MICHELLE YOHAN POONAWALLA,PUNE vs. ACIT, CIR-7, PUNE, PUNE

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ITA 3199/PUN/2026Status: FixedITAT Pune22 October 2026AY 2016-174 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found merit in the assessee's arguments. It accepted that the assessee had an opening cash balance of Rs. 15,00,000. The Tribunal held that Rs. 7,50,000 of this amount was deposited prior to the demonetization period, and the remaining Rs. 7,50,000 was deposited during the demonetization period. Furthermore, the Tribunal noted that the balance of Rs. 7,50,000 deposited during the demonetization period was explained by the assessee's current year's disclosed income, which included agricultural income. Therefore, the Tribunal concluded that the assessee had successfully explained the sources of the Rs. 15 lakh deposit. The ratio decidendi is that cash deposits during demonetization can be explained by a combination of opening cash balance and disclosed current year's income, including agricultural income, even if the entire opening balance is not fully substantiated. The Tribunal set aside the order of the Ld. CIT(A) and directed the Assessing Officer to delete the addition of Rs. 15 lakh made under section 69A.

What were the facts?

The assessee, Raja Gela Bera, an individual with commission and agricultural income, filed an appeal against the order dated 22.10.2025 passed by the Ld. Addl./JCIT(A)-1, Chennai, for Assessment Year 2017-18. The appeal challenges an addition of Rs. 15,00,000 made by the Assessing Officer (ITO, Ward-3(2), Thane) under section 69A of the Income Tax Act, 1961, for unexplained cash deposits into a bank during the demonetization period (09-11-2016 to 30-12-2016). The assessee claimed an opening cash balance of Rs. 19,74,376 as of 01-04-2016, from which Rs. 15,00,000 was deposited. Both subordinate authorities rejected this claim, leading to the addition.

What were the issues?

1. Whether the addition of Rs. 15,00,000 made under section 69A of the Income Tax Act, 1961, on account of unexplained cash deposits into the bank during the demonetization period, is justified? The assessee contends that the addition is erroneous as the Ld. CIT(A) failed to appreciate the facts in their entirety. The assessee argued that an opening cash balance of Rs. 15,00,000 was available, derived from long-standing agricultural income, even if the entire opening balance of Rs. 19,74,376 could not be substantiated. The assessee also pointed to having declared substantial agricultural income and a total income exceeding Rs. 11 lakh in earlier years, and disclosed agricultural income of Rs. 2,75,653 in the current year's return. The revenue, through the Assessing Officer and upheld by the Ld. CIT(A), considered the cash deposits unexplained.

Which sections of the Income-tax Act were involved?

Section 69A

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 Rajiv Khandelwal (Virtual)
For Respondent: Shri Sandeep Jumale (Virtual)
Hearing: 06.08.2026Pronounced: 22.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.3199/PUN/2025 िनधा�रण वष� / Assessment Year : 2017-18 Raja Gela Bera, Vs. ITO, Ward-3(2), Thane. 5/303, Devdaya Nagari, Pokhran Road No.1, Thane West- 400606. PAN : ACYPP6948C Appellant Respondent Assessee by : Shri Rajiv Khandelwal (Virtual) Revenue by : Shri Sandeep Jumale (Virtual) Date of hearing : 06.08.2026 Date of pronouncement : 22.10.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 22.10.2025 passed by Ld. Addl./JCIT(A)-1, Chennai [‘Ld. CIT(A)’] for the assessment year 2017-18. 2. The appellant has raised the following grounds of appeal :- “1. The Additional Commissioner of Income-tax (Appeals)-1, Chennai (hereinafter referred to as the AddI CIT(A)) erred in upholding the action of the Income-tax Officer - 3(2), Thane (hereinafter referred to as the Assessing Officer), in making an addition of Rs 15,00,000 under section 69A of the Act, on the ground that cash deposits into bank of the appellant is unexplained.

2 ITA No.3199/PUN/2025 2. The appellant contends that on the facts and in the circumstances of the case and in law, the Addl CIT(A) ought not to have upheld the action of the Assessing Officer inasmuch as he has not appreciated the facts of the case in its entirety, and hence, the impugned addition needs to be deleted. 3. The appellant craves leave to add to, alter or amend the aforestated ground of appeal.” 3. Facts of the case, in brief, are that the assessee an individual earning commission income & also agricultural income & has deposited SBN of Rs.15,00,000/- during demonetization period i.e. during 09-11-2016 to 30-12-2016 in TJSB Bank as per the information collected u/s 133(6) of the IT Act from the Branch Manager, TJSB Bank. Before the Assessing Officer it was claimed that the Opening Cash in hand was Rs.19,74,376/- on 01-04-2016 & out of which Rs.15,00,000/- cash was available with the assessee which was deposited during demonetisation period. However, the contention of the assessee were not accepted by both the subordinate authorities and addition of Rs.15 lakh was made to the income of the assessee on the basis of deposit of Rs.15 lakh in the shape of SBN during demonetization period in the TJSB Bank. 4. In this regard, we find that the assessee is regularly filing its return of income since assessment year 2012-13 and also showing substantial agricultural income since assessment year 2016-17. The fact of agricultural income is not denied by the Assessing Officer,

3 ITA No.3199/PUN/2025 however, since the assessee has not disclosed agricultural income in earlier years, the benefit of same was not allowed by the Assessing Officer. It was the request of Ld. counsel of the assessee that even if opening balance of Rs.19,74,376/- could not be accepted at least an amount of Rs.15,00,000/- may kindly be accepted since the assessee was having agricultural income since long back, however, not shown in the returns of income and has furnished its return of income for earlier years declaring income of more than Rs.11 lakh and also disclosed agricultural income of Rs.2,75,653/- in those returns. 5. Considering the totality of the facts of the case we find merit in the above arguments of Ld. counsel of the assessee and accept that the assessee was having opening balance of cash in hand of Rs.15,00,000/- out of which Rs.7,50,000/- was deposited by the assessee prior to demonetization period & Rs.7,50,000/- was deposited by him during demonetization period. Regarding the balance of Rs.7,50,000/- we find that the assessee himself has declared total income of Rs.8 lakh including agricultural income during the year under consideration which was deposited by the assessed during the demonetization period. Accordingly, we find that the assessee has successfully explained the sources of deposit of

4 ITA No.3199/PUN/2025 Rs.15 lakh during demonetisation period. At the cost of repetition it is made clear that Rs.7,50,000/- were deposited out of opening balance available with the assessee and balance of Rs.7,50,000/- were deposited out of current years income disclosed by the assessee in his return of income which also includes agricultural income. In view of our above discussion, we deem it appropriate to set-aside the order passed by Ld. CIT(A) and direct the Assessing Officer to delete the addition of Rs.15 lakh made to the income of the assessee u/s 69A of the IT Act. Thus, the grounds of appeal raised by the assessee are allowed. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 22nd day of October, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 22nd October, 2026. Sujeet/DOC आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Addl./JCIT(A)-1, Chennai. 4. The Pr. CIT/CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Sunil Kumar More Digitally signed by Sunil Kumar More Date: 2026.10.24 16:41:14 +05'30' Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.

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