SUDHIR POPATRAO CHAUDHARI,NASHIK V. ITO, WARD 1(1), NASHIK

ITA 2438/PUN/2024

AI Insights

The case involves an appeal by Sudhir Popatrao Chaudhari against the order of the Commissioner of Income Tax (Appeals) which confirmed the addition of Rs.19,02,000 as unexplained cash deposits under section 69A of the Income-tax Act, 1961 for the Assessment Year 2017-18. The assessee argued that these deposits were from cash withdrawals made to settle a family dispute, which coincidentally were deposited back during the demonetization period. The Tribunal examined the explanations and evidence provided by the assessee, including the nature of the family dispute and the timing of the cash withdrawals and deposits, and found merit in the assessee's arguments for the majority of the amount except for Rs.73,000.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472345 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Gopalrao Shankarrao Nagras vs. ITO, Smt. Pushpalata Maruti Ghule Vs. DCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARSHIT DILIP BARI ADD
• Assessee Lawyers: SANKET JOSHI
• Keywords: Presumptive income
• Section: 250; 139(1); 44AD; 69A

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.2438/PUN/2024 िनधाᭅरण वषᭅ / Assessment Year: 2017-18 Sudhir Popatrao Chaudhari, Plot No.1, 2 B, Sr. No.260, Suman Bunglow, Dattatray Nagar, Amrutdham, Panchvati, Nashik – 422003. PAN: AFZPC5605F V s The Income Tax Officer, Ward-1(1), Nashik. Appellant/ Assessee Respondent / Revenue Assessee by Shri Sanket Joshi – AR Revenue by Shri Harshit Dilip Bari – Add.CIT(DR) Date of hearing 21/01/2025 Date of pronouncement 27/01/2025 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(Appeals)[NFAC] passed under section 250 of the Income-tax Act, 1961 for Assessment Year 2017-18; dated 15.10.2024. The Assessee has raised the following grounds of appeal : “1. The learned CIT(A) erred in confirming the addition u/s 69A towards alleged unexplained cash deposits by holding that the cash deposits of Rs.19,02,000 made in bank account during demonetization ITA No.2438/PUN/2024 [A] 2 period represent the unexplained income of the appellant without appreciating that the said addition made by the A.O. was not justified on facts and in law 2. The learned CIT(A) failed to appreciate that the source of cash deposits of Rs.19,02,000 was duly explained to be out of cash withdrawals made during the year under consideration and this fact also comes out from the documentary evidences filed by the appellant and therefore, the addition u/s 69A made only on the basis of suspicion and surmises was not justified. 3. The learned CIT(A) ought to have appreciated that the A.O. had not brought any material on record to prove that the appellant had utilized the cash withdrawn during the year and hence, the A.O. was not justified in rejecting the explanation of the appellant and taxing the said cash deposits as unexplained income u/s 69A merely on the basis of suspicion and surmises. 4. Without prejudice to the above grounds, the appellant submits that the he had not maintained any books of accounts since he has opted for presumptive taxation u/s 44AD and hence, the addition made by the A.O. by invoking the provisions of section 69A towards alleged unexplained cash deposits, was apparently unjustified and hence, the said addition may please be deleted. 5. The appellant craves, leave to add, alter, amend and delete any of the above grounds of appeal.” Submission of ld.AR : 2. Ld.Authorised Representative(ld.AR) for the Assessee filed a paper book. Ld.AR submitted that Assessee had filed Return of Income under section 139(1) of the Act. During the scrutiny proceedings, Assessee had explained the source of cash deposits to ITA No.2438/PUN/2024 [A] 3 the Assessing Officer. Ld.AR submitted that during the year, Assessee had withdrawn in cash by prematurely withdrawing the Fixed Deposits kept with Bank. During the assessment proceedings, assessee explained all these facts with evidence to the AO. Ld.AR further submitted that Assessee had withdrawn these amounts from Banks to settle his family dispute. The ld.AR submitted that there was a family dispute regarding ancestral property among the siblings. In order to settle the family dispute, Assessee was in need of cash and hence, Assessee withdrew in cash from Bank. Ld.AR invited our attention to “Souda Pouti” which is in Marthi which has been reproduced by Assessing Officer in the Assessment Order to explain the nature of family dispute. Ld.AR submitted that since family dispute was to be settled during Diwali, however, suddenly on 8th Nov, 2016 Demonetization was declared. Therefore, Assessee had to deposit the cash back in the Bank Account. Ld.AR submitted that all these facts were explained to the Assessing Officer and ld.CIT(A). However, AO made an addition of Rs.19,02,000/- under section 69A of the Act. Ld.AR submitted that the addition made is arbitrary. Ld.AR relied on the decisions of ITAT Pune Benches in ITA No.2438/PUN/2024 [A] 4 the case of ITA No.780 & 775/PUN/2024 of Gopalrao Shankarrao Nagras vs. ITO, for A.Y.2015-16 & 2016-17 and in ITA No.566/PUN/2021 of Smt. Pushpalata Maruti Ghule Vs. DCIT for A.Y.2014-15. Submission of ld.DR : 3. Ld.Departmental Representative(ld.DR) for the Revenue relied on the order of Assessing Officer and ld.CIT(A). Findings & Analysis : 4. We have heard both the parties and perused the records. Assessee had filed Return of Income under section 139(1) of the Act, declaring total of Rs.7,13,420/-. Case of the Assessee was selected for scrutiny on account of cash deposit. It is observed that admittedly, Assessee had filed elaborate explanation before ld.CIT(A) and Assessing Officer. It is also observed that Assessee had withdrawn cash by prematurely encashing the Fixed Deposits receipts kept with State Bank of India and Thane Janata Sahakari Bank Limited totalling to Rs.18,29,000/- which includes opening cash also. The details of fixed deposits have been mentioned by the Assessing Officer in the Assessment Order. Assessee had ITA No.2438/PUN/2024 [A] 5 submitted balance sheet during the Assessment Proceedings, but Assessing Officer rejected it stating that since assessee had been filing Return of Income under section 44AD of the Act, Balance Sheet is to be rejected. Thus, Assessing Officer has not given any valid reason for rejecting the Balance Sheet. Assessing Officer had not given any reason for rejecting the Assessee’s claim for availability of cash, whereas AO has not denied withdrawal of cash from the Bank. Thus, Assessing Officer has merely on surmises made an addition of Rs.19,02,000/- on account of cash deposits. However, it is also a fact that assessee had explained only Rs.18,29,000/- which was amount withdrawn from the fixed deposits. Assessee also claimed that remaining cash of Rs.73,000/- was available with him. However, no specific document filed to prove the same. But, Assessee has not filed any satisfactory reply for the remaining cash of Rs.73,000/-[Rs.19,02,000/- minus Rs.18,29,000/-]. 4.1 ITAT Pune Bench in ITA No.566/PUN/2021 of Smt.Pushpalata Maruti Ghule on identical issue had held as under : “In addition, she made withdrawals date-wise totalling Rs.10,72,000/- from her bank account with total amount coming to Rs.14.34 lakh and it was out of this amount, that she deposited Rs.13.73 lakh in the bank ITA No.2438/PUN/2024 [A] 6 account that has been added by the AO. The authorities below have simply brushed aside the explanation of the assessee without showing that such agricultural receipts/withdrawals from the bank were used elsewhere. Taking into consideration the entirety of facts and circumstances of the instant case, I am satisfied that the assessee has genuinely explained the source of deposits in the bank account amounting to Rs.13.73 lakh as emanating from the withdrawals made from the bank account during the same year as well as certain agricultural receipts. I, therefore, order to delete the addition.” 5. In the case of Assessee, the facts are identical to the case of Smt.Pushpalata Maruti Ghule(supra). However, in the case of Assessee, Assessee had successfully explained that only an amount of Rs.18,29,000/-. Therefore, in the facts and circumstances of the case, respectfully following the decision of ITAT Pune(supra), we direct the Assessing Officer to delete the addition of Rs.18,29,000/-. Accordingly, grounds of appeal raised by the assessee are partly allowed. 6. In the result, appeal of the Assessee is Partly Allowed. Order pronounced in the open Court on 27th January, 2025. Sd/- Sd/- (VINAY BHAMORE) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 27th Jan, 2024/ SGR* ITA No.2438/PUN/2024 [A] 7 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. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. "