Jehan Percy Variava Vs ITO (ITAT Surat)
In the matter abovementioned ITAT deleted addition made on account of undisclosed cash deposits during demonetization period after observing that assessee has substantiate means of income for depositing cash.
Assessee filed his ITR for AY 2017-18 declaring nil income. The case was selected for scrutiny on the issue of large agricultural income shown in ITR and cash deposits during demonetization period. During assessment, AO recorded that assessee was given several opportunities by issuing show cause notice, to explain the source of cash deposit of Rs.24,07,000/-. Entire cash deposit of Rupee 24 lacs was treated as unexplained money u/s 69A. The AO further made addition of Rs. 5,43,190/- by treating agricultural income as unexplained cash credit u/s 68 and taxed the same u/s 115BBE.
Before CIT (A) it was submitted that assessee is engaged in agricultural activities and growing different type of agricultural crops including mango, paddy, sugarcane. Assessee is holding agricultural land jointly with his father and mother. and assessee is maintaining joint accounts with them. Due to demonetization, assessee deposited cash of Rs.23,57,000/- in joint account. The same amount is mentioned in the return of income of respective person’s / family members which were not considered by AO. The agricultural income shown by assesse was treated as unexplained cash credit and added to the income of assessee. On the basis of material available on record, CIT(A) recorded that only source of income declared by assessee is agricultural income. The assessee is holding bank accounts with his parents. There is no evidence that those joint owners were filing their return of income or not. The cash deposit during relevant period is more than agricultural income, so no credit can be given of any other amount. The assessee has not furnished satisfactory explanation before AO. Regarding agricultural income, CIT (A) held that income declared by assessee cannot be disallowed and it cannot be brought to tax under section 68 of the Act. But instead of allowing appeal in part, he dismissed the appeal.
