Jaywanytrao Bhikaji Jadhav, Nashik V. Income-tax Officer,

ITA 763/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6982 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-09-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGGARWAL
• Keywords: Business income; Income from undisclosed sources; Source of fund; Additional evidence
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 763 /P U N/20 1 5 / ASSESSMENT YEAR : 20 0 9 - 1 0 SHRI JAYWANTRAO BHIKAJI JADHAV, PROP. OF JADHAV GAS AGENCY, STATION ROAD, LASALGAON, TAL. NIPHAD, DIST. NASHIK . / APPELLANT PAN:A CKPJ5719R VS. THE INCOME TAX OFFICER , WARD 1(3), NASHIK . / RESPONDENT / APPELLANT BY : SHRI SANKET JOSHI / RESPONDENT BY : S HRI VIVEK AGGARWAL / DATE OF HEARING : 20 .0 9 .2017 / DATE OF PRONOUNCEMENT: 11 . 1 2 .2017 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE ASSESSEE IS AGAINST ORDER OF CIT(A) - 1 , NASHIK , DATED 26 . 0 3 .201 5 RELATING TO ASSESSMENT YEAR 20 0 9 - 1 0 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS OF RS.6,99,500/ - IN SAVING ACCOUNT NO.337, BANK OF INDIA. 2 ITA NO. 763 /PUN/20 15 JAYWANTRAO BHIKAJI YADHAV 2] THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS OF RS.10,05,200/ - IN BANK ACCOUNT HELD IN LOKNETE DA TTAJI PATIL SAH. BANK, L ASALGAON. 3] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE APPELLANT WAS NOT ABLE TO EXPLAIN THE SOURCE OF THE CASH DEPOSITS IN THE ABOVE TWO BANKS AND HENCE, THE ADDITION MADE BY THE LEARNED A.O. WAS JUSTIFIED ON THE FACTS OF THE CASE. 4] THE LEARNED CIT (A) FAILED TO APPRECIATE THAT THE ASSESSEE HAD GIVEN EXPLANATION REGARDING THE SOURCES OF THE CASH DEPOSITS IN THE ABOVE TWO ACCOUNTS AND THEREFORE, THERE WAS NO REASON TO HOLD THAT THE ASSESSEE HAD FAILED TO PROVE THE SOURCES OF THE CASH DEPOSITS IN THE T WO BANK ACCOUNTS AND HENCE, THE ADDITION MADE MAY KINDLY BE DELETED. 5] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE ASSESSEE HAD RECEIVED AMOUNTS FROM VARIOUS PERSONS IN CASH WHICH WERE DEPOSITED BY THE ASSESSEE IN THE TWO BANK ACCOUNTS AND ALL THESE PERSONS HAD ADMITTED GIVING OF THE AMOUNTS TO THE ASSESSEE AND ACCORDINGLY, THERE WAS NO REASON TO SUSTAIN THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE ABOVE TWO ACCOUNTS. 6] THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE U/S 40(A)(IA) OF RS.2,09,838/ - ON THE GROUND THAT THE ASSESSEE HAD FAILED TO DEDUCT TDS ON THE INTEREST PAID WITHOUT APPRECIATING THAT NO TDS WAS REQUIRED TO BE DEDUCTED ON THE SAID AMOUNT AND HENCE, THE DISALLOWANCE OF INTEREST U/S 40(A)(IA) IS NOT WARRANTED AT ALL. 3. THE FIRST ISSUE RAISED VIDE GROUNDS OF APPEAL NO.1 TO 5 IS AGAINST THE ADDITION MADE ON ACCOUNT OF CASH DEPOSITS OF RS.6,99,500/ - IN THE BANK OF INDIA ACCOUNT AND RS.10,05,200/ - IN THE BANK ACCOUNT HELD WITH LOKNETE DATTAJI PATIL SAH. BANK, LASALGAON. THE ISSUE IN GROUND OF APPEAL NO.6 IS AGAINST DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE ACT AT RS.2,09,838/ - . 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.2,96,110/ - . THE ASSESSEE WAS THE PROPRIETOR OF M/S. JADHAV GAS AGENCY, DEALER OF HPCL GAS CYLINDERS. THE ASSESSEE HAD PRODUCED THE BOOKS OF ACCOUNT AND THE BUSINESS INCOME AS SUCH HAS BEEN ACCEPTED IN THE HANDS OF ASSESSEE EXCEPT FOR CERTAIN MINOR DISALLOWANCES EXPENSES UNDER DIFFERENT HEADS. THE ASSESSING OFFIC ER DURING THE COURSE OF ASSESSMENT PROCEEDINGS 3 ITA NO. 763 /PUN/20 15 JAYWANTRAO BHIKAJI YADHAV NOTED THAT THE ASSESSEE HAD INTRODUCED CAPITAL OF RS.5 LAKHS. IN HIS STATEMENT RECORDED UNDER SECTION 131 OF THE ACT ON 13.11.2011, THE ASSESSEE EXPLAINED THE SOURCE OF CAPITAL INTRODUCED TO THE EXTENT OF RS. 1,90,000/ - OUT OF ACCUMULATED AGRICULTURAL INCOME SINCE LAST 15 TO 20 YEARS, RS.1,40,000/ - LOAN TAKEN IN CASH FROM SHRI NAMDEO RAGHUNATH HARLE AND RS.1,70,000/ - FROM SHRI SAMPAT RANU KALE. THE ASSESSEE WAS ASKED TO PRODUCE THE ABOVE INDIVIDUALS. HOWEVER, THE Y WERE NOT PRODUCED BY THE ASSESSEE AND THE COUNSEL FOR THE ASSESSEE POINTED OUT THAT SINCE THE ASSESSEE HAD MET WITH AN ACCIDENT, THE SAID PERSONS COULD NOT BE PRODUCED. ON VERIFICATION OF THE TRANSACTIONS RELATING TO INTRODUCTION OF CAPITAL, THE ASS ESSING OFFICER FOUND THAT THE SAVINGS BANK ACCOUNT S HELD WERE NOT DISCLOSED BY THE ASSESSEE NEITHER IN THE WRITTEN SUBMISSIONS NOR DURING THE COURSE OF HEARING THE ASSESSEE HAD DISCLOSED THE SAID BANK ACCOUNT. THE TOTAL CASH DEPOSITS IN THE SAID BANK ACCO UNT WERE RS.6,99,500/ - , OUT OF WHICH SUM OF RS.5 LAKHS WAS INTRODUCED AS ADDITION TO THE CAPITAL ACCOUNT. SINCE THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCES, THE SAID SUM OF RS.6,99,500/ - WAS ADDED AS INCOME FROM UNDISCLOSED SOURCES IN THE HANDS OF ASSE SSEE. FURTHER, AS PER THE DATABASE AVAILABLE WITH THE DEPARTMENT, THE ASSESSEE WAS ALSO FOUND TO HAVE DEPOSITED CASH OF RS. 10,05,200/ - ON 17.12.2008 WITH LOKNETE DATTAJI PATIL SAH. BANK. THE SAID BANK ACCOUNT WAS ALSO NOT REFLECTED IN THE FINANCIAL STATE MENTS OF THE ASSESSEE ; IN THE SAID BANK ACCOUNT, THERE WAS CASH DEPOSIT TOTALING RS.10,05,200/ - . THE ASSESSEE EXPLAINED THAT THE SOURCE FOR THE SAID CASH WAS OUT OF MONEY COLLECTED FROM DIFFERENT PERSONS FOR PURCHASING FERTILIZERS AND SEEDS FOR AGRICULTURAL PURPOSES. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE SAID PERSONS WITHIN WEEK FOR VERIFICATION AND EVEN AFTER THE REMINDER. THE ASSESSING OFFICER HELD THE SAME TO BE UNDISCLOSED INCOME OF THE ASSESSEE. FURTHER, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD PAID INTER EST OF RS.2,09,838/ - TO HIS FATHER ON UNSECURED LOANS RAISED. HOWEVER, NO TAX WAS 4 ITA NO. 763 /PUN/20 15 JAYWANTRAO BHIKAJI YADHAV DEDUCTED AT SOURCE FROM THE SAID PAYMENT AND IN VIEW OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, THE SAID SUM OF RS.2,09,838/ - WAS ADDED TO THE TOTAL INCOME OF THE ASSESS EE. 5. BEFORE THE CIT(A), THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS IN WHICH HE EXPLAINED THE SOURCE OF CASH DEPOSITED. THE ASSESSEE ALSO EXPLAINED THAT BECAUSE HE HAD MET WITH AN ACCIDENT, HE COULD NOT PRODUCE THE SAID PERSONS. THE ASSESSEE FILED AFFI DAVITS OF THE SAID LENDERS / CONTRIBUTORS DURING APPELLATE PROCEEDINGS. THE SAID INFORMATION WAS FORWARDED TO THE ASSESSING OFFICER, WHO WAS DIRECTED TO EXAMINE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS I SSUED SUMMONS TO ALL THE LENDERS ON 29.07.2013 TO ATTEND THE OFFICE ON 05.08.2013 AND THE ASSESSEE ON 06.08.2013, FOR RECORDING THEIR RESPECTIVE STATEMENTS. THE LENDERS APPEARED BEFORE THE ASSESSING OFFICER ALONG WITH DOCUMENTS. THEY ALSO PRODUCED COPIES OF RESPECTIVE 7/12 EXTRACTS OF AGRICULTURAL LAND AND STATED THAT THE LOANS WERE RETURNED BY THE ASSESSEE IN THE YEAR 2010. THIS WAS THE STATEMENT IN RESPECT OF RS.1,40,000/ - AND RS.1,70,000/ - RECEIVED IN SEPTEMBER, 2008 FROM SHRI NAMDEO RAGHUNATH HARLE A ND SHRI SAMPAT RANU KALE, RESPECTIVELY. IN RESPECT OF BALANCE SUM OF RS.1,90,000/ - I.E. OUT OF TOTAL AMOUNT OF RS.6,99,500/ - DEPOSITED IN BANK OF INDIA, THE ASSESSEE EXPLAINED THAT IT WAS HIS PAST AGRICULTURAL SAVINGS. THE OBJECTION OF THE ASSESSING OFFI CER WAS THAT NO CHEQUES FOR THE TRANSACTIONS HAVE BEEN ISSUED. THE ASSESSING OFFICER DID NOT ACCEPT THE PLEA OF ASSESSEE IN RESPECT OF PAST SAVINGS AS THE ASSESSEE WAS REGULARLY DEPOSITING CASH IN THE BANK ACCOUNT. WITH REGARD TO LOANS TAKEN, THE ASSESSI NG OFFICER REJECTED THE CLAIM OF ASSESSEE AND OBSERVED THAT SUM OF RS.6,99,500/ - WAS NOTHING BUT ASSESSEES OWN AMOUNT TREATED AS UNDISCLOSED INCOME. IN RESPECT OF DEPOSITS IN LOKNETE DATTAJI PATIL SAH. BANK TOTALING RS.10,05,200/ - , THE ASSESSING OFFICER 5 ITA NO. 763 /PUN/20 15 JAYWANTRAO BHIKAJI YADHAV RECORDED WRITTEN STATEMENTS OF ALL THE CONCERNED LENDERS WHO WERE FRIENDS AND RELATIVES OF THE ASSESSEE. THE SAID PERSONS ALSO PRODUCED THEIR SOURCES OF INCOME AND STATED THAT THE CASH AMOUNT OR LOAN WAS GIVEN TO THE ASSESSEE FOR THE PURPOSE OF FERTILIZER S, PESTICIDES, AGRICULTURAL EQUIPMENT IN SYNDICATE WAY BUT THE