₹22.01L Cash Deposits from Agricultural Land Sale: ITAT Restores Matter to AO on Ignored Affidavits and Sale Deeds [Read Order]

The Agra bench of Income Tax Appellate Tribunal (ITAT) has restored the matter to the AO for fresh adjudication as the CIT(A) ignored affidavits on ₹22.01L cash deposits and the sale deed of the agricultural land of the farmer-assessee.

The assessee is an agriculturalist having only agricultural income. The assessee had made a cash deposit of Rs 22,01,000/- in his bank account. Since no return of income was filed by the assessee, the AO formed a belief that the income of the assessee had escaped assessment and accordingly sought to reopen the case vide issuance of notice.

Assessee, being an uneducated person and having no knowledge of operating the computer and income tax portal, could not make compliance with the notices issued by the AO, which ultimately culminated in framing of assessment, adding a sum of Rs 22,01,000/- on account of cash deposits made in the bank account as unexplained money under section 69A of the Income Tax Act. This action was upheld by the NFAC.

Aggrieved, the assessee preferred an appeal before the Tribunal. This Tribunal remanded the matter back to the file of Learned NFAC for deciding the issue afresh. The NFAC, ignoring the directions given by this Tribunal passed an order dismissing the appeal of the assessee.

The Tribunal had observed that the CIT(A) ought to have either verified the circle rates of the agricultural land from the office of the land registering authority to arrive at the correct value of the land, or should have made third-party verification regarding the value of rates of land in the vicinity or neighbourhood, instead of outrightly rejecting the additional evidence filed by the assessee.

The Tribunal also observed that the brothers of the assessee had filed affidavits in support of the fact that they had received sale proceeds from the sale of agricultural land and had given that cash to the assessee for depositing in the bank account belonging to the assessee. This affidavit has not been put to test by the revenue.

The single bench of M. Balaganesh (Accountant Member) restored the entire issue to the AO for fresh adjudication.

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