RAKESH SHIVRAM BANDRE,THANE vs. ITO WARD 3(2),THANE, THANE
IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH MUMBAI
BEFORE: SHRI PAWAN SINGH, JUDICIAL MEMBER
Rakesh Shivram Bandre
Proprietor of R B Textile
5/503, Laxmi Bhuvan, Road No. 16,
Behind Bhagyashree Jewellers,
Kisan Nagar No.2, Thane- 400604,
Mumbai- 400604
Vs. ITO ward 3(2),
Thane, Maharashtra
PAN: AKCPB 1069 N
(Appellant)
..
(Respondent)
Assessee by Shri. Awadhesh Kumar,CA
Revenue by Ms. Smitha V. Nair, Sr. DR
Date of Hearing
09/09/2025
Date of Pronouncement
13/10/2025
Order under section 254(1) of Income Tax Act
PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of Learned Commissioner of Income Tax (Ld. CIT(A)) dated 29.04.2025 for A.Y. 2017-18. The assessee in its appeal has raised following ground of appeal:- “1. On the facts and in the circumstances and in law the Learned CIT Appeal has erred in confirming the addition of Rs. 6,28,000/-
On the facts and in the circumstances and in law the Learned CIT Appeal has erred in not considering the second bank account ending 117 in PMCLB.
Crave leave to alter or remove any grounds of appeal during appeal.”
Brief facts of the case are that the assessee is an individual and filed his return of income for A.Y. 2017-18 declaring its total income of Rs. 12,81,120/-. The case was selected for scrutiny to verify the cash deposits during the demonetization period. During the assessment the assessing officer noted that the assessee has shown his income from business through the property of Rakesh Shivram Bandre 2
concerned namely „R. B. Textile‟. The assessee was engaged in the business of dyeing the yarn. The assessing officer further recorded that during demonetization period the assessee has deposited Rs. 27,61,000/- in his two bank account with Punjab & Maharashtra Co-operative Bank Ltd. (PMC Bank),
Thane. The assessing officer obtained information from the banker of assessee by issuing notice under section 133(6). The banker of assessee provided details of specific bank note (SBN) deposited in between 12.11.2016 to 24.11.2016. The assessing officer after preparing such summary of cash deposit issue details show caused notice to provide month wise details of opening and closing sales in the given format. The details of show caused notice is recorded in para 2.3 of assessment order. In response to show caused notice the assessee filed his reply on 14.12.2026. Reply of assessee is extracted in para 4.4 of assessment order. The assessee filed its reply dated
14.12.2016. Contents of reply of assessee are not recorded by assessing officer. The assessing officer (AO) recorded that assessee filed reply in tapal.
The assessing officer without recording contention of reply concluded that contention of assessee is not acceptable. The AO further held the assessee failed to give valid explanation about cash deposit. Cash flow submits is not furnished. Cash in hand in the month of May 2016 was Rs.2711/-. Other cash flow statement filed on 16.12.2019. On perusal of such cash flow statement shows that the assessee was not holding such high amount of cash in his hand. The assessee in the business wherein cash expenses is inevitable.
However, in cash book while less cash expenses have been shown. There is continuous withdrawal from the bank account throughout the year which is not Rakesh Shivram Bandre
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inconsonance with high volume of cash in hand as claimed by the assessee. No businessman will withdraw the cash amount from bank and when he has already had sufficient/used cash in hand. In the return of income for various years the assessing officer recorded the figure of cash in hand for the A.Y.
2016-17 of Rs. 6,13,305/-. In A.Y. 2015-16 the assessee made cash deposit of Rs. 32,47,000/- and from 01.04.2016 to 08.11.2016 cash deposit of Rs.
4,86,000/- and from 09.11.2016 to 13.12.2016 it is Rs.27,61,000/-. On the basis of such adverse observation the assessing officer allowed set of average cash in hand from A.Y. 2012-13 and 2017-18 which was figured out at Rs.
3,54,795/-. Thereby he made addition of Rs. 24,06,205/- (27,61,000 –
3,54,795). Aggrieved by the addition in the assessment order the assessee filed appeal before Ld. CIT(A).
3. Before Ld. CIT(A) the assessee filed detailed statement of facts as well as his bank statement highlighting the cash withdrawal from his bank account upto
08.11.2016 to substantiate that he was having sufficient cash available from bank withdrawal and cash in his cash book, when demonetization take place.
Ld. CIT(A) on consideration of submission of assessee noted that on perusal of cash flow statement, cash is withdrawn from 01.04.2016 to 01.11.2016 and closing balance as on 31.10.2016 is of Rs. 27,45,881. The assessee also furnished bank statement of account of XXX164 in PMC bank to substantiate cash flow entries. On perusal of such interest Ld. CIT(A) was of the view that is satisfied with the cash deposit in bank account ending with XXX164 in PMC
Bank during the demonetization period and thereby deleted the addition in respect to said bank account. So far as other bank account with same bank
Rakesh Shivram Bandre
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ending with XXX117. The assessee has not furnished any documentary evidence. Thus, the cash deposit to the extent of Rs. 6,28,000/- was upheld.
Further, aggrieved the assessee has filed present appeal before Tribunal.
4. I have heard the submission of learned Authorized Representative (Ld.AR) of the assessee and learned Senior Department Representative (Ld. Sr. DR) for the revenue. The Ld. AR of the assessee submits that he has filed the application for admission of additional evidence under Rule 29 of Income Tax
(Appellate Tribunal) Rules, 1963. The Ld.AR submits that he has filed complete bank statement of bank account ending with XXX117 in PMC Cooperative Bank.
Though, before lower authorities the assessee has furnished complete evidence in the form of cash flow statement to substantiate the cash deposit the assessing officer allowed setoff average cash in hand for A.Y. 2012-13 to 2016-17 by disregarding the fact that opening cash balance as per return of income of above Rs. 5.00 lakhs. The assessee is in the business of dying of yarn, wherein majority of transaction are held in cash. The ld. CIT(A) allowed relief of cash deposit in bank account ending in XXX114 in PMC Co-Operative
Bank only. The ld. AR of the assessee submits that perusal of bank statement shows regular pattern of cash deposit and cash withdrawal There is no abnormal cash deposit during the demonetization period there was total cash deposit and withdrawal in bank account ending with XXX117 of Rs. 23,08,000/- and of Rs. 31,00,000/- in bank account ending with XXX164. Such fact is recorded by assessing officer in show cause notice itself. The assessee has shown taxable income of more than 12,00,000/- and also furnished cash flow
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statement which is duly supported by bank statements. Ld.AR of the assessee prayed to admit the additional evidence and to delete the entire addition.
5. On the other hand Ld. Sr. DR for the revenue supported the order of lower authorities. Ld. Sr. DR submit that Ld. CIT(A) has already allowed relief in respect of deposit in one bank account details of which was furnished before
Ld. CIT(A). However the assessee failed to substantiate the cash flow deposit in other bank account ending with Account No. xxxx117. The overall cash in hand claimed by assessee in not commensurate with the income shown by assessee in past several assessment years. On admission on additional evidence, the Ld. Sr. DR for the revenue submits that in case the additional evidence filed by assessee is accepted. The matter may be restored back to the file of assessing officer for verification of fact and to pass the order afresh as such evidence was not filed before assessing officer.
6. I have considered the rival submission of both the parties and have gone through the orders of lower authorities carefully. I found that during assessment proceeding the assessing officer was of the view that assessee has made cash deposit in the form of SBN during demonetarization period.
Thought he officer accepted that there was cash in hand as per return of income in A.Y. 2015-16, 2016-17 and 2017-18 around Rs. 5,00,000/- or in between Rs. 5.00 to 6.00 lakhs still he has allowed setoff cash in hand of Rs.
3,54,795/- by taking average closing balance of cash in hand for A.Y. 2012-13. The assessing officer has taken an average closing balance of five years without specifying any reason. The Ld. CIT(A) accepted the cash deposit in bank account ending with XXX164. I find that total cash deposit in the form of Rakesh Shivram Bandre
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SBM in bank account ending with account No. XXX117 is of Rs. 6,27,500/- only. Before us, the ld.AR of the assessee has filed additional evidence in the form of bank statement of account No. ending with XXX117, which is not examined by the lower authorities. Thus, considering the relevancy of such additional and evidence filed now, I deem it appropriate to restore this appeal l to the file of AO to examined and verify the cash deposits in bank account ending with xxxx117 and pass order afresh. The assessee is also directed to furnished complete details of bank deposit in bank Account No. ending with XXX117 in PMC Bank and substantiate such deposits. Needless to direct that before passing the order afresh, the AO shall allow reasonable opportunity to the assessee. In the result, ground of appeal raised by assessee is allowed for statistical purposes.
7. In the result, the appeal of the assessee is allowed for statistical purpose.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced on 13/10/2025 in open court. (PAWAN SINGH)
JUDICIAL MEMBER
Mumbai; Dated 13/10/2025
Disha Raut, Steno
Copy of the Order forwarded to:
BY ORDER,
(Asstt.