Smt. Anita Kubba, ITO, Suratgarh V. ITO, Suratgarh, Suratgarh

ITA 138/JODH/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2581 (ITAT-JODHPUR)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-03-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 03-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AKSHAT VERMA; AMAN SAXENA
• Keywords: Unexplained investment; Search and seizure; Source of fund; Deemed to accrue or arise in india; Retrospective amendment; Condonation of delay; Set aside
• Section: 68; 69; 69C; 143(3); 133(6); 250; 69A; 48; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 Smt. Anita Kubba Ward No. 19 Vikas Nagar, Sri Bijey Nagar, Sri Ganga Nagar, Rajasthan [PAN: BWEPK 1851 Q] (Appellant) Vs. Income-Tax Officer, Suratgarh (Respondent) Appellant by Sh. Akshat Verma & Sh. Aman Saxena, Adv. Respondent by Sh. A. S. Nehra, Sr. DR Date of Hearing 21.03.2024 Date of Pronouncement 02.05.2024 ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by assessee is arising out of the order of the National Faceless Appeal Centre, Delhi dated 15/11/2023 [here in after ‘NFAC’ ] for assessment year 2017-18 which in turn arise from the order dated 31.10.2019 passed under section 143(3) of the Income Tax Act, by AO. I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 2 2. At the outset of hearing, the Bench observed that there is delay of 50 days in filing of the appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay with following prayers:- “APPLICATION UNDER SECTION 5 OF THE LIMITATION ACT, 1963 FOR CONDONATION OF DELAY. ***** MAY IT PLEASE THE HON'BLE TRIBUNAL, 1. That the appellant is preferred the present appeal against the order dated 15.11.2023 whereby, the income stands added to the appellant on the count of the income arising from sources other than agriculture income. However, at the very outset none of the authorities below i.e. Assessing Officer or the Commissioner, Income Tax Appeal have arrived at any conclusion so as to establish the finding. 2. That one of the associate Mr. Ram Kishore Suthar visited the office where on account of some misunderstanding client has been communicated to receive the certified copy of the order dated 15.11.2023. While the certified copy of the order was tried to be received on different occasions however, it came to be informed that the requirement of certified copy need not be obtained on the count that the order under the Appeal stands received under the digital signature of the Commissioner of Income Tax Appeal. 3. That despite the best efforts, the appellant was not able to receive the certified copy of the order, it is on this consequence, the Appeal stands delayed. After clarification of the misunderstanding on 02.03.2024 the appellant preferred the appeal without any further delay. Furthermore, mere procedure technicalities would further delay and defeat the cause of justice forwarded by the means of present appeal wherein, patently the principles of law stands misinterpreted. 4. That the petitioner has been attempting to Hon'ble Tribunal within time however, it is only on the count of the certified copy that the delay has occurred. It is also relevant to mention here that the copies of the record was received by the appellant on 12.01.2024 and even as such no deliberate delay stands occurred and therefore, the present application for condonation of delay needs to be considered. 5. That in the aforementioned facts and circumstances the Appellant herein respectfully prays for condonation of delay in filing this present D.B. Appeal. It is most respectfully and humbly submitted and prayed that in the interest of justice the delay may be condoned in the light of the above mentioned prayed that the application may kindly be allowed in the interest of justice and the delay caused in filing of the appeal may be condoned by the Hon'ble Court and the appeal may be heard on merits; I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 3 Any other appropriate order of direction, which this Hon'ble Court considers just and proper in the facts and circumstances of this case, may kindly be passed in favour of the appellant.” 2.1 During the course of hearing, left the decision on the condonation petition upon the bench and prayed that Court may decide the issue as deem fit in the interest of justice. 2.2 We have heard both the parties and perused the materials available on record. The Bench Noted that the assessee has consulted in time for filling the appeal but on account of the misadvise of the counsel that the certified copy of the order was required. But in fact since the order of the ld. CIT(A) received in online mode digitally signed there is no requirement of certified copy. These process of undertaking the wrong believe has caused the delay of 50 days. Which based on the set of facts is considered as reasonable cause and we concur with the submission of the assessee. Thus, the delay of 50 days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause. 3. In this appeal, the assessee has raised following grounds: - I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 4 “1. That the learned Appellate Below have failed to consider the appropriate nature of income and that the Assessee has rightly treated the income to accrue agricultural income and therefore, the learned Appellate Authority Below have failed to consider the classification made by the Authority. 2. That the learned CIT (A) have failed to consider the correct prospective in the matter as the bonafides attached to the Assessee cannot be disputed on the count of the fraud committed with the Assessee and therefore, the finding were arrived by the authority have been arrived at in a mechanical manner and without proper application of mind. 3. That the authority below have failed to consider the explanation accorded by the assessee in as much as the revenue record stands produced before the authorities below and as such, it has not been found that the revenue record produced is transpiring the transaction to be forged in any manner. 4. That the prevalent practice of maintaining the stock and keeping the stock in reserve could not have been questioned by the authorities below, there cannot be a boundation as to the selling of stocks to transpire in a same year and hence, the authorities below have failed to consider the fact of maintenance of stocks and have thus, arrived at a finding that was beyond the purview of the jurisdiction exercised by the authorities. 