2023 (1) TMI 1010 - AT - Income Tax

Unexplained cash deposits - cash deposited in the saving bank account by an agriculturist, without establishing any other source of Income - HELD THAT - We concur with the view taken by the A.O that it is beyond preponderance of human probability that the assessee would have withdrawn cash from his bank account with Jila Sahakari Kendriya Bank, Baradwar Branch from 06.01.2010 onwards and thereafter, kept the same with him till 20.05.2011 i.e. for a period of more than 1 year and redeposited the said sum at the time of sale of agricultural land - as the aforesaid explanation of the assessee is nothing but a concocted story hatched by him to justify the source of cash deposits, thus, the same cannot be accepted and had rightly been rejected by the A.O. Cash deposits were sourced from his agriculture income - We find that as observed by the A.O, and, rightly so, as the assessee was in receipt of sale proceeds of agricultural produce i.e. paddy vide cheques from the samiti to whom the same were sold, therefore, his aforesaid explanation in absence of any supporting material does not merit acceptance. In case, the assessee would have sold any intermittent crop, then, the onus was cast upon him to establish the said fact by placing on record supporting documentary evidence, which,we find had not been done by him. On the basis of aforesaid observations, find no infirmity in the view taken by the A.O that the assessee s claim that cash deposits in his bank account was partly sourced out of his agriculture income did not merit acceptance. Claim of the assessee that the cash deposits in question were sourced out of his past savings - Though he had failed to place on record any material which would have evidenced the availability of any amount of cash in hand out of his past savings, but the A.O in all fairness had accepted his claim to the extent of Rs.1 lac, which thereafter had been raised by the CIT(Appeals) to an amount of Rs.3 lac. Considering the aforesaid fact, find no infirmity in the view taken by the A.O that the assessee had failed to substantiate his claim that the entire amount of cash deposits in his bank account were sourced out of his past savings. Invocation of section 69A - As the assessee at the time of making the cash deposits in the bank account i.e. on 20/25.05.2011 was the owner of cash i.e. money, and had failed to come forth with any explanation about the nature and source of the acquisition of the same, therefore, no infirmity can be attributed to the invocation of the provisions of Section 69A of the Act by the A.O. Thus, finding no merit in the claim of the Ld. AR that the A.O had wrongly triggered the provisions of Section 69A of the Act for making the addition in the hands of the assessee, reject the same. As the assessee in the course of the assessment proceedings had not come forward with any such explanation about the nature and source of the cash deposits, therefore, the A.O was constrained to make an addition of the said amount u/s.69A of the Act. My aforesaid view is fortified by the fact that an addition under section 69A in itself pre-supposes a condition that the assessee had either failed to offer any explanation; or the explanation offered by him is not, in the opinion of the A.O found to be satisfactory. Admittedly, in the present case, as the assessee had never come forth with any explanation that the cash deposit in question was the on money that was received by him on sale of agriculture land, therefore, the provisions of Section 69A in my considered view were rightly triggered by the A.O. - Decided against assessee.

Issues Involved:
1. Addition of Rs.7,00,000/- against cash deposited in the savings bank account.
2. Applicability of Section 69A for the addition made.
3. Penalty proceedings initiated under Section 271(1)(c) for concealment of particulars.
4. Other reliefs as deemed fit by the court.
5. Right to amend grounds of appeal.

Detailed Analysis:

1. Addition of Rs.7,00,000/- Against Cash Deposited in the Savings Bank Account:
The assessee deposited Rs.18.80 lac in his savings bank account in two tranches. The AO accepted Rs.7.80 lac as sourced from the sale of agricultural land but rejected the claim that Rs.11 lac was from savings or redeposit of cash withdrawals. The CIT(Appeals) allowed an additional benefit of Rs.3 lac, restricting the addition to Rs.7 lac. The tribunal found that the assessee's claim of retaining cash for over a year was implausible and upheld the addition of Rs.7 lac.

2. Applicability of Section 69A for the Addition Made:
The assessee argued that Section 69A was inapplicable as no search or survey was conducted. The tribunal disagreed, stating that Section 69A applies when the assessee is found to be the owner of money not recorded in the books of account and fails to satisfactorily explain its source. The tribunal found no merit in the argument that the AO wrongly invoked Section 69A, as the assessee failed to explain the cash deposits satisfactorily.

3. Penalty Proceedings Initiated Under Section 271(1)(c) for Concealment of Particulars:
The tribunal did not explicitly address the penalty proceedings under Section 271(1)(c) in the detailed analysis, focusing instead on the primary issues of cash deposits and the applicability of Section 69A.

4. Other Reliefs as Deemed Fit by the Court:
The tribunal did not find any additional reliefs warranted beyond the primary issues discussed.

5. Right to Amend Grounds of Appeal:
The tribunal did not address any amendments to the grounds of appeal, focusing on the existing issues presented.

Conclusion:
The tribunal upheld the addition of Rs.7 lac, rejecting the assessee's claims regarding the source of cash deposits and the applicability of Section 69A. The appeal filed by the assessee was dismissed.

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