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Income Tax Appellate Tribunal, “SMC-C” BENCH : BANGALORE
O R D E R
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by the assessee and this is directed against the order of CIT(A)-7, Bangalore dated 30.05.2017 for Assessment Year 2010-11.
The grounds raised by the assessee are as under.
“1.The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2.The learned CIT[A] is not justified in sustaining an addition of Rs. 7,25,000/- out of the original addition of Rs.9,65,000/- made by the learned A.O. by denying the exemption claimed u/s. 10[1] of the Act in respect of the agricultural receipts of the appellant under the facts and in the circumstances of the appellant's case. 2.1 The learned CIT[A] failed to appreciate that the joint family of the appellant was the owner in cultivation of substantial agricultural land and the agricultural income of the appellant's
Page 2 of 5 joint family was being deposited by the appellant in his individual capacity, which extent of agricultural income claimed as pertaining to the joint family of the appellant was highly reasonable and commensurate with the agricultural holding of the joint family of the appellant under the facts and in the circumstances of the appellant's case. 3.The learned CIT[A] is not justified in sustaining an addition of Rs. 3,22,192/- out of the original addition of Rs.6,53,300/- as the unexplained investment being the peak cash credit in the two bank accounts of the appellant under the facts and in the circumstances of the appellant's case. 4.Without prejudice to the above, the impugned additions made are highly excessive and liable to be reduced substantially. 5.Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s. 234-B of the Act, which under the facts and in the circumstances of the appellant's case and the levy deserves to be cancelled. 6.For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”
Regarding ground no. 2, it was submitted by ld. AR of assessee that out of total amount received by assessee on account of agriculture produce of Rs. 9.65 lakhs, an amount of Rs. 7.25 lakhs was received by way of cheques. He further submitted that as per Para no. 6.2 of his order, CIT (A) has held that the assessee was unable to produce either the documentary evidence or the corroborative evidence to manifest that these amounts received by the assessee by way of cheques were received in lieu of agricultural produce. He submitted that if in the interest of justice, one more opportunity is provided to assessee, he undertakes that the assessee will produce the concerned person from whom the cheques were received and all the required details and evidences will also be produced in support of assessee’s claim. The ld. DR of revenue submitted that sufficient opportunity was provided by AO and CIT (A) and therefore, no further opportunity should be provided.
I have considered the rival submissions. I find that the details of bank account are very much noted by the AO in the assessment order in which the cheques which are claimed to be on account of sale of agricultural produce were deposited in HDFC bank Account No. 08751930000808 and Syndicate bank Account No. 04252010052884. When the details of bank accounts were available with the AO, the AO might have made enquiry from the bank to find out the name and other details of the person from whom these cheques were received. It is not in dispute that the cheques were deposited in these two bank accounts of the assessee. This is true that the details of person from whom the cheques were received were not provided by the assessee before the AO and CIT (A) and therefore, the AO and CIT (A) could not examine the person in question to find out the truth. Under these facts and in the interest of justice, I feel it proper to restore back this matter to the file of AO for fresh decision. Hence I set aside the order of CIT (A) on this issue and restore the matter back to the file of AO for fresh decision in the light of above discussion after providing adequate opportunity of being heard to assessee. I want to make it clear that the ld. AR of assessee has given an undertaking that if the issue is restored back to the file of AO / CIT (A), the assessee will produce the issuer of cheque along with other required evidences in support of the claim of the assessee and the department can examine him and the evidences to find out the truth. Accordingly ground no. 2 of the assessee’s appeal is allowed for statistical purposes.
Regarding ground no. 3, it was submitted by ld. AR of assessee that on pages 99 to 104 of paper book is the copy of cash book for the present year and as per the same, it can be seen that the opening balance of cash is Rs. 7,03,639.93/- but the AO has disregarded the same. He also submitted that even after disregarding the opening balance, the working of AO in respect of peak cash deposit is not proper for several reasons. He submitted that the AO has worked out the peak working for each bank separately while it should have been done in a combined manner. It is also submitted that the AO has not considered the receipt on account of rent and agricultural income and therefore, for this reason also, the working of peak is defective. At this juncture, it was pointed out by the bench that as per the statement of facts available on page no. 30 of the appeal memo, there is drawings shown of Rs. 8,49,170/- in the present year and there is repayment of Car loan from ICICI bank also because the balance of such loan as on 31.03.2009 was Rs. 2,13,570/- and the same as on 31.03.2010 is Rs. 71,190/-. The bench wanted to know as to whether the repayment of car loan was by cash or cheque. The ld. AR of assessee submitted that this matter may also be restored back to the file of AO for fresh decision and during those proceedings, the AO can examine all these aspects. The ld. DR of revenue submitted that enough opportunity was provided by the AO and CIT(A) to the assessee and therefore, no further opportunity should be provided.
I have considered the rival submissions. I find that in para 2.3 of assessment order, the AO has produced the statement of facts of the assessee as on 31.03.2009 and 31.03.2010 and as per the same, there was closing cash balance of Rs. 7,03,640/- as on 31.03.2009 and there was car loan from ICICI bank of Rs. 2,13,570/- on that date and on the asset aside as on 31.03.2009 car was shown at Rs. 6.30 lakhs. In the statement of facts as on 31.03.2010, the car loan from ICICI Bank has gone down to Rs. 71,190/- and there is drawings of Rs. 8,49,170/-. It is also seen that on the asset side, the value of car has gone up to Rs. 11.55 lakhs as on 31.03.2010 and the car loan has gone down and this means that a new car was purchased but whether this purchase of new car was out of cash payment or cheque payment, is not known and as per the peak working done by the AO (which is available along with the assessment order) also, there is no indication on this aspect. It is seen that for both the bank accounts i.e. with Syndicate bank and HDFC bank, Peak working has been done separately. In fact, we are concerned with excess cash deposit and therefore, this peak working should have been done for both the bank accounts jointly. It is also to be seen that regarding other receipts such as rental income and agricultural income, the assessee has to establish as to how much was received by way of cash and how much by way of cheque and how much of expenses for earning these incomes were in cash. In fact, net cash generated from these activities in each month has to be worked out and Page 5 of 5 considered in peak working. Similarly for the repayment of car loan from ICICI bank and purchase of new car also, it should be seen as to how much is spent in cash and how much in cheque on account of repayment of car loan and purchase of car and the cash spent for these purposes should also be considered for working out the peak. Hence, I set aside the order of CIT(A) on this issue also and restore this matter also back to the file of AO for fresh decision in the light of above discussion after providing adequate opportunity of being heard to assessee. Ground no. 3 is also allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on the date mentioned on the caption page.