RAMESH BABU BANDI,VIJAYAWADA vs. INCOME TAX OFFICER, WARD-2(3), VIJAYAWADA

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ITA 140/VIZ/2023Status: DisposedITAT Visakhapatnam31 July 2023AY 2017-18Bench: SHRI DUVVURU RL REDDY, HON’BLE (Judicial Member)5 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the assessee is a farmer with agricultural land and had provided confirmation letters for cash sales of produce. The AO's disallowance without valid reasons was deemed unreasonable.

What were the facts?

The assessee, an individual, did not file his return of income for AY 2017-18 but deposited Rs. 12,74,000/- in his bank account. He claimed this was from agricultural income, but the AO disallowed Rs. 2,50,000/- and added it as income from other sources.

What were the issues?

Whether the disallowance of Rs. 2,50,000/- by the AO from the assessee's alleged agricultural income was justified, and if the CIT(A) erred in confirming the addition.

Which sections of the Income-tax Act were involved?

Section 144,Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM

Before: SHRI DUVVURU RL REDDY, HON’BLE

For Appellant: Shri G.V.N.Hari, AR
Hearing: 22.06.2023Pronounced: 31.07.2023

अपीलधथी की ओर से/ Appellant by : Shri G.V.N.Hari, AR प्रत्यधथी की ओर से / Respondent by : Shri O.N.Hari Prasada Rao, DR सुनवधई की तधरीख / Date of Hearing : 22.06.2023 घोर्णध की तधरीख/Date of Pronouncement : 31.07.2023 आदेश /O R D E R

Per Shri Duvvuru RL Reddy, Judicial Member :

1.

This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi vide DIN & Order No.ITBA/NFAC/S/250/2022-23/1050404171(1) dated 04.03.2023, arising out of assessment order passed u/s 144 of the Income Tax Act, 1961 (in short ‘Act’) dated 24.12.2019 for the Assessment Year (A.Y.) 2017-18.

Ramesh Babu Bandi, Vijayawada

2.

Brief facts of the case are that the assessee, an individual, had not filed his return of income for the A.Y.2017-18, but had deposited cash amoutning to Rs.12,74,000/- in his bank account during the year under consideration. Statutory notices were issued and served on the assessee and the assessee had submitted his response, stating that he hold agricultural lands and earn income of about Rs.6 lakhs per annum by doing agriculture. He made cash deposits out of the savings made from agricultural activities underaken in the lands of about 12.91 acres, after meeting exepnses. But the AO disallowed amount of Rs.2,50,000/- and added the same as income from other sources of the assessee.

3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) confirmed the addition made by the AO and dismissed the appeal of the assessee.

4.

Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :

1. The learned Assessing Officer had ignored the fact that the appellant is a farmer earning agricultural income and has no other source of income liable to tax under the Income Tax Act, 1961.

2. The Learned Assessing Officer arbitrarily made an addition without calling for the ‘details of purchases made’ by others from the appellant.

Ramesh Babu Bandi, Vijayawada

3.

The Learned Assessing Officer arbitrarily estimated a sum and treated the same as undisclosed money within the meaning of Sec.69A r.w.s. 115BBE of the Income Tax Act, 1961.

4. Learned Commissioner of Income Tax (Appeals), NFAC, erred in disregarding the merits of the case before him and proceeded against the appellant on the lone ground that ‘The appellant has not filed any written submission / document with respect to ground raised

in Form-35.

5. Learned Commissioner of Income Tax (Appeals) NFAC erred in not considering the fat admitted by the Learned Income-tax Officer, to the effect that ‘the assessee has furnished confirmation from other parties’.

6. Learned Commissioner of Income Tax (Appeals) NFAC erred in not obtaining a report of the Assessing Officer directly on grounds of appeal or information, document or evidence furnished by the appellant as provided in the “Procedure in Appeal” 5(11)(ii)(d) notification on “Faceless Appeal Scheme, 2021” dated 28th December 2021.

7. On such other grounds which support the case of the appellant and not inconsistent with the above, to be pleaded at the time of hearing. It was the contention of the Ld.AR that the assessee is a farmer, having 12.91 acres of agricultural land, doing agriculture for the past 20 years and is having only agricultural income. The assessee is also having gold loan and is in the habit of taking loans from others also. The Ld.AR further contended taht the agricultural produces were sold by the assessee by way of cash transactions, therefore, he deposited the amount in the bank account. He also filed confirmations letters about the sale of agricultural produces between the assessee and other purchasers. But Ramesh Babu Bandi, Vijayawada the AO has disallowed amount of Rs.2.50,000/- and completed the assessment. He further contended that in the assessment order, the AO has not given any reasons for the disallowance of Rs.2,50,000/-. He, therefore, pleaded to quash the order passed by the Ld.CIT(A) and delete the addition made by the AO.

5. On the other hand, the Ld.DR submitted that though the assessee had filed confirmation letters, he had not given any details of purchases made by the purchasers. Therefore, he pleaded to uphold the order passed by the Ld.CIT(A).

6. I have heard both the parties and perused the material available on record. After considering the submissions of the AO, there is no dispute that the assessee is having agricultural holdings and thereby, he is getting agricultural income. The sale of agricultural produces is by way of cash and to that extent, the assessee had also filed confirmation letters, but, without any valid reason, the AO simply disallowed stating that the assessee has not given details of purchases made by the purchasers. Therefore, considering the facts and circumstances, there is no reasonable ground to make the disallowance of Rs.2,50,000/- and I find force in the argument of the assessee. I, therefore, direct the AO to delete

Ramesh Babu Bandi, Vijayawada the addition of Rs.2,50,000/- made. Hence, the grounds raised by the assessee are allowed.

7.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on 31st July, 2023.

Sd/- (दुव्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 31.07.2023 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Shri Ramesh Babu Bandi, D.No.52-1/5-1 Flat TF-1, Lakshmi Narayan Enclave, Veterinary Colony, Gunadala 2. रधजस्व/The Revenue – The Income Tax Officer, Ward-2(3), C.R.Buildings, M.G.Road, Vijayawada 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER

Sr. Private Secretary ITAT, Visakhapatnam

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