MAHENDRA OMPRAKASH AGRAWAL,JALNA vs. ITO, WARD-1, JALNA, JALNA

Since the issues involved in these appeals are common, identical and similar and for the sake of convenience, we shall take up ITA 746/PAN/2025 for the Assessment Year 2014-15 as a lead case and facts narrated.

At the time of hearing, the Ld.AR has not pressed grounds of appeal Nos. 2 and 3 in the appeal memo and accordingly, these are treated as withdrawn and are dismissed. The sole effective ground of appeal raised that the CIT(A) has erred in sustaining the addition made by the Assessing Officer.

At the time of hearing, the Ld. A.R. submitted that there is a delay of 25 days in filing the appeals before Hon'ble Tribunal and the delay was not intentional and filed an application with affidavit for condonation of delay by the assessee. On consideration of facts and information mentioned in the affidavit, there is a reasonable cause explained and the Ld. DR. has no specific objections. Accordingly, the delay is condoned and the appeals are admitted and heard.

The brief facts of the case are that, the assessee is carrying on business of retail trading in agricultural equipments in the name and style of “Mahendra Traders”, The assessee has filed the return of income on 14.02.2014 disclosing a total income of Rs. 4,04,800/-.Whereas the Assessing Officer(A.O) has received information that the assessee has made huge cash deposits in the cooperative society during the F.Y. 2013-14 and the assessee has not disclosed this information in the return of income filed. Accordingly, the A.O has issued notice u/sec 148 of the Act and in response to the notice, the assessee has filed return of income on 03.04.2021 disclosing a total income of Rs. 4,04,800/- Subsequently, the AO has issued notice u/sec 142(1) of the Act on various dates and there was partial compliance. The AO has also issued notice to explain the sources of cash deposits in bank account and there was no proper compliance and also the assessee has opted for IDS-2016 Scheme and paid the taxes for the F.Y.

2 It is the contention of appellant that whatever deposits found and withdrawals made from in bank account number 00010459410017in which deposits made to the extent of Rs 1,88,27,687/ and another account No 00010459430991 in which deposits made to the extent of Rs 13,37,684/-maintained with Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd are already offered under IDS 2016. However, during the course of assessment proceedings, the AO examined the relevant details and found that only Rs. 13,37,684/- is offered under IDS 2016. The AO also examined whether cash deposit of Rs.1.88.27 687/- pertains to business receipts of appellant or not. It is stated that by AO in the assessment order that assessee has failed to substantiate the business activity. 8.7.3 The appellant during appeal proceedings, contended that AO has made addition u/s 69A contrary to addition proposed u/s 68 in SCN issued which is against principles of natural justice. I have carefully considered contentions of appellant. The appellant during course of assessment proceedings admitted that he has not maintained any books of account w.r.t. business conducted by him. The AO vide para 6.2 & 6.5 noticed that appellant failed to furnish for actual conducting of business by proving copy of trade license for the year. The AO also clearly noted in assessment order that appellant failed to file purchase invoices sale invoices, transportation details, vouchers for other expenses, receipts etc. Even during appeal proceedings, the appellant failed furnish any evidence in support of actual conduct of business by appellant.

4 The fact that appellant has conducted business and whatever amounts deposited and withdrawn pertain to business can't be made out from narration of transactions of bank account which has been clearly brought out of by AO vide para 6.4 of assessment order. It is noticed that in absence of such narration, if it is claim of appellant that such transactions pertain to business of appellant, onus is on appellant to furnish transaction wise details of each of entry in his bank account and how such transaction is related to his business which appellant failed to do both during assessment as well as appeal proceedings. 8.7.5 It is established law that whenever deposits are found in bank account of appellant, onus is on appellant to explain nature and source of such deposits which the appellant failed to discharge in the present case, Provisions of section 69A states that "Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion jewellery or other valuable article may be deemed to be the income of the assessee for such financial year in the present case, the appellant has explained that cash deposits in bank account pertain to his business. However, such explanation was not supported any evidence for actual carrying out of business activity and link between deposits and business transactions so called business. Therefore, AO has rightly considered that explanation given for cash deposits found in bank account is not satisfactory and rightly invoked provisions of section 69A. 8.7.6 It is a fact that AO has proposed addition u/s 68 in Show cause notice issued on 24 03.2022 However, after noticing that appellant has not maintained any books of accounts, the AO decided not to invoke provisions of section 68 since it can be invoked only in cash of cash deposits found in books of accounts. Coming to opportunity not being provided to give explanation regarding non applicability of section 69A to facts of case, ample opportunity has been provided during appeal proceedings to make submissions against additions made by AO

8 Further, it is nowhere case of appellant that bank accounts identified by AO as belonging to appellant in which cash deposits are made are not disputed by appellant either with regard to ownership or quantum of deposits in such bank accounts. It is also admitted fact that appellant has owned up bank accounts in MisRenuka Mata Multi State Urban Credit Co-operative Society Lid and disclosed them as part of IDS 2016. Though only part of deposits are disclosed under IDS 2016, the appellant never disputed quantum of deposits arrived by AO basing on such bank statements. Therefore the argument of appellant that non provision of report. statements which were never received by AO, not providing opportunity of cross examination of parties has violated principles of natural justice can't be accepted. Hence rejected. 8.7.9 It is noticed that, the AO has added Rs 13.37 684/ on protective basis in the hands of appellant because he was not sure whether income disclosed under IDS 2016 of Rs 1,07.014/ pertains to cash deposit found in bank aic Nos 00010459410017/00010459430991as claimed by the appellant or not. It is clear from the assessment order that the AO has not added the amount Rs 13.37,684/substantively in the hands of any other person. 8.7.10 Protective assessment is a precautionary assessment. Where an income has arisen, but AO is not sure who will pay tax on that income, he resorts to precautionary or protective assessment. The concept of protective assessment', was explained by the Hon'ble Apex Court in the case of LaljiHaridas v. ITΟ [1961] 43 ITR 387, as follows:

We considering the facts, circumstances, submissions and the ratio of the judicial decisions dealt and follow the judicial precedence. Accordingly, set aside the order of the CIT(A) and remit the disputed issue to the file of the Juri ictional Assessing officer to adjudicate afresh on merits considering the peak balance in accordance with law and also consider the income declared under IDS2016 scheme. Further the assessee should be provided with adequate opportunity of hearing and shall cooperate in submitting the information. And this ground of appeal of the assesse is allowed for statistical purposes.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. ITA No. 747 to 750/PUN/2025 (A.Y. 2013-14, 2015-16, 2016-17 & 2017-18)

As the facts and circumstances in these appeals are identical to ITA 746/PAN/2025 for the A.Y 2014-15 (except variance in figures) and the decision rendered in above paragraphs would apply mutatis mutandis for this appeal also. Accordingly, the grounds of appeal of the assessee are allowed for statistical purpose.

In the result, the five appeals filed by the assessee are partly allowed for statistical purposes. Order pronounced in the open Court on 29th June, 2026. MANISH BORAD PAVAN KUMAR GADALE (ACCOUNTANTMEMBER) (JUDICIAL MEMBER) Pune, Dated: 29th June, 2026 Abhishek Mohan.

The Pr. CIT concerned. विभागीयप्रविविवि,आयकरअपीलीयअविकरण, “B” बेंच, 4. पुणे/ DR, ITAT, “B” Bench, Pune. गार्डफ़ाइल / Guard File. 5. आदेशािुसार / BY ORDER, ////