2015 (5) TMI 358 - AT - Income Tax

Agricultural income - CIT(A) deleted the addition - Held that - From the documentary evidence filed by the assessee before the ld. First Appellate Authority i.e. cash statement, the assessee has not established that assessee has deposited the cash on account of sale proceeds of agricultural crops. The assessee has also not established that he has received ₹ 7 lacs on account of sale of poplar trees from Atim Khan and Hamid Khan and ₹ 4,02,000/- on account of giving his Amrud Bagh on lease to Jamil Khan. As regards to the land measuring 42.92 hectares belonging to Ranbir Collective Cooperative Farming Society, the assessee has not established that he has received agricultural income from this farming society in spite of the fact that this land is belonging to Ranbir Collective Cooperative Farming Society. The assessee has also not produced any lease deed establishing that he is doing agriculture on the land measuring 42.92 hectares. Keeping in view of the facts and circumstances of the present case and the order passed by the revenue authorities as well as the evidences produced by the assessee before the ld. First Appellate Authority in the shape of paper book, we are of the view that ld. First Appellate Authority has deleted the addition merely on the basis of surmises and presumptions which is not permissible under the law. In our considered view, the impugned order is not sustainable in the eyes of law, therefore, we cancel the impugned order - Decided in favour of revenue.

Summary

Issues Involved:
1. Deletion of addition of Rs. 23,57,000/- made by the Assessing Officer (A.O.) regarding unexplained cash deposits.

Issue-wise Detailed Analysis:

1. Deletion of Addition of Rs. 23,57,000/- by CIT (Appeals):
The primary issue in this case revolves around the deletion of an addition of Rs. 23,57,000/- made by the Assessing Officer (A.O.) concerning unexplained cash deposits in the assessee's bank account.

Facts and Proceedings:
- Return of Income: The assessee filed a return declaring a total income of Rs. 3,04,713/- and agricultural income of Rs. 25 lakhs.
- Scrutiny Selection: The case was selected for scrutiny based on AIR information about a cash deposit of Rs. 57,57,000/- in the assessee's bank account.
- Assessment: The A.O. accepted Rs. 34,00,000/- as proceeds from the sale of ancestral property but questioned the remaining Rs. 23,57,000/- claimed as agricultural income.
- Evidence Submission: The assessee submitted details of Rs. 7 lakhs from the sale of poplar trees and Rs. 4,02,000/- from leasing an Amrud Bagh, but failed to substantiate these claims adequately.
- Notices Issued: The A.O. issued notices u/s 133(6) to verify the transactions, which were returned undelivered or unanswered.
- Addition by A.O.: The A.O. added Rs. 23,57,000/- as unexplained cash deposits due to lack of satisfactory evidence.

CIT (Appeals) Decision:
- Agricultural Income: The CIT (Appeals) accepted the assessee's explanation of agricultural income, referencing a certificate from the local Tehsildar indicating agricultural receipts of Rs. 30 lakhs per year.
- Reconciliation: The CIT (Appeals) reconciled the cash deposits and agricultural income, concluding that the cash deposit of Rs. 23,57,000/- was explained.
- Remand Report: The CIT (Appeals) did not adequately address the remand report from the A.O., which objected to the admission of additional evidence.

Tribunal's Analysis:
- Evidence Evaluation: The Tribunal noted that the CIT (Appeals) relied on the assessee's explanations and additional evidence without proper substantiation or addressing the A.O.'s objections.
- Land Ownership: The Tribunal emphasized that the assessee only owned 1.262 hectares of land, and there was no concrete evidence of agricultural income from the additional land claimed to be managed by the assessee.
- Lack of Corroboration: The Tribunal found that the assessee failed to provide corroborative evidence for the claimed agricultural income and transactions with the mentioned individuals.
- Presumptions and Assumptions: The Tribunal criticized the CIT (Appeals) for making decisions based on assumptions and the status of the assessee, which is not permissible under law.

Conclusion:
- Impugned Order: The Tribunal concluded that the CIT (Appeals) deleted the addition without a solid basis, relying on presumptions and assumptions.
- Sustainability: The Tribunal held that the impugned order was not sustainable in law and reinstated the A.O.'s addition of Rs. 23,57,000/- as unexplained cash deposits.
- Final Decision: The appeal filed by the revenue was allowed, and the assessment order dated 27.12.2010 was upheld.

Final Judgment:
The Tribunal allowed the revenue's appeal, reinstating the addition of Rs. 23,57,000/- made by the Assessing Officer, and concluded that the CIT (Appeals) erred in deleting the addition without sufficient evidence. The order pronounced on April 30, 2015, emphasized the need for proper substantiation and evidence in tax assessments.