MANASI MAHESH SAIGAONKAR,SHRIVARDHAN, RAIGAD vs. ITO, WARD-1, PANVEL, PANVEL

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ITA 1927/PUN/2026Status: DisposedITAT Pune25 August 2026AY 2013-1410 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found merit in the assessee's argument that the deposits were business receipts, though not fully explained. Considering the business nature and subsequent year's accepted profit margin, the Tribunal directed the addition to be restricted to a 12% profit on the cash deposit.

What were the facts?

The assessee, engaged in the business of ladies' bangles, did not file her return of income for AY 2013-14. Information was received about a cash deposit of Rs. 26,51,000/- in her bank account, the source of which she could not explain. The Assessing Officer made an addition under Section 69A.

What were the issues?

Whether the entire cash deposit can be treated as unexplained income under Section 69A, or if a reasonable profit margin from the business should be considered.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 148,Section 143(1)

AI-generated summary — verify with the full judgment below

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

Before: SHRI R. K. PANDA & MS ASTHA CHANDRA

For Appellant: Shri Prasad S Bhandari
For Respondent: Shri Pradnya Gholap, JCIT

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS ASTHA CHANDRA, JUDICIAL MEMBER ITA No.1927/PUN/2026 Assessment Year : 2013-14

Manasi Mahesh Saigaonkar ITO, Ward – 1, Panvel Kasba Peth, Sonar Ali, Vs. Shrivardhan, Raigad – 402110 PAN : FSFPS1197Q (Appellant) (Respondent) Assessee by : Shri Prasad S Bhandari Department by : Shri Pradnya Gholap, JCIT Date of hearing : 17-08-2026 Date of pronouncement : 25-08-2026

O R D E R PER R.K. PANDA, VP:

This appeal filed by the assessee is directed against the order dated 09.03.2026 of the Ld. Addl. / JCIT(A)-1, Gurugram relating to assessment year 2013-14.

2.

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. Addl. / JCIT(A) in confirming the addition of Rs.26,51,000/- made by the Assessing Officer u/s 69A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

3.

Facts of the case, in brief, are that the assessee is an individual and engaged in the business of ladies’ bangles at Shivardhan, Dist. Raigad. She has not filed

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her return of income for the impugned assessment year 2013-14. Information was received from the ITO (I&CI), Kalyan that the assessee has entered into financial transaction in the form of cash deposit of Rs.26,51,000/- in SBI, Shriwardhan Branch. It was also stated that during verification the assessee could not explain the source of cash deposits with documentary evidence. On the basis of information and considering the fact that the assessee has not filed her return of income, the case was reopened as per the provisions of section 147 of the Act. Accordingly, notice u/s 148 was issued and served on the assessee. Since the assessee did not file the return in response to the notice u/s 148 and failed to explain the source of such cash deposit, the Assessing Officer, invoking the provisions of section 69A of the Act made addition of Rs.26,51,000/-.

4.

Before the Ld. Addl. / JCIT(A), the assessee apart from challenging the addition on merit, challenged the validity of the re-assessment proceedings and also filed certain additional evidences, based on which the Ld. Addl. / JCIT(A) called for a remand report from the Assessing Officer. After considering the remand report of the Assessing Officer and the rejoinder of the assessee to such remand report, the Ld. Addl. / JCIT(A) rejected the contention of the assessee that the peak theory credit should be applied in her case. He also rejected the argument of the assessee to estimate the income @ 8% of turnover u/s 44AD. The relevant observations of the Ld. Addl. / JCIT(A) read as under:

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5.

Aggrieved with such order of the Ld. Addl. / JCIT(A) the assessee is in appeal before the Tribunal.

6.

The Ld. Counsel for the assessee submitted that there is no dispute to the fact that the assessee is engaged in the business of ladies’ bangles which is discernable from page 1 of the assessment order. Referring to pages 6 to 10 of the paper book he drew the attention of the Bench to the copy of the bank statement and submitted that there are continuous deposits in and withdrawals from the bank account. Referring to the submissions made before the Assessing Officer during

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the remand proceedings he drew the attention of the Bench to the letter dated 20.09.2016 and submitted that it was categorically stated before the Assessing Officer that since her total turnover during the financial year is approximately Rs.25 lakhs and her income is below the taxable limit, hence the assessee has not filed her return of income. He submitted that in the subsequent year the income declared by the assessee disclosing the net profit @ 10.57% (approximately) has been accepted and the return has been processed u/s 143(1) of the Act. He submitted that the assessee being engaged in the business of ladies’ bangles, the profit margin is very low and a reasonable percentage be estimated and the entire addition cannot be made by invoking the provisions of section 69A of the Act.

7.

The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. Addl. / JCIT(A). He submitted that the assessee could not explain the nature and source of the deposits, therefore, the Ld. Addl. / JCIT(A) was fully justified in sustaining the addition made by the Assessing Officer by invoking the provisions of section 69 of the Act.

8.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. Addl. / JCIT(A) and the paper book filed on behalf of the assessee. It is an admitted fact that the assessee is an individual and engaged in the business of ladies’ bangles which has been accepted by the Assessing Officer himself at page 1 of the assessment order and which reads as under:

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9.

Further, a perusal of the bank statement shows that there are continuous deposits and withdrawals of money in the said bank account. It is also pertinent to mention here that the entire deposits and withdrawals are in cash and there is no deposit of cheque or payment by cheque. Further, the assessee’s business is also discernible from the certificate issued by Micro, Small and Medium Enterprises (MSME) which is as under:

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10.

Under these circumstances we find merit in the argument of the Ld. Counsel for the assessee that the entire deposits cannot be treated as unexplained cash deposits and the same is out of business receipts of the assessee. Since in the instant case the assessee has not filed her return of income nor participated in the assessment proceedings and in the subsequent year has declared the profit @ 10.57% on its total turnover, therefore, considering the totality of the facts of the case and in the interest of justice, we are of the considered opinion that adoption of profit rate @ 12% for the impugned assessment year on the deposit of Rs.26,51,000/- will meet the ends of justice. We, therefore, set aside the order of

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the Ld. Addl. / JCIT(A) and direct the Assessing Officer to restrict the addition by computing the profit @ 12% of the cash deposit of Rs.26,51,000/-. The grounds raised by the assessee are accordingly partly allowed.

11.

In the result, the appeal filed by the assessee is partly allowed.

Order pronounced in the open Court on 25th August, 2026.

Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 25th August, 2026 GCVSR Gajjala Chinna Digitally signed by Gajjala Chinna Venkata Subba Reddy Venkata Subba Reddy Date: 2026.08.25 17:52:25 +05'30' आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; प्रत्यर्थी / The Respondent 2. 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘SMC’ Bench, Pune ग र्ड फ ईल / Guard file. 5. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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S.No. Details Date Initials Designation 1 Draft dictated on 17.08.2026 Sr. PS/PS 2 Draft placed before author 25.08.2026 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to the Office 9 Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order

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