SHRI PADAMRAJ SINGH DARRI, BEMETARA,BEMETARA vs. INCOME TAX OFFICER, WARD-KAWARDHA, KAWARDHA

That when the matter was called out for hearing, none appeared for the assessee, however, an adjournment petition had been filed, which is not admitted. The submissions of the Ld. Sr. DR are recorded and upon careful consideration of the documents on record, the matter is heard on merits.

The relevant facts at the time of assessment proceeding on the perusal of the balance sheet filed by the assessee, it was noted by the AO that the assessee had shown cash in hand of Rs.7,41,123/- and sundry debtors of Rs.2,25,240/-. Necessary notices were issued to the assessee asking him to furnish explanation on these issues. The assessee had filed written submissions along with evidences stating that he is a farmer having three acres of land wherein he has cultivated crops and seasonable vegetables. It was further submitted by the assessee that the cash in hand had been accumulated through savings of the assessee and for his daughter’s marriage he has kept that amount with him. Further, the assessee explained that sundry debtors was with regard to one local farmer Shri Moradwaj Verma, who had purchased Bamboo from him and an amount of Rs.2,25,400/- was outstanding against his name. The AO, not being satisfied further deputed an Inspector of the Department for physical verification of the contention made by the assessee. It is clearly evident from the assessment order that the Inspector writes in his report that indeed the assessee is an agriculturist having three acres of land and also he is having certain farm equipment for the necessary agricultural activities. That, inspite of all these, without any reasoning, the AO dismissed the claim of the assessee and added the cash in hand of Rs.7,41,123/- and sundry debtors of Rs.2,25,240/- to the total income of the assessee.

This is a case where the assessee is a farmer having three acres of land on which he is cultivating certain vegetables and other crops. He is also having various farm equipment necessary for cultivation. These facts are also akin to the report furnished by the Inspector of the Department to the AO. Regarding addition of cash in hand, the assessee, therefore, has explained of having such amount through savings from earning through agricultural activities and sales of produce. He had also submitted that he had kept that amount with him for the purpose of his daughter’s marriage and therefore, had not deposited the same in the bank account. The revenue has not brought any evidence to negate the contention of the assessee. In fact, the revenue accepts that the assessee is a farmer and his earning from agricultural activities. Therefore, having savings from such agricultural income cannot to be doubted in the hands of the assessee without any evidence on record placed by the revenue. The Department has also not stated that the assessee was having some unexplained source of income. That when it is accepted that the income of the assessee is only from the agricultural activities and farming, when the assessee has explained his source of income as well as that such amount he has accumulated and saved for his daughter’s wedding, when the Department has not brought on record any specific evidence to deny such contention of the assessee, in such circumstances, the addition of Rs.7,41,123/- in the hands of the assessee is arbitrary, bad in law and liable to be deleted. I order accordingly.

In view thereof, the order of CIT(A)/NFAC is set-aside and I direct the AO to delete the addition from the hands of the assessee while providing the appeal effect of this order.

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