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Facts
The assessee, engaged in the liquor business, filed its return of income. The Assessing Officer (AO) reopened the case under Section 147, alleging that cash deposits in bank accounts linked to the deceased previous owner were not disclosed. The assessee claimed that the information was already available and that the transactions were reflected in the books.
Held
The Tribunal found that the AO had knowledge of the death of the previous owner and the transfer of business. The Tribunal also noted that the assessee had filed an online reply with supporting documents which were not considered. The bank account transactions were already appearing in the audited balance sheet.
Key Issues
Whether reassessment proceedings under Section 147 were valid when the AO was aware of the business transfer and the assessee's explanations were not considered? Whether cash deposits in bank accounts linked to a deceased owner, already reflected in audited books, constitute unexplained money?
Sections Cited
147, 148, 69A, 115BBE, 144, 144B, 143(3), 44AB, 139
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2017-18 Geetanjali Anil Kankrej, Vs. ITO, Ward-1, M/s. Kishor Wines, Jadhav Ahmednagar. Building, Dharangaon Road, Tal. Kopargaon- 423109. PAN : AGXPK9352L Appellant Respondent Assessee by : Smt. Deepa Khare Revenue by : Shri Uodol Raj Singh Date of hearing : 12.11.2025 Date of pronouncement : 27.11.2025 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 23.04.2024 passed by Ld. CIT(A)/NFAC for the assessment year 2017-18.
The appellant has raised the following grounds of appeal :-
1. Whether on facts and circumstances of the case, the reassessment proceedings u/s 147 valid in law in absence of reason to believe that any income has escaped assessment when the ld AO himself states that notice u/s 148 is issued to verify and make enquiry 2. Whether on facts and circumstances of the case, the reassessment proceedings u/s 147 valid in law in absence of any tangible material to indicate any escapement of income in the hands of the appellant.
3. Whether on facts and circumstances of the case, the ld AO having accepted the fact that cash deposit in bank account has been duly disclosed and return of income being duly filed, the reopening of assessment can be made without any indication that cash deposit represents income escaped assessment? 4. The ld CIT(A) erred in law and on facts in confirming addition of Rs 97,28,000/- as unexplained money u/s 69A made without following the due process of law and grossly violating the principles of natural justice.
5. The ld CIT(A) erred in law and on facts in confirming addition of Rs 97,28,000/- as unexplained money u/s 69A without appreciating that the cash deposit was fully explained and substantiated.
6. The appellant craves leave to add, alter, modify or substitute any ground of appeal
at the time of hearing.”
3. Facts of the case, in brief, are that the assessee is an individual engaged in the business of Indian made foreign liquor & country liquor and has furnished its return of income on 02.11.2017 by declaring taxable income of Rs.12,15,090/-. The case of the assessee was reopened u/s 147 and notice u/s 148 was issued to the assessee on 31.03.2021. According to the Assessing Officer, the assessee did not file the return of income in response to notice u/s 148 nor did she submitted any explanation with evidences as to the source of the cash deposited in bank accounts. Accordingly, as per the Assessing Officer in the absence of any submission or Rs.97,28,000/- which was deposited in the bank accounts as unexplained money u/s 69A r.w.s. 115BBE of the Act. The assessment order was passed u/s 147 r.w.s. 144 r.w.s. 144B of the IT Act by determining total income of Rs.1,09,43,090/- as against the income returned by the assessee in his original return of income at Rs.12,15,090/-.
Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply of the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee.
It is the above order against which the assessee is in appeal before this Tribunal.
Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR submitted before the bench that even the order passed by the Assessing Officer was also not justified since a proper online reply with all the relevant documents was furnished before the Assessing Officer on 16.03.2022. Ld. AR further submitted that the case of the assessee was reopened on the basis of information that PAN number of Smt. Sulochana were linked with impugned bank accounts maintained with Bank of Maharashtra wherein cash of Rs.97,28,000/- was deposited and no return for the period under consideration was filed on the PAN number of Smt. Sulochana. Ld. AR further submitted that after the death of Smt. Sulochana on 14.08.2015 the legal heir i.e. the current assessee i.e. Geetanjali Anil Kankrej took over the business of Kishor Wines and was regularly showing her income from the above business. Ld. AR further submitted that vide order dated 06.03.2021 the assessment order for assessment year 2018-19 was also passed u/s 143(3) of the IT Act by National e-Assessment Centre, Delhi wherein income from Kishor Wine Shop was disclosed by the assessee Geetanjali Anil Kankrej & the same was accepted by the department. Ld. AR further submitted that even in the impugned assessment order the fact of the death of Smt. Sulochana and transfer of her business to the assessee i.e. Geetanjali Anil Kankrej was duly mentioned, however the Assessing Officer without considering the online reply filed by the assessee continued the assessment proceedings which were never required since the turnover appearing in the impugned Bank of Maharashtra accounts were already considered/disclosed by the instant assessee in her return of income. Accordingly, Ld. counsel of the assessee requested before the bench to set-aside the order passed by Ld. CIT(A)/NFAC and further requested to quash the assessment order passed u/s 147 r.w.s. 144 r.w.s. 144B of the IT Act, since the Assessing Officer was already having knowledge of the fact that Smt. Sulochana Kishor Pehlwan having PAN No.ABAPP2825P has already died in the year 2015 who was the erstwhile owner of M/s Kishor Wines Jadhav Building, Dharangaon Road, Tal. Kopargaon and was using the impugned accounts of Bank of Maharashtra.
Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same, however he did not raise any objection if the matter is set-aside back to the file of the Assessing Officer to verify the contentions of the assessee that the turnover appearing in the impugned bank accounts of Bank of Maharashtra is shown in the books of accounts of the assessee.
We have heard Ld. Counsels from both the sides and perused the material available on record including paper book furnished by the assessee. In this regard, we find that the case of the assessee Bank of Maharashtra is not disclosed by the assessee since the PAN Number of Smt. Sulochana was linked to these bank accounts. The assessee furnished information before the Assessing Officer that Late Smt. Sulochana was the erstwhile owner of the business named as Kishor Wine Shop since she died on 14.08.2015, the assessee being legal heir became the owner of above business and have already furnished its return of income for the period under consideration. An online reply was also furnished by the assessee on 16.03.2022 before the Assessing Officer, however the same was not considered/referred by the Assessing Officer in his order and without accepting the contentions raised by the assessee, the assessment order u/s 147 r.w.s. 144 r.w.s. 144B of the IT Act was passed by making addition of Rs.97,28,000/-, turnover appearing in the impugned bank accounts u/s 69A being unexplained money. Ld. CIT(A)/NFAC also did not consider the fact of filing of online reply by the assessee before the Assessing Officer and dismissed the appeal filed by the assessee.
9. In this regard, we further find that the fact of death of Smt. Sulochana on 14.08.2015 was very well known to the Assessing Officer even the fact of the assessee becoming legal heir of Late Smt. Sulochana was also known to the Assessing Officer and furthermore the fact of the business named Kishor Wine Shop is now run by the assessee was also known to the Assessing Officer. We also find that the assessment in the case of the assessee for assessment year 2018-19 was also completed u/s 143(3) of the IT Act vide order dated 06.03.2021 by the NeAC, Delhi wherein income from Kishor Wine Shop was disclosed by the assessee. We also find that the books of accounts of the assessee were audited u/s 44AB of the IT Act and the impugned bank accounts were also appearing in the balance sheet of the assessee for the period under consideration. From the copy of audited trading account, it is apparent that the assessee has already disclosed turnover from sale of liquor at Rs.12,54,72,216/- and the impugned turnover is much more than the turnover appearing in the impugned bank accounts i.e. Rs.97,28,000/-. The return of income u/s 139 for the period under consideration was filed on 02.11.2017 by the assessee alongwith audit report & was already available on the income tax Assessing Officer since the income disclosed in the above return of income has been considered by the Assessing Officer. We also find that both the impugned bank accounts maintained with Bank of Maharashtra were appearing in the audited balance sheet of the assessee & the information of cash deposited during demonetization was also furnished in the respective column of the return of income for the period under consideration.
After hearing rival parties contentions, we find some force in the arguments of Ld. counsel of the assessee, that most of the information was already available with the Assessing Officer. However, at the same time we also find that instead of the PAN Number of the assessee, the PAN number of Late Smt. Sulochana were linked to the impugned bank accounts and the fact remained to be verified that the transactions appearing in the impugned bank accounts were considered by the assessee in her books of accounts or not.
Considering the totality of the facts of the case, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC & remand the matter back to the file of Assessing Officer with a