TaxTMI 
TaxTMI 
2025 (7) TMI 1660
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....idated order, as the issues involved are interconnected having the same assessment year and of the same assessee. 2.1 The grounds of appeal taken by the assessee in ITA No. 957/JP/2024 for A.Y 2013-14 are as under; "1. The Ld. CIT(A), NFAC, has erred on facts and in law in ignoring the business activities of the assessee. The assessee is engaged in business activities in brokering and artiya of fruits, particularly fresh graphs on sale on approval, and keeping a fixed margin of 1% on the purchase of said transactions. Considering trading activities, the Ld CIT(A), NFAC, quantified a profit of Rs. 15,40,450/- at 8% on Rs. 1,92,55,660/- under Section 44AD of the Income Tax Act of 1961, in contrast to brokerage receipts of Rs. 1,91,000/-. 2.2 Whereas the grounds appeal raised by the revenue in appeal No. 929/JP/2024 for assessment year 2013-14 reads as follows: "(1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of cash deposits of Rs. 1,65,71,200/- and other deposits of Rs. 26,84,360/- (out of total addition of Rs. 3,29,51,200/-) made by the AO on account of unexplained money u/s 69A of the Act a....
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....otice issued U/s 148 also. The assessee has not filed any return of income in response to notice u/s 148 of the IT Act, 1961 issued. The case was transferred to Faceless Assessment Unit through NeFAC on 08.12.2021. Again notices u/s 142(1) of the IT Act, 1961 were issued on 16.11.2021 and 01.02.2022 asking assessee to submit details/documentary evidence for sources of such cash deposit. The assessee has not filed any submissions in response to notice u/s. 148 and notices u/s 142(1) of the Act, so issued. The assessee was given ample opportunities during the scrutiny proceedings but failed to furnish any explanation along with documentary evidence regarding the sources of deposits to the bank account. Therefore, the Assessing Officer was constrained to pass the assessment order u/s 144 of the Act based on the information available on records. Record reveals that the assessee has deposited cash in bank account maintained with HDFC Bank Ltd., to the tune of Rs. 3,29,51,200/- during FY 2012-13 relevant to AY 2013-14. The assessee was asked to furnish explanation and documentary evidence in respect of sources of such cash deposit. The assessee has not filed any reply. In the absence ....
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....fore, in normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration so received was deposited in bank accounts after keeping a fixed margin of 01% of the sale consideration; the balance amount was paid through account pay cheques or drafts to the farmers. 2. During the relevant assessment year, the assessee's income was below the basic taxable income. The assessee has not reviewed the other provision of the Income Tax Act and has his own limited verse that he has not an income above the basic limit. Therefore, he has not filed a return of income for the year. 3. The LD assessing officer, based on the information available through Actionable Information Monitoring Systems (AIMS), that during the year under consideration, the assessee has deposited cash of Rs 32,951,200/- in his bank accounts maintained in HDFC Bank. which remained unexplained. besides, the assessee neither filing his return of income nor making compliance to the letter issued by the JAO, as per the assessment order... Page .. 01 4. Therefore, the LD Assessing Officer issued noti....
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.... summary of cash deposited into the bank accounts during the relevant previous year and also copies of both bank accounts and relevant bank ledgers, which support that the appellant deposited total cash of Rs 16571200/- and not Rs 32951200/- as alleged by the AO and even aggregate deposits, i.e., cash and others, are only Rs 19255560/-, which is also far below the alleged amount of Rs 32951200/- Bank Account No. Cash Deposits Other Deposits Total HDFC 9872320000399 11,471,200.00 2,173,360.00 13,644,560.00 HDFC 9872000001902 5,100,000.00 511,000.00 5,611,000.00 16,571,200.00 2,684,360.00 19,255,560.00 9.3 Thus, it is very clear that before recording the reason for reopening the assessment, the OA did not gather bank statements and merely proceeded on the basis of information available through AIMS. The very basis for reopening of assessment, i.e., cash deposit of Rs 32951200/-, is wrong; therefore, the reopening based on this cannot stand at all. (PB ... Order Pg 4) 9.4 The AO simply based on the information through AIMS passed an order, and the AO did not carry out the proper procedure. Ther....
