DEPUTY COMMISSIONER OF INOCME TAX CIRCLE-1, NASHIK, NASHIK vs. SHIVANJALI PETROLEUM PRODUCTS, NASHIK

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ITA 2554/PUN/2025Status: HeardITAT Pune21 August 2026AY 2017-183 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee had explained the source of the cash deposits, which were from normal business operations. The AO had not disputed that the assessee ran a petrol pump and received the currency during the specified period.

What were the facts?

During the demonetization period, the assessee, a petrol pump owner, deposited demonetized currency. The Assessing Officer (AO) made an addition, believing only public sector entities were allowed to accept such currency.

What were the issues?

Whether the addition made by the AO on account of cash deposits of demonetized currency during the specified period was justified when the source was explained and the assessee was operating a petrol pump.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI PAVAN KUMAR GADALE & SHRI Dr. DIPAK P. RIPOTE

For Respondent: Ms. Bhavya I.V., Jt. CIT

आदेश /ORDER

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2017-18 on 19.08.2025, emanating from the Assessment Order u/s 143(3) of the Act, dated 25.12.2019.

Findings and Analysis :

2.

None appeared on behalf of the assessee. We have heard Ld. DR and perused the records. The Ld. DR submitted that the Ld. CIT(A) has erred in directing to delete the addition made by the AO for AY 2017-18 on account of cash deposits during de- monetization period.

ITA No. 2554/PUN/2025 3. In this case, the assessee had filed return of income electronically for AY 2017-18 declaring total income at Rs.32,71,400/-. During scrutiny proceedings, the Assessing Officer (AO) noted that the assessee had deposited cash consisting of demonetized currency during period 10.11.2016 to 29.12.2016. The assessee submitted before the AO that the assessee runs Petrol Pump of Reliance Industries Ltd. The assessee submitted that during demonetization period Petrol Pumps were allowed to accept demonetized currency. However, the AO observed that the assessee runs Petrol Pump of Reliance Industries Ltd. which is private company. The AO in the assessment order wrote that only the public sector entity were allowed to accept demonetized currency. Accordingly, the AO made addition of Rs.2,56,83,987/-. Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) allowed the appeal of the assessee following the decision of ITAT, Pune in the case of V R Auto Services Vs. ACIT in ITA No. 42/PUN/2025, dated 06.05.2025. Aggrieved by the order of the Ld. CIT(A), the Revenue filed an appeal before this Tribunal.

4.

The Ld. DR pleaded that during the demonetization period, the assessee was not permitted to accept demonetized currency. We specifically asked the Ld. DR how the order of the Ld. CIT(A) is incorrect when the Ld. CIT(A) has followed the decision of ITAT, Pune which is binding on the Ld. CIT(A). The Ld. DR could not answer. In this case, the AO has made addition only because demonetized currency was accepted during specified period. It is not the case of the AO that the assessee had undisclosed income. The AO had admitted that the assessee runs Petrol Pump and demonetized currency was received during normal Petrol Pump business during specified period.

ITA No. 2554/PUN/2025

This fact has not been disputed by the AO. The ITAT in the case of V R Auto Services (Supra) has held as under : “We find that the same is squarely applicable on the assessee in the instant appeal as the assessee has also maintained all the specific records for successfully explaining the alleged cash deposit and since the source of alleged cash is explained therefore section 69A cannot.”

5.

No contrary decision has been brought to our notice. Assessee has duly explained source of cash. This fact has not been doubted by the AO. Hence Ld. CIT(A) was right in following decision of ITAT, Pune (supra). In these facts and circumstances of the case, there is no merit in the appeal filed by the Revenue. Accordingly, grounds raised by the Revenue are dismissed.

6.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open Court on 21st August, 2026

Sd/- Sd/- (PAVAN KUMAR GADALE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER

पुणे/Pune; दिन ांक/Dated : 21-08-2026 Ravi Kumar Digitally signed by Ravi Kumar Ravi Kumar Date: 2026.08.21 18:13:46 +05'30' आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. The concerned Pr. CIT, Pune 4. DR, ITAT, ‘B’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण,पुणे / ITAT, Pune

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