ASHUTOSH DESHPANDE,NAGPUR vs. ACIT/DCIT CIRCLE -5, NAGPUR

Date of Hearing –16/10/2025 Date of Order – 17/10/2025

O R D E R The assessee has filed the appeal against the order passed by the CIT(A)/National Faceless Appeal Centre(NFAC), Delhi, u/sec 144 and u/sec 250 of the Income Tax Act, 1961 (for short "the Act") for the A.Y. 2014–15. The assessee has raised the grounds of appeal:–

“1. The order passed by Hon'ble CIT(A) is illegal invalid and bad in law. The Hon'ble CIT(A) erred in sustaining the action of the Ld. AO on total additions of Rs. 13,28,500/- is incorrect, unjustifiable, excessive and should be quashed. That CIT(A) instead of dismissing the appeal without appreciating the facts & circumstances correct, he could have set aside the case as per provision of section 251(1)(a) of the Income Tax Act, 1961. Without prejudice to above the assessment framed by the Ld. ACIT/DCIT is in violation of CBDT Instruction No. 1/2011 [F. NO. 187/12/2010-IT(A-1)], dated 31-1-2011 2.The Hon'ble CIT(A) erred in sustaining the action of Ld. AO towards addition of cash deposit of Rs. 13,28,500/- during the demonetization period as Unexplained Money u/s. 69A while charging only profit element for the rest of the cash deposit. The Ld. AO & CIT(A) could instead of making entire amount as addition should have treated the deposits as business receipt and only profit must be added. 3.The above grounds of appeal are without prejudice and notwithstanding each other. Any consequential relief, to which the appellant may be entitled under the law in pursuance of the aforesaid grounds of appeal, or otherwise, may thus be granted. The appellant craves leave to add to or alter, by deletion, substitution or otherwise, any or all of the above grounds of appeal and the factual and legal arguments against the addition by the Ld. CIT (A)/Ld. AO at the time or before the course of appellate proceedings in the interest of natural justice.”.

2. The brief facts of the case are that, the assessee has not filed return of income for the A.Y. 2017–18 and as per the information available with the ITD System, the assessee has deposited cash aggregating to Rs.10,20,000/–in Punjab National Bank, Dharampeth Branch, Nagpur, and similarly Rs.3,08,000/– cash was deposited in State Bank of India, Ambazhari Branch, Nagpur, during the F.Y.2016-17. The Assessing Officer has issued notice u/sec 142(1) of the Act to explain the source of cash deposits. Since there was no proper compliance by the assessee to the notice, the Assessing Officer has also issued show cause notice to treat the total deposits as income of the assessee. Further notice u/sec 133(6) of the Act was issued to the Banks and the Assessing Officer has obtained the bank statements. On a perusal of the facts and the written submissions filed by the assessee in the course of assessment proceedings, the assessee was engaged in the business of Travel Agency and was taking a group of people to the different places in the country. The assessee has explained that the cash belongs to the customers who have paid to the Travel Agency. The Assessing Officer has also issued notice as final opportunity to the assessee to substantiate the cash deposits with evidence. Since there was no proper compliance to the notice, the Assessing Officer has made addition of Rs.13,28,000/– u/sec69A of the Act. Similarly, in respect of cash deposited after demonetization period, the Assessing Officer on the total credits of Rs.17,03,785/– has treated the same as turnover and estimated the income @8% which worked out to Rs.1,36,302/– and assessed the total income of Rs.14,64,800/- and passed the order u/sec144 of the Act dated 22/12/2019. Aggrieved by the order, the assessee has filed the appeal before the CIT(A).