SAMEER MAGAN BHUJBAL,MUMBAI vs. ITO, MUMBAI

आयकरअपीलीयअधिकरणन्यायपीठम ुंबईमें। IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VP & SHRI ARUN KHODPIA, AM I.T.A. No.4419/Mum/2025 (Assessment Year: 2015-16) Sameer Magan Bhujbal ITO 5th Floor, Militia Apartment, Aaykar Bhavan, Mumbai-400020 Mathar Pakhadi Road, Mazgaon, Vs. Mumbai-400010 PAN: AACPB9678B Assessee- अपीलार्थी / Appellant Revenue -प्रत्यर्थी/ Respondent :

Assessee by : Shri Nishit Gandhi, Advocate Revenue by : Shri Swapnil Choudhary – Sr. DR Date of Hearing : 28.01.2026 Date of Pronouncement : 27.04.2026

O R D E R Per Arun Khodpia, AM: This appeal of the assessee is directed against the order of Commissioner of Income Tax Appeals/ National Faceless Appeal Centre, Delhi [“the Ld. CIT(A)] dated 03.07.2025 for the assessment year 2015-16, arises from the order u/s 143(3) of the Income Tax Act, 1961 (“the Act”) dated 29.12.2017 passed by Income Tax Officer - Ward 8(2)(4), Mumbai. The grounds of appeal raised by the assessee are as under: “1) On the facts and circumstances of the case and in law, the Authorities below have erred in making an addition/confirming the addition of Rs. 59,22,100/- being the entire sales consideration of agricultural produce to parties u/s 68 of the Act and reasons stated for doing this were wholly wrong, inconsistent with facts of the case and against

ITA No. 4419/Mum/2025 Sameer Magan Bhujbal the provisions of the Income Tax Act, 1961 and rules made thereunder and therefore the appellant prays that the entire agricultural receipts considered as unexplained income be deleted. 2) On the facts and circumstances of the case and in law, the Authorities below have erred in levying/confirming the interest u/s 234A/2348 and 234C of the IT which was wholly wrong, and against the provisions of Income Tax Act, 1961 and rules made thereunder. 3) On the facts and circumstances of the case and in law, the Authorities below have erred in initiating/confirming the penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 which were wholly wrong, irrelevant, and not in accordance with the facts and circumstances of the case as no income is concealed nor any inaccurate particulars were furnished” 4) the appellant craves leave to add, Alter, modify and DELETE all or any of the aforesaid grounds of appeal on or before the date of hearing.

ITA No. 4419/Mum/2025 Sameer Magan Bhujbal reply of Sula Vineyards Pvt Ltd. for agricultural receipts of Rs.28,73,200/-, however, the replies of other three parties namely, N. D. Wines Pvt. Ltd. for Rs.6,15,040/-, Venus Cellars Pvt Ltd. Rs.32,98,360/- and Flamingo Wines Pvt Ltd. Rs.19,36,200/-, ld. AO was not satisfied, therefore, another show-cause was issued to the assessee stating that the amount of agricultural sale shown by the assessee was not matching with the response furnished by the aforesaid parties as (i) M/s. N. D. Wines Pvt Ltd. have stated that the payments 46,15,040/- was made during the year but the purchases were made in the earlier year. (ii) M/s. Venus Cellars Pvt Ltd. replied that it had made a purchase of 9,44,930/- only during the year, whereas the assessee has shown a sale of Rs.23,53,430/- of sale to the said party. In case of Flamingo Wines Pvt Ltd., it is stated that they have not made any purchase during the year under consideration whereas the assessee has shown a sale of Rs. 19,36,200/-. 4. Further, after the issue of the aforesaid show-cause notice dated 14.12.2017, M/s. Flamingo Wines Pvt Ltd. have come up with another response dated 16.12.2017, wherein it has been mentioned that during the financial year 2013-14 they have purchased grapes of Rs.19,36,200/- from M/s. Kamdhenu Farm Proprietary of Shri Sameer Magan Bhujbal and payment of the same is made to M/s. Kamdhenu Farm for financial year 2014-15. It is submitted that the purchase is duly reflected in their books of accounts and the same is made in financial year 2014-15. It is further clarified that M/s. Kamdhenu Farm has directly made such sale to Nashik Vintners Limited (Sula Wines) on behalf of 3

