2018 (1) TMI 136 - AT - Income Tax

Addition as income from other sources - claim of agricultural income - Held that - We are of the view that the primary onus is on the assessee to demonstrate through verifiable evidence in support of the agriculture income so claimed in the return of income. However, in view of conflicting claims by both the parties and in absence of a specific finding in support of no income from the agriculture produce from the land so co-owned by the assessee, we deem it fit to restore the matter to the file of the AO to examine the same afresh in light of evidence so produced by the assessee and where so required, to carry out independent verification. In the result, the ground is allowed for statistical purposes. Estimate income from business - Held that - Firstly, regarding estimation of business income at ₹ 5 lacs by the ld CIT(A) as against ₹ 15 lacs estimated by the AO, we hereby affirm the following findings of the ld CIT(A) which we find just and reasonable given the peculiar facts and circumstances of the instant case wherein the assessee has admitted his receipts from property brokerage business to the tune of ₹ 15 Lac and in absence of books of accounts and other details in support of incurrence of various expenses so claimed, the expenses remain unverifiable Unexplained cash deposits - Held that - Matter relating to verification of source of cash deposits in the assessee s bank account is accordingly set-aside to the file of the AO to examine the same afresh taking into consideration the contention so raised by the ld AR before us and after providing reasonable opportunity to the assessee. Income earned from petrol pump - Held that - AR has contended that the assessee purchased the land at Village Sawar, Kekri on which he incurred expenditure of ₹ 20,000/- which is duly reflected in statement of affairs as on 31.03.2006. Since there is no finding of the lower authorities, the matter is set aside to the file of the AO to examine the said contention of the ld AR and decide afresh as per law. In the result, ground is allowed for statistical purposes. Disallowance of depreciation - AR has contended that necessary details in support of claim of depreciation has already been filed with the lower authorities - Held that - Since there is no finding of the lower authorities, the matter is set aside to the file of the AO to examine the said contention of the ld AR and decide afresh as per law. In the result, ground is allowed for statistical purposes. Unexplained source of funds for purchase of car - Held that - It is not in dispute that the assessee has taken loan of ₹ 5,50,000 from HDFC bank and to this extent, source of funds for purchase of car worth ₹ 9,88,000 stands explained. Further, the ld AR has contended that the balance amount of ₹ 3,38,000/- in respect of purchase of car and the repayment of bank loan installment of ₹ 3,72,000/- is paid by the assessee from his bank account with SBBJ Sodala, Jaipur from where the amount is withdrawn/ transferred to HDFC bank account for payment towards purchase of car/ installments. Since there is no finding of the lower authorities, the matter is set aside to the file of the AO to examine the said contention of the ld AR and decide afresh as per law. In the result, ground is allowed for statistical purposes.

Summary

Issues Involved:
1. Opportunity of being heard
2. Addition of ?82,456 as income from other sources
3. Estimation of business income at ?5,00,000
4. Addition of ?20,000 as income earned from petrol pump
5. Disallowance of depreciation amounting to ?1,67,346
6. Addition of ?3,38,000 against payment made to purchase the car
7. Addition of ?4,76,000 on account of payment of EMI towards the loan
8. Addition of ?1,58,500 as unexplained cash deposit into bank

Detailed Analysis:

1. Opportunity of being heard:
The assessee did not press this ground. Therefore, it was dismissed as not pressed.

2. Addition of ?82,456 as income from other sources:
The assessee declared ?82,456 as agricultural income, but the AO treated it as business income due to lack of documentary evidence. The CIT(A) upheld the AO's decision, noting the absence of proof regarding the cultivation and sale of agricultural produce. The Tribunal restored the matter to the AO for fresh examination in light of evidence provided by the assessee.

3. Estimation of business income at ?5,00,000 and unexplained cash deposit of ?14,58,500:
The AO estimated the business income at ?15,00,000 due to non-compliance by the assessee and added ?14,58,500 as unexplained cash deposits. The CIT(A) reduced the business income estimate to ?5,00,000 but upheld the addition of ?14,58,500 due to lack of explanation for the cash deposits. The Tribunal affirmed the business income estimation at ?5,00,000 and set aside the matter of cash deposits to the AO for verification, allowing the assessee to seek set-off of intangible additions.

4. Addition of ?20,000 as income earned from petrol pump:
The AO added ?20,000 as unexplained expenditure for land purchased for a petrol pump. The CIT(A) upheld this addition as the assessee did not press the ground. The Tribunal set aside the matter to the AO for fresh examination based on the assessee's contention that the expenditure was reflected in the statement of affairs.

5. Disallowance of depreciation amounting to ?1,67,346:
The AO disallowed the depreciation claim due to lack of supporting documents. The CIT(A) confirmed this disallowance. The Tribunal set aside the matter to the AO for fresh examination, directing the assessee to provide necessary details.

6. Addition of ?3,38,000 against payment made to purchase the car and ?4,76,000 on account of EMI payments:
The AO added ?9,88,000 for the car purchase, which the CIT(A) reduced to ?8,08,000, considering a loan of ?5,50,000 from HDFC bank. The Tribunal noted the loan and directed the AO to verify the source of the remaining ?3,38,000 and the EMI payments, setting aside the matter for fresh examination.

7. Addition of ?4,76,000 on account of payment of EMI towards the loan:
The Tribunal noted the discrepancy in the EMI payments and directed the AO to verify the source of the payments, setting aside the matter for fresh examination.

8. Addition of ?1,58,500 as unexplained cash deposit into bank:
The Tribunal set aside the matter to the AO for verification of the source of cash deposits, allowing the assessee to provide necessary explanations.

Conclusion:
The appeal was partly allowed for statistical purposes, with several matters being set aside to the AO for fresh examination and verification based on the assessee's contentions and evidence. The Tribunal emphasized the need for verifiable evidence and reasonable opportunity for the assessee to substantiate their claims.