DIPALI MURLIDHAR TODKAR,PUNE vs. ITO WARD 13(1), PUNE, PUNE

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ITA 3003/PUN/2025Status: DisposedITAT Pune30 April 2026AY 2015-20163 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the credit card payments were for business purposes, sourced from the assessee's gross receipts declared under Section 44AD. Therefore, the penalty was not sustainable.

What were the facts?

The assessee's assessment for AY 2015-16 included an addition for unexplained credit card payments of Rs. 4,63,320. The Assessing Officer levied a penalty of Rs. 1,43,166 under Section 271(1)(c) for this addition.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the addition for unexplained credit card payments is found to be for business purposes and sourced from accepted income.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE

Before: DR.MANISH BORAD

For Appellant: Shri Gaurang Khakhkhar
For Respondent: Shri Dayanand Jawalikar
Hearing: 11.03.2026Pronounced: 30.04.2026

The captioned appeal at the instance of assessee pertaining to A.Y. 2015-16 is directed against the order dated 29.11.2025 framed by National Faceless Appeal Centre, Delhi arising out of Penalty Order dated 27.09.2024 passed u/s.271(1)(c) of the Income Tax Act, 1961 (in short ‘the Act’).

2.

Assessee has raised various legal issues challenging the levy of penalty at Rs.1,43,166/- u/s.271(1)(c) of the Act along with raising grounds on merit. Submissions were made on all the grounds. I however proceed to adjudicate the issue on merits regarding levy of penalty on the addition for unexplained credit card payment at Rs.4,63,320/-.

3.

I have heard the rival contentions and perused the record placed before me. Assessee is an individual and in 2 Dipali Murlidhar Todkar

the assessment for A.Y. 2015-16 various additions were made including the addition for unexplained credit card payment of Rs.4,63,320/-. Ld. Assessing Officer has alleged that assessee failed to explain the source of making the payment for credit cards. In the penalty proceedings, ld. Assessing Officer levied penalty of Rs.1,43,166/- which has been confirmed by ld.CIT(A).

4.

On going through the submissions filed by the assessee before ld.CIT(A) as well as submissions filed before this Tribunal, I observe that the assessee is engaged in the business of outdoor catering services and income has been offered under the presumptive taxation scheme u/s.44AD of the Act on the gross receipts at Rs.18.74 lakhs. It has been consistently contended that against the gross receipts, assessee had to incur various expenses of which some were made through credit card. I observe that ld. Assessing Officer has accepted the assessee’s income offered under the presumptive taxation scheme u/s.44AD of the Act and therefore this contention of the assessee find support that against gross receipts the expenditure has to be incurred and there being no requirement of maintaining regular books of account and even if 8% of Rs.18.74 lakhs is considered as net profit then also there is expenditure of Rs.17.24 lakhs. Therefore, the credit card payment of Rs.4,63,320/- is accepted to have been made for business purposes and the source of such payment is from the gross receipts of Rs.18.74 lakhs declared by the assessee and accepted by the Revenue. Under these given facts and 3 Dipali Murlidhar Todkar

circumstances, the impugned penalty of Rs.1,43,166/- does not survive and the same is hereby deleted.

5.

Since I have already deleted the addition, dealing with the remaining grounds raised by the assessee would be merely academic in nature.

6.

In the result, the appeal of the assessee is allowed as per terms indicated hereinabove.

Order pronounced on this 30th day of April, 2026. (MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; दिन ांक / Dated : 30th April, 2026. Satish

Satish Kumar Madishetty आदेश की प्रतिलिपि अग्रेपिि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent.

2.3.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, “SMC” बेंच, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. आिेश नुस र / BY ORDER,

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