SAME COULD NOT BE EXECUTED AND THE AMOUNT OF LOAN WAS TAKEN BACK ON 11.07.2009 BY CASH. THE ASSESSING OFFICER HOWEVER, WAS OF THE VIEW THAT WHERE THE BANK ACCOUNT HAS BEEN DETECTED AND NOT DEC LARED BY THE ASSESSEE AND EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED. THE CIT(A) IN VIEW OF THE REMAND REPORT AND AFTER CONSIDERING THE REJOINDER OF ASSESSEE IN THIS REGARD HAS UPHELD THE ORDER OF ASSESSING OFFICER. THE EXPLANATION OF ASSESSEE AS TO WH Y THE SAID ACCOUNT S WERE NOT SHOWN IN THE RETURN OF INCOME BECAUSE THE SAME BELONGS TO THE HUF AND DID NOT HAVE ANY CONNECTION WITH THE BUSINESS ACTIVITY, WAS ALSO NOT ACCEPTED. HE ACCORDINGLY, UPHELD THE SAID ADDITION IN THE HANDS OF ASSESSEE BY REFERRIN G TO THE EVIDENCES FILED BY THE ASSESSEE IN THIS REGARD. THE CIT(A) ALSO UPHELD THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE ACT FOR NOT DEDUCTING TAX AT SOURCE OUT OF INTEREST PAYMENT. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE SAVINGS BANK ACCOUNT WAS IN INDIVIDUAL NAMES AND THE SOURCES OF CASH DEPOSITS IN THE TWO ACCOUNTS WERE EXPLAINED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER HIMSELF, WHEREIN THE AMOUNTS WERE RECEIVED FROM DIFFERENT PERSONS AND NAMES OF THE SAID PERSONS WERE GIVEN DURING REMAND PROCEEDINGS. OUT OF TOTAL SEVEN LENDERS, WHEREIN AMOUNT RECEIVED FROM TWO LENDERS WAS DEPOSITED IN BANK OF INDIA AND AMOUNT RECEIVED FROM FIVE LENDERS WAS DEPOSITED IN LOKNETE DATTAJI PATIL SAH. BANK, SIX PERSONS WERE PRODUCED AND SINCE THE 6 ITA NO. 763 /PUN/20 15 JAYWANTRAO BHIKAJI YADHAV SEVENTH PERSON BEING AN OLD MAN ABOUT 85 YEARS OLD COULD NOT BE PRODUCED. HE FURTHER STATED THAT ALL SIX LENDERS ADMITTED TO HAVE ADVANCED THE SAID AMOUNT TO THE ASSESSEE, EVEN 7/12 EXTRACTS AND SALE PATTIES EVIDENCING THE AGRICULTURAL INCOME WERE PRODUCED. OUR ATTENTION WAS DRAWN TO SUBMISSIONS MADE BEFORE THE CIT(A), WHICH ARE PLACED AT PAGES 9 TO 11 OF THE PAPER BOOK AND THE COPY OF REMAND REPORT AT PAGES 12 TO 15 OF THE PAPER BOOK. HE FURTHER REFERRED TO THE DOCUMENTARY EVIDENCES FILED AT PAGES 67 ONWARDS OF THE PAPER BOOK AND POINTED OUT THAT IN THE ABSENCE OF ANY DISCREPANCY POINTED OUT BY THE ASSESSING OFFICER IN THE SAID EVIDENCES FILED AND EVEN IN THE STATEMENTS RECORDED DURING THE COURSE OF REMAND PROCEEDINGS, THERE WAS NO MERIT IN MAKING THE AFORESAID ADDITION IN THE HAND S OF ASSESSEE. WITH REGARD TO GROUND OF APPEAL NO.6, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT INTEREST WAS GIVEN TO HIS FATHER AND THERE WAS NO MERIT IN DISALLOWING THE PART OF INTEREST UNDER SECTION 40(A)(IA) OF THE ACT. 8 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, STRESSED