SUHAS SHANTTARAM PHADTARE, PUNE V. WARD 13(4), PUNE, PUNE

ITA 842/PUN/2025

AI Insights

The case involves an appeal by Suhas Shantaram Phadtare against the order of the Ld. CIT(A) / NFAC, which sustained additions made by the Assessing Officer under sections 69A and 147 of the Income Tax Act, 1961. The additions pertained to unexplained investments in agricultural land and unexplained cash deposits in the bank account. The Tribunal examined the creditworthiness of the lender, Shri Gawade Maruti Ramdas, and the source of the cash deposits, ultimately finding merit in the assessee's arguments and reducing the sustained additions.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838286 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Appeal Filed On: 27-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHILPA N C
• Assessee Lawyers: KISHOR B PHADKE
• Keywords: Set aside; Business income; Unexplained investment; Presumptive income
• Section: 147; 148; 142(1); 44AD; 194C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.842/PUN/2025 Assessment year : 2018-19 Suhas Shantaram Phadtare Phadtare Wasti, Vadhu Road, Near Balwadi, Koregaon Bhima, Pune – 412216 Vs. Ito, Ward 13(4), Pune PAN: AWIPP2865L (Appellant) (Respondent) Assessee by : Shri Kishor B Phadke Department by : Smt Shilpa NC, Addl.CIT Date of hearing : 17-02-2026 Date of pronouncement : 19-02-2026 O R D E R PER R.K. PANDA, V.P: This appeal filed by the assessee is directed against the order dated 30.01.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2018-19. 2. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC in sustaining the addition of Rs.10 lakhs made by the Assessing Officer u/s 69A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on account of unexplained investment towards purchase of agricultural land and Rs.5,77,500/- u/s 69A of the Act on account of unexplained cash deposits in the bank account. Printed from counselvise.com 2 ITA No.842/PUN/2025 3. Facts of the case, in brief, are that the assesse is a non-filer of return of income. Information was obtained by the Assessing Officer that the assessee has purchased three properties for Rs.37,50,000/- each, sold property for consideration of Rs.37,50,000/-, amount received u/s 194-I of Rs.1,54,980/- and u/s 194C of Rs.13,380/-. He, therefore, reopened the assessment by invoking the provisions of section 147 of the Act and thereafter issued notice u/s 148 of the Act on 30.03.2022 in response to which the assessee filed his return of income declaring total income of Rs.1,24,190/-. Subsequently, the Assessing Officer issued notice u/s 143(2) of the Act. Thereafter, notice u/s 142(1) of the Act along with a questionnaire was issued to the assessee in response to which the assessee filed the requisite details. 4. From the submissions filed by the assessee the Assessing Officer observed from the bank statement that the assessee has deposited cash of Rs.5,77,500/- and made incidental expenses for purchase of property at Rs.1,31,064/- and Rs.1,39,801/- in cash. Further, the assessee was unable to explain the source of investment in purchase of the properties. After considering the various submissions made by the assessee from time to time, the Assessing Officer completed the assessment u/s 147 r.w.s. 144B of the Act on 28.03.2023 determining the total income of the assessee at Rs.70,20,050/- by making various additions, the details of which are as under: Printed from counselvise.com 3 ITA No.842/PUN/2025 a) Unexplained investment in 2 properties Rs.16,50,000 b) Unexplained money u/s 69A Rs.5,77,500 c) Unexplained investment in property Rs.37,50,000 d) Short term capital gain Rs.7,50,000 e) Income from house property Rs.1,54,980 f) Business income Rs.13,380 5. In appeal, the Ld. CIT(A) / NFAC gave part relief to the assessee but sustained the addition of Rs.10 lakhs out of addition of Rs.16,50,000/- made by the Assessing Officer on account of unexplained investment and sustained addition of Rs.5,77,500/- made by the Assessing Officer being unexplained cash deposit u/s 69A of the Act. 6. Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal. 7. The Ld. Counsel for the assessee at the outset while arguing the first issue i.e. addition of Rs.10 lakhs sustained by the Ld. CIT(A) / NFAC out of the addition of Rs.16,50,000/- made by the Assessing Officer, drew the attention of the Bench to page 5 of the assessment order where the Assessing Officer has discussed the issue. He submitted that the assessee has obtained an amount of Rs.10 lakhs from his brother-in-law Shri Gawade Maruti Ramdas who is a doctor. Referring to page Printed from counselvise.com 4 ITA No.842/PUN/2025 229 of the paper book, he drew the attention of the Bench to the copy of the income tax return filed by Shri Gawade Maruti Ramdas for the assessment year 2018-19 wherein he has declared taxable income of Rs.4,28,216/- after claiming deduction of Rs.88,100/- u/s Chapter VI-A. Referring to page 230 of the paper book, he drew the attention of the