2019 (11) TMI 200 - AT - Income Tax

Addition u/s 69A r.w.s. 115BBE - A.O. proceeded to estimate the agricultural income by taking into consideration the total land holdings of the assessee and approximate crop yield - A.O. has estimated agricultural income partly and the balance amount was assessed as income of the assessee from undisclosed source - HELD THAT - A.O. has not disputed the fact that the agricultural operations on the agricultural land measuring 30 acres in Hanumangarh were carried out by the tenant one Shri Mahendra Singh S/o Shri Mani Ram. In order to verify the fact, the A.O. examined the said person and recorded his statement. He has admitted the fact of agricultural activity carried out on the agricultural land of the assessee and payment of ₹ 19,60,000/- through cheques issued from OBC bank account. Once the payment of ₹ 19,60,000/- were admitted by the tiller/tenant who has carried out agricultural operations and that too through the banking channel then to that extent the agricultural income of the assessee for the year under consideration cannot be doubted. CIT(A) has accepted the source of deposit to the extent of ₹ 4,10,000/- as past savings of the assessee. Accordingly, by considering the said amount of ₹ 19,60,000/- as agricultural income for the year under consideration and ₹ 4,10,000/- as past savings of the assessee, the source of deposit to the extent of ₹ 23,70,000/- is accepted, as explained by the assessee. Hence, the addition of the remaining amount of ₹ 1,61,200/- is sustained. Appeal of the assessee is allowed in part.

Summary

Issues:
1. Addition under section 69A r.w.s. 115BBE of the Income Tax Act
2. Estimate of agricultural income by Assessing Officer
3. Rejection of evidence supporting declared agricultural income
4. Levy of interest under section 234B of the Act

Analysis:
1. The appellant contested the addition of ?6,21,200 under section 69A r.w.s. 115BBE of the Income Tax Act. The Assessing Officer noted cash deposits in the assessee's bank account and estimated agricultural income, leading to the addition. The CIT(A) restricted the addition to ?6,21,200, acknowledging a portion as past savings. The Tribunal upheld the CIT(A)'s decision partially, accepting the source of deposit and past savings, thereby sustaining the remaining addition.

2. The Assessing Officer estimated the agricultural income based on land holdings and crop yield, resulting in an assessment of undisclosed income. The appellant argued that evidence and documents supported the declared agricultural income, challenging the estimation. The Tribunal considered the tenant's statement and payment evidence, concluding that the admitted agricultural activity and payments through banking channels validated a portion of the declared income. The Tribunal sustained the addition based on this analysis.

3. The appellant raised concerns about the rejection of evidence supporting the declared agricultural income. The Tribunal evaluated the evidence presented, including statements and payment records, to ascertain the source of deposits. By accepting a portion as past savings and verifying the agricultural activities, the Tribunal justified the partial sustenance of the addition, aligning with the CIT(A)'s decision.

4. Lastly, the appellant challenged the levy of interest under section 234B of the Act. While the Tribunal did not provide detailed reasoning on this issue in the summary, it allowed the appeal in part, indicating a favorable outcome for the appellant on certain grounds. The Tribunal's decision was pronounced openly on 14th October 2019, concluding the legal proceedings in this case.