Case Number: ITA 412/DEL/2019
Appellant: Narayan Dutt, Panipat
Respondent: ITO, Ward-3, Panipat
Assessment Year: 2010-11
Case Filed On: 2019-01-21
Order Type: Final Tribunal Order
Date of Order: 2022-08-24
Pronounced On: 2022-08-24
Narayan Dutt, a resident individual from Panipat, filed an appeal against the order dated 01.11.2018 of the Learned Commissioner of Income-Tax (Appeals), Karnal, pertaining to the assessment year 2010-11. The dispute in the appeal centered around an addition of Rs.13,00,500 made by the assessing officer and sustained by the Commissioner (Appeals).
The case was heard by the Delhi Bench ‘SMC’ of the Income Tax Appellate Tribunal (ITAT), presided over by Shri Saktijit Dey, Judicial Member. The appellant was represented by Shri J.B. Sharma, Advocate, while the respondent was represented by Shri Om Parkash, Senior Departmental Representative (DR).
The assessee, Narayan Dutt, received a notice under Section 148 of the Income Tax Act, 1961, based on information that he had deposited Rs.51,81,000 in his savings bank account during the year under consideration. The assessing officer suspected that income chargeable to tax had escaped assessment and subsequently reopened the assessment under Section 147 of the Act. In response, the assessee filed his return of income, declaring income from other sources amounting to Rs.19,646 and agricultural income of Rs.16,50,500.
Upon completion of the assessment, the assessing officer doubted the veracity of the agricultural income declared by the assessee. The officer believed that earning Rs.16,50,500 from 3.5 acres of agricultural land was improbable and estimated the actual agricultural income to be Rs.3,50,000. Consequently, the balance amount of Rs.13,00,500 was treated as income from other sources.
The Commissioner (Appeals) upheld the decision of the assessing officer, leading to the current appeal.
During the hearing, the Tribunal reviewed the submissions and evidence presented by both parties. The Judicial Member, Shri Saktijit Dey, noted that the assessing officer reopened the assessment by considering the bank deposit of Rs.51,81,000 as escaped income. However, after evaluating the assessee’s explanations, the officer accepted the source of the deposits. The only contention was the classification of agricultural income, which the officer reclassified as income from other sources.
The Tribunal found this reclassification to be contrary to established legal principles. It cited relevant judicial precedents, including:
The Tribunal concluded that the assessing officer erred in changing the nature of the income without making any addition for the reason the assessment was reopened. This action was against the settled principles of law. Consequently, the Tribunal decided to delete the addition of Rs.13,00,500 made by the assessing officer.
The Tribunal allowed the appeal filed by Narayan Dutt, setting aside the additions made by the assessing officer and confirmed by the Commissioner (Appeals). The decision was pronounced in the open court on 24th August, 2022.
Members of the Tribunal:
Saktijit Dey, Judicial Member
For more information on similar cases and legal precedents, visit the official website of the Income Tax Appellate Tribunal of India.
Narayan Dutt vs ITO: Dispute Over Agricultural Income – ITA 412/DEL/2019
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