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

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ITA 722/JPR/2023Status: DisposedITAT Jaipur26 December 2024AY 2016-17Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)1 pages

AI SummaryAllowed

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

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.