DINESHBHAI MANIBHAI PATEL,ANAND vs. THE ITO, WARD-2, ANAND

We have gone through the orders of the authorities below. We have noted that the assessee’s justification of the cash deposit in his bank account was agricultural income earned by him. To justify the same, he submitted copies of revenue records reflecting his land holding of agricultural land. He had also submitted copies of invoices of sale of agricultural produce and the assessee also had submitted that cash deposited in subsequent year i.e. A.Y. 2013-14 was of more than Rs.10 Lakhs which was accepted by the AO in scrutiny assessment. The AO disbelieved the assessee’s explanation stating that mere ownership of land would not establish the sale of agricultural produce and also noted that verification conducted by him by issuing notices to the parties to whom the assessee had allegedly sold agricultural produce, by issuing notices u/s.133(6) of the Act, had yielded no response.

The Ld. CIT(A), we have noted, accepted the fact of the assessee indulging in agricultural activities by accepting the veracity of sale bills furnished by the assessee as evidence, to the tune of Rs.8,62,000/-. Therefore, cash deposited to the tune of Rs.8,62,000/- in the bank account of the assessee stood accepted by the Ld. CIT(A) as sourced from agricultural income earned by the assessee. The balance was not agreed by him noting that the amounts deposited in the bank in cash did not tally with the bills.

We find that the order of the Ld. CIT(A) is completely arbitrary and based on his own whims and fancies. He has in principal accepted the fact of the assessee indulging in agricultural activities. He has accepted bills to the tune of Rs.8,62,000/- evidencing sale of agricultural produce as being genuine. The only reason for not accepting remaining bills as genuine is that the cash deposited in the bank account did not tally with the bills raised. This is an absolutely absurd reason for rejecting the veracity of the remaining bill. There may be any number of reasons for cash deposited in the bank account not tallying with the remaining bills. The assessee may have deposited cash after accumulation or for any other reason. Therefore, the reason given by the Ld. CIT(A) for rejecting the balance bills is arbitrary. With no other valid reason given for rejecting the balance bills and accepting the fact the assessee was indulging in agricultural activity, we find that the order of the Ld. CIT(A) confirming addition to the tune of Rs.4.90 Lakhs is not inconsonance with the facts of the case, more particularly when in succeeding years the assesses agricultural income to the tune of Rs.10 lacs stood accepted in scrutiny assessment. The addition, therefore, confirmed by the Ld. CIT(A) of Rs.4.90 Lakhs is directed to be deleted.

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