Suhel Inayatulla Punekar Vs ITO (ITAT Pune)
In the case of Suhel Inayatulla Punekar vs. ITO, the ITAT Pune addressed an appeal regarding the classification of ₹10 lakh received by the assessee from the sale of a truck. The dispute arose when the Assessing Officer (AO) treated the amount as Short-Term Capital Gain due to the assessee’s inability to provide purchase proof for the truck. The Commissioner of Income Tax (Appeals) [CIT(A)] further reclassified it as unexplained cash credit under Section 68 of the Income Tax Act, 1961. The assessee, engaged in the transport business and a partner in M/s IRC Logistics, argued that the truck was purchased through Sumayya Enterprises in 2019-20 via banking channels, supported by registration documents, RTO receipts, and bank statements. The sale proceeds were also received through banking channels, and similar transactions for two other trucks were accepted by the AO.
Upon reviewing the evidence, ITAT Pune found the transaction genuine and noted that even if the receipt was treated as business income, it would fall under the presumptive taxation scheme of Section 44AE. Additionally, the truck’s purchase cost exceeded the sale amount, resulting in a Short-Term Capital Loss rather than a gain. Concluding that the sale proceeds were duly explained, the tribunal set aside CIT(A)’s order and allowed the assessee’s appeal. The decision, pronounced on January 6, 2025, confirmed that the ₹10 lakh transaction could not be considered as unexplained cash credit under Section 68.
