AMOL RAMCHANDRA MHATRE,REVDANDA vs. ITO, WARD 3, PANVEL, PANVEL

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ITA 475/PUN/2026Status: DisposedITAT Pune18 May 2026AY 2013-144 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the cash deposits were sourced from the assessee's mobile recharge business, as evidenced by a Gram Panchayat certificate. Therefore, only the net profit from the business should be taxed.

What were the facts?

The assessee deposited Rs. 21,07,550/- in cash into his bank account. The Assessing Officer (AO) treated these deposits as unexplained income and made an addition. The Commissioner (Appeals) upheld the addition.

What were the issues?

Whether cash deposits in a bank account are to be treated as unexplained income when the assessee claims they are from business receipts, and if so, to what extent should the addition be made.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 147,Section 144,Section 144B,Section 250,Section 133(6)

AI-generated summary — verify with the full judgment below

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

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

For Respondent: Shri Madhukar Anand, JCIT

आदेश /ORDER

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the Assessee against the order of Commissioner of Income Tax (appeal)(NFAC) passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2013-14 on 02/12/2025, emanating from the Assessment Order u/s 147 r.w.s. 144 r.w.s. 144B of the Act, dated 20/09/2021.

2.

The Assessee has raised following grounds of appeal :

“1. The Hon CIT(A) erred in upholding the addition of Rs.21,07,550/-, as unexplained money u/s 69A of the IT Act, 1961, on account of cash deposits in the bank account with State Bank of India, Chaul branch, Dist Raigad, when the source of such cash deposits was out of business receipts from money transfer and mobile recharge proprietary business of the appellant and therefore the addition of Rs.21,07,550/- was not merited by law and may kindly be deleted. 2. Without prejudice to ground no. 1, the Hon CIT(A) erred in upholding the addition of Rs.21,07,550/- as unexplained money u/s 69A of the IT Act, 1961, without appreciating that any addition in respect of such deposits in the bank account ought to be restricted to the extent of profit percentage or

ITA No. 475/PUN/2026

the peak credit therein and not the entire receipts and for this reason the addition of Rs.21,07,550/- was not justified. 3. The Hon CIT(A) erred in upholding the addition of Rs. 21,07,550/- u/s 69A r.w.s. 115BBE of the I.T Act, 1961, not appreciating that the provisions of section 69A dealing with unexplained money are not attracted to the facts of the matter and therefore the addition is also legally incorrect and bears deletion on that account. 4. The appellant craves leave to add, alter, amend, delete and/or vary any of the above grounds of appeal at any time before the decision of the appeal.”

3.

Ld.Authorised Representative (Ld.AR) for the Assessee filed paper book. Ld.AR submitted that the assessee is a small trader doing business of mobile recharge etc., in a small town of Raigad District. During the year assessee had no taxable income hence assessee had not filed return of income. However, Ld.AO issued Notice u/s 148 on the basis of information that Assessee had deposited cash in his bank account. Since assessee could not file details before the AO as Assessee was not aware about the e- proceedings. The Assessee filed appeal before Ld.CIT (A) and filed all details. Assessee filed copy of a certificate issued by Gram Panchayat stating that Assessee was in the business of Mobile Recharge. Assessee submitted before the CIT(A) that assessee is in Mobile Recharge business and the cash deposits were out of the same business. However, the CIT(A) confirmed the addition . Ld.AR also submitted that every cash deposit does not mean escapement of income , the AO has failed to apply his mind before issuing notice u/s 148 of the Act.

4.

Ld.DR relied on the order of the AO and CIT(A).

5.

Findings and Analysis : We have heard both the parties and perused the records. In this case admittedly the assessee has not filed Return of Income. AO issued Notice u/s 148 based on the information that assessee had deposited cash in his bank account. AO collected information u/s 133(6) of the Act from State Bank of India . AO obtained Bank Statement from SBI. AO realized that Assessee had deposited cash of Rs.21,07,550/-. AO issued show cause notice to the assessee. However, assessee failed to file any reply. Hence AO passed a reassessment order u/s 144 of the Act assessing Total Income of the Assessee at Rs.21,07,550/-.

ITA No. 475/PUN/2026

5.1. Aggrieved by the Assessment Order, the Assessee filed Appeal Before the CIT(A). Assessee filed evidence that Assessee was in the business of Mobile Recharge. However, CIT(A) confirmed the addition of Rs.21,07,550/-.

5.2. Aggrieved by the Order u/s 250 of the Act, the Assessee has filed appeal before this Tribunal. It is observed that AO had obtained copy of bank statement u/s 133(6) of the Act. The said statement was filed by the assessee before the CIT(A). The CIT(A) has reproduced part of the statement. It is noted by the CIT(A) that after the cash deposits the assessee has transferred the amounts by Cheque to some one having account in SBI. However, neither the AO nor CIT(A) bothered to obtain information from the Bank regarding the impugned Transfer of amounts by cheques. Assessee had submitted that Assessee is in the business of Mobile Recharge. But CIT(A) did not believe the explanation submitted by the assessee. Assessee has filed a Certificate issued by Gram Panchayat stating that Assessee was doing Mobile Recharge business. Gram Panchayat is a Government Office and the certificate issued by it cannot be just brushed aside without any contrary evidence. Ld.DR, CIT(A) has not brought on record any evidence to rebut the submission of the assessee that he was in the business of Mobile Recharge. There are regular deposits and regular payments by cheques in the assessee’s bank account which explains that it was from business transaction.

5.3. Considering all the facts , the certificate issued by Gram Panchayat, circumstances of the case we are of the opinion that Assessee has established that he was in the business of mobile recharge. Therefore, the cash deposits were sourced from business of the assessee. Therefore, only Net Profit can be taxed. It was pleaded by the Ld.AR that the margin in the business of Mobile Recharge was very minimal may be around 1-2 % of receipt.

5.4. We have already held that the cash deposits were sourced from business of mobile recharge by the assessee. Hence only Net Profit can be taxed. Accordingly, we estimate the Net Profit at 8 % of Total Cash

ITA No. 475/PUN/2026

Deposits of Rs.21,07,550/-. Accordingly, we direct the AO to make addition of only Rs. 1,68,604/-, which is below taxable limits.

6.

In the result the appeal of the assessee is allowed.

Order pronounced in the open Court on 18th May, 2026

Sd/- Sd/- (PAVAN KUMAR GADALE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/Pune; दिन ांक/Dated : 18th May, 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, ‘SMC’ 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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