Validity of ddition under section 68 when cash amount explained as derived from sale of agricultural produce

 819 total views

Validity of ddition under section 68 when cash amount explained as derived from sale of agricultural produce

Short Overview : Where assessee had explained source of the cash deposit in the bank account by producing copies of the bills of sale of agricultural produce, which supported the explanation of assessee that assessee had received cash out of sale of agriculture produce, no addition under section 68 was warranted.

Assessee had deposited certain cash amount in his bank account, upon enquiry by AO assessee submitted that it was derived from agricultural income and from land sold. AO made addition under section 68 alleging that assessee failed to prove the sources of income.

it is held that Assessee had explained source of the cash deposit in the bank account. Copies of the bills of sale of agricultural produce were filed, which supported the explanation of assessee that assessee had received cash out of sale of agriculture produce. The explanation of assessee for sale of property was also not disputed by revenue. Apart from it, assessee had salary income, which was not taken into consideration. These facts clearly showed that assessee had source to make deposit in the bank account. Thus, the entire addition was deleted.

Decision: In assessee’s favour.

 

IN THE ITAT, DELHI

BHAVNESH SAINI, J.M.

Naresh Kumar v. ITO

ITA.No. 1760/Del./2018

8 March, 2019

Assessee by: Rajiv Saxena And Shri Sankalp Sharma

Revenue by: S.L. Anuragi, Senior Departmental Representative

ORDER

This appeal by assessee has been directed against the order of learned Commissioner(Appeals)-I, Noida, dated 28-11-2016 for the assessment year 2009-2010, challenging the addition of Rs. 11,51,525 under section 68 of the Income Tax Act, 1961.

2. Briefly the facts of the case are that assessing officer collected information that the assessee had between 17-4-2008 to 6-8-2008 had deposited Rs. 20,73,400 in his bank accounts. The assessment was reopened and material was confronted to the assessee. The assessee has not given any satisfactory explanation.

Therefore, assessing officer, made addition of Rs. 20,73,400 as unaccounted income and added under section 68 of the Income Tax Act, 1961.

2.1. The assessee submitted before the learned Commissioner(Appeals) that during financial year under reference assessee along with his family members had on 9-5-2008 sold the land owned by assessee and his family members, for a total consideration of Rs. 24,37,500 and assessee has 1/4th share of Rs. 6,09,375. This amount was utilised for making cash deposit in the bank account. The sale deed of the property was filed in support of the same. The assessee further explained that he owned about 12 acres of land in District Faridabad and he used to grow vegetables and sold the same in the market and the remaining cash was from such activities. The assessee filed copy of the sale deed and other details and bills of agriculture produce from several parties in respect of earning of agriculture income. The learned Commissioner(Appeals) noted the claim of assessee after selling agriculture produce in a sum of Rs. 17,01,643 is very exorbitant. The learned Commissioner(Appeals), however, accepted that assessee has owned agricultural land and is engaged in agricultural activities.

The learned Commissioner(Appeals) accepted the sale consideration of Rs. 6,09,375 out of sale of the property, of which, benefit was given to assessee. Further on account of agricultural income, learned Commissioner(Appeals) accepted the claim of assessee in a sum of Rs. 3,12,500. Therefore, source of cash deposited in a sum of Rs. 9,21,875 was accepted and addition to that extent was deleted, restricting the addition to Rs. 11,51,521.

3. The assessee is in appeal challenging the addition of Rs. 11,51,521.

4. We have heard the learned representatives of both the parties and perused the material available on record.

5. Learned Counsel for the assessee reiterated the submissions made before the authorities below and filed copy of the sale deed and bills for sale of agricultural produce. He has submitted that the share of assessee and his brother Shri Anil Kumar of sale consideration of the property comes to Rs. 12,18,750 which is available to assessee for making cash deposit being the amount available to the family. He has further submitted that assessee has filed bills of sale of agricultural produce from pages 13 to 31 of the paper book, which shows that assessee has sold the agricultural produce of Rs. 14,65,480 and these bills have not been disputed by the learned Commissioner(Appeals). He has, therefore, submitted that assessee has availability of funds of Rs. 26,84,230, therefore, cash deposit of Rs. 20,70,400 stands explained.

6. On the other hand, learned Departmental Representative relied upon the orders of the authorities below.

7. After considering the rival submissions, I am of the view that assessee has explained source of the cash deposit in the bank account. Copies of the bills of sale of agricultural produce are filed in the paper book, which supports the explanation of assessee that assessee received cash of Rs. 14,65,480 out of sale of agriculture produce.

The learned Commissioner(Appeals) partly accepted the agricultural income which supports the explanation of assessee that assessee had source from agricultural income. The learned Commissioner(Appeals) also partly accepted the explanation of assessee for sale of property, but, assessee explained that the share of property of assessee’s brother is also available to him being the amount getting in joint family. All these documents in the paper book have not been disputed by the authorities below.

Learned counsel for the assessee further submitted that apart from it, assessee has salary income, which have not been taken into consideration. These facts clearly show that assessee has source to make deposit in the bank account.

The explanation of assessee is thus accepted and entire addition is deleted.

8. In the result, appeal of assessee allowed.

Order pronounced in the open Court.

Leave a Comment

Your email address will not be published.

the taxtalk

online portal for tax news, update, judgment, article, circular, income tax, gst, notification Simplifying the tax and tax laws is the main motto of the team tax talk, solving