The Income Tax Appellate Tribunal (ITAT) Amritsar Bench, has recently, in an appeal filed before it, while deleting the addition u/s 68 of the income tax act, held that agriculturalist need not maintain books of accounts.
The aforesaid observation was made by the Amritsar ITAT, when an appeal was preferred before it by the assessee, as directed against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, [CIT (A)], passed u/s 250of the Income Tax Act 1961, dated 05.08.2021 for the A.Y. 2008-09, the impugned order being emanated from the order of the Income Tax Officer, Ward-5(4), Amritsar, (AO) , passed u/s 147 r.w.s. 144 of the Income Tax Act , dated 19.01.2016.
The issues raised in the assessee’s appeal being that the CIT(A) has erred in confirming the addition of Rs. 737948/- on account of peak cash deposited in ICICI Bank Account No 006601529228 u/s 68 without providing the benefit of opening cash in hand and agriculture income earned during the year under consideration, that the CIT(A) has erred in not appreciating that the cash was deposited in bank out of agriculture income earned by the assessee during the year under consideration, that the CIT(A) has erred in confirming the addition of Rs. 737948/- made by the AO by alleging that the assessee made a bald statement in respect of ownership of agriculture land of more than 20acres, that the observation of the CIT(A) is erroneous since the assessee had duly furnished proof of ownership of agriculture land along the bank account statement, and further that the CIT(A) has erred in not appreciating that the assessee has filed income tax returns from AY 2012-13 onwards and has duly disclosed the agriculture income ,which has not been disputed, the brief facts of the case were that the appellant was an agriculturist , owning more than 20 acres of land individually and jointly with his family at village Bhangala, who had been declaring agriculture income consistently in the returns of income filed on year-to-year basis .
It so happened that the appellant failed to file the return of income u/s 139(1) for the year under consideration, since the total income of the assessee was below the statutory limit as prescribed by the Income Tax Act, 1961. And subsequently, the case of the assessee was re-opened u/s 148, on the basis of the AIR information that the assessee had deposited cash to the tune of Rs. 10,46,000/- in his ICICI Bank Account.
The assessment was completed under section 147 r.w.s 144 of the Act, with an addition of Rs. 7,37,948/- by taking into consideration peak amount date 24.12.2017 on account of cash deposited in ICICI bank. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) uphold the order of assessment. Being dissatisfied the assessee filed an appeal before us.
The assessment was completed under section 147 r.w.s 144 of the Income Tax Act, with an addition of Rs. 7,37,948/, by taking into consideration, the peak amount date 24.12.2017 on account of cash deposited in ICICI bank. And being aggrieved by this, the assessee filed an appeal before the CIT(A), who uphold the order of assessment, thus leaving the assessee agitated to prefer the instant appeal before the Amritsar ITAT.
With Sh. Rohit Kapoor, CA, the AR for the assessee, having filed the written statement, he submitted that the appellant has filed the returns for subsequent years in which agriculture income has been declared and that the same was accepted by the department, thereby enclosing a copy of the return for A.Y. 2012-13 at page no 63-84 of APB.
He, in his argument, placed that the assessee in appeal filed the written submissions has well explained that the cash deposit was out of cash withdrawals, agriculture income and out of opening cash in hand, and further that the assessee had also furnished the land holding details, mentioning the fact that the agriculture operations were performed through tube well installed in the land.
It was also submitted by the AR that the appellant holds approximately 20 acres of land which includes self-owned land and land in the name of family members, and that the peak as calculated by the AO is not correct, thereby furnishing the cash flow explaining the source of cash deposits, while furtherplacing that the CIT(A) has, in order has stated that the appellant has neither filed any evidence in support of the claim made in the written submissions, while in reality, the appellant has duly furnished Jamabandi, mentioning the land holding details, appearing in the name of the appellant along with the family members, as was enclosed in by a copy of same at page no. 7 to 40 of the APB.
