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Facts
The assessee, an agriculturist, challenged the estimation of agricultural income and the addition of unexplained money. The assessee had made cash deposits of Rs. 16.90 lacs in his bank accounts. The Assessing Officer (AO) estimated agricultural income at Rs. 4.50 lacs and treated the balance deposit of Rs. 12.40 lacs as unexplained money.
Held
The Tribunal noted that the assessee is an agriculturist with substantial land holdings and submitted sale bills for agricultural produce. The AO admitted that the assessee has huge land holdings and did not place on record any other source of income. Therefore, the Tribunal concluded that the deposited amount of Rs. 12.40 lacs were from the assessee's own source of income.
Key Issues
Whether the CIT(A) erred in upholding the AO's estimation of agricultural income and addition of unexplained money, or whether the entire deposit was from the assessee's agricultural income.
Sections Cited
144, 142(1), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES, ‘’SMC” JAIPUR
Before: Hon’ble SHRI SANDEEP GOSAINvk;dj vihy la-@ITA No. 264/JP/2024
ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 21-12-2023, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2017-18 raising the solitary ground of appeal
as under:- ‘’The AO erred by not providing credit of Rs.14.50 including Rs.10.00 Lacs Credit Card cash always available with the assessee and allowed only Rs.4.50,000/-‘’ 2 HUKAM SINGH SHEKHAWAT VS ITO, WARD 1(4), JAIPUR 2.1 At the time of hearing of the appeal, the Bench noticed that none appeared on behalf of the assessee, however, a written submission has been filed by the ld. AR of the assessee controverting the order of the ld. CIT(A). Hence, the Bench decided to dispose off the appeal of the assessee on the basis of the written submission filed before the Bench. 3.1 Further at the outset of the hearing, the Bench noted that there is delay of 15 days in filing the appeal by the assessee for which the assessee filed an application dated 07-02-2024 for condonation of delay with following prayers.
1. The assesse did not receive any notice / letter for relevant as the assessee’s residence is in small agriculture field located at Remote Area Kolwa near Mondroo, Tehsil- Shrimadhpur, Distt. Neemkathana. Thus the assesee was unable to reply.
2. Assessee came to know the matter when notice of demand was served to him. If any previous notice or letter was served by the Department, the same would also be served like notice of demand. As soon as he came to know, he immediately responded.
3. Kindly condone the delay which happened without any default on his part.’’ 3.2 On the other hand, the ld. DR objected to such delay made by the assessee in filing the appeal. 3.3 The Bench has heard the ld. DR parties and perused the condonation of the assessee and feel that there is a merit in the submission of the assessee and thus in view of the condonation application of the assessee, the delay in filing the appeal by the assessee is condoned.
3 HUKAM SINGH SHEKHAWAT VS ITO, WARD 1(4), JAIPUR 4.1 Apropos the solitary ground of the assessee, the facts as emerges from the order of the ld. CIT(A) who dismissed the appeal of the assessee by observing as under:-
‘’The assessee has challenged the estimation of agricultural income at Rs 4,50,000 as against Rs 11,00,000 declared by the assessee. In the Para 4 of the assessment order the AO estimated the agriculture income based on the gross receipts of agricultural income in the impugned year. In the scrutiny proceedings, the assessee submitted coples of 10 sale invoices issued by Krishi Upaj Mandi wherein the receipts aggregated to Rs. 7,65,596/-. Except those receipts no other documents were produced to justify the claim of Rs 11,00,000 as agriculture income. Mere submission of documents indicating the ownership and extent of land holdings is not sufficient to justify the claim of agriculture income. The assessee was duty bound to give the details of the gross receipts from sale of different crops, expenses incurred and the resulting net income. The assessee was able to produce the details of gross receipts only to the extent of AO Rs. 7,65,596/- and the AO reasonably estimated the net agriculture income at Rs. 4,50,000/- after accounting for agricultural expenses. Even during the appeal proceedings, the assessee reiterated his stand earlier stand before the AO and submitted the copies of agricultural receipts aggregating only to extent of Rs. 7,65,596/-. Nothing prevented the assessee from providing the complete details of how the net agriculture income of Rs 11,00,000 was arrived. In view of this, I am constrained to uphold the action of the AO in estimating the agriculture income of Rs 4,50,000. As regards sources of cash deposits of Rs. 16,90,000/-, during the assessment proceedings the assessee claimed that the cash deposits were out of agriculture income and the cash in hand. As already discussed above, the AO estimated the agriculture income at Rs 4,50,000/-. Further, in the assessment order the AO also noted that the assessee claimed the utilisation of cash withdrawn for purchase of inputs like seeds and fertilizers and other agricultural expenses.
4 HUKAM SINGH SHEKHAWAT VS ITO, WARD 1(4), JAIPUR Therefore, AO did not accept the claim of cash in hand available for making deposits in the bank. In effect, out of the total deposits of Rs 16,90,000/-, AO treated only the deposits made out of agriculture income to the extent of Rs 4,50,000/- as explained and the balance deposit of Rs. 12,40,000/- as unexplained money. In the appeal proceedings, the assessee did not make any submission to controvert this finding of the AO. Hence, the addition of Rs. 12,40,000/- is upheld. Therefore, ground no. 2 is accordingly dismissed. In result the appeal is dismissed.’’ 4.2 On the other hand, the ld. DR supported the order of the ld. CIT(A). 4.3 The Bench heard the ld. DR and also perused the written submission of the ld. AR of the assessee including ld. CIT(A)’s order. As per facts of the present case, the assessee is an individual who is engaged in the agricultural activities. The assessee did not file his return of income despite making cash deposits of Rs.16.90 lacs in his bank accounts maintained with Oriental Bank of Commerce, Sri Madhopur. Therefore, the AO issued notice upon the assessee and eventually the assessee filed the return on 14-05-2018 declaring income of Rs.2,87,960/- including agricultural income of Rs.11.00 lacs. Since the assessee did not file a valid return in response to notice u/s 142(1), therefore, the AO completed the assessment u/s 144 of the Act. After considering the assessee’s submission, the AO estimated the agricultural income of Rs 4.50 lacs as against the claim of Rs.11.00 lacs. Further out of total cash deposit of Rs.16.90 lacs the AO treated only a sum of