5. That the learned Authorities below have failed to consider the fact that the land has always been cultivative in its very nature and as such was not in capable of generating the income under question which remains the pre- dominance source of income arising to the Assessee and hence, the finding arrived by the authorities below deserves to be set aside. 6. That the preponderance of probability theory would also goes in favour of the Assessee as much as the only pre-dominant income with the Assessee was that of agriculture and no other source of income has been brought on record by the assessing officer and thus, it cannot be disputed that the Assessee was engaged in any other profession or business. Hence, the explanation accorded by the Assessee could not have been denied on the count of demonetization. 7. That the Assessing Officer have itself proceeded on presumption of sources other than agriculture income to which effect no finding stands attached even by the CIT(A) and therefore, the standards of two as required I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 5 could not have been solely based on the presumption of receipt produced by the Assessee. 8. That no amount of presumption as against the bonafide of assessee can be brought under question as the assesses has itself participated in fair and genuine manner and therefore, the presumption as drawn upon by the Income Tax Authorities remains unsustainable. 9. That the Income Tax Authority Below have failed to consider the statement made by the Assessee and its witness and have merely relied on a selective portion as against the reading the statement as a whole which itself shows the mechanize approach undertaken by the Authorities and hence, the impugned orders as well as the addition of income deserves to be set aside. 10. That the cultivators himself have produced on record in the capacity of witness who has justified the transaction and as such there remains nothing that would be attached with the intent to defraud of a wrongful gain or as much as with terms of misrepresentation and hence, the finding so arrived by the authorities deserves to be quashed and set aside. 11. That the learned authorities have failed to consider the equitable practice and the principle applicable in the present circumstances and hence, the addition of income needs to be deleted. 12. That the judgment relived by the CIT(A), nowhere relates to the principle applicable in the present case and therefore, the legal principles relied upon by the authorities below could not be read against the Assessee and hence, on the count of non-applicability of proper law, the impugned order as well as the addition of income deserves to be quashed and set aside. 13. That the bank account of the Assessee stands produced before the authorities below and even, on that count nothing transpire before the authorities so as to add any other source of income. Therefore, the finding arrived is completely beyond the material available on record and hence, the appeal deserves to be accepted. 14. That the learned assessing officer eared in passing the order under order 143(3) and made addition under section 69(a) without adopting the true interpretation of the provision. Hence, the assessment order deserves to be quashed and set aside. 15. That the receipts submitted below to the Assessing Officer were I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 6 bonafidely trusted by the Assessee on the count of illiteracy and to no extent, any transaction that remain suspicious and an act to deceive the authorities stands taken by the Assessee thus, the finding of the assessing officer that the receipt so submitted was bogus and thus, cannot support the transactions therefore, cannot be accepted and thus, the assessment order deserves to be quashed and set aside.” 4. Succinctly, the fact as culled out from the records is that the assessee had filed her return of income for A.Y 2017-18 on 02/08/2017 declaring total income of Rs. 3,26,540/-. The source of income of the assessee is rent and agricultural income earned by the assessee. After the filling the return of income the case of the assessee was selected for complete scrutiny based on large cash deposited during the demonetization period. During the assessment proceeding the ld. AO issued a show cause notice dated 01.10.2019 to the assessee asking to explain the source of cash deposited into the bank account maintained by the assessee with Oriental Bank of Commerce. The assessee has deposited a sum of Rs. 14,75,000/- in to her bank account. In response the ld. AR of the assessee submitted the receipt of sale of agricultural produce approved by the office of the Krushi Upaj Mandi Samiti Shri Vijaynagar District, Ganganagar. The ld. AO issued letter u/s. 133(6) to that Mandli asking the details of the sale bill produced by the assessee. In response mandli samiti stated that the assessee has sold the agricultural produce with the firm is not recognised with them and there I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 7 is no corresponding cess collected by the mandli for the bills were produced by the assessee. Based on this information the ld. AO noted that the assessee has submitted the forged bill in support of the agricultural income so as to justify the cash deposited into the bank account by the assessee in demonetisation period. The ld.AO based on these set of facts issued summons to the assessee and her statement was recorded by the ld. AO. The assessee submitted the details of the agricultural land owned by her and details of the produce from the said land was submitted. The assessee also submitted that a person named “Pappu” looks after the agricultural activity in the firm of the assessee. He lives in the firm from so many years. (Q.11). When the assessee confronted about the details on the agricultural produce, she stated that the assessee is not much aware, but the Mr. Pappu who looks after the firm will be able to give those details. Vide question no. 17 the assessee was confronted that as per Khasara / Girdavari record the assessee has not produced the sarso but the bill suggest of sale of