Sh. Deep Malhotra, Faridkot V. DCIT, Ludhiana

CO 27/CHANDI/2015

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2075 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 02-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 14-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER CROSS OBJECTION NOS. 26 & 27/CHD/2015 (IN ITA NOS.659 & 660/CHD/2015) ASSESSMENT YEARS: 2009-10 & 2010-11 SH. DEEP MALHOTRA, VS. THE DCIT, OLD CANT ROAD CENTRAL CIRCLE-II FARIDKOT LUDHIANA PAN NO. ADKPM8478M (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL RESPONDENT BY : SH. MANOJ MISHRA DATE OF HEARING : 09/03/2016 DATE OF PRONOUNCEMENT : 10 /03/2016 ORDER PER BHAVNESH SAINI, J.M. BOTH THESE CROSS OBJECTIONS BY THE ASSESSEE ARE DIR ECTED AGAINST THE DIFFERENT ORDERS OF LD. CIT(A)-5, LUDHINA DT. 27/03 /2015 FOR ASSESSMENT YEAR 2009- 10 AND 2010-11. 2. BOTH THESE CROSS OBJECTIONS WERE FILED ON FILING THE DEPARTMENTAL APPEAL IN ITA NOS. 659 AND 660 OF 2015. BOTH THE DEPARTMEN TAL APPEAL HAVE NOT BEEN PRESSED BY THE DEPARTMENT IN VIEW OF THE BOARD CIR CULAR NO. 21/2015 DATED 10.12.2015 AND AS SUCH BOTH THE DEPARTMENTAL APPEAL S WERE DISMISSED BEING NOT PRESSED VIDE ORDER DT. 28/12/2015. THESE CROSS OBJECTIONS ARE THEREFORE CONSIDERED ON MERITS. 3. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE MATERIAL ON RECORD. 2 4. IN CROSS OBJECTION NO. 26/CHD/2015, THE ASSESSEE CHALLENGED THE ORDER OF LD. CIT(A) IN SUSTAINING THE ADDITION OF RS. 14,08, 200/- ON ACCOUNT OF AGRICULTURAL INCOME. 5. THE BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESS EE CLAIMED AGRICULTURAL INCOME OF RS. 28,28,260/-. THE PERUSAL OF THE ASSES SMENT ORDER REVEALED THAT THE AO HAS RAISED THE ISSUE OF AGRICULTURAL INCOME DISC LOSED BY THE ASSESSEE AT RS. 28,28,260/-. THE ASSESSEE WAS ASKED TO SUBSTANTIAT E THE CLAIM OF AGRICULTURAL INCOME AS DECLARED IN THE RETURN OF INCOME ON THE B ASIS OF DOCUMENTARY EVIDENCE IN THE FORM OF FARD / ZAMABANDI AND EVIDE NCES OF SALE PROCEEDS. THE AO NOTED THAT THE ASSESSEE DESPITE GIVING OPPORTUNI TY HAS NOT PROVED THE EARNING OF THE AGRICULTURAL INCOME THEREFORE WHOLE AMOUNT WAS TREATED AS UNACCOUNTED INCOME. 6. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A) AND IT WAS SUBMITTED THAT THE ASSESSEE FURNISHED REPLY REGARDI NG THE AGRICULTURE INCOME TO THE QUESTIONNAIRE. NO FURTHER OPPORTUNITY WAS GRANT ED TO ESTABLISH THE FACT OF EARNING OF AGRICULTURE INCOME. THE ASSESSEE OWNED / CULTIVATED ABOUT 142 ACRES OF AGRICULTURE LAND AND HAS EARNED THE AGRICULTURE INCOME THERE FROM. THE DETAILS ALONGWITH EVIDENCE OF HOLDING OF AGRICULTUR E LANDS AND EARNING OF AGRICULTURE INCOME WERE FILED. THE ACCOUNTS OF THE ASSESSEE ARE DULY AUDITED AND THE AGRICULTURE INCOME OF RS. 28,28,260/- HAS B EEN CREDITED IN THE CAPITAL ACCOUNT. ALL THE RECEIPTS OF THE AGRICULTURE INCOME CREDITED IN CAPITAL ACCOUNT HAVE BEEN MADE THROUGH BANKING CHANNELS. THE AO COM PLETED THE ASSESSMENT IN HASTE. THE REVENUE RECORD IS FURNISHE D TO PROVE THAT LANDS ARE CULTIVATED ON HISSEDARI. ALL THE EXPENSES INCURR ED FOR SOWING, CULTIVATION AND OTHER ALLIED EXPENSES WERE BORNE BY THE LESSEE. THE QUALITY AND YIELD OF THE CROP ALSO DEPENDS ON THE CLIMATE CONDITIONS. IT WAS THER EFORE SUBMITTED THAT WHOLE ADDITION MAY BE DELETED. 3 6.1 THE LD. CIT(A) IN VIEW OF THE SUBMISSIONS RAISE D BY THE ASSESSEE THAT NO OPPORTUNITY HAVE BEEN GRANTED BY THE AO BEFORE TREA TING THE AGRICULTURE INCOME TO BE INCOME FROM OTHER SOURCE AND THAT NECE SSARY EVIDENCES NOW FILED IN THE FORM OF JAMABANDI AND GIRDAVRI SHOWS O WNERSHIP AND CULTIVATION OF LAND BY THE ASSESSEE SUPPORTED BY RECEIPTS ON ACCOU NT OF SALES THROUGH BANKING CHANNELS, FORWARDED ALL THE DOCUMENTARY EVI DENCES TO THE AO FOR FILING REMAND REPORT / COMMENTS AND THE AO SUBMITTED THAT ASSESSEE HAS FAILED TO FURNISH THESE DETAILS BEFORE AO AT ASSESSMENT STAGE HOWEVER, SAME MAY BE CONSIDERED IF DEEM FIT. 6.2 LD. CIT(A) CONSIDERING SUBMISSIONS OF THE ASSES SEE, EVIDENCE ON RECORD AND COMMENTS OF THE AO FOUND THAT THE EVIDENCE FILE D BY THE ASSESSEE DURING APPELLATE PROCEEDINGS AND VERIFIED BY THE AO SHOWS THAT ASSESSEE OWNED 142 ACRES OF LAND WHICH HAS BEEN CULTIVATED AS PER THE GIRDAVRI RECORD PRODUCED. IT WAS ALSO FOUND THAT SALES AMOUNT HAD BEEN CREDITED IN THE BOOKS OF ACCOUNT BY CHEQUE RECEIVED FROM THE BUYER. THE ASSESSEE FIL ED BANK CERTIFICATE CERTIFYING THE TRANSFER OF AMOUNT FROM THE BANK ACC OUNT OF KESHAV TRADING CO., KANODIA ENTERPRISES & RAMESH CHAND KESHAV KUMAR. T HE LAND OF THE ASSESSEE WERE FOUND TO BE LOCATED IN BIKANER (RAJASTHAN) AND THE REGISTERED DEED SHOWS THAT THE LAND IS CAPABLE OF GIVING ONLY ONE CROP DE PENDS UPON SEASONAL RAIN. THEREFORE THE INCOME OF THE ASSESSEE COULD BE LIMIT ED AS COMPARED TO THE LANDS AVAILABLE IN PUNJAB & HARYANA. THE LD. CIT(A) FOUND THAT THE CLAIM OF ASSESSEE THAT LAND BEING CULTIVATED ON HISSEDARI HA S NOT BEEN SUBSTANTIATE. THE ASSESSEE DID NOT FILE THE DETAILS OF CULTIVATION, T HEREFORE CLAIM OF ASSESSEE OF ENTIRE AGRICULTURE INCOME WAS FOUND EXAGGERATED. HO WEVER THE EVIDENCE ON RECORD SHOWS THAT ASSESSEE HAS EARNED AGRICULTURE I NCOME THEREFORE LD. CIT(A) ALLOWED THE PART CLAIM OF THE ASSESSEE AND ACCEPTED THE AGRICULTURE INCOME OF RS. 10,000/- PER ACRE AND ACCEPTED THE AGRICULTURE INCOME OF RS. 14,20,000/- 4 AND THE REMAINING AMOUNT OF RS. 14,08,200/- WAS CON FIRMED BEING INCOME FROM OTHER SOURCE. 7. THE APPEAL WAS THUS ALLOWED PARTLY . 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD, WE ARE OF THE VIEW THAT ADDITION IS STILL ON EXCESSIVE SID E. THE EVIDENCE AND MATERIAL ON RECORD CLEARLY PROVED THAT ASSESSEE IS OWNER OF 142 ACRES OF LAND WHICH HAVE BEEN CULTIVATED AS PER GIRDAVRI RECORD PRODUCED. TH E CLAIM OF THE ASSESSEE WAS NOT REBUTTED BY THE AO IN HIS COMMENTS TO EARN AGRI CULTURE INCOME. THE ASSESEE IN THE PAPER BOOK HAVE ALSO FILED CERTIFICATE FROM THE BUYER SHOWING AGRICULTURE PRODUCED PURCHASED BY THEM AND PAYING THE AMOUNT TH ROUGH BANKING CHANNELS WHICH IS SUPPORTED BY THE BANK CERTIFICATE . THEREFORE, LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT ASSESSEE EARNED AGRICULTU RE INCOME. IT WAS ALSO FOUND FROM THE RECORD PRODUCED THAT THE LAND HELD BY THE ASSESSEE WAS CAPABLE OF GIVING ONLY ONE CROP DEPENDS UPON THE SEASONAL RAIN . THE ASSESSEE HOWEVER COLD NOT PRODUCE ANY EVIDENCE THAT THE LAND WAS BEI NG CULTIVATED THROUGH HISSEDARI THEREFORE, LD. CIT(A) WAS JUSTIFIED IN HO LDING THAT ENTIRE CLAIM OF AGRICULTURE INCOME CANNOT BE ACCEPTED. HOWEVER, THE MATERIALS ON RECORD AND THE HUGE LAND HOLDING HELD BY THE ASSESSEE, CULTIVA TED BY THE ASSESSEE AND THAT SALE PROCEEDS OF AGRICULTURE PRODUCE RECEIVED THROU GH BANKING CHANNELS CLEARLY SUPPORTS THE CLAIM OF THE ASSESSEE OF EARNI NG OF THE SUBSTANTIAL AGRICULTURE INCOME THEREFORE, LD. CIT(A) WAS NOT JU STIFY IN HOLDING THAT CLAIM OF HAVING EARNED AGRICULTURE INCOME CANNOT BE ACCEPTED BEYOND SUM OF RS. 10,000/- PER ACRES. WE THEREFORE CONSIDERING EVIDEN CES ON RECORD IN THE LIGHT OF FINDINGS OF FACTS RECORDED BY LD. CIT(A) ACCEPT THE CLAIM OF ASSESSEE OF EARNING AGRICULTURE INCOME @ RS. 15,000/- PER ACRES AS AGAI NST RS. 10,000/- CONFIRMED BY THE LD. CIT(A). WE THEREFORE ACCEPT THE AGRICULTURE INCOME EARNED BY THE ASSESSEE IS A SUM OF RS. 21,30,000/- AS AGAINST THE TOTAL CLAIM MADE BY THE 5 ASSESSEE OF RS. 28,28,260/-. WE THEREFORE RESTRICT THE ADDITION TO RS. 6,97,260/-. THUS THE ORDERS OF AUTHORITIES BELOW ARE SET ASIDE AND MODIFIED TO THE EXTENT THAT AO SHALL ACCEPT THE AGRICULTURE INCOME IS A SUM OF RS. 21,30,000/- AND RESTRICT THE ADDITION ON ACCOUNT OF INCOME FROM OTHER SOURCE IS A SUM OF RS. 6,97,260/-. 9. IN THE RESULT, CROSS OBJECTION OF THE ASSESSEE I S PARTLY ALLOWED. 10. IN CROSS OBJECTION 27/CHD/2015, THE BRIEF FACTS ARE THAT THE ASSESSEE MADE A CLAIM OF AGRICULTURAL INCOME OF RS. 27,28,00 0/- WHICH WAS ADDED BY THE AO ON ACCOUNT OF INCOME FROM OTHER SOURCE. THE LD. CIT(A) ACCEPTED THE CLAIM AT RS. 14,20,000/- AND ADDED THE REMAINING AMOUNT O F RS. 13,08,000/- WHICH IS NOW CHALLENGED IN THE PRESENT CROSS OBJECTION. 11. THIS ISSUE IS SAME AS HAVE BEEN CONSIDERED IN C ROSS OBJECTION NO. 26/CHD/2015 FOR ASSESSMENT YEAR 2009-10, THEREFORE FOLLOWING THE REASONS FOR DECISION FOR ASSESSMENT YEAR 2009-10 (SUPRA). WE S ET ASIDE AND MODIFY THE ORDER OF AUTHORITIES BELOW AND DIRECT THE AO TO ACCEPT AG RICULTURAL INCOME OF RS. 21,30,000/- ON ACCOUNT OF AGRICULTURAL INCOME AND R ESTRICT THE ADDITION OF RS. 5,97,000/- AS INCOME FROM OTHER SOURCE. IN THE RESU LT CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED. 12. IN THE RESULT, BOTH THE CROSS OBJECTIONS ARE PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 10 TH MARCH 2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR