BHERU LAL KUMAWAT,VILL KULTHANA V. ITO PRATAPGARH, PRATAPGARH

ITA 1288/JPR/2024

AI Insights

The case involves Bheru Lal Kumawat, who appealed against the order of the National Faceless Appeal Centre, Delhi, which confirmed the additions made by the AO for the assessment year 2016-17. The additions were based on unexplained cash deposits and agricultural income treated as income from undisclosed sources. The Tribunal noted that the case was selected for limited scrutiny specifically to examine cash deposits during the demonetization period, and the AO exceeded his jurisdiction by making additions unrelated to the reasons for selection. The Tribunal also highlighted that the AO did not follow the proper procedure to convert the case from limited to complete scrutiny, as required by CBDT instructions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714189 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Other Referred Cases: Sumati Dayal Vs. CIT, Chuhar Mal V CIT, Dhakeshwari Cotton Mills v CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: TARUN MITTAL
• Keywords: Set aside; Difference of opinion; Change of opinion; Corroborative evidences; Income from undisclosed sources; Principle of natural justice; Earning of tax free income
• Section: 143(3); 142(1)

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 1288/JP/2024 fu/kZkj.k o\"kZ@Assessment Year : 2016-17 Bheru Lal Kumawat, 151 Rawla Chok, Ward No. 05, Kul Thana, Pratapgarh cuke Vs. ITO, Pratapgarh, Pratapgarh LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: EGDPK1402F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Tarun Mittal, CA jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, Addl. CIT lquokbZ dh rkjh[k@ Date of Hearing : 09/07/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 06/08/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM The above named assessee by way of this appeal challenges the order of the National Faceless Appeal Centre, Delhi [ for short CIT(A) ] dated 23/08/2024 for assessment year 2016-17. The said order of the ld. CIT(A) arises because the assessee has challenged the assessment order dated 12.12.2018 passed under section 143(3) of the Income Tax Act, 1961 [ for short “Act”] by ITO, Ward, Pratapgarh [ for short AO]. Printed from counselvise.com 2 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO 2. In this appeal, the assessee has raised following grounds: - 1. The Ld. CIT(A) has erred in confirming the addition of Rs 29,68,200/- on account of Cash deposited in the Bank A/c without appreciating the Facts of the Case that total cash deposit into the Bank a/c and Amount withdrawn from the Bank A/c during the year is summarized as under:- S. No. Particulars A/c No Cash Deposited Cash Withdrawn Net Withdrawal 1 Oriental Bank 5105115003099 1472000.00 2210000.00 738000.00 2 Oriental Bank 5105115001202 1418200.00 690000.00 -728200.00 3 Oriental Bank 5102201000490 21000.00 0.00 -210000.00 Total 3100200.00 2900000.00 -200200.00 2. The Ld. AO has erred in estimating the Agriculture income without appreciating the and Ld. actual sales invoices and also estimated Expenditure on very high side CIT(A) has erred in confirming the additions of Rs 7,26,969/- being Agriculture income as income from other sources, without appreciating the facts of the case. 3. The Ld. CIT(A) has further erred in confirming the additions of Income from other sources of Rs 7,26,969/- without giving credit of the same in the Cash deposit into Bank A/c. 4. Your appellant craves leave to add, alter, modify or withdraw any of the grounds of appeal on or before the date of hearing. 2.1 In this appeal, the assessee has raised the following additional grounds: - 5. On the facts and in the circumstances of the case and in law, ld. CIT(A) has erred in confirming the addition of Rs.29,68,200/- and Rs.7,26,969/- on allegation of cash deposit in bank account on protective basis and disallowance of agricultural income alleging from undisclosed sources respectively, when as per notice issued under CASS, the only reason for selection in scrutiny was “Return filed after 07.11.2016 and cash deposit during demonetization period.” It is submitted that making additions on the issue other than recorded for limited scrutiny without following the procedure for conversion of limited scrutiny to the Printed from counselvise.com 3 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO fully complete scrutiny as prescribed by CBDT is bad in law and thus the consequent addition so made deserves to be deleted. 