NIKHIL GYANCHAND BARDIYA,KOLHAPUR vs. ITO, WARD-1, ICHALKARANJI, ICHALKARANJI

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.2597 & 2598/PUN/2025 िनधा�रण वष� / Assessment Years : 2010-11 & 2009-10 Nikhil Gyanchand Bardiya, Vs. ITO, Ward-1, 8th Lane, Near Dr. Subhash Ichalkaranji. Patil Hospital, Post- Jaysingpur, Dist. Kolhapur- 416101. PAN : AEOPB3784N Appellant Respondent Assessee by : Shri Nikhil S. Pathak Revenue by : Shri Manoj Tripathi (Virtual) Date of hearing : 23.04.2026 Date of pronouncement : 29.06.2026 आदेश / ORDER PER VINAY BHAMORE, JM: Both the above captioned appeals filed by the assessee are directed against the separate orders dated 27.09.2025 passed by Ld. CIT(A)/NFAC for the assessment years 2009-10 and 2010-11 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.2597 & 2598/PUN/2025 3. First, we shall take up the appeal in ITA No.2597/PUN/2025 for A.Y. 2010-11 for adjudication as the lead case. ITA No.2597/PUN/2025, A.Y. 2010-11 : 4. The appellant has raised the following grounds of appeal :- “1] The learned CIT(A) erred in confirming the addition of Rs.1,28,39,098/-made u/s 69A on account of unexplained deposits in the bank account number 167010100116534 with Axis Bank Ltd. 2] The learned CIT(A) erred in holding that the assessee had failed to prove the sources of the deposits of Rs.1,28,39,098/- and accordingly, addition was rightly made by the ld. A.O u/s. 69A of the Act. 3] The learned CIT(A) failed to appreciate that the deposits in the bank account of Rs. 1,28,39,098/- were in respect of the transactions of sale of raw tobacco and hence, there was no reason to tax the entire deposits as an unexplained credit u/s 69A of the Act. 4] The learned CIT(A) erred in not appreciating that the assessee had submitted evidences to prove that he had carried out transactions of purchase and sale of raw tobacco and accordingly, the addition made of the entire deposits in the bank account was not warranted. 5] The assessee submits that during the year under consideration, he had carried out transactions of purchase and sale of raw tobacco and only a reasonable percentage of profit could be taxed as an income of the assessee. 6] The ld. CIT(A) erred in rejecting the voluminous details submitted by the assessee on the ground that some of the ledgers submitted were fabricated and there were other deficiencies without appreciating the correct facts of the and accordingly, the addition made of the entire deposits is not justified and the same ought to have been deleted. 7] The learned CIT(A) erred in not appreciating that the assessee had also made purchases of raw tobacco for which the payments were also made from the said bank account and accordingly, there was no reason to hold that the assessee had failed to prove the sources of the deposits in the said bank account and thus, the

3 ITA Nos.2597 & 2598/PUN/2025 addition made is not justified and the same may kindly be deleted. 8] The appellant craves leave to add, alter, amend or delete any of the above ground of appeal.” 5. Facts of the case, in brief, are that the assessee is an individual and engaged in the business of trading in tobacco. He deals in two types of tobacco namely raw tobacco and finished / processed tobacco. The assessee in his original return of income filed u/s 139(1) of the IT Act on 20.09.2010 has declared total income at Rs.2,02,350/- which was subsequently revised by furnishing revised computation of income by declaring total income at Rs.3,55,138/-. The original assessment u/s 143(3) of the IT Act was completed on 15-03-2013 at Rs.19,71,303/- by making the addition of Rs.3,71,565/- on account of undisclosed profit by estimating the GP @ 9% of Rs.41,28,500/- and another addition of Rs.13,97,393/- taking the peak credit of cash deposits made by the assessee in his Axis Bank Account No.167010100116534 during the year under consideration. Thereafter, in first appeal proceedings Ld. Commissioner of Income Tax (Appeals)-2, Kolhapur vide order dated 29.07.2016 enhanced the additions of Rs.17,68,958/- (371565+1397393) to Rs.1,28,39,098/- treating the same as undisclosed

4 ITA Nos.2597 & 2598/PUN/2025 income for the assessment year under consideration. The assessee preferred an appeal before the Tribunal & vide order dated 08.11.2019 in ITA No.2269/PUN/2016, Tribunal restored the matter back to the file of the Assessing Officer & directed the Assessing Officer to pass speaking order after considering the additional evidences furnished by the assessee and after granting reasonable opportunity of being heard to the assessee in accordance with set principles of natural justice. 6. Consequently, in compliance to the Hon’ble ITAT’s order dated 08.11.2019, vide order dated 21.09.2021 the Assessing Officer completed the assessment proceedings u/s 143(3) r.w.s. 254 r.w.s. 144B of the IT Act by determining the total income of the assessee at Rs.1,30,41,450/- as against the income of Rs.2,02,350/- returned by the assessee in original return of income. The above assessed income includes addition of Rs.1,28,39,098/- on account of undisclosed income u/s 69A of the IT Act being undisclosed cash deposits and other credits. 7. Being aggrieved with the above action of the Assessing Officer, the assessee preferred an appeal before the Ld. CIT(A)/NFAC. After considering the reply & submissions of the

5 ITA Nos.2597 & 2598/PUN/2025 assessee, vide order dated 27.09.2025, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee and consequently confirmed the order passed by the Assessing Officer. 8. It is the above order against which the assessee is in appeal before this Tribunal. 9. Ld. Counsel for the assessee at the outset submitted before us that in the case of the assessee identical additions were made on similar grounds (on the basis of cash deposited and other credits in the bank accounts) for assessment years 2008-09, 2009-10 & 2010-11, and a coordinate bench of this Tribunal in ITA No.2596/PUN/2025 vide order dated 09.03.2026 has already reduced the addition for assessment year 2008-09. Accordingly, it was requested by Ld. AR that following the earlier year’s decision of the Tribunal in the case of the assessee for assessment year 2008-09, the impugned addition made for assessment years 2009-10 & 2010-11 may also be reduced. 10. On the other hand, Ld. DR supported the order passed by Ld. CIT(A)/NFAC however, could not bring any adverse material on record in support of his contentions.

6 ITA Nos.2597 & 2598/PUN/2025 11. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. Admittedly, this is the second round of litigation before the Tribunal. In this regard, we find that the Assessing Officer made additions on the basis of unaccounted cash deposits and other credits in Axis Bank Account which were not considered/shown by the assessee in his books of accounts/original return of income for assessment years 2008-09, 2009-10 & 2010-11, and a coordinate bench of this Tribunal in second round of litigation while deciding the appeal for assessment year 2008-09 has substantially reduced the addition by observing as under :- “18. I have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. It is an admitted fact that the assessee neither in the original return nor in the revised return has included the profit from sale of raw tobacco though all the transactions were routed through Axis Bank Ltd account bearing A/c No.167010100078205. These transactions remained outside the books of account. I find in the original assessment the Assessing Officer estimated the profit from such unaccounted business @ 9% which was enhanced by the Ld. CIT(A) / NFAC directing the Assessing Officer to tax the entire deposits as income of the assessee. I find the Tribunal, on the basis of certain additional evidences filed before it, set aside the matter to the file of the Assessing Officer for deciding the issue afresh. I find while the Assessing Officer in the case of the mother of the assessee has accepted the submissions and did not make any addition in the set aside proceedings, however, in the case of the assessee he rejected the various submissions made by the assessee and made the addition of the entire deposits in the bank account without giving any set off towards purchases made, payments of which were also made

7 ITA Nos.2597 & 2598/PUN/2025 through the said bank account. It is the submission of the Ld. Counsel for the assessee that when the assessee has given the confirmation of accounts giving date-wise details, bill numbers, quantity, rate and amount etc and all the transactions are routed through proper banking channel, therefore, making the addition of the entire deposits without giving any set off towards purchases is not justified. It is also his submission that merely because certain annexures were unsigned, the same cannot be a ground for rejecting the contention of the assessee especially when such annexures were part of the signed letter addressed directly to the Assessing Officer. 19. I find some force in the above arguments of the Ld. Counsel for the assessee. As mentioned earlier in the preceding paragraphs, the assessee has filed the chart giving the details of purchases as well as sales. The assessee has given the details of invoices along with confirmations of the parties giving the quantitative details, rate and amount and all the payments made or received are through proper banking channel. Further, in the case of the mother of the assessee no such addition has been made in the set aside proceedings although the Tribunal in the common order has restored the matter to the file of the Assessing Officer in case of the assessee as well as his mother. I, therefore, find some force in the arguments of the Ld. Counsel for the assessee that the entire sales cannot be added without giving any set off towards purchases. Since the Assessing Officer in the original assessment has estimated the profit from such unaccounted transactions at 9% of the turnover and since in case of the mother of the assessee no such addition has been made in the set aside proceedings, therefore, considering the totality of the facts and circumstances of the case and in the interest of justice, in my opinion, the addition @ 10% of the total sales of Rs.33,12,571/- in the instant case will meet the ends of justice. I, therefore, set aside the order of the Ld. CIT(A) / NFAC sustaining the entire deposits and direct the Assessing Officer to adopt the profit @ 10% of the total deposits of Rs.34,94,560/- being the deposits and the other credits in the bank account maintained with Axis Bank Ltd during the period. Thus, the addition is restricted to Rs.3,49,456/- as against Rs.34,94,560/- made by the Assessing Officer and sustained by the Ld. CIT(A) / NFAC. The grounds raised by the assessee are accordingly partly allowed. 20. In the result, the appeal filed by the assessee is partly allowed.” 12. Respectfully following the above decision passed by a coordinate bench of this Tribunal in assessee’s own case for

8 ITA Nos.2597 & 2598/PUN/2025 assessment year 2008-09 wherein identical additions were made on similar grounds which were reduced by the Tribunal, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC for assessment year 2010-11 sustaining the entire deposits and direct the Assessing Officer to apply net profit of 10% on the cash deposits and other credits of Rs1,28,39,098/- in the Axis Bank Account No.167010100116534 during the period under consideration. Thus, the addition is restricted to Rs.12,83,910/- as against Rs.1,28,39,098/- made by the Assessing Officer and sustained by Ld. CIT(A)/NFAC. Thus, the grounds of appeal raised by the assessee are partly allowed. 13. In the result, the appeal filed by the assessee in ITA No.2597/PUN/2025 for A.Y. 2010-11 is partly allowed. ITA No.2598/PUN/2025, A.Y. 2009-10 : 14. Since the facts and issues involved in the appeal of the assessee in ITA No.2598/PUN/2025 for A.Y. 2009-10 are identical to the appeal of the assessee in ITA No.2597/PUN/2025 for A.Y. 2010-11 therefore, our decision in ITA No.2597/PUN/2025 for A.Y. 2010-11 shall apply mutatis mutandis to the appeal of the assessee in ITA No.2598/PUN/2025 for A.Y. 2009-10. Accordingly, the

9 ITA Nos.2597 & 2598/PUN/2025 appeal of the assessee in ITA No.2598/PUN/2025 for A.Y. 2009-10 is also partly allowed. 15. In the result, the appeal filed by the assessee in ITA No.2598/PUN/2025 for A.Y. 2009-10 is partly allowed. 16. To sum up, both the above captioned appeals filed by the assessee are partly allowed. Order pronounced on this 29th day of June, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 29th June, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.06.29 12:54:05 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. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “B” ब�च, 4. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.