Furthermore, he added that while the CIT(A) has relied upon judgment of the Allahabad High Court in the case of Avdesh Kumar Jain vs. CIT, he has failed to appreciate that the fact of the said case is not applicable to the assessee, particularly in the circumstance where in the present case, the assessee has duly submitted the ‘Jamabandi’ mentioning the fact that the land was used for the agriculture operations. And in order to further substantiate this claim, the AR for the assessee placed that the assessee was earning agriculture income and the copies of ‘Girdawari/Jamabandis’ are enclosed at page no 7-40 of APB.
With the Counsel for the assessee adding to his arguement that as such, when the assessee has established on record that he was doing agriculture activities, in such a circumstance, no adverse view can be drawn.
And, with regard to the documentary evidence in respect of agriculture income, it was submitted by him that the there was a lag of more than 10 years and that as such, the copies of J-form could not be produced, while further adding that the non-availability of J-form cannot be a ground for making an addition where the appellant has submitted Girdawari , which clearly states that agriculture activities were done on such land.
By placing his reliance upon a number of judicial precedents, the Counsel for the assessee further argued that as per section 68 of the Income Tax Act, any sum found credited in the books of an assessee was maintained in any previous year, and that as such, the primary requirement for invoking the provisions of section 68 is, maintenance of books of accounts, thus submitting that in the present case, the assessee has not maintained any books of accounts and as such the provisions of section 68 are not at all applicable.
However, on the other hand, Sh. Ravinder Mittal, the Sr Dr, vehemently argued and relied on the orders of revenue authorities.
Hearing the opposing contentions of either sides, the ITAT commented:
“We heard the rival submission and considered the documents available in record. The asseessee is an agriculturist. The assessee owns more than 20 acres of land individually and jointly with his family at village Bhangala. The copy of ‘Jamabandi’ mentioning the ‘khasara number’ and shareholding details is enclosed at page no 7 to 40 of APB. The summary of Landholding details is enclosed separately onpage 43 of APB. That the appellant has filed the returns for subsequent years in which agriculture income has been declared and accepted by the department. The copy of return for A.Y. 2012-13 is enclosed onpage no 63-84 of APB. The nature of income of the assessee is properly depictedwhichis from agriculture. The evidence was submitted before the ld. CIT(A) by the assessee by a letter dated 13/02/2021 which is enclosed at page 1-4 of APB. The Jamabandi/Girdawari represents the nature of income of assessee as agriculturist. Further, the assessee properly raised the ground related addition U/s 68 of the Act without maintaining the books of accounts.”
“The assessee has confirmed that as an agriculturist, it is not maintain books of accounts for the impugned year. We fully relied on the order of Smt. Ramilaben B. Patel v. ITO, Ward-3, Gandhinagar. Mere possession of pass book cannot be treated as books of accounts. We respectfully relie on the order of CIT vs Bhaichand H. Gandhi. The application of Section 68 is uncalled for the assessee.”, the ITAT Panel further added.
Further rendering their observation, a coram comprising of Dr. M. L. Meena, the Accountant Member, along with Anikesh Banerjee, the Judicial Member, noted:
“In our considered view the cash deposited by assessee is income from agriculture which is not come under purview of the taxable income. The opening balance of cash was also not considered during determination of peak by the ld. AO. We set aside the order of revenue authorities. So, the entire addition amount to Rs. 737,948/- is quashed. Considering the ground, no-4 of assessee the ld. Counsel filed a calculation related to peak but the issue is remained only for academic purpose.”
Thus, allowing the assessee’s appeal, Amritsar ITAT held:
“Considering the above discussion, the Assessee’s ground no. 1 & 2 are not pressed. Ground no. 3,5,6 & 7 are allowed. Ground No. 4 is for academic purposes. Ground no.8 is general in nature. In the result, the appeal of the assessee bearing ITA No. 258/Asr/2022 is allowed.”Subscribe Taxscan Premium to view the Judgment
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