Dashrath Kisanrao Vs ITO (ITAT Pune)
Income Tax Appellate Tribunal (ITAT) Pune, in a recent ruling, has set aside an order confirming the addition of Rs. 40,99,500 as unexplained income in demonetized currency for Dashrath Kisanrao, a petrol pump owner. The Tribunal, in its decision pronounced on May 27, 2025, remanded the case back to the Assessing Officer (AO) for a fresh examination, citing newly submitted bank certificates that dispute the original findings.
The assessee, Dashrath Kisanrao, operates a petrol pump business. For Assessment Year 2017-18, his case was selected for scrutiny following a declaration of Rs. 17,58,480 in total income. During assessment, the AO identified cash deposits totaling Rs. 40,99,500 (Rs. 37,96,500 in SBI and Rs. 12,03,000 in IDBI bank, though later clarified by the assessee as two SBI accounts) made in specified bank notes (SBNs) after December 3, 2016. This was considered a contravention of Government Notification No. SO-3598(E) dated November 30, 2016, which prohibited petrol pumps from accepting SBNs beyond that date.
The AO sought an explanation for these deposits, proposing to treat them as unexplained cash credits under Section 68 of the Income Tax Act. The assessee responded, stating that his petrol pump served rural areas where customers insisted on paying with demonetized currency, fueled by rumors of an extension to the acceptance deadline until December 15, 2016. The assessee claimed the SBNs were accepted until December 13, 2016, based on this “bonafide belief.” He further argued that the deposited amount represented sales proceeds and was ultimately remitted to Hindustan Petroleum Corporation Limited, with no personal benefit beyond sales commission.
