DEEPSHIKHA KOTHARI,PUNE vs. ITO, W-2(1), GUWAHATI

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ITA 432/GTY/2025Status: DisposedITAT Guwahati30 April 2026AY 2020-214 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer made the disallowance based on suspicion without disproving the assessee's elaborate explanation for cash deposits. Since the verification unit confirmed the floriculture activity and no contrary evidence was found, the addition was deleted.

What were the facts?

The assessee, engaged in floriculture, claimed agricultural income and expenses. The Assessing Officer disallowed the agricultural income and proportionate expenses, treating cash deposits in the bank account as doubtful. The verification unit had previously confirmed the assessee's floriculture operations.

What were the issues?

Whether cash deposits in a bank account related to agricultural operations can be disallowed solely on suspicion without disproving the assessee's explanation and in light of verification of agricultural activity.

Which sections of the Income-tax Act were involved?

Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, GAUHATI BENCH

Before: SHRI GEORGE MATHAN & SHRI LAXMI PRASAD SAHU

For Appellant: Shri Sunil Surana, AR
For Respondent: Shri Santosh Kr. Karnani, Addl. CIT, Sr. DR
Hearing: 30.04.2025Pronounced: 30.04.2025

IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI BENCH VIRTUAL HEARING AT KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA No.432/Gau/2025 Assessment Year: 2020-21

DeepShikha Kothari ITO, Ward-2(1), Guwahati

507, Lunkad Sky Station, Vs Viman Nagar, Pune, Maharashtra-411014. (PAN: AQLPK8088K) (Appellant) (Respondent)

Assessee by : Shri Sunil Surana, AR Revenue by : Shri Santosh Kr. Karnani, Addl. CIT, Sr. DR Date of Hearing : 30.04.2025 Date of Pronouncement : 30.04.2025

ORDER Per George Mathan, JM: This is an appeal filed by the assessee against the order of the CIT(A), Central NER, Guwahati [hereinafter referred to as the ‘CIT(A)’] in appeal no. CIT(A), Central NER, Guwahati/10075/2018-19 dated 19.09.2025.

2.

Shri S. P. Bhati, FCA, represented on behalf of the assessee and Shri Santhosh Kr. Karnani, Sr. DR represented on behalf of the revenue.

3.

It was submitted by the ld. AR that the assessee is in the business of floriculture. It was the submission that the assessee has disclosed

ITA No.432/Gau/2025 agricultural income of Rs.1,04,75,125/- and expenses of Rs.39,91,812/-. The exemption claimed was to the tune of Rs.64,83,313/-. It was the submission that the Assessing Officer had disallowed the agricultural income claimed as exemption and the proportionate expenditure. It was the submission that in the course of assessment, the verification unit had examined the farm of the assessee and confirmed that the operations were going on. It was the submission that because cash had been deposited in the bank account of the assessee, the Assessing Officer treated the same as doubtful and made the addition. It was the submission that the verification unit has found that the assessee was doing agricultural operation and that the assessee was in the activity of floriculture, the addition as made by the Assessing Officer is liable to be deleted. It was the submission that the addition cannot be made on suspicion and surmises.

4.

In reply, the ld. Sr. DR submitted that opportunity had been given to the assessee and even show-cause notice has been issued to the assessee and the assessee had not responded to the show-cause notice. It was the submission that there could be agricultural activity done by the assessee but the assessee has not proved the cash deposits made in the bank account which came from the said agricultural operations.

5.

We have considered the rival submissions. A perusal of pages 5 to 7 of the assessment order shows that the Assessing Officer has extracted verification report from the designated verification unit. The Assessing

ITA No.432/Gau/2025 Officer had issued a show-cause notice on 05.09.2022 and from pages 5 to 9, the Assessing Officer extracted reply to the show-cause notice filed by the assessee. The assessee has explained why the cash has been deposited in the reply to the show-cause notice. The Assessing Officer however mentioned that the assessee has not responded to the notice issued u/s 142(1) dated 09.09.2022. However, it is noticed that the response of the assessee to the show-cause notice itself is elaborate and the explanation given by the assessee has not been disproved. The Assessing Officer made the disallowance only because he felt that the cash deposits were from the agricultural operation is doubtful. The evidence given to us does not show that the assessee has any other source of income which could have even generated the said undisclosed cash. This being so, as the verification unit has also found that the assessee is doing floriculture activity and no evidence has been found which is contrary to the assessee’s claim, the addition as made by the Assessing Officer and confirmed by the ld. CIT(A) stands deleted.

6.

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

Order pronounced in the open court on 30/04/2026.

Sd/- Sd/- [Laxmi Prasad Sahu] [George Mathan] लेखा सदस्य/Accountant Member न्याययक सदस्य/Judicial Member Dated: 30/04/2026 RS

ITA No.432/Gau/2025

Copy of the order forwarded to: 1. Appellant - 2. Respondent – 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar, Kolkata Benches

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