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Facts
The appellant claimed agricultural income from sale of agricultural products, depositing sale proceeds during the demonetization period. The Assessing Officer (AO) added Rs. 17.51 lakh to the appellant's income, finding no evidence to substantiate the agricultural produce or related expenses. The CIT(A) confirmed the addition, deeming the explanation for the cash deposit unconvincing.
Held
The Tribunal noted that the evidence produced before it was not presented to the lower authorities. Exercising leniency, the Tribunal remitted the entire issue of the genuineness of cash deposits and the claim of agricultural income back to the AO for fresh examination.
Key Issues
Whether the appellant has provided sufficient evidence to substantiate the claim of agricultural income and the source of cash deposits made during the demonetization period.
Sections Cited
69A, 115BBE
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Income Tax Appellate Tribunal, Mumbai “J(SMC
Before: Shri Rahul Chaudhary (JM) & Shri Omkareshwar Chidara (AM)
From the assessment order, it is observed that the Ld. AO posted the case for hearing and sought for certain details like copy of audited profit and loss account, balance-sheet, capital account alongwith schedule and tax audit report, copy of income tax return filed by the appellant for A.Ys. 2014- 15 and 2016-17, details of bank accounts maintained by the appellant for the above three years, cash book and stock register, source of each deposits in the bank account during demonetization period alongwith corroborative evidence. From the assessment order, it is observed that the appellant deposited cash of Rs. 17.51 lakh in his bank account. The Ld. AO found that 2 Ramesh Mohanlal Zaveri there is no evidence to substantiate the agro products being cultivated and harvested on the agricultural land. The appellant has not produced any valid documents relating to agricultural income owned/possessed. Apart from this, the Ld. AO noted that no documentary evidence produced in respect of expenses incurred to earn the agricultural income and specifying the quantity of agricultural produce and items of purchases involved. In view of the same, the Ld. AO invoked section 69A of the I.T. Act and added Rs. 17.50 lakh while completing the assessment.
Aggrieved by the addition made by the Ld. AO, an appeal was filed before the Ld. CIT(A).
After taking into consideration the submissions of the appellant, Ld. CIT(A) agreed that the contention of Ld. AO and confirmed the addition. Ld. CIT(A) held that the explanation for source of cash deposited during demonetization period is not convincing as there were no cash sale in preceding financial year and period subsequent to the current financial year. As the appellant has not furnished list of parties with their identity to whom cash sales were made, Ld. CIT(A) came to the conclusion that the appellant could not explain satisfactorily the source of cash deposited in his bank account. Ld. CIT(A) also came to the conclusion that the addition under section 69A of the Act can be made as the appellant was found to be owner of the cash and deposited the same in his bank account and the appellant has not explained the source properly. Finally, the addition made under section 69A of 115BBE of the Act were correctly invoked by the Ld. AO. Addition made by the Ld. AO was confirmed.
As the Ld. CIT(A) has confirmed the addition, the appellant filed an appeal before the ITAT pleading that he has got all the evidences relating to stock register, crops sold, evidence to demonstrate that cash deposited is only out of sale proceeds of agricultural income. Copy of cash book was also filed before the Bench at the time of hearing.
3 Ramesh Mohanlal Zaveri
Ld. DR relied on the orders of the Ld. AO and Ld. CIT(A) and argued that the addition should be confirmed as there is no evidence for claim relating to agricultural income and hence addition made by the Ld. AO should be confirmed.
Heard both sides and perused the material filed by the Ld. AR of the appellant. Material filed and evidences produced before the ITAT now at the time of hearing, was not been produced before the Ld. AO and Ld. CIT(A). Taking a lenient view, request of Ld. AR of the appellant that the matter may be remitted back to the Ld. AO has been taken into consideration. In view of the same, the entire issue relating to genuineness of cash deposits and claim of agricultural income is remitted to the file of the Ld. AO to examine all contentions of appellant afresh and pass a speaking order after giving an effective opportunity to the appellant.
The appeal of appellant is allowed for statistical purposes.
Order pronounced in the open Court on 27/06/2025.