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2022 (5) TMI 1386 - ITAT DELHIAddition u/s 68 - Unexplained cash deposit - HELD THAT:- Explanation of receipt of gift and past savings has rightly been rejected by the authorities below for cryptic evidence. As regards the claim of sale of land being agricultural receipt, we note that in the statement of facts before us, assessee himself has admitted that there is no evidence whatsoever of agricultural activity having been done in the said land by assessee itself. Assessee has submitted that land was purchased from persons who were doing agricultural activity. If the land was purchased from persons who were doing agricultural activities and assessee has not been performing any agricultural activities in the said land, then said land cannot be said to be agricultural land in the hands of the assessee. Also, as noted by the authorities below, the purchase and sale has been done in a short period of time. In this view of the matter, the location of the land cannot come to the rescue of the assessee de hors any evidence of agricultural activity. Accordingly, we do not find any infirmity in the order of the ld. CIT (A) in this regard. Hence, we uphold the order of the ld. CIT (A) and the appeal of the assessee is dismissed. Penalty levied u/s 271(1)(c) - HELD THAT:- We note that the AO has passed the penalty order before the CIT (A) passed the order in the quantum proceedings. The addition in this case related to rejection of claim of agricultural income and rejection of sources of deposits. In our considered opinion, assessee has made a claim and the same has been rejected by the Revenue authorities. Mere rejection of a claim cannot ipso facto fasten rigours of penalty upon the assessee. This has been so held by Hon’ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT]. We are conscious that we have upheld the addition on agricultural income on the grounds of absence of cogent evidence of agricultural activities done on the said land. In this view of the matter, the said addition does not fasten upon the assessee liability for penalty. Other addition has also been sustained by us for not having any cogent evidence. We are of the opinion that penalty u/s 271(1)(c) is not exigible on these additions also. Hence, we set aside the orders of the authorities below and delete the penalty levied in this regard. Therefore, the appeal of the assessee is allowed.
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