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

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ITA 724/JPR/2023Status: DisposedITAT Jaipur26 December 2024AY 2018-19Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)1 pages

AI SummaryAllowed

Facts

The assessee, a 60-year-old individual deriving income from milk and agricultural activities, filed their return of income. The assessee was also a partner in a firm, M/s Meena Construction Works, which was formed to undertake rural development activities. During the course of business, the assessee and another partner travelled to Bhubaneswar to purchase machinery, carrying a substantial amount of cash. The cash was seized by the GRP. Subsequently, assessment proceedings were initiated against the assessee under section 153A of the Income Tax Act, leading to additions made by the AO and confirmed by the CIT(A). The assessee appealed these additions.

Held

The Tribunal found that the cash seized belonged to the partnership firm, not solely to the assessee. It was noted that the firm was established prior to the cash seizure and that the partners had made contributions to the firm. The Tribunal also noted that the AO did not conduct sufficient independent inquiries and disregarded documentary evidence. The Tribunal allowed the appeal, directing that the additions made were not sustainable.

Key Issues

The main issues were the validity of the assessment order under section 153A, the proper approval for the assessment order, the addition of unexplained money under section 69A, the invocation of section 115BBE, the addition of interest income, and the addition of business and agricultural income.

Sections Cited

153A, 153D, 68, 115BBE, 69A, 139A

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.