RAVINDRA CHANDRAKANT LAMJANE ,OSMANABAD vs. ITO WD-1 , LATUR

PDF · subscribers
ITA 901/PUN/2026Status: DisposedITAT Pune14 July 2026AY 2016-177 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal upheld the validity of reassessment proceedings. However, it directed the Assessing Officer to restrict the addition to the peak credit of cash deposits after a proper cash flow analysis, as the entire amount could not be treated as unexplained money without proper verification.

What were the facts?

The assessee, engaged in agricultural activities, did not file an income tax return. The department received information about cash deposits of Rs. 50,75,500/- in the assessee's bank account, leading to reassessment proceedings. The assessee claimed the deposits were from agricultural income and past savings, but lacked supporting documentation.

What were the issues?

Whether the reassessment proceedings were validly initiated and whether the entire cash deposits should be added as unexplained income or restricted to the peak credit after considering agricultural income and past savings.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 142(1),Section 69A,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA

For Appellant: Shri S.G. Bhutada
For Respondent: Ms. Bhavya I.V., Jt. CIT

PER R.K. PANDA, VP:

This appeal filed by the assessee is directed against the order dated 18.12.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2016-17. 2. Facts of the case, in brief, are that the assessee is an individual and engaged in agricultural activities and had not filed his return of income for the impugned assessment year. Information was received by the department regarding the cash deposits amounting to Rs.50,75,500/- in the Savings Bank account maintained by the assessee with State Bank of Hyderabad. Based on such information, proceedings u/s 148A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) were initiated. After passing of the order u/s 148A(d), a notice u/s 148 of the Act was issued and served on the assessee. The Assessing Officer thereafter issued notice u/s 142(1) of the Act asking the assessee to explain the source of the cash

2 deposits. The assessee submitted that the deposits represent the agricultural income of the family and the accumulated savings of earlier years. However, in absence of any quantitative details of crop grown, sale bills of agricultural produce, expenditure record or the cash book, the Assessing Officer rejected the contention of the assessee stating that mere ownership of agricultural land or filing of affidavits does not automatically establish the nexus between agricultural income and the cash deposits. The alternate argument of the assessee that only the peak credit should be added was also rejected by the Assessing Officer. He accordingly treated the entire cash deposit of Rs.50,75,500/- as unexplained money u/s 69A of the Act.

3.

Before the Ld. CIT(A) / NFAC the assessee apart from challenging the validity of reopening of the assessment, challenged the addition on merit. Further, before the Ld. CIT(A) / NFAC the assessee also filed certain details such as holding of agricultural land by the family, 7/12 extracts of agricultural land and affidavits of the family members. However, the Ld. CIT(A) / NFAC was not satisfied with the arguments advanced by the assessee and upheld the validity of re-assessment proceedings as well as the addition by observing as under:

3 4

4.

Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal by raising the following grounds: The following grounds are taken without prejudice to each other-

1.

The learned Assessing Officer erred in reopening the assessment beyond three years by invoking section 149(1)(b) on the basis of cash deposits in the bank account by treating the same as "asset", which is contrary to the Act and settled legal position, the assumption of juri iction under section 148 being invalid, the reassessment deserves to be quashed.

2.

The learned CIT(A) failed to hold that the order passed under section 148A(d) dated 25.03.2023 and the consequent reassessment order dated 05.03.2024 are bad in law, as the objections and explanations of the appellant were rejected mechanically without proper appreciation of the material on record and without conducting the enquiry contemplated under section 148A(a), thereby vitiating the proceedings which deserve to be annulled.

3.

The learned CIT(A) erred in sustaining the addition in principle despite recording that the issue of cash deposits requires verification by way of proper cash flow analysis and determination of peak credit, having found the assessment to be incomplete on facts, the addition could not have been sustained and deserves to be deleted.

4.

The learned Assessing Officer and the learned CIT(A) erred in treating the entire cash deposits of ₹50,75,500/- as unexplained money under section 69A; in any event, only the real income element, if any, could be brought to tax and not the gross deposits, particularly when frequent withdrawals and redeposits are evident, and the addition deserves to be deleted.

5.

The learned CIT(A) failed to accept the explanation that the cash deposits represented agricultural income of the family and past savings despite revenue records and affidavits evidencing ownership and cultivation of agricultural land having been placed on record, the rejection being without rebuttal by any positive material, the addition deserves to be deleted.

6.

Without prejudice, the learned CIT(A) erred in rejecting the plea for peak credit despite rotation of cash being apparent from the bank statements; the addition, if any, deserves to be restricted to peak credit after granting due telescoping of withdrawals.

5

7.

The appellant craves leave to add, alter, amend or withdraw any of the above grounds at the time of hearing.

5.

The Ld. Counsel for the assessee at the outset submitted that no addition is called for since the entire income is out of agricultural land held by the assessee along with the various family members. In his alternate contention, he submitted that only the peak credit should be added and the entire cash deposits should not be added because continuous deposits and withdrawals were made and the amounts so withdrawn in earlier period have been re-deposited being not required.

6.

The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC.

7.

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. So far as the grounds challenging the validity of re- assessment proceedings are concerned, the Ld. Counsel for the assessee did not make any submission nor could prove how the same is incorrect and therefore, the grounds challenging the validity of the re-assessment proceedings are dismissed.

8.

So far as the argument of the Ld. Counsel for the assessee that the entire income is from agricultural activities which is exempt from tax and the assessee has no other income is concerned, the same in our opinion cannot be accepted in absence of any documentary proof such as quantitative details of crop grown, sale

6 bills of agricultural produce, expenditure record or the cash book etc. Therefore, in absence of any evidence to substantiate that the agricultural income which has been produced by the assessee was more than sufficient for consumption of the family and the surplus is sold to earn such huge income which has been deposited in the bank account is liable to be rejected. Since the Ld. CIT(A) / NFAC in the instant case has already directed the Assessing Officer for the limited purpose of re-examination of cash deposits by preparing a proper cash flow statement and determining the peak credit, if any, therefore, we are of the considered opinion that the same is justified. The Assessing Officer is directed to restrict the addition to the extent of peak credit. Needless to say the Assessing Officer shall give due opportunity of being heard to the assessee while computing such peak credit. We hold and direct accordingly. The grounds raised by the assessee are accordingly partly allowed for statistical purposes.

9.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open Court on 14th July, 2026. (ASTHA CHANDRA) VICE PRESIDENT पुणे Pune; दिन ांक Dated : 14th July, 2026 GCVSR Gajjala Chinna Chinna Venkata Subba Reddy Venkata Subba Reddy Date: 2026.07.14 13:30:51 +05'30'

7 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपील र्थी / The Appellant; 1. 2. प्रत्यर्थी / The Respondent

3.

The concerned Pr.CIT, Pune

4.

DR, ITAT, ‘B’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, ////

More judgments on Section 148A

All 3,543 judgments and leading authorities on Section 148A →

Recent GST High Court judgments

Search GST case law →