SUDHIR GAJANAN PATIL,BELAGAVI vs. INCOME TAX OFFICER WARD -2, BELAGAVI

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH “SMC”, PANAJI – VIRTUAL COURT BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.132/PAN/2026 िनधा�रण वष� / Assessment Year : 2017-18 Sudhir Gajanan Patil, Vs. Assessment Unit, 576, Narayan Galli, Kangrali Income Tax Department. Kh. Belgaum – 590010. PAN : AHBPP7716Q Appellant Respondent Assessee by : Shri Swapnil Patil (Virtual) Revenue by : Smt. Rijula Uniyal (Virtual) Date of hearing : 12.06.2026 Date of pronouncement : 09.09.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 15.01.2026 passed by Ld. CIT(A)/NFAC for the assessment year 2017-18. 2. The appellant has raised the following grounds of appeal :- “1. CIT(A) confirmed the order of AO by taxing the addition u/s 115BBE. a. Since such stock is related to business it should be taxes at normal tax rates. b. Since stock of petrol and diesel was purchased from Indian Oil Ltd to whom payment was made from electronic mode only and same is books. So taxing u/s 69B is non- sustainable.

2 ITA No.132/PAN/2026 c. Reliance has been made on case law Sanjay Gupta Vs ACIT JAIPUR (ITA No. 292/JP/2023). 2. Appellant craves lead to add, alter, amend or delete any of the above grounds of appeal.” 3. Facts of the case, in brief, are that the assessee is an individual engaged in the business of selling petrol and diesel and has e-filed his return of income on 30.10.2017 by declaring total income of Rs.10,94,570/-. The case was selected for scrutiny and vide order dated 19.12.2019 assessment was completed u/s 143(3) of the IT Act wherein the Assessing Officer added an amount of Rs.2,23,977/- on account of difference in stock of petrol and taxed the same under normal rate of tax. Subsequently, Ld. PCIT vide order dated 26.03.2022 passed u/s 263 of the IT Act directed the Assessing Officer to tax the difference in stock of Rs.2,23,977/- u/s 69B r.w.s. 115BBE of the IT Act at special rate of income tax. The Assessing Officer vide order dated 17.03.2023 passed re-assessment order u/s 143(3) r.w.s. 263 r.w.s. 144B of the IT Act and the addition of Rs.2,23,977/- being addition on account of difference in stock of petrol was brought to tax u/s 69B r.w.s. 115BBE of the IT Act at special rate of income tax instead of at normal rate of tax. 4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering

3 ITA No.132/PAN/2026 the reply and submissions of the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee. 5. It is the above order against which the assessee is in appeal before this Tribunal. 6. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the solitary issue in the instant appeal relates to the applicability of provisions of section 115BBE of the IT Act in respect of addition made on account of difference in stock of petrol. The dispute is only with regard to the applicability of provisions of section 115BBE of the IT Act. Admittedly, the addition on account of excess stock determined during the course of assessment proceedings was accepted by the assessee and no appeal against the addition of Rs.2,23,977/- was filed. Therefore, the amount representing excess stock is certainly undisclosed business income and cannot be termed as an unexplained investment. Therefore, the presumption is to be drawn that the additional income was derived from the business. Thus, it cannot be said that the source for the additional income remain unexplained and, therefore, the provisions of section 115BBE of the IT Act have no application to the present case. The ratio of the decision of the Hon’ble Rajasthan High Court in the case of CIT vs. Bajargan Traders, (2017) 86 taxmann.com 295 (Rajasthan) is squarely applicable to the facts of the present case. It is

4 ITA No.132/PAN/2026 undisputed fact that the additional income was derived from business. The other judicial precedents relied on by Ld. CIT(A)/NFAC are distinguishable and not applicable to the facts of the present case, since they talk only about the applicability of special rate of tax during assessment year 2017-18. Therefore, the orders of the Assessing Officer as well as passed by Ld. CIT(A)/NFAC are reversed and we direct the Assessing Officer not to tax the additional income of Rs.2,23,977/- under the provisions of section 115BBE of the IT Act. The Assessing Officer shall tax the additional income under the normal rate of income tax. Accordingly, the grounds of appeal raised by the assessee are allowed. 7. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 09th day of September, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 09th September, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.09.11 14:17:02 आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : +05'30' अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. 4. DR, ITAT, Panaji. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.