CHATRU,SAWAI MADHOPUR vs. DCIT, CENTRAL CIRCLE, KOTA, KOTA

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ITA 721/JPR/2023Status: DisposedITAT Jaipur26 December 2024AY 2015-16Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)1 pages

AI SummaryAllowed

Facts

The assessee, engaged in milk and agricultural activities, was found with a substantial amount of cash which was seized. The assessee claimed the cash belonged to a partnership firm, 'MCW,' in which he was a partner and intended to use it for purchasing machinery. The Assessing Officer (AO) and CIT(A) disallowed the claim, treating the cash as unexplained. Several grounds of appeal were raised, including challenges to the validity of the assessment order and additions made.

Held

The Tribunal noted that the cash seizure was from individuals who were partners of a firm formed prior to the seizure. The Tribunal found that the assessee had discharged the onus of proving the source of the cash by presenting documentary evidence and the statements of partners. The AO and CIT(A) had disregarded this evidence without cogent reasons or rebuttal. Consequently, the Tribunal held that the cash did not belong to the assessee alone but to the firm, and the additions made were not justified.

Key Issues

1. Whether the cash seized was unexplained money belonging to the assessee, or to the partnership firm MCW. 2. Validity of assessment proceedings initiated under Section 153A without proper approval. 3. Correctness of additions made on account of business income from milk sale and agricultural income. 4. Applicability of Section 115BBE for taxation on the additions.

Sections Cited

153A, 153D, 68, 115BBE, 69A, 102 of CRPC, 131(1A) of the LT Act, 161 of CrPC Act, 1973

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR

Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 721 to 727/JPR/2023

For Appellant: Shri Tarun Mittal, CA &, Shri Harshit Agarwal, CA jktLo dh vksj ls@

Hearing: 23/10/2024Pronounced: 26/12/2024

was assessed at Rs 1,50,000/-, As, the assessee has shown agricultural income of Rs. 4,42,500/-. Therefore, the excess amount of Rs. 2,92,500/-(442500-150000) was added to the total income of the assessee as per provision of section 68 of the IT Act and tax is charged as per provision of section 115BBE of the IT Act.

When the same was carried before the ld. CIT(A) he confirmed the action of the ld. AO by merely stating that “the appellant has failed to explain the source and nature of credit in the books of accounts. Therefore, the AO has rightly made the addition u/s 68 of the Act.”

We note that ld. AO accepted the agricultural income at the rate of Rs 12,000 per bigha, totalling per annum of Rs 1,50,000 and made addition of differential amount of Rs 2,92,500 (4,42,500- 1,50,000) u/s 68 and invoked the provisions of section 115BBE for taxing such income, which stood confirmed by ld.CIT(A). Thus, we note that the ld. AO has estimated the income without any supporting documents. Whereas the income offered by the assessee once accepted in part and thereafter the same is supported by bills for sale items sold the said agricultural income cannot be considered in part. If we calculate the income of Rs.

4,42,500/- dividing the land 12.5 vigha it comes to Rs. 35,400/- per vigha which is also fair and reasonable and does not require to disbelieved merely the assessee could not produce the bills whereas the bills where submitted but was disbelieved merely on account of the fact that same are not complete. Ld. AO when partly considered the income on set of evidence why not full. In view of the above, entire agriculture income stands explained and the addition of Rs 2,92,500/- made by ld.AO deserves to be deleted.