SHRINIVAS CHANDRAKANT BORATE,SATARA vs. INCOME-TAX OFFICER, WARD - 3, SATARA

First issue raised in this appeal is against the confirmation of addition of Rs.6,85,000/-.

Briefly stated, the facts of the case are that the assessee, at the material time, was partner in a firm and filed his return declaring total income of Rs.1,80,386/- apart from agricultural income of Rs.4,02,200/-. During the course of assessment proceedings, the Assessing Officer (AO) observed that there were cash deposits in the assessee’s bank account maintained with Axis Bank to the tune of Rs.6,85,000/-. On being called upon to furnish the source of such deposits, the assessee submitted that such deposits were made from agricultural income as well as certain withdrawals from the partnership firm. The AO found certain infirmities in 7/12 extracts vis-à- vis the explanation of the assessee. Rejecting the assessee’s explanation, he added the entire amount of Rs.6.85 lakh. The ld. CIT(A) affirmed the addition.

I have heard Sh. Shrinivas Chandrakant Borate, the assessee in person and the ld. DR and also perused the relevant material on record. In so far as the source of Rs.6.85 lakh, being, deposits in the assessee’s bank account are concerned, it is seen that the assessee tendered an explanation before the AO in this regard, which has been summed up at page 52 of the paper book. Apart from minor items, there are three main items of Rs.3.00 lakh deposited on 27-06-2012; Rs.2.00 lakh on 29-06-2012; and Rs.85,000/- on 09-07-2012. The first sum of Rs.3.00 lakh was, in fact, withdrawn by the assessee from his partnership concern, namely, M/s. Kamrock Tiles and pavers on the same day on 27-06-2012 on which it was deposited in the bank account. A copy of the assessee’s account in the books of partnership firm has been placed at page 75 of the paper book, which evidences the withdrawal of cash of equal amount from such account. The other item is deposit of Rs.2.00 lakh on 29-06-2012. In this regard, the assessee submitted details of the receipts from the bank account of his father Shri Chandrakant Borate in which the agricultural receipts were deposited. Evidence of the agricultural land holding by the assessee’s family for more than three generations is available at pages 21 to 51 of the paper book, which justifies the earning of the agricultural income as claimed. As regards the other major item of Rs.85,000/- deposited on 09-07-2012, it is seen that sums of Rs.22,100/- and Rs.64,000/- were withdrawn on 06-07-2012 and 09-07-2012 respectively from the bank account of Shri Chandrakant Borate, which went into the assessee’s bank account. All other small deposits in the bank account, namely, Rs.22,000/- on 28-04-2012, Rs.25,000/- on 05-09-2012, Rs.25.000/- on 05-11-2012, Rs.15,000/- on 08-12-2012 and Rs.13,000/- on 07-02-2013 were made by withdrawals from the bank account of Shri Chandrakant Borate. In the light of such evidence, it is clear that the assessee properly explained the source of deposits in the bank account. I, therefore, delete the addition.

The next ground is against the confirmation of addition of Rs.4,90,000/- u/s.69A of the Act.

Facts apropos this ground are that the assessee was found to have purchased a Duster car on down payment of Rs.4,90,000/-. The assessee tendered an explanation about the source of deposit with which the AO was not satisfied. He made the addition, which came to be countenanced in the first appeal.

Having heard both the sides and perused the relevant material on record, it is observed that page 67 of the paper book is a confirmation of purchase of sugarcane by Shri Pramod Abdagire for Rs.4,23,000/-. Details of sale bills of agricultural produce to several parties have been placed at pages 68 to 74 of the paper book. Such amount was received by the assessee’s father, namely, Shri Chandrakant Borate and in turn given to the assessee for giving down payment of the Duster car. In my considered opinion, the assessee successfully explained the source of the amount of down payment. I, therefore, order to delete the addition.

In the result, the appeal is allowed. Order pronounced in the Open Court on 05th February, 2020.