HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO AND HONOURABLE SRI JUSTICE K.LAKSHMAN I.T.T.A. Nos.378 and 379 of 2019 COMMON JUDGMENT: (Per Hon ble Sri Justice M.S.Ramachandra Rao) These two appeals are being disposed of by this common judgment since they relate to same assessee/appellant in relation to two different assessment years 2009-10 and 2010-11. 2. In both these appeals, orders dt.15-11-2019 in ITA No.1246 & 1247/Hyd/2018 passed by Income Tax Appellate Tribunal, Hyderabad Bench at Hyderabad are assailed by assessee. 3. assessee is individual deriving income from agriculture and claiming that he had no other source of income. assessee , his wife, father and mother together possess Ac.58.30 gts of agricultural land. 4. During financial year 2008-09, assessee deposited Rs.83,78,700/- and during financial year 2009-10, he made deposits into his S.B.Account totaling Rs.56,60,450/- by way of cash deposits. assessee had not filed any returns of income for assessment year 2009-10 and also for assessment year 2010-11. 5. To verify source for cash deposits, respondent Department initiated action under Section 147 of Income Tax Act, 1961 (for short Act ) and issued notice dt.30-03-2016 under Section 148 of Act to assessee , which were served on him on 31-03-2016. M.S.R,J. & K.L,J I.T.T.A.Nos.378 and 379 of 2019 2 6. Notices dt.21-04-2016 under Section 142(1) of Act were also issued to assessee. There was no compliance from assessee either to notice under Section 148 of Act or notice issued under Section 142(1) of Act. 7. Thereafter another notice under Section 142(1) of Act dt.02-05-2016 was issued to assessee calling for information, for which also there was no response from assessee. 8. Due to non-cooperation of assessee, show cause notice dt.06-10-2016 was issued informing assessee that his case for assessment year 2009-10 and 2010-11 had been taken up for consideration and assessee was directed to file information for completion of assessment and to show cause why entire cash deposit of Rs.83,78,700/- for assessment year 2009-10 and entire cash deposit of Rs.56,60,450/- for assessment year 2010-11 should not be treated as income from unexplicable sources and directing assessee to file objections. 9. Even to this show case, there was no explanation from assessee. 10. Another set of final show cause notices dt.06-12-2016 were issued to assessee. 11. In response to this final show cause notice, assessee addressed letter dt.08-12-2016, which was received in Inward Section of Income Tax Department, Range-4, Hyderabad on 26-12-2016. M.S.R,J. & K.L,J I.T.T.A.Nos.378 and 379 of 2019 3 12. In said explanation, assessee contended that he received notice dt.21-04-2016; that he was furnishing his account details; that he was not carrying on any business and all amounts stated in Bank Accounts are solely from agricultural income; and that as he was only male member of family, all expenses and income relates to his father, mother and wife are operated through his bank account only. He gave details of agricultural holdings in his name, and in name of his parents and wife. He also furnished pattadar pass books, Bank Account statements and transaction narration sheets for period from 01-04-2008 to 31-03-2009 and 01-04-2009 to 31-03-2010. orders of Assessment Officer dt.30-12-2016 13. Assessment Officer considered said material and passed assessment orders on 30-12-2016 for both assessment years under Section 143(3) r/w Section 147 of Act holding that to some extent cash deposits made by assessee could be from sale proceeds of agricultural produce of land holdings held by him and his family members and that to extent of Rs.30,00,000/- p.a., such agricultural income can be considered for both assessment years. 14. He also referred to sworn statement made by assessee before ITO (Inv.) Unit-I, Hyderabad on 16-10-2015 that cash deposits are from real estate business and some are collections from petrol bunk till opening of current Bank Account of petrol bunk, which was being run in name of spouse of assessee. He then held that petrol bunk business was started only in 2012 and was not in existence M.S.R,J. & K.L,J I.T.T.A.Nos.378 and 379 of 2019 4 during previous assessment year 2010-11, and version of assessee that all amounts deposited in bank accounts are solely from agricultural income, cannot be accepted. 15. Therefore, for assessment year 2009-10, he held that amount of Rs.53,78,700/- is to be treated as income from unexplained sources and for assessment year 2010-11, Rs.26,60,450/- is to be treated as income from unexplained sources. Tax and penalty were also levied thereon. order dt. 1-3-2018 of CIT (Appeals) 16. This was questioned by assessee before Commissioner of Income Tax (Appeals)-1, Hyderabad vide Appeal No.0239/CIT(A)- 1/Hyd/2016-17/2017-18 and Appeal No.240/CIT(A)-1/Hyd/2016- 17/2017-18. 