2023 (8) TMI 590 - AT - Income Tax

Agriculture Income - genuineness and proof of agricultural activities - AO disallowed the entire agriculture income by taking view that agriculture income is not supported with reliable documentary evidences and in other years the assessee has shown less agriculture income - HELD THAT - The agriculture income was treated as non-genuine. CIT(A) granted partial relief to the assessee by taking view that in subsequent years the assessee has shown similar income in AY 2018-19 and 2019-20. CIT(A) on the basis of agriculture income declared in AY 2019-20, granted relief to that extent. Before Tribunal the assessee has filed various documents to substantiate the agriculture income, however, the basic evidence to substantiate such income i.e. the evidence of holding of agriculture land is not filed either before assessing officer, or before CIT(A) or before me. During hearing of appeal as raised very specific question that how, much agriculture land is owned by the assessee. Assessee fairly accepted that he does not have any evidence with him to show that the assessee owned agriculture holding. Thus, in absence of such basic and primary evidence, find no merit in submissions of assessee to extent any further relief, in addition to the relief granted by ld CIT(A) in absence of ownership of the land. In the result, this ground of appeal is dismissed. Additions of cash deposits - AO made the additions of cash deposits by taking view that during the demonetization period the assessee made deposit during demonetization period - HELD THAT - As recorded above before ld CIT(A) the assessee retreated that he has received Gift from sister of his mother. Assessee also filed gift deed executed by the donor, however, CIT(A) not accepted such gift deed by taking view that why the donor kept such cash amount with her. We find that the ld CIT(A) has neither made any investigation of fact before discarding the gift not sought any remand report from the assessing officer. And as such the evidence in the form of gift deed was discarded without bringing any evidence against such evidence. Thus, accept the gift as genuine. So far as other remaining receipt and receipt of Sound system is concerned find that CBDT in its instruction No. 3/2017 F.NO.225/100/2017/ITA-II , Dated 21-2-2017, has issued standard operating procedure (SOP) that cash deposits up may be accepted in case of individual, thus, by giving benefit of the above circular, hence, the addition to the extent is also deleted from disallowance. Thus, the assessee is allowed total relief of Rs. 3.50 lakhs and Rs. 2.50 lakhs against the total addition of Rs. 10,00,500/-. And on remaining addition as concurred with the finding of ld CIT(A) that no such rental income was shown by assessee prior to 25.07.2016 and after 24.10.2016 and there were discrepancies in the cash book. In the result, this ground of appeal is partly allowed.

Summary

Issues Involved:
1. Disallowance of Agricultural Income
2. Addition of Cash Deposits During Demonetization
3. Telescoping Benefits
4. Taxation under Section 115BBE

Summary:

1. Disallowance of Agricultural Income:
The assessee's agricultural income of Rs. 8,33,020/- was disallowed by the Assessing Officer (AO) due to lack of reliable documentary evidence and discrepancies with income reported in subsequent years. The Commissioner of Income Tax (Appeals) [CIT(A)] granted partial relief, allowing Rs. 3,31,906/- based on income from subsequent years, but upheld the disallowance of Rs. 5,01,114/-. The Tribunal found no merit in the assessee's submissions due to the absence of evidence of ownership of agricultural land and dismissed this ground of appeal.

2. Addition of Cash Deposits During Demonetization:
The AO added Rs. 10,00,500/- deposited during the demonetization period to the assessee's income, citing lack of proof for the claimed gift of Rs. 3.50 lakhs and rental income from a sound system. The CIT(A) upheld this addition. The Tribunal accepted the gift of Rs. 3.50 lakhs as genuine and provided relief of Rs. 2.50 lakhs in line with CBDT instructions, reducing the disallowed amount to Rs. 4,00,500/-. The Tribunal concurred with the CIT(A) regarding discrepancies in the cash book and upheld the remaining addition.

3. Telescoping Benefits:
The assessee's claim for telescoping benefits was dismissed by the Tribunal, considering the dismissal of the ground related to agricultural income and partial relief granted for cash deposits.

4. Taxation under Section 115BBE:
The ground related to taxing the addition of cash deposits and agricultural income under Section 115BBE was treated as not pressed by the Tribunal and dismissed accordingly.

Conclusion:
The appeal was partly allowed, providing partial relief on the addition of cash deposits but dismissing other grounds.

Order announced in open court on 09th August, 2023.