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2021 (5) TMI 959 - AT - Income TaxUnexplained income u/s 69A - undisclosed cash deposit in bank a/c - HELD THAT - From the cumulative consideration of both the charts i.e. chart containing agriculture income disclosing the return of income and also the chart containing cash flow statement, we noticed that the department had given benefit of the current year s agricultural income to the tune of ₹ 25,17,195/- - from the cash flow statement, it was reflected that during the year under consideration, total cash generation was ₹ 50,48,966/- and the opening cash balance for the year under consideration was ₹ 22,91,771/-, therefore, under such circumstances, the explanation put forth by the assessee that the cash deposited by the assessee was from the agricultural and other income as well as from the accumulative past savings of the preceding years appears to be reasonable. Department had also accepted the generation and availability of cash because of agricultural income for the year under consideration, therefore, there was no reason for ignoring the availability of cash with the assessee due to accumulative/past savings of the preceding years. Thus we direct to delete the addition sustained by the ld. CIT(A) qua this issue. - Decided in favour of assessee.
Issues Involved:
1. Jurisdiction and validity of the impugned addition under Section 143(3). 2. Confirmation of addition of ?18,45,060 as unexplained income under Section 69A. 3. Charging of interest under Sections 234A, 234B, 234C, and 234D, and withdrawal of interest under Section 244A. Detailed Analysis: 1. Jurisdiction and Validity of the Impugned Addition under Section 143(3): - The assessee initially contested the jurisdiction and validity of the addition under Section 143(3) dated 30/11/2016. However, during the hearing, the assessee's representative chose not to press this ground. Consequently, the Tribunal dismissed this ground as not pressed. 2. Confirmation of Addition of ?18,45,060 as Unexplained Income under Section 69A: - Assessee's Argument: - The assessee declared a total income of ?1,68,000 and agricultural income of ?25,17,195 for the assessment year 2014-15. The AO completed the assessment at ?27,30,260, making an addition of ?7,17,195 for undisclosed agricultural income and ?18,45,060 for unexplained cash deposits. - The assessee argued that the source of the cash deposits was fully established, emphasizing that the CIT(A) proceeded on suspicion rather than material evidence. The assessee highlighted that the AO accepted substantial agricultural income and rental income, implying that the assessee had significant cash availability from past savings. - The assessee presented a systematic cash flow statement showing substantial cash availability from agricultural income and past savings, which was not adequately rebutted by the authorities. The assessee contended that the authorities' suspicion about the improbability of keeping such cash at home was unfounded. - The assessee also argued that the non-disclosure of a bank account with Axis Bank was irrelevant as there was no requirement to disclose all bank accounts in the applicable ITR form for the assessment year 2014-15. - Revenue's Argument: - The Revenue relied on the orders of the lower authorities, maintaining that the addition was justified based on the unexplained nature of the cash deposits. - Tribunal's Findings: - The Tribunal noted that the assessee had consistently declared substantial agricultural income over the years and had a significant opening cash balance. The cash flow statement indicated total cash generation of ?50,48,966, with an opening balance of ?22,91,771. - The Tribunal found the assessee's explanation reasonable, given the accepted agricultural income and past savings. The authorities' failure to rebut the cash flow statement and the absence of evidence showing alternative utilization of the cash supported the assessee's claim. - The Tribunal cited relevant case laws, including CIT v/s P.V. Bhoopathy and CIT vs Kulwant Rai, which supported the principle that the availability of cash from past savings should be considered unless proven otherwise by the Revenue. - Conclusion: - The Tribunal directed the deletion of the addition of ?18,45,060, finding the assessee's explanation plausible and supported by evidence. 3. Charging of Interest under Sections 234A, 234B, 234C, and 234D, and Withdrawal of Interest under Section 244A: - Since the Tribunal deleted the addition on account of unexplained income, the issue of charging interest under Sections 234A, 234B, 234C, and 234D, and withdrawal of interest under Section 244A became moot and required no further adjudication. Order: - The appeal was allowed partly, with the addition of ?18,45,060 being deleted and the issue of interest charges rendered moot. The order was pronounced in the open court on 24th May 2021.
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