9911796707
TMI Blog2023 (11) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... ar AY 2017-2018 is contrary to facts, opposed to law and untenable. 2. The Ld AO failed to follow the Standard Operating procedure as laid out by the CBDT in the instruction no 03/2017 2.1 The Ld AO failed to follow the spirit of the instruction no 4/2017 and failed to follow the instructions of CBDT on operation Clean money Assessments 3. The Learned CIT-A erred in making the addition on account of cash deposited in the bank account out of clear finding of facts alleging the same to be income chargeable to tax u/s 68 without appreciating the facts of the case and the scope of provisions of above section. 3.1 The Learned CIT A erred in making the addition in respect of cash deposited in the bank account which were represented by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are that, the appellant is a Chartered Accountant, deriving income from profession, income from other source and income from agricultural activities. The assessee filed his return of income for the assessment year 2017-18, declaring total income of Rs. 2,38,240/-. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer noticed that the assessee has deposited a sum of Rs. 11,54,500/- in specified bank notes during demonetization period to his bank account and thus, called upon the assessee to explain source for cash deposits. In response to the notice, the assessee vide his letters dated 16.10.2019 & 04.12.2019, submitted that source for cash deposits is out of agricultural income, being nurs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer erred in disputing the fact that the assessee is carrying out agricultural operations. Further, although the assessee did not file his return of income for earlier assessment years, but fact of the matter is that the Assessing Officer cannot disregard land held by the assessee and agricultural operations carried out during the earlier period. Further, just because the assessee did not file his return of income, any adverse inference cannot be drawn against explanation offered for source for cash deposits. Therefore, he submitted that the Assessing Officer and CIT(A) are completely erred in not appreciating fact while making additions towards cash deposits during demonetization period. 5. The ld. DR, on the other hand supporting the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from agricultural operations. In fact, there is no dispute with regard to the fact that the assessee is having huge extent of land and is carrying out various agricultural operations including nursery etc. The assessee had also filed relevant cash vouchers for receipt of cash from various parties for sale of agricultural products. Therefore, when the assessee is having sufficient land holding and also proved carrying out agricultural operations, then in our considered view the Assessing Officer ought to have accepted the explanation of the assessee regarding source of income for cash deposits during demonetization period, more particularly when the Assessing Officer has accepted partial explanation of the assessee and allowed relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered view that, credit for agricultural income to the extent of Rs. 6,54,500/- needs to be given to the assessee.
Thus, we direct the Assessing Officer to allow credit for source to the extent of Rs. 6,54,500/- out of agricultural income earned by the assessee for the impugned assessment year and balance amount of Rs. 5,00,000/- to be treated as unexplained money taxable u/s. 69 of the Act. In other words, the assessee gets partial relief of Rs. 6,54,500/- out of total cash deposits of Rs. 11,54,500/- and balance amount of Rs. 5,00,000/- towards cash deposits is hereby sustained.
8. In the result, appeal filed by the assessee is partly allowed.
Order pronounced in the court on 11th August, 2023 at Chennai. X X X X Extracts X X X X X X X X Extracts X X X X
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