2023 (10) TMI 1314 - AT - Income Tax

Additions towards unexplained advance paid to land owner for development of the land - AR submitted that the assessee invested impugned amount towards irrevocable advance for development of site at Pedagantyada out of the accumulated savings, agricultural income of the HUF and also amounts from HUF - AR submitted that she had not maintained any books of account and that the income from the construction business was admitted on estimate basis HELD THAT - Assessee had advanced an amount towards development of site at Pedagantyada and the source being agricultural income from Ac.27.50 cents. AO found that the assessee is having only Ac.16.77 cents and accordingly estimated the agricultural income of Rs. 1,67,000/- @Rs.10,000/- per acre and brought the difference amount of Rs. 3,33,000/- to tax as unexplained expenditure u/s 68 which was upheld by the Ld.CIT(A). It is observed that the assessee has not furnished any supporting evidences for substantiating her claim that the advance is given out of her past accumulated savings, agricultural income and income received from HUF, either before the revenue authorities or before me. When the assessee claims to admit the source, the onus is on the assessee to prove the source with cogent evidence. In the absence of any proper documentary evidence, no reason to interfere with the orders passed by the lower authorities and hence, dismiss the appeal of the assessee on this ground. Unexplained agricultural income - AR submitted that the assessee had admitted agricultural income of Rs. 3,10,000/- in her return of income and the AO is not justified in estimating the agricultural income at Rs. 1,67,000/- - HELD THAT - As after survey u/s 133A, when the evidence of undeclared advance made by the assessee was unearthed, the assessee filed ITR admitting agricultural income in response to notice u/s 148 on 30.05.2016, which appears to be an afterthought to explain the source of advance subsequent to the survey conducted by the department. It is observed from the receipts and payment account that the agricultural income of Rs. 3,00,000/- was credited on account of transfer from HUF against the agricultural income of Rs. 3,10,000/- as shown in the ITR filed by the assessee in response to notice u/s 148. This discrepancy was not explained by the assessee and moreover, no supporting evidences have been filed to support the claims of receipt on account of transfer from HUF in the receipts and payment account - no reason to interfere with the order passed by the lower authorities, hence, dismiss the appeal filed by the assessee on this ground.

Summary

Issues involved:
The issues involved in this case are the addition of unexplained advance paid to the landowner for development of land and the computation of agricultural income.

Issue 1: Unexplained advance paid to landowner for development of land

The appeal was filed against the order of the Commissioner of Income Tax (Appeal) arising from the assessment order passed under the Income Tax Act. The assessee, a director of a construction company, filed her return of income admitting a total income. A survey was conducted, and based on the findings, the Assessing Officer issued a notice for which the assessee responded by admitting income and agricultural income. The AO estimated agricultural income and set off against the advance paid for development, treating the difference as unexplained expenditure. The CIT(A) dismissed the appeal, leading to the appeal before the Tribunal. The Tribunal found that the assessee failed to provide sufficient evidence to substantiate the source of the advance, leading to the dismissal of the appeal.

Issue 2: Computation of agricultural income

The appeal also challenged the addition of unexplained agricultural income. The assessee claimed a higher agricultural income in the return filed post-survey, which was contested by the AO. The Tribunal noted discrepancies in the claimed agricultural income, especially regarding the transfer from HUF, without supporting evidence. The Tribunal observed that the assessee did not adequately explain the discrepancies, leading to the dismissal of the appeal on this ground as well.

Conclusion:
The Tribunal upheld the orders of the lower authorities, dismissing the appeal of the assessee regarding the addition of unexplained advance paid to the landowner for development of land and the computation of agricultural income.