ITA No. 4419/Mum/2025 Sameer Magan Bhujbal M/s. Flamingo Wines Pvt Ltd. and have debited their account. While furnishing the original reply, the M/s. Flamingo Wines was not aware of the fact that proprietor of M/s. Kamdhenu Farm was Mr. Sameer Magan Bhujbal, hence they replied that they had not transacted with Mr. Sameer Magan Bhujbal during the year under consideration. 5. Ld. AO observed that even if the agricultural income of M/s. Kamdhenu Farm is treated as income of Mr. Sameer Magan Bhujbal, that income belongs to outstanding balances as on 01.04.2014, therefore, there was no purchases during the year under consideration. The assessee further explains its case before the Ld. AO that it is just a timing gap wherein the purchases were booked by the aforesaid concern in their books of accounts in earlier year, whereas the assessee had recorded as income in the year under consideration. It was the submission that all the sales shown by the assessee are legitimate and genuine. It is also clarified that in some of aforesaid cases, the agricultural produce was directly delivered to Sula Vineyards Pvt Ltd. on behalf of the aforesaid parties and, therefore, the assessee debited those parties, there is no concealment of facts by the assessee. 6. Submissions of the assessee were considered by the AO. But was not convinced with the same. The AO was of the view that the response of assessee was not satisfactory, the accounting treatment and reconciliations furnished are not in accordance with the normal accounting practices. Ld. AO doubted the agricultural sale of assessee for preceding as well as succeeding year also. It is 4

ITA No. 4419/Mum/2025 Sameer Magan Bhujbal also observed that the assessee has explained expenditure for the period from April 2014 to September 2014, whereas the sale pertains to financial year 2013- 14, which according to mercantile system of accounting is not acceptable. Therefore, Ld. AO has treated the amount of Rs.59,22,000/- shown as sale by the assessee from three parties i.e., Venus Cellars Pvt Ltd., N. D. Wines Pvt. Ltd. and Flamingo Wines Pvt Ltd. as unexplained cash credit u/s 68 of the Act. 7. Aggrieved with the aforesaid additions, assessee preferred an appeal before the Ld. CIT(A). Again, the assessee reiterated the submissions which were made before AO explaining that it is just a timing difference of accounting between the parties otherwise the entire sales which have been treated as unexplained cash credit u/s 68 by the AO were genuine and, therefore, no addition is called for. Ld. CIT(A) dismissed the appeal of assessee with the following observations: “5.Decision I have carefully perused grounds of appeal, statement of facts, assessment order, submissions made by the Appellant and other details/evidences on records. 5.1. Ground 5.1 Ground 1 Vide this Ground, the Appellant has objected to the addition of Rs. 59,22,100/-u/s 68 of the Act. In this regard, the Appellant has made a detailed submission; the same has been reproduced at para 4 above. The Appellant has mainly submitted that he has accounted for the sale of agricultural produce to the three parties i.e. M/s. Venus Cellars Pvt. Ltd., M/s N.D. Pvt Ltd., and M/s Flamingo Wines Co. Pvt. Ltd (03 parties) vide sale bill dated 30.04.2014. However, the agricultural produce was delivered to the sale party on various dates in the month of January, February and March, 2014. These 03 parties have accounted for the transaction of these purchases in AY 2014-15 and not AY 2015-16. The Appellant has, therefore, submitted that merely due to difference in accounting year, the AO should not treat the agricultural income as unexplained income u/s 68 of the Act. 5.1.1 I have considered the submissions made by the Appellant. I have also perused the assessment order. I find that the submissions made in the present proceedings were also made before the AO. I find that the AO has considered the submissions of the Appellant and has correctly rejected the same, inter alia, observing that: “4.7…. 5

ITA No. 4419/Mum/2025 Sameer Magan Bhujbal (d) It is noticed from the Balance sheet filed by the assessee that current liabilities are appearing on the liabilities side. This shows that the assessee is maintaining its books of account by adopting "Mercantile System of Accounting. In the Mercantile system of accounting, whatever income received receivable and expenses paid/payable during the year is completely accounted for in the corresponding year itself. Therefore, the assessee's claim of earlier years agricultural income as this year's income could not be accepted in the Mercantile system of accounting. 4.8. During the year, the assessee has shown total agriculture income of Rs. 87,95,3001-. Out of the four parties from whom the assessee has shown agriculture income only one party l.e., Sula Vineyards pvt. Ltd. actually confirmed as purchases made during the year. Of the other parties M/s. Flamingo Wines Co. pvt. Ltd. initially denies any purchase and then files a letter that it misunderstood the trade name of the assessee confirming that purchases were made in earlier year i.e., F.Y. 2013-14. 4.9. The remaining two parties state that purchases were made earlier and the outstanding amount was paid during the year on their behalf by M/s. Sule Vineyards pvt Ltd. 4.10. In light of the above, the claim of Agricultural income from M/s. Venus Cellars Frt. Ltd, M/s. N.D. Wines Pvt. Ltd., and M/s. Flamingo Wines Co. R/t. Ltd. is held to be incorrect claim and 'Agricultural income' during the year is held to be only Rs. 28,73,2001- and the balance of Rs. 59,22,100/- is treated as Income from unexplained sources during the year. 4.11. The income of Rs. 59,22,000/-is treated as unexplained cash credits of the assessee and added to the total income of the assessee u/s. 68 of the I.T. Act, 1961........ It is, further, observed that none of the 'grapes inward receipts' issued by the above 03 parties to the Appellant contain details of sale bills issued by the Appellant. So, contrary to the submission made by the Appellant, it is not possible to match the quantity of grapes sold vide issue of sale bills to these parties with the 'grapes inward receipts' issued by these parties to the Appellant or with the bills of the weight bridges. Further, the submissions that the 'mismatch' is on account of the purchases shown by the 03 parties in AY 2014-15 and the corresponding sales being shown by the Appellant in AY 2015-16, the same has not been confirmed either by the above 03 parties or by M/s Sula Wines Pvt Ltd. In view of the same, in my considered opinion, the findings made by the AO remain unrebutted by the Appellant. Accordingly, the addition of Rs. 59,22,100/- made by the AO u/s 68 of the Act is confirmed. Appeal is, thus, dismissed. ”

ITA No. 4419/Mum/2025 Sameer Magan Bhujbal explanation by assessee and response of the parties in 133(6) proceedings, an addition was made u/s 68 of the Act. It was the submission that there was no concealment of facts by the assessee, which is further explained by the respective parties also u/s 133(6) of the Act, therefore, no addition was called for and the addition made by AO u/s 68, which is confirmed by the Ld. CIT(A) is liable to be deleted. 10. Alternatively, It is also argued by Ld. AR that even if the sales of assessee are to be taken as sales for the earlier year or succeeding year, the exercise would be revenue neutrally, therefore as per settled principle of law, no addition is called for. Reliance was made on the decision of Hon’ble Apex Court in the Case of CIT(A) vs. Excel Industries Ltd. (2013) 358 ITR 295 SC. 11. Per contra, Ld. Sr. DR representing the revenue submitted that the issue is clearly discussed at length by the AO as well as Ld. CIT(A), wherein Ld. CIT(A) has categorically observed that the three parties have accounted for the transaction of purchases in assessment year 2014-15 and not in relevant assessment year 2015-16. Ld. CIT(A) further observed that it is not possible to match quantity of grapes sold vide issue of sale bills to the parties with the grapes inward receipts issued by those parties to the assessee or with the bills of the weighbridge. Further, the submissions of the assessee, that mismatch is on account of purchases shown by the three parties in AY 2014-15 and the corresponding sale shown by the assessee in AY 2015-16, the same has not been confirmed either by the above parties or by M/s. Sula Wines Pvt Ltd. Therefore, 7

ITA No. 4419/Mum/2025 Sameer Magan Bhujbal Ld. CIT(A) had dismissed the appeal of assessee with proper findings. Accordingly, the order of Ld. CIT(A) deserves to be sustained. 12. We have considered the rival submissions, perused the material available on record. Admittedly, in the present matter the sale of assessee from agricultural produce was not found to be explained to the satisfaction of revenue authorities. The submission of concerned parties and the assessee was to establish that the purchases which were recorded by the said parties in their respective books of accounts were in AY 2014-15, whereas the assessee has recorded such transactions to be sales of the assessee in the AY 2015-16. Ld. AO doubted such transactions, which is further endorsed by the Ld. CIT(A) that such transactions could not be matched through quantity of grapes sold and grapes inward receipts in the books of respective parties. It is also observed by Ld. CIT(A) that the timing difference of transaction for recording of entries in the books of accounts by concerned parties and the assessee was never confirmed by the respective parties. Therefore, the addition made by AO was confirmed by him. 13. We, in terms of aforesaid deliberation are of the considered view that in the present case, the sales which were doubted by the Ld. AO, but claimed to be genuine by the assessee, when are confronted with the purchasers, it is revealed that such purchase belongs to earlier years. At this juncture, a question arises whether such purchases, which were claimed by the concerned parties in their books of accounts in the earlier years are shown as sales in those earlier years also or not. A concern was raised by the AO in his observations that assessee has 8

ITA No. 4419/Mum/2025 Sameer Magan Bhujbal similar sales in earlier years and in the current year also. So, the overlapping effect of sales of same transactions in earlier year or succeeding year was there or these transactions are recorded only in the concerned year has to be verified, for a logical conclusion. The assessee needs to furnish necessary reconciliation of transaction of sales for the preceding as well as succeeding year, so as to clarify the position that the particular transactions of sales shown by assessee are genuine and those were never claimed as agricultural sales for any other year. 14. In view of such deliberations, we are inclined to set aside this matter back to the file of Ld. CIT(A) for adjudication afresh, wherein the assessee is directed to furnish all the necessary information, evidence, reconciliations and confirmation from the parties concerned, if so desired by the revenue authority so as to reach a justified and logical finding. Further, regarding alternate plea by the Ld. AR that taxability of income in preceding year or succeeding would be revenue neutral, we cannot subscribe to it, having find no substance in such contention, since the sale of assessee is not matching with the purchase of other parties for the year under consideration, which in any case needs reconciliation, also as we have directed to reconcile the sale of preceding year and succeeding year, so as to clarify that there is no overlapping effect of the sale in the relevant year.

ITA No. 4419/Mum/2025 Sameer Magan Bhujbal 15. In backdrop of aforesaid facts, circumstances and discussions, the matter is restored back to the file of Ld. CIT(A) for fresh adjudication. Accordingly ground no.1 of the present appeal stands allowed for statistical purposes. 16. Ground no.2 and 3 of the appeal regarding interest and penalty are consequential in nature, thus, are also restored to the file of Ld. CIT(A). 17. Ground no.4 is a general in nature, needs no separate adjudication. 18. In result, the appeal of assessee stands allowed for statistical purposes.

Order pronounced in the open court on 27-04-2026.

Sd/- Sd/- (SAKTIJIT DEY) (ARUN KHODPIA) Vice President Accountant Member

Mumbai, Dated : 27-04-2026. Ankit, Sr. PS

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai