VINAY KUMAR AGRAWAL,KOLKATA V. DC/ACIT, RANGE - 2, VARANASI

ITA 29/VNS/2023

AI Insights

The case involves Vinay Kumar Agrawal, who appealed against the order of the CIT(A) confirming an addition of Rs.6,80,370 to his income for the Assessment Year 2017-18, which was treated as 'unexplained money' under section 69A of the Income Tax Act. The addition was based on the difference between the lease rent claimed by Agrawal and the amount stated in the lease agreements. The Assessing Officer (AO) contended that the difference should have been claimed as agricultural expenditure, thereby reducing the agricultural income reported. Agrawal argued that the amount was not paid and thus not deductible. The Tribunal found that the AO had not provided any material evidence to support the claim that the difference was paid outside the books and had not conducted any inquiries with the lessors.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473600 (ITAT-VARANASI)
• Duration Of Justice: 1 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-09-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 06-03-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITA MEENA
• Assessee Lawyers: A.K. PANDEY
• Keywords: Set aside
• Section: 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, VARANASI BEFORE: SHRI B.R. BASKARAN, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No.29/VNS/2023 (Assessment Year :2017-18) Vinay Kumar Agrawal F-14, 156-A, Kamalalaya Centre, Lenin Sarani Kolkata – 700 013 West Bengal Vs. Ram Kripal Meena DC/Asst. Commissioner of Income Tax Range – 2 Varanasi PAN/GIR No.ACEPA7259H (Appellant) .. (Respondent) Assessee by Shri A.K. Pandey, Advocate Revenue by Smt. Kavita Meena, Sr. DR Date of Hearing 10/09/2024 Date of Pronouncement 15/10/2024 आदेश / O R D E R PER B.R. BASKARAN (A.M): The assessee has filed this appeal challenging the order dated 30/01/2023 passed by ld. CIT(A), NFAC, Delhi and it relates to the A.Y.2017-18. 2. The assessee is aggrieved by the decision of ld. CIT(A) in confirming the addition of Rs.6,80,370/- made by the AO u/s.69A of the Act. ITA No.29/VNS/2023 Vinay Kumar Agrawal 2 3. The facts relating to the case are stated in brief. The assessee filed his return of income for the year under consideration declaring total income of Rs. 15,78,090/- and agricultural income of Rs.11,88,644/-. 4. It was noticed that the assessee has taken on lease certain agricultural lands from three persons. Upon examination of the lease agreements, the AO noticed that the aggregate amount of lease rent payable by the assessee as per agreement was Rs.13,23,000/-. while the assessee has claimed lease rent of Rs.6,42,630/- only while computing the agricultural income. Accordingly, the AO took a view that the difference amount of Rs.6,80,370/- should have been claimed by the assessee as agricultural expenditure and consequently, the agricultural income should have been declared at a lower amount of Rs.5,08,274/-. 5. The assessee explained that it has not paid the difference amount of Rs.6,80,370/- to the land owners and hence the actual amount paid has been claimed as deduction. The AO took the view that even if the lease rent was not paid, the lease rent payable by the assessee should have been deducted while arriving at the agriculture income. Accordingly, he took the view that agriculture income declared by the assessee was in excess by Rs.6,80,370/- and assessed the same as „unexplained money‟ u/s.69A of the Act. The ld. CIT(A) also confirmed the same. ITA No.29/VNS/2023 Vinay Kumar Agrawal 3 6. We heard the parties and perused the record. First of all, we noticed that the Assessing Officer has not brought on record any material to show that the assessee has paid the difference lease rent of Rs.6,80,370/- outside the books of accounts. We notice that the Assessing Officer also did not conduct any enquiry from the lessors in order to find out the actual amount paid by the assessee. From the discussions made by the AO in the assessment order, we notice that the AO has only observed that the “lease rent payable” by the assessee should have been deducted for computing agricultural income. However, the above said observation may not give rise to any “unexplained money” as observed by the AO. 7. The ld. AR submitted that the method of computing agricultural income is consistent with the assessee. He submitted that agricultural sale proceeds declared in the earlier year was Rs.34.48 lakhs, while it was declared at Rs.24.68 lakhs during the year under consideration. He further submitted that net profit rate declared by the assessee for agricultural activities was equal in both the years. The Ld A.R submitted that the consistent practice followed by the assessee should not have been disturbed by the AO without bringing any contrary material. 8. We heard ld. DR on this issue and perused the record. From the facts discussed above, we are of the view that the AO has not made out any case to support his view that the assessee was having any unexplained money requiring ITA No.29/VNS/2023 Vinay Kumar Agrawal 4 addition u/s 69A of the Act. If the AO was of the view that the assessee would have paid the entire lease rents as per the lease agreement, then he should have conducted necessary enquiries to substantiate its views. However, the AO did not do so, meaning thereby, the AO has arrived at his conclusions on surmise and conjecture. On the contrary, the Ld A.R has furnished details to show that the assessee has been following a consistent practice in arriving at the net agricultural income. Accordingly, we are of the view that the impugned addition made by the AO is not sustainable. Accordingly, we set aside the order passed by the ld. CIT(A) on this issue and direct the AO to delete the impugned addition. 9. In the result, appeal filed by the assessee is allowed. Order pronounced on 15/10/2024 by way of proper mentioning in the notice board. Sd/- (AMIT SHUKLA) Sd/- (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Varanasi; Dated 15/10/2024 KARUNA, sr.ps ITA No.29/VNS/2023 Vinay Kumar Agrawal 5 Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Varanasi 1. The Appellant 2. The Respondent. 3. The CIT(A), Varanasi. 4. CIT 5. DR, ITAT, Varanasi 6. Guard file. //True Copy// "