2019 (3) TMI 531 - AT - Income Tax

Addition u/s 68 - addition of unaccounted income - non explanation to source from agricultural income - HELD THAT - Assessee has explained source of the cash deposit in the bank account. Copies of the bills of sale of agricultural produce are filed in the paper book, which supports the explanation of assessee that assessee received cash out of sale of agriculture produce. CIT(A) partly accepted the agricultural income which supports the explanation of assessee that assessee had source from agricultural income. CIT(A) also partly accepted the explanation of assessee for sale of property, but, assessee explained that the share of property of assessee s brother is also available to him being the amount getting in joint family. All these documents in the paper book have not been disputed by the authorities below. Assessee further submitted that apart from it, assessee has salary income, which have not been taken into consideration. These facts clearly show that assessee has source to make deposit in the bank account. - Decided in favour of assessee.

Summary

Issues:
1. Addition under section 68 of the Income Tax Act, 1961 for cash deposits in bank accounts.

Detailed Analysis:

Issue 1: Addition under section 68 of the Income Tax Act, 1961
The case involved an appeal by the assessee against the order of Ld. CIT(A)-I, Noida, challenging the addition of ?11,51,525 under section 68 of the Income Tax Act, 1961 for the assessment year 2009-2010. The assessing officer noted cash deposits of ?20,73,400 made by the assessee between April and August 2008, leading to a reopening of assessment. The assessee claimed the funds were from selling land and agricultural activities. The Ld. CIT(A) accepted part of the explanation, acknowledging the sale consideration of ?6,09,375 from the property sale and ?3,12,500 from agricultural income. Consequently, the addition was reduced to ?11,51,521.

The assessee appealed the remaining addition of ?11,51,521. During the hearing, the Counsel for the Assessee reiterated the explanation, providing evidence of the sale deed and bills for agricultural produce sales. The Counsel argued that the total available funds, including the share from property sale and agricultural income, explained the cash deposits. The Departmental Representative supported the lower authorities' decisions.

Upon review, the Judicial Member found the explanations satisfactory. The bills for agricultural produce supported the receipt of ?14,65,480 from such sales, aligning with the claimed agricultural income. The Judicial Member also noted the unchallenged documents supporting the property sale explanation and the joint family's share. Additionally, the Counsel highlighted the undisclosed salary income, further substantiating the source of funds for the bank deposits. Consequently, the Judicial Member accepted the assessee's explanations and deleted the entire addition.

In conclusion, the appeal of the Assessee was allowed, and the entire addition under section 68 of the Income Tax Act, 1961 was removed.

Order pronounced in the open Court.