Shri Lalit Babubhai Patel, Ahmedabad V. The Dy.CIT, Circle-9, Ahmedabad

ITA 1210/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6020 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIPKUMAR MAJUMDAR
• Assessee Lawyers: S N DIVATIA
• Keywords: Income from undisclosed sources; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NOS. 1210 & 1211/AHD/2014 (ASSESSMENT YEAR : 2009-2010) (1). LALIT BABUBHAI PATEL & (2). KETAN BABUBHAI PATEL JAMNADAS HOUSE, AMBALI BOPAL ROAD, S. G. HIGHWAY, AHMEDABAD-51 APPELLANT (S) VS. DY.CIT, CIRCLE-9, AHMEDABAD RESPONDENT PAN: I. ACTPP0291P & II. ACTPP0292Q /BY ASSESSEE : SHRI S. N. DIVATIA, A.R. /BY REVENUE : SHRI PRADIP KUMAR MAJUMDAR, SR. D.R. /DATE OF HEARING : 01.05.2017 /DATE OF PRONOUNCEMENT : 05.05.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THESE TWO ASSESSEES HAVE FILED THEIR INSTANT RESPEC TIVE APPEALS AGAINST THE CIT(A)-XX, AHMEDABADS SEPARATE ORDERS; BOTH DA TED 21.03.2014, IN ITA NOS. 1210 & 1211/AHD/2014 (LALIT & KETAN B. PA TEL VS. DY.CIT) - 2 - CASE NOS. CIT(A)-XV/DCIT/CIR.9/308/11-12 & CIT(A)-X V/DCIT/CIR.9 /306/11-12, UPHOLDING ASSESSING OFFICERS ACTION T REATING THEIR AGRICULTURAL INCOMES DECLARED OF RS.4,33,688/- & RS.4,02,358/- A S UNDISCLOSED INCOME OF RS. 3LACS EACH, IN ASSESSMENT ORDERS DATED 16.01.20 14 IN BOTH CASES, IN PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961, IN SHORT THE ACT. WE HAVE HEARD THESE APPEALS TOGETHER. THE SAME AR E BEING ADJUDICATED BY THE INSTANT COMMON ORDER FOR THE SAKE OF CONVENI ENCE AND BREVITY SINCE INVOLVING SIMILAR FACT RAISING IDENTICAL ISSUE OF Q UANTIFICATION OF AGRICULTURAL INCOME. 2. THESE TWO ASSESSEES ARE REAL BROTHERS. THEY ARE ASSESSED AS INDIVIDUALS. THE ASSESSEES DERIVED INCOME FROM HOU SE PROPERTY, SHARE OF PROFIT FROM BUILDING CONSTRUCTION FIRMS, CAPITAL GA INS AND INCOME FROM OTHER SOURCES. THEY CLAIMED TO HAVE DERIVED THEIR RESPEC TIVE AGRICULTURAL INCOME OF RS.4,33,688/- AND RS.4,02,358/- FROM AGRICULTURAL L ANDS SITUATED IN DISTT. SURENDRANAGAR. COMMON FACTS START HEREAFTER. FORM ER ASSESSEE STATED BEFORE THE ASSESSING OFFICER IN THE COURSE OF SCRUTINY THA T HE HAD GOT INDUCTED SHRI NAVNITBHAI P. PATEL AS TILLER OF THE LAND. THE ASS ESSING OFFICER ASKED INTO PRODUCE THE SAID TILLER VIDE SHOW CAUSE NOTICE DATE D 31.11.2011. THE ASSESSEE APPEARS TO HAVE FILED HIS REPLY THAT HIS T ILLER EXPIRED ON 26.08.2007. HE HOWEVER PRODUCED TILLING AGREEMENT ALONG WITH EL ECTION CARD OF THE DECEASED TILLER. THE ASSESSEE FURTHER PLEADED THAT HE HAD THEREAFTER CHANGED HIS TILLER TO ONE SHRI HARSHAD NANJIBHAI GHADVI. H E WOULD THEN SUBMIT NECESSARY AGREEMENT. THE ASSESSING OFFICER HOWEVER DID NOT AGREE TO THE SAID EXPLANATION. HE INTER ALIA OBSERVED THAT MERE CONNECTION WITH THE LAND IN ABSENCE OF EVIDENCE OF BASIC OPERATIONS OF TILLI NG, SOWING AND OTHER ACTIVITIES FOLLOWED BY SUBSEQUENT OPERATIONS WOULD NOT PROVE THE ASSESSEE TO HAVE DERIVED THE IMPUGNED AGRICULTURAL INCOME OF RS .4.33LACS IN QUESTION. ITA NOS. 1210 & 1211/AHD/2014 (LALIT & KETAN B. PA TEL VS. DY.CIT) - 3 - HE THEREAFTER TREATED THE SUM IN QUESTION OF RS.3LA CS AS ASSESSEES INCOME FROM UNDISCLOSED SOURCES. THE VERY ADDITION FIGURE IS THERE IN LATTER ASSESSEES CASE (SUPRA). 3. THE ASSESSEES PREFERRED THEIR RESPECTIVE APPEALS . LEARNED CIT(A) HAS AFFIRMED THE ABOVE IDENTICAL ADDITION WITH FOLLOWIN G DISCUSSION: 4.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND SUBMISSION MADE BY THE APPELLANT. THE AO HAS MADE THE ADDITION OF RS.3,00, 000/- OUT OF THE TOTAL AGRICULTURAL INCOME SHOWN AT RS.4,33,688/- CONCLUDI NG THAT THE AGRICULTURAL INCOME PURPORTED TO BE WAS ONLY UNDISCLOSED SOURCES . THE APPELLANT HAS NOT DISCHARGED HIS ONUS TO PRODUCE EVIDENCES/PAPERS TO PROVE THE SOURCE OF AGRICULTURAL INCOME. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, THE AO VIDE SHOW CAUSE NOTICE DTD. 31.11.2011 WAS BROUGHT TO TH E NOTICE OF THE APPELLANT THAT THE DETAILS OF THE TILLING /CULTIVATION OF LAND, IR RIGATION FACILITY AVAILABLE, CROPS TAKEN, EXPENDITURE INCURRED ON AGRICULTURAL ACTIVIT IES AND EVIDENCES IN SUPPORT OF SALES REALIZATION OF CROPS HAVE NOT BEEN SUBMITTED. IT WAS ALSO BROUGHT TO THE NOTICE THAT THE LAND SITUATED IN DISTRICT SURENDRAN AGAR WAS IN THE NAMES OF SEVERAL CO-OWNERS. IT WAS ALSO MENTIONED IN THE SHOW CAUSE NOTICE THAT NO EVIDENCE IN SUPPORT OF CULTIVATION IN LAND, FERTILITY OF LAND A ND HAVING TAKEN CROPS OF ANY TYPE THERE FROM WERE BROUGHT ON RECORD. MOREOVER, NO DET AILS OF VARIOUS AGRICULTURAL RECEIPTS AND CORRESPONDING EXPENSES FOR PLUGGING OF LAND, PURCHASE OF SEEDS, FERTILIZER, LABOUR, LORRY DETAILS HAVE BEEN SUBMITT ED. SO, VIDE THE AFORESAID SHOW CAUSE NOTICE THE APPELLANT WAS ASKED TO SUBMIT THE RELEVANT DOCUMENTS TO PROVE THE AGRICULTURAL INCOME. HOWEVER, IN RESPONSE TO THE SA ME, HE HAS MADE THE SUBMISSION ABOUT THE TILLER OF THE LAND AS GADHVI H ARSHADBHAI MANJIBHAI DUE TO DEATH OF SHRI NAVINBHAI ON 26.8.2007. HOWEVER, NO D ETAILS AND EVIDENCES AS SOUGHT BY THE AO WERE FURNISHED. CONSIDERING THE FA CTS THE ADDITION WAS MADE. 4.4. DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E APPELLANT HAS SUBMITTED THE COPY OF AGRICULTURAL LEDGER ACCOUNTS FROM A.Y. 2005-06 TO 2008-09, GRAM NAMUNO IN