INCOME TAX OFFICER, WARD-7(2), JAIPUR, JAIPUR vs. DARSHIT PATEL, JAIPUR

2.2 Whereas the grounds appeal raised by the revenue in appeal No. 929/JP/2024 for assessment year 2013-14 reads as follows:

“(1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of cash deposits of Rs.1,65,71,200/- and other deposits of Rs. 26,84,360/- (out of total addition of Rs.3,29,51,200/-) made by the AO on account of unexplained money u/s 69A of the Act as the assessee could not explain nature and source of such amount in absence of return of income for the year under consideration. (2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has not justified in restricting the profit at the rate 8% of the total amount of cash deposits and credit entries in his bank account amounting to Rs.1,92,55,560/- as the business of the assessee has not been established. (3) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has not justified in treating the eligible business u/s 44AD of the Act at the rate of 8% of the quantified turnover of Rs.1,92,55,560/- which exceeded prescribed limit u/s 44AB of the Act and the assessee failed to get his accounts audited and no return of income had been filed for the year under consideration. (4) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the facts that the assessee produced agreements of farmers which were notarized 10 years later and did not produce any bills and vouchers to prove sale or purchase. Hence, the receipts of Rs.1,92,55,560/- constitute undisclosed income from undisclosed sources u/s 69A of the income- tax Act, 1961.”

3. First, we take up the appeal of the revenue in ITA no. 929/JP/2024.

Record reveals that the assessee is an Individual and has not filed his return of income for the year under consideration i.e. AY 2013-14. As per the information available through Actionable Information Monitoring System [AIMS], the revenue noted that the assessee deposited cash of Rs.3,29,51,200/- in his bank accounts maintained with HDFC Bank Ltd. As the assessee has not filed his return of income ld. AO was of the view that the said amount remained unexplained. The ld. AO drawn that view JAO. Based on that Assessing Officer had reason to believe that income chargeable to tax has escaped assessment within the meaning of the provisions of clause (a) of Explanation 2 to section 147 of the Income Tax Act, 1961. The necessary approval of the prescribed Authority in terms of the provisions of sub-section (1) of section 151 of the Income Tax Act, 1961 was obtained and notice u/s 148 was issued on 30/03/2021. The assessee has not furnished any return of income in response to the notice issued U/s 148 also. The assessee has not filed any return of income in response to notice u/s 148 of the IT Act, 1961 issued. The case was transferred to Faceless Assessment Unit through NeFAC on 08.12.2021.

Again notices u/s 142(1) of the IT Act, 1961 were issued on 16.11.2021 and 01.02.2022 asking assessee to submit details/documentary evidence for sources of such cash deposit. The assessee has not filed any submissions in response to notice u/s. 148 and notices u/s 142(1) of the Act, so issued. The assessee was given ample opportunities during the scrutiny proceedings but failed to furnish any explanation along with documentary evidence regarding the sources of deposits to the bank account. Therefore, the Assessing Officer was constrained to pass the records.

Record reveals that the assessee has deposited cash in bank account maintained with HDFC Bank Ltd., to the tune of Rs.3,29,51,200/- during FY 2012-13 relevant to AY 2013-14. The assessee was asked to furnish explanation and documentary evidence in respect of sources of such cash deposit. The assessee has not filed any reply. In the absence of a reply, the deposit amount of Rs. 3.29,51,200/- was treated as unexplained money u/s 69A of the Act and added as income in the hands of the assessee and taxed as per the provisions of section 115BBE of the IT Act, 1961. Accordingly, the total income of the assessee is computed as under:-

Returned income of the assessee: Rs. Nil/- Add: Addition Rs.3,29,51,200/- Total Assessed Income: Rs.3,29,51,200/-

4. Aggrieved from the order of the National Faceless Assessment Center, assessee preferred an appeal before ld. CIT(A), NFAC. Apropos to the grounds raised by the assessee the relevant finding of ld. CIT(A), NFAC is reiterated here in below:

