GURMANGAL SINGH,MALOUT, PUNJAB vs. INCOME TAX OFFICER WARD-2(5), MUKTSAR, PUNJAB
Facts
The assessee, an agriculturist, deposited Rs. 33.99 lacs cash, including Rs. 20 lacs during the demonetization period, into a bank account but did not file a return of income. The AO made an addition under Section 69A as unexplained money, which the CIT(A) upheld. The assessee furnished various documents, including jamabandi, bank statements, commission agent certificates, and affidavits, claiming the source was agricultural income from 66 acres of land.
Held
The Tribunal observed that the lower authorities had failed to adequately consider the affidavits and confirmations from commission agents regarding agricultural sales provided by the assessee. Consequently, the matter was remanded back to the CIT(A) for fresh adjudication on merits, with directions to consider all documentary evidence and for the assessee to fully cooperate.
Key Issues
Whether the cash deposits in the bank account, including during demonetization, were sufficiently explained by agricultural income and other documentary evidence, and thus whether the addition under Section 69A and subsequent tax under Section 115BBE, interest, and penalty were justified.
Sections Cited
Section 250, Section 144, Section 69A, Section 115BBE, Section 234A, Section 234B, Section 271AAC, Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. MANOJ KUMAR AGGARWAL & SH. UDAYAN DASGUPTA
Per Udayan Dasgupta, J.M.:
This appeal is filed by the assessee against the order of ld. CIT(A) NFAC, Delhi dated 30.03.2024 passed u/s 250 of the Income Tax Act, 1961 which has emanated from the order of the AO, Ward-2(5), Muktsar dated 02.12.2019 passed u/s
144 of the I.T. Act, 1961.
2 I.T.A. No. 275/Asr/2024 Assessment Year: 2017-18
Grounds of appeal taken by the assessee in Form No. 36 are as follows:
“1. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the actions of the Ld. AO in making an addition of Rs. 33,99,200/- on account of unexplained money under Section 69A of the Income Tax Act, 1961.
That the Ld. CIT(A) has erred in upholding the action of the Ld. AO in charging tax under section 115BBE of the Act.
That the interest charged under section 234A and 234B of the Act and initiation of penalty proceedings under section 271AAC of the Act is against the law and to the facts of the case.
That the appellant craves to add, amend, or alter grounds of appeal before the appeal is finally heard and disposed of.”
Brief facts emerging from records are that the assessee has deposited an
amount of Rs.33.99 lacs in cash in his bank account with HDFC Bank (A/c No.
xxxxx05690), out of which an amount of Rs.20 (twenty) lacs has been deposited
during the demonetization period. However, neither any return of income has been
filed by the assessee nor any compliance has been made to notice u/s 142(1).
However, in response to final show cause notice, the assessee submitted copies of
bank account, jamabandi and copies of his son’s account in the books of the
commission agent and he submitted that he is an agriculturist having 16 acres
(sixteen) of agricultural lands as owner and further 50 (fifty) acres of agricultural
3 I.T.A. No. 275/Asr/2024 Assessment Year: 2017-18 land taken on lease and he has earned agricultural income amounting to Rs. 42.67
lacs out of sale of agricultural crops out of which an amount of Rs.24.39 (forty two
lakhs) lakhs has been received through bank channels and Rs.9.37 lacs in cash and
the remaining amount of Rs.8.90 lacs by way of adjustments against diesel, spray and
fertilizers required in the agricultural activities. However, the explanation was not to
the satisfaction of the AO and the assessment was completed on a total income of
Rs.33.99 lacs, by considering the entire deposits as income.
The matter was carried in appeal and the ld. first appellate authority after
considering the (written submissions) filed by the assessee has dismissed the appeal
by observing that no satisfied logical explanations has been given by the appellant.
Now, the assessee is in appeal before the Tribunal on the grounds contained in
the memorandum of appeal. In course of hearing, the ld. AR of the assessee
submitted that an agricultural income generated by the assessee from agricultural
activities carried out on landholdings of (66 acres) is sufficient to cover the source of
cash deposits in the bank account. He further referred to the copies of the bank
statement and the jamabandi along with the copies of accounts of his son and
certificate of the commission agent to submit that all these documents furnished
before the first appellate authority has never been considered its proper prospective.
He further referred to copies of affidavits which is placed in page no. 1 to 2 of the
4 I.T.A. No. 275/Asr/2024 Assessment Year: 2017-18 paper book filed before us to submit that the deposits made on 13th May, 2016
amounting to Rs.13,25,200/- is explained to have come out of cash received from one Mr. Ajaypal Singh (affidavit enclosed), from one Atmaram Vikas Kumar (commission agent), and from one Mr. Gurpreet Singh (commission agent). He further explained the amount of Rs.20 lacs deposited in bank on 21st Nov., 2016 to have been sourced out of cash received from one Mr. Ranga Singh (affidavit filed), from Mr. Gurpreet Singh (commission agent) and Mr. Kanwal Jeet Singh and he prays that considering
the evidence, the addition which his sustained by the ld. CIT(A) may please be deleted.
The ld. DR relied on the order of the ld. CIT(A) and has pointed out that these affidavits on which the ld. AR is relying upon has never been discussed by the
Assessing Officer is the body of the assessment order and neither discussed by the ld. CIT(A). He further submitted that the contents of the affidavit needs to be verified and the contents of the certificates issued by the commission agent also requires
verification. He further referred to the written submissions contained in the paper book and submitted that the assessee is explaining the source of the cash deposits during the demonetization period from cash received more than six months back and argued that in absence of any cash flow statement on record, availability of cash is
disputable. However, he has no objection if the matter is remanded back to the files
5 I.T.A. No. 275/Asr/2024 Assessment Year: 2017-18 of the ld. CIT(A) for fresh adjudication on the strength of the documentary evidences
now submitted before the Tribunal.
We have heard the rival submissions and considered the materials on record
we find from the records that all these documentary evidences regarding bank
accounts, jamabandi and certificate issued by commission agent where before the
Assessing Officer in course of assessment proceedings (page 2 of assessment order)
and the Assessing Officer has discussed the issues but the contents of the affidavit
filed by the parties has not been discussed in the assessment order, and we are of the
opinion that the contents of the affidavits and the confirmation of the agricultural
sales and certificates issued by the commission agents needs to be considered before
arriving at a conclusion in the matter.
As such, in the interest of justice, we set aside the matter back to the files of
the ld. CIT(A) for fresh adjudication on merits of the case after considering all
documentary evidences available on record and the assessee is also directed to file all
documentary evidences and submissions before the first appellate authority for fresh
adjudication on the grounds contained in Form 35 on merits, and to fully cooperate in
appellate proceedings.
The ld. first appellate authority shall obtain necessary reports from the AO as
per the provisions of law.
6 I.T.A. No. 275/Asr/2024 Assessment Year: 2017-18 10. We have not expressed any opinion on merits and all issues are kept open.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate
Tribunal) Rules, 1963 as on 28.07.2025.
Sd/- Sd/- (Manoj Kumar Aggarwal) (Udayan Dasgupta) Accountant Member Judicial Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T True Copy By Order