Bench to the confirmation given by Shri Gawade Maruti Ramdas confirming the loan of Rs.10 lakhs given to the assessee from his own funds. Referring to pages 231 to 233 of the paper book, he drew the attention of the Bench to the UCO bank account No.23440210000663 maintained with Kesnanad where the opening balance as on 13.04.2017 was Rs.2,70,534.88. He submitted that on 23.11.2017 Shri Gawade Maruti Ramdas has given an amount of Rs.5 lakhs to the assessee vide account payee cheque out of his balance of Rs.5,09,045.92. Referring to pages 234 and 235 of the paper book, he drew the attention of the Bench to another bank account maintained by Shri Gawade Maruti Ramdas with UCO bank, Kesnanad vide account No.23440110006061 from which Shri Gawade Maruti Ramdas has given an amount of Rs.5 lakhs on 23.11.2017. He submitted that in the said bank account the opening balance as on 11.04.2017 was Rs.2,08,879.35 and there are continuous deposits and withdrawals in the said bank account which are all through banking channel. He submitted that since Shri Gawade Maruti Ramdas is a doctor filing his return of income regularly and confirmed to have given a loan of Rs.10 lakhs to the assessee from his bank account which has sufficient balance before giving the loan, therefore, the Ld. Printed from counselvise.com 5 ITA No.842/PUN/2025 CIT(A) / NFAC should not have sustained the addition made by the Assessing Officer. 8. So far as the addition of Rs.5,77,500/- u/s 69A of the Act is concerned, the Ld. Counsel for the assessee drew the attention of the Bench to pages 104 and 105 of the paper book and drew the attention of the Bench to the various submissions made by the assessee and submitted that the assessee has deposited cash of Rs.5,77,500/- in the bank account maintained with State Bank of India from time to time out of his business of missal pav centre. He submitted that the assessee was offering business income by applying the provisions of section 44AD @ 8% of the total turnover of Rs.5,45,248/-. Further, the assessee has also withdrawn cash of Rs.4,51,500/- from the bank account from time to time. He submitted that the Assessing Officer has not considered the sale of Rs.5,42,248/- in cash which has been declared by the assessee in the income tax return and the Ld. CIT(A) / NFAC without considering the facts properly upheld the addition which is not justified. 9. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. So far as addition of Rs.10 lakhs sustained by the Ld. CIT(A) / NFAC is concerned, the Ld. DR submitted that in the account No.23440210000663, Shri Gawade Maruti Ramdas has deposited cash of Printed from counselvise.com 6 ITA No.842/PUN/2025 Rs.1,00,000/- on 18.11.2017 and he has issued a cheque for Rs.5 lakhs on 23.11.2017. Similarly, in the account No.23440110006061 Shri Gawade Maruti Ramdas has deposited cash of Rs.1,08,000/- on 18.11.2017 before issue of cheque for Rs.5 lakhs on 23.11.2017. Thus, Shri Gawade Maruti Ramdas has deposited cash of Rs.2,08,000/- in his two bank accounts and thereafter, issued two cheques for Rs.5 lakhs each to the assessee. She accordingly submitted that since the creditworthiness of Shri Gawade Maruti Ramdas was doubtful, therefore, the Ld. CIT(A) / NFAC was fully justified in sustaining the addition of Rs.10 lakhs out of addition of Rs.16,50,000/- by the Assessing Officer on account of investment towards purchase of agricultural land. 10. So far as the addition of Rs.5,77,500/- u/s 69A of the Act on account of unexplained cash deposit is concerned, she submitted that since the assessee could not give any justifiable reasons for such cash deposit in the bank account, therefore, the Ld. CIT(A) / NFAC was fully justified in sustaining the addition made by the Assessing Officer. 11. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. So far as the addition of Rs.10 lakhs u/s 69A of the Act on account of Printed from counselvise.com 7 ITA No.842/PUN/2025 unexplained investment towards purchase of agricultural land is concerned, we find the Assessing Officer while examining the source of purchase of agricultural land found that the assessee while explaining the source of investment has explained that he has received a loan of Rs.10 lakhs from Shri Gawade Maruti Ramdas. We find the Assessing Officer rejected the contention of the assessee on the ground that the assessee has not given the bank statement of Shri Gawade Maruti Ramdas for the entire year but has given the statement for the part period and that Shri Gawade Maruti Ramdas has declared income of Rs.4,28,216/- only for the assessment year 2018-19. Thus, according to the Assessing Officer, since Shri Gawade Maruti Ramdas has declared meagre income and after giving the loan only meagre amount is left in the said bank account of the lender, therefore, the creditworthiness is doubtful. We find the Ld. CIT(A) / NFAC while sustaining the addition held that the creditworthiness of Shri Gawade Maruti Ramdas is doubtful since the quantum of income declared in