“8. Decision 8.1 In view of the detailed discussions made above, addition of Rs. 3,29,51,200/- as unexplained money is not maintainable. During the course of appeal proceedings, the appellant was asked to submit copies of purchase invoices and the ledger account in support of the purchases made. However, the appellant failed to produce such evidences. The reply given by the appellant is as under:-

8.2 Without verifying such evidences, the claim of the appellant that he receives only 1% as profit on the total turnover/sales is not acceptable. The AO is directed to quantify 8% as the profit in accordance with section 44AD of the IT Act. For the purpose of quantifying the total turnover, the AO is directed to verify the Bank Accounts referred by the appellant in his return submissions.

9. As a result, the appeal is partly allowed.”

revenue and that of the assessee challenges that order before this tribunal on the grounds as reiterated herein above. Both the parties supported the order of the lower authority as favorable to them.

6. The assessee in support of the appeal so filed in & 929/JPR/2024 supported the grounds so raised by filling a detailed written submission for his appeal and for the revenue appeal he also supports the order of ld. CIT(A) based on the written submission which reads as under :

FACTS OF THE CASE

1. The Assessee is an individual. The Assessee was engaged in the business of trading fruits, more particularly fresh grapes. The grapes are highly perishable in nature and weather sensitive; the transportation causes deterioration in quality. Therefore, in normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration so received was deposited in bank accounts after keeping a fixed margin of 01% of the sale consideration; the balance amount was paid through account pay cheques or drafts to the farmers.

2. During the relevant assessment year, the assessee's income was below the basic taxable income. The assessee has not reviewed the other provision of the Income Tax Act and has his own limited verse that he has not an income above the basic limit. Therefore, he has not filed a return of income for the year.

& 929/JP/2024 Darshit Patel vs. ITO 3. The LD assessing officer, based on the information available through Actionable Information Monitoring Systems (AIMS), that during the year under consideration, the assessee has deposited cash of Rs 32,951,200/- in his bank accounts maintained in HDFC Bank. which remained unexplained. besides, the assessee neither filing his return of income nor making compliance to the letter issued by the JAO, as per the assessment order... Page .. 01

4. Therefore, the LD Assessing Officer issued notice U/s 148 of the Income Tax Act 1961 on dated 30/03/2021 and after that issued notices U/s 142(1) of the Income Tax Act 1961. The issued notices were not served/received by the assessee, thus they remained non-complied by the assessee.

6. The assessee did not give a reply to the notice issued by the ld. assessing officer. Therefore, the ld. Assessing Officer passed an order under section 147 r.s.w. 144 of the Income Tax Act 1961 dated 30/03/2022, with the assessed total income of Rs 3,29,51,200/- treated as cash deposited of Rs 32951200/- in HDFC Bank Accounts as unexplained money under section 69A of the Income Tax Act 1961.

9. The Assessee, before the Ld CIT(A) Appeal, submitted that 9.1 The AO received information from AIMS that the appellant deposited cash of Rs 32951200/- in a bank account during the year under consideration. On this basis only the assessment was passed ( PB … Order Pg 4)

9.2 A summary of cash deposited into the bank accounts during the relevant previous year and also copies of both bank accounts and relevant bank ledgers, which support that the appellant deposited total cash of Rs 16571200/- and not Rs 32951200/- as alleged by the AO and even aggregate deposits, i.e., cash and others, are only Rs 19255560/-, which is also far below the alleged amount of Rs 32951200/-

Cash Other Deposi Deposi Bank Account No. ts ts Total HDFC 9872320000399 11,471,200.00 2,173,360.00 13,644,560.00 HDFC 9872000001902 5,100,000.00 511,000.00 5,611,000.00 16,571,200.00 2,684,360.00 19,255,560.00

