2010 (2) TMI 891 - AT - Income Tax

Additions u/s 68 - addition made on account of available cash - claim of the assessee that she is having agricultural income and cash in hand is out of this agricultural income - CIT(A) reworked out the available cash and addition was retained to the extent of Rs.2, 05, 265/- Held that - Going through the order of the Tribunal in the case of another family member of the assessee i.e. Smt.Meena Devi which also pertains to the same search being carried out wherein addition was retained by the CIT(A) on account of cash found during the course of search wherein held failure to understand as to why such opening cash in hand of Rs.853, 011/- is treated as unexplained when increase in cash in hand in the present year of Rs. 152, 473/- out of agricultural income is accepted and such agricultural income in earlier years cannot be ruled out and there is no finding that such agricultural income in earlier years was used for some other purposes. Thu respectfully following the decision of the coordinate Bench as narrated above the addition of Rs.2, 05, 265/- as retained by the CIT(A) deleted.

Summary

Issues:
Appeal against order of CIT(A) u/s 153C for AY 1998-99; Additions confirmed u/s 68 for IDBI bonds, property improvement, Greater Noida property, and available cash; Dismissal of grounds except for available cash addition; Explanation of available cash during search; Disagreement with AO's addition of available cash; Comparison with similar case of Smt. Meena Devi; Deletion of available cash addition by ITAT.

Analysis:
The appeal was filed against the CIT(A)'s order for the assessment year 1998-99 under section 153C of the IT Act. The grievance of the assessee primarily concerned additions confirmed under section 68 for various items, with a focus on the available cash amount. The Appellate Tribunal dismissed the other grounds raised by the assessee and decided to only address the addition related to the available cash. The search at the residential premises led to the addition of cash in the hands of the assessee, which was contested based on the opening cash balance and bank statements provided. Despite the explanations, the AO added the available cash during the assessment. The CIT(A) reworked the available cash and retained an addition of Rs.2,05,265, leading to the assessee's further appeal.

During the proceedings, the learned AR referred to a previous ITAT order concerning a similar case within the family group, where the addition on account of available cash was deleted. The Tribunal reviewed the case of Smt. Meena Devi, another family member, and noted that the agricultural income explained the cash in hand. The Tribunal highlighted that the source of cash was agricultural income and found the explanation satisfactory, leading to the deletion of the addition. Given the similarities between the cases, the Appellate Tribunal decided to delete the addition of Rs.2,05,265 as retained by the CIT(A), following the precedent set in the case of Smt. Meena Devi.

In conclusion, the appeal of the assessee was allowed in part, with the addition related to available cash being deleted based on the findings and reasoning presented. The decision was pronounced in the open court on 21 February 2010.