PRIYA NARESH ATHAVALE,MUMBAI vs. INCOME TAX OFFICER-19(2)(4), MUMBAI , MUMBAI

The assessee is an old lady aged about 75 years. She filed her return of income for the year under consideration declaring a total income of Rs.46,940/-. The AO noticed that the assessee has deposited a sum of Rs18,93,500/- into her bank account by way of cash during demonetisation period. The assessee had deposited a sum of Rs.1.00 lakh into her bank account prior to that period. When asked about the sources of above said deposits, the assessee submitted that she owns 55 acres of land and the funds have been accumulated over the year out of her agricultural income and other savings. It was submitted that she is a widow with no children and hence her domestic expenses were low. She also furnished copy of records to prove land holdings. Since the assessee could not furnish any evidence to prove the submissions relating to income and savings, the AO assessed the entire cash deposit of Rs.19,93,500/- as income of the assessee.

The Ld CIT(A) noticed that the assessee does not have any other sources of income and hence the possibility of generation of unaccounted income from any other sources was not there. He also observed that even if the assessee had concealed agricultural income, the same is, in any way, not taxable. Accordingly, the Ld CIT(A) restricted the addition to 50% of the deposits made. Accordingly, the Ld CIT(A) confirmed the addition to the extent of Rs.9,93,500/-. Still aggrieved, the assessee has filed this appeal.

We heard the parties and perused the record. It is stated that the assessee is a widow with no children and she also holds 55 acres of land. Though it was claimed that the agricultural land was having mango trees, yet the land records did not show availability of such kind of trees. Be that as it may, the fact would remain that the expenses of the assessee would be less and further, the possibility of savings money over the years cannot also be ruled out. The land records show cultivation of paddy and grass. Hence, the availability of agricultural income cannot be ruled out. It was stated that she has declared agricultural income in her return of income filed for some of the years. Hence, it may not correct on the part of the AO to full reject the explanations of the assessee with regard to agricultural income and savings there from. We notice that the Ld CIT(A) has sustained the addition to the extent of 50% amounting to Rs.9,93,500/-. Considering the age of the assessee, her status, fact of no family members, availability of agricultural income etc., we are of the view that the addition may be sustained to the extent of 25% of the deposits. Accordingly, we modify the order passed by the Ld CIT(A) and direct the AO to sustain the addition to the extent of 25% of the deposits. Accordingly, the addition is sustained to the extent of Rs.4,98,375/- and the balance amount of addition is directed to be deleted.

In the result, the appeal filed by the assessee is partly allowed.