MASHRUBHAI KARNAJI RABARI,BANASKANTHA V. THE INCOME TAX OFFICER WARD 2, PALANPUR, PALANPUR

ITA 1920/AHD/2024

AI Insights

The case involves Mashrubhai Karnaji Rabari, an agriculturist and milk seller, who appealed against the order of the Commissioner of Income Tax (Appeals) which upheld a partial addition of unexplained cash deposits amounting to Rs.5,28,850 during the demonetization period in India. The Assessing Officer had initially made an addition of Rs.10,57,700, treating it as unexplained income under section 115BBE of the Income Tax Act, 1961, after the assessee failed to satisfactorily explain the source of cash deposits in his bank account. The Tribunal, after reviewing the evidence provided by the assessee, including bank statements and cash books, concluded that the deposits were from legitimate agricultural and milk sales, thus allowing the appeal and deleting the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312819 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member Mashrubhai Karnaji Rabari 110 Shivalika Shopping Centre, Nr. Pashu Bazar Deesa, Banaskanth-385535 Gujarat PAN: AYNPR6666E (Appellant) Vs Income Tax Officer Ward-2, Palanpur Palanpur (Respondent) Assessee Represented: None Revenue Represented: Shri S. K. Agal, Sr.D.R. Date of hearing : 24-04-2025 Date of pronouncement : 30-04-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 12.06.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the assessment order passed under section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18. ITA No: 1920/Ahd/2024 Assessment Year: 2017-18 I.T.A No. 1920/Ahd/2024 A.Y. 2017-18 Page No Mashrubhai Karnaji Rabari. vs. ITO 2 2. The registry has noted that there is a delay of 68 days in filing the above appeal. The assessee explained that being an agriculturist not familiar with the online filing and not verifying email which has resulted in filing appeal belatedly by 68 days. Having satisfied with the reason, the delay is hereby condoned. 3. Brief facts of the case is that the assessee is an agriculturist and also engaged in selling of Milks. For the Asst. Year 2017-18, assessee has not filed his Return of Income, since there was no taxable income. During demonetization period, the assessee deposited cash amounting to Rs.10,57,700/- in his Dena Bank Account at Deesa Branch. Therefore the Assessing Officer issued notice u/s. 142(1) of the Act. In response, the assessee filed his Return of Income on 04-12-2019 declaring total income of Rs.1,80,930/- and agricultural income of Rs.30,284/-. 3.1 The assessee explained that the cash deposit in bank accounts is nothing but sale of milks to Cooperative Society and also produced bank statements, cash book and comparison cash deposit made in earlier years. However the Assessing Officer found it to be not explained satisfactorily, therefore made addition of Rs.10,57,700/- and demanded tax thereon u/s. 115BBE of the Act. 4. Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A), which was partly allowed by holding 50% of cash deposit was remained unexplained. I.T.A No. 1920/Ahd/2024 A.Y. 2017-18 Page No Mashrubhai Karnaji Rabari. vs. ITO 3 5. Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal: 1. The Ld. CIT(A) erred in law as well as on facts in upholding an addition of Rs.5,28,850/- u/s. 69A, thereby treating entire cash deposited during demonetization as an unexplained money. 2. The Ld. CIT(A) erred in law as well as on facts in upholding an addition of Rs.5,28,850/- to returned income which is already been treated as invalid u/s.139(9) of the Act. 6. The assessee also filed a Paper Book containing the cash book and bank statements and other details. Perusal of the same makes it very clear that the deposits were made on account of sale of milks and agricultural income. There is no substantial increase in the cash deposits during demonetization period comparing with the earlier years. Thus the Ld. CIT(A) is not correct in holding 50% cash deposit as unexplained. Therefore the entire addition made by the Assessing Officer is hereby deleted. 7. In the result, the appeal filed by the Assessee is allowed. Order pronounced in the open court on 30 -04-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 30/04/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) I.T.A No. 1920/Ahd/2024 A.Y. 2017-18 Page No Mashrubhai Karnaji Rabari. vs. ITO 4 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "