Tulshidas Chandrabhan Jejurkar Vs ITO (ITAT Pune)
The appeal concerns the assessment year 2018–19, where the assessee, an individual, filed a return declaring total income of ₹5,37,110. The case was selected for limited scrutiny under the issue of “large cash deposits in bank account(s).” Notices under Sections 143(2) and 142(1) of the Income Tax Act, 1961 were issued, seeking explanation for the cash deposits. In the absence of any response from the assessee during assessment proceedings, the Assessing Officer treated cash deposits amounting to ₹9,32,75,495 as unexplained and added the same to the total income, determining total income at ₹9,38,12,600.
Before the CIT(A)/NFAC, the assessee contended that he operated as a franchisee for telecom and related services, earning commission income from recharge services. It was argued that the cash deposits represented business receipts from recharge sales, which were subsequently paid to service providers, and only commission income was earned. The assessee submitted various documents including financial statements, franchisee agreements, and supporting records. It was also claimed that due to the Covid period, the assessee could not properly participate in assessment proceedings.
A remand report was sought from the Assessing Officer, who highlighted deficiencies in the assessee’s submissions. The assessee failed to provide complete franchisee agreements (except for BSNL), did not furnish details of persons from whom cash was received, and could only explain a portion of the deposits amounting to ₹78,59,256. The Assessing Officer also noted the absence of PAN details of customers and raised concerns regarding non-audit of books despite a reported turnover of ₹10.27 crore. Based on these findings, the CIT(A)/NFAC upheld the addition.