sarso. Here also the assessee replied that the same is known to Mr. Pappu. The assessee was also confronted on the issue of sale bill upon which the agricultural mandli raised doubts that the firm issued bill has not collected the cess. Here also the assessee said that the Mr. Pappu is aware about the sale bill as he went to sell the product and has collected I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 8 the records. At last the assessee stated that she has Blood Sugar and pressure and high tension illness. The ld. AO then went to record the statement of the Mr. Pappu. In that statement he confirmed to have employed and working on behalf of the assessee. He also stated that the agricultural produce were taken away by the person from the firm and therefore, he is not much aware about that aspect of the matter. Even he has confirmed that the weight is also conducted in his presence in the firm and it is not that same person come to collect the goods, but different person come to collect the different goods. He stated that I inform the assessee over phone about the sale of agricultural produce. The ld. AO confronted to Mr. Pappu and stated that out of the bill so produced wherein the name of Hansaraj , Jitendra and Hemraj is written whether he knows these persons. He stated that does not know these persons but he confirmed to have sold the goods (question 31). Mr. Pappu also could not give the vehicle number which were used to transport those goods sold by the assessee. But at the same time he confirmed that the sale is supported the red coloured slip (question 26). The ld. AO also recorded the statement of her son Saurabh Kubba where in replied the question raised by the ld. AO. The ld. AO noted that the assessee does not know anything towards the crop produced and sold. The ld. AO noted in the order that based on the hearsay a I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 9 information he has, he came to know that the husband of the assessee Shri Ravikumar was running a concern M/s. Ravikumar Kubba who is engaged in the aadatiya activity. Mr. Ravikumar died in recent past and may to cover up the undisclosed income of that concern the assessee as coloured the story of the agricultural income and sale of produce bills which are not correct and the money deposited in the KCC account is undisclosed income to the extent of Rs. 10,75,000 ( 14,75,000 sale of produce less agricultural income offered by the assessee in the return of income). The ld. AO also added a sum of 50,000 being the deduction claimed by the assessee under chapter VIA. The reason advanced by the ld. AO that the assessee has claimed the deduction on loan taken on rented premises which was not considered and added in the income of the assessee. 5. Assessee on being aggrieved from the order of ld. AO preferred an appeal before the ld. CIT(A)/NFAC. Apropos to the grounds so raised by the assessee the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below: “[1.6] Discussion of facts and decision on merits:- While adequate opportunities have been provided during the assessment proceeding to explain, with supporting documents, the nature and source of cash deposited in the appellant's bank account amounting to Rs. 11,75,000/-. the appellant apparently gave a summary generic response and had not availed those opportunities to explain satisfactorily the genuineness of cash I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 10 credits, and the nature and source of cash deposits in bank accounts during the demonetization period. In the absence of the same, the AO had no option but to pass the assessment order u/s 143(3) of the Act with the afore- mentioned additions to the total income of the appellant. Against the said order, the appeal was filed on 8/1 / 2020 Since then, no further details have been provided. In Form-35 under Pt. 11, Statement of facts is reproduced here as under: "AS PER ASSESSMENT ORDER" Except for the statement made above in the appeal memo, the appellant had not provided any details regarding the nature and sources of cash deposits in her bank account along with the documentary evidences to explain to the satisfaction of AO or this office to claim the relief as sought in the grounds of the appeal. With regard to ground no. 3 wherein the application of section 115BBE was questioned, the issue is dealt with based on the legality involved in all such cases. It is noted that there are two limbs to this issue. One is the application of Section 115BBE per se and the second is the application of the rate of 60% on section 68/69/69A/69B or 69C cases for FY 2016-17 while the rate enhancement was introduced through Taxation laws (Second Amendment Act), 2016 which received the President's accent on 15 December 2016 but was applicable for AY 2017-18. With respect to the first question, there is no dispute or doubt because the addition made u/s 69A of the Act, section 115BBE applies w.e.f. 1.4.2013. In regards to the applicability of 60% rate for AY 2017-18, the Hon'ble Kerala High Court in the case of Maruthi Babu Rao Jadav, supra, and the Hon'ble Kerala High Court has held as under:- "12. The assessee contends that the seizures were made prior to the amendment. The affidavits admitting the ownership of amounts seized were also submitted prior to the amendment. The assessee was not aware of the enhanced tax liability when the admissions were made before the authorities. The assessee has also made an attempt to relate the amendments to the demonetization of the specified currencies announced on 8-11-2016 which contention we reject at the outset. The subject amendments which are relevant for our consideration have no direct link with the demonetization introduced or the taxation and investment regime of Pradhaan Mantri Garib Kalyan Yojana 2016 brought in under Chapter IX A of the 2nd amendment Act. The 2nd amendment Act as is clear from the Statements of Objects and Reasons, was to curb, evasion of tax and black money as also plug loopholes in the IT Act and to ensure that defaulting assessees are subjected to higher tax and stringent penalty provision. Both the measures spoken of herein were to further the said objects and there cannot be any nexus assumed nor is it discernible. I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 11 13. Section 