PRABHAT MISHRA, DELHI,DELHI V. ITO, WARD-4(1), RAIPUR, RAIPUR

ITA 509/RPR/2025

AI Insights

The case involves Prabhat Mishra, the appellant, contesting the additions made to his income by the Income Tax Officer, Ward-4(1), Raipur, for the assessment year 2017-18. The primary issues were the acceptance of an opening cash balance and the estimation of agricultural income. The CIT(A)/NFAC had restricted the agricultural income and added the unexplained cash deposits to the assessee's income. However, the Tribunal found that the documents and evidence provided by the assessee were sufficient to substantiate his claims, leading to the setting aside of the CIT(A)'s decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791803 (ITAT-RAIPUR)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 28-08-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: RAJESH GOLCHHA
• Keywords: Gift; Principle of natural justice

Judgement Text

"आयकर अपीलीय अिधकरण Ɋायपीठ “एक-सद˟” मामला रायपुर मŐ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR ŵी पाथŊ सारथी चौधरी, Ɋाियक सद˟ क े समƗ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.509/RPR/2025 िनधाŊरण वषŊ /Assessment Year: 2017-18 Prabhat Mishra, B-07 Sahyadri Apartment, IP Extension East Delhi, Delhi, 110092 PAN: APAPM0887N .......अपीलाथŎ / Appellant बनाम / V/s. Income Tax Officer, Ward-4(1), Central Revenue, Building, Raipur- 492001, Chhattisgarh. ……ŮȑथŎ / Respondent Assessee by : Mr. Rajesh Golchha, CA Revenue by : Dr. Priyanka Patel, Sr.DR सुनवाई की तारीख / Date of Hearing : 11.12.2025 घोषणा की तारीख / Date of Pronouncement : 11.12.2025 Printed from counselvise.com 2 Prabhat Mishra, Delhi Vs. Income-Tax Officer, Ward 4(1), Raipur ITA No. 509/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The captioned appeal preferred by the assessee emanates from the order of the Ld.CIT(A)/NFAC, Delhi dated 25.06.2025 for the assessment year 2017-18 as per the following grounds of appeal: “1. I respectfully submit that the Ld. CIT(A), NFAC has erred in sustaining addition of 12,76,200/-under section 69A of the Income Tax Act, though I had fully explained the source of cash deposits with proper evidence 2. The Ld. IT(A) has not accepted my opening cash balance of 6,16,285/- though the same was duly carried forward from earlier year and reflected in my cash book. The Ld. CIT(A) has restricted my agricultural income to 2,70,000/- only on estimate basis, ignoring land records, Rin Pustika, and sale bills of agricultural produce submitted by me. 4. The Ld. CIT(A) has failed to appreciate that I had sufficient explained sources consisting of agricultural income, rental income, gifts from my father, and opening cash balance, which together fully explain the deposits. 5. The orders passed are unjust, arbitrary and against the principles of natural justice. Printed from counselvise.com 3 Prabhat Mishra, Delhi Vs. Income-Tax Officer, Ward 4(1), Raipur ITA No. 509/RPR/2025 I reserve my right to add, alter or modify any grounds of appeal at the time of hearing.” 2. The grievance of the assessee in this appeal is two-fold as appearing in the aforestated grounds of appeal Nos. 2 and 3. 3. That with regard to the opening cash balance of Rs.6,16,285/-, it was contended by the assessee that the same was duly carried forward from the earlier years and reflected in his cash book. The observation of Ld. CIT(A)/NFAC on this issue is as follows: “8.9.1 It is not clear whether assessee is regularly maintaining books of accounts or cash book has been prepared and filed only for purpose of appeal proceedings. It appears most likely latter is the case. The appellant nowhere explained source for opening cash balance of Rs 6,16,285/- by filing either cash book of previous year or cash flow statement of the previous year. In the absence of any details in the form of either cash book/ cash flow statement of previous year, existence of opening cash balance of Rs.6,16,285/- as on 01.04.2016 cannot be accepted. Consequently, opening balance of Rs.6,16,285/- being source for cash deposits during the year cannot be accepted” 4. A