RADHA RAMDIGESH MAPUSKAR,RATNAGIRI vs. INCOME TAX OFFICER, KOLHAPUR

ORDER

PER DR. DIPAK P. RIPOTE, AM:

1. On the facts and circumstances of the case and in law the CITIAN, INFAC erred in confirming the addition made by the ITO of Rs 5,50,000/- representing the total of cash deposits during demonetization period, not accepting the contention of the appellant.

The appellant prays that the ITO be directed to delete the addition

The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing.” Submission of LdAR :

2. Ld.Authorised Representative(ld.AR) for the Assessee filed a paper book. Ld.AR submitted that the assessee is a small fruit vendor engaging mainly in sale of Mangoes. Assessee was not having taxable income hence she was not required to file return. Her sale is mainly in cash. Ld.AR further submitted that during the assessment proceedings assessee had filed all the details like certificate issued by Gram Panachayat that Assessee is a Fruit vendor, Confirmations from some customers. Hence the addition made by the AO needs to be deleted.

Submission of Ld.DR : 3. Ld.Departmental Representative(ld.DR) for the Revenue relied on the order of the AO and CIT(A). Ld.DR vehemently stated that Assessee has deposited Cash during the demonetization period and the explanation is not satisfactory. Hence Additions needs to be sustained.

Findings and Analysis : 4. We have heard both the parties and perused the records.

4.1 The assessing officer in para 5 of the assessment order has admitted that assessee had filed submission vide letter dated 09/12/2019. However, the Assessing Officer made addition in the assessment Order. The relevant paragraphs of the assessment order are as under : “6. The submission of the assesse are considered, but not fully acceptable. Even if considering the documentary evidence for mango trading, the source of income for the entire cash deposits stated to be out of the sale proceeds cannot be fully justified. It is worth mentioning that almost entire amounts of cash deposits made during the whole year (F.Y.2016-17) are during the demonetization period only. In view of the these facts, the explanation for cash deposits in Indusind Bank account and SBI Bank account to be out of sale proceeds of mango trading is not acceptable.” 4.2 Then, in Para-8, the Assessing Officer(AO) observed that Assessee has deposited Rs.3,00,000/- in cash during demonetization in her Account of Indusind Bank and Rs. 2,50,000/- in SBI Account. Then, the AO made addition of Rs.5,50,000/- under section 69A of the Act. Aggrieved by the assessment order, assessee filed an appeal before the ld.CIT(A). Ld.CIT(A) confirmed the addition.

4.3 It is a fact that Assessee claimed before the Assessing Officer that she is Fruit Vendor. She received cash from sale of fruits. It is also a fact that she had filed a certificate issued by Gram Panchayat that assessee is a Fruit Vendor since 2014. Copy of the said certificate was enclosed by the ld.AR in the paper book. Assessee has also submitted copies of certain confirmations from the Purchasers regarding cash payments in lieu of mangoes. None of these evidences have been rebutted by the Assessing Officer. Assessing Officer has made an addition only because assessee had deposited cash during the Demonetization Period. Assessing Officer has ignored the explanation offered by the assessee. Neither the ld.CIT(A) has disputed the assessee’s claim that she is a Fruit Vendor nor the Assessing Officer. In these facts and circumstances of the case, we are of the opinion that assessee had duly discharged her onus of explaining source of cash deposits made during the Demonetization Period. Therefore, we direct the Assessing Officer to delete the addition of Rs.5,50,000/- made under section 69A of the Act. Accordingly, Ground No.1 of the assessee is allowed.

4.4 Since we have deleted the quantum addition of Rs.5,50,000/- the ground no.2 becomes academic in nature, hence Ground No.2 dismissed as unadjudicated.