Tribunal allows appeal, cancels unjustified tax addition, grants credit for explained deposits.

The Tribunal concluded that the addition of Rs. 16,28,004/- confirmed by the CIT(A) was unjustified and deleted the addition. The appeal by the assessee was allowed, giving full credit for the deposits as explained by the sources presented.

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Issues Involved:
1. Confirmation of the addition of Rs. 16,28,004/- as unexplained deposits in the assessee's bank account.
2. Credit for cash withdrawn from the same bank account on prior dates.
3. Credit for past savings from agricultural income.

Detailed Analysis:

Issue 1: Confirmation of the Addition of Rs. 16,28,004/- as Unexplained Deposits
The appeal concerns the confirmation of an addition of Rs. 16,28,004/- made by the Income Tax Officer on account of alleged unexplained deposits in the assessee's bank account. The assessee, an agriculturist engaged in dairy farming, claimed that the deposits were from savings, sale of livestock, and sale of agricultural land. The assessment was initially conducted by the Income Tax Officer Ward-5, Phagwara, and later transferred to Nakodar, resulting in an addition of Rs. 51,37,000/- as unexplained deposits.

Issue 2: Credit for Cash Withdrawn from the Same Bank Account on Prior Dates
The CIT(A) considered the evidence and allowed credit for Rs. 35,08,996/- out of the total deposits, including amounts from the sale of land, livestock, and partial cash withdrawals. However, the CIT(A) did not give full credit for cash withdrawals, only allowing Rs. 4,45,000/- out of Rs. 15,50,000/- withdrawn on 22-05-2008. The Tribunal found this unjustified, stating that unless the AO or CIT(A) could show that the withdrawn cash was spent elsewhere, the full amount should be credited.

Issue 3: Credit for Past Savings from Agricultural Income
The CIT(A) allowed only Rs. 4,00,000/- out of Rs. 6,50,000/- claimed as agricultural income, leaving Rs. 2,50,000/- unexplained due to lack of corroborative evidence. The Tribunal, considering the ownership of agricultural land and livestock, found the agricultural income of Rs. 6,50,000/- reasonable and accepted it as explained. Consequently, the remaining balance of Rs. 2,73,004/- was also allowed as personal savings from agricultural income, making the total deposits of Rs. 16,28,004/- explained.

Conclusion:
The Tribunal concluded that the addition of Rs. 16,28,004/- confirmed by the CIT(A) was unjustified and deleted the addition. The appeal by the assessee was allowed, giving full credit for the deposits as explained by the sources presented.

Order:
The appeal of the assessee is allowed, and the order was pronounced in the open court on 16.08.2021.

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