2020 (4) TMI 464 - AT - Income Tax

Addition u/s 69A - assessee has made cash deposit in a bank account - HELD THAT - Though, there may be a delay of about 24 25 days between the cash withdrawal and cash deposit, however, the explanation of the assessee in this regard is acceptable. - Cash deposit made on 1st February 2014, in our view, stands explained. Generation of cash from agriculture activity - Held that - in the impugned assessment year, the assessee has offered net agricultural income, which has been accepted by the Assessing Officer. Therefore, explanation of the assessee that he has past savings from agricultural income cannot be rejected totally. Assessee s claim that the entire net agricultural income was available with him is also not acceptable considering the fact that the assessee must have utilized some amount out of such income for his domestic and other expenditure. Thus, out of the net agricultural income of the past years, the assessee could reasonably be accepted to have saved an amount of ₹ 9,00,000. Therefore, to that extent, cash deposit made in the bank account stands explained. Balance cash deposit of ₹ 19,80,000 assessee has relied upon the affidavit of the concerned persons and confirmation letters. As it appears, the aforesaid documentary evidences (affidavits, etc.) were not furnished before the Assessing Officer, but were furnished for the first time before learned Commissioner (Appeals). - CIT(A) has rejected these evidences by stating that they are in the nature of self serving documents. - Since, the aforesaid verification has not been done by the Departmental Authorities, matter restored before the AO to that extent. Decided partly in favor of assessee.

Summary

Issues:
- Challenge to addition under section 69A of the Income Tax Act, 1961.
- Explanation of sources for cash deposits.
- Rejection of affidavits as evidence.
- Dispute over agricultural income and past savings.
- Assessment of unexplained cash deposits.

Analysis:

The appeal challenges the addition of ?35,80,000 under section 69A of the Income Tax Act, 1961. The assessee, a retired individual with pension and agricultural income, explained cash deposits totaling ?43,00,000. The Assessing Officer accepted ?7,20,000 as agricultural income but deemed the remaining ?35,80,000 unexplained. The first appellate authority upheld this decision.

The assessee's representative argued that a portion of the cash deposit was from pension withdrawals and agricultural income. He claimed that loans given and repaid, along with past savings, accounted for the rest. Affidavits were submitted to support these claims. The Departmental Representative contended that the explanations lacked proper evidence, especially regarding loan repayments and agricultural income details.

The tribunal found the explanation for a ?7,00,000 deposit plausible, sourced from a pension withdrawal. It also partially accepted the claim of past agricultural savings. However, the remaining ?19,80,000 required further verification. The tribunal deemed the affidavits as having evidentiary value and ordered the issue to be re-examined by the Assessing Officer, allowing the assessee relief of ?16,00,000. The decision was to give the assessee a chance to present additional evidence for the remaining cash deposit.

In conclusion, the appeal was partly allowed, with the tribunal directing a fresh examination of the unexplained cash deposit issue. The assessee was granted relief for a portion of the disputed amount.