MANOJKUMAR JETHABHAI PATEL,NADIAD vs. INCOME TAX OFFICER, WARD ONE NADIAD

There was delay of 59 days in filing of this appeal. The assessee has filed a condonation application explaining the reason for delay. It has been submitted that the assessee is a farmer having agricultural income only and did not file his return of income as his income was below the

The brief facts of the case are that the assessee did not file his return of income for A.Y. 2019-20. The AO had reopened the case on the basis of information received that the assessee had made cash withdrawals of Rs. 29,76,150/- from his bank account maintained with Bank of Baroda and it had also received interest of Rs. 1,61,118/- during the year under consideration. Accordingly, a notice u/s. 148 of the Act was issued on 31.03.2023 after passing an order u/s. 148A(d) of the Act. In response to notice u/s. 148, the assessee had filed his return of income declaring total income of Rs.1,61,120/- and showing agricultural income of Rs. 5,32,540/- -. The AO had treated the cash withdrawals of Rs. 29,76,150/- as unexplained expenditure u/s. 69C of the Act. Further, the agricultural income of Rs. 5,32,540/- was also added to income u/s 69A of the Act. The assessment was completed u/s. 147 r.w.s. 144B of the Act, on 08.03.2024 at total income of Rs. 36,69,810/-.

Aggrieved with the order passed of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Th

Shri B T Thakkar, the Ld. AR of the assessee submitted that the AO was not correct in treating the cash withdrawal of Rs. 29,76,150/- from the bank account as unexplained expenditure u/s. 69C of the Act. He further, submitted that he AO was also not correct in treating the net agricultural income of Rs. 5,32,540/- as income from other source.

Per Contra Smt. Mamta Singh, the Ld. SR-DR submitted that the assessee did not make any compliance either before the AO or before the Ld. CIT(A). He submitted that no evidence for agricultural land holding or sale of agricultural produce was brought on record in spite of specific requisition by the AO. She, therefore, strongly supported the order of the lower authorities.

The first grievance of the assessee is against addition of Rs. 29,76,150/- on account of unexplained expenditure. The undisputed facts are that the assessee had made cash withdrawals of Rs. 29,76,150/- from his bank account which was treated as unexplained expenditure u/s. 69C of the Act. We fail to understand as to how the cash withdrawals from the bank account can be held as unaccounted expenditure. If the assessee

The next ground pertains to treating the agricultural income of Rs. 5,32,540/- disclosed by the assessee, as income from other source. The case of the assessee was reopened to examine the cash withdrawals from bank account which was treated as unexplained expenditure. We have already held earlier that the withdrawals from bank account can’t be treated as unexplained expenditure. Thus, the basis on which the case was reopened doesn’t survive. It has been held by Hon’ble Gujarat High Court in the case of CIT Vs. Mohd. Junaid Dadani (335 ITR 172)(Guj.) that if no addition is made on the reopened issue, no other addition can be made. Since, the ground on which the case was reopened in the present case doesn’t survive, the AO couldn’t have made addition on any other issue. Therefore, the addition of Rs. 5,32,540/- by treating the agricultural income as income from other source, is also deleted. The ground taken by the assessee is allowed.

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