TaxTMI 
TaxTMI 
2026 (9) TMI 931
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....casioned the delay in preferring the appeal within the stipulated time, as the assessee was suffering from severe lower back pain and was admitted to the hospital on 15.03.2025. We have carefully considered the contents of the affidavit and examined the explanation tendered by the assessee. Having regard to the facts and circumstances of the case, and being satisfied that the assessee was prevented by sufficient and reasonable cause from filing the appeal within the prescribed period, we are of the considered opinion that the delay does not appear to be deliberate, intentional or attributable to any mala fide conduct. 3. It is a settled proposition of law that, while considering an application for condonation of delay, a liberal and justice-oriented approach is required to be adopted so as to advance substantial justice, particularly when no prejudice is shown to have been caused to the opposite party. In the present case, we are satisfied that sufficient cause has been demonstrated by the assessee for the delay in filing the appeal. Accordingly, the delay of 323 days in filing the present appeal is condoned, and the appeal is admitted for adjudication on merits in accordance wi....
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....ts of the case, written submission and case laws relied upon by the appellant as against the observations and findings of the AO in the assessment order. The submissions and contentions of the appellant are discussed and decided as under: 6.1 Grounds No.1 to 3: In these grounds the appellant has challenged the addition worth Rs. 43,55,000/- as unexplained investment. The AO has made the addition as the cash amounting to Rs. 43,55,000/- was deposited during demonetization period. The appellant stated before the AO that he was a dealer in paddy. The AO pointed out in the last para of the assessment order that there was no cash sales of paddy during previous year. Hence the source of the cash was unexplained and hence AO made the addition. 6.1.1 Now before me in the appellate proceedings, the appellant has filed written submission. The appellant has filed the details of paddy sales before me along with the cash book and profit and loss account before me. I have gone through the entire written submission. It is not clear about the land holding of the appellant. It is not known whether the appellant has sold paddy in earlier years and in later years. The names of the p....
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....low were justified in treating the cash deposits aggregating to Rs. 43,55,000/- made by the assessee during the demonetisation period as unexplained money u/s. 69A of the Act, notwithstanding the assessee's explanation that the said deposits represented cash generated from his regular business of trading in paddy and were duly recorded in the books of account. 9. At the outset, we note that the assessee is admittedly engaged in the business of trading in paddy. The return of income for the year under consideration was filed along with the tax audit report u/s. 44AB of the Act. During the course of assessment proceedings, the assessee had furnished, inter alia, the computation of income, trading account, profit and loss account, balance sheet, cash book, purchase and sales details, commission income details, paddy loading and unloading account and particulars relating to the cash deposits. Thus, this is not a case where the assessee, for the first time after detection of the cash deposits, has set up a plea of carrying on paddy trading business. The nature of the business and the maintenance of books of account form part of the regular financial records of the assessee. 10....
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....dy recorded in the books were bogus, that the assessee did not possess sufficient stock capable of being sold, or that the sales recorded in the books resulted in any discrepancy in the quantitative stock position. Nor has any specific defect been pointed out in the cash book demonstrating that the cash generated from the recorded business transactions was unavailable for making the impugned deposits. Once the business transactions forming the source of cash are reflected in the regular books, the explanation has to be tested on the basis of those records and cannot be rejected merely because the cash was ultimately deposited into the bank during the demonetisation period. 13. We also find that the reasoning adopted by the ld.CIT(A) proceeds partly on an erroneous premise. The ld.CIT(A) observed that the extent of landholding of the assessee was not clear. However, the case of the assessee is that he is a trader in paddy and not that the cash represented sale proceeds of paddy cultivated on his own agricultural lands. Therefore, the extent of agricultural land owned by the assessee, by itself, is not determinative of the source of cash generated from his trading activity. The re....
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....erits with reference to the books of account and contemporaneous evidence. In the present case, the chain of circumstances emerging from the material placed before us shows that (i) the assessee was carrying on the business of trading in paddy; (ii) books of account and financial statements were maintained and furnished; (iii) the assessee had availed a substantial HDFC Bank loan specifically in connection with the paddy trading activity; (iv) the loan of Rs. 40,32,000/- had been disbursed in February 2016; (v) the cash book records paddy sales during October 2016; and (vi) repayment towards the paddy loan was made during November 2016. These circumstances, when read cumulatively, provide a commercially plausible and documentary nexus between the assessee's regular business operations and the cash available during the relevant period. 16. The Revenue has not brought any positive material on record to establish that the entries appearing in the cash book were fabricated or that the paddy sales recorded therein were fictitious. There is no finding that the corresponding purchases were bogus or that sufficient stock was not available for effecting such sales. The books have als....