9.3 Thus, it is very clear that before recording the reason for reopening the assessment, the OA did not gather bank statements and merely proceeded on the basis of information available through AIMS. The very basis for reopening of assessment, i.e., cash deposit of Rs 32951200/-, is wrong; therefore, the reopening based on this cannot stand at all. ( PB … Order Pg 4)

9.4 The AO simply based on the information through AIMS passed an order, and the AO did not carry out the proper procedure. There is no independent application of mind on the part of the assessing officer while recording the reasons for reopening; merely placing a figure provided by AIMS for recording reasons is impermissible. ( PB … Order Pg 5)

9.5 The Assessee in view of none of the notices being received, the appellant could not submit any documents before the AO. The appellant has no intention of cooperating in the assessment processing. Therefore, the appellant prayed under Rule 46A of the Income Tax Rules and furnished all the documents before the Hon’ble CIT(A) and requested to accept the additional evidence for the act with kindness; the appellant will remain grateful forever.

9.6 On the prayer made to admit the details under Rule 46A of the Income Tax Rules

9.6.1 The Ld CIT(A), filed a written submission along with additional evidence that were forwarded to the AO calling for a remand report vide letter dated 26/12/2023.

9.6.2 The LD AO did not respond to the call for the remand report; the LD CIT(A) filed reminders dated 1) 09/01/2024 2) 23/01/2024 3) 21/02/2024 4) 06/03/2024 and 5) 18/03/2024

On the above request, ld AO vide letter 01/04/2024, he requested that due to the heavy workload of time-barring cases, he requested 15 more days to submit the Remand Report.

9.6.3 On Again, no response up to 15/04/2024, another letter was issued to AO with the request to submit the remand report on or before 30/04/2024; however, the ld AO did not send the remand report to the ld CIT(A). ( PB … Order Pg Mo 11)

10 The Ld CIT(A) admitted the additional evidence filed by the assessee appellant. With the finding on para no. 7.2, page no. 12 of the order

7.2 The appellant claimed in the written submissions that the notices were issued to wrong email id and hence he prayed for admitting additional evidences under Rule 46A of IT Rules. In view of the detailed discussions made above, the additional evidences are admitted as the appellant demonstrated sufficient cause that had prevented him from producing the evidences to the AO.

11 FINDING OF LD CIT(A)

At para no 8 of page no 12 of 14

Decision: 8.1 In view of the detailed discussions made above, addition of Rs.3,29,51,200/- as unexplained money is not maintainable.

During the course of appeal proceedings, the appellant was asked to submit copies of purchase invoices and the ledger account in support of the purchases made. However, the appellant failed to produce such evidences.

8.2 Without verifying such evidences, the claim of the appellant that he receive only 1% as profit on the total turnover/sales is not acceptable. The AO is directed to quantify 8% as the profit in accordance with section 44AD of the IT Act. For the purpose of quantifying the total turnover, the AO is directed to verify the Bank Accounts referred by the appellant in his return submissions.

Ground No.: 1 (Department)

On the facts and in the circumstances of the case and in law , the ld CIT(A) has erred in deleting the addition of cash deposit of Rs 16571200/- and other deposits of Rs 2684360/-( out of total addition of Rs 32951200/-) made by the AO on account of unexplained money u/s 69A of the Act as the assessee could not explain nature and source of such amount in absence of return of income for the year under consideration.

AO Page 2 of 3 CIT(A) Page 11-13, Findings at para 7.1 and 7.2 of the order

Facts:- 1. The Assessee is an individual. The Assessee was engaged in the business of trading fruits, more particularly fresh grapes. The grapes are highly perishable in nature and weather sensitive; the transportation causes deterioration in quality. Therefore, in normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration received was deposited in bank accounts after keeping a fixed margin of 01% of the sale consideration; the balance amount was paid through account pay cheques or drafts to the farmers.

2. The LD assessing officer, based on the information available through Actionable Information Monitoring Systems (AIMS), that during the year under consideration, the assessee has deposited cash of Rs 32,951,200/- in his bank accounts maintained in HDFC Bank. which remained unexplained. besides, the assessee neither filing his return of income nor making compliance to the letter issued by the JAO, as per the assessment order... Page .. 01

3. The AO has, in the absence of a non-filed reply by the assessee. The cash deposit of Rs. 3,29,51,200/- is treated as unexplained money u/s 69A of the I T Act, 1961 and added as income in the hands of the assessee and taxed as per the provisions of section 115BBE of the I T Act, 1961.

SUBMISSION :-

1 The assessee has submitted a detailed submission before the ld CIT(A). That 1.1 The assessee was engaged in the business of trading fruits, more particularly fresh grapes in the year relevant, and the grapes are highly perishable in nature and weather sensitive; transportation causes deterioration in quality. Therefore, in normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration received was deposited in bank accounts after keeping a fixed margin of 01% of the sale consideration; the balance amount was paid through account pay cheques or drafts to the farmers.

1.2 The assessee has submitted that he has maintained two bank accounts in HDFC Bank, and he also submitted copies of both the bank statements and copies of ledger accounts to the ld CIT(A). which establishes that the assessee has deposited a total amount of Rs 1,92,55,560/- (Out of it, CASH Rs 1,65,71,200/- and Other Receipts of Rs 2,684,360/-).

1.3 It is further submitted that the ld CIT(A) called for a remand report and thus forwarded the assessee's written submission along with additional evidence fled by the assessee vide letter dated 26/12/2023, and even after six (6) reminders, despite the Ld CIT(A), no remand report was submitted (Order Page No. 11, pra no. 6.2 of the order).

1.4 The Ld AO, during the making of an assessment, merely relived the information available through Actionable Information Monitoring Systems (AIMS) only, and he did not make any independent inquiries from the bank that the information has been received in a correct manner or not. Besides the fact, the assessee had not deposited such amount as the AO order in the bank account. On the facts, the A O has not followed the procedure required to be followed to make the assessment and merely to create demand made huge amounts added in the pass order . This is shown with the facts of the case that the addition made by the AO is bad in law.

In view of the above, the CIT(A) has rightly deleted the addition made by the AO, and thus the ground of the department be dismissed.

Ground No.: 2 (Department)

On the facts and in the circumstances of the case and in law, the Ld CIT(A) has not justified in restricting the profit at the rate 8% of the total amount of cash

CIT(A) Page 12-13, Findings at para 8.1 of the order

Facts:-

1. The assessee was engaged in the business of trading fruits, more particularly fresh grapes in the year relevant, and the grapes are highly perishable in nature and weather sensitive; transportation causes deterioration in quality.

2. In the normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration received was deposited in bank accounts after keeping a fixed margin of 01% of the sale consideration; the balance amount was paid through account pay cheques or drafts to the farmers.

3. The Assessee is submitted before the ld CIT(A) , details of goods received from the farmers as he was maintaining a purchased ledger in his books of accounts ( PB- Deppt-pages 47-49) “Annexure 5“ (… refer to Page No. 13 of 14 of the CIT(A) Order.

4. The Assessee also submitted that all the payments were made through an account payee cheque/ i.e., through banking channels only. The Assessee also submitted copies of ledger accounts of farmers, which were maintained in books of accounts before the CIT(A) via Annexure 6 with the submission.

5. The Assesssee also submitted that he had closed their business activities. Therefore, he is not in contact with many farmers, as almost 10 years have lapsed from the goods being received on an approval basis and were sold, year under relevant.

6. However, The Assessee tried hard to contact them and could get confirmatory affidavits from a few farmers regarding fruits given on approval by them, and copies of confirmatory affidavits along with agricultural revenue records of such farmers were furnished at Annexures 7 to 14 before the CIT(A).

7. In the affidavits filed by the farmers, it was confirmed that they have given fruit on an approved basis with a fixed margin of 01% of the sale consideration.