THAT THE ADDITION IS BASED ON DEPOSITS MADE IN UNDISCLOSED BANK ACCOUNTS OF THE ASSESSEE. HE STRESSED THAT CASH WAS DEPOSITED IN THE BANK OF INDIA AND LOKNETE DATTAJI PA TIL SAH. BANK AND THE ASSESSEE CLAIMS THAT IT HAS BORROWED FUNDS FROM DIFFERENT PERSONS. HOWEVER, PERUSAL OF THE DOCUMENTS FILED BY THE SAID PERSONS REFLECT THAT THEY HAD LANDHOLDING OF ABOUT 4 ACRES AND WERE NOT IN A POSITION TO MAKE THE SAID ADVANCES. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE FIRST ISSUE WHICH IS RAISED BY WAY OF GROUNDS OF APPEAL NO.1 TO 5 IS AGAINST THE CASH DEPOSITS IN THE BANK ACCOUNTS OF ASSESSEE. THE ASSESSEE WAS THE SOLE PROPRIETOR OF HPCL DEALERSHIP, W HEREIN THE ASSESSEE HAD MAINTAINED BOOKS OF 7 ITA NO. 763 /PUN/20 15 JAYWANTRAO BHIKAJI YADHAV ACCOUNT AND ALSO DISCLOSED THE SAID BANK ACCOUNTS AND THE BUSINESS INCOME AS DECLARED BY THE ASSESSEE HAS BEEN ACCEPTED EXCEPT FOR MINOR DISALLOWANCES MADE ON ACCOUNT OF CERTAIN EXPENSES. HOWEVER, WHILE MAKING E NQUIRIES DURING THE COURSE OF PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT IT WAS CAPITAL INTRODUCED OF RS.5 LAKHS. WHILE MAKING INVESTIGATION, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS MAINTAINED BANK ACCOUNT WITH BANK OF INDIA IN WHICH THERE WE RE VARIOUS CASH DEPOSITS TOTALING RS.6,99,500/ - . THE ASSESSING OFFICER SHOW CAUSED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN THE SAID BANK ACCOUNT, WHEREIN THE ASSESSEE EXPLAINED THAT SUM OF RS.1,90,000/ - WAS OUT OF PAST SAVINGS AND THE BALAN CE SUM OF RS.1,70,000/ - AND RS.1,40,000/ - WERE RECEIVED FROM TWO AGRICULTURISTS. THE ASSESSEE HA D PRODUCED PERSONS FROM WHOM HE HAD TAKEN LOAN WHICH HAS DEPOSITED IN BANK OF INDIA AND ALSO PRODUCED 7/12 EXTRACTS EVIDENCING THEIR AGRICULTURAL HOLDING AND A LSO THE SOURCING OF AGRICULTURAL INCOME. ANOTHER ASPECT WHICH WAS FOUND BY THE ASSESSING OFFICER WAS THE CASH DEPOSIT IN LOKNETE DATTAJI PATIL SAH. BANK TOTALING RS.10,05,200/ - . THE EXPLANATION OF ASSESSEE IN THIS REGARD WAS ALSO THAT PART OF THE AMOUNT I.E. ABOUT RS.1,40,000/ - WAS OUT OF HIS CASH SAVINGS AND BALANCE WAS THE AMOUNT RECEIVED FROM DIFFERENT PERSONS FOR BUYING FERTILIZERS, SEEDS, ETC. HE EXPLAINED THAT THE ASSESSEE WAS DOING THE SAID BUSINESS ON SIDELINE AND AS STRATEGY IT WAS DECIDED TO PU RCHASE ITEMWISE OF FERTILIZERS OR AGRICULTURAL EQUIPMENT ON CUMULATIVE BASIS IN ORDER TO AVAIL DISCOUNTS. HENCE, IT WA S NOT THE CASE WHERE THE ASSESSEE HAD RECEIVED LOANS WHICH WERE DEPOSITED IN HIS ACCOUNT WITH LOKNETE DATTAJI PATIL SAH. BANK . BEFORE THE CIT(A), THE ASSESSEE PRODUCED ALL THE PERSONS EXCEPT ONE WHO WAS ABOUT THE AGE OF 85 YEARS OLD. HE ALSO PRODUCED 