PRABHAT MISHRA, DELHI,DELHI vs. ITO, WARD-4(1), RAIPUR, RAIPUR

The captioned appeal preferred by the assessee emanates from the order of the Ld.CIT(A)/NFAC, Delhi dated 25.06.2025 for the assessment year 2017-18 as per the following grounds of appeal:

The grievance of the assessee in this appeal is two-fold as appearing in the aforestated grounds of appeal Nos. 2 and 3.

A direction was given to the Ld. Sr. DR to procure a report from the AO on this issue and the Ld. Sr. DR submitted the said report before this Bench dated 02.12.2025, wherein the AO writes as follows:

Ld. Sr. DR fairly supported the findings of the jurisdictional AO and submitted that as examined by the office of the AO everything was found correct with regard to opening cash balance of Rs.6,16,285/-.

That as discernable from the aforestated report of the AO, he has examined the assessee’s documents i.e. cash flow statement, books of accounts, agricultural receipts/documents furnished by the assessee and all of them had been thoroughly examined and found to be correct. Hence, there remains no dispute that the opening cash balance of Rs.6,16,285/- is correct and it had been brought forward from earlier year. Accordingly, the findings of the CIT(A)/NFAC on this issue is set-aside and the AO is directed to delete the addition from the hands of the assessee while providing appeal effect of this order. Ground No. 2 is allowed.

The assessee vide ground No.3 of appeal has contended that the Ld. CIT(A)/NFAC was not correct in restricting his agricultural income at Rs.2,70,000/- on estimate basis ignoring the land records, Rin Pustika and sale bills of agricultural produce which were already submitted by the assessee before the Department. Ld. CIT(A)/NFAC on this issue held and observed as follows: “8.11 The appellant has filed evidence for land holding i.e. (1) alnd record showing 14.175 acres of land at Janta held by Sri Prabhat Mishra (2) land record The appellant has filed evidence for land holdings .c. (1) land record showing 2.8 acres of land at Baharbode held by Sri Prabhat Mishra (3) land record showing 5.5 acres of land at Java held by mother Smt. Surya Kumari Mishra, The 05.05.2016, 11.07.2016, 28.09.2016 and 03.10.2016 for Rs 2,25,000/-, Rs 2,13,200/-appellant has also filed copies of sale bills of agricultural produce dated 7.04.2016, Rs 1,56,800/-, Rs 2,08,000/- and Rs 1,98,400/-respectively. Thus, sale bills for Rs 10,01,400/- has been produced by appellant. However, no details with regard to agricultural expenditure incurred have been furnished. It can not be a case where agricultural income is earned without incurring any expenditure. Therefore, entire sale proceeds cannot be considered to have formed source for cash deposits in the bank account. Further, in cash book reproduced above, the appellant has not recorded any expenditure incurred in cash for carrying out agricultural operations except Rs 2,985/- on 11.07.2016. It is not the case of the appellant that entire agricultural expenditure is incurred through banking channel which is not possible also because of nature of activity. Such complete absence of recording of expenditure towards agricultural operations and also for household expenditure in cash book filed for the year raises questions regarding authenticity of cash book prepared and furnished by appellant, consequently cash

That vide aforestated finding, the Ld. CIT(A)/NFAC determined the net agricultural income in the hands of the assessee at Rs.2,70,000/- against the claim of the assessee that he was having agricultural income at Rs.11,00,996/-, accordingly the Ld. CIT(A)/NFAC had added Rs.8,30,996/- as un-explained cash deposits in the hands of the assessee.

Similarly, Ld. Sr. DR as directed by this Bench had obtained a report from the AO dated 02.12.2025 and submitted that said agricultural income of Rs.11,00,996/- has been verified from the documents furnished by the assessee i.e. Rin Pustika, Mandi Receipts etc. and therein it did reflect cultivation of own land. That on the basis of the said documents, the said agricultural income of Rs.11,00,996/- was found to be correct and no questions are raised. The relevant para of the said report is extracted as follows: “The Agricultural income of Rs.11,00,996/- which is provided by JCIT-DR has been verified from the documents supported by Rin Pustika, Mandi Receipts etc. which is reflecting the cultivation of own lands. On the basis of the above documents, it is found to be correct and no questions are raised.”

That on careful consideration of the documents placed on record on this issue, it is discernable that the AO himself admitted as per the documents furnished on record by the assessee regarding genuineness of the agricultural income in the hands of the assessee to the tune of Rs.11,00,996/- during the year under consideration. The assessee had provided Rin Pustika, Mandi Receipts which were thoroughly examined by the AO and found to be genuine. Therefore, the findings of the Ld. CIT(A)/NFAC that Rs. 8,30,996/- of the cash deposits are un-explained, such conclusion is not correct, hence, arbitrary and based on wrong assumptions. The order of the CIT(A)/NFAC is therefore, set-aside and the AO is directed to delete the said addition from the hands of the assessee while providing appeal effect of this order. Ground No. 3 is allowed.

Rest of the grounds are only supportive of these two effective grounds i.e. Ground Nos. 2 and 3, hence, Grounds No. 1, 4 and 5 remains academic only.

As per the aforesaid terms, the grounds of appeal by the assessee stands allowed.

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