Submission:-

& 929/JP/2024 Darshit Patel vs. ITO 1. The assessee specifically admitted that he has closed the business activities and had been lapsed for 10 years and has not been in touch with the farmers and, to prove their business transactions, tried hard to contact them and could collect a confirmatory affidavit along with agricultural revenue records from farmers and was submitted before CIT(A).

2. The LD CIT(A) submitted all the documents submitted by the appellant for calling for a remand report. However, the AO has not given any responses despite seven reminders to the AO.

In view of the above, the CIT(A) has rightly accepted that the assessee was engaged in the business activities, and thus the ground of the department be dismissed.

Ground No.: 3 (Department)

On the facts and in the circumstances of the case and in law, the Ld CIT(A) has not justified in treating the eligible business u/s 44AD of the Act at the rate of 8% of the quantified turnover of Rs 1,92,55,560/- which exceeded prescribed limit u/s 44AB of the Act and the assessee failed to get his accounts audited and no return of income has been filed for the year under consideration. Facts

1. The assessee was engaged in the business of trading fruits, more particularly fresh grapes in the year relevant, and the grapes are highly perishable in nature and weather sensitive; transportation causes deterioration in quality.

2. In the normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration received was deposited in bank accounts after keeping a fixed margin of 01% of the sale consideration; the balance amount was paid through account pay cheques or drafts to the farmers.

3. The assessee's total income was below the basic taxable income, and his own limited verse is that he has not an income above the basic limit. Thus, he

Submission

1. The assessee has categorically stated that he has sold fruits on an approval basis with the fixed margin of 01% commission. The facts are that the appellant earned only Rs 191,000/- out of these transactions.

2. The Assesssee also submitted that he had been closed for their such year business activities, and he is not in contact with farmers from the goods being received on an approval basis and were sold, as almost 10 years had lapsed in the year under relevant.

3. However, to justify their business, modus operandi, and to prove their business transactions carried out in the year relevant. The assessee tried hard to contact the farmers, who had given goods on an approval and could get confirmatory affidavits from a few farmers regarding fruits given on approval by them, and copies of confirmatory affidavits along with agricultural revenue records of such farmers were furnished at Annexures 7 to 14 before the CIT(A).

4. In the affidavits filed by the farmers, it was confirmed that they have given fruit on an approved basis with a fixed margin of 01% of the sale consideration.

5. The assessee's total income was below the basic taxable income, and his own limited verse is that he has not an income above the basic limit. Thus, he has not filed a return of income for the year.

Ground No.: 4 (Department)

On the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in ignoring the facts that the assessee produced agreements of farmers which were notarised 10 years later and did not produce any bills and vouchers

Facts:- 1. The assessee was engaged in the business of trading fruits, more particularly fresh grapes in the year relevant, and the grapes are highly perishable in nature and weather sensitive; transportation causes deterioration in quality.

2. In the normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration received was deposited in bank accounts after keeping a fixed margin of 01% of the sale consideration; the balance amount was paid through account pay cheques or drafts to the farmers.

3. The Assessee is submitted before the ld CIT(A) , details of goods received from the farmers as he was maintaining a purchased ledger in his books of accounts ( PB- Deppt-pages 47-49) “Annexure 5“ (… refer to Page No. 13 of 14 of the CIT(A) Order.

4. The Assessee also submitted that all the payments were made through an account payee cheque/ i.e., through banking channels only. The Assessee also submitted copies of ledger accounts of farmers, which were maintained in books of accounts before the CIT(A) via Annexure 6 with the submission.

5. The Assesssee also submitted that he had closed their business activities. Therefore, he is not in contact with many farmers, as almost 10 years have lapsed from the goods being received on an approval basis and were sold, year under relevant.

6. However, The Assessee tried hard to contact them and could get confirmatory affidavits from a few farmers regarding fruits given on approval by them, and copies of confirmatory affidavits along with agricultural revenue records of such farmers were furnished at Annexures 7 to 14 before the CIT(A).

