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Facts
The assessee declared gross agricultural income of Rs. 41.87 lakhs, claiming it exempt under Section 10(26) of the Act. However, cash deposits of Rs. 61.98 lakhs were added to her income under Section 69A by the AO, as she failed to substantiate their source as being from Nagaland, which was upheld by the CIT(A).
Held
The Tribunal found that the assessee deserved another opportunity to prove that the source of the cash deposits was also from the State of Nagaland. Consequently, it set aside the CIT(A)'s order and remanded the case back to the Assessing Officer for fresh consideration after granting the assessee a proper hearing.
Key Issues
Whether the assessee could substantiate the source of cash deposits exceeding Rs. 61 lakhs as originating from the State of Nagaland to claim exemption and avoid addition under Section 69A.
Sections Cited
Section 250, Section 10(26), Section 69A
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Income Tax Appellate Tribunal, : GAUHATI BENCH: GUWAHATI
Before: SHRI MANOMOHAN DAS, HON’BLE & SHRI SANJAY AWASTHI, HON’BLE
ORDER
PER MANOMOHAN DAS, JM
This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the (“CIT(A)” dated 20.11.2023 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) and pertains to the Assessment Year [AY] 2021-22.
Page 1 of 3 Pelhoubbeinuo Sopfii -Vs- The ITO, Ward-2, Dimapur AY: 2021-22 2. The facts of the case are that, the assessee has declared gross agricultural income of Rs. 41,87,920 and claimed the same as exempt income under section 10(26) of the Act. The learned Assessing Officer observed that, the assessee could not substantiate its claim of cash deposits for Rs. 61,98,400/- and therefore, this amount of Rs. 61,98,400/- is disallowed and has added to the total income of the assessee u/s 69A of the Act. Being aggrieved, the assessee filed 1st appeal before the ld.
CIT(A). The ld. CIT(A) vide order dated 20.11.2023 has confirmed the addition of Rs. 61,98,400/- made by the ld. Assessing Officer [AO].
4. Being aggrieved, the assessee filed the present appeal before the Tribunal.
We observe that, the ld. CIT(A) has confirmed the addition made by the ld. AO due to failure to substantiate the source of the cash deposit in the bank account that the source was not out of the State of Nagaland.
We observe that, the assessee can claim exemption from payment of income tax if he / she can prove that the income was from the State of Nagaland since, the assessee is a member of the Scheduled Tribe community of the State of Nagaland. The assessee already could prove her agricultural income of Rs. 31,78,620/- as exempt income before the lower authorities. However, she could not prove before the lower authorities the source of the cash deposited in her bank accounts also from the State of Nagaland.
We have carefully considered the submissions of the parties and are of the view that, for the ends of justice, the assessee should get another opportunity to substantiate her claims that, the source of cash deposited in bank accounts were also from the State of Nagaland only. Accordingly, we set aside the order of the ld. CIT(A) dated 20.11.2023 and remand the case of the assessee to ld. AO for consideration afresh.
Pelhoubbeinuo Sopfii -Vs- The ITO, Ward-2, Dimapur AY: 2021-22 We direct the ld. AO to reconsider the claims of the assessee after giving the assessee an adequate opportunity of being heard. At the same time, we direct the assessee to substantiate her claims before the ld. AO. The parties have also no objection in remanding the matter to the ld. AO for consideration afresh.
In the result, the appeal of the assessee is allowed for statistical purposes only.