ITAT Deletes Cash Deposit Addition Backed by Agricultural Income

Case Details: Anuradha vs. Income-tax Officer - [2026] 186 taxmann.com 383 (Amritsar-Trib.)

Judiciary and Counsel Details

Udayan Dasgupta, Judicial Member & Brajesh Kumar Singh, Accountant Member
Swaran Singh, CA for the Appellant.
Charan Dass, Sr. DR for the Respondent.

Facts of the Case

The assessee, a widow, was engaged in agricultural activity on about 30 acres of agricultural land inherited from her deceased husband. She had no income other than agricultural receipts and interest on bank fixed deposits renewed over the years. Based on information regarding cash deposits and investments in time deposits aggregating to about Rs. 47.77 lakhs, and in the absence of a response to the notice under section 133(6), the AO issued a notice under section 148. He completed the assessment ex parte, determining the total income at about Rs. 7.73 lakhs, including an addition of Rs. 5.61 lakhs on account of peak cash deposit in the State Bank of India.

On appeal, the CIT(A) deleted the addition of Rs. 2.11 lakhs towards interest on bank fixed deposits but sustained the addition of Rs. 5.61 lakhs on account of peak cash deposit. The matter reached the Amritsar Tribunal.

ITAT Held

The Tribunal held that the assessee owned 30 acres of agricultural land (inherited from her deceased husband), a fact certified by the local panchayat authority. It was also factually not disputed that the assessee had no other source of income except agricultural income and bank interest from old fixed deposits renewed over the years. Taking a very practical approach, the total yearly agricultural income generated from thirty acres of agricultural land cultivated jointly by the widow assessee and her son, after meeting all agricultural expenses, would certainly be good enough to cover a meagre deposit of Rs. 5.61 lakhs in her bank account.

On the facts, to arrive at a very logical conclusion, the addition on account of the meagre cash deposit of Rs. 5.61 lakhs in the bank account stood explained as derived from the assessee’s agricultural income and needed to be deleted.

List of Cases Reviewed

CIT v. S. Goyanka Lime & Chemicals Ltd. [2015] 56 taxmann.com 390/231 Taxman 73 (Madhya Pradesh) (para 16)
Pr. CIT v. N.C. Cables Ltd. [2017] 88 taxmann.com 649/391 ITR 11 (Delhi) (para 17)
Teleperformance Global Service (P.) Ltd. v. Asstt. CIT [2024] 161 taxmann.com 258/298 Taxman 769/[2025] 478 ITR 74 (Bombay) (para 18) followed

List of Cases Referred to

National Thermal Power Co. Ltd. v. CIT [1998] 97 Taxman 358/229 ITR 383 (SC) (para 7)
CIT v. Atlas Cycle Industries [1989] 180 ITR 319/46 Taxman 315 (Punjab & Haryana) (para 10.4)
Bir Bahadur Singh Sijwali v. ITO [2015] 53 taxmann.com 366/68 SOT 197 (Delhi – Trib.) (para 10.5)
Gurpal Singh v. ITO [2016] 71 taxmann.com 108/159 ITD 797 (Amritsar – Trib.) (para 10.6)
Ashwani Kumar v. ITO ITA No. 129(ASR)/2015 (para 10.6)
KMV Collegiate Sr. Sec. School v. ITO (Exemption) [2017] 79 taxmann.com 455/163 ITD 653 (Amritsar – Trib.) (para 14)
Sunbarg Tradelink (P.) Ltd. v. ITO [2016] 74 taxmann.com 16/[2017] 292 CTR 222 (Gujarat) (para 14)
Sukhvir Singh v. ITO [2024] 165 taxmann.com 197/208 ITD 97 (Amritsar – Trib.) (para 14)
Smt. Monika Rani v. ITO [IT Appeal No. 582 (Chd.) of 2019, dated 28-2-2020] (para 14)
Kissan Fats Ltd v. DCIT [ITA NO 407/Chd/2023, dated 1-7-2024] (para 14)
CIT v. S. Goyanka Lime & Chemicals Ltd. [2015] 56 taxmann.com 390/231 Taxman 73 (Madhya Pradesh) (para 16)
Pr. CIT v. N.C. Cables Ltd. [2017] 88 taxmann.com 649/391 ITR 11 (Delhi) (para 17)
Teleperformance Global Service (P.) Ltd. v. Asstt. CIT [2024] 161 taxmann.com 258/298 Taxman 769/[2025] 478 ITR 74 (Bombay) (para 18).