direction was given to the Ld. Sr. DR to procure a report from the AO on this issue and the Ld. Sr. DR submitted the said report before this Bench dated 02.12.2025, wherein the AO writes as follows: Printed from counselvise.com 4 Prabhat Mishra, Delhi Vs. Income-Tax Officer, Ward 4(1), Raipur ITA No. 509/RPR/2025 “On the basis of documents provided by the Jt. Commissioner of Income Tax, ITAT, Raipur vide office letter in F. No. Jt. CIT- ITAT/RPR/Report/2025-26 dated 21.11.2025, it is found from the documents of the assessee's cash flow statement, books of accounts, agricultural receipts/documents furnished by the assessee has been thoroughly examined by this office and found correct. In respect of the opening cash balance of Rs. 6,16,285/- is brought forward from FY-2015-16 which is not income of the current year i.c. FY-2016-17 relevant to AY-2017-18.” 5. Ld. Sr. DR fairly supported the findings of the jurisdictional AO and submitted that as examined by the office of the AO everything was found correct with regard to opening cash balance of Rs.6,16,285/-. 6. That as discernable from the aforestated report of the AO, he has examined the assessee’s documents i.e. cash flow statement, books of accounts, agricultural receipts/documents furnished by the assessee and all of them had been thoroughly examined and found to be correct. Hence, there remains no dispute that the opening cash balance of Rs.6,16,285/- is correct and it had been brought forward from earlier year. Accordingly, the findings of the CIT(A)/NFAC on this issue is set-aside and the AO is directed to delete the addition from the hands of the assessee while providing appeal effect of this order. Ground No. 2 is allowed. Printed from counselvise.com 5 Prabhat Mishra, Delhi Vs. Income-Tax Officer, Ward 4(1), Raipur ITA No. 509/RPR/2025 7. The assessee vide ground No.3 of appeal has contended that the Ld. CIT(A)/NFAC was not correct in restricting his agricultural income at Rs.2,70,000/- on estimate basis ignoring the land records, Rin Pustika and sale bills of agricultural produce which were already submitted by the assessee before the Department. Ld. CIT(A)/NFAC on this issue held and observed as follows: “8.11 The appellant has filed evidence for land holding i.e. (1) alnd record showing 14.175 acres of land at Janta held by Sri Prabhat Mishra (2) land record The appellant has filed evidence for land holdings .c. (1) land record showing 2.8 acres of land at Baharbode held by Sri Prabhat Mishra (3) land record showing 5.5 acres of land at Java held by mother Smt. Surya Kumari Mishra, The 05.05.2016, 11.07.2016, 28.09.2016 and 03.10.2016 for Rs 2,25,000/-, Rs 2,13,200/-appellant has also filed copies of sale bills of agricultural produce dated 7.04.2016, Rs 1,56,800/-, Rs 2,08,000/- and Rs 1,98,400/-respectively. Thus, sale bills for Rs 10,01,400/- has been produced by appellant. However, no details with regard to agricultural expenditure incurred have been furnished. It can not be a case where agricultural income is earned without incurring any expenditure. Therefore, entire sale proceeds cannot be considered to have formed source for cash deposits in the bank account. Further, in cash book reproduced above, the appellant has not recorded any expenditure incurred in cash for carrying out agricultural operations except Rs 2,985/- on 11.07.2016. It is not the case of the appellant that entire agricultural expenditure is incurred through banking channel which is not possible also because of nature of activity. Such complete absence of recording of expenditure towards agricultural operations and also for household expenditure in cash book filed for the year raises questions regarding authenticity of cash book prepared and furnished by appellant, consequently cash Printed from counselvise.com 6 Prabhat Mishra, Delhi Vs. Income-Tax Officer, Ward 4(1), Raipur ITA No. 509/RPR/2025 balance available in the hands of the appellant for making cash deposits in the bank account. The appellant owns around 17 acres of land. Information available in public domain (research papers regarding