FORM NO.8, COPY OF FORM NO.7/12 AND COPIE S OF SALE BILLS, BESIDES AGREEMENT WITH SHRI GADHVIBHAI HARSHADBHAI MANJIBHA I AND LATE SHRI NAVNITBHAI PATEL ALONGWITH HIS DEATH CERTIFICATE. IT TRANSPIRE D THAT THE VARIOUS DOCUMENTS SUBMITTED IN THE APPELLATE PROCEEDINGS HAVE BEEN SU BMITTED FIRST TIME BEFORE THIS OFFICE AND HAVE NOT BEEN SUBMITTED TO THE A.O. IN T HE ASSESSMENT PROCEEDINGS AND THEREFORE, THE SAME WERE THE ADDITIONAL EVIDENCES W HICH WOULD HAVE BEEN FILED BY FOLLOWING THE PROCEDURE UNDER RULE-46A OF THE ACT. BUT NO SUCH REQUEST FOR ADMISSION OF SUCH ADDITIONAL EVIDENCES HAVE BEEN MA DE BY THE APPELLANT. EVEN IN THE APPELLATE PROCEEDINGS THE APPELLANT HAS NOT GIV EN ANY COPIES OF THE SUBMISSIONS FILED BEFORE THE A.O. ESTABLISHING THE FACT THAT ALL THE DETAILS AND DOCUMENTS SUBMITTED IN THE APPELLATE PROCEEDINGS WE RE IN FACT ALREADY GIVEN TO THE A.O. IN THE ASSESSMENT PROCEEDINGS. SO WITHOUT KNOW ING THE GOOD AND SUFFICIENT REASONS OF NON-SUBMISSION OF THE AFORESAID DOCUMENT S BEFORE THE A.O. THE SAME ARE NOT ADMITTED DUE TO VIOLATION OF THE RULE-46A O F THE I.T. RULES. SINCE THE ITA NOS. 1210 & 1211/AHD/2014 (LALIT & KETAN B. PA TEL VS. DY.CIT) - 4 - APPELLANT HAS FAILED TO PRODUCE THE VARIOUS DETAILS AS CALLED FOR DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY SHOW CAUSE NOTICE DTD. 31.11.2011 AND HENCE THE AGRICULTURAL INCOME SHOWN BY THE APPELLANT REMAINS UNVERIFIABLE AND UNSUBSTANTIATED. IN ABSENCE OF ANY DETAILS AND DOCU MENTS WITH REGARD TO THE VARIOUS AGRICULTURAL ACTIVITIES HAVING BEEN CARRIED OUT THE AUTHENTICITY OF THE AGRICULTURAL INCOME REMAINS UN-ESTABLISHED. EVEN TH ERE IS CHANGE IN THE STAND OF THE APPELLANT BEFORE THE A.O. TO THE EXTENT THAT IN ITIALLY IT WAS SUBMITTED THAT THE LAND WAS BEING TILLED BY SHRI NAVINBHAI P. PATEL AN D WHEN THE A.O. ASKED HIS PERSONAL PRESENCE FOR VERIFICATION HE CAME WITH THE ANOTHER SUBMISSION THAT IN FACT THE LAND WAS BEING TILLED BY SHRI HARSHADBHAI NANJI BHAI GADHVI AS THE EARLIER TILLER SHRI NAVINBHAI PATEL EXPIRED ON 26.8.2007. T HIS CHANGE OF STAND ALSO CREATES THE DOUBT ABOUT THE TILLER OF THE LAND THROUGH WHIC H THE AGRICULTURAL ACTIVITIES CAME TO HAVE BEEN CARRIED OUT. IN VIEW OF THE ABOVE DISC USSION, THE ADDITION MADE BY THE A.O. IS CORRECT AND JUSTIFIED AND THE SAME IS CONFI RMED. THUS, THE GROUND OF THE APPELLANT IS DISMISSED. 4.5. WITHOUT PREJUDICED TO THE ABOVE, EVEN IF THE A DDITIONAL EVIDENCES SUBMITTED ARE CONSIDERED THEN ALSO THE SAME DO NOT ESTABLISH THE AGRICULTURAL INCOME AS CLAIMED BY THE APPELLANT. AS IS NOTICED FROM THE AG RICULTURAL INCOME LEDGER ACCOUNT FOR ALL THE FOUR YEARS SUBMITTED THAT THE A PPELLANT HAS CREDITED WITH RECEIPTS ONLY AND NO EXPENDITURES/PAYMENTS HAVING B EEN MADE TOWARDS THE AGRICULTURAL ACTIVITIES WERE DEBITED. SO IN ABSENCE OF ANY AGRICULTURAL EXPENDITURES THE CORRESPONDING INCOME IS NOT POSSIBLE. FURTHER I N RESPECT OF THE LAND AT SURENDRANAGER IT WAS FOUND THAT THE NAME OF THE KHE DUT FOR F.YRS. 2005-06, 2006- 07 AND 2007-08 IS SHOWN AS SHRI RANUBHAI KACHRABHAI WHILE THE APPELLANT HAS CONTENDED THE TILLER AS SHRI NAVIN B. PATEL IN F.YR S. 2007-08,2006-07 AND 2005-06 AND SHRI HARSHADBHAI NANJIBHIA GADHVI IN F.YRS. 200 7-08. IF THE APPELLANT'S CONTENTION ABOUT THE TILLER IS TO BE TREATED AS COR RECT THEN IN THE FORM NO.7/12 THE NAME OF THE AFORESAID TILLERS WOULD HAVE BEEN APPEA RED IN PLACE OF SHRI RANUBHAI KACHRABHAI. SO THE APPELLANT'S CONTENTION IN THIS R EGARD IS NOT CORRECT. MOREOVER, IN THE AFORESAID LAND THE FORM NO.7/12 SHOWS THAT T HERE WERE NO SOURCES OF THE IRRIGATION. HENCE, THE AGRICULTURAL ACTIVITIES ARE ALSO NOT POSSIBLE. FURTHER, THE APPELLANT HAS SUBMITTED THE COPIES OF THE SALE BILL S. HOWEVER, THE AUTHENTICITY OF THE BILLS REMAIN UNPROVED. THE CONTENTION THAT THE AFORESAID PRODUCES WERE CULTIVATED IN THE LAND OF THE APPELLANT IS UNVERIFI ABLE. MOREOVER, THE COPIES OF THE AGREEMENT WITH THE TILLERS FILED IN GUJARATI DOES N OT GIVE ANY DETAILS ABOUT THE CROPS CARRIED OUT AND THE ACTIVITIES HAVING BEEN CA RRIED BY THEM AND THE SHARING OF THE CROPS AND ITS BASIS. SO THE SAME CANNOT BE RELI ED UPON. SO ON THE BASIS OF THE ADDITIONAL EVIDENCES ALSO THE APPELLANT'S CASE DOES NOT GET SUPPORTED AND THEREFORE, AO'S ACTION FOR MAKING THE ADDITION IS C ONFIRMED. 4. HEARD BOTH SIDES. RELEVANT CASE FILES PERUSED I N BOTH CASES. THE SOLE ISSUE BEFORE US IS ABOUT DETERMINATION OF ASSESSEES AGRICULTURAL INCOME IN THE IMPUGNED ASSESSMENT YEAR. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER HIMSELF ACCEPTED AGRICULTURAL INCOME OF RS.1,33,688 /- LACS IN CASE OF FORMER AND RS.1,02,358/- IN LATTER ASSESSEES CASE (SUPRA). THESE CASE FILES R EVEAL THAT ITA NOS. 1210 & 1211/AHD/2014 (LALIT & KETAN B. PA TEL VS. DY.CIT) - 5 - THE TWO ASSESSEES HAVE PREVIOUSLY DECLARED AGRICULT URAL INCOME OF RS.3,21,496/-, RS.4,11,660/-, RS.4,88,796/- AND RS. 2,74,281/-, RS.4,01,065/- AND RS.6,15,956/- IN ASSESSMENT YEARS 2006-07 TO 20 08-09; RESPECTIVELY. WE SOUGHT TO KNOW ABOUT THEIR RESPECTIVE LAND HOLDINGS . SHRI DIVATIA INFORMS THAT THE FORMER ASSESSEE OWNS APPROXIMATELY 40ACRES WHEREAS THE LATTER ASSESSEES LAND MEASURE 33ACRES ON APPROXIMATE BASI S. LEARNED DEPARTMENTAL REPRESENTATIVE INVITES OUR ATTENTION