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Facts
The assessee, a government school teacher, deposited Rs. 13,00,000 in his bank account for a house purchase. The Assessing Officer initially made an addition of Rs. 2,00,000, which was subsequently increased to Rs. 11,00,000 under revisional directions from the PCIT under Section 263. The assessee appealed, claiming the sources for the cash deposit were his Provident Fund withdrawals and savings, commission income from his wife, and agricultural income from his father.
Held
The Tribunal condoned the delay of 81 days in filing the appeal. It found the assessee's explanations for Rs. 3,75,000 (PF/savings), Rs. 6,00,000 (wife's income), and Rs. 3,00,000 (father's agricultural income) to be satisfactorily proven. Consequently, the Tribunal deleted Rs. 10,00,000 of the original addition and sustained only Rs. 1,00,000 as unexplained.
Key Issues
Whether the CIT(A) was justified in confirming the addition of Rs. 11,00,000 for unexplained cash deposits, considering the sources claimed by the assessee; and condonation of delay in filing the appeal.
Sections Cited
143(3), 147, 263, 142(1), 143(2)
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Income Tax Appellate Tribunal, INDORE SMC BENCH, INDORE
(Assessment Year: 2009-10) Gyan Prakash Tiwari, Income Tax Officer, Talab Mohalla Chhapiheda, Shajapur Vs. Rajgarh (Appellant / Assessee) (Respondent/ Revenue) PAN: ABUPT8470C Assessee by Ms. Ruchira Nerkar, AR Revenue by Shri Ashish Porwal, Sr.DR Date of Hearing 28.08.2025 Date of Pronouncement 29.08.2025 O R D E R
This appeal by the assesse is directed against the order dated 16.08.2024 of the Commissioner of Income Tax (Appeals), A-6 Kolkata for A.Y.2009-10 which is arising from the assessment order u/s 143(3) of the Act dated 30.09.2019 framed by Income Tax Officer, Shajapur.
Registry has informed that there is a delay of 81 days in filing of the instant appeal. Application for condonation of delay along with affidavit have been placed on record. Considering the reason that during the relevant period the assessee has shifted his at the new residence, certain postal communications including the appellate order were either misplaced or received belatedly due to which the appeal could not be filed in the prescribed time.
Immediately upon realizing the lapse the assessee contacted his authorized representative to initiate steps to prepare and file the present appeal. Taking support from the judgment of Hon’ble Supreme Court in the case of Inder Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (20235 INSC 382 and in another case of Collector, Land Acquisition, Amantnag & Anr, V/s Mst. Katiji & Ors reported in (1987) 2 SCC 107, I hereby condone the delay of 81 days and admit the appeal for hearing.
3. The sole grievance of the assessee is that the Ld. CIT(A) has erred in confirming the addition of Rs.11,00,000/- made by the Ld. A.O for the Assessment Year 2009-10.
4. Brief facts of the case is that the appellant is a government school teacher deriving income solely from salary. Return for Assessment Year 2009-10 filed on 10.07.2009 declaring income of Rs.1,05,101/-. Case selected for scrutiny and valid notices u/s 142(1) and 143(2) were served. The Ld. A.O after carrying out the dated 27.05.2016 made addition of Rs.2,00,000/-. The Ld. A.O accepted the source of cash deposited at Rs.11,00,000/- and only for the remaining amount of Rs.2,00,000/- made addition and assessed the income at Rs.3,05,101/-. Thereafter Ld. PCIT invoked jurisdiction u/s 263 of the Act and after considering the submissions of the assessee held the assessment order dated 27.05.2016 as erroneous so far as prejudicial to the interest of revenue and directed the Assessing Officer to again carry out the assessment proceedings as per the directions given in the revisionary order u/s 263 of the Act. The assessee failed to challenge the revisionary order u/s 263 of the Act dated 28.03.2019. Subsequently the Ld. A.O in compliance to the directions given in the order u/s 263 of the Act carried out the assessment proceedings and in the order framed u/s 143(3) r.w.s.