115 BBE was inserted by Finance Act 2012 w.e.f 1-4- 2013. As on 1-4-2016 the financial year in which the subject seizures occurred Section 155BBE provided for 30% tax on income referred to in Sections 68, 69, 69A, 69B, 69C and 69D. The same was amended by the 2nd Amendment Act; w.e.f. 1-4-2017, enhancing the rate to 60%. Hence there was no new liability created and the rate of tax merely stood enhanced which is applicable to the assessments carried on in that ye.... The enhanced rate applies from the commencement of the assessment year, which relates to the previous financial year." It is also noted from the taxation law, Second Amendment Act, 2016 that the Income-tax payable shall be the aggregate of the amount of income-tax calculated on the income referred to clause (a) and clause (b) of section 115BBE(1) of the Act at the rate of 60% w.e.f. 1-4-2017 that means from assessment year 2017-18 relevant to financial year 2016-17 rate of tax will be at sixty percent. In our view and as held by Hon'ble Kerala High Court, there was no new liability created and the rate of tax merely stood enhanced which is applicable to the assessment year 2017-18. The enhanced rate applies from the commencement of the assessment year 2017-18, which relates to previous financial year 2016- 17 as the case in the present assessee and not on the date of commencement of the amendment. The reasoning for the same is wat the date of amendment on which an amendment comes into force is the date of the commencement of the amendment. It is read as amended from that date. Under the ordinary circumstances, and Act does not have retrospective operation on substantial rights which have become fixed before the date of the commencement of the Act. But, this rule is not unalterable. The legislature may affect substantial rights by enacting laws which are expressly retrospective or by using language which has that necessary result. And this language may give an enactment more retrospectivity than what the commencement clause gives to any of its provisions. When this happens the provisions thus made retrospective, expressly or by necessary intendment, operates from a date earlier than the date of commencement and affect rights which, but for such operation, would have continued undisturbed. This view has been held by Hon'ble Supreme court in the case of Ahmedabad Mfg. and Calico Printing Co. Ltd. v. S.G. Mehta, ITO [1963] 48 ITR 154. Even Hon'ble Kerala High Court in the case of Bhagavathy Tea Estates Ltd. v. State of Kerala [1990] 50 Taxman 180/[1989] 179 ITR 508 (Ker.) held that the rate or rates prescribed by a Finance Act is or, subsequently, changed by passing a finance (amendment) Act having retrospective effect from the date from which the original Finance Act was passed or enforced. In such circumstances, the changed rate or rates of tax is to be applied for the relevant Assessment Year. I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 12 The above legal position was confirmed by ITAT CHENNAI BENCH 'B' in the case of Karthick Natarajan v. Deputy Commissioner of Income-tax, International Taxation* [2023] 154 taxmann.com 136 (Chennai - Trib.) "Accordingly, we are of the view that in the instant case before us the provisionsofSection 115BBEofthe Act as amended by second amendment Act bythe Taxation Laws (second amendment) Act, 2016 will apply w.e.f 1-4-2017 on enhanced rate of tax @60% instead of @30%. The enhanced rates applies from the commencement of the assessment year relevant to previous financial year. In this case, this applies to Financial Year 2016-17 relevant to Assessment Year 2017-18. Hence, we find no force in the arguments of the Ld. Counsel and hence same are rejected. This issue is decided in favour of Revenue and against assessee." In the light of the judicial pronouncements, the grounds of appeal no.3 of the appellant is dismissed. With respect to Gr. No 5 where the appellant claimed that section 68 is not applicable on bank deposit and bank statement does not come under the definition of books of account, the legal position based on the facts and circumstances of this case are examined below. For ease of understanding, section 69A is reproduced as under: - "Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or valuable article and such money, bullion, jewellery or valuable article is recorded in the books of accounts, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or valuable article or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and value of the bullion, jewellery or valuable article may be deemed to be the income of the assessee for such financial year." Section 69A therefore requires fulfilment of twin conditions: - (i) During the financial year, the investments/ money/bullion/article/valuable thing is not recorded in books of accounts, if any, maintained by him for any source of income, AND, (ii) Assessee fails to offer satisfactory explanation about the nature and source thereof. The expression "not recorded in the books of accounts, if any, maintained by him for any source of income" in section 69A clearly indicates that by the use of words 'if any 'in above expression, the section is also applicable in cases where the assessee has nothing at all for a source of income. The section envisages that if the books of accounts are not maintained, then the onus will I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 13 be on assessee to prove the genuineness of the investments by some other evidence to show that such investment was out of disclosed source. For e.g., if an assessee is found to be in possession of investment/asset/cash received and claims that such investments are out of capital receipt in kind/cash and maintains no books of accounts for such source, then the assessee can still be falling in the sweep of section 69A if the explanation offered by her is unsatisfactory. Section 69A can be invoked, once the source is unexplained even if the other condition of not recording in books of accounts are not fulfilled as the assessee does not maintain books of accounts. In this context, following decisions are of relevance: R. Mallika Vs CIT [2017] 79 taxmann.com 117 (SC) where Hon'ble Supreme Court dismissed SLP against Madras High Court's ruling that where assessee had not discharged burden as regards source from