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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGH & SHRI G. MANJUNATHA
आदेश /O R D E R
PER G. MANJUNATHA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals)-16, Chennai, dated 26.06.2022 and pertains to assessment year 2017-18.
:-2-: ITA. No: 717/Chny/2022 2. The assessee has raised the following grounds of appeal: “1. The order of Ld. Assessing Officer is contrary to facts and circumstances of the case. 2. The Ld. Assessing Officer failed to consider the records and submissions filed during the course of the assessment. 3. The Ld. Assessing Officer failed to consider that the appellant is a non-resident who inherited the land from this father by way of family settlement. The land was maintained and the agricultural activities were carried out by the appellant's brother on appellant's behalf. 4. Subsequent to the demise of his brother, the appellant's cousins has taken over the responsibility of being the care taker for the said agricultural land. Thus, the bank accounts were operated on appellant's behalf, wherein cash was withdrawn at various dates for expenditure and subsequently, the unspent portion was re-deposited. 5. The Ld. Assessing Officer failed to consider the fact that the agricultural income was also deposited into the bank account , the income of which has been shown in the statement of computation for the year under consideration. 6. Further, the Ld. Assessing Officer erred in making addition of cash deposit u/s 69A amounting to Rs.6,93,000/- without considering that some of the deposit was made out of prior withdrawal. Out of the total cash withdrawn of Rs.3.81 Lakhs, the Ld. Assessing Officer allowed only Rs. 1 lac as explained for reasons best known to him. 7. Thus, the source of cash deposit is savings of agricultural income and deposit out of prior withdrawals. 8. The Ld. Assessing Officer failed to note that the appellant being a non-resident does not have any other source of income in India that would generate cash income apart income from agricultural activities. 9. For the above reasons and other reasons that may be adduced at the time of hearing, the Order u/s 250 by the CIT(A) may kindly be quashed and justice be rendered. 10. The appellant craves to amend, alter or delete any of the above grounds of appeal.”
:-3-: ITA. No: 717/Chny/2022 3. The brief facts of the case are that, the assessee is an individual and filed his return of income for the assessment year 2017-18, under the status NRI and declared total income of Rs. 3,97,170/-. The case was taken up for scrutiny under CASS to verify cash deposits and transactions in property. During the course of assessment proceedings, the AO noticed that the assessee had made cash deposits of Rs. 15,93,000/- in State Bank of India, Cuddalore branch and Rs. 90,000/- in Indian Bank, Cuddalore branch, aggregating to Rs. 16,83,000/-. The assessee was called upon to file necessary source of income for cash deposits, for which the assessee submitted that source for cash deposits are out of advance received from sale of property, agricultural income, income from house property and earlier withdrawals during the same assessment year. The AO, on the basis of details submitted by the assessee noticed that the assessee had withdrawn a sum of Rs. 1 lakh in earlier occasions and thus, cash deposits to the tune of Rs. 1 lakh can be found to be acceptable and explainable as one of the source. The AO, further noticed that the sum of Rs. 1.50 lakhs and Rs. 50,000/- found to be acceptable being advance received for sale of property. Similarly, a sum of Rs. 5.50 lakhs and Rs. 1.40 lakhs being
:-4-: ITA. No: 717/Chny/2022 agricultural income of the current and previous year is found to be acceptable. In total a sum of Rs. 9.90 lakhs was duly explained and thus, in absence of plausible explanation and for want of proper evidence, the balance cash deposits of Rs. 6,93,000/- is treated as unexplained money u/s. 69A of the Act. The assessee carried the matter in appeal before the first appellant authority, but could not succeed. The Ld. CIT(A), for the reasons stated in their order dated 26.06.2022, sustained addition made by the AO.
The ld. Counsel for the assessee, submitted that the assessee being an NRI, derived income from house property, agricultural income, which is the source for cash deposits found in bank accounts. The AO has accepted cash deposits partly out of source explained by the assessee, but for remaining sum of Rs. 6,93,000/-, he has made addition only on the ground that no evidence was filed. But, fact remains that except agricultural income and other income, the assessee does not have any income which can be unexplained money u/s. 69A of the Act.
:-5-: ITA. No: 717/Chny/2022 5. The Ld. DR, on the other hand supporting the order of the Ld. CIT(A) submitted that, the AO has allowed relief wherever the assessee could furnish and explain source for cash deposits. For balance sum of Rs. 6,93,000/-, the assessee could not file plausible explanation and evidences. Therefore, the AO has rightly made addition and their order should be upheld.
We have heard both the parties, perused materials available on record and gone through orders of the authorities below. There is no dispute with regard to the fact that the assessee is an NRI, derived income from house property and agricultural income. It is also not in dispute that the assessee does not have any other income. It was the explanation of the assessee before the Assessing Officer that source for cash deposits is out of sale advances received for the year, agricultural income, income from house property and earlier withdrawals from same bank accounts. The AO has accepted explanation of the assessee and out of Rs. 16,83,000/-, a sum of Rs. 9,90,000/- has been accepted. The balance amount of Rs. 6,93,000/- has been treated as unexplained money. We find that the assessee being an NRI, not involved in any kind
:-6-: ITA. No: 717/Chny/2022 of business activity, except agricultural income and income from house property. Therefore, the explanation of the assessee that source for cash deposits is out of agricultural income of earlier years seems to be reasonable. But, fact remains that the assessee could not file any evidence except claiming that he has derived agricultural income for earlier years also. Therefore, we are of the considered view that neither the assessee could file necessary evidence to justify source for cash deposits nor the AO reached to a conclusion that sum found in bank accounts of the assessee is unexplained money. Under these facts and circumstances, the only way left with us is to resolve the dispute between the parties by drawing mid-way line. Therefore, we are of the considered view that a reasonable estimation can be made for the source of income which is available for cash deposits and thus, out of sum of Rs. 6,93,000/-, we accept the explanation of the assessee with regard to source for cash deposits is out of agricultural income of earlier years also. Therefore, we direct the AO to delete a sum of Rs. 3,43,000/- out of addition of Rs. 6,93,000/- and balance amount of Rs. 3,50,000/- is confirmed.
:-7-: ITA. No: 717/Chny/2022 7. In the result, appeal filed by the assessee is partly allowed. Order pronounced in the open court on 16th January, 2023 at Chennai. Sd/- Sd/- (जी. मंजुनाथ) (महावीर �सह ) (G. MANJUNATHA) (MAHAVIR SINGH) उपा�य� /Vice President लेखासद�य/Accountant Member चे�ई/Chennai, �दनांक/Dated, the 16th January, 2023 JPV आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकर आयु� (अपील)/CIT(A) 4. आयकर आयु�/CIT 5. िवभागीय �ितिनिध/DR 6. गाड� फाईल/GF