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2021 (7) TMI 282 - AT - Income TaxUndisclosed purchase of car and the investment so made in purchase of car - assessee is engaged in agricultural and diary activities - HELD THAT:- Considering the fact that the agricultural and diary activities are predominantly rural activities where the transactions continues to be undertaken predominantly in cash rather than through formal banking channels, what is relevant is availability of overall cash in hands of the assessee at the time of purchase of the car towards the end of the financial year i.e, on 13.02.2013. On perusal of the return of income alongwith accompanying cash flow statement, we find that the assessee has generated net cash receipts of ₹ 191,240/- from agricultural operations, net cash receipts (before depreciation) of ₹ 315,589/- from diary business during the year under consideration which reasonably explains the source of purchase of car for which part payment was made in cash of ₹ 369,850/-. As far as withdrawals for household expenses are concerned, we find that the same is again demonstrated partly from agricultural and diary activities during the year as well as availability of cash at the beginning of the financial year. We therefore find that the assessee has duly explained the source of payment for purchase of car and the investment so made in purchase of car cannot be treated as made out of undisclosed sources - Decided in favour of assessee.
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