which investment had been made, investment in property was an unexplained investment and same was rightly added to income of assessee. CIT Vs R. Mallika [2013] 36 taxmann.com 231 (Madras)/[2013] 219 Taxman 244 (Madras) where Hon'ble Madras High Court held that where assessee had purchased a property for Rs. 22 lakhs and she had not discharged burden as regards source from which investment had been made, investment in property was an unexplained investment and same was rightly added to income of assessee. Fakir Mohmed Haji Hasan Vs CIT [2002] 120 Taxman 11 (Gujarat)/[2001] 247 ITR 290 (Gujarat)/[2001] 165 CTR 111 (Gujarat) where Hon'ble Gujarat High Court held that scheme of sections 69, 69A and 69C shows that where nature and source of investments or source of acquisition of money, bullion, etc., owned by assessee are not explained satisfactorily and same are not recorded in books of account or expenditure incurred is unexplained, then same may be deemed to be income of such assessee and it would not be possible to classify such deemed income under any of heads mentioned in section 14 and, consequently, no question of giving any deduction under provisions which correspond to such heads would arise. The AO made additions LS 69A. Tribunal agreed with the AO as the assessee fails to explain the source of investment in gold. The Hon'ble High Court held that there was no fault in the Tribunal's decision as the assessee did not furnish any explanation about the source of investment in the gold. Mahabeer Prasad Jain Vs ACIT [2017] 88 taxmann.com 9 (Allahabad)/[2018] 253 Taxman 152 (Allahabad)/[2017] 399 ITR 600 (Allahabad) where Hon'ble Allahabad High Court held that where assessee had purchased drafts by depositing cash but failed to provide source of said cash utilised to make such investment, additions made under section 69 was justified I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 14 Amita Kochar Vs ACIT [2017] 79 taxmann.com 432 (Patna)/[2016] 389 ITR 345 (Patna) where Hon'ble Allahabad High Court upheld addition where assessee, in block return, did not disclose total gold found during sealh nor did it give any reasonable explanation therefor and even figures given in belated explanation did not match with gold jewellery actually found in assessee's possession Vijay Kumar Saraf Vs ITAT [1996] 85 Taxman 465 (Madhya Pradesh)/[1997] 226 ITR 860 (Madhya Pradesh) Certain jewellery and ornaments seized during raid on business premises of assessee were claimed to be assets of ancestral business of assessee's father. Assessee's aforesaid plea having not been pressed before tax authorities nor substantiated by any material evidence. Hon'ble MP High Court held that Tribunal had rightly upheld assessment by treating value of seized assets as also purchase of scooter as unexplained investments of assessee within meaning of section 69. Sukh Ram Vs ACIT 159 Taxman 385 (Delhi)/[2006] 285 ITR 256 (Delhi)/[2006] 204 CTR 336 where Hon'ble Delhi High Court held that where pursuant to a search conducted at residential premises of assessee, huge sum of cash was found, for which assessee explained that said cash belonged to certain organisation but did not bring any material on record to substantiate his explanation and, moreover, verification of books of account of said organization showed no connection with cash recovered from assessee, in said circumstances assessee was to be treated as owner of said cash, and same was to be added to income of assessee under section 69A. In the instant case, the appellant has failed to discharge the initial onus of explaining the source of funds for deposits appearing in the bank account of the appellant. The AO therefore rightly added this amount to the income of the under Section 69A r.w.s 115BBE of the Act. In the light of the above, it is found unnecessary and imprudent to isturb the order of the AO and his findings. Therefore, the impugned assessment order is upheld and no interference is called for. [2] Accordingly, all the grounds of appeal are dismissed.” I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 15 6. Feeling dissatisfied with the order of the ld. CIT(A). The assessee preferred the present appeal on the ground as reproduced hereinabove. To support the various grounds so raised by the ld. AR of the assessee, has filed the written submissions and the same is reproduced herein below: (A) FINDING AS TO PREPONDERANCE OF PROBABILITY THEORY 1. That the appellant is preferred the present appeal against the order dated 15.11.2023 passed under section 250 of the Income Tax Act, 1961 whereby, the order dated 31.10.2019 was confirmed adding income to the tune of Rs.11,25,000/- inclusive of unexplained money under section 69(a) amounting to Rs. 10,75,000/- and section ATC exemption amounting to Rs.50,000/-. 2. That in order to gain context on the factual aspect of the case, the following reference under the Income Tax Act are relevant :- Section 2(1)(a) defines Agricultural Income which includes itself any rent or revenue derived from rent which is situated in India and is use of Agriculture purpose. Further, the definition also includes any income derives from such land which is situated in India and is use for Agriculture purposes, by agriculture itself, performance by a cultivator or receiver of rent-in-kind of any process employed by the cultivator or receiver to render the produced rate or receive to be taken to market and further includes the sale by cultivator or received for rent-in-kind or produced raised or received in respect of which no process has been performed other than the process of nature describe in Paragraph-II of Sub Clause (b) of the definition. Lastly an income derived from a building owned and occupied by the receiver of the rent or revenue officers rent or occupied by the cultivator or receiver by the rent-in-kind with respect to the rent or proceeded wherein, process is mentioned in paragraph II & III as prescribed. 