SALVANTSINGH SWARUPSINGH PALLU,VADODARA vs. ITO, WARD 1(1)(1), VADODARA, VADODARA

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ITA 949/AHD/2025Status: DisposedITAT Ahmedabad02 September 2025AY 2011-12Bench: DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL (Judicial Member)6 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the assessee provided adequate documentary evidence, including land documents, cash book, bank statements, and family confirmations, to explain the sources of the deposits from agricultural income, transportation, dairy, son's savings, opening cash balances, and loan repayments. Since the Revenue Authorities had already accepted a portion of the agricultural income based on similar evidence, the Tribunal concluded there was no reason to disallow the remaining Rs.6,78,400/-.

What were the facts?

The assessee, engaged in agricultural and transportation businesses, did not file an Income Tax Return for AY 2012-13. Proceedings under Section 147/148 were initiated due to cash deposits of Rs.18,77,600/- in bank accounts. The Assessing Officer accepted part of the agricultural income but treated Rs.6,78,400/- as unexplained investment under Section 69, which the CIT(A) upheld due to non-compliance by the assessee.

What were the issues?

Whether cash deposits in bank accounts, explained by agricultural income, family income, past savings, and loan repayments, can be treated as unexplained investment under Section 69, especially when documentary evidence is provided and rural economic practices are relevant.

Which sections of the Income-tax Act were involved?

Section 69,Section 147,Section 148,Section 250

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

For Appellant: Shri Sanket Bakshi, AR
For Respondent: Shri Rajenkumar M. Vasavda, Sr DR
Hearing: 12.08.2025Pronounced: 02.09.2025

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER Salvantsingh Swarupsingh Pallu, The Income Tax Officer, Vs. A1, 204, Mangal Marvel Ward 1(1)(1), Apartment, Tarsali, Vadodara. Vadodara-390009 [PAN : ALQPP 5330 F] (Appellant) .. (Respondent) Appellant by : Shri Sanket Bakshi, AR Respondent by: Shri Rajenkumar M. Vasavda, Sr DR Date of Hearing 12.08.2025 Date of Pronouncement 02.09.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-

This appeal has been filed by the Assessee against the order dated 26.02.2025 passed by the Ld. ADDL/JCIT(A)-4, Chennai [‘Ld. CIT(A)’ for short], under Section 250 of the Income-tax Act, 1961 [‘the Act’ for short], relating to the Assessment Year 2012-13. 2. The assessee has raised the following grounds of appeal:

1. Ground No. 1: Erroneous Addition under Section 69 of the Income Tax Act, 1961 The learned Assessing Officer erred in law and on facts in treating the cash deposit amounting to Rs.6,78,400/- as unexplained investment under Section 69 of the Income Tax Act, 1961, without properly appreciating the evidences submitted regarding the availability of sources including agricultural Income, past savings, family income, and loan repayments. The learned CIT(A) further erred in upholding such addition without judicial application of mind and in violation of principles of natural justice Salvantsingh Swarupsingh Pallu Vs. ITO Asst. Year : 2012-13

2. Ground No. 2: Non-Consideration of Agricultural and Family Income Evidences The learned authorities below have failed to consider the cogent documentary evidences produced by the appellant, including land ownership records, certificate from village authorities confirming agricultural activities, confirmations from family members, and cash book reflecting agricultural and family income. The addition was made arbitrarily without disproving or rebutting the documentary evidences furnished by the appellant.

3. Ground No. 3: Disregarding Source from Past Savings and Loan Repayments The learned Assessing Officer and CIT(A) grossly erred in ignoring the fact that the cash deposits were partly sourced from past accumulated savings and loan repayments from third parties, duly supported by confirmations. The authorities failed to appreciate that accumulation of savings from agricultural and dairy activities over years is a reasonable and accepted phenomenon, especially in the case of a rural agriculturist family.

4. Ground No. 4: Violation of Principles of Natural Justice The learned CIT(A) erred in dismissing the appeal solely for alleged non-compliance with notices without affording adequate and meaningful opportunity of hearing, thereby violating the fundamental principles of natural justice. The appeal was adjudicated without evaluating the merits of the case and the evidences already on record.

