TaxTMI 
TaxTMI 
2023 (3) TMI 858
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....he Act, dated 16/12/2019 for the AY 2017-18. 2. Briefly stated the facts of the case are that the assessee is an individual deriving income from purchase and sale of fertilizers and pesticides in the name and style of "Dhanalakshmi Agencies" filed its return of income on 9/6/2017 for the AY 2016- 17 admitting a total income of Rs. 5,10,480/- u/s 44AD of the Act(presumptive taxation). Subsequently, the case was selected for "limited scrutiny" under CASS to verify the sources for cash deposits during the year. Accordingly, notices U/s. 143(2) was issued electronically on 9/8/2018 and served on the assessee. Subsequently, notice U/s. 142(1) was also issued on 15/7/2019, 25/10/2019, 5/11/2019, 14/11/2019 and 21/11/2019 calling for the informat....
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....nexplained cash deposits in various bank accounts. Aggrieved by the order of the Ld. AO the assessee filed an appeal before the Ld. CIT(A)-NFAC. 4. The Ld. CIT(A)-NFAC, considering the submissions made by the assessee during the appeal proceedings, dismissed the appeal of the assessee and upheld the order of the Ld. AO. Aggrieved by the order of the Ld. CIT (A)-NFAC, the assessee is in appeal before us. 5. The assessee has raised three grounds in his appeal however, the only issue raised by the assessee is with respect to addition of Rs. 1,34,40,000/- made by the Ld. AO U/s. 69A of the Act towards alleged unexplained cash deposits in bank accounts. 6. The Ld. AR submitted that the assessee is trading in fertilizers and pesticides and has....
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....e gift from mother-in- law was not accepted by the Ld. AO due to the fact that there is a huge time lag between the date of sale of property and date of gift to the assessee. Further, the Ld. DR submitted that the partnership firm is unregistered and it entered into on 11/11/2016 which is during the demonetization period. The Ld. DR also questioned the need of depositing the cash as contribution towards capital by the various partners into the assessee's bank account. The Ld. DR also submitted that the partners to the firm are non-filers of the income tax returns and has never disclosed their agricultural income as claimed by them and has never filed their returns of income for any assessment year. Further, the Ld. DR also submitted that th....
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....is a gift from mother-in-law and it was deposited into the bank account on 30/07/2016 itself in our considered view is acceptable and allowed. 8. With respect to the addition on account of sale of paddy, fertilizers and pesticides, it was submitted by the Ld. AR that the assessee has made turnover of Rs. 51 lakhs during the impugned assessment year by way of purchase and sale of paddy and has earned the commission of Rs. 2,60,000/- being 5% as disclosed in the returns of income filed by the assessee. This fact was not disputed by the Ld. AO. The Ld. AO has merely relied on the reported turnover as per VAT returns and has considered the submissions of the assessee as illogical. We find merit in the arguments of the Ld. AR that the assessee ....
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.... addition of Rs. 2,50,000/- which was made out of the savings of the assessee. 11. With respect to addition of Rs. 35,40,000/- cash deposits made by the assessee into the bank account, the submissions of the Ld. AR that these amounts have been received by cash being the contribution towards the capital of the firm Dhanalakshmi Traders by various partners of the firm. The Ld. AR also submitted admission of additional evidence substantiating the sources of funds by various partners towards contribution to the capital to the firm. The Ld. AR also submitted a copy of the partnership deed before us. Further, from the verification of the partnership deed, we find that there is no recital with respect to the capital contribution made by the partn....