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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आयकर अपील�य अ�धकरण, इंदौर �यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA Nos.937 & 938/Ind/2016 Assessment Years: 1997-98 & 1998-99
Shri Ishwar Patel Income Tax Officer Pithampur Vs. Dhar (Revenue) (Respondent ) PAN No.AGDPP – 0622Q
Revenue by Shri Ravi Sarda Respondent by Shri K.G Goyal Date of Hearing 18.01.02.2018 Date of Pronouncement 15.02.2018
ORDER PER MANISH BORAD, AM.
These appeals filed by the assessee pertaining to the A.Ys.
1997-98 and 1998-99 are directed against the consolidated order of
ld. Commissioner of Income-tax (Appeals)-22 (holding concurrent
jurisdiction of CIT(A)01, Indore, dated 16.6.2016 which is arising
out of the order u/s 143(3) of the Income Tax Act dated 20.3.2002
framed by the ITO, Dhar.
As the issues raised in both these appeals are common, they
were heard together and are disposed of by this common order for
the sake of convenience and brevity.
In ITA No. 937/Ind/2016 the assessee has raised the following
grounds :-
“Ground no. 1 :-
The learned CIT(A) has erred in approving action of A.O. in
correct prospective whereas the assessee has no income in
individual status and entire income is earned out of fund
received in partition of HUF and as such assessment in
question is liable to be annulled.
Ground No.2
The assessment of income from house property at
Rs.38,400/- in the status of Individual is invalid in law
and it is liable to be deleted.
Ground no. 3 :-
The assessment of income at Rs. 1,05,500/- is bad in law,
without supplying the papers relied, as assessee is not the
owner of deposits in individual capacity.
Ground no. 4 :-
The assessment of agriculture income out of Rs. 62,000/-
at Rs. 33,000/- as income from other sources is bad in law
and that too in individual status of the assessee.
Ground no. 5 :-
The entire assessment is bad in law and it is liable to be
quashed.”
In ITA No. 938/Ind/2016 the assessee has raised the following
grounds :-
Ground no. 1 :-
The learned CIT(A) has erred in approving action of A.O. in
correct prospective whereas the assessee has no income in
individual status and entire income is earned out of fund
received in partition of HUF and as such assessment in
question is liable to be annulled.
Ground No.2
The assessment of income from house property at
Rs.48,000/- in the status of Individual is invalid in law
and it is liable to be deleted.
Ground no. 3 :-
The assessment of income at Rs. 6,62,400/- is bad in law,
without supplying the papers relied, as assessee is not the
owner of deposits in individual capacity.
Ground no. 4 :-
The assessment of agriculture income out of Rs. 72,000/-
at Rs. 40,000/- as income from other sources is bad in law
and that too in individual status of the assessee.
Ground no. 5 :-
The entire assessment is bad in law and it is liable to be
quashed.”
From a perusal of the above grounds, following common issues
need our adjudication :-
(i) Whether the learned CIT(A) erred in approving the action of
the AO assessing the income in the hands of the assessee
rather than in the status us HUF ?
(ii) The addition on account of income from house property.
(iii) The addition for undisclosed income in the form of cash
deposited at Rs. 1,05,500/- and Rs. 6,62,400/- for the A.Ys.
1997-98 and 1998-99, respectively.
(iv) Assessing the agriculture income at Rs.33,000/- and
Rs.40,000/- as against the agricultural income disclosed by
the assesee at Rs. 62,000/- and Rs. 72,000/- for the A.Ys.
1997-98 and 1998-99, respectively.
For adjudication of the above common issues, we will take the
facts for the A.Y. 1997-98. Briefly stated, the facts of the case are 5
that the assessee is an Individual. On the basis of information
received by the AO relating to deposit of cash in the bank account,
notice under section 148 of the Act dated 18.1.2000 was issued and
duly served upon the assessee. In compliance, the assessee filed the
return of income on 3.3.2000 disclosing income from house
property at Rs. 30,720/- and agricultural income at Rs. 65,000/-.
During the course of assessment proceedings, details were called
for by the AO towards the basis of showing house property income
which the assessee failed to submit. In the meantime, the learned
counsel for the assessee through letter dated 8.1.2002 submitted
that the income from agriculture may be calculated at Rs. 32,000/-
as against Rs. 62,000/- shown by the assessee in the return of
income. The learned AO also observed that the assessee has
deposited cash of Rs. 1,05,500/- in the bank account held with
State Bank of Indore. No reasonable explanation was put-forth.
The learned AO accordingly completed the assessment by
estimating the income from house property at Rs. 48,000/- making
addition for unexplained income under section 69 of the Act at
Rs.1,05,500/- and addition for income from other sources at
Rs.33,000/- on account of declaring excess figure of agricultural
income. The income was assessed at Rs.1,76,900/-.
Aggrieved, the assessee preferred appeal before the learned
CIT(A) but failed to succeed. Now the assessee is in appeal before
the Tribunal.
The learned counsel for the assessee reiterated the
submissions made before the lower authorities and also took us
through paper book running from page 1 to 71 and written
submissions placed on record. On the other hand, the learned
Departmental Representative supported the order of the learned
CIT(A).
We have heard the rival contentions and perused the record
placed before us and carefully gone through the documents.
The first issue raised by the assessee is that there was no
source of income in the Individual capacity as the entire income
was earned out of the funds received on partition of HUF and
thereby questioning the validity of assessment.
We find that this ground of the assessee has no basis for the
very reason that the assessee is trying to connect the source of
alleged funds deposited during the year out of the compensation
received in 1984 through cheque on account of compensation
received by the HUF comprising the assessee and other family
member towards acquisition of land held jointly in the family
namely. In these circumstances, the plea of the learned counsel for
the assessee cannot be accepted that the source of income earned
during the year was out of the funds received ten years ago.
Accordingly, we dismiss this common ground no. 1 raised by the
assessee for both the years.
The next common ground relates to addition under the head
‘income from house property’ wherein the CIT(A) has confirmed the
income at Rs. 48,4000/- for both the A.Ys. 1997-98 and 1998-99 as
against Rs. 30,720/- and Rs. 38,400/- shown by the assessee. We
find that the assessee has shown income from house property in
the income tax return and the learned AO has estimated the income
at Rs. 48,000/- and Rs.60,000/- for the A.Ys. 1997-98 and 1998-
99 because the assessee could not place any documentary evidence
to support the basis of rental income. The ld. CIT(A) gave part relief
in the A.Y. 1998-99 thereby confirming the income from house
property at Rs. 48,000/- for both the years. We find no reason to
interfere with the findings of the learned CIT(A) and confirm the
same.
In the result, ground no. 2 for both the years is dismissed.
Now we shall take up common ground no. 3 relating to
unexplained income of Rs. 1,05,500/- and Rs. 6,62,400/- in both
the years. The learned counsel for the assessee has pleaded that the
source of alleged cash deposited in the bank account is out of the
money received in partition of HUF as well as income from
agriculture which was kept in hand in the past. The submissions of
the assessee are general in nature and having no substantial
evidence to support the same. The learned counsel for the assessee
also took us through the chart showing peak cash credit which was
filed during the course of hearing placed at pages 72 to 75 of the
paper book. From perusal of these records as well as looking to the
fact that the matter is very old and relates to the A.Ys. 1997-98 and
1998-99, it will not be justified to restore the issue to the file of the
AO for carrying out verification of the peak credit working. We
agree with the contention of the learned counsel for the assessee
that the addition should be made only for the peak cash credit and
not for the total cash deposited on various dates. It is not in
dispute that there have been regular cash withdrawals also before
the cash deposited.
We further find that the assessee is having agricultural income
and holds agricultural land since many years. One cannot deny the
fact that the assessee had accumulated some cash in hand earned
through agricultural operations. Looking to these practical aspects
as well as the factual matrix arising in the given facts and
circumstances, we are of the view that the assessee had an opening
cash balance of Rs. 1,51,000/- on account of past savings. This
opening balance will take care of all the alleged unexplained income
of Rs. 1,05,500/- for the A,.Y. 1997-98 and the same stands
deleted. However, for the A.Y. 1998-99 wherein the addition of
Rs.6,62,400/- has been confirmed by the learned CIT(A), we, after
going through the peak credit statement, are of the view that the
addition for unaccounted income should be sustained at
Rs.2,50,000/- and this will take care of the peak credit working as
well household withdrawals not shown by the assessee in the peak
credit working.
In the result, ground no. 3 for the A.Y. 1997-98 is allowed and
for the A.Y. 1998-98 it is partly allowed.
Now we shall take up last common issue i.e. ground no. 4
relating to estimation of agricultural income. We find that the
assessee disclosed Rs.62,000/- and Rs.72,000/- in the income tax
return. Thereafter, during the course of assessment proceedings,
these figures were revised to Rs.32,000/- for both the years. Even
after accepting these reduced figures of agricultural income, the
assessee again raised a ground before the learned CIT(A) but failed
to succeed for the A.Y. 1997-98 and partly succeeded for the A.Y.
1998-99. In these circumstances, where the assessee is himself not
clear about the quantum of agricultural income earned by him
during the year and as no details were maintained to support the
income, we find no reason to interfere with the findings of the
learned CIT(A) estimating the agricultural income at Rs. 32,000/-
and Rs. 40,000/- for both the years respectively and thereby
confirming the addition under the head ‘income from other sources’
at Rs.30,000/- and Rs.32,000/- for both the years.
In the result, ground no. 4 in both the years are also
dismissed.
Ground no. 5 is general in nature which needs no
adjudication.
In the result, both the appeals are partly allowed.
The order pronounced in the open Court on .02.2018.
Sd sd/-
( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 15 February, 2018 Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file.
By order Private Secretary/DDO, Indore 1. Date of dictation : 8.2.2018 2. Date on which the typed draft is placed before the Dictating Member : 9.2.2018 3. Date on which approved draft comes to the Sr.P.S./P.S: 10.1.2018 4. Date on which the fair order is placed before the dictating Member for pronouncement: 5. Date on which the fair order comes back to the Sr.P.S./P.S.: 6. Date on which the file goes to the Bench Clerk: 7. Date on which the file goes to the Head Clerk: 8. The date on which the file goes to the Assisstant Registrar for signature of the order. 9. Date of Despatch of the Order: