2025 (5) TMI 1477 - AT - Income Tax

Unexplained Cash deposits - assessee shown presumptive income u/s 44AD - HELD THAT - The undisputed fact that emerges is that the assessee has declared other incomes during AYs 2009-10 2010-11 and 2011-12 which are stated to be business income. In support of business income the assessee has filed an affidavit which has been extracted in the assessment order. The assessee also filed ledger extract of agricultural receipts before lower authorities which was not considered. Considering the nature of the business the assessee may not be in a position to furnish concrete evidence to establish the fact of carrying out the said business. In the absence of any contrary fact on record the assessee s explanation has to be accepted. The assessee has already shown presumptive income of 8% u/s 44AD. Therefore separate addition is not justified.

Summary

The Appellate Tribunal (ITAT Agra) heard the assessee's appeal for AY 2011-12 against the CIT(A)'s order confirming an addition of Rs. 11 Lacs to income under assessment framed u/s. 143(3) r.w.s. 147 of the Income Tax Act. The addition arose from cash deposits of Rs. 11 Lacs in the assessee's bank account, with the AO doubting the genuineness of the business (vegetable selling) and discrepancies between original and revised returns. While the CIT(A) deleted an addition of Rs. 26.18 Lacs relating to proprietor's capital account, it upheld the Rs. 11 Lacs addition for lack of satisfactory explanation.The ITAT noted the assessee had declared business income in preceding years and filed an affidavit and ledger extracts of agricultural receipts, which were not considered by lower authorities. Recognizing the nature of the business and absence of any contrary evidence, the Tribunal held that the assessee's explanation must be accepted. Since presumptive income under section 44AD at 8% was already declared, the Tribunal found the separate addition of Rs. 11 Lacs unjustified and accordingly "delete[d] the same." The appeal was allowed.