SATISH SARJERAO CHOUDHARI,PARBHANI vs. INCOME-TAX OFFICER, WARD - PARBHANI, PARBHANI

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ITA 1296/PUN/2018Status: DisposedITAT Pune14 January 2020AY 2008-094 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's declared cash sales and agricultural income significantly exceeded the peak bank balance addition. Therefore, the source of the cash deposits was sufficiently proved.

What were the facts?

The assessee, engaged in agricultural produce trading, had deposits in his bank account without filing a return. Reassessment proceedings were initiated, and the Assessing Officer added the peak bank balance of Rs. 8,30,538/-. The assessee claimed the deposits were from agricultural and business income.

What were the issues?

Whether the addition made by the Assessing Officer on account of peak bank balance is sustainable when the assessee has demonstrated sufficient cash receipts from sales and agricultural income.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI R.S. SYAL

For Appellant: Shri Pramod Shingte
For Respondent: Shri S.P. Walimbe

This appeal by the assessee arises out of the order passed by the CIT(A)-1, Aurangabad on 04-06-2018 in relation to the assessment year 2008-09.

2.

The only issue raised in this appeal is against the confirmation of addition of Rs.8,30,538/- made towards peak balance in the assessee’s bank account.

3.

Brief facts of the case are that the assessee is engaged in the trading of agricultural produce. The Assessing Officer received information that the assessee had deposited a sum of Rs.15,30,300/- in his savings bank account maintained with State Bank of Hyderabad, Branch Bori. No return of income was filed. Reassessment proceedings were initiated. Pursuant to the same, the assessee filed his return declaring total income of Rs.57,500/- apart from agricultural income of Rs.3,90,768/-.

The assessee submitted 7/12 extracts and sale patties of agricultural produce sold. The assessee also furnished purchase bills of APMC, Jintur with regard to Toor, Udid, Jawar and Moong. On being called upon to explain the source of deposit in the bank account, the assessee submitted that the deposits were made out of his agricultural income and other business income arising from trading activities. The Assessing Officer computed the peak bank balance of Rs.8,30,538/- on 08.12.2007 and made addition for the same. The ld. CIT(A) confirmed the above addition, against which the assessee has come up in appeal before the Tribunal.

4.

I have heard both the sides and gone through the relevant material on record. It is seen from the assessment order that the assessee declared sale of Rs.15,30,300/- and showed profit @ 5% amounting to Rs.76,500/-. The Assessing Officer has not disputed the making of cash sales to the above extent. In addition, the assessee also declared agricultural income of Rs.3,90,768/-, which has also been accepted by the Assessing Officer. This shows that as against the addition of Rs.8,30,538/- towards cash deposit in the bank, the assessee during the year itself made cash sale of Rs.15,30,000/- and earned net agricultural income of Rs.3,90,768/-. Such an amount of cash available in the hands of the assessee for more than Rs.19.00 lakh is much higher than the amount of addition of Rs.8,30,538/- made by the Assessing Officer towards peak bank deposit in cash. Since the Assessing Officer did accept the factum of cash sales of Rs.15,30,000/- and agricultural income to the tune of Rs.3,90,768/-, I am satisfied that the source of the cash deposit in the bank account is automatically proved out of such receipts. I, therefore, overturn the impugned order and delete the addition.

5.

In the result, the appeal of the assessee is allowed.

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