VIJAY SHRIDHAR WADKAR,SANGLI vs. ITO WD- 6, SANGLI

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ITA 1771/PUN/2025Status: DisposedITAT Pune23 January 2026AY 2017-18Bench: SHRI R. K. PANDA (Vice President), Ms. ASTHA CHANDRA (Judicial Member)7 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) admitted additional evidence and directed the AO to verify if the cash deposits were business receipts; if so, income should be estimated at 8% of such receipts. Otherwise, the Section 68 addition would be confirmed. The Tribunal upheld the CIT(A)'s order, finding no infirmity in its decision to remand the matter to the AO with these specific directions, and dismissed the assessee's appeal.

What were the facts?

The assessee, a distributor for Vodafone Idea Ltd., filed an income tax return of Rs. 3,16,180/-. His case was selected for scrutiny due to large cash deposits (Rs. 51,80,990/-) in his bank account. Due to non-compliance with notices, the Assessing Officer completed the assessment ex-parte under Section 144, treating the deposits as unexplained cash credits under Section 68 and assessing total income at Rs. 54,97,170/-.

What were the issues?

Whether unexplained cash deposits in a commission agent's bank account should be treated as unexplained cash credits under Section 68 or as business income estimated at 8% of receipts, and the applicability of Section 44AD in such a case.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 144,Section 68,Section 44AD,Section 234A,Section 234B,Section 234C,Section 234D,Section 271AAC

AI-generated summary — verify with the full judgment below

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

Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA

For Respondent: Shri Manish Mehta, Addl.CIT

This appeal filed by the assessee is directed against the order dated 28.03.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2017-18.

2.

None appeared on behalf of the assessee at the time of hearing. No application seeking adjournment of the case has been filed. A perusal of the order sheet entries shows that in the previous occasions also no one was appearing. Further, there is a delay of 419 days in filing of this appeal by the assessee. Under these circumstances, we deem it proper to decide this appeal on the basis of material available on record and after hearing the Ld. DR.

3.

Facts of the case, in brief, are that the assessee is an individual and engaged in the business as distributor of Vodafone Idea Ltd under the trade name Navkar Agency. The assessee collects recharge amount for the company and remits the same to the company and he gets commission from the company. He filed his return of income declaring total income of Rs.3,16,180/-. The case was selected for scrutiny under CASS for the following reason: “Large cash deposits in bank account(s) during the year”

4.

Accordingly statutory notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued and served on the assessee. Thereafter, notice u/s 142(1) of the Act was issued on a number of times. However, there was no compliance from the side of the assessee. In view of the above, the Assessing Officer proceeded to complete the assessment u/s 144 of the Act. On perusal of ITS data generated on system, he noted that the assessee has deposited an amount of Rs.51,80,990/- in his Current Account maintained with Ashta Peoples Cooperative Bank, Ashta Branch. In absence of any submission to explain the source of such cash deposit, the Assessing Officer made addition of the same to the total income of the assessee by invoking the provisions of section 68 of the Act and determined the total income of the assessee at Rs.54,97,170/-.

5.

Before the Ld. CIT(A) / NFAC the assessee made certain submissions, based on which the Ld. CIT(A) / NFAC called for a remand report from the Assessing Officer which was confronted to the assessee. After considering the submissions of the assessee to such remand report, the Ld. CIT(A) / NFAC restored the matter back to the file of the Assessing Officer with certain directions.

6.

Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal by raising the following grounds:

1. Learned CIT Appeal has erred in fact and in law in directing AO to determine income of the appellant @ 8% of the cash deposits in the bank account of the appellant despite the fact that the appellant is service provider for recharge vouchers for Vodafone Idea Ltd and the income of the appellant is only commission received from Vodafone Idea Ltd and hence the assessment of the income by applying 8% Net profit ratio is patently invalid and perverse being contrary to the facts and evidences and hence deserves to be deleted.

2. Learned CIT Appeal has erred in fact and in law in directing AO to determine income of the appellant @ 8% of the cash deposits in the bank account of the appellant despite the fact that the cash deposited by the appellant was collected from customers of the company namely Vodafone Idea Ltd and this fact is undisputed by CIT Appeal also at para 5.4. of his order and ergo the assessed income should be only commission received to the appellant and not 8% of the cash deposit, and hence the assessment of the income by applying 8% Net profit ratio is patently invalid and perverse being contrary to the facts and evidences and hence deserves to be deleted.

3. Learned CIT Appeal has erred in fact and in law in directing AO to determine income of the appellant @ 8% of the cash deposits in the bank account of the appellant despite the fact that appellant is commission agent of Vodafone Idea Ltd and his activity is not covered by provisions of Sec 44AD which prescribes 8% net profit on gross receipts, and ergo the actual commission received from the company should be assessed income and not 8% of the cash deposit, hence the assessment of the income by applying 8% Net profit ratio is patently invalid and perverse being contrary to the facts and evidences and hence deserves to be deleted.

4. Appellant craves leave to add grounds of appeal or alter, amend any of the above grounds of appeal.

7.

We have heard the Ld. DR and perused the record. A perusal of the order of the Ld. CIT(A) / NFAC shows that he has given a direction to the Assessing Officer to estimate the income @ 8% on the receipts by observing as under:

8.

We do not find any infirmity in the order of the Ld. CIT(A) / NFAC. Since the assessee did not furnish any details before the Assessing Officer at the time of assessment proceedings and since the Ld. CIT(A) / NFAC has set aside the issue to the file of the Assessing Officer with a direction to estimate the income @ 8% of the total cash deposits, therefore the order of the Ld. CIT(A) / NFAC in our opinion is a reasoned order and does not call for any intereference. Accordingly, we uphold the order of the Ld. CIT(A)/NFAC. The grounds raised by the assessee are accordingly dismissed.

9.

In the result, the appeal filed by the assessee is dismissed.

Order pronounced in the open Court on 23rd January, 2026.

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