T O THE FACT THAT BOTH THESE ASSESSEES ARE PERMANENT RESIDENTS OF AHMEDABAD WHER EAS THEIR ABOVE AGRICULTURAL LANDS ARE SITUATED IN DISTT. SURENDRAN AGAR. HE FURTHER SEEKS TO HIGHLIGHT THE FACT THAT THEY HAVE FAILED TO PRODUCE TILLER OF THEIR LANDS. WE DO NOT CONCUR WITH THIS TECHNICAL ARGUMENT. IT HAS AL READY COME ON RECORD THE ASSESSEES HAVE NOT BEEN ABLE TO PROVE EITHER THE TI LLING AGREEMENT OR THEIR RESPECTIVE TILLERS. THE NECESSARY COROLLARY THAT F LOWS FROM THIS FAILURE IS THAT BOTH THE ASSESSEES HAVE TO BE HELD AS CULTIVATORS O F THEIR RESPECTIVE LANDS. THAT BEING THE CASE, IT WILL ONLY ADD UP TO THEIR R ESPECTIVE AGRICULTURAL INCOME SINCE THE LAND IS DEEMED TO BE IN THEIR SELF CULTIV ATION RESULTING IN ENHANCEMENT OF THE AGRICULTURAL INCOME. WE FURTHER NOTICE FROM THE CASE FILE THAT THE LEARNED CIT(A) HAS ADOPTED HYPER TECHNICAL VIEW IN REJECTING ADDITIONAL EVIDENCE IN THE FORM OF AGRICULTURAL SAL E PRODUCE RECEIPTS, AGRICULTURAL INCOME LEDGE AND OTHER DOCUMENTS. SHRI MAJUMDAR SEEKS TO ADD WEIGHT TO THE SAID FINDINGS BY STRONGLY ARGUING THA T THE ASSESSEES AGRICULTURAL LAND DO NOT HAVE A REGULAR SOURCE OF IRRIGATION. T HIS PLEA ALSO FAILS TO IMPRESS UPON US SINCE MERE ABSENCE OF SUCH A REGULAR SOURCE OF IRRIGATION LEADS US TO AN INFERENCE THE LANDS IN QUESTION ARE RAINFED WHER EIN THE ASSESSEES ARE ABLE TO CULTIVATE SOME LESS WATER CONSUMING CROPS LIKE B LACK COTTON IN THE INSTANT CASE. THE ASSESSEES HAVE FURTHER PLACED SOME SALE BILLS OF BLACK COTTON IN THEIR RESPECTIVE FILES. THE FACT HOWEVER ALSO REMA INS THAT ALL THESE DOCUMENTS DO NOT MAKE IT CLEAR THAT THE ASSESSEES HAVE DERIVE D THE IMPUGNED AGRICULTURAL INCOME THEMSELVES WITHOUT ANY EXTERNAL HELP AT ALL. WE THEREFORE ARE OF THE ITA NOS. 1210 & 1211/AHD/2014 (LALIT & KETAN B. PA TEL VS. DY.CIT) - 6 - VIEW THAT REASONABLE ESTIMATION METHOD DESERVES TO BE ADOPTED IN PECULIAR FACTS BEFORE US. WE ACCORDINGLY OBSERVE THAT LARGE R INTEREST OF JUSTICE WOULD BE MET IN CASE THE ASSESSING OFFICER TREATS ASSESSE ES AGRICULTURAL INCOME @ RS.10,000/- PER ACRE ON NET BASIS AFTER PERUSING TH E RELEVANT FORM -7/12 OF THE REVENUE RECORD CONCERNED AND FRAME CONSEQUENTIAL AS SESSMENT AS PER LAW. IT IS MADE CLEAR THAT OUR INSTANT DETERMINATION OF AGR ICULTURAL INCOME @RS.10,000/- PER ACRE SHALL NOT FORM PRECEDENT IN A NY PRECEDING OR SUCCEEDING ASSESSMENT YEAR. 5. THESE TWO ASSESSEES APPEALS ARE ALLOWED FOR STA TISTICAL PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 5 TH DAY OF MAY, 2017.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 05/05/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0