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Facts
The Revenue filed an appeal challenging the deletion of an addition of ₹1,48,86,218/- made under section 69A read with 115BBE of the Income Tax Act, 1961. The addition was on account of alleged unaccounted cash receipts and payments. A search was conducted, and incriminating documents were seized, which the Assessing Officer (AO) believed represented unexplained money. The assessee contended that these entries pertained to Jagatbandhu Tea Estate Pvt. Ltd., of which the assessee is a director, and were duly accounted for in the company's books as agricultural income.
Held
The Tribunal noted that the seized documents contained entries of cash receipts and payments that pertained to M/s. Jagatbandhu Tea Estate Pvt. Ltd. and were duly accounted for in the company's books. These were related to the sale of green tea leaves and payments to laborers, which constitute agricultural income exempt under Section 10(1) of the Income Tax Act. The Commissioner of Income-tax (Appeals) had already made a clear-cut finding to this effect.
Key Issues
Whether the addition of ₹1,48,86,218/- as unexplained money to the assessee's income was justified, given that the entries pertained to a company engaged in agricultural activities and were accounted for in its books?
Sections Cited
69A, 115BBE, 10(1), 132, 153A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM
The appeal preferred by the Revenue and Cross Objection by assessee are against the order of the Commissioner of Income-tax (Appeals), Kolkata-27 (hereinafter referred to as the “Ld. CIT(A)”] dated 27.02.2025 for the AY 2017-18.
The Revenue has challenged the order of ld. CIT (A) deleting the addition of ₹1,48,86,218/- as made by the ld. AO u/s 69A read with section 115BBE of the Income-tax Act, 1961 (the Act) on account of unaccounted cash receipts and payments as evidenced by the seized material marked DKG-01 & DKG-04.
The facts in brief are that the assessee is an individual and Director of Jagatbandhu Tea Estate Pvt. Ltd. This company is engaged in growing of tea and allied activities. The assessee filed the return of income during the year on 27.03.2018, declaring total income at ₹6,06,140/- . A search action was conducted on 25.09.2020, at the premises of Agarwal Group of cases Ranchi/ Kolkata and assessee being a close associate of the group was also covered under the said search. During the course of search certain incriminating materials were found and seized marked as DKG-01 to DKG-09. Accordingly, the notice u/s 153A was issued on 08.11.2021, and the assessee replied the said notice by filing the return of income on 11.10.2021, declaring total income of ₹6,06,140/-. Thereafter, the ld. AO issued statutory notices along with questionnaire which were replied by the assessee. The assessee submitted before the ld. AO that the documents seized during the
In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee after taking into account the contentions and submissions of the assessee that the entries contained in the seized documents were pertaining to Jagatbandhu Tea Estate Pvt. Ltd. and were duly accounted for in the books of that company. The ld. CIT (A) allowed the appeal of the assessee by observing and holding as under:-
“7.3 Discussion and Decision 7.3.1 I have pursued the assessment order as well as the submission of the assessee. On perusal of the same, it is seen that the assessee, Sri Dilip Kumar Ghosh, is a director of Jagatbandhu Tea Estate Pvt. Ltd. which is engaged in the activity of growing and selling tea leaves, income from which falls under Agricultural Income. During the search operation u/s 132 of the Act, incriminating documents marked ‘DKG-01’ to ‘DKG-09’were seized from the premises of the assessee. While explaining, the assessee in his submissions mentioned that another similar impounded document marked as ‘JBTE-23’ was found at the premises of Jagatbandhu Tea Estate Pvt. Ltd. The assessee replied that the entries in “JBTE-23” and the entries in ‘DKG-01’ related to M/s. Jagatbandhu Tea Estate Pvt. Ltd. The assessee mentioned that the cash receipts found in ‘DKG-01’ were from sale of green tea leaves and the cash expenses were payments to the labourers. The same entries were repeated in the impounded material ‘JBTE-23’. The assessee also said that the AO failed to appreciate the fact that the entries found in ‘DKG-01’ & ‘JBTE- 23’ were repetitions of the same income and expenditure of M/s. Jagatbandhu Tea Estate Pvt. Ltd. The assessee stated that these rough notings were written for making a fair copy of accounts of M/s. Jagatbandhu Tea Estate Pvt. Ltd., that is why those rough notings were found at the residence of the director as well as the office of M/s. Jagatbandhu Tea Estate Pvt. Ltd. The AO ignored this fact and made huge additions in the hands of the director as well as the company M/s. Jagatbandhu Tea Estate Pvt. Ltd.
In the result, both the appeals of the Revenue and CO of the assessee are dismissed.
Order pronounced in the open court on 20.01.2026.
Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 20.01.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: