SHANTANU DURYODHAN RANANAWARE,SATARA vs. DCIT,CIRCLE, SATARA

The only grievance of the assessee is that Ld. CIT(A) erred in confirming the addition of Rs. 10,63,680/- made by the Ld. Assessing Officer (AO) for unexplained cash deposit towards undisclosed income.

At the outset Ld. Counsel for the assessee submitted that during the year under consideration there is cash deposit of Rs. 1,35,07,500/- The assessee offered income of Rs. 6,95,672/- under the Presumptive Taxation scheme. Based on which Ld. AO has accepted the source of cash deposit of Rs. 1,24,43,820/- He submitted that the alleged sum is basically out of cash withdrawn and deposited in the Bank during the year but in absence of proper details the assessee agrees to offer income @ 8% of the alleged cash deposit of Rs. 10,63,680/-

On the other hand Ld. Departmental Representative (DR) submitted that Ld. AO has examined the details filed by the assessee and has explained the source of cash deposits of Rs. 1,24,43,820/- and therefore the remaining amount is rightly been treated as undisclosed income and therefore finding of Ld. CIT(A) may please be confirmed.

I have heard rival contentions and perused the record placed before me. The assessee did not file any return of income for A.Y. 2015-16. Ld. AO based on certain information about cash deposits, interest income, investment in purchases of shares and receipt from sale of share, issued notice u/s 148 of the Act. In response assessee filed return of income declared income of Rs. 15,46,601/- During the course of assessment proceedings Ld. AO while examining the issue of cash deposit of Rs. 1,35,07,500/- found that the assessee has received contract receipts for undertaking agricultural developmental work from farmers on contract basis, land leveling, filling of better soil, digging work for pipelines, nalla, paneling work, etc. Based on the details filed in the return of income Ld. AO accepted the Presumptive income affirmed by the assessee under no account case and accepted the source of cash deposit of Rs. 1,24,43,820/- So far as the remaining amount of Rs. 10,63,680/-, the submissions of the assessee is that the alleged cash deposit is out of the cash withdrawn from bank account and are re-deposited. Ld. AO in absence of any documentary evidence has made the impugned addition for undisclosed income which has been subsequently affirmed by Ld. CIT(A).

I further find that when the major portion i.e. almost 92% of the total cash deposit in the bank during the year under consideration has been accepted out of business and related receipts, treated the remaining sum of Rs. 10,63,680/- as undisclosed income of the assessee is not justified. However since the assessee has not been able to place any evidence in the form of cash flow statement to prove that the alleged cash is out of the cash withdrawn from bank and are deposited, I deem it appropriate to treat the alleged sum as business receipt and calculate the income @ 8% under the presumptive taxation scheme at Rs. 85,095/- and partly allow the ground of appeal raised by the assessee. Accordingly addition of Rs. 85,095/- is sustained and remaining amount of addition at Rs. 9,78,585/- stands deleted. Grounds of appeal raised by the assessee is partly allowed.

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