agricultural income earned by chickpea farmers in India for the period 2014 to 2017) shows that net agricultural income of Rs.10,283/- per acre was earned by farmers involved in chickpea cultivation for the period under consideration. Even if a reasonable and higher estimate of net agricultural income of Rs.12,000/- per acre is taken into consideration, the appellant's net agricultural income for the year works out to Rs.2,04,000/- (Rs 12,000 X 17acres). Even if, it is considered that net agricultural income of mother from 5.5 acres of land owned by her was also deposited in bank account of the appellant such income would not exceed Rs.66,000/-(Rs 12,000 X 5.5 acres). Therefore, net agricultural income available in the hands of appellant for the purpose of cash deposits works out to Rs.2,70,000/- against appellant's claim of availability of agricultural income of Rs. 11,00,996/ Hence, source for cash deposits to the tune of Rs 8,30,996/-(Rs.11,00,996 (-) Rs.2,70,000/-) remains unexplained” 8. That vide aforestated finding, the Ld. CIT(A)/NFAC determined the net agricultural income in the hands of the assessee at Rs.2,70,000/- against the claim of the assessee that he was having agricultural income at Rs.11,00,996/-, accordingly the Ld. CIT(A)/NFAC had added Rs.8,30,996/- as un-explained cash deposits in the hands of the assessee. 9. Similarly, Ld. Sr. DR as directed by this Bench had obtained a report from the AO dated 02.12.2025 and submitted that said agricultural income of Rs.11,00,996/- has been verified from the documents furnished Printed from counselvise.com 7 Prabhat Mishra, Delhi Vs. Income-Tax Officer, Ward 4(1), Raipur ITA No. 509/RPR/2025 by the assessee i.e. Rin Pustika, Mandi Receipts etc. and therein it did reflect cultivation of own land. That on the basis of the said documents, the said agricultural income of Rs.11,00,996/- was found to be correct and no questions are raised. The relevant para of the said report is extracted as follows: “The Agricultural income of Rs.11,00,996/- which is provided by JCIT-DR has been verified from the documents supported by Rin Pustika, Mandi Receipts etc. which is reflecting the cultivation of own lands. On the basis of the above documents, it is found to be correct and no questions are raised.” 10. That on careful consideration of the documents placed on record on this issue, it is discernable that the AO himself admitted as per the documents furnished on record by the assessee regarding genuineness of the agricultural income in the hands of the assessee to the tune of Rs.11,00,996/- during the year under consideration. The assessee had provided Rin Pustika, Mandi Receipts which were thoroughly examined by the AO and found to be genuine. Therefore, the findings of the Ld. CIT(A)/NFAC that Rs. 8,30,996/- of the cash deposits are un-explained, such conclusion is not correct, hence, arbitrary and based on wrong assumptions. The order of the CIT(A)/NFAC is therefore, set-aside and the AO is directed to delete the said addition from the hands of the assessee while providing appeal effect of this order. Ground No. 3 is allowed. Printed from counselvise.com 8 Prabhat Mishra, Delhi Vs. Income-Tax Officer, Ward 4(1), Raipur ITA No. 509/RPR/2025 11. Rest of the grounds are only supportive of these two effective grounds i.e. Ground Nos. 2 and 3, hence, Grounds No. 1, 4 and 5 remains academic only. 12. As per the aforesaid terms, the grounds of appeal by the assessee stands allowed. 13. In the result, the appeal of the assessee is allowed. Order pronounced in open court on 11th day of December, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) Ɋाियक सद˟/JUDICIAL MEMBER रायपुर / Raipur; िदनांक / Dated : 11th December, 2025. HKS, PS आदेश की Ůितिलिप अŤेिषत / Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant. 2. ŮȑथŎ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, “एक-सद˟” बŐच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाडŊ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, //True copy// Private Secretary आयकर अपीलीय अिधकरण, रायपुर / ITAT, Raipur Printed from counselvise.com "