Tribunal grants relief for agricultural income, allows interest on borrowed capital, and partially accepts Revenue's appeal.

The Tribunal condoned the delay in the Revenue's appeal due to the Covid-19 pandemic. Partial relief of Rs. 2 lakhs was granted for agricultural income disallowance. Interest on borrowed capital was allowed as a business expenditure. The Tribunal directed the adoption of voluntarily admitted interest income. The decision to allow telescoping benefits for unexplained cash deposits was set aside, allowing the Revenue's appeal partly. The cross-objection raised by the assessee was deemed infructuous.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Disallowance of agricultural income.
3. Disallowance of interest on borrowed capital under Section 24(b) of the Income Tax Act.
4. Suppression of interest income.
5. Unexplained cash deposits in bank accounts.

Summary:

Condonation of Delay:
The Revenue's appeal was delayed by 80 days due to the Covid-19 pandemic. The Tribunal condoned the delay, considering the reasonable and sufficient cause presented by the Revenue.

Disallowance of Agricultural Income:
The Revenue argued that no proof of land holdings was provided. However, the Tribunal upheld the Ld. CIT(A)'s decision to grant partial relief of Rs. 2 lakhs, noting that the assessee had submitted evidence of land holdings and leased lands.

Disallowance of Interest on Borrowed Capital U/s. 24(b):
The Ld. AO disallowed Rs. 19,05,640/- claimed under Section 24(b), as it was not supported by a bank certificate. The Tribunal found that the interest was wrongly claimed under Section 24(b) but should be allowed as a business expenditure since it was used for money lending. The Tribunal upheld the Ld. CIT(A)'s decision.

Suppression of Interest Income:
The Ld. AO estimated interest at 18% on outstanding loans, while the Ld. CIT(A) adopted 12%. The Tribunal directed the Ld. AO to adopt the amount voluntarily admitted by the assessee, Rs. 10,42,193/-, acknowledging the assessee's computation and voluntary admission.

Unexplained Cash Deposits:
The Revenue contended that the Ld. CIT(A) wrongly allowed telescoping benefits for cash deposits. The Tribunal found that the Ld. CIT(A) erred in treating cash deposits from AY 2016-17 as available for the impugned year. The Tribunal set aside the Ld. CIT(A)'s order on this ground, allowing the Revenue's appeal.

Conclusion:
The appeal of the Revenue was partly allowed for statistical purposes, and the cross-objection raised by the assessee was deemed infructuous.

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