DY. COMMISSIONER OF INCOME-TAX, CIRCLE-5, PUNE, PUNE vs. RUJULA REALTY PRIVATE LIMITED, PUNE

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “B” BENCH : PUNE BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER I.T.A.No.2535/PUN/2025 (Assessment Year : 2018-19) D.C.I.T.Circle-5, Rujula Reality Pvt. Ltd. 4th Floor, Narpatgiri 3rdflor,PMTBldg. vs. Corner 4301a, Shankarsheth Road., Mangalwar Peth, Swargate, Pune-411011, Maharashtra. Pune-411037, PAN NO. AAFCR8996N Maharashtra (Appellant) (Respondent) For Assessee : Shri.Saurbh Patil. AR For Revenue : Shri Ratnakar Shelake.Addl.JCIT.Sr.DR Date of Hearing : 19.05.2026 Date of Pronouncement : 02.07.2026 ORDER PER PAVAN KUMAR GADALE, JUDICIAL MEMBER The Revenue has filed the appeal against the order of NFAC/CIT(A) passed u/sec250 of the Income Tax Act. The revenue has raised the following grounds of appeal:- (i) On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in deleting the addition of Rs. 1,45,00,000/- made u/s 69 of the Income Tax Act, 1961 and addition of Rs. 22,50,000/- u/s 69A of the Income Tax Act, 1961 based on the documentary evidences furnished by the assessee during the appellant proceedings, without appreciating that these documents/evodemces were never produced by the assessee before the AO during the assessment proceeedings but procedure for the first time before the ld. CIT(A) and therefore, the same would fall in the category of additional evidences within the meaning of Rule 46A of the I.T. Rules. (ii) On the facts and circumstaces of the case and in law, the ld. CIT(A) erred in admitting the additional evidences furnished by the assessee without recording a clear finding as to the circumstances as detailed in sub-rule (1) of the Rule 46A under which it merited admission as additonial evidences, thereby violating the mandate contained in sub-rule (2) of Rule 46A. (iii) On the facts and circumstances of the case and in law, the ld. CIT(A) erred in admitting the additional evidences furnished by the assessee without giving the AO reasonable opportunity to examine the same and to furnish any evidence to rebut the same, there by grossly disregarding the requirements as mandated in Rule 46A(3) of the I.T. rules. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in holding that the assessee has discharged the initial burden and therefore, burden shifted on the AO. Without appreciating that mere filing of paper compliance is not sufficient to substantiate him claim. (iv) Without prejudice, on the facts and in the circumstances of the case and in law, the ld. CIT(A) grossly erred in accepting banking channel payments as sufficient explanation, ignoring the fact that amount of Rs. 1,36,50,000/- paid is not reflected in the audited Balance Sheet submitted before the AO and asset value of Rs. 1,45,56,200/- is absent from Balance Sheet in ITR.

