2022 (5) TMI 362 - AT - Income Tax

Assessment u/s 153A - No valid approval under section 153D - HELD THAT - As assessee fairly admitted that there is due approval in the records which was duly shown to learned CIT(A). However he submitted that there is no mention of the same in the assessment order. We find that this is frivolous ground not sustainable in law. Approval is duly on record hence this ground raised by the assessee is dismissed in as much as learned counsel himself has agreed that due approval is already on record which was shown to learned CIT(A) in the first appellate proceedings. Addition on account of agricultural income - HELD THAT - Learned counsel reiterated the submission that claim for agricultural income is cogent and learned CIT(A) erred in not deleting the same. On a query from the Bench whether land revenue record in the form of 7/12 extracts were furnished before the authorities below learned counsel admitted that only a miniscule portion of the same was submitted. A perusal of them shows that it also mention status of the land is BANJAR i.e. non-cultivable. As already emanating from the orders of the authority below there is no cogent evidence of agricultural income and agricultural expenses incurred by the assessee. Entire submissions of the assessee are an afterthought and make believe submission. We note that the revenue is not in appeal against the relief granted by learned CIT(A). In our considered opinion learned CIT(A) has granted more than fair relief to the assessee. The theory of agricultural income by the assessee is devoid of cogent evidence. In this view of the matter we do not find any infirmity in the order of learned CIT(A) in this regard. Hence, we confirm the same. Addition for cash and jewellery - HELD THAT - In the present case it is not at all the case that there is any seizure. The issue here is that cash and jewellery was found during search and the onus was upon the assessee to explain the same. However, before the Assessing Officer, as recorded in the assessment order the assessee has not made any submission in this regard after due notice. Before learned CIT(A) also nothing was submitted as it has been duly noted by learned CIT(A) that the assessee has all along being harping upon the validity of notice and jurisdiction of assessment. As noted by us hereinabove this has been not been pressed by learned counsel. Even this plea of relief of jewellery found on the basis of CBDT guideline was also not made before learned CIT(A). Hence, this new plank raised by learned counsel is not emanating from the orders of authorities below. As noted by learned CIT(A) except for submitting that the items found in search were not unusual, no explanation was made by the assessee before learned CIT(A). In the absence of any material on record in this regard we are not inclined to grant any relief whatsoever by simply mentioning of that CBDT guideline. In this view of the matter this ground raised by the assessee stands dismissed. Appeal of assessee dismissed.

Summary

Issues Involved:
1. Validity of Notice under Section 153C of the Income Tax Act.
2. Approval under Section 153D of the Income Tax Act.
3. Addition of Agricultural Income as Unexplained Cash Credit under Section 68.
4. Addition of Cash and Jewellery found during search as Unexplained Income under Section 69A and 69B.

Detailed Analysis:

1. Validity of Notice under Section 153C:
The assessee initially contested the validity of the notice issued under Section 153C, arguing that no incriminating material was found to justify the issuance of the notice. However, the assessee's counsel later chose not to press this ground. Consequently, this issue was dismissed as not pressed.

2. Approval under Section 153D:
The assessee argued that the assessment order was invalid due to the non-mention of approval under Section 153D in the body of the assessment order. The counsel for the assessee admitted that the approval was on record and shown to the CIT(A). The tribunal found this ground frivolous and dismissed it, stating that the approval was duly on record and thus, the ground was not sustainable in law.

3. Addition of Agricultural Income as Unexplained Cash Credit:
The assessee declared agricultural income in various assessment years, which was added as unexplained cash credit by the Assessing Officer (AO) due to a lack of supporting evidence. The AO noted the failure of the assessee to provide necessary details such as land agreements, measurement area, type of crops, bills for seeds/fertilizers, and details of sale transactions.

Upon appeal, the CIT(A) noted that the assessee submitted additional evidence, which was forwarded to the AO. The AO's remand report maintained that the agricultural income could not be substantiated with the provided evidence. The CIT(A) granted partial relief, allowing a certain amount as agricultural income based on the sample vouchers provided but disallowed the remaining amount as unexplained cash credit.

The tribunal upheld the CIT(A)'s decision, noting that the assessee failed to provide cogent evidence of agricultural income and expenses. The tribunal found no infirmity in the CIT(A)'s order, confirming the disallowance of the remaining amount as unexplained cash credit.

4. Addition of Cash and Jewellery as Unexplained Income:
During a search, cash and jewellery were found at the assessee's residence. The AO added the value of these items as unexplained income under Section 69A, as the assessee failed to provide any explanation or supporting evidence for the source of these assets.

The CIT(A) upheld the AO's addition, noting that the assessee did not furnish any credible explanation or evidence during the assessment or appellate proceedings. The tribunal also upheld this decision, rejecting the assessee's argument based on the CBDT Circular regarding the non-seizure of jewellery. The tribunal clarified that the issue was about explaining the source of the found assets, not their seizure, and since the assessee failed to provide any explanation, the addition was justified.

Conclusion:
The tribunal dismissed the appeals by the assessee, confirming the orders of the CIT(A) and the AO regarding the disallowance of agricultural income as unexplained cash credit and the addition of cash and jewellery as unexplained income. The tribunal found that the assessee failed to provide sufficient evidence to substantiate the claims and explanations regarding the agricultural income and the assets found during the search.