AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 1103
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....on facts and in law in confirming addition of Rs. 16,00,000/- on account of alleged unexplained cash introduced in the capital account of Prop concern Pavan Associates. 2. The Ld.CIT(A) erred on facts and in law in confirming addition of Rs. 1,20,000/- by treating part of agricultural income to be as income from undisclosed sources. 3. The Ld.CIT(A) erred on facts and in law in confirming disallowance out of depreciation and petrol expenses to the extent of Rs. 36,203/- by treating the same to be personal in nature. 3. The brief facts of the case are that, the assessee is an HUF. It has filed its Return of Income on 13/06/2011 for AY 2010-11 declaring total income of Rs. 9,36,577/- and the same was processed u/s.143(1) of the Income Ta....
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....ount as under:- (i) Withdrawal from his capital account with Pavan Associates of Rs. 10,64,100/- (Rs. 7 lacs on 08/02/2008) and withdrawal of Rs. 3 lacs on11/02/2008 which was credited into his HUF personal account. (ii) Withdrawal of Rs. 3 lacs from SB alc. no. 17072 standing in the name of Sabebsingh B. Sengar Individual. (iii) Rs. 3 lacs agricultural income for the F.Y. 2009-10 relevant A. Y. 2010-11 which was not originally declared in the return of income. (iv) Remaining amount Rs. 3 lacs from past saving from agricultural activities. 5.1. Assessee had further explained that such huge cash balances in personal account were kept, looking to the nature of its business activities i.e. transport activities for Government Agencies ....
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....ural activities. Ld AO has mentioned that the assessee has never shown his agricultural income in any of his previous year's ITR for rate purpose except first time by way of filing a revised return for the AY 2010-11, the year under assessment. Therefore, the Ld AO had not accepted the contention of the assessee having a sum of Rs. 3.00 lakhs as past savings are without any supporting evidence. 5.6. The Ld AO by stating that the assesses had failed to furnish any supporting evidence to explain the source of cash and thereby failed to prove the genuineness of the cash deposited in capital account. 5.7. The Ld AO has placed his reliance on the decision of the Hon'ble Calcutta High Court in the case of CIT vs. United Comm. And Industrial Co.....
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....The ld. AR further stated that out of the total agricultural receipt of Rs. 3 lakhs, only 60% be treated as cash introduced in the business of the appellant and the balance of Rs. 1,20,000/- be treated as expenditure incurred for agricultural activity. The Ld.AR submitted that the appellant has not incurred any expenses in the present case for earning agricultural income. Cultivation of the agricultural land of the Appellant is undertaken by a local farmer who shares receipts from sale of the produce in an agreed ratio with the appellant. As per the arrangement between the appellant and farmer, all expenses of crop cultivation are to be borne by the farmer and the appellant receives certain proposition of the sale proceeds of the cultivated....
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....unt of unexplained cash credit. 9.1. In other words, an addition of Rs. 10 lakhs is deleted from the total addition of Rs. 17,20,000/-. Thus, this ground of appeal is partly allowed. 9.2. The next aspect is that the assessee has shown agricultural income of Rs. 3 lakhs out of that Assessing Officer has disallowed 40% on account of expenditure incurred by the assessee. 10. I have perused the records carefully. On perusal of the assessment order would reveal that the ld.AO did not dispute landholding owned by the assessee. He has not made any discussion on that point. He has also not disputed the earning of agricultural income. The Assessing Officer was of the view that for earning this income of Rs. 3 lakhs, there must be some expenditure....