263 of the Act dated 30.09.2019 made further addition of Rs.9,00,000/-to the earlier assessed income of Rs.3,05,101/- and assessed the income at Rs.12,05,100/- . Aggrieved assessee preferred appeal before Ld. CIT(A) and filed detailed written submission explaining the source of alleged cash deposit which are bank account and amount received from his wife Smt. Radha Tiwari as well as his father Shri Hiralal Tiwari. However Ld. CIT(A) did not grant relief and dismissed the appeal observing as under:-
“V. DECISION:-
I have gone through the detail assessment order passed by Assessing officer ( AO)and details of submission given by appellant.
All grounds points to single issue, therefore considered together.
The fact of the case is that Out of the cash deposited by the appellant in the savings bank account during the year, Rs. 6,00,000/- which was deposited by the appellant's wife Shri Gamti Radha Tiwari and Rs. 3,00,000/- which was deposited by the assessee's father Shri Hiralal Tiwari. The source of same was out of agricultural income. AO had added Rs.9,00,000/ as unexplained money, as no satisfactory reply received from appellant.
Appellant had not furnished copies of income tax return filed by appellant's father indicating that agricultural income reported to tax. Further, appellant had failed to furnish evidence of agricultural expenses incurred by his father proving that agricultural activities are genuine.
Further appellant had submitted that the AO had not accepted the claim of agricultural income as the appellant did not file evidence in support of sale of agricultural produce and expenditure incurred for the agricultural activity. Appellant argued, contention of the AO is not justified particularly in view of the fact that agricultural sector in India is unorganized sector and the farmers do not maintain evidence in support of sale proceeds of agricultural produce and expenditure incurred for agricultural activity.
This argument put forth by appellant is not correct. As agricultural income is exempt under the provisions of the Income Tax Act, giving credit to agricultural income for income tax purposes without adequate verification of claim may involve risk of allowance of exemption on ineligible incomes resulting in loss of revenue to the Government.
Gyan Prakash Tiwari– A.Y 2009-10 The third Tax Administration Reform Commission Report (2014) noted that agricultural income of non-agriculturists is being increasingly used as a conduit to avoid tax and for laundering funds, resulting in leakage to the tune of crore in revenue annually. Report on white paper on black money (2012) issued by Ministry of Finance cited that Agriculture contributes around 14 per cent of the country's GDP.
AO is mandated by law to see evidences before arriving at conclusion. No where in Income Tax Act, 1961 says that for agricultural income, AO needs no evidence.
It has been held by the Apex Court in CIT v. R. Venkataswamy Naidu (1956) 29 ITR 529 (SC) that the onus lies on the assessee who claims exemption to establish it.
Therefore, as appellant had failed to submit evidence in support of sale of agricultural produce and expenditure incurred for the agricultural activity, his argument that Rs. Rs.3,00,000/-deposited as cash are from agricultural source is rejected.
The appellant had stated that Rs.6,00,000/- earned by his wife as a commission income from Life Insurance Corporation in last preceding years, withdrawn in cash dated 05/04/2008 from saving account of Narmada Malwa Gramin Bank Account Number-314.However, appellant had failed to provide copies of Income Tax Return of his wife indicating that commission income reported to tax. Further, there is no gift deed, indicating that any cash gift was being received from his spouse. Therefore, contention of appellant on this ground is rejected.
In the result, appeal filed by appellant is dismissed”.
5. Aggrieved assessee is now before this tribunal. Ld. Counsel for the assessee vehemently argued referring to the following written submissions filed before Ld. CIT(A):-
The appellant is a Government employee working as school teacher at Government Higher Secondary School, Sandawata in financial year 2008-09.
Gyan Prakash Tiwari– A.Y 2009-10 2. The appellant was deposited Rs. 1300000 Cash in his self-saving account due to non-awareness of cash deposit rules of Income Tax Act and he has Purchased a House at Bhopal and make a payment of Rs.1200000 from his saving bank account. Which is comes from his family and self- saving and income.
