Loading judgment…
Facts
The assessee, a super senior citizen, failed to file a return of income for AY 2017-18. The AO noticed cash deposits of ₹10,00,000 in his bank account and, after the assessee failed to respond to notices, added the amount as unexplained income. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal held that the assessee's claim of agricultural income and past savings as the source of the cash deposits was not rebutted by the Department. Considering the assessee's age, remoteness of location, and the nature of transactions, the addition was deemed unsustainable.
Key Issues
Whether cash deposits, claimed to be from agricultural income and past savings, can be added as unexplained income when the assessee is a super senior citizen residing in a remote area and the department fails to provide contrary evidence.
Sections Cited
250, 139, 142(1), 133(6), 144, 69, 115BBE, 10(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC” BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2017-18 Ganendra Nath Halder, Little Andaman………………....Appellant Vivekanandapur Post, Little Andaman Union Territory of Andaman and Nicobar Islands, Andaman and Nicobar Islands-744207. [PAN: AMNPH7301J] vs. ACIT Circle-3(2), Port Blair…………………..………………….…..... Respondent Appearances by: Shri Akkal Dudhewala, AR, appeared on behalf of the appellant. Shri Kallol Mistry, JCIT, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 29, 2025 Date of pronouncing the order : July 30, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal by the assessee is directed against the order dated 04.06.2024 passed by the CIT, Appeal ADDL/JCIT(A)-1, Pune [in short CIT(A)] under section 250 of the Income-tax Act, 1961.
Brief Facts of the case are that the assessee a resident of Little Andaman, is a super senior citizen aged 82 years during the relevant assessment year. He did not file a return of income under Section 139 for A.Y. 2017–18. Based on the information available in the departmental database and ITS data, it was observed that cash deposits of ₹10,00,000 were made in the assessee’s bank account—₹5,00,000 each on 10.11.2016 and 11.11.2016 respectively. Accordingly notice under Section 142(1) was issued on 13.03.2018 through speed post, but the assessee failed to respond or file the return. Subsequently, the Ganendra Nath Halder, Little Andaman AO obtained the assessee’s bank account statement through Section 133(6) from the bank and issued a show cause notice dated 15.11.2019 issued to the assessee proposing to treat the cash deposits as income from other sources. The assessee again failed to respond. Accordingly, the assessment was completed ex parte under Section 144 on 16.12.2019, treating ₹10,00,000 as unexplained income under Section 69 of the Act, and taxing the same under Section 115BBE of the Act.
Aggrieved by the above order assessee went in appeal before the Ld. CIT (A) where appeal of the assessee was dismissed.
Dissatisfied with the order of CIT(A) assessee is in appeal before this tribunal. At the time of hearing Ld. AR submitted that assessee derives income from agricultural activity carried out on his land in Little Andaman, including cultivation of vegetables, coconuts, and betel nuts. He submitted that the cash deposits were out of agricultural proceeds and accumulated past savings. It is also contended that agricultural income is exempt under the Act, and assessee being a super senior citizen, the assessee was unaware of the procedural requirements.
At the time of hearing before the Ld. CIT(A) called for a remand report and the AO, however, declined to physically verify the agricultural activity or the location of the land, citing the remoteness of Little Andaman (being over 100 km from Port Blair and accessible only by limited shipping services). Based solely on the assessment folder and written submissions, the Ld. CIT(A) upheld the addition made by the AO which is bad in law. The Ld AR reiterated that the source of the cash deposits was agricultural income and past savings. It is pointed out that ₹5,00,000 was later transferred to the assessee’s son-in-law, Mr. Amit Kumar, and ₹2.5 lakh to his daughter Mrs. Minati Haldar, out of natural love and affection, which cannot be viewed as abnormal or Ganendra Nath Halder, Little Andaman non-genuine transactions. He further, argued that agricultural income is exempt under Section 10(1)of the Act. Besides that the assessee being a super senior citizen is entitled to a basic exemption up to ₹5,00,000. Even if part of the deposit is considered out of savings, no addition is warranted in absence of contrary evidence.
The Departmental Representative supported the order of the lower authorities and submitted that the absence of corroborative evidence weakens the assessee’s case. However, he did not dispute the age or geographical hardship faced by the assessee.
We have considered the submissions and examined the records. It is not in dispute that the assessee is 82 years old and a resident of a remote location in Little Andaman. The claim that he earned income from agricultural activities such as cultivation of coconuts, betel nuts, and vegetables has not been rebutted by the Department with any material evidence. The AO refrained from conducting physical verification solely due to logistic difficulty as in the case of assessee. Further, the cash deposits of ₹10,00,000 were made during the demonetisation period out of which ₹7.5 lakh was transferred to close family members. These transactions, in our view, do not establish any non-agricultural or suspicious source of income, particularly when the assessee had plausible explanations and there is no evidence to the contrary. Even otherwise, considering the basic exemption limit of ₹5,00,000 available to super senior citizens as well as the income is exempt agricultural income and treating the balance ₹5,00,000 as accumulated savings from earlier exempt agricultural income, the addition made under Section 69 is unsustainable. In light of the above, we are of the considered view that the addition of ₹10,00,000 made Ganendra Nath Halder, Little Andaman under Section 69 of the act and taxed under Section 115BBE is not justified. Accordingly, we direct the AO to delete the addition.
In the result, the appeal of the assessee is allowed. Kolkata, the 30th July, 2025.