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2023 (9) TMI 674 - AT - Income TaxUnexplained cash deposit in savings bank account - assessee had not furnished details in respect of agricultural income, family members and their activity, borrowings for agricultural activities, cash flow statement, ownership of bank account etc. - HELD THAT - CIT(Appeals) has erred in facts and in law in sustaining the addition of Rs. 5 lakhs on ad-hoc basis, when it has not been disputed that the assessee is having agricultural income for past many years and further, no rationale/basis has been given for confirming the addition on ad-hoc basis. The ITAT Ahmedabad in the case of Samir Kishor Parekh 2022 (6) TMI 1111 - ITAT AHMEDABAD held that that addition made on estimated basis, without rejecting books of accounts of the assessee, is unsustainable in law. Further, it is well-settled law that no addition could be made on estimated basis without rejecting books of account of assessee as held by various Courts in the case of Asian Grantio India Ltd. 2019 (10) TMI 1193 - ITAT AHMEDABAD , Royal Marwar Tobacco Product (P.) Ltd. 2007 (12) TMI 321 - ITAT AHMEDABAD , Anil Kumar Company 2016 (3) TMI 184 - KARNATAKA HIGH COURT , Ercon Composites 2013 (12) TMI 902 - ITAT JODHPUR to name a few. Accordingly, the addition as sustained by Ld. CIT(Appeals) is directed to be deleted, looking into the instant facts which has been done as on ad-hoc basis, especially when fats placed on record by the assessee have not been disputed. Appeal of assessee allowed.
Issues involved:
The issues involved in this judgment are the addition of unexplained cash deposit in savings bank account, reopening of assessment under section 147, condonation of delay in filing appeal, and the assessment of agricultural income for the appellant. Addition of Unexplained Cash Deposit: The appellant filed an appeal against the order confirming the addition of Rs. 5,00,000 on account of unexplained cash deposit in the savings bank account. The appellant contended that all documents were provided, and none were rejected or found concocted. The Ld. CIT(A) restricted the addition to Rs. 5 lakhs, considering the appellant's agricultural income and past savings. The ITAT observed that the Ld. CIT(A) erred in sustaining the addition on an ad-hoc basis without a specific basis, especially when the appellant's agricultural income and substantial holdings were not disputed. Citing legal precedents, the ITAT directed the deletion of the addition of Rs. 5 lakhs as it was made on an estimated basis without rejecting the books of accounts. Reopening of Assessment under Section 147: The Assessing Officer reopened the assessment under Section 147 based on information that the appellant had deposited cash in the savings account. The appellant argued that the assessment was barred by limitation as no notice under section 143(2) was issued before completing the assessment proceedings. However, the ITAT did not delve into this issue in its judgment. Condonation of Delay: The appellant sought condonation of an 18-day delay in filing the appeal, citing reasons such as being an illiterate farmer dependent on an advocate. The ITAT accepted the condonation of the delay, considering the appellant's circumstances and the extended time due to the Corona Period. Assessment of Agricultural Income: The appellant's agricultural income and land holdings were scrutinized during the assessment. The Assessing Officer made an addition to the returned income, which was partly upheld by the Ld. CIT(A). The ITAT noted that the Ld. CIT(A) restricted the relief to Rs. 3.7 lakhs on an ad-hoc basis without providing a specific rationale. Given the appellant's consistent agricultural income and holdings, the ITAT found the Ld. CIT(A) erred in sustaining the addition of Rs. 5 lakhs without a proper basis, leading to the deletion of the said addition. This judgment addresses the issues of unexplained cash deposits, reopening of assessment, condonation of delay, and assessment of agricultural income, providing insights into the legal reasoning and precedents applied to reach the final decision in favor of the appellant.
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