Shri Mahadevbhai Vasrambhai Desia, Ahmedabad V. The DCIT, Circle-7(2), Ahmedabad

ITA 1712/AHD/2019

AI Insights

The case revolves around an appeal by Shri Mahadevbhai Vasrambhai Desai against the order of the Learned Commissioner of Income Tax (Appeals)-7, Ahmedabad, concerning the assessment order for the year 2016-2017. The primary issue was the addition of Rs. 11,00,000 to the assessee's income, attributed to unexplained cash deposits in his bank account. The Assessing Officer (AO) treated these deposits as undisclosed income due to lack of satisfactory explanation from the assessee. The CIT(A) partly upheld this addition, leading to the current appeal. The Tribunal examined the assessee's records, including cash books and previous assessment orders, and found credible evidence of agricultural income and sufficient cash balances, leading to the decision to allow the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135802 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-10-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 14-11-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MSNEEJUGUPTA
• Assessee Lawyers: SHRIM.JSHAH; ..SOFARASREMAININGCASHOFRS.; ISCONCERNED; ITISFOUNDTHATAPPELLANTHAS

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’A’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRITRSENTHILKUMAR,JUDICIALMEMBER आयकरअपीलसं./ITANo.1712/AHD/2019 धििाधरणवरध / Asstt.Year:2016-2017 ShriMahadevbhaiVasrambhaiDesai, 40/59,PunjalalChali, Opp.KalyamMill, NarodaRoad, Ahmedabad-380025. PAN:AGXPD7665F Vs. D.C.I.T, Circle-7(2), Ahmedabad. (Applicant)(Respondent) Assesseeby:ShriM.JShah,with ShriRushinPatel,A.Rs Revenueby:MsNeejuGupta,Sr.D.R सुिवाईकीतारीख /DateofHearing:26/10/2023 घोरणाकीतारीख/DateofPronouncement:10/11/2023 आदेश /ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: ThecaptionedappealhasbeenfiledattheinstanceoftheAssesseeagainst theorderoftheLearnedCommissionerofIncometax(Appeals)-7,Ahmedabad, arisinginthematterofassessmentorderpassedunders.143(3)oftheIncome TaxAct,1961(here-in-afterreferredtoas"theAct")relevanttotheAssessment Year2016-2017. ITAno.1712/AHD/2019 A.Y.2016-17 2 2.TheonlygrievanceoftheassesseeisthattheLd.CIT(A)erredin confirmingtheadditionofRs.11,00,000/-onaccountofcashdepositsinthebank. 3.Thefactsinbriefarethattheassesseeinthepresentcaseisanindividual andfileditsreturnonincomeon13/10/2016declaringtotalincomeof Rs.27,58,930/-only.Therewasacashdepositinthebankaccountofthe assesseeamountingtoRs.26,50,000/-,thesourceofwhichwasnotexplainedby theassessee.Accordingly,theAOtreatedthesameasundisclosedincomeand addedtothetotalincomeoftheassessee. 4.AggrievedassesseepreferredanappealtotheLd.CIT(A),whopartly allowedtheappealoftheassesseebyobservingasunder: 9.8.SofarasremainingcashofRs.11,00,000isconcerned,itisfoundthatappellanthas shownopeningcashbalanceofRs.9.44lacs.Similarly,inappellant'sHUFaccountopening cashbalanceofRs.12.25laceisshown.Noprudentpersonwouldhavehugecashbalance onhandwithoutanyuse.Sofarasclaimofappellantthatheisregularlymaintainingthe BooksofAccountandcashbalanceshownincashbookisgenuine,forwhichappellanthas relieduponsubmissionsfiledforearlierassessmentyears,itisobservedthatinreplyto noticeunderSection142(1)forA.Y.2014-15.appellanthasonlysubmittedbankbookand journalregister.Theappellanthassubmittedcashbookon25thFebruary,2013before DCIT(Inv.),AIUbutsuchcashbookisnotexplainingtheopeningcashbalanceofRs.9.44 lacs.TheappellanthasnotsubmittedanycashbookforearlieryearseitherbeforeAOor beforeundersignedsothatgenuinenessofsuchcashbookcanbeverified.Itisfoundthat appellantisshowingmonthlyhouseholdwithdrawalofRs.10,000onlyandforsuch householdexpenses,noprudentpersonwouldkeephugecashbalanceofRs.20lacsat home.ItisalsoobservedthatappellanthastakenloanofRs.5.75croresandnoprudent Rs.5.75croresandnopersonwouldkeepcashbalanceonhandinsteadofrepayingsuch loan.Consideringthesefacts,claimofappellantthatcashdepositsareoutofopeningcash balancecannotbeaccepted. 