3. It is further relevant to consider the provisions of Chapter-IV that includes the heads of income u/s 14 for the purposes of charge of Income Tax and the computation of total income to be inclusive and limited to :- (A) Salaries, (B) Income from house property (C) profit and gains of business or profession (D) Capital Gain and (E) Income from other sources. That it is to this effect that it is required to ascertain that the income other than the agriculture income is to arise only from the name sources on which a charge is created u/s 14 and no more. In the present proceeding the finding arrived by the Assessing Officer as well as the respected Commissioner Income Tax, nowhere discloses that as to the addition of income done in the income of Assessee have infact arise from the sources mentioned under Section 14. In I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 16 the lack of such finding, the addition so arrived could not have been infact reached and it is to this effect that the impugned orders deserves to be quashed and set aside. 4. That the issue patently relates to the preponderance of probability theory wherein, the predominant income from the Assessee would in all probabilities should be deemed to arise from the predominant income of the nature i.e. in the present case, the Agriculture Income. It is important to note that by no means any other sources of income stands highlighted by the Assessing Officers and it is not in dispute that the Assessee was not engaged in any business or profession so as to excludes the Income arising under the definition of Agriculture. Hence, the sources of income in any manner whatsoever could only have eminent from Agriculture Income and hence, the explanation accorded by the Assessing Officer could by no means overshadowed the preponderance of probability theory and could not have infact stand confirmed by the respected commission. 5. That to this effect, the order of learned ITAT, Dehradun in ITA No.36/DDN/2022 "Choundary Mange Ram Panwar Vs. Income Tax Officer Ward-1(3)(4), Roorkee is produced herewith. (B) FINDING AS TO BOGUS TRANSACTION 1. That the Assessing Officer has throughout relied on the fact colorized by the cash deposited during the demonetisation period and have restrained the finding as on the questionnaire with the Assessee. That the bare reading of t eh questionnaire incorporated in the Assessing Order reveals the very nature of the transaction to be done only at the instance of the cultivator namely Pappu. Further, in totality the Assess has clearly established that the transaction that have been transpired remains between the cultivator and the same so made. That consequently, the learned Assessing Officer have further relived on the questionnaire of Sudesh Kumar @ Pappu – The Cultivator, who has infact ascertain the receipts of transactions, now the fact that the transactions was questionable to the extent of Assessee could not have infact being arrived and therefore, the finding that the transactions with the firm that was none-existing could not have related to the assesse and the finding that the Assessee to any extent played a role to evade or meaningfully furnish a written so as to commit a fraud towards remedy stands completely misplaced and hence, by no means, the transactions could stands question at the stands of the Assessee and hence, the addition of the amount so arrived is completely misplaced. It is also relevant to note here that throughout the lifetime of the Assessee no other sources of income that arising from the land stands praised and infact it also remain out of question to dispute the nature of the land etc. where the land revenue record produced clearly marks the land to be attributable to revenue collection then, by no means, the documents of the revenue department would stands disputed therefore, in totality the Assessee has I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 17 discharge its burden which has been failed to be consider by the Assessing Officer as well as the respective Commission. (C) MISCELLANEOUS SUBMISSIONS 1. That the receipts submitted below to the Assessing Officer were bonafidely trusted by the Assessee on the count of illiteracy and to no extent, any transaction that remain suspicious and an act to deceive the authorities stands taken by the Assessee thus, the finding of the assessing officer that the receipt so submitted was bogus and thus, cannot support the transactions therefore, cannot be accepted and thus, the assessment order deserves to be quashed and set aside. 2. That the learned Appellate Below have failed to consider the appropriate nature of income and that the Assessee has rightly treated the income to accrue agricultural income and therefore, the learned Appellate Authority Below have failed to consider the classification made by the Authority. 3. That the learned CIT (A) have failed to consider the correct prospective in the matter as the bonafides attached to the Assessee cannot be disputed on the count of the fraud committed with the Assessee and therefore, the finding were arrived by the authority have been arrived at in a mechanical manner and without proper application of mind. 4. That the authority below have failed to consider the explanation accorded by the assessee in as much as the revenue record stands produced before the authorities below and as such, it has not been found that the revenue record produced is transpiring the transaction to be forged in any manner. 5. That the prevalent practice of maintaining the stock and keeping the stock in reserve could not have been questioned by the authorities below, there cannot be a boundation as to the selling of stocks to transpire in a same year and hence, the authorities below have failed to consider the fact of maintenance of stocks and have thus, arrived at a finding that was beyond the purview of the jurisdiction exercised by the authorities. 6. That the learned Authorities below have failed to consider the fact that the land has always been cultivative in its very nature and as such was not in capable of generating the income under question which remains the pre- dominance source of income arising to the Assessee and hence, the finding arrived by the authorities below deserves to be set aside. 7. That the preponderance of probability theory would also goes in favour of the Assessee as much as the only pre-dominant income with the Assessee was that of agriculture and no other source of income has been brought on record by the assessing officer and thus, it cannot be disputed that the I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 18 Assessee was engaged in any other profession or business. Hence, the explanation accorded by the Assessee could not have been denied on the count of demonetization. 