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2016 (2) TMI 515 - AT - Income TaxUnexplained deposits in the bank account - AO treated it as income from other sources - contention of the assessees that the deposits are agricultural income rejected - Held that - Keeping in view the past history of the assessee, in which agricultural income from Mango Orchard was accepted by the Revenue, we are of the view that in this year the agricultural income declared by the assessee at ₹ 24,70,800/- should be accepted, but they are required to explain the excess deposit in the joint bank account and for this purpose we restore the matter to the Assessing Officer with a direction to examine the nature of excess deposit in the bank account. If both the assessees fail to explain the source of deposit of the difference amount of ₹ 19,85,000/-, the Assessing Officer may make addition in accordance with law. - Decided partly in favour of assessee for statistical purposes.
Issues:
Common issue of addition made by the Assessing Officer on account of unexplained deposits in the bank account treated as income from other sources instead of agricultural income. Analysis: The assessees declared agricultural income in their returns but faced an addition by the Assessing Officer for unexplained deposits in their bank accounts, totaling to Rs. 69,26,600. The assessees claimed the deposits were from auctioning a Mango Orchard, but the Assessing Officer rejected this explanation and treated the deposits as income from other sources. This led to an addition of Rs. 34,63,300 each in the hands of the assessees. The assessees challenged this before the ld. CIT(A), providing detailed evidence of Orchard holdings and relying on a previous Tribunal order for a different assessment year where agricultural income from Mango Orchard was accepted. However, the ld. CIT(A) upheld the additions, finding the explanations unconvincing. The assessees then appealed to the Tribunal, arguing that the Revenue did not dispute the certified copies of their Orchard holdings and highlighting the previous Tribunal order accepting agricultural income from Mango Orchard. The ld. D.R. contended that detailed enquiries were conducted in this case, unlike the previous assessment year, and the source of auction money was not explained by the bidders. The Tribunal examined the orders of the lower authorities, the previous Tribunal order, and the Revenue record showing the assessees' ownership of the Orchard farm. The Tribunal noted that where the assessees owned Mango Orchard, agricultural income was expected. Referring to the previous Tribunal order's observations, the Tribunal found that the assessees had established their ownership of the Orchards and the agricultural income earned. The Tribunal confirmed the ld. CIT(A)'s order considering the detailed evidence presented by the assessees. In light of the past acceptance of agricultural income from Mango Orchard, the Tribunal accepted the declared agricultural income of Rs. 24,70,800 but directed the Assessing Officer to examine the nature of the excess deposits in the bank account totaling Rs. 69,26,600. If the assessees failed to explain the source of the excess amount of Rs. 19,85,000, the Assessing Officer was permitted to make additions as per the law. Consequently, the appeals of the assessees were partly allowed for statistical purposes.
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