(v) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred on facts in holding that mere reflection of bank balance in balance sheet and cash book entrerd explain the source, overlooking that unexplained cash deposits reflect in books regardless of source, and the assessee failed to discharge burden u/s 69A with independent evidence. (vi) The appellant craves leave to add, amend and alter any of the above grounds of appeal. 2. The brief facts of the case are that, the assessee company is engaged in real estate business. The Income tax department based on the information received under the Risk Management Strategy (NMS cases) find that (i) the assessee has made aggregate cash deposits of Rs. 22,50,000/- in the bank account maintained with the Kotak Mahindra bank and (ii) the assessee has purchased immovable property value of Rs. 1,45,00,000/- in the F.Y.2017-18 and the assessee has not filed the return of income for the AY 2018-19.The Assessing Officer(A.O) has reason to believe that the income has escaped assessment and issued notice u/sec 148 of the Act. In compliance to the notice, the assessee has filed the return of income on 09.05.2022 disclosing a total income of Rs. NIL. Further the A.O has issued notice u/sec142(1) of the Act to explain with supporting evidences the sources of acquisition of immovable property and cash deposits in the bank account. In compliance, the assessee has filed partial information vide letter dated 26.04.2023. Further the A.O has issued a show cause notice on 28.02.2024 and there was no compliance. The A.O has also issued notice u/sec133(6) of the Act on the bank and obtained bank statements. of the assessee. Since there was no proper compliance to the notices/letter by the assessee with supporting evidences, in respect of disputed issues. Finally, the A.O based on the information available on record has dealt on the issues and made addition of (i) unexplained investment of Rs.1,45,00,000/- u/sec69 of the Act and (ii) unexplained money u/sec69A of the Act and assessed the total income of Rs.1,67,50,000/- and passed the order U/sec147 r.w.s144B of the Act dated 15.03.2024. 3. Aggrieved by the order, the assessee has filed the appeal with the CIT(A). In the appellate proceedings, the CIT(A) considered the grounds of appeal, statement of facts, findings of the A.O and the assessee submissions with supporting additional evidences in respect of the claims of the assessee and deleted the additions and allowed the assessee appeal. Aggrieved by the order of the CIT(A), the revenue has filed the appeal with the Honble Tribunal.. 4. At the time of hearing, the Ld.DR submitted the CIT(A) has erred in admitting the additional evidences furnished by the assessee without providing fair opportunity to verify and examine the evidences by the assessing officer and deleting the additions in violation of Rule 46A of the I T rules . Further the CIT (A) has erred in overlooking the factual aspects that the assessee could not file nor explained the transactions of purchase of property and the cash deposits made in the bank account with evidences in spite of providing adequate opportunities by the A.O in the assessment proceedings and prayed for allowing the revenue appeal. Per contra, the Ld.AR supported the order of the CIT(A) with factual paper book. 5. We heard rival submission and perused the material record. The Ld.DR submitted that the CIT(A) has erred in deleting the additions based on the additional evidences filed by the assessee in the appellate proceedings for the first time and the assessing officer was not provided opportunity to examine and verify the evidences and thereby violated the provisions of rule46A of the IT rules. Further the assessee could not file nor explained the transactions of purchase of property and the cash deposits made in the bank account with evidences in spite of providing adequate opportunities by the A.O in the assessment proceedings. We find on the first disputed issue with respect of acquisition of immovable property. The Ld.AR submitted that the assesse has purchased the immovable property and was registered in the FY 2017-18 and most of payments are made in the FY 2016-17 and except two payments are made in the FY 2017-18 and the Ld.AR demonstrated the sources of acquisition and cash deposits. The Ld. DR submitted that these submissions/evidences were not filed before the AO. We find the CIT(A) has considered submissions and evidences filed by the assessee in support of the acquisition of the property and cash deposits and deleted the additions dealt at Page 8 Para 6 to 7 of the order read as under: “6. The appellant is a company engaged in realty business. The appellant did not filre return of income u/s 139. However in response to the notice u/s 148, the appellant filed return of incomeon 09.05.2022 returning NIL income.

6.1 The first issue involved is the purchase of immovable property for Rs. 1,45,00,00/-. The AO treated the same as unexplained investment u/s 69 holding that the appellant failed to explain the source for the same.

6.2 the appellant explained that the investment in immovable property was the purchase of office space at Sacred World. The appellant has argued that the investment was made through its current account with Bharat Cooperative Bank and that the investmentw as through a loan of Rs. 91.5 lakhs from the bank. The submission of the appellant is reproduced below:

It can be seen that, the amount for property purchase is through bank account no. CA 157. Copy of Bank Book statement account of Bharat Bank 157, explaining each entry is enclosed as Annexure-IV which is for the FY 16-17 which shows the loan disbursement. Also copy of bank statement for the FY 16-17 is enclosed as Annexure-V. copy of Bank statement for the FY 2017-18 is enclsoed as Annexure -VI.

From Bharat Bank account statement, it can be seen that 91.50 lacs are financed through the Bharat Bank Loan which evident from Annexure-IV already enclosed. Also, for ready reference, copy of puchase deed is enclsoed as Annexure-VII.

The details of payment made for the purchase of property, matching with bank statement enclsoed in Annexure- IV is as follows:

Sr. Date Particular Payment Source No. Amount

Loan from Financial institution: An amount of Rs. 91,50,000/- was raised as a term loan, which was duly sanctioned and disbursed by Bharat Cooperative Bank (Mumbai) Ltd. The remaining amount of Rs. 53,50,000/- was paid through the company’s current account maintained with Bharat Cooperative Bank (Mumbai) Ltd., which is reflected in the bank statement enclosed. These founds represent regular business inflows and capital contributions and do not involve any cash component or unaccounted income. We emphasize that the entire transaction was conducted through banking channels, and no unaccounted or unexplained cash transactions were involved. All documents substantiating the source of funds are attached herewith. In light of the above, it is humbly submitted that the allegation of unexplained investment u/s 69 is not applicable to the present case, as the soruce of funds is duly explained, traceable and supported by verifiable documentation. 6.3 In the return of income filed, in the asset schedule the addition of building Rs. 1,45,56,200/- is shown. Therefore the appellant has claimed that investment in property was from accounted sources as per the books. The AO has not pointed out any mistakes in the soruces as per the books of the appellant. Therefore, the addition on account of unexplained investment may be deleted. Ground 1 is allowed. 6.4 In the 148A(d) order, the AO highlighted that the appellant had started time deposits worth Rs. 58,60,000 in Kotak Mahindra bank during the year. During assessment stage, the appellant replied as under: "It is a sweep account and not a fixed time deposit the ledger of which is attached B. 6.5 From the bank statement of Kotak Mahindra Bank (A/c No. 9211209356) the AO noticed that that there were cash deposits totaling Rs. 22,50,000. The AO treated cash deposit as unexplained credits u/s 68. 6.6 On verification it is found that the above bank account is part of the books of account of the appellant and the balance in the bank account is reflected in the balance sheet. The appellant has also filed the cash book where these transactions are reflected. Hence the addition u/s 68 on account unexplained cash credit is not needed and may be deleted. Ground 2 is allowed. 7. In the result, appeal is treated as allowed.” 6. The Ld.AR submitted that the assessee has filed the details/information before the assessing officer and referred to e-proceedings response acknowledgement dated 26.04.2023 placed at page 5 & 6 of the paper book. When a query was raised, with respect to documents/evidences filed with the CIT(A)/NFAC in the appellate proceedings, the Ld.AR demonstrated (i)the e-proceedings response acknowledgement dated 19.06.2025 placed at page 99 & 100 and also (ii) the e- proceedings response acknowledgement placed dated 14.08.2025 at page 206 & 207 of the paper book. The Ld.DR’s contentions are additional evidences are filed in the appellate proceedings for the first time and the CIT(A) has not provided opportunity to the Assessing officer for verification and examination. Whereas on comparison of the attachments and description in the e-proceedings response acknowledgement filed before the Assessing officer on 26.04.2023 and before the CIT(A) on (i)19.06.2025 & 14.08.2025. We find in addition to the documents filed before the Assessing officer on 26.04.2023, the assessee in the appellate proceedings in the two hearing proceedings has filed purchase deed, cashbook, purchase ledger, unsecured loan confirmations. Prima facie the CIT(A) has accepted these evidences in violation of rule 46A of the I T rules and deleted the additions. The CIT(A) has not provided fair opportunity to the assessing officer to examine and submit the comments/remand report. We considering the facts, circumstances and submissions set aside the order of the CIT(A) and restore the disputed issues to the file of the Assessing officer to adjudicate a fresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. And the grounds of appeal of the revenue are allowed for statistical purposes. 7. In the result, the appeal filed by the revenue appeal is allowed for statistical purpose. Order pronounced in the open Court on 02.07.2026 Sd/- Sd/- [DIPAK P. RIPOTE] [PAVAN KUMAR GADALE] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated:02nd July 2026 Abhishek Abhishek Digitally signed by Abhishek Mohan Mohan Date: 2026.07.03 11:44:30 +05'30' Copy of the Order forwarded to: 1. The appellant 2. The respondent 3. The Ld. PCIT concerned. 4. D.R. ITAT, “B” Bench, Pune. 5. Guard File. //True Copy//

By Order Assistant Registrar, ITAT, Pune.