GIRISH MOTILAL JAIN,NANDURBAR vs. THE INCOME TAX OFFICER, WARD 2, DHULE, DHULE

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.572 & 573/PUN/2025 िनधा�रण वष� / Assessment Year : 2012-13 Girish Motilal Jain, Vs. ITO, Ward-2, Dhule. At Post Shahada, Dist. Nandurbar- 425409. PAN : AFEPJ1601D Appellant Respondent Assessee by : Shri Pramod S. Shingte : Smt. Neha Thakuar (Virtual) Revenue by Date of hearing : 19.05.2026 Date of pronouncement : 13.07.2026 आदेश / ORDER PER VINAY BHAMORE, JM: These appeals filed by the assessee are directed against the separate orders dated 09.01.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2012-13 respectively. 2. Since the facts are identical and both the appeals were heard together, therefore, we proceed to dispose of the same by this common order.

2 ITA Nos.572 &573/PUN/2025 3. First, we shall take up the appeal in ITA No.572/PUN/2025 for adjudication as the lead case. ITA No.572/PUN/2025 : 4. The appellant has raised the following grounds of appeal :- “1. On the basis of facts and as per law, the notice issued u/s. 148 as well as assessment order passed u/s 147/144 pursuant to said notice please be quashed being without jurisdiction when the notice u/s. 148 was issued by The Income-tax Officer, Ward -2, Dhule when the jurisdiction of the appellant was with The Income-tax Officer, Ward 2, Nandurbar. 2. On the basis of facts and as per law, the notice issued u/s. 148 as well as assessment order passed u/s 147/144 pursuant to said notice please be quashed because reasons for issuance of notice u/s. 148 were recorded by The Income-tax Officer, Ward 2, Nandurbar, whereas the notice u/s. 148 was issued by The Income-tax Officer, Ward - 2, Dhule. 3. On the basis of the facts and in the circumstances of the case and as per law, the order passed u/s 147/144 may please be quashed as the same does not contain the mandatory (Document Identification Number) DIN and the said order is also passed without following the mandatory directions given in circular issued by CBDT No.19/2019 dated 14/08/2019. 4. On the basis of facts and as per law, the assessment order passed u/s 147/144 may please be quashed as the same is passed by The Income-tax Officer, Ward -2, Dhule, illegally assuming the concurrent jurisdiction. 5. On the basis of facts and circumstances of the case and as per law, The Commissioner of Income Tax (Appeals) is not justified in confirming the estimation of the net income of the appellant @30% of the turnover in the order passed u/s. 147 as no addition is made in respect of the reasons recorded for issue of notice u/s. 148, particularly when assessment of the income for which the reasons are recorded for issuing the notice u/s. 148 is prerequisite for assessing any other income which is not subject matter of the reasons recorded for issuance of notice u/s. 148 of the Act.

3 ITA Nos.572 &573/PUN/2025 6. On the basis of facts and circumstances of the case and as per law, the notice issued u/s. 148 as well as assessment order passed pursuant to said notice may please be quashed because the said notice is issued by holding that the cash deposited in the savings bank account of the appellant is income in the absence of furnishing return of income by the appellant, particularly, when there is no such provision under the Act. 7. On the basis of facts and circumstances of the case and as per law, The Commissioner of Income Tax (Appeals) is not justified in confirming the addition of Rs. 47,44,100/- by estimating the net profit of the appellant 230% of the turnover of the appellant, particularly when, the appellant was wholesaler and not retailor. 8. On the basis of facts and circumstances of the case and as per law, The Commissioner of Income Tax (Appeals) is not justified in confirming the order of assessment and putting vicious remarks in his appellate order. 9. The appellant craves leave to furnish additional evidences in support of his claim in the course of the appellate proceedings.” 5. Facts of the case, in brief, are that the assessee is an individual and claimed to be engaged in the activity of selling recharge vouchers and chips/wafers etc. The assessee filed his return of income on 17.02.2016 by declaring an income of Rs.2,05,970/- after receiving letter from the ITO (I&CI), however, the said return was found to be time barred. On the basis of information that the assessee has deposited cash amounting to Rs.1,33,42,000/- in his State Bank of India account & return of income has not been furnished, the Assessing Officer have reasons to believe that the income of the assessee amounting to Rs.1,33,42,000/- has escaped

4 ITA Nos.572 &573/PUN/2025 assessment. Therefore, the case of the assessee was reopened u/s 147 of the IT Act by issuing notice u/s 148 of the IT Act on 28.03.2019. The assessee did not file any return in response to above notice. Subsequently, notices u/s 142(1) and show-cause notices u/s 144 of the IT Act respectively were issued to the assessee, however, the assessee did not complied with them. Therefore, the Assessing Officer vide order dated 05.12.2016 completed the assessment proceedings u/s 144 r.w.s. 147 of the IT Act by determining the income of the assessee at Rs.47,44,783/- as against the income of Rs.2,05,970/- disclosed in the time barred return. The above assessed income includes addition of Rs.47,44,100/- being 30% profit estimated on the deposits of Rs.1,58,13,670/- in his bank accounts. Addition of Rs.683/- regarding bank interest income was also made by the Assessing Officer. 6. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee and confirmed the additions made by the Assessing Officer.

