Rajendra Kumar Meena Vs ITO (ITAT Jaipur)
Conclusion: Where surplus money deposited by assessee as explained was required to be considered out of the agricultural land proceed and since that land proceed had already been considered while assessing the income of the assessee as exempt the remaining amount of Rs. 46,00,000/- could not be held as income of the assessee. Therefore, addition made by AO was not sustainable.
Held: Notice under section 148 was issued upon assessee by AO for reassessing the cash deposit as undisclosed income, following approval from the Joint Commissioner of Income Tax (JCIT). Various notices under Section 143(2) and 142(1) were issued from time to time. AO on perusal of the documents furnished by assessee found that assessee had shown Rs. 12,00,000/- received as cash on the sale of two agricultural lands but only deposited 58,00,000/- into his bank account. No proper explanation/reply for remaining Rs. 46,00,000/- (5800000-1200000) was furnished by assessee. Consequently, AO made an addition of Rs. 46,00,000/- in the hands of the assessee as undisclosed income. Assessee preferred an appeal before CIT(A), who dismissed the appeal noting that assessee failed to comply with the hearing notices issued by AO, which indicated that the assessee was not interested in completing appeal proceedings, and passed an ex parte order upholding the AO’s decision. Assessee contended that the cash originated from the sale of agricultural land, which was outside the scope of capital assets under section 2(14) and hence, exempt from tax, and disputed the addition of Rs. 46,00,000 by AO. Assessee also challenged the reassessment under sections 147 and 148, claiming they were illegal, barred by limitation, and conducted without proper approval or satisfaction from the competent authority citing the approval from JCIT as insufficient. It was held that the holding of agricultural land by assessee was not disputed, the payment of money was an unfortunate practice followed and there could not be any contrary proof of having other income to the extent of Rs. 46,00,000/- by the assessee thus it was a case of the assessee that buyer paid the assessee the fair value of consideration which assessee had deposited into bank account. Thus, the explanation given by assessee by submitting documentary evidence which had been partly accepted and partly disapproved. The Apex Court in the case of Sreelekha Banerjee vs. CIT (1963) 49 ITR 112 (SC) had held that the department could not by merely rejecting unreasonable a good explanation converting good proof into no proof. Thus, the contention of the assessee could not be totally brush aside and the surplus money deposited by assessee as explained was required to be considered out of the agricultural land proceed and since that land proceed had already been considered while assessing the income of the assessee as exempt the remaining amount of Rs. 46,00,000/- could not be held as income of the assessee. The bench also noted while making the addition AO did not mention any section under which that income was made chargeable to tax in the hands of the assessee. Therefore, even on that account also addition made by AO was not sustainable.
