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Facts
The assessee, an agriculturist with 30 acres of land, had a 'Kisan Gold Credit Card' with HDFC Bank where Rs. 63,70,000/- was deposited. The assessment was reopened as the assessee did not file a return. The AO made an addition of Rs. 64,60,500/- under Section 69A, which was upheld by the CIT(A).
Held
The Tribunal held that the assessee's explanation that the sum represented rotated credit in the account, supported by bank statements, cash flow statements, and land ownership documents, was plausible. The income from agriculture alone was sufficient source.
Key Issues
Whether the addition made under Section 69A based on bank deposits, without considering the assessee's explanation of rotated credit and agricultural income, is justified? Whether reopening of assessment was valid when the assessee did not file a return?
Sections Cited
69A, 148
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
The assessee is in appeal against the order of the ld.
Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 07.10.2024 passed for assessment year 2013-14.
The assessee has taken six grounds of appeal which are not in consonance with Rule 8D of the ITAT Rules and they are descriptive and argumentative in nature.
ITA No.1098/CHD/2024 A.Y.2013-14 2
In brief the grievance of the assessee revolves around two fold, namely, ld. CIT(A) has erred in upholding the re- opening of assessment and confirming the addition of Rs.64,60,500/- which was added by the AO with the aid of Section 69A of the Income Tax Act.
The brief facts of the case are that assessee is an agriculturist having 240 kanal of land. In other words, he was having 30 acres of land alongwith his son. He has a ‘Kisan Gold Credit Card’ with HDFC Bank where, according to the AO, deposits of Rs.63,70,000/- were noticed. The assessee did not file his return of income, therefore, his assessment was reopened. The assessee contended before the AO that he has not made any deposit exceeding Rs. 10 lacs in this account. The alleged accumulated sum of Rs.63,70,000/- is the amount which has been rotated in this account. In other words, it is the total credit side of the account during the year. The assessee has been withdrawing the same from this account and re-depositing it. For buttressing his statement, assessee has filed copy of the bank statement as well as copy of the Jamabandi and A.Y.2013-14 3 Girdawari exhibiting the fact that agriculture land of more than 30 acres is being owned and possessed by him and his son. He has also filed copy of an account from his Commission Agent M/s Bharpur Singh.
With the assistance of ld. Representative, we have gone through the record carefully. It emerges out from the record that assessment order was an ex-parte order, however before the CIT(A), assessee has submitted the complete details and filed application under Rule 46A of the Income Tax Act. The ld. CIT(A) called for the Remand Report of the AO whose copy is available on page No. 51 to 53 of the Paper Book. We have gone through all these documents. We find that alleged account with the HDFC Bank is a Kisan Gold Credit Account where the deposits have been made as well as sums have been withdrawn. The assessee has produced Cash Flow Statement on page No. 40 to 41 of the Paper Book. We have examined this cash flow alongwith the bank account whose statement is available on page No. 49 to 50 of the Paper Book. We find that sufficient withdrawals have been made by the assessee which has been re-deposited. He has more A.Y.2013-14 4 than Rs.25 lacs of agriculture income from alleged 30 acres, therefore, assessee has sufficient source of income. The ld.
Revenue Authorities have failed to appreciate the entries in the alleged bank account as well as statement of affairs of the assessee who owned 30 acres of land. No addition under Section 69A deserves to be made in the hands of the assessee. Accordingly, we allow second fold of grievance and delete the addition of Rs.64,60,500/- made by the AO.
As far as first fold of grievance is concerned, we do not find any merit in this ground of appeal because assessee did not file return of income and for the purpose of verifying the alleged deposits, a notice under Section 148 was bound to be issued to the assessee. Accordingly, first fold of grievance of the assessee is rejected. However, the additions on merit are deleted.
In the result, appeal of the assessee is partly allowed.