ABHAY PANDHARINATH KELE,PUNE vs. DCIT, CENTRAL CIRCLE 2(2), PUNE, PUNE

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), Pune-12 [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2019-20 on 26-03-2025, emanating from the Assessment Order u/s 153A of the Act, dated 05-06-2022.

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Brief facts : 3.1. In this case, assessee is an individual, CMD of the company, M/s. Prithvi Edifice Pvt. Ltd., which is engaged in the business of real estate and property development. The assessee had filed original return of income u/s. 139 of the Act on 30-03-2020, declaring total income at Rs. 83,77,990/-. A search u/s. 132 of the Act was conducted at the residential premises of Shri Abhay P. Kele on 03-02-2021. Simultaneously, a survey u/s. 133A of the Act was carried out in the case of M/s. Prithvi Edifice Pvt. Ltd., and other group concerns. A notice u/s. 153A of the Act was issued on 22-10-2021. Assessee filed return of income in response to notice u/s. 153A of the Act on 26-02-2022, declaring total income at Rs. 83,77,990/-, same as original return. Subsequently, various notices were issued. Assessee filed submissions.

3.2. The relevant paragraphs of the assessment order are reproduced here as under: Quote“……. ..7.4.2 In order to verify the noting on impounded documents under the name Manasvi Enterprises, statement of Shri Abhay P Kele was recorded during

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the survey action. On being enquired about the noting on impounded documents, Shri Abhay Kele had stated that there is no such entity as Manasvi Enterprises and further he had not accepted that the entries noted in the ledger accounts of Manasvi Enterprises pertains to him or any of his business concern. However, it was accepted by him that the name of contractors appearing in ledger accounts in the name of Manasvi Enterprises are also the contractors who worked for his company M/s Prithvi Edifice Pvt Ltd. where the assessee is CMD. …….. ……..

7.4.5 In the statement recorded, the assessee further stated that he was not aware of the nature of cash receipt/payment transactions mentioned in the incriminating seized and impounded documents. He also reiterated that these transactions mentioned in the name of Manasvi Enterprises did not belong to him or any of his business entity.”Unquote

The Assessee without prejudice submitted a chart claiming telescopic benefit which has been reproduced by the AO in the Assessment Order which is as under:

Sr AY Year wise Amount to be set Remaining Substantive No. unexplained off out of Rs. Balance to addition to be interest 6,45,50,000/- Set off made in expenses addition to regular income assessed 1 2015-16 2,92,15,000/- 2,92,15,000/- 3,53,35,000/- 0 (64550000-29215000) 2 2016-17 1,79,95,300/- 1,79,95,300/- 1,73,39,700/- 0 (35335000-17995300) 3 2017-18 5,40,000/- 5,40,000/- 1,67,99,700 0 (17339700-540000 4 2018-19 1,64,72,580/- 1,64,72,580/- 3,27,120/- 0 (16799700-16472580) 5 2019-20 1,30,55,600/- 3,27,120/- 0 1,27,28,480/- 6 2020-21 10,30,000/- 0 0 10,30,000/- 7 2021-22 6,13,625/- 0 0 6,13,625/-

3.3. Finally, AO assessed the total income at Rs. 2,18,21,481/-. Aggrieved by the assessment order, the assessee filed appeal before the Ld.CIT(A). Ld.CIT(A) passed a consolidated order for AY. 2015-16 to 2021- 22 on 26-03-2025. Ld.CIT(A) upheld the part additions.

3.4. Aggrieved by the order of the Ld.CIT(A), the assessee filed appeal before this Tribunal.

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Submission of Ld.AR for the Assessee : 4. Ld.AR filed a paper book. Ld.AR took us through the assessment order to prove that the additions made were without any supporting documents. Ld.AR submitted that it has been alleged in the assessment order that documents pertaining to entity called Manasvi Enterprises were found, which contained cash transactions. Ld.AR submitted that from the beginning, assessee has denied the cash transactions. Ld.AR further submitted that Mr. Abhay Kele, in his statement recorded during the search specifically denied any knowledge of Manasvi Enterprises. Mr. Abhay Kele denied any transactions which were appearing in the documents titled Manasvi Enterprises. Ld.AR submitted that thus, from the date of the search, assessee has denied knowledge of Manasvi Enterprises, denied cash transactions. The Ld.AR further submitted that AO has not brought on record any document to prove that Manasvi Enterprises pertains to assessee. AO has not proved the basis of addition. Ld.AR further submitted that it was brought to the notice of the AO that the dates are not clear in the so called documents. Ld.AR further submitted that the entire addition made by the AO is based on an alternative submission of the assessee made on 29-05-2022, wherein assessee has specifically said that assessee was not admitting any transactions appearing in Manasvi Enterprises, but if AO did not agree with the assessee’s submission, then, without prejudice AO was requested to provide telescoping benefit of the cash transactions appearing in earlier years. A chart was submitted which was narrating the cash transactions, denied by the assessee, but for the sake of telescoping, the chart was prepared, demonstrating cash available.

4.1. Ld.AR further submitted that the entire addition made by the AO in para 8.24 and 8.25 of the assessment order is based on this chart, submitted by the assessee. Ld.AR, therefore, submitted that addition may be deleted as it is without any basis.

4.2. Ld.AR further submitted that assessee has opted for DTVSV for some of the years. However, that does not mean that assessee has accepted the transactions. The AO has referred to the fact that assessee has opted for DTVSV and concluded that it means assessee has accepted

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the transactions. Ld.AR vehemently submitted that opting for DTVSV does not at all mean accepting the transactions.