7/12 EXTRACTS OF THE LANDHOLDING OF THE SAID PERSONS AND ALSO SALE PATTIES IN RESPECT OF CERTAIN SALE OF AGRICULTURAL PRODUCE AN D ALSO ADMITTED IN THE STATEMENT THAT THEY HAD MADE THE SAID ADVANCES. DESPITE ALL THESE EVIDENCES 8 ITA NO. 763 /PUN/20 15 JAYWANTRAO BHIKAJI YADHAV WERE AVAILABLE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF REMAND PROCEEDINGS, COPY OF WHICH ARE FILED BEFORE US AT PAGES 67 TO 82 OF THE PAPER BOOK, THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF ASSESSEE AND FOUND THE SAME TO BE AN AFTERTHOUGHT. UNDOUBTEDLY, NO SUCH EXPLANATION WAS FILED BEFORE THE ASSESSING OFFICER BUT THE REASON FOR THE SAME WAS THAT THE ASSESSEE HAD MET WITH AN ACCIDENT A ND COULD NOT APPEAR. THE ASSESSING OFFICER ALLEGED THAT THE COUNSEL FOR THE ASSESSEE COULD HAVE PRODUCED THE SAID PERSONS. IT MAY BE POINTED OUT HERE THAT THE ASSESSEE WAS BASED IN LASALGAON, HOWEVER, WAS BEING ASSESSED AT NASHIK AND AT THE FIRST AVAILAB LE OPPORTUNITY I.E. BEFORE THE CIT(A), THE ASSESSEE PUT UP ITS CASE AND POINTED OUT THAT IT WAS READY TO PRODUCE THE PERSONS AND THE ASSESSEE DID PRODUCE ALL THE PERSONS. THE STATEMENT ON OATH OF THE ASSESSEE WAS RECORDED UNDER SECTION 131 OF THE ACT ON 1 3.11.2011 AND THEREAFTER ON 20.08.2013 . T HE ASSESSEE ALSO EXPLAINED THAT THE SOURCE OF CASH ACCUMULATED BY HIM WAS OUT OF HIS AGRICULTURAL PRODUCE IN RESPECT OF WHICH, HE PRODUCED 7/12 EXTRACTS WHICH ARE PLACED AT PAGE 62 OF THE PAPER BOOK. HE ALSO PRODU CED THE MEDICAL CERTIFICATE IN RESPECT OF ROAD ACCIDENT OF THE ASSESSEE, WHICH IS PLACED AT PAGE 73 OF THE PAPER BOOK. THE COP IES OF STATEMENT RECORDED OF THE ASSESSEE ARE PLACED AT PAGES 43 TO 61 OF THE ACT. IN VIEW OF THE ABOVE SAID FACTS AND CIRCUMSTA NCES, WHERE THE ASSESSEE HAS PRODUCED THE EVIDENCE OF HIS OWN LANDHOLDINGS AND THE AGRICULTURAL OPERATIONS BEING UNDERTAKEN BY THE ASSESSEE, THEN THE SAVINGS OF RS.1,90,000/ - AND RS. 1,40,000/ - MERITS TO BE ACCEPTED IN THE HANDS OF ASSESSEE. THE SAID EXPLA NATION CANNOT BE REJECTED ON THE GROUND THAT THE ASSESSEE HAS DEPOSITED CASH ON DIFFERENT ACCOUNTS IN HIS BANK ACCOUNTS. THE ASSESSEE ALSO EXPLAINED OTHER DEPOSITS I.E. LOAN FROM TWO PARTIES; THE SAID PERSONS WERE PRODUCED BEFORE ASSESSING OFFICER IN REMA ND PROCEEDINGS AND THEY ALSO ESTABLISHED THEIR RESPECTIVE SOURCES. THE SAID TWO BANK ACCOUNTS DID NOT RELATE TO THE BUSINESS ACTIVITIES OF THE ASSESSEE AND 9 ITA NO. 763 /PUN/20 15 JAYWANTRAO BHIKAJI YADHAV HENCE, DID NOT FORM PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT. HOWEVER, WHEN CONFRONTED WITH ENTRIES IN THE BANK ACCOUNTS, THE ASSESSEE HAS FILED COMPLETE INFORMATION IN THIS REGARD AND