BASAVARAJ RAMESH INDIVIDUAL,KRISHNAGIRI vs. ITO, WARD-1, KRISHNAGIRI, KRISHNAGIRI
What did the Tribunal hold?
The Tribunal acknowledged the possibility of agricultural income but found the claimed amount to be excessive. It estimated the annual agricultural income at Rs. 5 lakhs for three financial years and estimated household expenses at Rs. 5 lakhs, deeming the remaining Rs. 5,96,500 as unexplained cash deposit.
What were the facts?
The assessee deposited Rs. 18,46,500 in cash in savings accounts during the demonetization period. The Assessing Officer (AO) treated Rs. 15,96,500 as unexplained investment, accepting only Rs. 2,50,000. The assessee claimed the deposits were from agricultural income.
What were the issues?
Whether cash deposits made during demonetization, claimed as agricultural income, are unexplained investments. The extent to which agricultural income can be estimated and considered as explained cash.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ (SMC
Before: SHRI MAHAVIR SINGH
आदेश /O R D E R This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in Order No.ITBA/NFAC/S/250/2023- 24/1054656999(1) dated 27.07.2023. The assessment order was passed by the Income Tax Officer, Ward-1, Krishnagiri for the assessment year 2017-18 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 09.12.2019.
The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of AO in treating the cash deposit in assessee’s savings bank accounts maintained with Bank of India, State Bank of India and Union Bank of India during the demonetization period in Specified Bank Notes (SBNs) as unexplained investment u/s.69 of the Act amounting to Rs.15,96,500/-. For this, assessee has raised various grounds which are explanatory, factual, and argumentative and hence, need not be reproduced.
I have heard rival contentions and gone through the facts and circumstances of the case. I noted that the assessee is an individual earning interest income from money lending and agricultural income. The AO noted that the assessee has deposited cash during demonetization period which is brought out in para 3 of the assessment order at pages 2 & 3, total cash deposit in three savings bank accounts amounting to Rs.18,46,500/-. The AO required the assessee to explain the cash deposit of Rs.18,46,500/- in demonetized currency and the assessee explained that the same is income earned from agricultural activity. The assessee in support of agricultural income filed land holding details and claimed that he owns 13.53 acres of land in villages in Krishnagiri Taluk and - 3 - accordingly, he filed patta, chitta, adangal and other details. The assessee also filed the claim of agricultural income and return filed after the period of demonetization and AO brought out the same in his assessment order in chart at para 5, which is being reproduced as under:- A.Y. Date of filing Income Agricultural Remarks of Return of Returned Rs. Income Rs. income 2014-15 NIL 2,65,000 2,40,000 ROI not filed 2015-16 26.11.2016 3,14,200 8,10,000 ROI filed 2016-17 26.11.2016 4,27,820 11,62,000 ROI filed 2017-18 12.07.2017 3,23,260 9,60,000 ROI filed The AO accepted the cash deposit of Rs.2.50 lakhs in SBNs and balance of Rs.15,96,500/- was treated as unexplained investment u/s.69 of the Act and taxed the same as per the provisions of section 115BBE of the Act. Aggrieved, assessee preferred appeal before CIT(A).
The CIT(A) did not believe the increase in agricultural income from Rs.2.40 lakhs in financial year 2013-14 to Rs.8.10 lakhs in financial year 2014-15 to Rs.11.62 lakhs in financial year 2015-16 and to Rs.9.60 lakhs in financial year 2016-17. According to CIT(A), cash was deposited in three bank accounts in different bank branches and spread over period of one month on various days.
- 4 - Applying the test of human probabilities, he confirmed the addition. Aggrieved, assessee is in appeal before the Tribunal.
I noted that there is every possibility of earning of agricultural income but the assessee is unable to file any details like crop grown or the crop sold in market and in what rate. It is not doubted that assessee is holding agricultural land to the extent of 13.53 acres and claim of assessee was that Mango was grown in this land and he has declared the agricultural income in the returns of income as noted above. I cannot doubt that assessee is not having agricultural income but not to that extent, what he has claimed. Hence, I make a fair estimate of agricultural income and treat cash deposit partly as explained and partly as unexplained. Going by the circumstances and theory of human probabilities and the fact is that assessee is holding agricultural land and growing mangoes in this land, which is supported by adangal, chitta and VAO certificates, I estimate the agricultural income annually at Rs.5 lakhs for these three years i.e., financial years 2015-16, 2016-17 & 2017-18 that means, assessee is having availability of Rs.15 lakhs of cash, out of this, assessee might have incurred household expenses and used the cash for household expenses. I estimate the household expenses at Rs.5 lakhs and the balance cash available with the assessee for depositing in the bank
- 5 - account, which he deposited during demonetization period. Hence according to me, out of cash deposit of Rs.18,46,500/-, the assessee is having cash-in-hand of Rs.10,00,000/- plus Rs.2,50,000/- accepted by AO i.e., total cash available is Rs.12,50,000/- out of Rs.18,46,500/-. Hence, balance cash of Rs.5,96,500/- be treated as unexplained and to that extent, this addition is confirmed as per the provisions of section 69A of the Act. Accordingly, the appeal of the assessee is partly-allowed.
In the result, the appeal filed by the assessee is partly-allowed.
Order pronounced in the open court at the time of hearing on 1st January, 2024 at Chennai.
More judgments on Section 69
- Azure Knowledge Corporation Private… vs The Dy.CIT, Circle-1(1)(1), AhmedabadITA 2013/AHD/2024[2018-19]Status: Disposed19 Oct 2026AY 2018-19
- Naresh Chandra Khattar, Agra vs ITO Ward-1(1)(2), AgraITA 475/AGR/2026[2019-20]Status: Disposed16 Oct 2026AY 2019-20
- Ranchhodbhai Kurjibhai Kakadiya, Rajkot vs Income Tax Officer, Ward-1(1)(1), RajkotITA 553/RJT/2025[2019-20]Status: Disposed16 Oct 2026AY 2019-20
- Gorantla Rahul Kumar, Visakhapatnam vs The Asst. Commissioner of Income Tax…ITA 670/VIZ/2025[2021-22]Status: Disposed16 Oct 2026AY 2021-22
- Gorantla Rahul Kumar, Visakhapatnam vs The Asst. Commissioner of Income Tax…ITA 669/VIZ/2025[2020-21]Status: Disposed16 Oct 2026AY 2020-21
Recent GST High Court judgments
Search GST case law →- M/S.Sri Satya Sai Constructions vs. The State Of Andhra PradeshAndhra Pradesh · 27 Oct 2026
- M/S. Sikka Motors PVT LTD vs. Union Of INDIA & Anr.Delhi · 27 Oct 2026
- Shri Yaras Suresh Babu Prabhu Kumar vs. The Union Of INDIATelangana · 27 Oct 2026
- Santa Singh vs. SuperintendentUttarakhand · 27 Oct 2026
- Azaad Builders vs. Assistant Commissioner SGSTUttarakhand · 27 Oct 2026