SHRI LAL CHAND SHARMA,JAIPUR vs. INCOME TAX OFFICER, WARD-7(2), JAIPUR

This appeal by the assessee is directed against the order dated 14th May, 2018 of ld. CIT (A)-3, Jaipur for the assessment year 2014-15. The assessee has raised the following grounds :-

“ 1. That under the facts and circumstances of the case the learned CIT (A) has erred in confirming the addition of Rs. 2,59,958/- on account of investment in Jeep without considering the submission of the assessee. 2. The assessee craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing.

2. The only issue raised in this appeal is regarding addition made by the AO on account of cash payment towards purchase of Jeep. The assessee is an individual and derives income from salary. The AO noted that the assessee has purchased a Mahindra Jeep for a consideration of Rs. 13,37,958/-, out of which a sum of Rs. 10,78,000/- was financed by Mahendra Finance Ltd. and balance amount of Rs. 2,59,958/- was paid in cash. The AO asked the assessee to explain the source of the cash of Rs. 2,59,958/- paid for purchase of Mahindra Jeep. The assessee explained the source as past savings as well as agricultural income, however, which was not accepted by the AO and consequently an addition of Rs. 2,59,958/- was made to the total income of the assessee. The assessee challenged the action of the AO before the ld. CIT (A) and contended that the source of cash is available in the cash book maintained by the assessee. Copy of the ledger account of cash was furnished before the ld. CIT (A) as well as the AO. The ld. CIT (A) did not accept the cash book produced by the assessee on the ground that the assessee has claimed the interest income of Rs. 72,000/-, however, no such income was shown in the return of income. Further, the assessee has shown drawings of Rs. 60,275/- which is not sufficient to meet the household expenditure as well as education expenditure of the children. Accordingly, the ld. CIT (A) confirmed the addition made by the AO.

3. Before us the ld. A/R of the assessee has submitted that the source of cash paid for purchase of Mahindra Jeep was duly explained and supported by cash book maintained by the assessee. The said cash book reflected the withdrawal of said amount of Rs. 2,59,958/- on 1st November, 2013. Further, the assessee also produced the necessary documents to show that the HUF of his father owned agricultural land of 2.30 hectare and the assessee has received his share from the agricultural income of HUF of Shri Harnath Sharma. Thus once the assessee has received his share of agricultural income from the HUF of his father, then the same was not required to be shown in the return of income. He has referred to the relevant documents regarding the holding of agricultural land and agricultural income of the father’s HUF. As regards the drawings during the year of Rs.60,275/-, the ld. A/R has submitted that the wife of the assessee also made drawings of Rs. 54,000/- and there is drawings of Rs. 54,000/- in the HUF also. Therefore, the total drawings of the family was Rs. 1,68,275/- which was sufficient when the assessee is living in the joint family. The assessee is also residing in the village and in his ancestral house, therefore, the total drawings of Rs. 1,68,275/- is sufficient to meet the household expenses as well as education expenses of children. Hence the ld. A/R has pleaded that the addition made by the AO and confirmed by the ld. CIT (A) is liable to deleted.

The assessee also produced the affidavit of his father who is Karta of the HUF. Only because of an entry of Rs. 72,000/- of agricultural income, the entire availability of cash in the cash book cannot be rejected, neither the AO nor the ld. CIT (A) has pointed out any other defect in the cash book, but due to the agricultural income not shown in the cash book the same was rejected. Further, the assessee has also brought on record that the total drawings by the family members of the assessee is Rs. 1,68,275/- though the assessee’s drawings is Rs. 60,275/-. Thus having regard to the facts of the case when the assessee has discharged onus of this availability of cash by producing the relevant documentary evidence as well as the household withdrawals of Rs. 1,68,275/- by the family members including the assessee, then the addition made by the AO and sustained by the ld. CIT (A) without giving a contrary finding is not sustainable. Even otherwise, the assessee being a salaried person and assessed to tax could have some past savings which is also shown in the Order pronounced in the open court on 28/03/2019.