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TMI Blog2024 (5) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... f facts merely invoices which are not of registered firm or a person and having not paid agricultural cess, the same cannot be considered as non genuine. In support of the contention our attention was invited to the various judgement of Co-ordinate Bench cited by ld. AR of the assessee. As decided in Shri Chaudhary Mange Ram Panwar [ 2023 (6) TMI 1129 - ITAT DEHRADUN] preponderance of probability theory would go in favour of the assessee in the instant case. The predominant income available with the assessee is only the agricultural income. No other source of income is brought on record by learned Assessing officer and it is not in dispute that the assessee is not engaged in any business or profession. The source of income in any manner whatsoever could only emanate from agricultural income. Hence, the overall explanation given by the assessee for explaining the cash deposits as emanating out of the sale of car and agricultural receipts need to be accepted. No other source available with the assessee which would have enabled him to earn income. Thus we are of the considered view that the addition made by the ld. AO in the case of the assessee is directed to be deleted. Appeal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, it is only on the count of the certified copy that the delay has occurred. It is also relevant to mention here that the copies of the record was received by the appellant on 12.01.2024 and even as such no deliberate delay stands occurred and therefore, the present application for condonation of delay needs to be considered. 5. That in the aforementioned facts and circumstances the Appellant herein respectfully prays for condonation of delay in filing this present D.B. Appeal. It is most respectfully and humbly submitted and prayed that in the interest of justice the delay may be condoned in the light of the above mentioned prayed that the application may kindly be allowed in the interest of justice and the delay caused in filing of the appeal may be condoned by the Hon'ble Court and the appeal may be heard on merits; Any other appropriate order of direction, which this Hon'ble Court considers just and proper in the facts and circumstances of this case, may kindly be passed in favour of the appellant." 2.1 During the course of hearing, left the decision on the condonation petition upon the bench and prayed that Court may decide the issue as deem fit in the interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has always been cultivative in its very nature and as such was not in capable of generating the income under question which remains the predominance source of income arising to the Assessee and hence, the finding arrived by the authorities below deserves to be set aside. 6. That the preponderance of probability theory would also goes in favour of the Assessee as much as the only pre-dominant income with the Assessee was that of agriculture and no other source of income has been brought on record by the assessing officer and thus, it cannot be disputed that the Assessee was engaged in any other profession or business. Hence, the explanation accorded by the Assessee could not have been denied on the count of demonetization. 7. That the Assessing Officer have itself proceeded on presumption of sources other than agriculture income to which effect no finding stands attached even by the CIT(A) and therefore, the standards of two as required could not have been solely based on the presumption of receipt produced by the Assessee. 8. That no amount of presumption as against the bonafide of assessee can be brought under question as the assesses has itself participated in fair and genu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd thus, the assessment order deserves to be quashed and set aside." 4. Succinctly, the fact as culled out from the records is that the assessee had filed her return of income for A.Y 2017-18 on 02/08/2017 declaring total income of Rs. 3,26,540/-. The source of income of the assessee is rent and agricultural income earned by the assessee. After the filling the return of income the case of the assessee was selected for complete scrutiny based on large cash deposited during the demonetization period. During the assessment proceeding the ld. AO issued a show cause notice dated 01.10.2019 to the assessee asking to explain the source of cash deposited into the bank account maintained by the assessee with Oriental Bank of Commerce. The assessee has deposited a sum of Rs. 14,75,000/- in to her bank account. In response the ld. AR of the assessee submitted the receipt of sale of agricultural produce approved by the office of the Krushi Upaj Mandi Samiti Shri Vijaynagar District, Ganganagar. The ld. AO issued letter u/s. 133(6) to that Mandli asking the details of the sale bill produced by the assessee. In response mandli samiti stated that the assessee has sold the agricultural produce wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that does not know these persons but he confirmed to have sold the goods (question 31). Mr. Pappu also could not give the vehicle number which were used to transport those goods sold by the assessee. But at the same time he confirmed that the sale is supported the red coloured slip (question 26). The ld. AO also recorded the statement of her son Saurabh Kubba where in replied the question raised by the ld. AO. The ld. AO noted that the assessee does not know anything towards the crop produced and sold. The ld. AO noted in the order that based on the hearsay a information he has, he came to know that the husband of the assessee Shri Ravikumar was running a concern M/s. Ravikumar Kubba who is engaged in the aadatiya activity. Mr. Ravikumar