TaxTMI 
TaxTMI 
2025 (2) TMI 1607
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.... three additions, namely (i) addition of Rs. 11,90,000/- u/s 69A on account of unexplained deposits in bank a/c during demonetization period, (ii) addition of Rs. 4,00,000/- on account of bogus creditors, and (iii) addition of Rs. 4,00,000/- on account of unexplained agricultural income. Aggrieved, the assessee carried matter in first-appeal whereupon the CIT(A) granted part relief in this manner, namely (i) out of addition of Rs. 11,90,000/- on account of unexplained deposits in bank a/c, addition to the extent of Rs. 3,50,000/- was deleted and remaining addition of Rs. 8,40,000/- was upheld, (ii) the addition of Rs. 4,00,000/- on account of bogus creditors is upheld, and (iii) the addition of Rs. 4,00,000/- on account of agricultural income is deleted. Now, the assessee has come in next appeal before us. Original Grounds: 3. Originally, the assessee raised following grounds in Form No. 36: 1. Learned Commissioner (Appeals) erred in confirming addition of Rs. 8,40,000/- made by assessing officer on account of cash deposited in bank account of the appellant, holding it to be unexplained money, invoking Section 69A. The addition made by the assessing officer and confi....
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....e deposited in Bank A/c, could not have been received from customers/cash sales. Therefore, the AO treated the entire deposit of Rs. 11,90,000/- in SBNs as unexplained money u/s 69A (Para 4.1 & 4.2 of assessment-order) and made addition. 6. During first-appeal, the CIT(A) firstly noted that the assessee failed to produce Cash-Book before AO (Para 7.2.1 of appeal-order). However, the assessee filed Cash-Book during first-appellate proceeding showing opening balance of Rs. 3,62,714/- as on the date of commencement of demonetization (08.11.2016). The CIT(A) further agreed with AO's observation that during demonetization period, the assessee's business was not permitted to receive SBNs. Accordingly, he gave benefit of opening balance of Rs. 3,62,714/- shown by Cash-Book accepting the same as source for deposits SBNs of Rs. 3,50,000/- [Rs. 2,00,000 + Rs. 1,00,000 + Rs. 50,000]. So far as the deposit of SBNs of Rs. 8,40,000/- made on 25.11.2016 is concerned, the CIT(A) made following adjudication and upheld addition to that extent: "7.2.3 It is however noted from the cash book that on 25.11.2016 the appellant has deposited cash of Rs 8,40,000/-, the source of which as shown i....
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....cted in the order of CIT(A) re-produced by us in foregoing para) on 25.11.2016 as "To Capital - for mini old saving". Ld. AR submitted that this credit entry represents the funds available from agricultural income of assessee and his family members. The details of the proceeds of agriculture received by assessee and family members are given by Ld. AR in Para 1.3.2 of his Written-Submission as under: St. No. Date Receipt No. Amount (Rs.) 1 18.04.2016 095 4,01,495 2 02.09.2016 086 3,45,587 3 03.09.2016 094 3,52,574 4 03.09.2016 098 3,23,191 5 31.10.2016 011 3,41,429 6 01.11.2016 029 3,21,710 7 02.11.2016 064 3,43,031 8 04.11.2016 062 3,38,280 Total 27,67,397 8.1 Ld. AR drew us to the Paper-Book where the bills/vouchers of above receipts of agriculture are filed. He submitted that the assessee and his family members hold a total of 69.713 acres of agricultural land and hence the above receipts from agriculture are reasonable and acceptable. He, relying upon the decision of ITAT, Ahmedabad in Appeal No. ITA/1239/AHD/2024 in case of Kamleshbhai Vinodbh....
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....in the AO has acknowledged the production of "accounts and documents". He submitted that the books were in fact shown to AO and seen by AO and he is making such an assertion in open court which is authentic. He submitted that the bills of agriculture were also submitted to AO as well as CIT(A). He submitted that the credit entry "To Capital - mini old savings" mentioned in Cash-Book truly represents the inflow from agriculture proceeds received by assessee and family members which must be accepted. Ld. AR also narrated that the assessee is located in a relatively smaller place where the accountants are less competent and do not mention sufficient details in books of accounts and that is why the accountant of assessee mentioned "old mini savings" in Cash-Book instead of narrating "agricultural proceeds of assessee and family members". Ld. AR also referred the provision of section 69A and submitted that the AO has not brought any evidence on record to show that the assessee has not offered any explanation about the nature and source of cash deposits or that the explanation offered by the assessee was not satisfactory, therefore the action of AO in invoking section 69A is wrong. 8.....
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.... receipts from which the assessee has shown net agricultural income of Rs. 4,00,000/-, obviously after deduction of expenses incurred for agriculture. Although the AO did not accept the agriculture income of Rs. 4,00,000/- declared by assessee in return but the CIT(A) has accepted and the revenue is not in appeal challenging the CIT(A)'s action. Hence, the net agriculture income of Rs. 4,00,000/- earned by assessee before 08.11.2016 can be said to be available with assessee in the form of "old mini savings". In that view of matter, we accept the availability of funds to the extent of Rs. 4,00,000/- as old savings with assessee. 9. The second source, for remaining deposit of Rs. 40,000/- out of deposit of Rs. 8,40,000/-, is a cash sale of Rs. 41,548/- made by assessee on 25.11.2016 as recorded in the very same Cash-Book chargeable @ 14% GST. While the assessee claims that the proceeds of this cash sale was received by way of SBNs and the same was utilized for making deposit of Rs. 40,000/- in bank, the lower-authorities are against such claim on the footing that the assessee's business was not permitted by Govt./RBI's notifications to receive SBNs during demonetization period. Ld....