2022 (5) TMI 823 - AT - Income Tax

Cash deposits in bank accounts - Submission of additional evidences - HELD THAT - As gone through the orders of the authorities below. Before authorities below, the assessee had filed certain evidences which were summarily rejected by the CIT(A) without considering or verifying the veracity of the same. Therefore, the action of the CIT(A) in rejecting the application for additional evidences under Rule 46A of the Income Tax Rules, 1962, do not conform the requirement of principle of natural justice - we deem it proper and in the interest of natural justice, admit the additional evidences and restore this issue to the file of AO to verify the correctness of the evidences filed by the assessee and decide the issue afresh. Thus, Ground No. 2 raised by the assessee is allowed for statistical purposes. Addition on account of alleged saving bank interest - HELD THAT - As perused the material available on record and gone through the orders of the authorities below. Ld. Counsel for the assessee could not controvert the findings of the AO that the interest income was not disclosed in the return of income. Therefore, we do not see any reason to interfere in the finding of the authorities below, the same is hereby rejected. Agricultural income - The contention of the assessee is that the income was wrongly disclosed in the return of income of the assessee as his income however, belonged to HUF - HELD THAT - As stated that the agricultural land belong to HUF. This contention of the assessee that the agricultural income was wrongly included in the return of income and the land belongs to HUF requires verification at the end of the AO. Therefore, this issue is restored to the file of AO for verifying the correctness of the contention of the assessee that this income belongs to HUF. Ground No. 4 raised by the assessee is thus, allowed for statistical purposes.

Summary

Issues:
1. Addition of Rs. 18,00,000/- on account of cash deposits in bank accounts without considering withdrawals and capital/income of the appellant.
2. Addition of Rs. 31,945/- on account of alleged saving bank interest.
3. Treatment of agricultural income of Rs. 5,17,560/- as belonging to the appellant instead of HUF.

Analysis:

Issue 1: Cash Deposits
The assessee filed a return declaring income from salary and agriculture. The AO made additions of Rs. 18,00,000/- for cash deposits and Rs. 31,945/- for bank interest. The CIT(A) upheld the additions. The Tribunal allowed the appeal for statistical purposes, noting that the CIT(A) rejected additional evidence without due consideration. The Tribunal directed the AO to verify the evidences and decide the issue afresh, emphasizing the principle of natural justice.

Issue 2: Bank Interest
The assessee contested the addition of Rs. 31,945/- as bank interest. The Tribunal upheld the decision of the authorities below, stating that the interest income was not disclosed in the return. The Tribunal found no reason to interfere with the findings, thus rejecting the appeal on this ground.

Issue 3: Agricultural Income
The appellant disputed the inclusion of Rs. 5,17,560/- as agricultural income, claiming it belonged to the HUF. The Tribunal found merit in the contention and remanded the issue to the AO for verification. The Tribunal emphasized the need to confirm whether the income truly belonged to the HUF, allowing the appeal for statistical purposes.

In conclusion, the Tribunal partly allowed the appeal, directing the AO to re-examine the cash deposit issue, upholding the addition of bank interest, and ordering verification of the agricultural income ownership. The delay in filing the appeal was condoned due to reasonable cause, ensuring the appellant's right to a fair hearing was upheld.