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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
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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. MANOJ KUMAR AGGARWAL & SH. UDAYAN DASGUPTA
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.
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.
2. That the Ld. CIT(A) has erred in upholding the action of the Ld. AO in charging tax under section 115BBE of the Act.
3. 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.
4. 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 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 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 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.
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.