his return of income prima facie is not commensurate with the impugned loan amount. It is the submission of the Ld. Counsel for the assessee that Shri Gawade Maruti Ramdas is a practicing doctor, regular filer of income tax return, has given his confirmation, amounts were routed through bank account and that there is sufficient balance in the bank account prior to the giving loan. Printed from counselvise.com 8 ITA No.842/PUN/2025 12. A perusal of the details furnished by the assessee in the paper book shows that Shri Gawade Maruti Ramdas has filed his return of income for the impugned assessment year declaring gross income of Rs.5,16,316/- and after deduction under Chapter VI-A of Rs.88,100/-, has declared the taxable income of Rs.4,28,216/-, copy of which is placed at page 229 of the paper book. Further, Shri Gawade Maruti Ramdas has given a confirmation letter to the Assessing Officer confirming the loan of Rs.10 lakhs given to his brother-in-law Suhas Shantaram Phadtare i.e. the assessee. A perusal of the bank statement from the beginning of the financial year 2017-18 till the end of the financial year 2017-18 shows that the amounts have been transferred through account payee cheques from both the accounts. A perusal of the bank statement filed by the assessee shows that the assessee has filed the bank statement of Shri Gawade Maruti Ramdas for the entire financial year 2017-18 and not as part of the period as mentioned by the Assessing Officer in the body of the assessment order. Further, the bank statement also contains the name of Shri Gawade Maruti Ramdas, therefore, the observations of the Assessing Officer that the account No.23440210000663 does not have the name of the account holder is incorrect. For the sake of clarity, we reproduce the concerned page which reads as under: Printed from counselvise.com 9 ITA No.842/PUN/2025 Printed from counselvise.com 10 ITA No.842/PUN/2025 13. However, a perusal of the two bank statements shows that before issue of cheques for Rs.5 lakhs each on 23.11.2017 there is cash deposit of Rs.1,00,000/- on 18.11.2017 in the bank account No.23440210000663 and Rs.1,08,000/- on 18.11.2017 in the bank account No.23440110006061. Since, there are no immediate cash deposits prior to the giving of loan except the above two amounts and since Shri Gawade Maruti Ramdas is a practicing doctor has regularly filed his return of income and has confirmed to have given the loan of Rs.10 lakhs to the assessee, we, therefore, accept his creditworthiness to the extent of Rs.8 lakhs and the balance amount of Rs.2 lakhs is not proved from the bank statement. We, accordingly, modify the order of the Ld. CIT(A) / NFAC and sustain an amount of Rs.2 lakhs as against the amount of Rs.10 lakhs sustained by the Ld. CIT(A) / NFAC. Thus, the assessee gets relief of Rs.8 lakhs. The Assessing Officer is directed to modify the order accordingly. 14. So far as the second issue i.e. addition of Rs.5,77,500/- u/s 69A of the Act on account of unexplained cash deposit is concerned, we find the Assessing Officer made addition of the same on the ground that the assessee could not explain the source of such cash deposit which has been upheld by the Ld. CIT(A) / NFAC. It is the submission of the Ld. Counsel for the assessee that the assessee is showing business income from Missal Pav Centre and has declared turnover of Rs.5,45,248/- and offered presumptive income @ 8%. The business income Printed from counselvise.com 11 ITA No.842/PUN/2025 declared by the assessee has been accepted by the Assessing Officer. We, therefore, find merit in the arguments of the Ld. Counsel for the assessee that the source of the said deposit is out of the business receipt of the Missal Pav Centre as well as the previous withdrawals. It is an admitted fact that the assessee has offered presumptive income @ 8% on turnover of Rs.5,45,248/- u/s 44AD of the Act. Therefore, there is no justification on the part of the Ld. CIT(A) / NFAC in sustaining the addition of Rs.5,77,500/- made by the Assessing Officer u/s 69A of the Act. We, therefore, set aside the order of the Ld. CIT(A) / NFAC on this issue and allow the grounds raised by the assessee on this issue. 15. The Ld. Counsel for the assessee did not press the ground of appeal No.2 challenging the validity of notice issued u/s 148 of the Act by the jurisdictional Assessing Officer for which the Ld. DR has no objection. Accordingly, this technical ground is dismissed as ‘not pressed’. 16. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open Court on 19th February, 2026. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 19th February, 2026 GCVSR Printed from counselvise.com 12 ITA No.842/PUN/2025 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘B’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 17.02.2026 Sr. PS/PS 2 Draft placed before author 17.02.2026 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Office Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order Printed from counselvise.com "