronouncement : 26.03.2025 ITA No.102/PUN/2025 2 assessment order. Thus, ground nos.1 and 2 are dismissed as not pressed. 3. The sole grievance of the assessee which remains for our adjudication is raised in ground no.3 regarding addition for unexplained money u/s 69A of the Act for unexplained cash deposit in two bank accounts and post office totalling to Rs.11,18,500/-. 4. Ld. Counsel for the assessee vehemently argued referring to the paper book running 173 pages and also referring to other details contending that the assessee is residing in Lonavala and engaged in the business of providing hotel/resident/villa to the tourists and all his income is below taxable limit. So far as the alleged cash deposit during the demonetization period is concerned, he firstly stated that the deposit during the demonetization period is of Rs.7,81,500/- whereas the Assessing Officer has made addition on total cash deposit of Rs.11,18,500/-. He also submitted that the assessee furnished the return but was not accepted by the Assessing Officer where he has declared business receipts and also offered income of Rs.2,95,410/-. He further submitted that accumulated past savings of his family members and self were the major source of deposits during the demonetization period and therefore considering the limit ITA No.102/PUN/2025 3 of Rs.2,50,000/- for each member, relief may be granted to the assessee. 5. On the other hand, Ld. DR supported the orders of the lower authorities. 6. We have heard rival contentions and perused the records placed before us. The issue for our consideration is whether Ld. CIT(A)/NFAC was justified in confirming the action of the Assessing Officer making addition for unexplained cash deposit of Rs.11,18,500/-. We observe that the assessee is engaged in the business of earning commission by way arranging the hotel/resident/villa for the tourists and also earning income from providing services of sightseeing, transportation, taxi services etc. The assessee’s case was selected for scrutiny for the substantial cash deposits during the demonetization period i.e. 09.11.2016 to 31.12.2016. The assessee also declared turnover of approx Rs.8,00,000/- in its investments and business offered income u/s 44AD at Rs.2,95,410/-, however, the said return has not been accepted by the Revenue Authorities. It is also admitted fact that the assessee is a small time businessman and residing with his family members who are not having separate bank accounts. It is ITA No.102/PUN/2025 4 also observed that during the demonetization period, the amount of deposit in the bank is Rs.7,81,500/- which includes investments in the post office at Rs.2,40,000/-. Though the separate banks accounts of the family members of the assessee have not been maintained but in case they had been maintained then assessee along with family members would have certain got the benefit of limit of Rs.2,50,000/- for each family members. Even out of the alleged cash deposit of Rs.11,18,500/- the assessee has already disclosed business turnover of approx Rs.8,00,000/- on which the profit has been estimated at Rs.2,95,000/-. 7. On an overall consideration of the facts of the case including that the assessee and his family members are having accumulated past savings and that the assessee has disclosed the business turnover u/s 44AD of the Act of approx Rs.8,00,000/-, we in order to end the dispute and being fair to both the parties deem it appropriate to sustain the addition at Rs.4,00,000/- as against the impugned addition made by the Assessing Officer. The addition of Rs.4,00,000/- sustained by us includes the business income of the assessee at Rs.2,95,410/- declared in the return not accepted by the department. Accordingly, finding of Ld. CIT(A)/NFAC on this ITA No.102/PUN/2025 5 issue is partly confirmed. Thus, ground no.3 raised by the assessee is partly allowed. 8. In the result, the appeal of the assessee is partly allowed. Order pronounced on 26th day of March, 2025. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 26th March, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “SMC” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "