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2022 (1) TMI 291 - AT - Income TaxAssessment u/s 153A - Scope of unabated assessment proceedings - HELD THAT - Scope of making assessment of total income u/s.153A in an unabated assessment proceedings is limited and can be only of assessing income that is not disclosed which is detected or which emanates from material found in the course of search of some other person and which relate to the Assessee, as has been held in the case of M/S.Delhi Interntional Airport Ltd. 2021 (11) TMI 928 - KARNATAKA HIGH COURT . Since the impugned addition treating the Agricultural income as income from other sources is not based on any incriminating material found during the course of search, the additions are liable to be deleted. Addition of agricultural income - HELD THAT - As far as the addition made in these two Assessment years are concerned, the Agricultural income declared was a sum of ₹ 1,26,500 and ₹ 1,65,800/- respectively. Assessee is aged 80 years and is residing with his daughter. The declaration of Agricultural income is not with a view to explain any source. Moreover the Agricultural holdings are not disputed. Absence of details of crops grown and evidence of sale of Agricultural produce in the form of bills can be a basis to doubt the quantum of Agricultural income but cannot be the basis the treat the entire Agricultural income as income from other sources, in the peculiar facts and circumstances of the case.We therefore accept the plea of the Assessee in this regard and delete the addition made by the AO in both the AYs. Unexplained expenditure u/s. 69C being the LIC Premium paid by the appellant's daughter - reliance on documents found during the course of search u/s 132 - HELD THAT - Under section 292C of the Act, there is a presumption that the contents of the documents found during the course of search u/s 132 of the Act are true. In the light of the aforesaid provisions, the revenue authorities have presumed that the premium on LIC policy, which is admittedly in the name of Dr. M. K. Girija has been paid by the Assessee. There can be no presumption that because this receipt was found in the course of search of the assessee that it is only the assessee who has paid premium. In fact, the presumption is that it is only Dr.M.K.Girija, who has paid the premium on LIC policies as the policy as well as the receipts are in her name. - the very basis of this addition is unsustainable and the same is directed to be deleted. Assessee appeal allowed.
Issues Involved:
1. Delay in filing appeals. 2. Taxation of agricultural income as income from other sources. 3. Addition of unexplained expenditure related to LIC premium payments. 4. Addition of unexplained expenditure related to NSC investments. 5. Addition of unexplained investment in fixed deposits. Detailed Analysis: 1. Delay in Filing Appeals: The Assessee filed appeals with a delay of 844 days. The Tribunal considered the reasons for the delay and condoned it by an order dated 28.1.2021. 2. Taxation of Agricultural Income: The Assessee declared agricultural income in the returns for AYs 2009-10 to 2011-12, which were filed in response to notice u/s.153A of the Income Tax Act, 1961. The AO treated the agricultural income as "income from other sources" due to the Assessee's inability to produce crop details and sale bills. The CIT(A) confirmed the AO's decision. The Assessee argued that the additions were not based on any incriminating material found during the search, referencing the Tribunal's decision in Yunus Zia v. DCIT and the Karnataka High Court's decision in Prl.CIT vs. M/S.Delhi International Airport Pvt.Ltd. The Tribunal agreed, stating that the assessments for AYs 2009-10 to 2011-12 were unabated and could not be disturbed without incriminating material. Consequently, the additions were deleted. For AYs 2008-09 and 2013-14, the Tribunal noted the Assessee's age (80 years) and the undisputed agricultural holdings. The absence of crop details and sale bills could only cast doubt on the quantum but not justify treating the entire agricultural income as income from other sources. Thus, the additions were deleted. 3. Addition of Unexplained Expenditure Related to LIC Premium Payments: In ITA No.683/Bang/2020 and ITA No.684/Bang/2020, the AO added unexplained expenditure for LIC premiums paid by the Assessee's daughter, Dr. M.K. Girija, based on receipts found during the search. The Tribunal held that the presumption under section 292C of the Act did not imply that the Assessee paid the premiums, especially since the policies and receipts were in the daughter's name. Therefore, the additions were deleted. 4. Addition of Unexplained Expenditure Related to NSC Investments: In ITA No.685/Bang/2020, the AO added unexplained expenditure for an NSC certificate found during the search, which was in the name of Dr. M.K. Girija. The Tribunal ruled that the Assessee could not be asked to explain the source of investment in the daughter's name. Hence, the addition was deleted. 5. Addition of Unexplained Investment in Fixed Deposits: In ITA No.685/Bang/2020, the AO added unexplained investment for a fixed deposit of ?2,50,000 found during the search. The Assessee claimed it was from past savings. Considering the Assessee's age and past income, the Tribunal accepted the explanation and deleted the addition. Conclusion: All the appeals were allowed, and the additions made by the AO were deleted. The Tribunal pronounced the judgment in the open court.
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