5.1. On the facts and in the circumstances of the case and in law, ld. CIT(A) has grossly erred in confirming the addition of Rs. 29,68,200/- made by ld.AO on allegation of cash deposit by assessee in bank account during the year under consideration. It is submitted that the case was selected for scrutiny in view of the fact the return was filed belated and cash was deposited during demonetization, which happened to be on 8.11.2016, i.e. after end of F.Y. 2015-16. Appellant prays that deposits made in bank account even prior to announcement of Demonetization cannot be deemed to have been a planned affair, therefore addition of Rs.29,68,200/- being outside the scope of limited scrutiny deserves to be deleted. 3. Succinctly, the fact as culled out from the records is that the assessee has e-filed his Return of income declaring total income of Rs. 2,00,330/- and agricultural income of Rs. 8,58,969/- on 22.03.2018. The case of the of the assessee was selected under Limited Scrutiny though CASS under the following criterions/reasons; Reason Code Reason Description Issue Tx01.05 Cash Deposit for demonitiation period (9th November to 30th December) is reported as per SFT reporting, No return was filed for preceding assessment year & current year return filed after 07.11.2016. Returnfiled after 07.11.2016 and cash deposit during demonetization period. Based on that reason statutory notice u/s 143(2) of the Act dated 27.09.2018 was issued to the assessee on ITBA and the assessee was Printed from counselvise.com 4 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO requested to submit the evidence/information in support of return of income through electronically via e-proceeding facility in his account in e-filing website of the income tax department on or before 16.10.2018. Thereafter, notice u/s 142(1) of the I.T. Act along with questionnaire was issued on 01.10.2018 to furnish evidence/information on or before 11.10.2018. No compliance has been made by the assessee. Another opportunity was allowed to the assessee vide notice u/s 142(1) dated 15.10.2018 requiring to furnish the evidences/information as per annexure on or before 18.10.2018 but again no compliance has been made by the assessee. Due to natural justice notice u/s 142(1) of the 1.T.Act.1961 was issued to the assessee on 18.10.2018 requiring the assessee to furnish the evidences/information as per annexure on or before 24.10.2018. As usual, no compliance has been made by the assessee of notice u/s 142(1) of the Act. Ld. AO while assessment proceeding noted that the assessee has shown net agricultural income of Rs. 8,58,969/- and claimed as exempt income. Vide notice dated 01.10.2018 the assessee was asked to furnish the document as owner ship of agricultural land, details of gross receipts, details of crop grown and details of the expenditure incurred along with the bills and vouchers for labour / wages, seeds, fertilisers, electricity / diesel, Printed from counselvise.com 5 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO transportation and other miscellaneous expenditure incurred and details of the person to whom those agricultural produces sold. Based on the submission filed the ld. AO noted that the assessee owns only 38 bighas of land and 36 bighas of land in the name of his mother. The assessee has claimed agriculture income of that land in his return of income but not furnished SIZARI agreement/document in respect of land in the name of his mother. The assessee has neither submitted purchase bill of seeds. insecticides & pesticides nor evidence of sale of agriculture produce till date ve passing of assessment order. The assessee has not furnish the evidence regarding electricity/diesel consumption. Therefore, having regard to the submission furnished by the assessee and considering the facts and circumstance and material available on record. Ld. AO estimated reasonable and fair of Rs. 12.000/- per bigha agriculture receipt of the assessee for the year under consideration and the assessee having 38 bigha land therefore, the gross agricultural receipt of the assessee is Rs.4,56,000/-(Rs. 12,000*38) As the assessee has failed to furnish any documentary evidences regarding expenditure incurred on agricultural produce, therefore, it is fair and reasonable to disallow @50% of agricultural receipts as expenditure which comes to Rs.2,28,000/-(50% of Rs. 4,56,000/-). Further, the assessee has not shown house hold Printed from counselvise.com 6 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO withdrawal in his return of income and no family details of the assessee is available on record, therefore, it is fair and reasonable to estimate the house hold expenses of Rs. 8,000/- per month i e. Rs 96,000/- for the year under consideration. As the assessee has not declared house hold expenses in his return of income. Therefore, Rs.96,000/- is added to the total income of the assessee treating that the assessee has incurred such expenses out of his agricultural income for the year under consideration. Hence, the net agriculture income of the assessee comes to Rs. 1,32,000/- (4,56,000-2,28,000-96,000) During the year under consideration the assessee has deposited cash