INCOME TAX ACT, 1961

Section 69A

Income from undisclosed sources - Addition under section 69A - Cash deposits into bank account - Assessee furnished land holding papers to substantiate deposits to be made out of agricultural income

Total cash deposits in assessee's bank account during demonetization period were Rs. 7.70 lakhs. No explanation was submitted before AO and hence, AO treated the entire cash deposits as unexplained money under section 69A. Assessee furnished the land holding papers i.e., agricultural land holding owned by assessee of 5 acres and 10 acres in the name of assessee's husband. Assessee also submitted income certificate from Village Administrative Officer (VAO) certifying income per annum at Rs. 8 lakhs (Rs. 3 lakhs from assessee's land and Rs. 5 lakhs from her husband's agricultural land). Held: Village Administrative Officer was not an authority to certify the agricultural income and assessee was unable to correlate these entries with that of the deposits of cash during demonetization period. But, undeniably assessee was holding agricultural lands including her husband, i.e., 15 acres and for that, assessee might have earned agricultural income although she had no definite evidence. Also, assessee was a pure agriculturist residing in a village and selling agricultural produce in cash to petty traders who were coming to villages to procure the products of coconut. In such circumstances, assessee might have earned some Rs. 30,000 per acre and assessee's income during the year would be around Rs. 4.5 lakhs. Giving further credit, assessee might have accumulated some cash in earlier year also after allowing deduction of personal expenses, the assessee might have saved some cash. Hence, considering availability of cash with assessee at Rs. 5 lakhs, AO was directed to delete addition to the extent of Rs. 5 lakhs.

REFERRED :

FAVOUR : Partly in assessee's favour.

A.Y. : 2017-18

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