YASHWANT RANGNATH KULKARNI,PUNE vs. INCOME-TAX OFFICER, WARD - 7(2), PUNE

आदेश / ORDER

PER VIKAS AWASTHY, JM :

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), 3, Pune, dated 24.04.2018 for assessment year 2010-11.

“1. The learned CIT(A)-3, Pune erred in law and on facts in sustaining the addition made by the learned ITO, Ward 7(2), Pune (hereinafter referred to as the learned AO) u/s 68 of the ITA, 1961; amounting to Rs. 21,50,000/- for cash deposited in Pune People Co-op Bank Ltd.

ITA No.1128/PUN/2018

submitted that the assessee is a salaried person and is also having

income from house property and from other sources. The assessment

of appellant for A.Y. 2010-11 was taken up for scrutiny under CASS.

During the course of scrutiny assessment, the Assessing Officer

observed that the assessee has made cash deposits of Rs.21,50,000/-

from time to time in his Bank account with Pune Peoples Co-operative

Bank Ltd., Aundh, Pune. The assessee explained that the deposited

cash was received by the assessee from his father before his death on

18.10.2009. The ld.A.R. further submitted that the father of the

assessee was an agriculturist and was holding around 36 acres of

land in Akkalkot, District Solapur and was earning agricultural

income. The father of the assessee was not keeping good health for

the past some time. The earnings from sale of agricultural produce

were retained by his father at home and were not deposited in the

Bank as he was not having any bank account of his own. The father

of the assessee was not having any PAN as well. The assessee

opened the bank account in his own name and deposited the cash

received from his father. The ld.A.R. submitted that the assessee had

deposited Rs.20,00,000/- (Rs.2,00,000/- in August, 2009 and

ITA No.1128/PUN/2018

Rs.18,00,000/- in September, 2009) before the death of his father.

The remaining amount i.e., Rs.1,50,000/- was deposited in January

and February, 2010. The ld.A.R. contended that the AO rejected

explanation furnished by the assessee outrightly without even

verifying the facts. The assessee filed appeal against the assessment

order dt.31.10.2012 before CIT(A). In First Appellate proceedings, the

assessee made elaborate submissions giving details of agricultural

land owned by his father, income earned from agricultural activities

during the assessment years 2007-08 to 2010-11. The assessee

furnished documentary evidence in support of his submissions. The

CIT(A) sought remand report on additional evidences filed. The

CIT(A) proceeded to decide the appeal of the assessee after waiting for

remand report for a long time. The AO did not rebut the explanation

and the documentary evidences filed by the assessee in remand

proceedings. Therefore, they have to be admitted as true and correct.

The ld.A.R. submitted that CIT(A) dismissed the appeal of assessee

on the ground that the assessee has failed to establish nexus between

the cash deposits in the bank and the agriculture income of his

father. The ld.A.R. asserted that once the evidences filed by the

assessee have not been controverted by the AO and there is no

contrary material record the same have to be accepted in toto.

Department vehemently defended the order of CIT(A). The ld.D.R.

submitted that the assessee has failed to furnish cogent evidence

establishing the link between agricultural income and huge cash

ITA No.1128/PUN/2018

deposits in the bank account of assessee. The ld.D.R. prayed for

upholding the impugned order and dismissing the appeal of assessee.

and have perused the orders of authorities below. The solitary issue

raised in appeal is against confirming the addition of Rs.21,50,000/-

u/s 68 of the Income Tax Act (hereinafter referred to as ‘the Act’) on

account of cash deposits in the bank account of assessee. As per the

contentions of assessee, cash deposited in the bank account is the

income of father of the assessee from agriculture operations carried

out in the past 4 - 5 years. Ostensibly, The father of assessee owned

approximately 36 acres of agricultural land. The assessee has filed

copies of 7/12 extracts to show the ownership of the land and the

agriculture produce in the past years. The CIT(A) sought report from

the AO on the additional evidences filed by the assessee. However,

the AO failed to comment upon the additional evidences and thus, no

remand report was filed for considerable period of time before the

CIT(A). The CIT(A) decided the appeal of assessee in the absence of

any comments from the AO. The CIT(A) confirmed the addition

without verifying the veracity of the statement of assessee and his

claim of agriculture income. Taking into consideration entirety of

facts, we deem it appropriate to restore the issue to the file of AO to

verify the genuineness of the assessee’s claim. The AO while deciding

the issue afresh shall consider all documentary evidences filed by

assessee in support of his claim and shall grant reasonable

opportunity of hearing to the assessee, in accordance with the law.

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The impugned order is set aside and the appeal of the assessee is allowed for statistical purposes.

Order pronounced on Wednesday, the 16th day of January, 2019.

Sd/- Sd/- (R.S. SYAL) (VIKAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER

पुणे Pune; �दनांक Dated : 16th January, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER

// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.