died in recent past and may to cover up the undisclosed income of that concern the assessee as coloured the story of the agricultural income and sale of produce bills which are not correct and the money deposited in the KCC account is undisclosed income to the extent of Rs. 10,75,000 ( 14,75,000 sale of produce less agricultural income offered by the assessee in the return of income). The ld. AO also added a sum of 50,000 being the deduction cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. In regards to the applicability of 60% rate for AY 2017-18, the Hon'ble Kerala High Court in the case of Maruthi Babu Rao Jadav, supra, and the Hon'ble Kerala High Court has held as under:- "12. The assessee contends that the seizures were made prior to the amendment. The affidavits admitting the ownership of amounts seized were also submitted prior to the amendment. The assessee was not aware of the enhanced tax liability when the admissions were made before the authorities. The assessee has also made an attempt to relate the amendments to the demonetization of the specified currencies announced on 8-11-2016 which contention we reject at the outset. The subject amendments which are relevant for our consideration have no direct link with the demonetization introduced or the taxation and investment regime of Pradhaan Mantri Garib Kalyan Yojana 2016 brought in under Chapter IX A of the 2nd amendment Act. The 2nd amendment Act as is clear from the Statements of Objects and Reasons, was to curb, evasion of tax and black money as also plug loopholes in the IT Act and to ensure that defaulting assessees are subjected to higher tax and stringent penalty provision. Bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, would have continued undisturbed. This view has been held by Hon'ble Supreme court in the case of Ahmedabad Mfg. and Calico Printing Co. Ltd. v. S.G. Mehta, ITO [1963] 48 ITR 154. Even Hon'ble Kerala High Court in the case of Bhagavathy Tea Estates Ltd. v. State of Kerala [1990] 50 Taxman 180/[1989] 179 ITR 508 (Ker.) held that the rate or rates prescribed by a Finance Act is or, subsequently, changed by passing a finance (amendment) Act having retrospective effect from the date from which the original Finance Act was passed or enforced. In such circumstances, the changed rate or rates of tax is to be applied for the relevant Assessment Year. The above legal position was confirmed by ITAT CHENNAI BENCH 'B' in the case of Karthick Natarajan v. Deputy Commissioner of Income-tax, International Taxation* [2023] 154 taxmann.com 136 (Chennai - Trib.) "Accordingly, we are of the view that in the instant case before us the Provisions of Section 115BBE of the Act as amended by second amendment Act by the Taxation Laws (second amendment) Act, 2016 will apply w.e.f 1-4-2017 on enhanced rate of tax @60% instead of @30%. The enhanced rates applies from the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at such investments are out of capital receipt in kind/cash and maintains no books of accounts for such source, then the assessee can still be falling in the sweep of section 69A if the explanation offered by her is unsatisfactory. Section 69A can be invoked, once the source is unexplained even if the other condition of not recording in books of accounts are not fulfilled as the assessee does not maintain books of accounts. In this context, following decisions are of relevance: R. Mallika Vs CIT [2017] 79 taxmann.com 117 (SC) where Hon'ble Supreme Court dismissed SLP against Madras High Court's ruling that where assessee had not discharged burden as regards source from which investment had been made, investment in property was an unexplained investment and same was rightly added to income of assessee. CIT Vs R. Mallika [2013] 36 taxmann.com 231 (Madras)/[2013] 219 Taxman 244 (Madras) where Hon'ble Madras High Court held that where assessee had purchased a property for Rs. 22 lakhs and she had not discharged burden as regards source from which investment had been made, investment in property was an unexplained investment and same was rightly added to income of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85 (Delhi)/[2006] 285 ITR 256 (Delhi)/[2006] 204 CTR 336 where Hon'ble Delhi High Court held that where pursuant to a search conducted at residential premises of assessee, huge sum of cash was found, for which assessee explained that said cash belonged to certain organisation but did not bring any material on record to substantiate his explanation and, moreover, verification of books of account of said organization showed no connection with cash recovered from assessee, in said circumstances assessee was to be treated as owner of said cash, and same was to be added to income of assessee under section 69A. In the instant case, the appellant has failed to discharge the initial onus of explaining the source of funds for deposits appearing in the bank account of the appellant. The AO therefore rightly added this amount to the income of the under Section 69A r.w.s 115BBE of the Act. In the light of the above, it is found unnecessary and imprudent to isturb the order of the AO and his findings. Therefore, the impugned assessment order is upheld and no interference is called for. [2] Accordingly, all the grounds of appeal are dismissed." 6. Feeling dissatisfied with the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present proceeding the finding arrived by the Assessing Officer as well as the respected Commissioner Income Tax, nowhere discloses that as to the addition of income done in the income of Assessee have infact arise from the sources mentioned under Section 14. In the lack of such finding, the addition so arrived could not have been infact reached and it is to this effect that the impugned orders deserves to be quashed and set aside. 4. That the issue patently relates to the preponderance of probability theory wherein, the predominant income from the Assessee would in all probabilities should be deemed to arise from the predominant income of the nature i.e. in the present case, the Agriculture Income. It is important to note that by no means any other sources of income stands highlighted by the Assessing Officers and it is not in dispute that the Assessee was not engaged in any business or profession so as to excludes the Income arising under the definition of Agriculture. Hence, the sources of income in any manner whatsoever could only have eminent from Agriculture Income and hence, the explanation accorded by the Assessing Officer could by no means overshadowed the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction that remain suspicious and an act to deceive the authorities stands taken by the Assessee thus, the finding of the assessing officer that the receipt so submitted was bogus and thus, cannot support the transactions therefore, cannot be accepted and thus, the assessment order deserves to be quashed and set aside. 2. That the learned Appellate Below have failed to consider the appropriate nature of income and that the Assessee has rightly treated the income to accrue agricultural income and therefore, the learned Appellate Authority Below have failed to consider the classification made by the Authority. 3. That the learned CIT (A) have failed to consider the correct prospective in the matter as the bonafides attached to the Assessee cannot be disputed on the count of the fraud committed with the Assessee and therefore, the finding were arrived by the authority have been arrived at in a mechanical manner and without proper application of mind. 4. That the authority below have failed to consider the explanation accorded by the assessee in as much as the revenue record stands produced before the authorities below and as such, it has not been found that the revenue record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as such there remains nothing that would be attached with the intent to defraud of a wrongful gain or as much as with terms of misrepresentation and hence, the finding so arrived by the authorities deserves to be quashed and set aside. 12. That the learned authorities have failed to consider the equitable practice and the principle applicable in the present circumstances and hence, the addition of income needs to be deleted. 13. That the judgment relived by the CIT(A), nowhere relates to the principle applicable in the present case and therefore, the legal principles relied upon by the authorities below could not be read against the Assessee and hence, on the count of non-applicability of proper law, the impugned order as well as the addition of income deserves to be quashed and set aside. 14. That the bank account of the Assessee stands produced before the authorities below and even, on that count nothing transpire before the authorities so as to add any other source of income. Therefore, the finding arrived is completely beyond the material available on record and hence, the appeal deserves to be accepted. 15. That the learned assessing officer eared in passing the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pts were issued bearing name of the Krishi Upaj Mandi, Shri Vijaynagar having the stamp and serial number, wherein the name of seller, name of broker and the details of the sale of items made. The ld. AO issued latter u/s 133(6) and confirmed the invoices produced by the assessee, wherein it was informed that the same are not approved by the agricultural Mandli. Upon receipt of this information the statement of assessee his son and Mr. Pappu was recorded by the ld. AO, wherein the ld. AO confronted about the fact that whether the invoices and the agricultural activities done by the assessee is genuine or not. It is not under dispute that the assessee is holding the agricultural land and the assessee also undertake the agricultural activity as it is evident from Khasra/Girdawati filed by the assessee and the ld. AO also considered the source of the assessee as agricultural activity in part. The ld. AO only disbelieved the income of the assessee on part, based on the information confirmed by Krishi Upaj Mandi wherein he stated that the bills invoices are not approved by them and the party who has issued the bill has not paid the cess based on that aspect of the matter the ld. AO draw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is relied is in the case of Shri Chaudhary Mange Ram Panwar vs. ITO in ITA No. 36/DDN/2022 dated 23.06.2023 wherein the Co-ordinate Bench held as under:- "It is also crucial to note that preponderance of probability theory would go in favour of the assessee in the instant case. The predominant income available with the assessee is only the agricultural income. No other source of income is brought on record by learned Assessing officer and it is not in dispute that the assessee is not engaged in any business or profession. The source of income in any manner whatsoever could only emanate from agricultural income. Hence, the overall explanation given by the assessee for explaining the cash deposits as emanating out of the sale of car and agricultural receipts need to be accepted. There is no other source available with the assessee which would have enabled him to earn income." 10. The other decision relied upon by the ld. AR of the assessee wherein the Co-ordinate Bench in the case of Shri Madhusudan Dhakad Harda vs ITO in ITA No. 9/Ind/2022 dated 28.06.2022 wherein it has held as under:- "11. We have considered rival submission of both sides, perused the material held on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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