TaxTMI 
TaxTMI 
2024 (7) TMI 574
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.... of the case, liable to be annulled. (3) The Ld. CIT(A) was not justified in confirming the addition of Rs. 11,46,500/- against cash deposits during demonetization period. (4) The Ld. CIT(A) was not justified in confirming the application of section 68 and moreover adopting section 115BBE. 2. The background facts leading to present appeal are such that the assessee-individual is a farmer having sole source of income as agriculture. The revenue, from an information available in AIMS/ITBA module that the assessee has made cash deposits of Rs. 11,46,500/- in an a/c with Indusind Bank during demonetization period from 08.11.2016 to 30.12.2016, issued notice dated 14.03.2018 u/s 142(1) requiring the assessee to file return by 31.03.2018. In response, the assessee filed a belated return on 20.05.2019 declaring interest income of Rs. 4,537/- and agricultural income of Rs. 21,20,298/-. Although in Para No. 2 and 3 of assessment-order, the AO has noted that the assessee did not file any return, subsequently in Para No. 4.3 of same order the AO has accepted filing of belated return on 20.05.2019 declaring aforesaid incomes. The AO issued notices dated 13.08.2019 and 18.0....
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....was having sufficient land and the crops like Banana, Makka, Chilli, Kapas, Sugarcane were grown and the produce was sold. The Written-Submission filed by assessee is re-produced below for an immediate reference: 5. Drawing us to the documents filed in Paper-Book and referred in the above Written-Submission at different places, Ld. AR submitted that the assessee is holding sufficient land for earning agricultural income; that the assessee has also availed KCC loan for the purpose of cultivation on lands; that the assessee has sold agriculture produce in market which is evident from sample bills. He submitted that the assessee is an agriculturist and has not kept complete record and all sale bills though enough sale was in fact made. He submitted that the assessee has declared agricultural income of Rs. 21,10,298/- out of which the AO has accepted only agricultural income of Rs. 9,63,798/- without any basis. Ld. AR submitted that the AO has picked figure of Rs. 9,63,798/- just to leave approximate amount to treat the cash deposit of Rs. 11,46,500/- as unexplained to enable him to make addition u/s 69A. Ld. AR strongly contended that the assessee's full time occupation is agricult....
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....to maintain complete record/bills of entire sales, more particularly the crops directly sold to the customers. We also find that the assessee is having agriculture as sole source of income and there is no other source of income brought on record by Ld. AO. The assessee has also filed a solemnized affidavit to CIT(A) making averment that he has no income except agriculture. Since agricultural income is fully exempt, the assessee does not have any taxable income and therefore the addition u/s 69A cannot be made. These aspects get full support from direct decision by Co-ordinate Bench of ITAT, Indore in Madhusudan Dhakkad (supra); we extract below a few paras of decision relevant to present case of assessee: "6......Ld. AR submitted that the agricultural sector in our country is not fully organized. It is a known fact that the agriculturists are selling part of their crop to the established dealers and part of their crop directly to consumers. This fact is very much accepted by Hon'ble ITAT, Chennai in Smt. Annakkalanjiam Mathivanan ITA No. 2451/Chny/2018 order dated 22.01.2019: "5. The Assessing Officer as well as the CIT(Appeals) have to appreciate the fact that th....
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....at the assessee does not have any income except agricultural income. Ld. AR submitted that when there is no source of income except agricultural income, it is but natural that the assessee has made cash-deposits in the bank account out of agricultural income only. According to Ld. AR, agricultural income is non-taxable and hence there cannot be any addition on account of taxable income u/s 69A. Ld. AR relied upon the decision of Indore Bench in ITO Vs. Smt. Shahnaj Bano, ITA No. 443/Ind/04 order dated 07.01.2005 and claimed it to be directly applicable to the assessee: "8. As regards investment in flat, the AO has not brought on record any source of income except the income from agriculture claimed by the assessee. If a person has only agricultural income and no other income, then no addition can be made to the total income unless and until the AO proves that the assessee has any other source of income which is taxable under the Income-tax Act. The AO has not brought on record any material or evidence to show that the assessee was having any other source of income except agricultural income which is not taxable. CIT(A) was, therefore, justified in deleting the addition of ....
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....his appeal of assessee is allowed. Order pronounced in open court on 23.01.2024 ============= Document 1 Submissions At the outset it is submitted that the assesseg an agriculturist deriving his total income from the agricultural activity on 36 Acres of land. The assessee has no other sources of income. To prove his agricultural income following evidences were placed on record:- a) Affidavit (PB 3-4) b) Mandi Bills & Other Bills (PB 9-11) & (PB 95-130) c) Khasra (PB 18-58) Document 2 3 The table below shows the complete details for the A.Y 2017-18 of land holding along with crops grown as per Khasra. CHART-A Current Year Khasra Number Land Holdings F.Y Crops Grown PB Reference 88/1, 88/2, 4.415 2016-17 81/1, 81/2 Hectare 1. Banana 2. Makka PB-21 3. Wheat 20/1 1.708 2016-17 1. Banana PB-22 Hectare 20/2 3.415 2016-17 1. Banana PB-22 Hectare 2. Makka 106/3 2.113 2016-17 1. Sugarcane PB-23 Hectare Total 11.651 Hectare CHART-B Earlier Years (as available) Khasra Land F.Y Crops Grown PB Reference Number 88/1, ....
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....nk loans thereby frequently dealing with the banks and on the other hand, he is keeping huge amount of cash idle at his home. The assessee has also not given an lota of explanation regarding the need to keep so much cash in hand with him. 5. However, the assessee had furnished the complete details of Mandi Bills, Bills of the crops that were sold directly to the customers as available :- Crops Sold Date of Sale Amount PB REFERENCE Sugarcane 01.08.2016 68,449/- PB-100 Banana 31.05.2016 74,560/- PB-101 Banana 26.06.2016 91,720/- PB-103 Banana 05.06.2016 86,500/- PB-104 Banana 11.06.2016 72,200/- PB-106 Banana 17.06.2016 1,12,400/- PB-108 Banana 18.06.2016 85,950/- PB-110 Banana 04.10.2016 1,75,200/- PB-112 Banana 14.06.2016 84,000/- PB-113 Banana 06.08.2016 1,64,400/- PB-114 Banana 09.08.2016 1,17,200/- PB-115 Banana 10.08.2016 1,70,500/- PB-116 Banana 15.08.2016 1,34,600/- PB-117 Banana 01.09.2016 1,79,500/- PB-118 Banana 05.09.2016 1,23,500/- PB-119 Banana 18.10.2016 94,270/-....