SUBBARAYA GOUNDER THAMILSELVAN,DHARMAPURI vs. ITO, WARD 1 DHARMAPURI, DHARMAPURI

The Assessee raised the following grounds of appeal : “1) The Impugned Order is bad, erroneous and unsustainable in law.

Briefly stated facts of the case are that the appellant is an Individual. No regular return of income for the Assessment Year 2012-13 was file by the appellant. No regular return of income for the assessment year under consideration under the provisions of section 139(1) of the Act was filed for the Assessment Year 2012-13.

Subsequently, based on the information that the appellant made cash deposits of Rs.22,97,000/- in the account maintained with State Bank of India. The Assessing Officer formed an opinion that income got escaped assessment from tax, accordingly a notice u/s.148 was issued on 29.03.2019. In response to notice u/s.148, appellant filed return of income on 30.04.2019 disclosing income of Rs.6,35,140/-. Against the said return of income, the assessment was completed by the ACIT, Circle-1, Hosur (hereinafter called ‘AO’) vide order dated 30.11.2019 passed u/s.148 r.w.s 147 at a total income of Rs.34,32,140/-. While doing so, the Assessing Officer made addition of cash deposits in the bank account maintained with State Bank of India, Elakkiampatti of Rs.27,97,000/- treating as unexplained money for the failure of the appellant to explain he source of the said cash deposits.

Being aggrieved by the above assessment order, appellant filed an appeal before the ld.CIT(A) challenging the very validity of the reassessment proceedings and also explained that cash deposits are made out of agriculture of Rs.13,06,438/- of current year and the balance money was made out of accumulated agriculture of earlier years of A.Y.2011-12 of Rs.11,05,428/- and the balance amount was made out of the amount withdrawn from the earlier withdrawals from the bank account. However, the ld.CIT(A) dismissed the appeal by holding that appellant had failed to furnish any supporting documentary evidence such as details of land holding nature of crops cultivate, yield for acre the details of agricultural expenses, and sale/purchase receipts to substantiate the claim of agricultural income.

Being aggrieved, the appellant is in appeal before us in the present appeal. Admittedly, there is a delay of 21 days in presenting the appeal before us. The appellant filed an Affidavit seeking the condonation of delay, having regard to the explanation offered before us, we are convinced that there is a reasonable and sufficient cause for delay, hence, the delay is condoned and we admit the appeal for adjudication on merits.

The ld.Counsel submitted that the ld.CIT(A) had not considered the written submissions filed before him and he further submitted that having accepted the agricultural income returned in the current year as well as in the earlier assessment years, the same should have been treated as available for deposits in the bank account. He also filed copies of returned income for earlier years before us.

On the other hand, Learned CIT-DR opposed the above submission.

We heard both the parties and perused the records. The issues that arises for our consideration is whether the ld.CIT(A) was justified in sustaining the addition Rs.27,97,000/- being the cash deposits in the bank account maintained with State Bank of India as unexplained money of the appellant. Before the Assessing Officer, the appellant had not offered any explanation in support of the source of the cash deposits in the bank account. However, during the course of proceedings before the ld.CIT(A), the appellant had filed explanation stating that the cash deposited in the bank account were made out of agricultural income for the current year of Rs.13,06,438/- accumulated agricultural income of earlier years of Rs.11,05,428/- in the immediate preceding year. Admittedly, there was no evidence to show that agricultural income shown by the appellant was utilized for some other purposes. Therefore, it should be presumed that the agricultural income shown was utilized for the purpose of making cash deposits in the bank account. The ld.CIT(A) ought to have deleted the cash deposit in the bank account accepting the explanation offered by the appellant. Therefore, we direct the Assessing Officer to delete the addition.

In the result, appeal filed by the Assessee is allowed. Order pronounced in the open Court on 29th May, 2026.