9911796707
TMI Blog2023 (3) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that the Ld. AO has not considered this exempt income as disclosed by the assessee in his return of income. AO has therefore erred in treating the agricultural income of Rs. 4 lakhs as unexplained. We therefore direct the Ld. AO to delete this addition as it has been properly explained and disclosed in the return of income filed by the assessee. Addition out of savings - Considering the submissions, this amount was out of surplus available with the assessee and which has been deposited into the bank account, we are inclined to direct the Ld. AO to delete the addition which was made out of the savings of the assessee. Addition of cash deposits made by the assessee into the bank account - Deposits during the demonetization period for Rs. 33,00,000/- in both the bank accounts by way of cash is out of the capital alleged to be introduced by the partners of the firm. In the absence of any substantiated evidence with regard to deposits of the cash into the assessee s account instead of partnership firm s account we could not accept that these deposits are from explained sources. We are therefore inclined to uphold the addition of Ld. Revenue Authorities to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale deed and details of agricultural land holdings. Subsequently, the Ld. AO issued show cause notice on 11/12/2019 calling for detailed information. In reply, the assessee on 11/12/2019 furnished the details as required by the Ld. AO through ITBA. Examining the submissions made by the assessee on various dates, the Ld. AO concluded the assessment by making the following additions: 1 Disallowance of gift from mother in law Rs. 18,00,000 2. Amount received from farmers on sale of paddy, fertilizers and pesticides Rs. 42,50,280 3. Amount withdrawn from partnership firm Rs. 35,40,000 4. Unexplained agricultural income Rs. 4,00,000 5. Unexplained cash deposits in HDFC Bank Rs. 2,50,000 6. Unexplained cash deposits during demonetization period Rs. 32,00,000 Total Rs. 1,34,40,280 3. The Ld. AO considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a huge time lag between the date of sale of property and date of gift to the assessee. Further, the Ld. DR submitted that the partnership firm is unregistered and it entered into on 11/11/2016 which is during the demonetization period. The Ld. DR also questioned the need of depositing the cash as contribution towards capital by the various partners into the assessee s bank account. The Ld. DR also submitted that the partners to the firm are non-filers of the income tax returns and has never disclosed their agricultural income as claimed by them and has never filed their returns of income for any assessment year. Further, the Ld. DR also submitted that the claim of the Ld. AR that the assessee is a commission agent for Paddy sales and purchases and this fact was not disclosed in the VAT return submitted by the assessee. The Ld. DR therefore pleaded that the order of the Ld. Revenue Authorities may be upheld. 7. We have heard both the parties and perused the material available on record and the orders of the Ld. Revenue Authorities. With respect to Rs. 18 lakhs as gift from mother-in-law, the submission of the Ld. AR is that the assessee deposited the same into the bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural income while filing the return of income. We find that the Ld. AO has not considered this exempt income of Rs. 5 lakhs as disclosed by the assessee in his return of income. The Ld. AO has therefore erred in treating the agricultural income of Rs. 4 lakhs as unexplained. We therefore direct the Ld. AO to delete this addition as it has been properly explained and disclosed in the return of income filed by the assessee. 10. With respect to addition of Rs. 2,50,000/- the Ld. AO considered as no source was explained by the assessee and hence treated the same as unexplained. It was the submission of the Ld. AR that this amount was out of surplus available with the assessee and which has been deposited into the bank account. Considering the above submissions, we are inclined to direct the Ld. AO to delete the addition of Rs. 2,50,000/- which was made out of the savings of the assessee. 11. With respect to addition of Rs. 35,40,000/- cash deposits made by the assessee into the bank account, the submissions of the Ld. AR that these amounts have been received by cash being the contribution towards the capital of the firm Dhanalakshmi Traders by various partners of the firm. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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