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TMI Blog2023 (12) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... f source of cash deposit of Rs 4 lacs out of agriculture produce is accepted. Also not in dispute that the assessee has worked as a contractor for HP Forest Corporation and has reported gross receipts u/s 44AD of the Act and which has been accepted by the AO. All the transactions in terms of receipts of money from HP Forest Corporation are credited in the assessee s bank account and corresponding expenditure are undertaken by way of withdrawals from time to time by way of cash and cheque payments. As submitted by the assessee that the work is being undertaken in remote far flung areas and given the nature of work, it is essential to keep certain cash in hand which is withdrawn from the bank from time to time and where certain cash so withdrawn is not required, the same is deposited back in the bank account. It has thus been submitted that source of cash deposit of Rs 3.20 lacs is out of earlier withdrawals and which has not been accepted by the AO merely for the reason that there is a time gap of two months in terms of withdrawal and subsequent deposits. In our view, the nature of assessee s activities and the business exigency of keeping cash in hand has to be considered ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lture income amounting to Rs. 4.50,000/-. 3.1 During the course of assessment proceedings, the assessee was directed to explain the cash deposits of Rs. 10 lacs in his bank account. The assessee has filed a reply to the same and has explained the source of cash deposits which is placed on the record. It was submitted that the Ld. A.O. has not appreciated the explanation given by the assessee has made an addition of Rs. 7,20,000/- from undisclosed sources of income. 3.2 The assessee preferred an appeal against the said assessment order dated 19/12/2017 before the ld CIT(A) and also filed a detailed written submission before the ld CIT(A). It was submitted that the appeal filed by the assessee was dismissed by the ld CIT(A) and an order dated 07/11/2022 was passed u/s 250 of the Income Tax Act, 1961 which has been assailed in the present appeal. 3.3 It was submitted that the assessee has declared agriculture income amounting to Rs. 4,50,000/-in the ITR filed by the assessee. A copy of jamabandhi i.e. agriculture land holding has been also supplied during the course of earlier proceedings, which was completely ignored by the Authorities below without assigning any reasons. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther). Against the cash credit limit of Rs. 7,10,000/- availed by Asseee, Rs 6,00,000/- tfd to his saving account dated 18/01/2011. This amount was used by him for agricultural operation on his land by frequent withdrawals between 18/01/2011 to 20/02/2011. As mentioned above in addition to agricultural income, Assessee is also working as petty contractor for HP Forest corporation and reed few payment i.e Rs. 128740/- dt 30/04/2011, Rs. 66,293/- dated 03/05/2011, Rs. 1,26,228/ dated 01/06/2011, Rs. 102763 dated 23/06/2011 and Rs. 84,107/- dated 25/07/2011. Total amount reed from HP forest corporation during this period was Rs. 5,08,131/-. As assesee's belong to rural Area having Agricultural income and also having contractual works in far flung forests areas, it was never feasible/possible to make payments through Cheques or banking channels to unorganised Labour class. As such all withdrawals Apprx.ll Lakhs made in cash for payments to labour working in orchard as well as for labour deployed for forest corporation works. Usually any cash left with Assessee after making payments to labour, re-deposited into bank. Further it is submitted that duirng the period Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02.08.2011 Rs. 4,00,000/- 09.12.2011 Rs. 1,00,000/- 20.12.2011 Rs. 5,000/- 14.01.2012 Rs. 3,20,000/- 24.01.2012 R s . 2 5,000/- 16.02.2012 Rs. 50,000/- 07.03.2012 Rs. 1,00,000/- 4.1. The assessee was asked to explain the source of above cash deposits in his bank account. The assessee has sought to explain cash deposit of Rs. 4,00,000/- made on 02.08.2011 out of agricultural income of Rs. 4,50,000/- declared in the ITR. However, no proof of sale of agricultural produce has been furnished by the assessee during the course of assessment proceedings. Jamabandi filed by the assessee, though, shows orchard land but it is only 00-11- 35 hect. (approx.1.5 bigha only). In any case, any proof of sale proceeds received by the assessee in cash or otherwise needs to be correlated with the cash deposit of Rs. 4 lakh made on 02.08.2011. But there is no proof whatsoever in support of his cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has concealed the particulars of his income. Therefore, penalty proceedings u/s 271(l)(c) of the Act are being initiated separately. 5. Heard the rival contentions and purused the material available on record. It is not in dispute that the assessee along with his mother owns agriculture land measuring 38 bighas where apple orchards are grown and cultivated by the assessee. The land holdings records have been submitted before the lower authorities. Further, agriculture produce records have now been submitted which shows production of apples. The assessee has also availed cash credit limit from the bank based on joint land holding and the amount has been transferred in his bank account. It is the claim of the assessee that all expenditure and receipts from agriculture operations are undertaken through his bank account. Therefore, taking into consideration the land holding and apples production and the fact that all transactions are routed through the assessee s bank account, the explanation so submitted by the assessee in support of source of cash deposit of Rs 4 lacs out of agriculture produce is accepted. 6. Further, it is also not in dispute that the assessee has worked as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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