5. Ground No. 5: Onus of Proof Not Properly Discharged by the Department The addition made under Section 69 presumes that the burden of proof was not discharged by the assessee. However, once primary evidences regarding source of cash were furnished, the onus shifted to the department to rebut the claim with cogent material, which has not been done. The addition made without disproving the appellant's explanation is unsustainable in law and facts Salvantsingh Swarupsingh Pallu Vs. ITO Asst. Year : 2012-13

6. Ground No. 6: Misapplication of Law and Ignorance of Established Judicial Precedents The authorities failed to apply the well-settled legal principles laid down by the Hon'ble Supreme Court and various High Courts that if the assessee provides a plausible explanation supported by documents, addition under Section 69 cannot be sustained. (Reliance placed on CIT P.K. Nourjahan (237 ITR 570 SC), Krishna Devi Vs. CIT (434 ITR 501 Del), Meghraj v. ITO (128) taxmann.com 404 (Raj).

7. Ground No. 7: Arbitrary Estimation and Ignoring Acceptable Rural Practices The authorities erred in not appreciating the rural economic practices where cash is retained for longer periods and not necessarily banked immediately. It is settled practice that in agriculturist families, income from agriculture, dairy and transport is often kept in cash, and sudden deposits in banks cannot be straightaway treated as unexplained.

8. Ground No. 8: General Ground The appellant craves leave to add, alter, amend, or withdraw any ground or to submit additional grounds at the time of hearing for better adjudication of the matter.”

3.

The brief facts of the case are that the assessee is an individual engaged primarily in agricultural activities, along with transportation business during the relevant year. The assessee also earns some interest income. The assessee did not file his return of income for the year under consideration. Based on information relating to cash deposits in two bank accounts i.e. State Bank of India and HDFC Bank, proceedings u/s. 147 of the Act were initiated and notice u/s. 148 was issued on 29.03.2019. In response, the assessee filed a return of Salvantsingh Swarupsingh Pallu Vs. ITO Asst. Year : 2012-13 income on 13.11.2019 declaring total income of Rs.1,18,860/- and agricultural income of Rs.1,60,020/- was also declared. The Assessing Officer, during assessment proceedings, noted cash deposits totaling Rs.18,77,600/- in the assessee’s two bank accounts. The Assessing Officer, after examination, accepted part of the agricultural income, but found that cash deposits of Rs.6,78,400/- remained unexplained. Accordingly, he added the said amount u/s. 69 of the Act, treating it as unexplained investment.

4.

The assessee filed appeal before the CIT(A). However, the Ld. CIT(A), noting non-compliance and lack of supporting documents, confirmed the addition made by the Assessing Officer and dismissed the appeal.

5.

Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

6.

Before us, the Ld. AR submitted that assessee is a farmer and engaged in agricultural activities. The Ld. AR submitted that the deposits were sourced from assessee’s agricultural income, transportation income, dairy income of his wife, agricultural income and savings of his son, opening cash balances, and repayment of loans given in the earlier year, for which the assessee had provided land documents, cash book, bank statements, confirmation letters from family members, and a certificate from the village sarpanch affirming agricultural activity before the Assessing Officer. Ld. AR submitted that while the Assessing Officer accepted agricultural income of Rs.5,00,000/-, he disallowed Rs.6,78,400/- on the grounds of Salvantsingh Swarupsingh Pallu Vs. ITO Asst. Year : 2012-13 insufficient documentary evidence, particularly regarding the cash balance and loan repayments.

7.

The Ld. DR, on the other hand, supported the orders of the authorities below.

8.

We have heard the rival contentions and perused the material available on record. We find that the arguments of the assessee have been accepted by the Revenue Authorities who have summarily allowed Rs.5,00,000/- based on the acceptance of the evidences that the deposits were sourced from assessee’s agricultural income, transportation income, dairy income of his wife, agricultural income and savings of his son. The assessee has shown opening cash balances, and repayment of loans given in the earlier year, for which the assessee has also provided land documents, cash book, bank statements, and confirmation letters from family members. Hence, keeping in view the entirety of the specific facts particular to this case, we find no reason to disallow Rs.6,78,400/- on the grounds of insufficient documentary evidence.

9.

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

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