DHANARAJA ,MADURAI vs. ACIT , INTERNATIONAL TAXATION , MADURAI

The impugned addition stem from the fact that the assessee deposited cash of Rs.49 Lacs during demonetization period. In support, the assessee furnished cash flow statement. After considering the same, Ld. AO accepted sources to the extent of Rs.16.55 Lacs out of earlier cash withdrawals, Rs.17 Lacs as agricultural receipts and Rs.4.27 Lacs from rental receipts and held that the remaining amount of Rs.11.17 Lacs remained unexplained. Accordingly, the same was added to the income of the assessee. During appellate proceedings, the assessee submitted that it has sufficient cash balance for deposit in the bank which was evident from the cash flow statement. The assessee also averred that it earned agricultural income of Rs.28.50 Lacs out of which only Rs.17 Lacs was accepted by Ld. AO. However, Ld. CIT(A) chose to confirm the impugned addition against which the assessee is in further appeal before us.

We find that no cogent reasons have been stated by lower authorities to reject the claim of the assessee regarding agricultural income. Only partial claim has been accepted. Considering the factual matrix, we accept further source to the extent of Rs.5 Lacs and sustain the remaining addition of Rs.6.17 Lacs. The Ld. AO is directed to recompute the income of the assessee.

The appeal stands partly allowed in terms of our above order. Order pronounced on 4th July,2023