amounting to Rs. 31,00,200/- in his bank accounts maintained by individually or jointly. The assessee was required vide notice u/s 142(1) of the IT Act dated 12.11.2018 to justify the source of cash deposited in bank accounts along with supporting documentary evidences. The assessee filed reply online in which stated that withdrawal from the bank accounts and income from agricultural produce deposited in these bank accounts. No supporting documentary evidences have been furnished by the assessee in his claim. Having considered the reply filed by the assessee but not found acceptable. The assessee stated that he has withdrawn cash from bank account and deposited the withdrawn money in the same bank account. Printed from counselvise.com 7 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO The assessee has failed to substantiate the source of cash deposit with supporting documentary evidence, therefore, the source of cash deposited in bank accounts remains unexplained. Hence, after giving the benefit of agriculture income as discussed para above of Rs. 1,32,000/-balance cash deposit of Rs.29.68,200/- treated as unexplained and added the same to the total income of the assessee. Ld. AO added that amount on protective basis for an amount of Rs. 29,68,200/-. 4. Aggrieved from the order of the ld. AO the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: 9.0 In the appeal proceedings, the appellant has not responded to the several notices issued. Therefore, the cash deposited amounting to Rs 29,68,200/- remains unexplained for want of supporting evidence. Therefore, the contention of the appellant that Ld AO has erred in making above addition does not have any merit. 10.0 It is a well settled principle of law as declared by the Hon'ble Supreme Court in the case of Sumati Dayal Vs.CIT, (214 ITR 801) (SC) that the true nature of transaction have to be ascertained in the light of surrounding circumstances. It needs to be emphasized that a standard of proof beyond reasonable doubt has no applicability in the determination of matters under taxing statutes. In the present case, it is clear that apparent is not the real as evidenced from the observation made by the Ld AO. Further, the Hon'ble Supreme Court, in the case of Chuhar Mal V CIT (1988) 172 ITR 250, highlighted the fact that the principle of evidence law are not to be ignored by the authorities, but at the same time, human probability has to be the guiding principle, since the AO is not fettered, by Printed from counselvise.com 8 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO technical rules of evidence, as held by the Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills v CIT (1954) 261 TR 775. The Hon'ble Supreme Court, in the case of Chuhar Mal V CIT (supra) held that what was meant by saying that evidence Act did not apply to the proceedings under Income-tax Act, 1961, was that the rigors of Rules of evidence, contained in the Evidence Act was not applicable; but that did not mean that when the taxing authorities were desirous of invoking the principles of Evidence Act, in proceedings before them, they were prevented from doing so. It was further held by the Hon'ble Apex Court that all that Section 110 of the Evidence Act, 1872 did, was to embody a salutary principle of common law, jurisprudence viz, where a person was found in possessing of anything, the onus of proving that he was not its owner, was on that person. Thus, this principle could be attracted to a set of circumstances that satisfies its conditions and was applicable to taxing proceedings. Ld. AO has therefore necessarily to consider the surrounding circumstances, which he indeed has done in a very meticulous and careful manner. 11.0 Thus, I find that the appellant has not been able to substantiate the sources of cash deposit with documentary evidence. Accordingly, I do not agree with the contentions of the appellant and hold that Ld AO has correctly treated the cash deposit in the bank account as income from undisclosed sources u/s 69A of the Act. Grounds of the appellant are dismissed. 12.0 In result, the appeal is dismissed. 5. Feeling dissatisfied with the finding so recorded in the order of the ld. CIT(A) the assessee preferred the present appeal on the grounds as reiterated herein above in para 2. To support the various grounds so raised by the assessee, ld. AR of the assessee, has filed the written submissions which reads as follows: Brief facts of the case are that assessee is an individual and had filed Return of Income for the year under consideration on 22.03.2018 declaring total income at Rs.2,00,330/-. Subsequently, case of assessee was selected for Limited scrutiny under CASS on following reason: “Cash deposit for demonetization period (9th Printed from counselvise.com 9 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO November to 30th December) is reported as per SFT reporting, No return was filed for preceding assessment year & current year return filed after 07.11.2016.” Assessee furnished various details and information as sought by ld.AO during the course of assessment proceedings. After perusing such details, ld.AO completed assessment by making three additions, i.e. on account of (i) Cash deposit of Rs. 29,68,200/-, (ii) Agricultural income of Rs. 7,26,969/- alleging it to be income from undisclosed sources. Aggrieved of the additions so made, assessee preferred appeal before ld. CIT(A), who dismissed the appeal of the assessee and therefore present appeal is preferred against the additions sustained by ld. CIT(A). With this background, ground-wise submission is made as under: Grounds of Appeal No. 1 to 5.1: In these grounds of appeals, assessee has challenged the action of ld.AO in making additions of Rs. 29,68,200/- & Rs. 7,26,969/- on account of cash deposited in bank and disallowance of agricultural income alleging it to be an income from undisclosed sources, any of which was not covered by the reason for selection of Limited scrutiny. Further, assessee has challenged the action of ld.AO in making addition of Rs. 29,68,200/- being cash deposits made during the year under consideration prior to even announcement of Demonetization and of Rs. 7,26,969/- being income from undisclosed sources (both of which again is not in the scope of reason for limited scrutiny). Since both the grounds of appeal are interconnected, the same are canvassed together for the sake of convenience. In this regard, as stated above, reason for selection of scrutiny as stated above, is reproduced again for the sake of ready reference: “Cash deposit for demonetization period (9th November to 30th December) is reported as per SFT reporting, No return was filed for preceding assessment year & current year return filed after 07.11.2016.” From perusal of above, it is evident that, basically case was selected for scrutiny assessment to examine source of cash deposit made during demonetization period as Return of income of A.Y. 2016-17 was filed after 07.11.2016. During the course of assessment proceedings, ld.AO conveyed that information was received that assessee has deposited cash in following bank accounts: Sl. No. Name of Bank Bank Account No. Sum deposited 1. Oriental Bank of Commerce, Kulthana 5105115001202 14,18,200/- Printed from counselvise.com 10 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO 2. Oriental Bank of Commerce, Kulthana 5105115003099 14,72,000/- 3. Oriental Bank of Commerce, Kulthana 5102010004900 2,10,000/- TOTAL 31,00,200/- Ld. AO, after giving the credit of Rs. 1,32,000/- i.e. the agricultural income sustained by the ld. AO, made an addition of Rs. 29,68,200/-. In the matter, at the outset, it is submitted that your honours would appreciate that what the ld.AO has added is cash deposits made from April 2015 to March 2016, which cannot, by any stretch of imagination be treated as with intention to explain source of deposits made in demonetization. For this reason also, addition of Rs. 29,68,200/- cannot be covered by scope of “Limited Scrutiny” and ld. AO has exceeded his jurisdiction in making such addition without converting Limited Scrutiny to Complete Scrutiny, which can be done only after seeking approval from designated authority. Apart from this, ld. AO by observing that as assessee is only an owner of 38 bigha of land and the rest is 36 bigha are owned by his mother, Smt. Kasturi Bai and alleging that no evidence pertaining to sale of agricultural produce nor invoices for purchase of seeds, insecticides or pesticides, ld. AO had estimated receipts of Rs. 12,000/- per bigha without any basis thereby computing total receipts from 38 bigha of agricultural land of Rs. 4,56,000/- and computed Rs. 1,32,000/- as the agricultural of assessee after giving credit of expenses to the tune of 50% of total receipts (again on assumption basis) and Rs. 96,000/- being household expense (again on assumption basis) and alleged rest of the income to the tune of Rs. 7,26,969/- [ 8,58,969 – 1,32,000] as income from undisclosed sources. In the matter, your honours would appreciate that it is an admitted fact that cash deposited during demonetization period was accepted by ld. AO and no discrepancy was found and therefore, scope of enquiry to be made by ld.AO for A.Y. 2016-17 was restricted to verify cash to this extent only and enquiries made beyond that are definitely outside the scope of Limited Scrutiny. At this juncture, kind attention of your goodself is invited to the CBDT Instruction No.05/2016 dated 14.07.2016 which was issued in partial modification to Instruction No.20/2015 dated 29.12.2015 defines the “Direction regarding scope of enquiry in cases under “Limited Scrutiny” selected through CASS 2015 & 2016”. Para 4 of such instruction