The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter involving unexplained cash deposits of Rs. 1.89 lakh, acknowledging that the amount was from cattle feed sales and that the agriculturist lacked knowledge of tax proceedings.
Sanjaykumar Virabhai Patel, the assessee is an agriculturist dealing in animal husbandry did not initially file a return of income for assessment years 2013-14 and 2014-15. The revenue department initiated re-assessment proceedings after observing huge cash deposits in the assessee’s bank accounts.
The AO found that the assessee had deposited cash of Rs. 32,85,400 in the savings bank account. The case was reopened under Section 148 of the Income Tax Act and a notice was issued on 31-03-2021.
The assessee failed to respond to the notice initially but later filed a return of income on 15-02-2022 declaring an income of Rs. 1,89,031. The assessee stated that the deposits came from the sale of cattle feed and claimed the business ran on a no-profit, no-loss basis with total sales and purchases approximately matching.
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The Assessing Officer (AO) was not satisfied with the explanation due to a lack of supporting evidence and added Rs. 32,85,400 as unexplained cash credits under Section 69A of the Income Tax Act.
The facts were identical for AY 2014-15 except the cash deposit amount was Rs. 28,02,000. On appeal, the CIT(A) upheld the AO’s decision to add these amounts as unexplained cash credits.
Aggrieved, the assessee approached the ITAT and submitted additional evidence, including confirmation letters, bank statements, profit and loss accounts, capital accounts, and balance sheets.
The two-member bench comprising Dr. B.R.R. Kumar (Vice President) and Suchitra Kamble (Judicial Member) admitted the additional evidence and decided to remand the matter back to the assessing officer for verification.
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The tribunal explained that the assessee’s lack of familiarity with tax proceedings which was the reason for the earlier non-submission of documents. The tribunal directed the AO to verify the additional evidence and adjudicate the issues as per the Income Tax statutes. The appeal was allowed for statistical purposes.
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