Agricultural sale proceeds claim on demonetisation cash deposits remitted for one final opportunity

5-Second Takeaway

The Tribunal held that the assessee should be given one final opportunity to substantiate his claim that demonetisation-period cash deposits came from sale proceeds of agricultural produce. The addition under s. 69A was not sustained on the existing record, and the matter was allowed for fresh examination.

The dispute concerned cash deposits of Rs. 11,50,500 made in the assessee’s bank account during the demonetisation period. The Assessing Officer treated the entire amount as unexplained money under s. 69A after proceeding under s. 144 because the assessee did not comply with notices and had not filed a return for the year.

The assessee, a 75-year-old agriculturist, maintained that the deposits represented sale proceeds of agricultural produce. The Commissioner (Appeals) upheld the addition, noting the absence of documentary support for that explanation.

On appeal, the Tribunal considered that the addition had effectively been made without any explanation from the assessee, as he had not participated in the assessment proceedings. In the interest of substantial justice, it found that he should be afforded one final opportunity to support his claim.

The appeal was allowed, with the matter left open for the assessee to substantiate the source of the cash deposits in further proceedings.