CHATRU,SAWAI MADHOPUR vs. DCIT, CENTRAL CIRCLE, KOTA, KOTA
Facts
The assessee, a 60-year-old individual, derives income from milk and agricultural activities and is a partner in M/s Meena Construction Works. A sum of Rs. 95,89,000/- was seized from the assessee and another partner by the GRP, which was claimed to be capital contribution to their firm for purchasing machinery. The AO treated this cash as unexplained money and made additions, which were confirmed by the CIT(A). The assessee appealed these additions, challenging the invocation of Section 153A, the manner of assessment, and the additions made on account of unexplained money, interest income, and disallowance of agricultural income.
Held
The Tribunal held that the cash seized was not unexplained money of the assessee but belonged to the firm, M/s Meena Construction Works. The Tribunal found that the assessee had discharged their onus by providing documentary evidence and that the AO had failed to investigate properly. The Tribunal allowed the appeal, directing the deletion of additions made under Sections 69A and 115BBE, as well as the addition of Rs. 25,481/- towards interest income. The addition related to business income from milk sale and agricultural income was also found to be not on merits and deserved deletion.
Key Issues
Whether the seized cash belonged to the assessee or the firm, whether the assessment proceedings were valid, and whether the additions made on account of unexplained money, interest income, and disallowance of agricultural income were justified.
Sections Cited
153A, 153D, 68, 115BBE, 69A
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
per bigha which comes to Rs. 1,50,000/- (12000*12.5).
96 ITA No.721 to727/JPR/2023 Sh. Chatru vs. DCIT Considering these fact, the agricultural income of the assessee
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
97 ITA No.721 to727/JPR/2023 Sh. Chatru vs. DCIT
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.
Further, and consequently invocation of the provisions of section
115BBE to such addition also being not in accordance with law
and deserves to be quashed.
Ground no. 1 and 2 raised by the assessee challenges the
order of the assessing officer on technical grounds. Since we have
considered the grounds of appeal on its merits this technical
ground becomes educative in nature. Ground no. 10 being general
does not require our finding.
98 ITA No.721 to727/JPR/2023 Sh. Chatru vs. DCIT Based on the observations made herein above, the appeal of
the assessee in ITA no. 726/JPR/2023 for A. Y. 2020-21 stands
allowed.
The bench noted that the grounds of appeal raised by the
assessee in ITA no. 721/JPR/2023 to 725/JPR/2023 and
727/JP/2023 for assessment year 2015-16 to 2019-20 and A. Y.
2021-22 are covered and discussed in detailed while considering
the appeal of the assessee in ITA no. 726/JPR/2023 for
assessment year 2020-21. Since we have allowed those grounds
by a detailed finding herein above, we do not find it imperative to
repeat the grounds, facts and the decision taken by us for the
appeal of the assessee in ITA no. 721/JPR/2023 to 725/JPR/2023
for assessment year 2015-16 to 2019-20 and that similar grounds
of appeal to appeal no. 727/JPR/2023 for A. Y. 2021-22 and
therefore, the finding recorded by the bench while dealing with the
appeal of the assessee in ITA no. 726/JPR/2023 shall apply
mutatis mutandis to ITA no. 721/JPR/2023 to 725/JPR/2023 and
ITA no. 727/JPR/2023.
In the result, all the seven appeals filed by the assessee are
allowed.
99 ITA No.721 to727/JPR/2023 Sh. Chatru vs. DCIT Order pronounced in the open Court on 26/12/2024.
Sd/- Sd/-
¼ Mk0 ,l- lhrky{eh ½ ¼ jkBkSM+ deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 26/12/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Sh. Chatru, Sawai Madhopur. 1. izR;FkhZ@ The Respondent- DCIT, Central Circle, Kota. 2. vk;dj vk;qDr@ CIT 3. 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { ITA No. 721 to 727/JPR/2023} vkns'kkuqlkj@ By order
सहायक पंजीकार@Aेेज. त्महपेजतंत