17. It was contended before Appellate Authority by assessee that Assessing Officer erred in holding that aggregate of deposits made into Bank Account of Rs.83,78,700/- for assessment year 2009-2010 and Rs.56,60,450/- for assessment year 2010-11 represents income of assessee; that there were substantial withdrawals during year under consideration which explain deposits made into Bank Accounts; that Assessing Officer should have considered fact that peak credit in Bank Account is much lesser and entire amount of peak is less than agricultural income determined by Assessing Officer. M.S.R,J. & K.L,J I.T.T.A.Nos.378 and 379 of 2019 5 18. By separate orders dt.01-03-2018, both appeals were dismissed. appellate authority held that before him, assessee had submitted that agricultural land owned by assessee was sold, but no evidence was brought before him that any property was sold during year relevant year; that Assessing Officer had allowed extent of Rs.30,00,000/- as agricultural income by estimation, but assessee did not accept it ; and assessee also did not bring out any evidence to show that agricultural receipts during relevant financial year were more than Rs.1.00 crore. 19. He also held that assessee did not submit any details of crops sold and income received out of agricultural pursuits, and attempt of assessee to justify Rs.26,60,450/- as agricultural income for assessment year 2010-11 and Rs.53,78,700/- as agricultural income for assessment year 2009-10, was not supported by evidence. 20. He also observed that in Bank Accounts, deposits were spread over all year; assessee had been selling crops all-round year specially when Bank Account was reduced to Nil; and it was evident that deposits were made to make payments. He held that Assessing Officer concluded that income of Rs.26,60,450/- for assessment year 2010-11 and Rs.53,78,700/- for assessment year 2009-10 is income from other source i.e. real estate and petrol bunk and there is no material submitted by assessee contradicting same. Consequently, he confirmed orders of Assessing Officer. M.S.R,J. & K.L,J I.T.T.A.Nos.378 and 379 of 2019 6 orders dt.15-11-2019 of ITAT 21. Challenging said orders of appellate authority, assessee filed I.T.A.Nos.1246 and 1247/Hyd/2018 before Income Tax Appellate Tribunal, Hyderabad Bench , Hyderabad. 22. It was contended in appeals before Tribunal that CIT(A)- 1, Hyderabad ought to have held that assessee did not have any other source of income except agricultural income and that assessee was in possession of sufficient funds from agricultural income for depositing cash into bank accounts. It was also contended that aggregate of deposits would not represent income of assessee and CIT (Appeals)-1, Hyderabad erred in treating them as income of assessees. 23. Tribunal considered Bank Account statements and observed that assessee was making cash deposits and also making corresponding cash withdrawals and therefore contention of Assessee that gross receipts from agricultural operations were deposits, withdrawn and re-deposited cannot be brushed aside in toto. Tribunal then referred to action of Assessing Officer in relying upon statement of assessee recorded during course of search wherein he has stated that he is also doing real estate business and cash deposits were receipts of such business as well. It therefore accepted that some of deposits would be from real estate business while others are cash withdrawals made earlier. It therefore partly allowed appeals by treating 50% of deposits which have been M.S.R,J. & K.L,J I.T.T.A.Nos.378 and 379 of 2019 7 treated as income from other source as unexplained and balance 50% to be part of agricultural income (in addition to Rs.30,00,000/- already treated as agricultural income by Assessing Officer) which were re-deposited into bank account. present Appeals 24. Assailing same, these appeals are filed. 25. Learned counsel for assessee strenuously contended that approach of Assessing Officer, CIT (Appeals)-1, Hyderabad as well as Tribunal is erroneous and that conclusions reached by Tribunal with regard to source of deposits made in Bank Accounts is perverse. 26. It is also contended that said authorities did not mention provision of law under which alleged income is assessable and that they had ignored decision of Supreme Court in CIT Vs. PK Noorjahan1. 27. We have considered orders passed by Assessing Officer, CIT (Appeals)-1, Hyderabad as well as Tribunal. 28. statement made by assessee before Income Tax Officer (Inv.), Unit-I, Hyderabad in response to summons issued under Section 131(1A) of Act has also been placed before us by counsel for assessee. In said statement, to Question No.5 please give 1 237 ITR 570 (SC) M.S.R,J. & K.L,J I.T.T.A.Nos.378 and 379 of 2019 8 sources of your income and explain cash deposits more than Rs.50,000/- deposited in your account , assessee stated: My source of income is from agriculture and rental income from HUF properties situated at Nalgonda and Suryapet. For above income I am maintaining SBH, Nalgonda which is in name of my mother Smt.Sulochana, my wife is having Bharath Petrol Bunk at Chivvemla, Suryapet since March, 2012 and my wife Madhuri Latha is proprietor of M/s.Dheekha Fuel Centre. I am deriving salary income from above petrol bunk of Rs.25,000/- per month. I am also into real estate business at Hyderabad on entering agreement of sale and by keeping certain margin and sell same to others and I will get on average income of Rs.4.0 lakhs per annum from real estate business since 2010 and we have done small ventures at Uppal behind Bus depot. I will furnish details in couple of days. cash deposits are from real estate business and some are collection from petrol bunk till opening of current account at SBH, Chivvemla. I will submit above bank accounts for your verification. ( emphasis supplied) 29. From above statements, it appears that sources of income of assessee are agriculture and also rental income from HUF properties situated at Nalgonda and Suryapet. Though he mentioned about petrol bunk, since according to assessee, petrol bunk business commenced only in 2012, income from petrol bunk business cannot be said to be source of income for assessee to deposit in Bank Accounts for assessment years 2009-10 and 2010-11. He also stated that he was doing real estate business at Hyderabad and was entering into agreements of sale and by keeping certain margin, he was selling same to others. Though he stated that he was getting average income of Rs.4,00,000/- p.a. from real estate business since 2010, and he claims to have done small ventures at Uppal Bus Depot and M.S.R,J. & K.L,J I.T.T.A.Nos.378 and 379 of 2019 9 promised to furnish details, there is nothing to show that he did furnish any details. Therefore, cash deposits, which are admitted by him to be from real estate business or rental income, have also to be taken into account. 30. It was duty of assessee to disclose these aspects before Assessing Officer or CIT (Appeals)-1, Hyderabad or Tribunal because these are within his exclusive knowledge. Having admitted that he was also doing real estate business and was also having rental income, and by not furnishing any details of same, he cannot blame Assessing Officer or Tribunal for drawing conclusion that his source of money for making deposits other than agricultural income, is real estate business. 31. No doubt in exercise of appellate jurisdiction under Section 260-A of Act, this Court has power to interfere with findings of fact which are vitiated by use of inadmissible material and if decision is based on conjectures, surmises and suspicions or irrelevant material or if there is perversity, but instant case does not fall in any of these categories. several opportunities given to assessee to persuade him to reveal sources of income have already been mentioned in order passed by Assessing Officer. assessee therefore cannot have any complaint against Department when he was not furnishing all details as sought by Department though he agreed to do so in statement given by him to Department on 16-10-2015. M.S.R,J. & K.L,J I.T.T.A.Nos.378 and 379 of 2019 10 32. In PK Noorjahan (1 supra) relied upon by assessee, Supreme Court interpreted Section 69 of Act and observed that word may occurring therein shall not be read as shall , and that it confers discretion on Assessing Officer in matter of treating source of investment which was not satisfactorily explained by assessee as income of assessee, and Assessing Officer was not obliged to treat such source of investment as income in every case where explanation offered by assessee is found to be not satisfactory. Supreme Court held that question whether source of investment should be treated as income or not under Section 69 of Act has to be considered in light of facts of each case. 33. We are of opinion that in instant case, no error of law has been committed by Assessing Officer or CIT (Appeals)-1, Hyderabad or Tribunal in treating portion of unexplained deposits as income of Assessee. 34. There is no question of law, much less substantial question of law, arising from facts of case warranting interference by this Court in exercise of its power under Section 260-A of Act. 35. These appeals fail and are accordingly dismissed. No costs. 36. Pending miscellaneous petitions, if any, shall stand closed. ____________________________ M.S.RAMACHANDRA RAO, J _________________ K.LAKSHMAN, J Date : 08-01-2020. Vsv Beeravalli Venkat Sai Ram Reddy v. Pr. Commissioner of Income-tax-1