5 ITA Nos.572 &573/PUN/2025 7. It is the above order against which the assessee is in appeal before this Tribunal. 8. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR further submitted that the assessee is engaged in selling of BSNL recharge vouchers and chips/wafers etc. For the purposes of re-sale of BSNL recharge vouchers, assessee was appointed by Mr. Chandrakant Vinchurkar, Proprietor of M/s Swami Samarth Medical & General Stores, PAN Number ADPPV8732L and Service Tax Registration No.27980756106V. In this regard, a confirmation letter issued by Mr. Chandrakant Vinchurkar and copy of Ledger Account in the books of M/s. Swami Samarth Medical & General Stores was also produced before Ld. CIT(A) wherein it was stated that the commission of the assessee was 2.5% on sale of recharge vouchers and sale of recharge vouchers was Rs.16,36,042/-. For the purposes of sale of wafers, the assessee was appointed by Kheradiya Enterprise, Proprietor Munaf Ibrahim Memon, PAN Number AKKPM2310H and MVAT Registration Number was 27400283356V. Confirmation letter and Ledger Account of the assessee in the books of Kheradiya Enterprise was

6 ITA Nos.572 &573/PUN/2025 also produced before Ld. CIT(A)/NFAC wherein it was stated that the commission of the assessee was 4% and as per Ledger, gross sales of wafers etc was Rs.1,23,40,523/-. Accordingly, Ld. AR submitted that the determination of net profit @ 30% is excessive and not practical, therefore, it was requested to apply a reasonable net profit on gross sales of the assessee. 9. Ld. DR appearing from the side of the Revenue relied on the orders passed by the Assessing Officer as well as by Ld. CIT(A)/NFAC and requested to confirm the same. 10. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. Ld. AR of the assessee has not pressed the ground nos.1, 2, 3, 4, 5, 6, 8 & 9, and argued on ground no.7 only therefore, the ground nos.1, 2, 3, 4, 5, 6, 8 & 9 are dismissed as not pressed. 11. With regard to ground no.7, we find that the assessee is selling BSNL recharge vouchers and chips/wafers and kirana etc on commission basis and as per certificates he was allowed to charge 4% commission only. 12. Considering the totality of the facts of the case, we find force in the above arguments of Ld. Counsel of the assessee that

7 ITA Nos.572 &573/PUN/2025 application of 30% net profit is not practicable and is on higher side and the relationship of the assessee with Kheradiya Enterprise and M/s. Swami Samarth Medical & General Stores was in the nature of principal and agent wherein it was agreed that the assessee can charge only 4% as his marked up. Therefore, we deem it appropriate to apply a commission rate of 5% on gross receipts of Rs.1,58,13,670/- deposited/credited in the bank account of the assessee. Accordingly, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and direct the Assessing Officer to apply net commission rate of 5% on gross receipts of Rs.1,58,13,670/- which comes to Rs.7,90,683/-. Thus, the ground no.7 raised by the assessee is partly allowed. 13. In the result, the appeal filed by the assessee in ITA No.572/PUN/2025 is partly allowed. ITA No.573/PUN/2025 : 14. In this appeal, the assessee has challenged the order of Ld. CIT(A)/NFAC wherein Ld. CIT(A)/NFAC confirmed the penalty of Rs.25,000/- levied by the Assessing Officer u/s 271A of the IT Act on ground of non-maintenance of books of accounts.

8 ITA Nos.572 &573/PUN/2025 15. Since we have already accepted the fact that the assessee was having principal and agent relation with Kheradiya Enterprise and M/s. Swami Samarth Medical & General Stores and was also entitled to return the unsold goods to the principal, the transaction appearing in the bank account of the assessee cannot be said to be done with relation to sales and purchase of BSNL recharge vouchers and wafers etc rather the transactions were related to agency business where the ownership of the goods is not with the assessee. Accordingly, once we accept that the receipts appearing in the bank account were related to agency business, the same cannot be treated as turnover of the assessee and therefore, the commission income of the assessee was determined by estimate. Apart from it, we also find that the Assessing Officer has not brought on record the fact with regard to turnover, if any, of the assessee, in any of the three years immediately preceding the previous year. 16. Considering the totality of the facts of the case and in view of our above discussion, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and direct the Assessing Officer to delete the penalty of Rs.25,000/- levied u/s 271A of the IT Act for non-maintenance of books of accounts.

9 ITA Nos.572 &573/PUN/2025 17. In the result, the appeal of the assessee in ITA No.573/PUN/2025 is allowed. 18. To sum up, the appeal in ITA No.572/PUN/2025 is partly allowed and the appeal in ITA No.573/PUN/2025 is allowed. Order pronounced on this 13th day of July, 2026. Sd/- Sd/- (DR. DIPAK P. RIPOTE) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 13th July, 2026. Sujeet/DOC Digitally signed by Sujeet Sujeet Kumar Kumar Sharma Sharma Date: 2026.07.14 आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : 12:22:39 +05'30' अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A” ब�च, 4. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.