DHAVAL HIMMAT BHANDRA,MUMBAI vs. ITO - 34(1)(1), MUMBAI

Briefly stated, facts of the case are that the assess Briefly stated, facts of the case are that the assess Briefly stated, facts of the case are that the assessee had filed its return of income on 04.08.2017 declaring total income at its return of income on 04.08.2017 declaring total income at its return of income on 04.08.2017 declaring total income at Rs.14,59,180/-. The return of income filed by the assessee was . The return of income filed by the assessee was . The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the selected for scrutiny assessment and statutory notices under the selected for scrutiny assessment and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued tax Act, 1961 (in short ‘the Act’) were issued tax Act, 1961 (in short ‘the Act’) were issued and complied with. During the assessment proceedings, the Assessing Officer with. During the assessment proceedings, the Assessing Officer with. During the assessment proceedings, the Assessing Officer observed cash deposit in two bank accounts maintained by the observed cash deposit in two bank accounts maintained by the observed cash deposit in two bank accounts maintained by the assessee. The assessee explained source of the cash deposit as by assessee. The assessee explained source of the cash deposit as by assessee. The assessee explained source of the cash deposit as by way of income from agriculture, commission income and gift. The way of income from agriculture, commission income and way of income from agriculture, commission income and Assessing Officer however was not Assessing Officer however was not convinced with the quantum of with the quantum of the agriculture income the agriculture income shown by the assessee and restricted the by the assessee and restricted the agriculture income to the extent of agriculture income to the extent of such income such income declared in immediately preceding assessment year i.e. assessment year 2016- immediately preceding assessment year i.e. assessment yea immediately preceding assessment year i.e. assessment yea 17 and excess amount of Rs.2,90,830/ amount of Rs.2,90,830/- over last year over last year was held as unexplained cash credit u/s 68 of the Act. On further appeal, the unexplained cash credit u/s 68 of the Act. On further appeal, the unexplained cash credit u/s 68 of the Act. On further appeal, the Ld. CIT(A) also upheld the addition. Aggrieved, the assessee is in Ld. CIT(A) also upheld the addition. Aggrieved, the assessee is in Ld. CIT(A) also upheld the addition. Aggrieved, the assessee is in appeal before the Tribunal by way of raising grounds as reproduced appeal before the Tribunal by way of raising grounds as reproduced appeal before the Tribunal by way of raising grounds as reproduced above.

Before us, the Ld. Counsel for the assessee f Before us, the Ld. Counsel for the assessee filed a Paper Book iled a Paper Book containing pages 1 to 89. containing pages 1 to 89.

