2022 (8) TMI 627 - AT - Income Tax

Revision u/s 263 - addition u/s 68 - unexplained cash credit - AO was of the opinion that the agricultural income shown by the assessee is not actually representing from the agricultural operations and therefore the same was treated as unexplained cash credit - Submission of additional evidences - additional evidence cannot be placed by the assessee for the admission before the Tribunal as a matter of right - HELD THAT - Additional evidences were collected from the 3rd parties and the assessee has put lot of efforts in obtaining the same from the concern parties. Furthermore, we note that these additional documents filed by the assessee go to the root of the matter and therefore in the interest of justice and fair play, the consideration of these documents at the end of the AO is necessary. Accordingly, we exercise our power granted under rule 29 of ITAT rules and admit these additional evidences and set aside the issue to the file of the AO for fresh adjudication as per the provisions of law and in the light of the additional evidences as discussed above. Hence the ground of appeal of the assessee is allowed for the statistical purposes.

Summary

Issues:
1. Addition of agricultural income as unexplained cash credit under section 68 of the Income Tax Act.

Analysis:
The appeal was filed by the Assessee against the order of the Commissioner of Income Tax (Appeals) regarding the addition of agricultural income as unexplained cash credit under section 68 of the Income Tax Act for the Assessment Year 2014-2015. The Assessee, an individual and partner in a firm, claimed agricultural income of Rs. 50,34,653.00 from the sale of wheat and paddy. The Assessing Officer (AO) raised concerns as the Assessee had not shown income from agricultural operations in the preceding years, no expenses were declared against the income, and there were discrepancies in the sale proceeds and land acquisition details. Consequently, the AO treated the agricultural income as unexplained cash credit and made the addition to the total income.

The Assessee contended before the Commissioner that the agricultural income was genuine, supported by land ownership details, sales information, and agricultural activities after land purchase. However, the Commissioner upheld the AO's decision, stating that the Assessee failed to provide substantial evidence of genuine agricultural income. The Commissioner highlighted discrepancies in the timing of income crediting and land acquisition, lack of expenditure records, and unverified sales to a specific party. The Commissioner concluded that the agricultural income was non-genuine.

In the subsequent appeal before the Appellate Tribunal, the Assessee submitted additional evidence, including affidavits from third parties related to land purchase. The Tribunal analyzed the admissibility of additional evidence under ITAT Rules, emphasizing that the Tribunal has discretion to allow additional evidence based on necessity and fairness. Considering the efforts made by the Assessee to collect crucial documents and the importance of the evidence, the Tribunal admitted the additional evidence and remanded the matter to the AO for fresh adjudication.

In conclusion, the Tribunal allowed the Assessee's appeal for statistical purposes, emphasizing the importance of fair play and justice in considering additional evidence. The Tribunal's decision to admit the additional evidence and remand the case for fresh assessment signifies a fair and thorough review of the complex issues surrounding the treatment of agricultural income as unexplained cash credit under section 68 of the Income Tax Act.