4.3. Ld.AR submitted that the Ld.CIT(A) has again relied on the so called transactions of Manasvi Enterprises, which has already been denied by the assessee. Ld.AR requested to delete the addition.

Submission of Ld.DR : 5. The Ld.DR relied on the order of the AO as well as the Ld.CIT(A). Ld.DR submitted that during the survey, ledger accounts in the name of Manasvi Enterprises were found. Ld.DR submitted that Manasvi Enterprises is a dummy concern of the assessee wherein assessee has entered the cash transactions. Ld.DR, therefore, submitted that additions are based on documents may be confirmed. However, on a specific query from the Bench the Ld.DR admitted that No where either AO or CIT(A) has proved that Manasvi Enterprises was concern of Abhay Kele.

Findings and Analysis : 6. In this case there was a search at the residence of the Assessee. It has been mentioned in the Assessment Order in para 7.4 , which has been reproduced by us above, that during Survey at the office premises of the group concern certain ledger accounts were found and impounded under the name “Manasvi Enterprises”. It has been alleged in the assessment Order that the ledger accounts Manasvi enterprises contained cash transactions. Thus, the entire base of the Assessment Order is the so called ledger of Manasvi Enterprises. However, it is also mentioned in the Assessment Order that Mr.Abhay Kele in his statement recorded during Search has denied the transactions. Mr.Abhay Kele in his statement has categorically stated that he was not aware of Manasvi Enterprises. Thus, Mr.Abhay Kele from the inception of Search has denied the transactions. Mr.Abhay Kele denied the said transactions again during the Assessment Proceedings. It is important to understand that during the Search the Income Tax Officers, Officials were present at the residence and office premises of the group concerns, inspite of that the Income Tax Officers could not bring on record any evidence to prove that the so called Manasvi Enterprises pertains to Abhay Kele. It is not clear from the Assessment Order whether the so called Manasvi Enterprises is a partnership concern

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or Proprietary concern ! Therefore, it is not emanating from the Assessment Order, on what basis the AO has alleged that Transactions appearing in the ledger account of Manasvi Enterprises pertains to Mr.Abhay Kele. Mr.Kele has denied since the date of search, which is mentioned in the Assessment Order. In these circumstances the onus was on the AO or the DDIT(Investigation) to prove that the transactions appearing in the ledger of so called Manasvi Enterprises are the transactions actually undertaken by Mr.Abhay Kele. No evidence has been brought on record to prove the same.

6.1. The Hon’ble Supreme Court in Parimisetti Seetharmamma Vs. CIT 57 ITR 532 (SC) has held as under :

Quote “By sections 3 and 4 the Act imposes a general liability to tax upon all income. But the Act does not provide that whatever is received by a person must be regarded as income liable to tax. In all cases in which a receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provision. Where however a receipt is of the nature of income, the burden of proving that it is not taxable because it falls within an exemption provided by the Act lies upon the assessee. The appellant admitted that she had received jewellery and diverse sums of money from Sita Devi and she claimed that these were gifts made out of love and affection. The case of the appellant was that the receipts did not fall within the taxing provision : it was not her case that being income the receipts were exempt from taxation because of a statutory provision. It was therefore for the department to establish that these receipts were chargeable to tax.” Unqoute.

6.2. Hon’ble Supreme Court in the case of K.P. VARGHESE vs ITO 1981 AIR 1922 has observed as under : Quote, “It is a well settled rule of law that the onus of establishing that the conditions of taxability are fulfilled is always on the Revenue ” Unquote.

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Quote, “At the outset it is submitted that Abhay Kele (myself) per se does not have any business operation on my own in the development of property save and except my ownership of land. Therefore, in all fairness it is incumbent of the AO to appropriately apportion and or segregate the transactions with regards to the individual entities for which such transactions are actually carried out, if at all be……. Loose papers being part of impounded materials page 22 of Bunde 10-ledger having heading TL-Kha-Khandi. Assuming but not admitting, in the captioned matter it is submitted as under: Further as required by your good self I am attaching herewith the working of the telescopic view of Prithvi group taken together, marked ANNEXURE- 1………..” Unquote.

7.1. We have studied the letter dated 29.05.2022 of the assessee addressed to the AO which has been relied by the AO in the Assessment Order paragraph 8.13 onwards. Primarily the assessee has denied the transactions, however, without prejudiced assessee stated that benefit of telescopy may be provided. The assessee submitted the working which was without prejudiced. The AO has reproduced the same chart in the Assessment Order and made the addition of Rs. 1,27,28,480/-.

7.2. Thus, the assessee has never accepted any transaction. Assessee has always stated that in his individual capacity he has not entered into any transaction alleged by AO. The AO has not brought on record any document to prove that the alleged income is income of Mr. Abhay Kele in

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individual capacity. The AO has relied on certain documents which were impounded during survey in the business premises of the concerns where Mr. Abhay Kele is partner or director. Therefore, the documents relied by AO do not establish that the impugned income pertains to Abhay Kele in individual capacity.

7.3. In these facts and circumstances of the case, the AO has miserably failed to prove that the alleged income belongs to assessee in individual capacity and hence taxable in the hands of assessee. Therefore, we direct AO to delete the additions of impugned amounts sustained by Ld.CIT(A). In the result ground number 1,2,4 raised by assessee are allowed.

7.4. Ld.AR has not pressed the ground number 3. Hence, ground number 3 is dismissed.

Order pronounced in the open Court on 22nd May, 2026

Sd/- Sd/- (MS. ASTHA CHANDRA) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/Pune; दिन ांक/Dated : 22-05-2026 TNMM

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपील र्थी / The Appellant 1. प्रत्यर्थी / The Respondent 2. 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune