ARUN MADHUKAR CHAVANKE ,NASHIK vs. ITO WD-1(1) , NASHIK

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.471/PUN/2026 िनधा�रण वष� / Assessment Year : 2013-14 Arun Madhukar Chavanke, Vs. ITO, Ward-1(1) Nashik. 1224 B, Shiwaji Nagar, A/P Pimpalgaon Baswant, Nashik- 422209. PAN : AEPPC6063G Appellant Respondent Assessee by : Shri Ramkrishna Dawre : Shri Sandeep Sathe Revenue by Date of hearing : 08.04.2026 Date of pronouncement : 24.06.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 29.12.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2013-14. 2. The appellant has raised the following grounds of appeal :- “1. Invalid reopening - u/s 147 The learned CIT(A) erred in law and on facts in upholding the reopening of assessment u/s 147, despite absence of fresh

2 ITA No.471/PUN/2026 tangible material and merely on change of opinion, rendering the reassessment proceedings void ab initio. 2. Incorrect characterization of the Appellant as Trader The learned CIT(A) grossly erred in confirming the finding that the Appellant is a "Trader" and not an "Adtya / Commission Agent", ignoring the statutory framework of the APMC Act, the licence conditions, trade practice, and documentary evidences on record. 3. Ignoring binding APMC legal framework The learned CIT(A) failed to appreciate that under the APMC Act, Rules and Bye-laws, an Adtya merely facilitates transactions between farmers and buyers and does not carry ownership, price risk or inventory risk. 4. Erroneous rejection of books of accounts u/s 145(3) The learned CIT(A) erred in confirming rejection of books of accounts u/s 145(3) without identifying any defect in: o method of accounting, o quantitative tally, o sales suppression, or o inflation of expenses. 5. Unjustified estimation of profit @ 8% The learned CIT(A) erred in sustaining estimation of income @ 8% on alleged turnover, which is arbitrary, excessive and unsupported by: o past history, o comparable cases, or o industry norms applicable to commission agents. 6. Gross receipts wrongly treated as turnover The learned CIT(A) erred in law in treating gross bank credits / sale proceeds as turnover of the Appellant, ignoring that the same represent pass-through amounts payable to farmers. 7. CBDT Circular No. 452 wrongly applied The learned CIT(A) misapplied CBDT Circular No. 452 dated 17-03-1986 by selectively relying on it without appreciating that the circular recognises commission agency where risk and ownership do not vest with the agent. 8. Violation of principles of natural justice

3 ITA No.471/PUN/2026 The impugned order is based on assumptions and presumptions without confronting the Appellant with any adverse material or granting effective opportunity of rebuttal. 9. Addition based on conjectures The sustained addition is based on surmises, conjectures and suspicion and not on any cogent evidence, hence liable to be deleted. 10. General The Appellant craves leave to add, alter, amend or withdraw any ground at the time of hearing.” 3. Facts of the case, in brief, are that the assessee is an individual & engaged in the activities connected with agricultural produce at APMC Pimpalgaon Baswant, Nashik. The return of income for the period under consideration was filed on 31.07.2013 declaring total income of Rs.3,80,000/- by way of commission. The case of the assessee was reopened on the basis of information that the assessee had undertaken substantial financial transactions through his bank account aggregating to Rs.6,08,53,233/- which was not disclosed in the original return of income furnished by the assessee. Accordingly, notice u/s 148 of the IT Act was issued to the assessee on 31.03.2021. The assessee filed return of income in response to above notice issued u/s 148 of the IT Act by declaring the same income of Rs.3,80,000/- from commission as disclosed in the original return of income filed u/s 139(1) of the IT Act.

4 ITA No.471/PUN/2026 Subsequently, notices u/s 143(2), 142(1) and show cause notices respectively were issued to the assessee. In response to the above notices, the assessee submitted certificate from APMC and stated that he is working as a Kachcha Adhatiya in the market committee and earning commission from sale and purchase of agricultural produce. It was also submitted by the assessee that for assessment year 2017-18, the Department has already accepted him as a commission agent. Not being satisfied with the contention of the assessee, the Assessing Officer rejected the books of accounts and vide order dated 30.03.2022 determined total turnover of the assessee at Rs.6,08,53,233/- and by applying gross profit rate of 8% determined the Gross income of the assessee at Rs.48,68,258/- and deducted the expenditure of Rs.10,27,111/- as per profit and loss account prepared by the assessee, accordingly, net profit was determined at Rs.38,41,200/- against income of Rs.3,80,000/- returned by the assessee. The above assessed income includes addition on account of profit from trading of agricultural produce on a turnover of Rs.6,08,53,233/-. 4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering

5 ITA No.471/PUN/2026 the reply and submissions of the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee, however, in the result it was mentioned that the appeal is partly allowed for statistical purposes. 5. It is the above order against which the assessee is in appeal before this Tribunal. 6. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is not justified. It was submitted by Ld. AR that the Assessing Officer as well as Ld. CIT(A)/NFAC in their orders, referred the figures pertaining to the other assessment years. It was also contended by Ld. AR that Ld. CIT(A)/NFAC has mentioned that the Assessing Officer disallowed the expenses without any basis, whereas on the contrary the Assessing Officer has allowed the expenditure as claimed by the assessee in its profit and loss account, it was therefore submitted that this fact itself proves that the first appellate order was passed without application of mind. Ld. AR also filed an application for admission of additional evidences wherein sample purchase bills, sample sale bills and relevant extract of bank statements were submitted and it was requested to consider the

6 ITA No.471/PUN/2026 additional evidences while adjudicating the appeal on merits of the case. 7. On the other hand, Ld. DR appearing from the side of the Revenue relied on the orders passed by subordinate authorities and requested to confirm the same. 8. We have heard Ld. counsels from both the sides and perused the material available on record including the additional evidences furnished by the assessee. Considering the totality of the facts of the case, we find some force in the arguments of Ld. counsel of the assessee that the Assessing Officer as well as Ld. CIT(A)/NFAC has considered the figures of other assessment years while deciding the appeal of assessment year 2013-14. In this regard, Ld. AR referred relevant pages of the order passed by the Assessing Officer as well as by Ld. CIT(A)/NFAC wherein both the authorities have mentioned the figures which are not related to the figures of assessment year 2013-14. Apart from it, we also find that certain additional evidences have been furnished by the assessee before us and in the interest of justice the same are required to be verified at the level of Assessing Officer. It was also the contention of Ld. AR that the assessee is a commission agent dealing in agricultural

7 ITA No.471/PUN/2026 produce at APMC Pimpalgaon Basant as a Kachcha Adhatiya and the fact of working as a commission agent has already been accepted by the Department during the assessment proceedings of assessment year 2017-18. In this regard, Circular No.452 dated 17-03-1986 was also produced before us. It was also the contention of the assessee that the allegation of the Assessing Officer is not correct that the terms & conditions of APMC has not been followed by the assessee, since in most of the cases the payment to the farmers was made on the same day. 9. Considering the totality of the facts of the case and in view of our above discussion, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and restore the matter back to the file of the Assessing Officer to pass assessment order afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by the Assessing Officer in this regard and to produce relevant reply, submissions, documents and evidences/ additional evidences in support of his contentions without taking any adjournment under any pretext, otherwise the Assessing Officer shall be at liberty to pass appropriate orders as per law. Thus, the

8 ITA No.471/PUN/2026 grounds of appeal raised by the assessee are allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 24th day of June, 2026. Sd/- Sd/- (DR. DIPAK P. RIPOTE) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 24th June, 2026. Sujeet/DOC Digitally signed by Sujeet Kumar Sujeet Kumar Sharma Sharma Date: 2026.06.24 16:56:14 +05'30' आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब�च, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.