Income tax department issued various notice to appellant from 2011 and based on notice issued designated authorities passed order Under Section 143(3)/147 dated 27/05/2016, Under Section 263 dated 28/03/2019, Under Section 143(3)/263 dated 30/09/2019
Respectively which is fully pre judicial to the interest of appellant and also department not gave proper opportunity to being heard to the appellant and passed order of demand of Rs.642550/-.
The learned Assessing Officer without considering reply of notice and related documents, make addition in income of Rs. 200000/- in first order Passed dated 27 may 2016 and also make addition in income of Rs. 900000/- in last order passed dated 30 September 2019 treated unexplained income.
The appeal filed before Hon'ble CIT(A) on 11/11/2019.
The main grounds of appeal is the learned Assessing Officer erred in law and was not justified in making addition of Rs.9.00.000/- Undisclosed Income. The reply on this ground is as under :-
Rs. 900000/- which is deposited dated 06/04/2008:-
Rs. 275000/-Previously comes from self-saving and Drawings from General Provident Fund of himself, withdrawn in cash dated 03/04/2008 from another self-saving bank account of Bank of India Chhapiheda Account Number- 996010100000122.
(Copy of bank account attached as Annexure No.1 and statement of general provident fund attached as Annexure No.2).
Rs.600000/- Previously earned by his wife Mrs. Radha Tiwari (Spouse of Assesses) as a commission income from Life Gyan Prakash Tiwari– A.Y 2009-10 Insurance Corporation in last preceding years. withdrawn in cash dated 05/04/2008 from saving account of Narmada Malwa Gramin Bank Account Number-314.
(Copy of bank account attached as Annexure No.3 and Form 16 A and Income Tax Return of Wife as Annexure No.4).
Rs. 25000/- deposit out of income and cash in hand. All above mentioned amount deposited in another saving bank account which is jointly maintained with his wife Mrs. Radha Tiwari (Spouse of Assesses) on dated 06/04/2008 in State Bank of India account number-30297898487 for the purpose of purchase a residential house (Flat) under joint ownership with his wife Mrs. Radha Tiwari (Spouse of Assesses) situated at 69, Gomti Colony, Nehru Nager, Bhopal (M.P.) by way of cheque number 659048 clearing dated 08/04/2008 as per bank records.
(Copy of Joint bank account attached as Annexure No. 5 and Purchase Registry of House attached as Annexure No. 6).
6. Rs. 300000/- which is deposited dated 07/04/2008: -
Rs. 300000/- Previously received from his father Agriculture income of previous years, withdrawn in cash dated 05/04/2008 from another self-saving bank account of Narmada Malwa Gramin Bank Sandawta account number- 438. Which is deposited out of received from assesses father's
(Copy of bank account attached as Annexure No. 7 and sale bill of crop and land pawti of his father attached as Annexure No. 8).
Above mentioned amount deposited in another saving bank account which is jointly maintained with his wife Mrs. Radha Tiwari (Spouse of Assesses) on dated 06/04/2008 in State Bank of India account number-30297898487 for the purpose of purchase a residential house (Flat) under joint ownership with his wife Mrs. Radha Tiwari (Spouse of Assesses) situated at 69, Gomti Colony, Nehru Nager, Bhopal (M.P.) by way of cheque number 659048 clearing dated 08/04/2008 as per bank records.
(Copy of Joint bank account attached as Annexure No. 5 and Purchase Registry of House attached as Annexure No. 6).
7. Rs. 100000/-which is deposited dated 25/02/2008: - Rs. 100000/-Previously comes from self-saving and Income, withdrawn in cash dated 30/01/2009 from another self- saving bank account of Narmada Malwa Gramin Bank Sandawta account number-438. (Copy of bank account Annexure No. 7). Above mentioned amount deposited in another saving bank account which is jointly maintained with his wife Mrs. Radha Tiwari (Spouse of Assesses) on dated 06/04/2008 in State Bank of India account number-30297898487 for repayment instalments of loan due on 10th days of every month from 10/3/2009 onwards.