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....e of appeal proceedings, the appellant was asked to submit copies of purchase invoices and the ledger account in support of the purchases made. However, the appellant failed to produce such evidences. 8.2 Without verifying such evidences, the claim of the appellant that he receive only 1% as profit on the total turnover/sales is not acceptable. The AO is directed to quantify 8% as the profit in accordance with section 44AD of the IT Act. For the purpose of quantifying the total turnover, the AO is directed to verify the Bank Accounts referred by the appellant in his return submissions. Ground No.: 1 (Department) On the facts and in the circumstances of the case and in law, the ld CIT(A) has erred in deleting the addition of cash deposit of Rs 1,65,71,200/- and other deposits of Rs 26,84,360/-( out of total addition of Rs 3,29,51,200/-) made by the AO on account of unexplained money u/s 69A of the Act as the assessee could not explain nature and source of such amount in absence of return of income for the year under consideration. AO Page 2 of 3 CIT(A) Page 11-13, Findings at para 7.1 and 7.2 of the order Facts:- 1. The ....
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....her Receipts of Rs. 2,684,360/-). 1.3 It is further submitted that the ld CIT(A) called for a remand report and thus forwarded the assessee's written submission along with additional evidence fled by the assessee vide letter dated 26/12/2023, and even after six (6) reminders, despite the Ld CIT(A), no remand report was submitted (Order Page No. 11, pra no. 6.2 of the order). 1.4 The Ld AO, during the making of an assessment, merely relived the information available through Actionable Information Monitoring Systems (AIMS) only, and he did not make any independent inquiries from the bank that the information has been received in a correct manner or not. Besides the fact, the assessee had not deposited such amount as the AO order in the bank account. On the facts, the A O has not followed the procedure required to be followed to make the assessment and merely to create demand made huge amounts added in the pass order . This is shown with the facts of the case that the addition made by the AO is bad in law. In view of the above, the CIT(A) has rightly deleted the addition made by the AO, and thus the ground of the department be dismissed. Ground ....
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....has closed the business activities and had been lapsed for 10 years and has not been in touch with the farmers and, to prove their business transactions, tried hard to contact them and could collect a confirmatory affidavit along with agricultural revenue records from farmers and was submitted before CIT(A). 2. The LD CIT(A) submitted all the documents submitted by the appellant for calling for a remand report. However, the AO has not given any responses despite seven reminders to the AO. 3. On the facts, it is absolutely wrong to state that the assessee business is not established and has not arisen. This is because the assessors, after the lapse of 10 years of the relevant year, had done their best effort and had collected their business transaction records and submitted that he was engaged in the business activities as stated. In view of the above, the CIT(A) has rightly accepted that the assessee was engaged in the business activities, and thus the ground of the department be dismissed. Ground No.: 3 (Department) On the facts and in the circumstances of the case and in law, the Ld CIT(A) has not justified in treating the eligible bus....
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....the basic taxable income, and his own limited verse is that he has not an income above the basic limit. Thus, he has not filed a return of income for the year. 6. On the above facts and submission and documents submitted. It is proved that the assessable turnover of Rs 191,000/- for the relevant year was in the nature of brokerage only. Therefore, the turnover of the assessee is not liable to obtain an audit report from the chartered accountant and has not failed to get his accounts audited In the affidavits filed by the farmers, it was confirmed that they have given fruit on an approved basis with a fixed margin of 01% of the sale consideration. Ground No.: 4 (Department) On the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in ignoring the facts that the assessee produced agreements of farmers which were notarised 10 years later and did not produce any bills and vouchers to prove sale or purchase. Hence, the receipts of Rs 19255560/- constitute undisclosed income form undisclosed sources u/s 69A of the Act,1961 Facts:- 1. The assessee was engaged in the business of trading fruits, more particularly fresh....
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....mitted that 4.1 Section 69A of the Act can be invoked when the two precedent conditions are jointly satisfied (i) Money, bullion, jewellery or other valuable article is found, which is not recorded in books of accounts and (ii) Assessee offers no explanation about the nature and source. In case of appellant the first and foremost condition, regarding money, bullion, Jewellery etc found fails as there is no money, bullion, Jewellery. Further the second condition regarding furnishing explanation also fails as cash deposits are self-explanatory. 4.2 In view of the above, as none of the conditions lain down u/s 69A of the Act are fulfilled, no addition u/s 69A can be made. 5. The assessee has relied on the following judgments below to them: the ld CIT(A) also appreciated and deleted the addition made under section 69A of the IT Act, that section 69A is not maintainable. Further reliance is Placed on the following cases..... 1. Smt. Teena Bethala Vs Income Tax Officer, Ward - 4(3)(2), Bengaluru. ITA Nos.1383 and 1384/Bang/2019, dated 28.08.2019 2. Smt. Gangambike, Vs The Income-tax Officer, Ward - ....
