2010 (4) TMI 269 - HC - Income Tax

Agriculture income nature of deposits made in the bank account - The assessee-respondent had furnished explanation that certain amount was withdrawn from the bank and the same was deposited in the bank account and that he had sold Poplar trees and the sale proceeds made available was deposited in the bank account although the aforesaid explanation was not found satisfactory by the Assessing Officer. Held that - there is no material on record to show concealment of income or that the assessee-respondent was not a regular agriculturist. The finding further is that the deposits were made by sale of Poplar trees and on that basis it has been found that the assessee-respondent is not involved in any other activities warranting an inference that the income has been concealed. revenue appeal dismissed

Summary

Issues:
Appeals challenging composite order dated 15.5.2009 by the Income Tax Appellate Tribunal for assessment years 1998-99 to 2003-04 regarding deposits made in UCO Bank account.

Analysis:
The High Court heard six appeals filed by the revenue challenging a composite order passed by the Income Tax Appellate Tribunal regarding deposits made by the assessee in the UCO Bank account. The Tribunal had upheld the opinion of the Commissioner of Income Tax (Appeals) who accepted the explanation provided by the assessee for the deposits. The assessee explained that the amounts were withdrawn and redeposited, and proceeds from the sale of Poplar trees were also deposited. The Assessing Officer found the explanation unsatisfactory. The Tribunal supported the reasoning of the CIT (A) as witnesses were produced to support the sale of Poplar trees, and a cash flow statement was presented to explain the deposits. It was established that the assessee was an agriculturist with no other income sources, declaring agricultural income in the respective assessment years, which was accepted by the Assessing Officer. The CIT (A) and the Tribunal found that the assessee had ample agricultural land, not disputed by the Assessing Officer.

The High Court, after considering the arguments of the appellant-revenue, agreed with the analysis of the CIT (A) and the Tribunal. It was observed that the findings of fact indicated no concealment of income and confirmed the assessee's status as a regular agriculturist. The deposits were linked to the sale of Poplar trees, and it was concluded that the assessee was not involved in any other activities suggesting income concealment. As no substantial legal question meriting intervention by the Court was identified, the appeals were dismissed. The Court directed a photocopy of the order to be placed in all connected appeals.

Judges' Decision:
The judgment was delivered by Hon'ble Mr. Justice M.M. Kumar and Hon'ble Mr. Justice Jitendra Chauhan on April 6, 2010.