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Facts
The assessee, an agriculturist and milk seller, deposited Rs. 10,57,700/- in cash during demonetization. The Assessing Officer added the entire amount under Section 115BBE, which the CIT(A) partly upheld, confirming 50% (Rs. 5,28,850/-) as unexplained money under Section 69A.
Held
The Tribunal found that the deposits were from milk sales and agricultural income, with no substantial increase compared to earlier years. Concluding that the CIT(A) was incorrect, the entire addition made by the Assessing Officer was deleted.
Key Issues
Whether the cash deposit made during demonetization, which the assessee attributed to income from milk sales and agriculture, could be treated as unexplained money under Section 69A of the Income Tax Act.
Sections Cited
144, 142(1), 115BBE, 69A, 139(9)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: DR. BRR Kumar & Shri T. R. Senthil Kumar
ITA No: 1920/Ahd/2024 Assessment Year: 2017-18 Mashrubhai Karnaji Income Tax Officer Rabari Ward-2, Palanpur 110 Shivalika Shopping Vs Palanpur Centre, Nr. Pashu Bazar Deesa, Banaskanth-385535 Gujarat PAN: AYNPR6666E (Respondent) (Appellant) Assessee Represented: None Revenue Represented: Shri S. K. Agal, Sr.D.R. Date of hearing : 24-04-2025 Date of pronouncement : 30-04-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against the appellate order dated 12.06.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the assessment order passed under section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18.
A.Y. 2017-18 Page No 2 Mashrubhai Karnaji Rabari. vs. ITO
The registry has noted that there is a delay of 68 days in filing the above appeal. The assessee explained that being an agriculturist not familiar with the online filing and not verifying email which has resulted in filing appeal belatedly by 68 days. Having satisfied with the reason, the delay is hereby condoned.
Brief facts of the case is that the assessee is an agriculturist and also engaged in selling of Milks. For the Asst. Year 2017-18, assessee has not filed his Return of Income, since there was no taxable income. During demonetization period, the assessee deposited cash amounting to Rs.10,57,700/- in his Dena Bank Account at Deesa Branch. Therefore the Assessing Officer issued notice u/s. 142(1) of the Act. In response, the assessee filed his Return of Income on 04-12-2019 declaring total income of Rs.1,80,930/- and agricultural income of Rs.30,284/-.
3.1 The assessee explained that the cash deposit in bank accounts is nothing but sale of milks to Cooperative Society and also produced bank statements, cash book and comparison cash deposit made in earlier years. However the Assessing Officer found it to be not explained satisfactorily, therefore made addition of Rs.10,57,700/- and demanded tax thereon u/s. 115BBE of the Act.
Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A), which was partly allowed by holding 50% of cash deposit was remained unexplained.
A.Y. 2017-18 Page No 3 Mashrubhai Karnaji Rabari. vs. ITO
Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal:
1. The Ld. CIT(A) erred in law as well as on facts in upholding an addition of Rs.5,28,850/- u/s. 69A, thereby treating entire cash deposited during demonetization as an unexplained money.
2. The Ld. CIT(A) erred in law as well as on facts in upholding an addition of Rs.5,28,850/- to returned income which is already been treated as invalid u/s.139(9) of the Act.
6. The assessee also filed a Paper Book containing the cash book and bank statements and other details. Perusal of the same makes it very clear that the deposits were made on account of sale of milks and agricultural income. There is no substantial increase in the cash deposits during demonetization period comparing with the earlier years. Thus the Ld. CIT(A) is not correct in holding 50% cash deposit as unexplained. Therefore the entire addition made by the Assessing Officer is hereby deleted.
In the result, the appeal filed by the Assessee is allowed.