clarifies that “……..in cases under Limited Scrutiny, the scrutiny assessment proceedings would initially be confined to Printed from counselvise.com 11 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO issues under Limited Scrutiny and questionnaires, enquiry, investigation etc. would be restricted to such issues. Only upon conversion of case to Complete Scrutiny after following the procedure outlined above, the AO may examine the additional issues besides the issue(s) involved in Limited Scrutiny. The AO shall also expeditiously intimate the taxpayer concerned regarding conducting Complete Scrutiny in such cases.” Further, para 2 of such Instruction lays down procedure for conversion of Limited Scrutiny cases in Complete Scrutiny, which reads as under: “2. In order to ensure that maximum objectivity is maintained in converting a case falling under “Limited Scrutiny” into a “Complete Scrutiny” case, the matter has been further examined and in partial modification to Para 3(d) of the earlier order dated 29.12.2015, Board hereby lays down that while proposing to take up “Complete Scrutiny” in a case which was originally earmarked for “Limited Scrutiny”, the Assessing Officer (AO) shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under “Complete Scrutiny”. In this regard, the monetary limits and requirement of administrative approval from Pr. CIT/CIT/Pr. DIT/DIT, as prescribed in Para 3(d) of earlier Instruction dated 29.12.2015, shall continue to remain applicable.” From perusal of above, it is evident that a case selected for Limited Scrutiny can be converted in Complete Scrutiny only after following the procedure laid down and not otherwise that too with the prior approval of the Pr. CIT/CIT as the case maybe, whereas in the instant case :- - No reasonable view was formed by ld.AO regarding possibility of under assessment of income if case was not assessed under Complete Scrutiny. - No approval was sought by ld.AO from Pr. CIT/CIT/Pr. DIT/DIT, as the case may, be before conducting enquiries on the issues other than those specified under CASS. - The inquiries made by ld. AO with reference to source of cash deposited prior to demonetization and with respect to agricultural income is also without jurisdiction in view of the fact that cash worth Rs. 11,05,000/- only was deposited during demonetization that too accepted by ld. AO and ld.AO has made addition much more than that, which is contrary to specific mandate given by CBDT in case of limited scrutiny. It is therefore submitted that ld.AO has exceeded his jurisdiction in converting Limited Scrutiny to Complete Scrutiny without following the procedure laid down Printed from counselvise.com 12 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO by the hon’ble CBDT and therefore the order so passed by ld. AO is bad in law and deserves to be quashed. In this regard, reliance is placed on below judicial pronouncements: 1. Hon’ble High Court Of Calcutta in the case of Principal commissioner of Income-tax vs Sukhdham Infrastructures LLP reported in [2024] 165 taxmann.com 84 (Calcutta) dated 14.08.2023 2. Hon’ble ITAT, Raipur Bench, Raipur in the case of Rahul Bajpai vs DCIT in ITA NO. 345/RPR/2023 dated 29.01.2025 3. Hon’ble ITAT, Delhi Bench “G” Delhi in the case of Sitac Re (P.) Ltd vs DCIT in ITA NO. 2237/DELHI/2019 dated 31.12.2024 4. Hon’ble ITAT, Delhi Bench “H”, New Delhi in the case of ACIT Vs Trehan Promoters and Builders Pvt. Ltd in ITA No. 9872/Del/2019 dated 19.10.2022 5. Hon’ble ITAT, “B” Bench, Pune in the case of Shri Sagar Uttam Murhe vs DCIT, Circle-8, in ITA Nos.1615 & 1329/PUN/2018 dated 24.08.2022 6. Hon’ble ITAT, Delhi Bench “A”, New Delhi in the case of Sh. Atul Gupta vs. ACIT in ITA No.3384/Del/2019 dated 31.08.2020 7. Hon’ble ITAT, Guwahati Bench, \"E Court\" at Kolkata in the case of Shri Prabir Das, Karimganj vs Income Tax Officer in I.T.A. No. 395/Gau/2019 dated 26.06.2020 8. Hon’ble ITAT, Delhi Bench “B”, New Delhi in the case of Dev Milk Foods Pvt. Ltd. Vs ACIT ITAT Delhi in ITA No.6767/Del/2019 dated 12.06.2020 9. Hon’ble ITAT, Jaipur Benches “A”, Jaipur in the case of Shri Sita Ram Swami Jaipur vs ITO Ward 2 in ITA No. 73/JP/2020 dated 27.02.2020 10. Hon’ble ITAT, “SMC-C” Bench: Banglore in the case of Shri H.N. Ravindra Hassan vs ITO Ward 2 in ITA No.1065/Bang/2019 dated 10.01.2020 11. Hon’ble ITAT, Jaipur Benches “A”, Jaipur in the case of Manju Kaushik Jaipur vs The DCIT in ITA No. 1419/JP/2019 dated 09.12.2019 12. Hon’ble ITAT, Jaipur Benches “B”, Jaipur in the case of Late Smt Gurbachan Kaur vs DCIT in ITA No. 692/JP/2019 dated 05.12.2019 13. Hon’ble ITAT, Chandigarh Bench in the case of Sh Vijay Kumar Patiala vs ITO Ward 1, Patiala in ITA No.434/CHD/2019 dated 12.09.2019 14. Hon’ble ITAT, Pune Bench in the case of Suresh Jugraj Mutha vs ACIT- ITAT in ITA No.05/PUN/2016 dated 04.05.2018 15. Hon’ble ITAT, Mumbai