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Facts
The assessee deposited cash in bank accounts during FY 2011-12 (AY 2012-13) and claimed it as agricultural income from mango sales, supported by 7/12 extracts and bills. The Assessing Officer initially made a large addition of Rs. 19,26,464/-, which the Ld.CIT(A) reduced and sustained partly at Rs. 4,00,000 under Section 69A, stating the assessee could not explain the source of all deposits.
Held
The Tribunal held that the Ld.CIT(A) erred by not recognizing that the reported agricultural income was net income after expenditure, meaning gross receipts would be higher. The assessee provided undisputed bills totaling Rs. 6,34,147/- as evidence for gross receipts from mango sales. The Tribunal concluded that the addition of Rs. 4,00,000/- sustained by the Ld.CIT(A) was erroneous and directed the AO to delete it.
Key Issues
Whether cash deposits in bank accounts, claimed as agricultural income from mango sales, were adequately explained by the assessee with supporting evidence, and if the addition sustained by the Ld.CIT(A) was justified.
Sections Cited
250, 139(1), 148, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
Assessment Year: 2012-13 Mustak Rajjak Kapade, V The Income Tax Officer, C/o.Bipin Shaha, 1756, Jutica, s Ward-1,Ratnagiri. Teli Ali, Ratnagiri – 415612. PAN: BPZPK7653G Appellant/ Assessee Respondent / Revenue Assessee by Shri Anup Bipin Shaha – AR Shri Akhilesh Srivastava –Addl.CIT(DR) Revenue by Date of hearing 06/01/2025 Date of pronouncement 22/01/2025 आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by the assessee against the order of ld.Commissioner of Income Tax(Appeals)[NFAC] passed under section 250 of the Income-tax Act, 1961 for Assessment Year 2012-13; dated 27.02.2024. The Assessee has raised the following grounds of appeal :
1. The Ld.CIT(A) has erred in law & failed to appreciate the facts and circumstances of the case by confirming the addition of Rs.4,00,000/- pertaining to cash deposits in the month of October,
2011 and such addition made by Ld.AO is merely on basis of guess work and surmise. The Ld.CIT(A) and the Ld.AO erred in appreciating the explanation furnished by the assessee in respect of such cash deposit and made an addition which is against the provisions and spirit of the Act. The said addition be deleted and the assessee be granted just and proper relief in this respect.
The appellant craves to add, delete, alter, modify any of the grounds of appeal.”
Submission of ld.AR : 2. Ld.AR for the Assessee filed a paper book and submitted that assessee had received the said cash on account of sale of mangoes. Assessee had explained these facts before Assessing Officer as well as ld.CIT(A). Ld.AR produced copies of the bills to demonstrate that it was on account of sale of mangoes. Ld.AR pleaded that therefore, additions need to be deleted. Ld.AR filed copies of 7/12 extract.
Submission of ld.DR : 3. Ld.DR for the Revenue relied on the order of Assessing Officer and ld.CIT(A).
Findings & Analysis :
We have heard both the parties and perused the records. Admittedly, assessee had not filed Return of Income for the A.Y.2012-13 under section 139(1) of the Act. Assessee filed Return of Income only after issue of notice under section 148 of the Act. In the return of income, assessee declared agricultural income of Rs.5,36,820/- and Income of Rs.1,00,670/-. The Assessing Officer had received information regarding deposits of the Assessee in the bank. The Assessing Officer collected the copies of the bank statements from the Bank. Then based on the bank statements the Assessing officer in para 6 noted that the assessee had deposited Rs. 7,70,000/-during FY 2011-12 and there were Time Deposits totalling to Rs. 14,00,000/-. After considering the assessee’s submission, AO made an addition of Rs.19,26,464/-. Assessee filed appeal before ld.CIT(A). Ld.CIT(A) held that the Time deposits were pertaining to years prior to FY 2011-12 hence cannot be taxed in AY 2012-13 as the Assessing Officer in the Assessment Order has specifically mentioned date of Initial Deposit which was pertaining mainly to FY 2005-06,2006-07. Ld.CIT(A) sustained the addition of Rs.4,00,000/- only. The relevant paragraph of ld.CIT(A) is as under :
“The submissions of the appellant are perused. The Assessee is having four savings bank accounts with Bank of India (as could be seen vide para no.3 of show cause notice dated 28.11.2019). The total cash deposits made in the all the bank accounts maintained with Bank of India during the FY 2011-12 relevant to AY 2012-13 was Rs.9,70,000/-. The appellant has already shown agricultural income of Rs.5,36,820/- for the year under consideration and has claimed that the cash deposit of Rs.4,00,000/- made on 19.10.2011 in the Account No.141410100008941 is summation of agricultural produce which he received from his debtors from time to time during the period July, 2011 to March, 2012, as this business involves credit system too. Even considering the appellant’s argument that the deposit of Rs.4,00,000/- was out of cumulative agricultural produce as true, still the appellant is not in a position to explain the sources for balance cash deposits of Rs.4,33,180/- (Rs.9,70,000 minus Rs.5,36,820) made in other three bank accounts.
In view of the above discussion, the addition of Rs.4,00,000/- u/s 69A is sustained and this ground is dismissed.”
It is observed that Assessee had filed copies of the 7/12 extract which is the Revenue Record, to demonstrate that assessee is an agriculturalist and as per 7/12 extract, the crop shown is Mango. Assessee has filed copies of 7/12 extract showing mango crop from F.Y.2007-08 to 2013-14. Assessee has also filed copies of the bills issued by various wholesale fruit merchants pertaining to the F.Y.2011-12 to demonstrate that assessee had received cash during the period from sale of Mangoes. These facts have not been disputed by ld.CIT(A). Ld.CIT(A) in the para 5.2 which we have already reproduced has stated that cash deposits were Rs.9,70,000/- , but agricultural income shown is Rs.5,36,820/-, hence, ld.CIT(A) confirmed the addition of Rs.4,00,000/-. However, ld.CIT(A) erred in not appreciating the fact that agricultural income of Rs.5,36,820/- shown by the assessee in the Return of Income is the Net Income after expenditure. Therefore, the Gross Receipts will obviously be more than Rs.5,36,820/-. Ld.CIT(A) has also stated that cash deposit was Rs.9,70,000/-. However, it is observed that as per assessment order, the cash deposits were Rs.7,70,000/-, out of which the AO made addition of Rs.6,00,000/-. In these facts, there is an apparent error in the calculation of the ld.CIT(A). However, we have already mentioned that agricultural income shown by the assessee in the Return of Income is Rs.5,36,820/- which is Net Income. The assessee has filed copies of the bills which total approximately Rs.6,34,147/-. Neither Assessing Officer, nor ld.CIT(A) has doubted these bills. Thus, assessee has filed evidence to support the claim. In these facts and circumstances of the case, we are of the opinion that the Ld.CIT(A) has erred in sustaining the addition of Rs.4,00,000/-, accordingly we direct the AO to delete the addition. Accordingly, grounds of appeal raised by the assessee are allowed.
In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 22nd January, 2025.