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Retention of seized property survives where recorded reasons support proceeds of crime, while stayed investigation periods are excluded from limitatio...
Assessee engaged in business of commission agent (Aadatia) for agricultural products. AO made addition u/s 68 treating entire cash deposits in bank account as unexplained, alleging undisclosed trading activity. CIT(A) deleted addition after considering cash books, ledgers, bank statements of three proprietorship concerns, observing cash deposits duly recorded relating to consignment sales over Rs. 17 crores, part received in cash. ITAT upheld CIT(A)'s decision, noting AO failed to rebut assessee's explanation that cash deposits represented sale proceeds received on farmers' behalf, incidental to commission income. AO could have cross-verified from Mandi Samiti records but didn't. Only real income taxable, AO erred by taxing receipts instead of commission income. CIT(A) also deleted 25% disallowance of expenses made by AO, as assessee substantiated salary payments through evidence like employee confirmations, volume of Rs. 17 crore business necessitating manpower. ITAT found no infirmity in CIT(A)'s well-reasoned order based on evidence. Revenue's appeal dismissed.
Assessee engaged in business of commission agent (Aadatia) for agricultural products. AO made addition u/s 68 treating entire cash deposits in bank account as unexplained, alleging undisclosed trading activity. CIT(A) deleted addition after considering cash books, ledgers, bank statements of three proprietorship concerns, observing cash deposits duly recorded relating to consignment sales over Rs. 17 crores, part received in cash. ITAT upheld CIT(A)'s decision, noting AO failed to rebut assessee's explanation that cash deposits represented sale proceeds received on farmers' behalf, incidental to commission income. AO could have cross-verified from Mandi Samiti records but didn't. Only real income taxable, AO erred by taxing receipts instead of commission income. CIT(A) also deleted 25% disallowance of expenses made by AO, as assessee substantiated salary payments through evidence like employee confirmations, volume of Rs. 17 crore business necessitating manpower. ITAT found no infirmity in CIT(A)'s well-reasoned order based on evidence. Revenue's appeal dismissed.
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