ITAT deletes section 69 addition for agricultural land investment disclosed in fixed asset schedule

5-Second Takeaway

The Tribunal held that an addition under section 69 could not be sustained where the assessee had disclosed the agricultural land investment in the fixed asset schedule and supported it with bank statements and a fund-flow statement showing identifiable sources. It deleted the Rs. 14,83,650 addition and held that the consequential interest and penalty proceedings did not survive.

The assessee had shown investment in agricultural land in the fixed asset schedule and produced bank statements during assessment. He also filed a fund-flow statement explaining that the investment came from cash balance, agricultural income, carting income and other identifiable sources.

The Revenue did not bring any material to rebut that explanation or to show that the investment came from undisclosed sources. On that footing, the Tribunal held that the addition under section 69 was unsustainable when the investment was already recorded and its source was supported by documentary evidence.

The Tribunal accordingly directed deletion of the Rs. 14,83,650 addition. As the quantum addition was removed, the related interest under sections 234A, 234B, 234C and 234D, as well as penalty proceedings under section 271AAC(1), were held to be consequential and not survive.