RAMKRUSHNA PRABHAKAR UGALE,KHEDGAON vs. ITO WARD 2 (1), NASHIK

ITA 2570/PUN/2026Status: DisposedITAT Pune09 October 2026AY 2017-186 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted the assessee's contention that out of total credit entries of Rs. 78,75,989/-, Rs. 50,44,766/- related to business turnover. The remaining Rs. 28,31,223/- pertained to commission income, down payments transferred to principals, unsecured loans from identifiable sources, credit card/EMI reversals, inter-bank transfers, LIC maturity, and car sale. However, the assessee could not produce concrete evidence for these claims, leading the CIT(A) to dismiss the appeal. Finding some force in the assessee's arguments and in the interest of justice, the Tribunal set aside the CIT(A)'s order. The matter was restored to the Assessing Officer for fresh assessment, with a direction to provide a reasonable opportunity of hearing and to pass an order as per facts and law. The assessee was directed to cooperate and produce necessary evidence without adjournment. The effective grounds were allowed for statistical purposes. Other grounds were rendered academic. The ratio decidendi is that where an assessee provides explanations for certain credit entries, even if not fully substantiated with concrete evidence at the appellate stage, and the revenue's assessment is based on a broad addition, remanding the matter for fresh consideration by the AO with an opportunity to the assessee to produce evidence is a just course of action, especially when jurisdictional issues are also raised.

What were the facts?

The assessee, Ramkrushna Prabhakar Ugale, an individual engaged in the sale and purchase of automobile spare parts, is in appeal against the order dated 09.03.2026 passed by the CIT(A)/NFAC for Assessment Year 2017-18. The assessee had not filed a return of income. Based on information of significant financial transactions amounting to Rs. 53,84,998/-, a notice under section 148A(b) was issued. As there was no reply, an order under section 148A(d) and a notice under section 148 were issued. The assessee filed a return declaring an income of Rs. 4,18,000/- with a turnover of Rs. 50,44,766/-. The Assessing Officer noted total bank credits of Rs. 78,75,989/- and added Rs. 28,31,223/- (difference between bank credits and disclosed turnover) to the assessee's income, completing assessment under section 147 r.w.s. 144B.

What were the issues?

1. Whether the reassessment order passed under section 147 r.w.s. 144B of the Income-tax Act, 1961, is bad in law, without jurisdiction, and liable to be quashed? (Assessee's contention: Yes, it is bad in law and without jurisdiction). 2. Whether the notice issued under section 148 dated 27/02/2024 for AY 2017-18, issued beyond three years from the end of the relevant assessment year without satisfying mandatory conditions under section 149(1)(b), is barred by limitation and liable to be quashed? (Assessee's contention: Yes, it is barred by limitation). 3. Whether the addition made under section 69A was erroneous despite the assessee furnishing books of account, bank statements, and reconciliation explaining the nature and source of bank deposits? (Assessee's contention: Yes, the addition is erroneous). 4. Whether the addition of entire bank deposits was made without considering business transactions, interbank transfers, rotation of funds, and applicability of peak credit/telescoping principles? (Assessee's contention: Yes, these principles were not considered). 5. Whether the CIT(A) erred in sustaining taxation under section 115BBE despite the receipts being connected with regular business transactions and recorded financial activity? (Assessee's contention: Yes, taxation under 115BBE is erroneous). 6. Whether reassessment proceedings under section 148 are invalid as the jurisdictional condition under section 149(1)(b) (escapement of income exceeding Rs. 50,00,000/- in the form of an asset) was not satisfied? (Assessee's contention: Yes, the condition was not satisfied). 7. Whether mere gross cash deposits or banking transactions, without determining actual income escaping assessment, can constitute escapement of income exceeding Rs. 50,00,000/- for section 149(1)(b)? (Assessee's contention: No, it cannot). Revenue's contentions were not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148,Section 148A,Section 149,Section 69A,Section 115BBE,Section 44AD,Section 143,Section 142

AI-generated summary — verify with the full judgment below

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

Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE

For Appellant: Shri Anup Laddha (Virtual)
For Respondent: Smt. R. M. Brindha
Hearing: 28.07.2026Pronounced: 09.10.2026

PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 09.03.2026 passed by Ld. CIT(A)/NFAC for the assessment year 2017-18. 2. The appellant has raised the following grounds of appeal :- “1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in confirming the reassessment order passed under section 147 r.w.s. 144B of the Income-tax Act, 1961, which is bad in law, without juri iction and liable to be quashed.

2.

On the facts and in the circumstances of the case and in law, the learned CIT(A) failed to appreciate that the notice issued under 2 section 148 dated 27/02/20

The order continues below.

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