Case Law Details
Dashrathbhai Shivabhai Chaudhary Vs ITO (ITAT Ahmedabad)
The assessee is engaged in farming and trading of milk and seeds. As per the information made available, the assessee made cash deposit of Rs. 21,95,000/- with Saving Bank Account. Being agricultural and the agricultural income is exempt the assessee did not file any return of income under Section 139(1) of the Act. The Assessing Officer after recording reasons under Section 147 and approval from the authority issue notice under Section 148 which was served to the assessee. The assessee therein filed return of income declaring income of Rs. 91,530/- and net agricultural income of Rs. 65,000/- on 10.04.2017. The Assessing Officer made addition under Section 69 related to cash deposited with Dena Bank Ltd.
The CIT(A) in Para 7.2 (i) clearly mentioned that the trading activities in milk and seed selling was duly supported from the affidavits and the cross verifications made by the Assessing Officer during the course of second remand report proceedings and the same is considered to be genuine which was offered under Section 44AF of the Act. In fact, the amount of Rs. 10,50,000/- was re-deposited in the bank withdrawn earlier in the said year which was also accepted by the CIT(A). The amount of Rs. 11,45,000/- was deposited out of trading activity income that of Rs. 16,32,990/-. Therefore, the assessee has explained through evidences during the remand proceedings that the cash deposit was genuinely made in the bank account. The CIT(A) as well as the Assessing Officer was not right in making addition under Section 69 of the Act. The appeal of the assessee is allowed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal is filed by the assessee against the order dated 09.08.2019 passed by the Ld. CIT(Appeals), Gandhinagar, Ahmedabad for A.Y. 2010-11.
2. The grounds of appeal raised by the assessee read as under:
“1. The Ld. CIT(A) has erred in not appreciating the submission as abstracted by him in his appeal order page 2 to 18 para 5.2 and 5.3,5,6,5.8,5.9 therefore, inter alia erred in confirming the addition as per page 33, para 7.4 of the appeal order and therefore, the addition confirmed may please be deleted.
2. That, Ld. CIT(A) has erred in upholding the addition of Rs. 11,45,000 in respect of unexplained cash deposited in Bank account
3. The Ld. CIT(A) has erred in not appreciating the facts that the cash deposited by the appellant in the bank account is out of his business receipts as declared by him u/s 44AF and business proved by the appellant and accepted by Ld. CIT(A) in his body of order.
4. The Learned CIT(A) has erred in not appreciating the facts that the appellant is poor farmer and has no means to generate such huge cash other than his trading activity. And Assuming that the cash is deposited not from appellant business activity but out of other sources without any evidence.
The aforesaid grounds are without prejudice to each other and the appellant craves leave to add/delete/alter and/or amend any of grounds as aforesaid as and when necessary.”
3. The assessee is engaged in farming and trading of milk and seeds. As per the information made available, the assessee made cash deposit of Rs. 21,95,000/- with Saving Bank Account. Being agricultural and the agricultural income is exempt the assessee did not file any return of income under Section 139(1) of the Act. The Assessing Officer after recording reasons under Section 147 and approval from the authority issue notice under Section 148 which was served to the assessee. The assessee therein filed return of income declaring income of Rs. 91,530/- and net agricultural income of Rs. 65,000/- on 10.04.2017. The Assessing Officer made addition under Section 69 related to cash deposited with Dena Bank Ltd.
4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
5. The Ld. A.R. submitted that the assessee has explained the detail related to 21,95,000/- but the CIT(A) restricted the addition to Rs. 10,50,000/- despite giving all the evidences in support of the same amount. The Ld. A.R. further submitted that the amount of Rs. 10,50,000/- was earned by the assessee from sell of milk and seeds wherein the purchase of the said items were established by the assessee to bill and invoices. In fact, the trading activity and gross receipt of the assessee was accepted by the CIT(A).
6. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). The Ld. D.R. further submitted that the assessee has not filed detail and therefore, the Assessing Officer has rightly made the addition.
7. We have heard both the parties and perused all the relevant material available on record. The CIT(A) in Para 7.2 (i) clearly mentioned that the trading activities in milk and seed selling was duly supported from the affidavits and the cross verifications made by the Assessing Officer during the course of second remand report proceedings and the same is considered to be genuine which was offered under Section 44AF of the Act. In fact, the amount of Rs. 10,50,000/- was re-deposited in the bank withdrawn earlier in the said year which was also accepted by the CIT(A). The amount of Rs. 11,45,000/- was deposited out of trading activity income that of Rs. 16,32,990/-. Therefore, the assessee has explained through evidences during the remand proceedings that the cash deposit was genuinely made in the bank account. The CIT(A) as well as the Assessing Officer was not right in making addition under Section 69 of the Act. The appeal of the assessee is allowed.
8. In result, the appeal of the assessee is allowed.
This Order pronounced in Open Court on 04/11/2022
