RANJITSINGH SARDARSINGH DEORA,MUMBAI vs. JCIT 25(2), MUMBAI

The above captioned two appeals preferred by the assessee against the separate orders of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] of even date 20.07.2012 have been heard together and are being disposed of by this common order.

An application for adjournment has been made on behalf of the assessee. However, considering that short and small issues are involved in these appeals, we proceed to dispose of these appeals after hearing the Ld. Departmental Representative. First we take up the assessee’s appeal bearing ITA No.7093/M/2014.

On being asked to explain, the assessee submitted that he had not received any loan from these persons and that he was the head of the family and looking after the sale of agricultural produce. The amount in question had been deposited in the account of the assessee out of the agricultural income from the land of the family. The assessee also furnished relevant documents pertaining to agricultural land/agricultural income. The AO, however, held that the assessee has not been able to produce evidence of agricultural activity. He, therefore, added the said amount as unexplained income. He also levied the penalty under section 271D against the assessee for receiving cash loans from the above said persons.

The Ld. CIT(A) also confirmed the impugned penalty. Being aggrieved by the above order of the Ld. CIT(A), the assessee has come in appeal before us.

We find from the record that a letter dated 15.09.2014 has been addressed to Ld. CIT(A) wherein it has been explained that the assessee Shri Ranjitsingh Sardarsingh Deora was the joint account holder with his son Shri Narendra Singh Deora in which the alleged deposits were found by the AO. The other two persons, whose share of income from agricultural land was 3 & 7094/M/2014 Shri Ranjitsingh Sardarsingh Deora deposited in the said account, one is the wife of the assessee namely Sayar Kunvar and the other is Bhuvnesh Deora who is the daughter in law of the assessee. The assessee has explained that the amount was out of the proceeds of agricultural income which was deposited pertaining to the share of the family members which was deposited in the bank account held by him jointly with his son. Further, we find that the assessee had also furnished copies of affidavits wherein the wife of the assessee Sayarkunwar Deora and daughter in law of the assessee Bhuvnesh Deora have confirmed in their respective affidavits that they jointly owned land with their family members and during the year they had received their share of agricultural income which was deposited in the joint bank account of the assessee with his son Shri Narendra Bhuvnesh Deora. It is pertinent to mention here that the assessee is the husband of Sayarkunwar Deora and Shri Narendra Bhuvnesh Deora is the husband of Bhuvnesh Deora. Under the circumstances, it cannot be said that the assessee had received any loan from his family members. The nature of deposits has been duly explained. The other family members of the assessee have never admitted that they had given any loan to the assessee rather the plea is that the amount has been deposited in the joint saving bank account of the family.

So far as the penalty on account of loan from his son Shri Narendra Bhuvnesh Deora is concerned, we find that from the record that the said account in question was jointly held by the assessee along with Shri Narendra Bhuvnesh Deora. Under these circumstances, the amount in question cannot be said to be received by the assessee as loan rather the amount in question was deposited by Shri Narendra Bhuvnesh Deora in the joint account and it cannot, in any manner, be termed as a loan to the assessee as Shri Narendra Bhuvnesh Deora himself was also the holder of the account along with the assessee. It has been pleaded that the other two ladies have also deposited the said amount in the family account who happened to be the wives of the assessee and his son

Now coming to the assessee’s appeal bearing ITA No.7094/M/2014. The assessee, in this case, has agitated the levy of penalty under section 271(1)(c) of the Act of Rs.46,510/-. As observed above, the AO found certain amount deposited in the bank account of the assessee. Out of the said amount, the assessee claimed that Rs.2,50,000/- was his own agricultural income and the remaining amount of Rs.8 lakhs was the income of the family members which was deposited in the said bank account. The assessee produced the relevant documents of ownership of the land, however, submitted that he had given the said land on contract and he himself did not carry out the agricultural operations. It was explained that the assessee was having total land of 4.32 hectors which produced 130 quintals of food grains out of which his share was 97 quintals and that the balance had been distributed to the cultivators. He also submitted the name and addresses of the cultivators. The AO, however, held that since the assessee had failed to furnish evidence of carrying out of agricultural operations and respective bills and vouchers for purchasing seeds and fertilizers, power consumption etc., he therefore treated the said deposit of Rs.2.50 lakh as unexplained income of the assessee. He levied the impugned penalty on account of the said addition made into the income of the assessee.

The Ld. CIT(A) also confirmed the penalty.

We have heard the Ld. D.R. and have also gone through the records. From the record, it is undisputed that the assessee is having agricultural land of 4.32 hectors. The additions have been made in this case on account of failture of the assessee to furnish evidences regarding the carrying out the agricultural