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2018 (9) TMI 1857

..... ow the assessee has not produce anything on record to establish that how he could obtain such a high yield by spending less on expenses related to agricultural income. AO also noted that no supporting evidence to support receipts on account of agricultural income or bills in support of agriculture related expenses such as fertilizers seeds, pesticides, labour etc. were submitted which again supports the allegation and stand of the AO. Before us also the ld. AR could not show us any documentary evidence supporting the fact of expending amounts on agriculture activity and for procurement of agriculture crop therefore, the appellant could not negate the allegations and contention of the AO. AR could not show us any contrary situation or facts to compel us to hold that the observations of the authorities below are not sustainable. In this situation, we are inclined to hold that the addition made by the AO and confirmed by the CIT(A) is quite justified and based on cogent reasons and we are unable to see any valid reason to interfere with the same. Hence, the conclusion drawn by the authorities below is uphold and consequently sole ground of assessee being devoid of merits is dismissed .....

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..... enue against the common order of Commissioner of Income Tax (Appeals), Valsad ( CIT(A) for short) dated 19.08.2015 for the Assessment Year (A.Y) 2011-12. 2. The grounds raised by the Assessee read as follows: 1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in making addition of ₹ 2,05,540/- on account of agriculture income as unexplained cash credits u/s. 68 of the I. T. Act, 1961. 2. It is therefore prayed that above addition made by the Assessing Officer and confirmed by CIT(A) may please be deleted. 3. The grounds raised by the Revenue read as follows: 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 2,76,97,000/- made under u/s 69 without appreciating the factual matrix clearly brought out by the AO. 2. The Id.CIT(A) has erred in deleting the addition of ₹ 2,76,97,000/- without appreciating the fact that the source of huge cash deposit made in the bank account operated by assessee were not explained and the primary onus of proving the source were not discharged by the assessee, even though cash deposits in the .....

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..... ctricity, fuel, fertilizer, seeds, and transportation has shortly risen during the year therefore, expenses shown by the assessee were held to be under stated on lower side. The AO held that to avail production of agriculture produce shown by the assessee the expenses are quite low the assessee has not produce anything on record to establish that how he could obtain such a high yield by spending less on expenses related to agricultural income. The AO also noted that no supporting evidence to support receipts on account of agricultural income or bills in support of agriculture related expenses such as fertilizers seeds, pesticides, labour etc. were submitted which again supports the allegation and stand of the AO. Before us also the ld. AR could not show us any documentary evidence supporting the fact of expending amounts on agriculture activity and for procurement of agriculture crop therefore, the appellant could not negate the allegations and contention of the AO. 7. From the relevant part of the first appellate order pg. 32 & 33, it is apparent that the ld. CIT(A) also confirmed the addition after considering the entire facts and circumstances of the case and by observing th .....

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..... All the bank accounts were operated by the assessee. The onus to explain the deposits lies on the assessee more specifically when the assessee is operating the accounts and operated on the authority of his PAN. The assessee has failed to explain source of these deposits. Returns of income filed in the names of family members showing income from other source which is just in the margin of minimum threshold limit of income chargeable to tax. The income declared by the assessee or his family members is not in commensurate with cash deposits. The assessee has not explained purpose of mandate holding and closing the bank accounts just after utilization of cash deposits. Therefore, entire cash deposits was rightly held to be income earned from undisclosed sources and the AO was right in making addition of ₹ 2,76,97,000/- is made on account of unexplained investment u/s. 69 of the Act. 10. The ld. DR submitted that the ld. CIT(A) has granted relief to the assessee without any basis and justified reason therefore, impugned order may kindly be set aside by restoring that of the AO. 11. Replying to the above, the ld. AR submitted that the AO ignored very vital facts and explanation of .....

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..... made addition of entire amounts of deposit u/s. 69 of the Act treating the same as unexplained investment of the assessee. Whereas the first appellate authority after considering the entire facts and circumstances of the case granted relief to the assessee with following observations and conclusion: Now from the form itself it is clear that the mandate holder can only operate the accounts as per jurisdiction /instructions given by the account holder. By virtue of this assigned role the mandate holder under no circumstances can become the owner of the account. Therefore, in the present case the appellant being the mandate holder of all the accounts cannot be treated as the real owner of these accounts. As a consequence the cash deposits made into all these accounts cannot be held to be belonging to the appellant. In case the appellant has to be treated as the real owner of cash deposits then sufficient material has to be brought on record that he has held all these accounts in fictitious owners. The assessing officer has recorded the statement of the appellant during the assessment proceedings and in which there is a categorical admission of the appellant that he is a merely mandate .....

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..... he income of all five alleged account holders. From these assessment orders, it is clear that the addition of ₹ 32,50,062/- has been made in the hands of Shri Thakorbhai C. Patel, the addition of ₹ 28,07,676/- has been made to the income of Smt. Madhuben T. Patel, addition of ₹ 33,50,509/- has been to the income of Shri Bachubhai C. Patel, the addition of ₹ 16.15, 197/- has been to the income of Smt. Shantaben B. Patel and addition of ₹ 19,03,316/- has been made to the income of Shri Samir T. Patel and thus, total addition in the hands of these five account holder has been of ₹ 1,29,26,760/- u/s. 68 of the Act considering the amount of deposits of ₹ 2,76,23,000/-. These facts have not been controverted by the ld. DR even on the specific quarry from the Bench and in all fairness he accepted that the addition have been made in the hands of respective bank account holders to which impugned deposits were made by the assessee in the capacity of mandate holder of the accounts. 15. In this peculiar situation when the impugned deposits have been considered in the hands of respective account holders for making additions u/s. 68 of the Act then, the .....

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..... d bank interest which was not shown in the computation of income for the year under consideration. The ld. DR submitted that the ld. First appellate authority was not correct in holding that these accounts do not belongs to the assessee therefore, addition in respect of interest credited to these accounts cannot be added to the income of the assessee. 20. Replying to the above, the ld. AR supported the order of the ld. CIT(A) and submitted that when the assessee in fact, is not the owner and beneficiary of the alleged bank accounts then, the interest earned there from cannot be treated as income of the assessee. 21. On careful consideration of above rival submissions, we are of the view that when the accounts were opened in the names of family members of the assessee and assessee was power of attorney to operate these accounts and the AO could not bring any material on record to show that the assessee was real owner and beneficiary of these accounts and the cash deposits made therein were in fact amounts belonging to the assessee then, the interest earned in such accounts cannot be treated as income in the hands of the assessee. The conclusion drawn by the ld. CIT(A) in this regard .....

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