We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant materials on record the relevant materials on record. Briefly stated facts of the case are . Briefly stated facts of the case are that to support of cash deposit in two bank accounts, the assessee support of cash deposit in two bank accounts, the assessee support of cash deposit in two bank accounts, the assessee explained same as out of income from agriculture, commission and out of income from agriculture, commission and out of income from agriculture, commission and gift. The income from commission and gift was not gift. The income from commission and gift was not disturbed disturbed by the AO but the AO was not satisfied regarding the agricultural income AO but the AO was not satisfied regarding the agricultural income AO but the AO was not satisfied regarding the agricultural income of Rs.13,64,921/- declared by the assessee fo declared by the assessee for the year under r the year under consideration for the reason that there being increase of 27% or the reason that there being increase of 27% or the reason that there being increase of 27% in the year as compared to the agriculture income of Rs.10,74,091/ as compared to the agriculture income of Rs.10,74,091/- as compared to the agriculture income of Rs.10,74,091/ declared in assessment year 2016 declared in assessment year 2016-17 i.e. immediately preceding 17 i.e. immediately preceding assessment assessment assessment year. year. year. During During During the the the assessment assessment assessment proceedings, proceedings, proceedings, the the the Assessing Officer issued notice u/s 133(6) cer issued notice u/s 133(6) of the Act to the party to of the Act to the party to whom the assessee sold the agricultural produce e sold the agricultural produce e sold the agricultural produce namely M/s Mahalaxmi Oil Industries. The said party duly confirmed the fact of Mahalaxmi Oil Industries. The said party duly confirmed the fact of Mahalaxmi Oil Industries. The said party duly confirmed the fact of the sale of the agriculture produce by the assessee. The assessee the sale of the agriculture produce by the assessee. The assessee the sale of the agriculture produce by the assessee. The assessee also submitted copy of the 7/12 extract to support owning of bmitted copy of the 7/12 extract to support owning of bmitted copy of the 7/12 extract to support owning of agricultural land. But the Assessing Officer did not accept the agricultural land. But the Assessing Officer did not accept the agricultural land. But the Assessing Officer did not accept the contention of the assessee as according to him increase of 27% was contention of the assessee as according to him increase contention of the assessee as according to him increase not justified in view of no addition to infrastructure or irrigation not justified in view of no addition to infrastructure or irrigation not justified in view of no addition to infrastructure or irrigation technique during the year under consideration. chnique during the year under consideration. Before us, the Ld. Before us, the Ld. Counsel for the assessee submitted that the Assessing Officer has Counsel for the assessee submitted that the Assessing Officer has Counsel for the assessee submitted that the Assessing Officer has not pointed out any defect or faults not pointed out any defect or faults in submission submissions made and evidence provided by the assessee. We find that that the assessee evidence provided by the assessee. We find that that the assessee evidence provided by the assessee. We find that that the assessee has filed evidence in support of sales of the agriculture produce has filed evidence in support of sales of the agriculture produce has filed evidence in support of sales of the agriculture produce during the year under consideration to M/s Mahalaxmi Oil g the year under consideration to M/s Mahalaxmi Oil g the year under consideration to M/s Mahalaxmi Oil Industries. The said party also confirmed before the Assessing Industries. The said party also confirmed before the Assessing Industries. The said party also confirmed before the Assessing Officer and no defect has been pointed out in the said sale quantity. Officer and no defect has been pointed out in the said sale quantity. Officer and no defect has been pointed out in the said sale quantity. Further, the Assessing Officer has also veri Further, the Assessing Officer has also verified the ownership of the fied the ownership of the land but the Assessing Officer only made the addition on the basis the Assessing Officer only made the addition on the basis the Assessing Officer only made the addition on the basis of the presumption that being same infrastructure of agriculture of the presumption that being same infrastructure of agriculture of the presumption that being same infrastructure of agriculture there was no reason for the increase in the agriculture income. The there was no reason for the increase in the agricultu there was no reason for the increase in the agricultu Ld. Assessing Officer also mentioned that on the basis of pictorial Ld. Assessing Officer also mentioned that on the basis of pictorial Ld. Assessing Officer also mentioned that on the basis of pictorial evidences gathered and statement recorded on oath by him of Sh evidences gathered and statement recorded on oath by him of Sh evidences gathered and statement recorded on oath by him of Sh Chintan Singhvi , agricultural activity on the land was accepted. In Chintan Singhvi , agricultural activity on the land was accepted. Chintan Singhvi , agricultural activity on the land was accepted. our opinion, the Assessing Officer has fa our opinion, the Assessing Officer has failed to understand that iled to understand that quantity of agriculture produced quantity of agriculture produced for two financial years cannot be for two financial years cannot be identically same particularly when the Assessing Officer himself has identically same particularly when the Assessing Officer himself has identically same particularly when the Assessing Officer himself has verified the sales of the assessee from third party. The addition verified the sales of the assessee from third party. The addition verified the sales of the assessee from third party. The addition made by the Assessing Officer made by the Assessing Officer and upheld by the Ld. CIT(A) is based and upheld by the Ld. CIT(A) is based only on the assumption and presumption without pointing out any only on the assumption and presumption without pointing out any only on the assumption and presumption without pointing out any defect in the documentary evidence defect in the documentary evidences submitted by the assessee. submitted by the assessee. Accordingly, we set aside the order of the Ld. CIT(A) on the issue in Accordingly, we set aside the order of the Ld. CIT(A) on the issue in Accordingly, we set aside the order of the Ld. CIT(A) on the issue in dispute. Thus entire Thus entire addition being on the presumption is deleted. addition being on the presumption is deleted. The grounds of the appeals are accordingly allowed. The grounds of the appeals are accordingly allowed. The grounds of the appeals are accordingly allowed.

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