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Income Tax Appellate Tribunal, “B” BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आयकर अपीलीय अिधकरण “बी” �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHENNAI माननीय �ी महावीर िसंह, उपा ! एवं माननीय �ी मनोज कुमार अ&वाल ,लेखा सद) के सम!। BEFORE HON’BLE SHRI MAHAVIR SINGH, VP AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ (िनधा*रण वष* / Assessment Year: 2017-18) Shri Kannappa Pillai Mani Ragunathan ACIT बनाम 32, Poes Road, II Street, Non-Corporate Circle-10(1), / Vs. Teynampet, Chennai-600 018. Chennai. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAFPR-4623-P (अपीलाथ�/Appellant) : (� थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri P.M.Kathir (Advocate)-Ld.AR � थ�कीओरसे/Respondent by : Shri D.Hema Bhupal (JCIT)- Ld. DR सुनवाईकीतारीख/Date of Hearing : 28-06-2023 घोषणाकीतारीख /Date of Pronouncement : 04-07-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 17-05-2022 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 03-12-2019. The grounds taken by the assessee are as under: “1.The order of the Commissioner of Income Tax (Appeals) is against the facts of the case and is in violation of the statutory provisions. 2.The CIT(A) has erroneously upheld the order of the Assessing Officer passed solely on assumptions and surmises.
3.1 The CIT(A) has erroneously upheld the ad-hoc disallowance of agricultural income of Rs.16,00,000/- and the addition of the same as unexplained investment of the appellant u/s.69 of the Act. 3.2 The notional and illogical addition by the AO having been made in the absence of any enquiry and against the facts and circumstances of the case, the CIT(A) erred in failing to delete the same. 4.1 The CIT(A) erred in confirming the addition of deposits of Rs.13,33,333/- as the appellant's unexplained income u/s.69 of the Act made by the AO, though he accepted that the appellant earned agricultural income of Rs.32,00,000/-. 4.2 The explanation of the appellant that the source of cash was agricultural receipts having not been disproved by the AO, the CIT(A)'s failure to delete the irrational addition makes the impugned order unsustainable in law. 4.3 In any case, the addition of agricultural receipts as unexplained investments is unsustainable and the same is to be deleted in full.”
As is evident, the assessee is aggrieved by confirmation of certain addition of unexplained investment. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.
The assessee admitted total income of Rs.50.69 Lacs and agricultural income of Rs.48 Lacs. The agricultural income was stated to be received from leasing out of agricultural land and this income was received in cash. The land was leased out by the assessee for yearly rent of Rs.48 Lacs and the leased proceeds were to be paid out of sale of agricultural produce (sale of coconuts). However, in comparison to earlier year, there was huge variation in the agricultural receipts even though there was no increase in agricultural holdings. The assessee had received proceeds of Rs.5 Lacs, Rs.8.50 Lacs and Rs.32 Lacs in earlier years. Therefore, the lease agreement was state to be make-believe arrangement only. Considering this fact, the agricultural income was restricted to the extent of Rs.32 Lacs and the balance Rs.16 Lacs was treated as unexplained investment of the assessee. This was further coupled by the fact that the assessee was shown to have received entire amount of Rs.48 Lacs on 13.10.2016 which was contradictory to the terms of lease agreement which provided that leased proceeds were to be paid out of sale of agricultural produce. Therefore, the monthly amount that was received under the agreement was computed at Rs.2.66 Lacs per month and the agricultural receipts for the period of 7 months were computed at Rs.18.66 Lacs as against Rs.48 Lacs shown by the assessee. Finally, valid source of cash deposit was accepted to be Rs.18.66 Lacs and the balance amount of Rs.13.34 Lacs was also treated as unexplained investment u/s 69 of the act. In other words, unexplained investment was held to be to the extent of Rs.29.33 Lacs. The returned income was assessed at Rs.50.69 Lacs plus Rs.29.33 Lacs of unexplained investment. Though the assessee preferred further appeal, however, the action of Ld. AO was upheld against which the assessee is in further appeal before us. Our findings and Adjudication 3. From factual matrix, it emerges that agricultural receipts have shown significant improvement during this year despite the fact that there was no increase in agricultural holding. Therefore, the findings of lower authorities, in this regard, could not be faulted with. No further evidence could be produced before us to rebut the findings of lower authorities. Therefore, we find no reason to interfere in the orders of lower authorities. However, we find that agricultural income of Rs.32 Lacs has been earned by the assessee in immediately preceding year which has been accepted and therefore, the same, to that extent, could be accepted in this year also. Accordingly, we direct Ld. AO to accept agricultural income to the extent of Rs.32 Lacs and treat the balance amount of Rs.16 Lacs as unexplained income / investment instead of Rs.29.33 Lacs. The Ld. AO is directed to re-compute the agricultural income of the assessee. 4. The appeal stand partly allowed in terms of our above order. Order pronounced on 4th July,2023