2019 (10) TMI 1227 - AT - Income Tax

Addition u/s 69A - cash deposit in the bank account - agricultural income claimed by the assessee - HELD THAT - In absence of any basis of estimating agricultural income of ₹ 2.00 lacs, the claim of agricultural income of ₹ 3,05,200/- cannot be rejected. Accordingly, the agricultural income claimed by the assessee at ₹ 3,05,200/- is allowed. Since the assessee is having agricultural operation for 8 to 10 years and the agricultural income for the year under consideration is ₹ 3,05,200/- then if the savings of the assessee out of his agricultural income per year is taken at ₹ 50,000/- for last 8 to 10 years then a savings of ₹ 5.00 lacs for the 10 years of agricultural income from a land of 34 to 35 bighas is not an abnormal claim of the assessee. A.O. has not disputed the fact that the assessee is not having any other source of income but the agricultural income only, therefore, in the facts and circumstances of the case, the savings for last 8 to 10 years of the assessee cannot be disputed and that too in toto. Hence, the claim of the assessee is allowed.

Summary

Issues:
1. Validity of order passed U/s 147 of IT Act, 1961
2. Addition of ?8,33,087/- U/s 69A of the IT Act by treating cash deposit in bank account as unexplained income
3. Request for alteration of any ground of appeal
4. Award of necessary costs to the assessee

Issue 1: Validity of order passed U/s 147 of IT Act, 1961
The appeal challenged the order of ld. CIT(A) upholding the validity of the order passed U/s 147 of IT Act. However, during the hearing, the assessee decided not to press ground No. 1 of the appeal, which was subsequently dismissed as not pressed.

Issue 2: Addition of ?8,33,087/- U/s 69A of the IT Act
The dispute centered around the addition of ?8,33,087/- under U/s 69A of the Income Tax Act, 1961, due to cash deposits in the bank account. The assessee, an agriculturist, explained that the deposits were from agricultural income and savings from previous years. The AO did not accept this explanation and made an addition of ?11,90,634/- as unexplained income. The ld. CIT(A) allowed credit for opening balance and estimated agricultural income, sustaining the addition of ?8,33,087/-. The Tribunal, however, found the explanation of the assessee reasonable, considering the agricultural income and savings over the years, and deleted the addition.

Issue 3: Request for alteration of any ground of appeal
The appellant requested the Tribunal to alter, amend, or modify any ground of appeal, which was a standard provision in the appeal.

Issue 4: Award of necessary costs to the assessee
The appeal also sought necessary costs to be awarded to the assessee, which was a routine request in such proceedings.

In conclusion, the Tribunal partially allowed the appeal, deleting the addition made by the AO and sustained by the ld. CIT(A) concerning the cash deposits in the bank account, based on the reasonable explanation provided by the assessee regarding agricultural income and savings over the years.