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.... 1. The assessee was engaged in the business of trading fruits, more particularly fresh grapes in the year relevant, and the grapes are highly perishable in nature and weather sensitive; transportation causes deterioration in quality. 2. In the normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration received was deposited in bank accounts after keeping a fixed margin of 01% of the sale consideration; the balance amount was paid through account pay cheques or drafts to the farmers. 3. The Assessee is submitted before the ld CIT(A), details of goods received from the farmers as he was maintaining a purchased ledger in his books of accounts (PB.47-49) "Annexure 5"(... refer to Page No. 13 of 14 of the CIT(A) Order. 4. The Assessee also submitted that all the payments were made through an account payee cheque/ i.e., through banking channels only. The Assessee also submitted copies of ledger accounts of farmers, which were maintained in books of accounts before the CIT(A) via Annexure 6 with the submission. 5. The Assessee also submitted....
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....f 1961, in contrast to brokerage receipts of Rs 191000/-. 7. To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions: S. No Page No. 1 Assessment Order dated 30/03/2022 1-3 2 CIT(A) Order Dated 15/05/2024 4-17 3. Written submission filed before CIT(A) -01 18-26 4 Written submission filed before CIT(A) -02 27 5 Written submission filed before CIT(A) -03 28 6 Copies of Bank Statements 6.1 HDFC Bank Account No. 09872320000399 29-30 6.2 HDFC Bank Account No. 09872000001902 31-32 7 Copy of Ledger Account of Bank in Books 7.1 HDFC Bank Account No. 09872320000399 33-35 7.2 HDFC Bank Account No. 09872000001902 36 8 Affidavits of Farmers along with Land Revenue Records of Framers 8.1 Suresh Sahebrao Dwange 37-46 8.2 Sanjay Vishnudas Bairagi 47-52 8.3 Anil Sahebrao Uphade 53-61 8.4 Dinkar Punja Lahtikar 62-72 8.5 Raghunath Dgu Waghcore 73-81 8.6 Dashrath Shriram Ufade 82-90 8.7 Vilas D....
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....560/- as the business of the assessee has not been established. Vide ground no. 3 revenue challenges the action of ld. CIT(A) in considering the business of the assessee as eligible business u/s 44AD of the Act at the rate of 8% of the quantified turnover of Rs. 1,92,55,560/- which exceeded prescribed limit u/s 44AB of the Act and the assessee failed to get his accounts audited and no return of income had been filed for the year under consideration and finally vide ground no. 4 ld. AO challenges that the assessee produced agreements of farmers which were notarized 10 years later and did not produce any bills and vouchers to prove sale or purchase. Hence, the receipts of Rs. 1,92,55,560/- constitute undisclosed income from undisclosed sources u/s 69A of the income-tax Act, 1961. Record reveals that out of total credit as alleged by ld. AO for Rs. 3,29,51,200/- the actual credit is Rs. 1,92,55,560/- based on the evidence placed on record and even that fact is not disputed by the revenue. Now so far as the credit of Rs. 1,92,55,560/-, the assessee placed on record additional evidence under rule 46A of the Act which the ld. CIT(A) has admitted and after admitting the same were forwa....
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....pport of contention of income in the hands of the assessee. Based on that fact stated in the affidavit we considered the solitary ground of the assessee. In the result the appeal of the assessee is allowed. In the result appeal filed by the assessee stands allowed and that of the revenue stands dismissed. Order pronounced in the open court on 03/06/2025. ============= Document 1 BEFORE THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS). NATIONAL FACELESS APPEAL CENTRE APPEAL No. NFAC/2012-13/10114959 Name of Assessee DARSHIT PATEL Assessment Year 2013-14 Order Appealed Against : Order U/S 147 r.w.s. 144 of LT. Act, 1961 Dated 30.03.2022 FURTHER WRITTEN SUBMISSION 1. Ground of appeal relating to addition of cash deposits of Rs. 3,29,51,200/- made u/s. 69A of the Act. (a) During the relevant previous year the appellant purchased fruits of Rs. 1.90,74.300- Relevant details of purchase of fruits were attached at Annexure 5 of first submission. The appellant made payment for purchases through account payee cheques / NEFT / RIGS i.e. through banking channels only. The same is also verifiable from bank statements. Relevant ledgers of farmers from whom purchases ....