During the course of hearing Ld. Counsel for the assessee referred to the copies of Income Tax returns filed by assessee’s wife as well as her bank statement showing the cash withdrawals prior to the amount given to the assessee which was utilized for depositing the amount of Rs.13,00,000/- in the bank account. She submitted that the assessee is a school teacher and his wife is providing services of LIC Commission Agent for past many years and earning income from commission and the amount withdrawn by her during the year under consideration has been utilized for giving the amount to the assessee.
On the other hand Ld. Departmental Representative submitted that the assessee has failed to furnish relevant details before this Counsel for the assessee that the details mentioned in the written submissions stands duly placed before Ld. CIT(A).
I have heard rival contentions and perused the records placed before me. The only issue for my consideration is whether Ld. CIT(A) was justified in confirming the addition of Rs.11,00,000/- in the hands of the assessee on account of unexplained cash deposit in the bank account. I notice that the assessee is a salaried employee and his wife is also working as LIC Agent for past many years. The assessee in order to make payment for purchase of house deposited the cash of Rs.13,00,000/- in his bank account. In the first round of assessment proceedings Ld. A.O was satisfied with the details filed for the source of cash of Rs.11,00,000/- and only made an addition of Rs.2,00,000/-. This assessment proceedings was carried out only for examining the source of cash deposited at Rs.13,00,000/-. The Ld. A.O in the second round of the assessment proceedings under the direction to the order u/s 263 of the Act, further made addition of Rs.9,00,000/-. I observe that during the course of assessment proceedings before the lower authorities the utilized to deposit Rs.13,00,000/- in the bank account:-
(a) Provident Fund withdrawal and Salary savings Rs.3,75,000/- (b) Amount received from wife Rs.6,00,000/- (c) Agriculture income of father Rs.3,00,000/-
(i) The details filed by the assessee explaining the source of cash deposited the first one is withdrawal of Rs.2,75,000/- in April, 2008 and along with Rs.1,00,000/- of accumulated cash saving the source of cash of Rs.3,75,000/- has been explained. The proof of withdrawal from Provident Fund has been duly placed before the lower authorities and even the GPF statement have also been enclosed. The Ld. CIT(A) has not controverted these documents and I therefore find that the source of cash deposit of Rs.3,75,000/- stands explained.
(ii) Next is the cash of Rs.6,00,000/- received from his wife. From the bank statement and Income Tax Return of before me that the assessee’s wife Smt. Radha Tiwari has been LIC Agent since 1999 and regularly earning commission income from LIC and tax at source has been deducted. Prior to the alleged cash deposit she withdrew cash of Rs.3,00,000/- on 05.05.2008 and also other withdrawals from other bank accounts as well as accumulated savings. The Income Tax Return duly support this contention. I am therefore satisfied that the assessee’s wife had sufficient creditworthiness to give cash of Rs.6,00,000/- to her husband and same in the shape of cash gift towards purchase of house property. I therefore find that the source of cash of Rs.6,00,000/- received from his wife is also explained.
(iii) Lastly the assessee claimed to have received
Rs.3,00,000/- from his father who is having agriculture income. The assessee has provided with the copy of bank statements as well as sale bills of crops sold and proof of ownership of agriculture land of his father in Annexure 7
& 8 before Ld. CIT(A). The revenue has not controverted have receive Rs.3,00,000/- from his father.
On going through the above observations and also the documents filed by the assessee before the lower authorities and before this Tribunal but simultaneously also considering that few details still remains for explaining the total cash deposit therefore, I in order to end the litigation sustain the addition of Rs.1,00,000/- as against Rs.11,00,000/- made by the Ld. A.O. The addition to extent of Rs.10,00,000/- stands deleted. Grounds of appeal raised by the assessee stands partly allowed as per the terms indicated above.
In the result appeal of the assessee is partly allowed.