THERE IS NO MERIT IN HOLDING THAT THE DEPOSIT OF RS.6,99, 500/ - IN THE BANK OF INDIA ACCOUNT IS UNDISCLOSED. ACCORDINGLY, WE HOLD SO. 10. IN RESPECT OF OTHER BANK ACCOUNTS, THE ASSESSEE CLAIMED THAT IT HAD RECEIVED THE AMOUNT FROM DIFFERENT PERSONS FOR PURCHASING FERTILIZERS ON THEIR BEHALF OR AGRICULTURAL EQ UIPMENT ON THEIR BEHALF. THE PLEA OF ASSESSEE IN THIS REGARD WAS THAT THE SAID DECISION WAS TAKEN TO CUMULATIVELY PURCHASE THE MATERIAL IN ORDER TO GET DISCOUNT ON PURCHASES. WE FIND MERIT IN THE EXPLANATION OF ASSESSEE ESPECIALLY, WHERE THE ASSESSEE HAS ALSO PRODUCED 7/12 EXTRACTS AND SALE PATTIES OF THE SAID AGRICULTURISTS IN ORDER TO ESTABLISH THEIR STANDING AND THEIR CAPACITY TO LEND THE AFORESAID AMOUNTS TO THE ASSESSEE. ACCORDINGLY, WE HOLD THAT WHERE THE LENDERS HAD ADMITTED TO HAVE GIVEN THE ADVA NCES AND WHERE THE ASSESSEE HAD GIVEN COMPLETE INFORMATION TO PROVE THE AVAILABILITY OF SOURCES OF CASH IN THE RESPECTIVE HANDS, THE SAME CANNOT BE BRUSHED ASIDE ON SOME PRESUMPTIONS AND CONJUNCTURES. AFTER GOING THROUGH THE EVIDENCES FILED BY THE ASSESSE E, WE FIND NO MERIT IN THE ORDERS OF AUTHORITIES BELOW IN HOLDING THAT THE ASSESSEE HAS FAILED TO FURNISH COMPLETE DATA TO EXPLAIN THE SOURCE OF CASH DEPOSITED IN LOKNETE DATTAJI PATIL SAH. BANK ACCOUNT. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMS TANCES, WE FIND NO MERIT IN THE STAND OF ASSESSING OFFICER AND THE SAME IS REVERSED. ACCORDINGLY, ACCEPTING THE EXPLANATION OF ASSESSEE IN THIS REGARD, WE DELETE THE ADDITION OF RS.10,05,200/ - . THE GROUNDS OF APPEAL NO.1 TO 5 ARE THUS, ALLOWED. 10 ITA NO. 763 /PUN/20 15 JAYWANTRAO BHIKAJI YADHAV 1 1 . NOW, THE SECOND ISSUE OF DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE ACT CLAIMING THE SAID INTEREST HAS BEEN PAID TO THE FATHER OF ASSESSEE . T HE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT HAVE BEEN BROUGHT IN FORCE TO CONTROL EVASION OF TAX BY CLAIMING V ARIOUS EXPENDITURE UNDER THE GARB OF CARRYING ON THE BUSINESS. HOWEVER, WHERE THE ASSESSEE HAS PAID THE SAID INTEREST TO THE RELATED PARTY, THE SAID AMOUNT CANNOT BE DISALLOWED ON THE GROUND OF NON DEDUCTION OF TAX AT SOURCE. WE ARE ALLOWING THE PLEA OF ASSESSEE ON THIS LIMITED ISSUE AND THIS DECISION OF OURS SHALL NOT BE USED AS PRECEDENT. THE GROUND OF APPEAL NO.6 RAISED BY THE ASSESSEE IS THUS, ALLOWED. 1 2 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 11 TH DAY OF DECEM BER , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 11 TH DECEM BER , 201 7 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 1, NASHIK ; 4. THE PR. C IT - I , NASHIK ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE