2023 (10) TMI 132 - AT - Income Tax

Undisclosed cash receipts including cash deposits into the bank account - addition is called for in the hands of the deceased assessee on account of cash deposits to the bank accounts - exempt agricultural income as not been allowed by the AO - HELD THAT - We are in agreement with the contention of Ld. AR that an amount received by the assessee on sale of crop is never mentioned in the Revenue records and thus, the basis taken by the AO for rejecting factum of cash consideration received against sale of crop is not correct and sustainable. Undisputedly, the assessee has shown exempt agricultural income in his return of income which cannot be disputed merely on the basis of suspicion or doubts. Therefore, we are inclined to agree with the contention of the assessee that assessee earned exempt agricultural income as a result of agricultural activity on the agricultural land and the assessee submitted documentary evidence before the AO in the form of Revenue records issued by Tehsildar Jewar. Cash gift receipt - AO has rejected the same by observing that the assessee has not submitted other cooperative evidence with regard to the identity, creditworthiness of the person giving advance gift - The copy of gift and copy of confirmation in the form of affidavit clearly reveals that Smt. Rajbati at the time of giving cash gift to the assessee and his brother Shri Krishna Kumar Sharma executed gift deed on stamp paper and again confirm the same fact in the affidavit sworn on 04.11.2019, therefore, the identity and capacity of cash gift provider cannot be disputed. AO was not satisfied with the explanation and documentary evidence filed by the assessee then he could have show caused the assessee asking him to produce the donor or he could have called the donor Smt. Rajbati directly by issuing summon/notice u/s 131 or 133(6) of the Act but there was no such exercise by the AO before dismissing the contention of the AO and dismissing the claim of assessee about receipt of cash gift from his sister in law Smt. Rajbati. It is not the case of the AO that the assessee has rooted his own unaccounted income through his sister in law in the garb of gift. Therefore we agree with the contention of assessee that the assessee received cash gift from his sister in law as per last wish of his elder brother Shri Madan Mohan Sharma. Advances receipt against agreement to sale of plot owned by him, from his brother - As noted that from the copy of gift deed and affidavit of gift provider reveals that as per last wish of her husband sister in law of assessee gifted cash to assessee and younger brother and gift deed as well as affidavit sworn on 04.11.2019. In the said gift deed and affidavit, she supported the fact that the gifts in cash were given to assessee as well as to his brother - Therefore, availability of cash of Rs. 2 lakhs which Shri Krishna Kumar Sharma on 28.05.2010 i.e. during FY 2010-11 pertaining assessment year under consideration 2011-12 cannot be doubted or disbelieved. Regarding remaining amount of advance of Rs. 4 lakhs the documentary evidence on record is not sufficient to establish capacity and creditworthiness of Shri Krishna Kumar Sharma hence, explanation of assessee to this extend is partly dismissed. Therefore, in view of foregoing discussion explanation of assessee is partly allowed.

Summary

Issues Involved:
1. Admission of additional ground.
2. Addition of alleged undisclosed cash receipts.
3. Exempt agricultural income.
4. Cash gift from sister-in-law.
5. Advance from brother against the sale of a plot.

Summary:

1. Admission of Additional Ground:

The assessee withdrew the application dated 27.03.2022 seeking admission of an additional ground, hence, it was dismissed as not pressed.

2. Addition of Alleged Undisclosed Cash Receipts:

The main grounds of appeal pertained to the addition of Rs. 22,52,200/- as alleged undisclosed cash receipts. The assessee argued that the actual cash deposits were Rs. 18,78,000/- as noted by the Assessing Officer (AO) and not Rs. 22,52,200/-. The AO had noted cash deposits of Rs. 12,67,000/- initially, but the assessee clarified the total deposits were Rs. 18,78,000/-.

3. Exempt Agricultural Income:

The AO rejected the assessee's claim of exempt agricultural income of Rs. 70,700/- due to lack of details on crops grown and amounts received from crop sales. However, the Tribunal agreed with the assessee, noting that such details are not typically mentioned in revenue records and accepted the agricultural income as genuine.

4. Cash Gift from Sister-in-Law:

The assessee received a cash gift of Rs. 2,50,000/- from his sister-in-law, supported by a gift deed and an affidavit. The AO dismissed this claim due to lack of corroborative evidence. The Tribunal, however, found the documentary evidence sufficient and noted that the AO could have summoned the donor for verification but did not do so. Thus, the cash gift was accepted.

5. Advance from Brother Against Sale of Plot:

The assessee claimed to have received Rs. 4 lakhs and Rs. 2 lakhs as advances from his brother against the sale of a plot. The AO dismissed this claim due to lack of verification of signatures and the brother's creditworthiness. The Tribunal accepted Rs. 2 lakhs as explained by the cash gift from the sister-in-law but found the evidence insufficient for the remaining Rs. 4 lakhs.

Conclusion:

The Tribunal concluded that the assessee satisfactorily explained the source of Rs. 18,61,950/- out of the total cash deposits of Rs. 18,78,000/-. The AO was directed to allow credit for Rs. 18,61,950/-, restricting the addition to Rs. 16,050/-. Thus, the appeal was partly allowed.

Order Pronounced:

Order pronounced in the open court on 25/09/2023.