TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 1240
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.... ld. CIT(A), who vide order dated 03.02.2014 in Appeal No.Pn/CIT(A)-III/Wd-1(1),Sol/516/2010-11/698 granted partial relief to the assessee. Aggrieved further by the order of ld. CIT(A), assessee is now in appeal before us and has raised following grounds :- "1. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) erred in sustaining the addition of Rs. 23,31,000/- as unexplained income u/s 69A of the Act though it was explained that the source of funds was from agriculture including funds available from the agricultural lands owned by the assessee in his capacity as Karta of Hindu Undivided Family. 2. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in disbelieving the source of funds from which the deposits were made in the bank account and in sustaining the addition made by the Assessing Officer on conjectures and surmises which was done without giving adequate opportunity to explain the facts particularly when your appellant was not aware of the consequences of conclusions that may be drawn by the authorities. 3. On the facts and in the circumstances of the case and in law the lear....
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....bmitted by the bank, Assessing Officer noticed that though the assessee had deposited sum exceeding Rs. 10 lakhs during the relevant period, but in the Balance Sheet filed by the assessee, the Saving Bank Account did not appear either in the Balance Sheet or in the books of account. The assessee was therefore asked to explain the transactions and also furnish the relevant proofs of source of cash deposits. The Assessing Officer noted that despite various opportunities granted to the assessee, the assessee did not furnish the relevant documentary evidences in respect of cash deposits and the sources thereof. The submissions of the assessee of having earned agricultural income out of agricultural land belonging to the HUF was also not found acceptable to the Assessing Officer. The Assessing Officer therefore treated the aggregate amount of Rs. 23,31,000/- deposited by the assessee in the bank account as unexplained income under section 69A of the Act. Aggrieved by the order of Assessing Officer, the assessee carried the matter before the ld. CIT(A), who upheld the order of Assessing Officer by holding as under :- "5. I have considered the submissions made by the appellant with refer....
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.... Chincholi 213/1 Wife 0H 63R Kumthe 59/2 Wife 1H 49R Kumthe 59/1 Wife 0H 81R Total 37H 38R 5.2 At the outset, though as per the working in the afore-mentioned table, it has been claimed that the appellant's total land holding in HUF capacity is around 90 acres (corresponding to 37 Hectares 38 Ares), the lands are seen to be held either by the appellant in his individual capacity or by his wife, Mrs. Rupali Ramesh Patil in her individual capacity. The only land that is in the joint names of the appellant and his wife is land at Gat No.107, Bandalagi, Solapur district, admeasuring 9H 33R. None of the 7/12 extracts make any mention of the HUF. The appellant has not supplied the dates of purchase of these lands. Apparently, however, as the 7/12 extracts show, some of the lands were mortgaged to either the Kumthe Society, Chincholi Cooperative Society, State Bank of India, or Corporation Bank for huge amounts of loans, ranging from 1 lakh to Rs. 25 lakhs, which indicate that the loans were taken for business purposes, which have also not been clarified by the appellant. The appellant's statement that the lands were owned by the HUF cannot....
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....ltural income," which was reiterated by the Apex Court in the case of CIT vs Ramakrishna Deo (35 ITR 312). In CIT v. Raja Benoy Kurnar Sahas Roy [1957] 32 ITR 466, which is regarded as the locus classicus on the subject of agricultural income, it was held that 'agriculture' in its root sense, means 'agar', a field and 'culture', i.e., cultivation of a field. 'Agriculture' implies expenditure of human skill and labour upon land. After exhaustively discussing the various cases dealing with the subject, the Apex Court held that agriculture involved "basic operations", such as tilling of land, sowing of seeds, planting etc. and "subsequent operations", such as weeding, tending, pruning, cutting, harvesting and rendering the produce fit for market. In the present case, not a shred of evidence has been presented by the appellant either before the Assessing Officer during assessment proceedings or before me during appellate proceedings to establish that the land in question was actually being used for cultivation at any time or any "basic operations" or "subsequent operations" as explained by the Hon. Supreme Court in Raja Benoy Kumar Sahas Roy (supra}. 5.4 T....
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....owever in that case, the assessee was a Muslim lady around 20 years of age. Her explanation regarding investment in certain land at Ernakutam was that the same was sourced through the savings from the properties left behind by her mother's first husband. The AO did not accept this explanation and invoked Section 69 and assessed the investment as income from other sources. The Hon'ble Supreme Court affirmed the ITAT and High Court's views that taking into account the complete absence of resources and her age and the position in which she was placed, even when the explanation rendered may not be satisfactory, the AO was not justified in treating the investment as her own. It was held that in view of the words 'may' used in section 69 as against 'shall', Section 69 of the Income-tax Act, 1961 ('the Act') conferred only a discretion on the ITO to deal with the investment as income of the assessee and that it did not make it mandatory on his part to deal with the income as income of the assessee as soon as the latter's explanation happened to be rejected. It was held by the Supreme Court that "The question whether the source of the investment should b....
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....ale of the aforesaid land, assessee had received his share of consideration of Rs. 35,00,000/-, which was deposited in Solapur District Central Co-operative Bank. Out of the aforesaid deposits, assessee had made withdrawals for purchase of agricultural land jointly with his wife. Before us, the ld. AR has also filed a sworn affidavit of the assessee wherein inter-alia it has been contended that the deposits of cash, apart from being out of sale proceeds of agricultural produce is also out of sale of land. It is further submitted by the ld. AR that the documents pertaining to the purchase and sale of land was not filed by the assessee before the lower authorities and also could not furnish the copy of Sale and Purchase Deed of the land. He therefore submitted that the additional evidences submitted by the assessee in the form of explanation, the copy of bank statements, copy of Sale and Purchase Deed be admitted and since the source of cash deposits are fully explained, the addition be deleted. In the alternate, he submitted that the additional evidences submitted by the assessee before Hon'ble Tribunal may be sent to the lower authorities for its verification and that they be direc....
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....l Rs.35,00,000/- All the these cheques were deposited by me in my savings bank account bearing No.19337 with the Solapur District Central Co-op. Bank Ltd. Attached herewith is a copy of bank account statement of said account for the financial year 2006-07 (Annexure 'C') This statement shows deposit of cheques of sale proceeds received as per above referred sale deed dated 29th August, 2006. This very statement at annexure 'C' shows that I had withdrawn cash on 1st December, 2006 of Rs. 25,00,000/- by drawing a cheque bearing No.1102425. This amount was withdrawn with a view of buy some agricultural land. I had purchased in my name along with my wife a Farm which had cost Rs. 8,77,010/-. The remaining amount being rounded off to Rs. 15,00,000/- was deposited by me in cash in savings bank account bearing No-01/009099 referred to in the assessment order Annexure 'D' on 25th July, 2007. I had further withdrawn from The Solapur District Central Co-op. Bank Ltd. a sum of Rs. 8,31,000/- on 7th March, 2008 (Annexure 'E') page 53 and same was deposited in my account with Corporation Bank Annexure 'D' (page 52). Both these bank accounts being one with The Solapur District ....