8. That the Assessing Officer have itself proceeded on presumption of sources other than agriculture income to which effect no finding stands attached even by the CIT(A) and therefore, the standards of two as required could not have been solely based on the presumption of receipt produced by the Assessee. 9. That no amount of presumption as against the bonafide of assessee can be brought under question as the assesses has itself participated in fair and genuine manner and therefore, the presumption as drawn upon by the Income Tax Authorities remains unsustainable. 10. That the Income Tax Authority Below have failed to consider the statement made by the Assessee and its witness and have merely relied on a selective portion as against the reading the statement as a whole which itself shows the mechanize approach undertaken by the Authorities and hence, the impugned orders as well as the addition of income deserves to be set aside. 11. That the cultivators himself have produced on record in the capacity of witness who has justified the transaction and as such there remains nothing that would be attached with the intent to defraud of a wrongful gain or as much as with terms of misrepresentation and hence, the finding so arrived by the authorities deserves to be quashed and set aside. 12. That the learned authorities have failed to consider the equitable practice and the principle applicable in the present circumstances and hence, the addition of income needs to be deleted. 13. That the judgment relived by the CIT(A), nowhere relates to the principle applicable in the present case and therefore, the legal principles relied upon by the authorities below could not be read against the Assessee and hence, on the count of non-applicability of proper law, the impugned order as well as the addition of income deserves to be quashed and set aside. 14. That the bank account of the Assessee stands produced before the authorities below and even, on that count nothing transpire before the authorities so as to add any other source of income. Therefore, the finding arrived is completely beyond the material available on record and hence, the appeal deserves to be accepted. 15. That the learned assessing officer eared in passing the order under order 143(3) and made addition under section 69(a) without adopting the true interpretation of the provision. Hence, the assessment order deserves to be quashed and set aside. I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 19 Therefore, it is most humbly and respectfully prayed that the further proceedings in pursuance of the impugned order may kindly be stayed until the pendency of the present Appeal.” 7. The ld. AR of the assessee in addition to the written submission submitted that the ld. AO has tried to bring on record by huck or cocks to disbelieving the fact placed on record by the assessee to justify the case deposited into the bank account. The ld. AO has not disputed the holding of land growing of crop and the person who is taking care of agricultural Mr. Pappu the statement of the assessee Mr. Pappu and his son and his representative of the agricultural purchase Krishi Upaj Mandi, Shrivijaynagar was also recorded. All these statements nowhere established that the assessee does not have the agricultural income to drive home to support the argument. He referred the decision of the Co- ordinate Bench of Dehradun in ITA No. 36/DDN/2022 and decision of Co-ordinate Bench of Indore in ITA No. 9/IND/2022 dated 23.06.2023 and other more decision wherein it has been held that when the assessee do not have any other source of income and the assessee substantiated the agricultural income by way of the evidence the source of income in any manner whatsoever given only emanate from agricultural income only. I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 20 8. Per contra, the ld. DR decided who has filed lower authorities. The ld. AR vehemently argued that the ld. AO has in as much as 32 pages past a detailed order recording statement of the assessee his son Mr. Pappu and the representative of the agricultural mundly so as to establish that the bills in support of the cash receipt alleged to have been claimed as agricultural income is not correct based that argument that ld. DR relied upon the details finding recorded in the orders of lower authorities. 9. We have heard the parties, considered the rival contentions and also perused the decision cited to drive home to the contentions raised. In this case, the bench noted that the assessee has deposited cash in his bank account maintained with Oriental Bank of Commerce, KCC account a sum of Rs. 14,75,000/- and claimed that the same is supported by the receipt of sale of agricultural produced. The receipts were issued bearing name of the Krishi Upaj Mandi, Shri Vijaynagar having the stamp and serial number, wherein the name of seller, nameof broker and the details of the sale of items made. The ld. AO issued latter u/s 133(6) and confirmed the invoices produced by the assessee, wherein it was informed that the same are not approved by the agricultural Mandli. Upon receipt of this information the statement of I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 21 assessee his son and Mr. Pappu was recorded by the ld. AO, wherein the ld. AO confronted about the fact that whether the invoices and the agricultural activities done by the assessee is genuine or not. It is not under dispute that the assessee is holding the agricultural land and the assessee also undertake the agricultural activity as it is evident from Khasra/Girdawati filed by the assessee and the ld. AO also considered the source of the assessee as agricultural activity in part. The ld. AO only disbelieved the income of the assessee on part, based on the information confirmed by Krishi Upaj Mandi wherein he stated that the bills invoices are not approved by them and the party who has issued the bill has not paid the cess based on that aspect of the matter the ld. AO drawn inference that these invoices are coloured so as to justify to cash deposited by the assessee in his KCC bank account maintained with the oriental bank of commerce bank as genuine cash transaction. The ld. AO also based on hearsay noted in the assessment order that the money so deposited may be the income of the her [ assessee’s ] husband who was engaged in the Aadat work of agricultural activities. He further noted that this also may be the income of her husband and during so the said income as genuine. The assessee has coloured the story of sale of agricultural produced. The ld. AO based on this set of examination of facts in the assessment proceedings he added a sum of I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 22 Rs. 10,75,000/- out of same sale of agricultural produce of Rs. 14,75,000 as undisclosed income of the assessee. The ld. CIT(A) also confirmed the view of ld. AO. Aggrieved from those orders of the lower authority the assessee is in appeal. The ld. AR vehemently argued before us that based on the information placed on record, it is not under dispute that the assessee is having the only source of income and that is agricultural income. Even on the same set of evidence the ld. AO has partly considered as income of the assessee. While making the addition the ld. AO recorded statement of Mr. Pappu, who handles the affairs of his agricultural land on sharing basis. The ld. AO also placed on record that Mr. Pappu was handling the activities related to the agricultural work and the issue of the bill being genuine or manipulated invoices is the responsibility of Mr. Pappu and not of the assessee as it is an evident from the record and various statements recorded by the AO. During the course of assessment proceedings, it is very much clear that the assessee has his son and his relative (Buwa) holding 50 bighas of agricultural land and the assessee is having facility for storage of agricultural produce. Even the Krushi Upaj Mandli based on the set of facts placed on record has not lodged any compliant for enquiry. Considering all these set of facts merely invoices which are not of registered firm or a person and having not paid agricultural cess, the I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 23 same cannot be considered as non genuine. In support of the contention our attention was invited to the various judgement of Co-ordinate Bench cited by ld. AR of the assessee. Out of the various judgment so cited and submitted one of the judgement which is relied is in the case of Shri Chaudhary Mange Ram Panwar vs. ITO in ITA No. 36/DDN/2022 dated 23.06.2023 wherein the Co-ordinate Bench held as under:- “It is also crucial to note that preponderance of probability theory would go in favour of the assessee in the instant case. The predominant income available with the assessee is only the agricultural income. No other source of income is brought on record by learned Assessing officer and it is not in dispute that the assessee is not engaged in any business or profession. The source of income in any manner whatsoever could only emanate from agricultural income. Hence, the overall explanation given by the assessee fro explaining the cash deposits as emanating out of the sale of car and agricultural receipts need to be accepted. There is no other source available with the assessee which would have enabled him to earn income.” 10. The other decision relied upon by the ld. AR of the assessee wherein the Co-ordinate Bench in the case of Shri Madhusudan Dhakad Harda vs ITO in ITA No. 9/Ind/2022 dated 28.06.2022 wherein it has held as under:- “11. We have considered rival submission of both sides, perused the material held on record and considered the legal precedents cited before us. At the outset we observe that the Ld. AO has not made addition of Rs. 9,42,063/- on account of unproved agricultural income, the addition is on account of unexplained cash-deposits in the bank accounts. Therefore we have to see whether the assessee had sufficient sources to prove cashdeposits made in the bank accounts or not. In this regard, firstly we observe that the assessee is a renowned and dedicated agriculturist. On perusal of various evidences placed by Ld. AR, we find that the assessee has received so much of recognition, awards and certificates from the Government or Governmental I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 24 authorities in appreciation of agricultural activities done by him. We also observe that the assessee has submitted Bills / Vouchers to the tune of Rs. 24,49,148/- and also submitted he had made sale of crops directly to ultimate consumers for which the evidences could not be maintained. We find much weightage in the submission of assessee. This submission of assessee finds direct support from Smt. Annakkalanjiam Mathivanan ITA No. 2451/Chny/2018 (supra). Therefore, the assessee’s submission deserves credence and acceptance. Secondly, we also observe that the assessee has made a total cashwithdrawals of Rs. 33,86,980/- from his bank accounts during the year from time to time and therefore moneys were available with the assessee for making cash-deposits. On perusal of the bank-statements placed in the paper-book, we observe that the cash-withdrawals and cash- deposits have been made on various dates during the year and the pattern is such that re-deposits out of cash-withdrawals is possible. Thirdly, we also find that the assessee is having agriculture as sole source of income and there is no other source of income brought on record by Ld. AO. Since agricultural income is fully exempt, the assessee does not have any taxable income and therefore the addition u/s 69A cannot be made as decided in ITO Vs. Smt. Shahnaj Bano (supra). 12. In view of above discussion, we are of the considered opinion that the addition of Rs. 9,42,063/- made by Ld. AO u/s 69A is not sustainable. We, therefore, delete this addition.” Considering the discussion so recorded hereinabove, respectfully following decision of the Co-ordinate Bench, we are of the considered view that the addition of Rs. 10,75,000/- made by the ld. AO in the case of the assessee is directed to be deleted. Based on these discussions recorded hereinabove the appeal of the assessee is allowed. In the result, appeal of the assessee is allowed. I.T.A. No. 138/Jodh/2024 Assessment Year: 2017-18 25 Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) Judicial Member Accountant Member Ganesh Kumar, Sr.PS Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order