Cash Deposit Arising Out of Agriculture Income and Past Savings: ITAT Deletes ₹7 Lakh Addition of Senior Citizen [Read Order]
The Tribunal deleted the Rs. 7,38,500 addition under Section 68, accepting the assessee’s explanation that cash deposits arose from agricultural income and past savings, and set aside the ex-parte order due to lack of proper notice service.
![Cash Deposit Arising Out of Agriculture Income and Past Savings: ITAT Deletes ₹7 Lakh Addition of Senior Citizen [Read Order]](https://images.taxscan.in/h-upload/2025/07/09/2061938-cash-deposit-itat-taxscan.webp "Cash Deposit Arising Out of Agriculture Income and Past Savings: ITAT Deletes ₹7 Lakh Addition of Senior Citizen [Read Order]")
The Nagpur Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the ex-parte order of the Commissioner of Income Tax (Appeals) [CIT(A)] and deleted an addition of Rs. 7,38,500 made under Section 68 of the Income Tax Act, 1961. Dilip Sampatrao Yewale (assessee), a senior citizen and agriculturist filed his return of income disclosing agricultural income and interest on...
The Nagpur Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the ex-parte order of the Commissioner of Income Tax (Appeals) [CIT(A)] and deleted an addition of Rs. 7,38,500 made under Section 68 of the Income Tax Act, 1961.
Dilip Sampatrao Yewale (assessee), a senior citizen and agriculturist filed his return of income disclosing agricultural income and interest on bank deposits. The assessee deposited ₹7,38,500 in cash into his bank account, which he claimed was sourced from agricultural income and redeposits of cash withdrawals amounting to Rs. 8,20,000 from his bank account.
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The case was selected for scrutiny due to the cash deposits. The Assessing Officer (AO) issued notices to verify the source of these deposits. The assessee, unfamiliar with online systems and electronic communication due to his age and lack of a smartphone or email, relied on a local Chartered Accountant to handle compliance.
The assessee provided the Chartered Accountant with all relevant documents, including agricultural extracts and bank statements. However, the Chartered Accountant failed to respond to the notices, leading the AO to make an ex-parte addition of Rs. 7,38,500 under Section 68, alleging unexplained cash credits.
Aggrieved by the AO’s order, the assessee appealed to the CIT(A). The CIT(A) dismissed the appeal ex-parte, confirming the AO’s addition. Aggrieved by the CIT(A)’s order, the assessee filed an appeal before ITAT.
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The counsel for the assessee argued that the cash deposits were from exempt agricultural income, as disclosed in the return, and past savings, which should not be taxed. The counsel submitted that the assessee’s status as a senior citizen unfamiliar with digital systems.
The two-member bench comprising V. Durga Rao (Judicial Member) and K.M. Roy (Accountant Member) observed that the assessee had explained the source of the cash deposits as agricultural income and bank withdrawals.
The tribunal held that agricultural income is exempt. The tribunal set aside the CIT(A)’s ex-parte order and directed the AO to delete the Rs. 7,38,500 addition under Section 68 of the Income Tax Act. The appeal of the assessee was allowed.
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