Bench “B”, Mumbai in the case of Nitin Killawala & ITO 11(3)(1) in ITA no. 1611/M/2013 dated 16.09.2015 In the alternative, it is also worthy to mention here that the case of assessee was selected for scrutiny for A.Y. 2017-18 as well and it is observed that only Rs. 11,05,000/- were deposited during the demonetization period and ld. AO, after making various enquiries and seeking evidences, completed the assessment vide his order dated 15.11.2019 passed u/s 143(3) of the Income Tax Act, 1961 Printed from counselvise.com 13 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO (WS page 9-16) accepting the returned income thereby making no additions, observing as under: “After considering the facts of the case and material available on record the assessee is having sufficient cash withdrawal from his bank accounts during the relevant year and preceding years and is also having agriculture income as discussed in detail above. Thus contention of the assessee that cash deposits were made from cash withdrawals made from the bank and out of agriculture income is acceptable and returned income of the assessee is accepted and assessed at Rs. 2,62,590/- & Agriculture income of Rs. 11,45,899 for rate purpose.” Form the perusal of above, it is evident that the cash deposits done by assessee during the demonitization period are accepted by the ld. AO taking into account the cash withdrawals of current as well as preceding years and further taking into account the agricultural income of the assessee. Thus, the purpose for which the case of assessee was selected for limited scrutiny for the year under consideration i.e. to verify the source of cash deposited during the demonitization period i.e. from 08.11.2016 to 31.12.2016 is accepted by ld. AO, therefore the stands no basis for sustaining the additions made in the year under appeal. Hence, the addition so made by ld. AO deserves to be deleted. Further, it is also worthy to mention here that ld. AO while passing his order in the case of assessee relevant to AY 2017-18 has observed that the agricultural income disclosed by assessee is fair and just and observed as under: “4. On perusal of submissions of the assessee and files of the assessee for the A.Y. 2016-17 and A.Y. 2017-18. It is evident that although the assessee has not kept the bills and vouchers in support of sale of agriculture produce and expenses incurred in relation to agriculture activity, fact of assessee being engaged in agriculture activity and is earning from agriculture cannot be denied. Assessee has filed the detailed calculation of area cultivated, type of crop cultivated, average prices prevalent in the current year and other details. In support of his claim, the assessee furnished the survey report of Rajasthan Government for Pratapgarh district. On perusal of these details and submission, there is a marginal difference of productivity as contained in the said report and as taken by the assessee. The assessee submitted that the marginal difference of productivity is arises due to various factors such as availability of in house machineries such as tractor, thresher and other equipments, irrigation facility etc. Assessee has also submitted copy of electricity bills, some sale bills available with the assessee in support of sale of agriculture produce and evidence in support of ownership of agriculture equipment such as tractor etc. Printed from counselvise.com 14 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO 5. The claim of the Assessee is verified by the Inspector of this office. Inspector has visited the farms of the assessee and submitted his report dated 13/11/2019 to this office. Inspector has reported that the assessee is engaged in agriculture activity in the farm and grown production of Soyabean Wheat, Chana, Kakdi, Mirchi & lahsun etc. Inspector also reported that the farms of the assessee are equipped with well, tubewell etc.” For AY 2017-18, assessee disclosed a total of Rs. 11,45,899/- as agricultural income which consisted of agricultural income from the land owned by her mother as well. Ld. AO, after making the enquiries and seeking the evidences, concluded that the agricultural activity as disclosed by assessee in AY 2017-18 is correct and was accepted by ld. AO in full. Therefore, making a disallowance in the year under appeal alleging Rs. 7,26,969/- as income from undisclosed sources on the basis or assumptions and presumptions is nothing but a mere change of opinion and thus, deserves to be deleted. Without prejudice to above, it is submitted that cash worth Rs. 31,00,200/- deposited by assessee during the year under consideration in his bank accounts were out the cash withdrawals made by assessee over the period of time to the tune of Rs. 29,35,000/- and also from the receipts from agricultural income. Further, it is also submitted that the above fact was also validated by the ld. AO while passing the order relevant to AY 2017-18 wherein the cash deposits and withdrawals made for the year under consideration and for AY 2017-18 as well were furnished before him and the same were accepted by ld. AO at Page 7 of his assessment order (WS Page 15). In view of above explanations and the order of ld. AO passed in the case of assessee for A.Y. 2017-18, addition of Rs. 29,68,200/- being made in respect of cash deposits made even prior to announcement of demonetization, cannot be treated as planned affair and subsequently accepted by ld. AO and thus outside the scope of Limited Scrutiny, deserves to be deleted outrightly. Similarly, addition of Rs. 7,26,969/- made on income from undisclosed sources is also not covered under “Limited Scrutiny” as stated above and deserves to be deleted. 6. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the cash of the assessee was Printed from counselvise.com 15 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO selected for the limited scrutiny the ld. AO noted that the assessee has deposited cash of Rs. 10,15,000/- but made the addition of Rs. 29,68,200/- that too because the assessee deposited cash into demonetized currency for an amount of Rs. 10,15,000 as noted in the order of the assessee. Based on that set of fact the protective addition was made in the hands of the assessee. The assessment for the subsequent year wherein the SBN were deposited for an amount of Rs. 10,15,000/- was considered as out of agricultural income the addition made in the year under consideration on protective basis is required to be quashed. Even otherwise the cash of the assessee was selected for limited scrutiny but the ld. AO went on examining the other issue of the year as well as of the subsequent year which is not permitted in the limited scrutiny case and even on that count the addition made that too protective is required to be quashed. 7. The ld DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. CIT(A). The ld. DR submitted that the since the assessee could not submit the details of the agricultural income and the order of the ld. CIT(A) ex-party the same may be set aside to the file of the ld. AO. Printed from counselvise.com 16 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO 8. In the rejoinder the ld. AR of the assessee submitted that the case of the assessee was not exparty before the ld. AO and therefore, the contention of the ld. DR was not correct and even otherwise the ld. AO was not suppose to verify the agricultural income and for the cash deposit he has not made any addition on substantive basis and made only on protective basis. Therefore, the appeal be decided to render the substantial justice to the assessee. 9. We have heard the rival contentions and perused the material placed on record. Record reveals that the case of the assessee was selected for limited scrutiny to examine the cash deposited in the demonetized period and the assessee filed the return after 07.11.2016 for the year under consideration. The bench noted that the cash of the assessee for the year under consideration wherein the cash deposited was not demonetized currency and ld. AO has not made any addition on substantive basis but has made an addition of Rs. 29,68,200/- on protective basis. The case of the assessee for the subsequent year [ year for which SBN was deposited ] was also selected for scrutiny and in that year there was no addition on account of SBN deposited. Therefore, there is no reason to sustain the protective addition. Even the ld. AO has not made addition of cash Printed from counselvise.com 17 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO deposited for the year under consideration as the cash deposited by the assessee for the year under consideration stands explained as is evident from the following chart placed on record and the same was remained uncontroverted ; S. No. Particulars A/c No Cash Deposited Cash Withdrawn Net Withdrawal 1 Oriental Bank 5105115003099 1472000.00 2210000.00 738000.00 2 Oriental Bank 5105115001202 1418200.00 690000.00 -728200.00 3 Oriental Bank 5102201000490 21000.00 0.00 -210000.00 Total 3100200.00 2900000.00 -200200.00 Based on the above observation the protective addition made by the ld. AO is directed to be deleted. In the light of the discussion recorded here in above the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 06/08/2025. 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:- 06/08/2025 *Ganesh Kumar, Sr. PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Bheru Lal Kumawat, Pratapgarh 2. izR;FkhZ@ The Respondent- ITO, Pratapgarh 3. vk;dj vk;qDr@ The ld CIT Printed from counselvise.com 18 ITA No. 1288/JP/2024 Bheru Lal Kumawat vs. ITO 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA No. 1288/JP/2024) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "