2021 (4) TMI 1188

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....unt of the amount deposited in the saving bank account of the assessee maintained with Punjab National Bank, Bahadur Ke Road, Ludhiana Branch. 4. Facts of the case in brief are that the A.O. on the basis of information that the assessee had deposited Rs. 48,56,000/- in his saving bank account, initiated the assessment proceedings by recording the reasons under section 147 of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). The A.O. mentioned that the assessee filed manual income tax return before ITO, Ward-2(5) Ludhiana on 08/02/2016. The A.O. observed that when the case was fixed for hearing the Counsel for the Assessee furnished the copy of J-Form in pursuance of Agricultural income of the assessee and merely stated that the assessee had collectively deposited the amount earned in the earlier years, however no satisfactory information regarding cash deposit or cash flow was filed. 4.1. The A.O. asked the assessee about the source of deposits in his bank account. The A.O. initiated the proceedings under section 144 of the Act and observed as under: Moreover, it is also noticed that there are other credits in your bank account also other than cash....

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.... have a PAN number. In view of above circumstances assessee had not filed his return. We hope you will find the aforesaid information as per requirement." 4.3. However, the A.O. was not satisfied from the submissions of the assessee and made the addition of Rs. 48,56,000/- by observing in para 4.7 to 4.16 of the assessment order as under: 4.7 During the course of assessment proceedings submission made in the case were found to be false. On verification it is found that the assessee was maintaining bank accounts in the earlier years and had also received his sale of agricultural produce form through bank. Therefore source of cash deposit in the bank accounts during the Financial year 2011-12 were not in any way was the cash available from the cash sale of agricultural produce of the previous year's collectively as claimed by the assessee. As per record and also as per confirmations u/s. 133(6) of the IT Act, assessee never received cash but received the payment through account payee cheque from the persons to whom he has sold the agricultural produce. 4.8 Thereafter counsel was specifically confronted that the assessee has received cheque against th....

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....ion about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. 4.13 Assessee has not offered any satisfactory explanation about the nature and "Source of the cash credit entries in his saving the bank account. Therefore total credit amount of cash deposits of Rs. 48,56,000/- remained unexplained and the information provided by the assessee regarding the source of cash deposit was found to be false and contradictory. 4.14 In view of above mentioned detailed discussion Rs. 48,56,000/- is required to be added to the income of the assessee. 4.15 For the above addition an academic issue of PEAK OF CASH DEPOSITS is discussed. In this case the benefit of peak of cash deposits is not given because benefit of peak of cash deposits is given when it can be inferred that the cash deposits were from the cash in hand out of the earlier cash withdrawals. In this case assessee has made cash withdrawal of Rs. 6,00,000/- only on 11.05.2011 whereas major entry of cash deposit of Rs. 48,00,000....

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....t, sought to enquire the sources of said deposit to satisfy himself about non escapement of any income from taxation, no satisfactory explanation could be given, constraining the hands of the A.O. to issue notice under section 148 of the Act on a prima facie belief of escapement of income from taxation, and that the A.O. had followed the due procedure in this regard. 5.2. The Ld. CIT(A) further observed that the A.O. on verification, found that the assessee had been receiving sale proceeds of agricultural produce by account payee cheque from two commission agents who confirmed the same and that at the beginning of the year in the month of April & May 2011, the assessee received a substantial amount of Rs. 91,00,000/- through banking channels. 5.3. The Ld. CIT(A) also observed that though no adverse opinion was formed by the A.O. regarding the taxability of the aforesaid receipt represented by credit entries in the bank account of the assessee, it was certain that the assessee's bank account was regularly being used for deposits of cheques. He pointed out that on 04/04/2011, a credit entry of Rs. 80,00,000/- was seen with the narration "By Sandhu Cold Storage", the said en....

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.... bring any material on record to substantiate that the aforesaid amount withdrawn by the assessee was utilized elsewhere other than in making the deposit in the bank account of the assessee, therefore the addition made by the A.O. and sustained by the Ld. CIT(A) was not justified. 8. In his rival submissions the Ld. Sr. DR strongly supported the orders of the authorities below and further submitted that when the assessee regularly deposited cheque and cash in his bank account against the sale of agriculture produce then it was unbelievable that the amount of Rs. 48,00,000/- was kept in cash for about 10 months, therefore, the Ld. CIT(A) was fully justified in sustaining the addition made by the A.O. 9. We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is not in dispute that the assessee is a senior citizen, holding agriculture land of about 44.5 acres and his source of income was only the agricultural income. In the instant case the A.O. has not doubted the receipt of Rs. 3,45,212/- by the assessee on account of sale of agriculture produce from M/s. Kaholon & Co. during the year ending on 31/03/201....