Case Number: ITA 1148/DEL/2020
Appellant: Charan Singh, Sonipat
Respondent: ITO Ward 1, Sonipat
Assessment Year: 2011-12
Result: Partial relief provided
Case Filed On: 2020-05-18
Order Type: Final Tribunal Order
Date of Order: 2021-09-30
Pronounced On: 2021-09-30
This case involves Charan Singh, a resident of Sonipat, appealing against the order of the Income Tax Officer (ITO) Ward 1, Sonipat, for the assessment year 2011-12. The appeal was heard by the Income Tax Appellate Tribunal (ITAT) and partial relief was provided to the appellant.
The appellant, Charan Singh, filed his return of income for the assessment year 2011-12. The Assessing Officer (AO) noticed that the appellant had deposited cash aggregating to Rs. 15,90,000 during the financial year 2010-11 in his bank account. The AO was of the view that these deposits were from undisclosed sources and issued a notice under Section 148 of the Income Tax Act, 1961.
The appellant raised the following grounds of appeal:
The appellant did not press Ground No. 1 during the hearing.
The appellant argued that he is a farmer and the cash deposits were from agricultural income. He submitted that he had leased out 17.40 acres of agricultural land to his brother for Rs. 5,70,000 per annum, which was paid in cash and deposited in his bank account. The appellant provided an affidavit from his brother confirming the lease agreement and the payment. The AO and CIT(A) did not accept this explanation, primarily due to the absence of a formal written agreement.
The AO estimated the household expenses to be Rs. 25,000 per month, totaling Rs. 3,00,000 per annum, and made an addition of Rs. 1,00,000 to the appellant’s income. The appellant argued that he lived in a village, and his basic needs were met through agricultural produce and livestock. Therefore, the household expenses of Rs. 1,00,000 were sufficient.
The tribunal considered the submissions and evidence provided by the appellant and the respondent.
The tribunal noted that the appellant had provided sufficient evidence to support the claim that the cash deposits were from agricultural income received from his brother. The absence of a formal written agreement was not sufficient to disregard the appellant’s explanation, especially given the familial relationship and the confirmation from the brother. The tribunal directed the AO to delete the addition of Rs. 5,70,000.
The tribunal found that the AO’s estimation of household expenses was not justified given the appellant’s lifestyle and the self-sufficiency provided by his agricultural activities. The tribunal accepted the appellant’s contention that Rs. 1,00,000 was sufficient for household expenses and directed the AO to delete the addition.
In conclusion, the ITAT provided partial relief to Charan Singh by accepting his explanations for the sources of cash deposits and household expenses. The appeal against the ITO Ward 1, Sonipat, for the assessment year 2011-12 was allowed in part.
Charan Singh, Sonipat vs. ITO Ward 1, Sonipat – ITA 1148/DEL/2020: Assessment Year 2011-12
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