9.9.Sofarasclaimofappellantthathewasearningagriculturalincome,itisfoundthat 7/12extractsubmittedbyappellantnowheredisclosesnatureofcropproduced.The appellanthasclaimedthatthereisnecessitytodisclosesuchfactsin7/12extract. However,inabsenceofsuchdetails,natureofactivitycarriedoutbyappellantcannotbe verified.EvenappellanthasnotsubmittedanycertificateofTalatiregardingcropsgrown byappellantinrelevantassessmentyears.Asappellanthasclaimedtohavesoldvarious agriculturalproducebeingwheat,paddy,bajri,potato,chori,ravayya,errand,groundnuts andcotton,itisnecessarythatevidencesarethatmajorityofthebillsareofAPMC, Dehgam,orvegetablemerchantsofDehgam,cottonisclaimedtohavebeensoldtoBalaji Industries,Vijapur,havingdistanceof58Kms.,andappellanthasnotsubmittedanyproof oftransportofsuchagriculturalproducetoVijapurinremandproceedings.Itisalso observedinthecashbooksubmittedbyappellantthatcashofRs.6,00,000isdepositedon 11thFebruary,2015andagriculturalincomeofRs.4,04,000isshowntohavebeenearned on9November,2015whereaspurchasebillissuedbyBalajiIndustriesasreproduced hereinbelowisof9thMarch,2016. ITAno.1712/AHD/2019 A.Y.2016-17 3 Theabovefactclearlyprovesthatappellanthasnotmaintainedthecashbookproperly.If theabovecashentryon9thNovember,2015isremovedfromcashbook,therewouldbe negativecashbalanceon31December,2015.Consideringthisfact,claimofappellant regarding-cashdepositevenoutofagriculturalincomeofRs.4,04,000cannotbeaccepted. Itisalsoobservedthatclaimofappellantregardingagriculturalincomeisnotfully verifiableforthereasonstatedsupramoreparticularlywhenalltheagriculturalexpenses arepaidonsimplevoucherswithoutanysupportingdocuments.Evenappellanthasshown agriculturalexpensesofRs.1.71lacsasagainstincomeofRs.8.57lacswhichisaround 20%ofgrossincome. Thisexpenditureseemtobeverylowsideincomparisonwiththeagriculturalincome earnedbyappellantinviewofvariousdecisionsofjurisdictionalITATwhereintheyhave estimatedagriculturalexpensestobe40%ofincome.Evenonperusalofbillsof agriculturalexpensesassubmittedbyappellantinpaperbook,itisfoundthatsameare handwrittenbyonepersononlyandonlypertainstopurchaseoffertilizerandlabour expenditure.Noexpenditureisclaimedtohavebeenincurredforanypesticides,electricity forirrigationorpurchaseofseedsforproducingagriculturalproduce.Consideringallthese facts,claimofappellantthatCashisdepositedoutofagriculturalincomecannotbe accepted.Inviewofthisfact,addition,madebyAOforRs.11,00,000beingcashdepositin appellant'sbankaccountisconfirmed.Thus,aggregateadditionofRs.26,50,000is restrictedtoRs.11,00,000.Therelatedgroundsofappealarepartlyallowed. 10.Intheresult,theappealoftheappellantispartlyallowed. 5.BeingaggrievedbytheorderoftheLd.CIT(A),theassesseeisinappeal beforeus. ITAno.1712/AHD/2019 A.Y.2016-17 4 6.TheLd.ARbeforeusfiledapaperbookrunningfrompages1to120and contendedthattheassesseeishavingagriculturalincomeearnedincashandthe samewasutilizedforthedepositsinthebank. 7.TheLd.ARalsosubmittedtherewasanopeningcashbalanceofRs.9.44 lacswhichwasavailablewiththeassesseewhichwasutilizedtodepositinthe bankaccount. 8.Ontheotherhand,theLd.DRvehementlysupportedtheorderofthe authoritiesbelow. 9.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.OncarefulexaminationofthevariousA.Ys,wefind thattheassesseehasbeenshowingagriculturalincomeonregularbasiswhichis rangingfrom4.30lacsto13lacs.Thiscanbeverifiedfromthechartfurnishedby theassesseeandavailableonrecord.Wealsonotethattherevenuehasadmitted anincomeofRs.5,51,000/-fromthesourceofagricultureactivityintheA.Y. 2014-15asevidentfromtheAssessmentOrderplacedonrecord. 9.1Besidestheabove,wenotethattheassesseehasfiledcashbookright from1 st April2011to31 st March2016,whichevidencesthattherewassufficient cashavailablewiththeassessee.Thecopyofthecashbookisavailableonrecord. Consideringtheavailabilityofthecashinhandsoftheassesseeaswellas agricultureincome,weareoftheviewthattherewassufficientcashavailablewith theassesseefromtheexplainedsourceswhichhavebeenusedforthedepositin thebankaccountoftheassessee.Atthisjuncture,itisalsoimportanttonotethat theRevenuehasalsonotbroughtanythingonrecordabouttheundisclosed sourcesofincomeoftheassesseebasedoncogentmaterials.Accordingly,weset- asidethefindingoftheLd.CIT(A)anddirecttheAOtodeletetheadditionmade byhim.Hencethegroundofappealoftheassesseeisallowed. ITAno.1712/AHD/2019 A.Y.2016-17 5 10.Intheresult,theappealoftheassesseeisherebyallowed. OrderpronouncedintheCourton10/11/2023atAhmedabad. Sd/-Sd/- (TRSENTHILKUMAR)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated10/11/2023 Manish