7. In the affidavits filed by the farmers, it was confirmed that they have given fruit on an approved basis with a fixed margin of 01% of the sale consideration.

Submission:-

& 929/JP/2024 Darshit Patel vs. ITO 1. The Assessee during the proceeding before the CIT(A) , has submitted evidence and requested to accept as an additional evidence under Rule 46A of the Act and on the assessee request

2. the ld CIT(A) called for a remand report and thus forwarded the assessee's written submission along with additional evidence fled by the assessee vide letter dated 26/12/2023,

3. The AO even after six (6) reminders from the CIT(A), No remand report was submitted (Order Page No. 11, pra no. 6.2 of the order).

In case of appellant the first and foremost condition, regarding money, bullion , Jewellery etc found fails as there is no money , bullion, Jewellery .

Further the second condition regarding furnishing explanation also fails as cash deposits are self-explanatory.

4.2 In view of the above , as none of the conditions lain down u/s 69A of the Act are fulfilled , no addition u/s 69A can be made.

5. The assessee has relied on the following judgments below to them: the ld CIT(A) also appreciated and deleted the addition made under section 69A of the IT Act, that section 69A is not maintainable. Further reliance is Placed on the following cases….. 1. Smt. Teena Bethala Vs Income Tax Officer, Ward – 4(3)(2), Bengaluru.

and 1384/Bang/2019, dated 28.08.2019 2. Smt. Gangambike, Vs The Income-tax Officer, Ward – 3[2][3], Bangalore. 07.12.2018 3. Dy Commissioner of Income Tax Act Vs Kartihik Contruction Co. Mumbai… ITA no.2292/Mum./2016… 23.02.2018

6. The Ld CIT(A) deleted the addition by giving the following findings:- (Page No 12, Para No 7.1 and 7.2 of the order) :- “ 7.1 Upon perusal of the written submission, Ledger account, Bank Account statements, it is evident that treating a sum of Rs.3,29,51,200/- as unexplained & 929/JP/2024 Darshit Patel vs. ITO money u/s 69A of the IT Act is not maintainable. The appellant submitted the bank account statement. Upon perusal of the bank account copy, it is seen that it had both credits and debits. All the debit entries were through RTGS to various persons. The appellant maintained two bank accounts in HDFC and the total cash deposits were only Rs.1,65,71,200/- and the total credits were Rs.1,92,65,560/-. If so, from where the AO detected cash deposit of Rs.3,29,51,200/- could not be substantiated in spite of number of reminders issued. The assessment order was cryptic without having any analysis of the bank account. The entire sum of Rs.3,29,51,200/- was added on the basis of AIMS data without any further verification. 7.2 The appellant claimed in the written submissions that the notices were issued to wrong email id and hence he prayed for admitting additional evidences under Rule 46A of IT Rules. In view of the detailed discussions made above, the additional evidences are admitted as the appellant demonstrated sufficient cause that had prevented him from producing the evidences to the AO.” In view of the above CIT(A) has rightly accepted that as unexplained money u/s 69A of the Income Tax Act is not maintainable and thus the ground of the department be dismissed.

ASSESSEE GROUND The Ld. CIT(A), NFAC, has erred on facts and in law in ignoring the business activities of the assessee. The assessee is engaged in business activities in brokering and artiya of fruits, particularly fresh graphs on sale on approval, and keeping a fixed margin of 1% on the purchase of said transactions. Considering trading activities, the Ld CIT(A), NFAC, quantified a profit of Rs 1540450/- at 8% on Rs 19255660/- under Section 44AD of the Income Tax Act of 1961, in contrast to brokerage receipts of Rs 191000/-.

CIT(A) Page 13, Findings at para 8.2 of the order

Facts

1. The assessee was engaged in the business of trading fruits, more particularly fresh grapes in the year relevant, and the grapes are highly perishable in nature and weather sensitive; transportation causes deterioration in quality.

2. In the normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration received was deposited in bank accounts after

3. The Assessee is submitted before the ld CIT(A) , details of goods received from the farmers as he was maintaining a purchased ledger in his books of accounts ( PB.47-49) “Annexure 5“ (… refer to Page No. 13 of 14 of the CIT(A) Order.

4. The Assessee also submitted that all the payments were made through an account payee cheque/ i.e., through banking channels only. The Assessee also submitted copies of ledger accounts of farmers, which were maintained in books of accounts before the CIT(A) via Annexure 6 with the submission.

5. The Assesssee also submitted that he had closed their business activities. Therefore, he is not in contact with many farmers, as almost 10 years have lapsed from the goods being received on an approval basis and were sold, year under relevant.

6. However, The Assessee tried hard to contact them and could get confirmatory affidavits from a few farmers regarding fruits given on approval by them, and copies of confirmatory affidavits along with agricultural revenue records of such farmers were furnished at Annexures 7 to 14 before the CIT(A).

7. In the affidavits filed by the farmers, it was confirmed that they have given fruit on an approved basis with a fixed margin of 01% of the sale consideration.

SUBMISSION

2. The Assesssee also submitted that he had been closed for their such year business activities, and he is not in contact with farmers from the goods being received on an approval basis and were sold, as almost 10 years had lapsed in the year under relevant.

3. However, to justify their business, modus operandi, and to prove their business transactions carried out in the year relevant. The assessee tried hard to contact the farmers, who had given goods on an approval and could get

confirmatory affidavits from a few farmers regarding fruits given on approval by them, and copies of confirmatory affidavits along with agricultural revenue records of such farmers were furnished at Annexures 7 to 14 before the CIT(A).

4. In the affidavits filed by the farmers, it was confirmed that they have given fruit on an approved basis with a fixed margin of 01% of the sale consideration.

5. Thus, based on the issue affidavit and submitted their agricultural revenue records of farmers, they were confirmed that they had sold fruits on approval with a fixed margin of 01%, thus considering the cost, the appellant earned only Rs 191,000/- out of these transactions in the relevant year.

Therefore, the quantified a profit of Rs 1540450/- at 8% on Rs 19255660/- under Section 44AD of the Income Tax Act of 1961, in contrast to brokerage receipts of Rs 191000/-.

7. To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions:

S. No Page No. Assessment Order dated 30/03/2022 1-3 1

4-17 2. CIT(A) Order Dated 15/05/2024

3. Written submission filed before CIT(A) -01 18-26 Written submission filed before CIT(A) -02 4 27 Written submission filed before CIT(A) -03 5 28 6 Copies of Bank Statements

6.1 HDFC Bank Account No. 09872320000399 29-30 31-32 6.2 HDFC Bank Account No. 09872000001902

Copy of Ledger Account of Bank in Books 7

7.1 HDFC Bank Account No. 09872320000399 33-35 7.2 HDFC Bank Account No. 09872000001902 36

Affidavits of Farmers along with Land Revenue Records of 8 Framers 8.1 Suresh Sahebrao Dwange 37-46 47-52 8.2 Sanjay Vishnudas Bairagi 53-61 8.3 Anil Sahebrao Uphade 62-72 8.4 Dinkar Punja Lahtikar 73-81 8.5 Raghunath Dgu Waghcore 8.6 Dashrath Shriram Ufade 82-90 8.7 Vilas Dhondiram Jadav 91-97 8.8 Somnath Kishanrao Padol 98-108

8. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the finding of the ld. CIT(A) while estimating the profit has not seen the nature of business and as regards the appeal of the revenue he submitted that the ld. CIT(A) has considered all the evidence placed before him and therefore, there is no merits in the appeal of the revenue. Even the revised limit of filling the appeal by the revenue is raised to Rs. 60 lac and in the present appeal the tax effect is 56,49,070/- the same is also required to be dismissed as withdrawn based on the CBDT Circular No. 09/2024 dated 17.09.2024.

Ld. DR also filed the following evidence in support of the contentions so raised ;

Page Nos. Sr. No Description 1 to 3 1. Brief Facts of the case

4 to 13 2. Communication during Assessment Proceedings 14 to 20 3. Assessment Order, Computation & Demand notice 21 to 38 4. Written submissions by Assessee before ld. CIT(Appeals)

39 to 42 5. HDFC Bank Account Statements 43 to 46 6. HDFC Bank Book 47 to 49 7. Purchase Ledger 50 to 104 8. Party Ledgers 105 to 143 9. Affidavits of Farmers along with Land Documents

Vide ground no. 3 revenue challenges the action of ld. CIT(A) in considering the business of the assessee as eligible business u/s 44AD of the Act at the rate of 8% of the quantified turnover of Rs.1,92,55,560/- which exceeded prescribed limit u/s 44AB of the Act and the assessee failed to get his accounts audited and no return of income had been filed for the year under consideration and finally vide ground no. 4 ld. AO challenges that the assessee produced agreements of farmers which were notarized 10 years later and did not produce any bills and vouchers to prove sale or purchase.

Hence, the receipts of Rs.1,92,55,560/- constitute undisclosed income from undisclosed sources u/s 69A of the income-tax Act, 1961.

Record reveals that out of total credit as alleged by ld. AO for Rs.

3,29,51,200/- the actual credit is Rs. 1,92,55,560/- based on the evidence placed on record and even that fact is not disputed by the revenue. Now so far as the credit of Rs. 1,92,55,560/-, the assessee placed on record admitted and after admitting the same were forwarded to AO for his comments. This remand report was called for vide letter dated 26.12.2023 and the reminder was given on 09.01.2024, 23.01.2024, 21.02.2024, 06.03.2024 and 18.03.2024. Vide letter dated 01.04.2024 the ld. AO sought time for 15 days which was also granted however ld. CIT(A) did not received it by 30.04.2024 and ultimately order was passed on 15.05.2024 considering the additional evidence placed on record. Thus, the ld. CIT(A) has duly considered the submission of the assessee and taken a view that whole credit cannot be considered as income of the assessee for an amount of Rs. 1,92,55,560/- and thereby considering the nature of the business conducted by the assessee ordered to considered the income @ 8 % on the turnover. Thus, the finding of the ld. CIT(A) is in appreciation of the additional evidence placed on record and ld. AO did not comment on that record in the remand proceeding and the proceeding carried out before this tribunal placing on record any contrary material and therefore, we do not find any merits in the grounds raised by the revenue and therefore ground no. 1 to 4 raised by the revenue stands dismissed.

929/JP/2024 is dismissed.

Considering trading activities, the Ld CIT(A), NFAC, quantified a profit of Rs 15,40,450/- at 8% on Rs 1,92,55,660/- under Section 44AD of the Income Tax Act of 1961, in contrast to brokerage receipts of Rs 1,91,000/-.

On this aspect of the matter, we note that the ld. CIT(A) has considered the overall evidence placed on record under rule 46A of the Act and we do not find any reasons that when the other fact of the case is considered based on the affidavit then why the income component which is supported by affidavit cannot be considered. Ld. AO in possession of all the information has not disputed the fact stated in the affidavit and therefore we see no reason to compute the income @ 8 % when the assessee has produced the third party evidence in the form of affidavit in support of contention of income in the hands of the assessee. Based on that fact stated in the appeal of the assessee is allowed.

In the result appeal filed by the assessee stands allowed and that of the revenue stands dismissed.

Order pronounced in the open court on 03/06/2025.

Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 03/06/2025 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Darshit Patel, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Ward-7(2), Jaipur vk;dj vk;qDr@ The ld CIT 3. vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File (ITA Nos. 957 & 929/JP/2024) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत