DHAVAL HIMMAT BHANDRA,MUMBAI V. ITO - 34(1)(1), MUMBAI

ITA 3886/MUM/2024

AI Insights

The case revolves around an appeal by Dhaval Himmat Bhandra against the order of the Commissioner of Income-tax (Appeals) for the assessment year 2017-18, which had added Rs. 2,90,830 to his income as unexplained cash credit under section 68 of the Income-tax Act. The addition was initially made by the Assessing Officer who was not convinced with the explanation of the source of cash deposits in the assessee's bank accounts, which included income from agriculture. The Tribunal, after considering the evidence and the submissions, concluded that the additions were unjustified as they were based on mere assumptions without any factual basis.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471343 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN UNAVEKAR
• Assessee Lawyers: ANAND MUNDRA
• Keywords: Set aside; Unexplained cash credit; Gift
• Section: 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “K (SMC)” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA No. 3886/MUM/2024 Assessment Year: 2017-18 Dhaval Himmat Bhandra, 401, Beach Apartment, Balraj Sahani Road, Near Novotel Hotel, Juhu, Mumbai-400049. Vs. ITO-34(1)(1), Kautilya Bhavan, Bandra Kurla Complex, Mumbai-400051. PAN NO. BHJPB 7511 A Appellant Respondent Assessee by : Mr. Anand Mundra Revenue by : Mr. Kiran Unavekar, Sr. DR Date of Hearing : 09/01/2025 Date of pronouncement : 24/02/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 07.06.2024 passed by the Ld. Commissioner of Income-tax (Appeals) [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds: “On the facts and in the circumstances of the case: Regarding addition of agriculture income of Rs. 290830/ cash credit 1. The Learned CIT(A) erred in adding the genuine income of Rs. 290830/ 2. The Learned CIT(A) failed to appreciate that the appellant had submitted all the evidences to prove the complete genuineness of the transactions. 3. The Learned CIT(A) erred in making the addition as cash credit u/s 68 to the genuine agriculture income on the basis of mere suspicion and surmises, and not based on facts or evidence. He failed to bring any evidence on record supporting his conclusions or controverting the evidence submitted by the appellant. 4. The Learned CIT(A) erred in adding Rs. 290830/ Act only on the assumption that increase in the agriculture income which the appellant has received in A.Y. 2016 artificial increase. 2. Briefly stated, facts of the case are that the assess its return of income on 04.08.2017 declaring total income at Rs.14,59,180/-. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued with. During the assessment proceedings, the Assessing Officer observed cash deposit in two bank accounts maintained by the assessee. The assessee explained source of the cash deposit as by way of income from agriculture, commission income and Assessing Officer however was not the agriculture income agriculture income to the extent of immediately preceding assessment year i.e. assessment yea 17 and excess amount of Rs.2,90,830/ Dhaval Himmat Bhandra ITA No. 3886/MUM/2024 Regarding addition of agriculture income of Rs. 290830/ 1. The Learned CIT(A) erred in adding the genuine income of Rs. 290830/-. 2. The Learned CIT(A) failed to appreciate that the appellant had submitted all the evidences to prove the complete genuineness of the transactions. 3. The Learned CIT(A) erred in making the addition as cash credit 8 to the genuine agriculture income on the basis of mere suspicion and surmises, and not based on facts or evidence. He failed to bring any evidence on record supporting his conclusions or controverting the evidence submitted by the appellant. ed CIT(A) erred in adding Rs. 290830/- u/s 68 of the Act only on the assumption that increase in the agriculture income which the appellant has received in A.Y. 2016-17 was by an increase. Briefly stated, facts of the case are that the assess its return of income on 04.08.2017 declaring total income at . The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the tax Act, 1961 (in short ‘the Act’) were issued with. During the assessment proceedings, the Assessing Officer observed cash deposit in two bank accounts maintained by the assessee. The assessee explained source of the cash deposit as by way of income from agriculture, commission income and Assessing Officer however was not convinced with the quantum of the agriculture income shown by the assessee and restricted the agriculture income to the extent of such income immediately preceding assessment year i.e. assessment yea amount of Rs.2,90,830/- over last year Dhaval Himmat Bhandra 2 ITA No. 3886/MUM/2024 Regarding addition of agriculture income of Rs. 290830/- as 1. The Learned CIT(A) erred in adding the genuine agriculture 2. The Learned CIT(A) failed to appreciate that the appellant had submitted all the evidences to prove the complete genuineness of 3. The Learned CIT(A) erred in making the addition as cash credit 8 to the genuine agriculture income on the basis of mere suspicion and surmises, and not based on facts or evidence. He failed to bring any evidence on record supporting his conclusions or controverting the evidence submitted by the appellant. u/s 68 of the Act only on the assumption that increase in the agriculture income 17 was by an Briefly stated, facts of the case are that the assessee had filed its return of income on 04.08.2017 declaring total income at . The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the tax Act, 1961 (in short ‘the Act’) were issued and complied with. During the assessment proceedings, the Assessing Officer observed cash deposit in two bank accounts maintained by the assessee. The assessee explained source of the cash deposit as by way of income from agriculture, commission income and gift. The with the quantum of by the assessee and restricted the such income declared in immediately preceding assessment year i.e. assessment year 2016- over last year was held as unexplained cash credit u/s 68 of the Act. On further appeal, the Ld. CIT(A) also upheld the addition. Aggrieved, the assessee is in appeal before the Tribunal by way of raising grounds as reproduced above. 3. Before us, the Ld. Counsel for the assessee f containing pages 1 to 89. 4. We have heard rival submissions of the parties and perused the relevant materials on record that to support of cash deposit in two bank accounts, the assessee explained same as out of income from agriculture, commission and gift. The income from commission and gift was not AO but the AO was not satisfied regarding the agricultural income of Rs.13,64,921/- declared by the assessee fo consideration for the reason that there being increase of 27% year as compared to the agriculture income of Rs.10,74,091/ declared in assessment year 2016 assessment year. During the assessment proceedings, the Assessing Officer issued notice u/s 133(6) whom the assessee sold the agricultural produce Mahalaxmi Oil Industries. The said party duly confirmed the fact of the sale of the agriculture produce by the assessee. The assessee also submitted copy of the 7/12 extract to support owning of agricultural land. But the Assessing Officer did not accept the contention of the assessee as according to him increase Dhaval Himmat Bhandra ITA No. 3886/MUM/2024 unexplained cash credit u/s 68 of the Act. On further appeal, the Ld. CIT(A) also upheld the addition. Aggrieved, the assessee is in appeal before the Tribunal by way of raising grounds as reproduced Before us, the Ld. Counsel for the assessee filed a Paper Book containing pages 1 to 89. We have heard rival submissions of the parties and perused the relevant materials on record. Briefly stated facts of the case are support of cash deposit in two bank accounts, the assessee out of income from agriculture, commission and gift. The income from commission and gift was not disturbed AO but the AO was not satisfied regarding the agricultural income declared by the assessee for the year under or the reason that there being increase of 27% as compared to the agriculture income of Rs.10,74,091/ declared in assessment year 2016-17 i.e. immediately preceding assessment year. During the assessment proceedings, the cer issued notice u/s 133(6) of the Act to the party to e sold the agricultural produce Mahalaxmi Oil Industries. The said party duly confirmed the fact of the sale of the agriculture produce by the assessee. The assessee bmitted copy of the 7/12 extract to support owning of agricultural land. But the Assessing Officer did not accept the contention of the assessee as according to him increase Dhaval Himmat Bhandra 3 ITA No. 3886/MUM/2024 unexplained cash credit u/s 68 of the Act. On further appeal, the Ld. CIT(A) also upheld the addition. Aggrieved, the assessee is in appeal before the Tribunal by way of raising grounds as reproduced iled a Paper Book We have heard rival submissions of the parties and perused . Briefly stated facts of the case are support of cash deposit in two bank accounts, the assessee out of income from agriculture, commission and disturbed by the AO but the AO was not satisfied regarding the agricultural income r the year under or the reason that there being increase of 27% in the as compared to the agriculture income of Rs.10,74,091/- 17 i.e. immediately preceding assessment year. During the assessment proceedings, the of the Act to the party to e sold the agricultural produce namely M/s Mahalaxmi Oil Industries. The said party duly confirmed the fact of the sale of the agriculture produce by the assessee. The assessee bmitted copy of the 7/12 extract to support owning of agricultural land. But the Assessing Officer did not accept the contention of the assessee as according to him increase of 27% was not justified in view of no addition to infrastructure or irrigation technique during the year under consideration. Counsel for the assessee submitted that the Assessing Officer has not pointed out any defect or faults evidence provided by the assessee. We find that that the assessee has filed evidence in support of sales of the agriculture produce during the year under consideration to M/s Mahalaxmi Oil Industries. The said party also confirmed before the Assessing Officer and no defect has been pointed out in the said sale quantity. Further, the Assessing Officer has also veri land but the Assessing Officer only made the addition on the basis of the presumption that being same infrastructure of agriculture there was no reason for the increase in the agricultu Ld. Assessing Officer also mentioned that on the basis of pictorial evidences gathered and statement recorded on oath by him of Sh Chintan Singhvi , agricultural activity on the land was accepted. our opinion, the Assessing Officer has fa quantity of agriculture produced identically same particularly when the Assessing Officer himself has verified the sales of the assessee from third party. The addition made by the Assessing Officer only on the assumption and presumption without pointing out any defect in the documentary evidence Accordingly, we set aside the order of the Ld. CIT(A) on the issue in Dhaval Himmat Bhandra ITA No. 3886/MUM/2024 not justified in view of no addition to infrastructure or irrigation chnique during the year under consideration. Before us, the Ld. Counsel for the assessee submitted that the Assessing Officer has not pointed out any defect or faults in submission evidence provided by the assessee. We find that that the assessee has filed evidence in support of sales of the agriculture produce g the year under consideration to M/s Mahalaxmi Oil Industries. The said party also confirmed before the Assessing Officer and no defect has been pointed out in the said sale quantity. Further, the Assessing Officer has also verified the ownership of the the Assessing Officer only made the addition on the basis of the presumption that being same infrastructure of agriculture there was no reason for the increase in the agricultu Ld. Assessing Officer also mentioned that on the basis of pictorial evidences gathered and statement recorded on oath by him of Sh Chintan Singhvi , agricultural activity on the land was accepted. our opinion, the Assessing Officer has failed to understand that quantity of agriculture produced for two financial years cannot be identically same particularly when the Assessing Officer himself has verified the sales of the assessee from third party. The addition made by the Assessing Officer and upheld by the Ld. CIT(A) is based only on the assumption and presumption without pointing out any defect in the documentary evidences submitted by the assessee. Accordingly, we set aside the order of the Ld. CIT(A) on the issue in Dhaval Himmat Bhandra 4 ITA No. 3886/MUM/2024 not justified in view of no addition to infrastructure or irrigation Before us, the Ld. Counsel for the assessee submitted that the Assessing Officer has submissions made and evidence provided by the assessee. We find that that the assessee has filed evidence in support of sales of the agriculture produce g the year under consideration to M/s Mahalaxmi Oil Industries. The said party also confirmed before the Assessing Officer and no defect has been pointed out in the said sale quantity. fied the ownership of the the Assessing Officer only made the addition on the basis of the presumption that being same infrastructure of agriculture there was no reason for the increase in the agriculture income. The Ld. Assessing Officer also mentioned that on the basis of pictorial evidences gathered and statement recorded on oath by him of Sh Chintan Singhvi , agricultural activity on the land was accepted. In iled to understand that for two financial years cannot be identically same particularly when the Assessing Officer himself has verified the sales of the assessee from third party. The addition and upheld by the Ld. CIT(A) is based only on the assumption and presumption without pointing out any submitted by the assessee. Accordingly, we set aside the order of the Ld. CIT(A) on the issue in dispute. Thus entire The grounds of the appeals are accordingly allowed. 5. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on Sd/ (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 24/02/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Dhaval Himmat Bhandra ITA No. 3886/MUM/2024 Thus entire addition being on the presumption is deleted. The grounds of the appeals are accordingly allowed. In the result, the appeal of the assessee is allowed. nounced in the open Court on 24/02/2025. Sd/- Sd/ (RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Dhaval Himmat Bhandra 5 ITA No. 3886/MUM/2024 addition being on the presumption is deleted. The grounds of the appeals are accordingly allowed. In the result, the appeal of the assessee is allowed. /02/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "