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Facts
The assessee, an agriculturist, appealed against an order confirming additions to income based on cash deposits and sale of agricultural produce. The Assessing Officer (AO) noted significant cash deposits in bank accounts and the assessee's explanation for these deposits was found unsatisfactory by lower authorities.
Held
The Tribunal condoned the delay in filing the appeal, acknowledging adverse medical conditions of the assessee. Considering the assessee is an agriculturist with exempt agricultural income, and acknowledging the difficulty in maintaining detailed documentation for cash sources, the Tribunal found that a lump sum addition of Rs. 5 Lacs would meet the ends of justice.
Key Issues
Whether the lower authorities erred in rejecting the explanation for cash deposits and agricultural income without proper appreciation of the assessee's status as an agriculturist and the difficulty in substantiating transactions from exempt income sources.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रणवष� / Assessment Year: 2011-12) Shri Surinder Paul Singh ITO Ward 5(2) Village Dera Jagadhari Chandigarh-160017 बनाम/ Vs. Ward No17, Post Office Derabassi, Punjab-140507 �थायीलेखासं./जीआइआरसं./PAN/GIR No. AQHPS-6902-K (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri Sudhir Sehgal (Advocate) & Sh. Aman Parti (Advocate) – Ld. ARs ��थ�कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 17-03-2025 घोषणाकीतारीख /Date of Pronouncement : 24-03-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2011-12 arises out of an order of learned Commissioner of Income Tax (Appeals)-2 Chandigarh [CIT(A)] dated 03-09-2019 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 31-03-2014.
The registry has noted delay of 936 days in the appeal. The Ld. AR sought condonation of delay and tabulated that excluding Covid-9 pandemic lockdown period, the effective delay is only for 132 days (02- 11-2019 to 13-03-2020). The Ld. AR drew attention to the fact that the assessee was facing adverse medical conditions which led to delay in the appeal. Though Ld. Sr. DR opposed condonation of delay, however, keeping in mind the guiding principles laid down by Hon’ble Apex Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987; (2) TMI 61 SC), we condone the delay and proceed for disposal of the appeal on merits. Proceedings before lower authorities 3.1 The sole grievance of the assessee is confirmation of addition of cash deposits for Rs.26.61 Lacs and Rs.21.90 Lacs respectively. The assessee is stated to be an agriculturist and it filed agriculture income for Rs.8 Lacs. It was noted by Ld. AO that the assessee deposited cash of Rs.106.77 Lacs in two of its bank accounts. To support the sources of the same, the assessee filed cash flow statement. Total sale proceeds from agricultural and popular trees were shown to be Rs.37.81 Lacs and Rs.21.90 Lacs respectively. The net agricultural income was shown to be Rs.52.43 Lacs as against agricultural income of Rs.8 Lacs as shown by the assessee. 3.2 In support of sale proceeds of popular trees, the assessee furnished sale receipt issued by him to one Sh. Kehar Singh. The affidavit of witness was furnished since Shri Kehar Singh had since expired. The witness deposed partially in support of the claim made by the assessee. Therefore, the explanation of the assessee was held to be not satisfactory.
3.3 On the issue of agricultural receipts for Rs.37.81 Lacs, Ld. AO estimated that, at the most, considering 40% expenses, the assessee could have sold agricultural produce for Rs.11.20 Lacs and accordingly, the balance amount of Rs.26.61 Lacs was added to the income of the assessee and the assessment was framed. 3.4 During first appeal, the assessee’s submissions were subjected to remand proceedings wherein the assessee submitted that it was holding 26 acres of land in Village Dera Jagadhari. The assessee also stated that it sold tractor for Rs.4.15 Lacs and Alto car for Rs.3.08 Lacs but the assessee failed to substantiate the same. The assessee also stated that cash deposit of Rs.16 Lacs were withdrawal transaction on the same date. However, the claims were rejected for want of substantiation thereof. Finally, Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us. Our findings and Adjudication 4. It is undisputed fact that the assessee is an agriculturist and it earns agricultural income. No other source of income has been shown for the assessee. The assessee owns 26 acres of land as noted by lower authorities. The assessee has deposited cash and in support of the same, it has furnished cash flow statement. The claim has been accepted partially. Though the assessee has furnished cash flow statement but it has filed partial documents to substantiate the same which has led lower authorities to estimate the quantum of impugned addition. However, the same has to be understood in the background of the facts that the assessee is an agriculturist and the agricultural income is exempt from tax. In such a case, the assessee may not be maintaining substantial documents to support the sources of cash deposits. Under these circumstances, we are of the opinion that a lump sum addition of Rs.5 Lacs would meet the end of justice. The same would be assessable as income from other sources.
The appeal stand partly allowed. Order pronounced on 24-03-2025.