Mohmmadharoon Babubhai Shaikh Vs ITO (ITAT Ahmedabad)
Once assessee places primary evidence substantiating source the onus shifts on Revenue to rebut the same with cogent material
Ahmedabad ITAT has deleted an addition made u/s 68 in respect of cash deposits during the demonetisation period, accepting Assessee’s explanation that the source was genuine agricultural income.
Assessee, an individual, derived income from agriculture & filed return declaring total income of Rs 2,33,290/-. During the demonetisation period (08.11.2016 to 31.12.2016), he deposited Rs 12,05,500 in Specified Bank Notes in his ICICI & HDFC bank accounts. Assessee explained that the deposits were sourced from Opening cash balance of Rs 10,98,289/-; & Agricultural sales proceeds from paddy & wheat cultivation on his own agricultural land .
AO rejected the explanation on the grounds that- No cash book or bank statement for the earlier year was furnished & it was improbable for an agriculturist to hold such large cash. Local harvest data did not match the claimed sale period. Credit card payments were made without source explanation. AO treated the cash deposits as unexplained income u/s 68 & taxed them u/s 115BBE. CIT(A) dismissed Assessee’s appeal ex parte without giving detailed findings on the evidence.
Before ITAT, Assessee submitted that he had a consistent pattern of depositing large cash amounts post-harvest in November–December of each year: Rs 14.55 lakh (AY 2015–16), Rs 22 lakh (AY 2016–17), & Rs 12.05 lakh (AY 2017–18). Ownership of 43,043 sq. mtrs. of agricultural land was evidenced by Form 7/12 & 8A records. Paddy & wheat were cultivated & sold to Arman Traders, who confirmed purchases & cash payments through the market committee. Cash flow statements showed accumulation of funds from agricultural operations, with low household withdrawals & no other major outgo.
