ITAT Deletes Cash Deposit Addition Backed by Agricultural Income

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  • Last Updated on 27 May, 2026

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Cash Deposit Addition

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

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied