M.P. Singh, V. ACIT, Range-I,

ITA 1216/DEL/2006

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69269 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 08-08-2013
• Assessment Year: 1998-1999
• Appeal Filed On: 12-04-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Additional evidence
• Section: 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI B.C. MEENA ITA NO. 1216/DEL/2006 ASSTT. YR: 1998-99 SHRI M.P. SINGH, VS. ACIT, RANGE-1, H. NO. 1337, SECTOR 15, FARIDABAD. FARIDABAD. PAN: ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI DINESH VERMA ADV. RESPONDENT BY : SHRI SUNIL GAUTAM SR. DR O R D E R PER R.P. TOLANI, J.M : THIS IS ASSESSEES APPEAL AGAINST CIT(A)S ORDER D ATED 6-2-2006, RELATING TO A.Y. 1998-99. FOLLOWING GROUNDS ARE RAI SED: 1. THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN L AW IN EXCLUSIVELY FOLLOWING AND RELYING UPON THE EARLIER ORDER OF THE THEN LD. CIT(A) AND HOLDING THAT RS. 8 LAKHS IS TO BE TAXED AS INCOME FROM UNDISCLOSED SOURCES WHEREAS IT WAS DECL ARED AS AGRICULTURAL INCOME. 2. THE LD. CIT(A) HAS CLEARLY ERRED BOTH ON FACTS AND IN LAW IN IGNORING THE VARIOUS DIRECT AND INDIRECT EVI DENCE BROUGHT ON RECORD TO PROVE THAT THE ASSESSEE OWNED VAST LANDS WHICH COULD AND DID PROVE THAT SAFFEDA TREES WERE C ULTIVATED AND AGRICULTURAL INCOME OF RS. 8 LAKHS DECLARED ON ESTIMATE BASIS REPRESENTED SALE OF SUCH SAFFEDA TREES. 2. BRIEF FACTS ARE: THE ASSESSEE FILED HIS RETURN OF INCOME AT RS. 7,44,015/- ON 13-6-2001. BEING BELATED RETURN, A NO TICE U/S 148 OF THE 2 INCOME-TAX ACT WAS ISSUED BY ASSESSING OFFICER ON 2 9-3-2004. VIDE LETTER DATED 13-4-2004 THE ASSESSEE SUBMITTED THAT ITS EAR LIER RETURN MAY BE TREATED AS ONE FILED IN RESPONSE TO NOTICE U/S 148. IN THE RETURN OF INCOME, THE ASSESSEE HAD CLAIMED AGRICULTURAL INCOME OF RS. 8 L AKHS. ASSESSING OFFICER FOUND THAT IN A.Y. 2000-01 ASSESSEES CLAIM OF AGRI CULTURE INCOME OF RS. 5 LAKHS WAS NOT ACCEPTED AND THE SAME WAS HELD AS INC OME FROM OTHER SOURCES. IN VIEW OF THESE FACTS, ASSESSING OFFICER REJECTED THE CLAIM OF IMPUGNED AGRICULTURAL INCOME BY FOLLOWING OBSERVATIONS: THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE YEA R UNDER CONSIDERATION ARE THE SAME. I HOLD THAT NO CULTIVAT ION OF SAFFEDA TREES IS BEING UNDERTAKEN BY THE ASSESSEE ON WHICH AGRICULTURE INCOME OF RS. 8,00,000/- HAS BEEN CLAIMED TO BE EAR NED BECAUSE THE LOCAL INQUIRIES FROM OTHER RESIDENTS OF VILLAGE ANANGPUR HAD CONFIRMED THAT THE SAFFEDA TREES GROWN BY SH. MAHIP AL SINGH WERE CULTIVATED ALONG THE ROAD SIDE AND WERE CUT 4- 5 YEARS BACK. UNDER THE CIRCUMSTANCES THE AGRICULTURE INCOM E IS NOTHING BUT INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES AND IS ADDED TO THE INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S 271(1)(C) FOR FILING INACCURATE PARTICULARS OF INCOME AND CONCEALING INCOME BY SHOWING THE SAME AS AGRICULTUR AL INCOME WHICH IS EXEMPT FROM TAX, ARE BEING INITIATED. 2.1. AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL WHEREIN THE CIT(A) CONFIRMED THE ORDER OF ASSESSING OFFICER BY FOLLOWI NG OBSERVATIONS: 5.1. I HAVE PERUSED THE ORDER DATED 13-01-2004 IN APPEAL NO. 08/03-04 PASSED BY MY PREDECESSOR FOR THE ASSESSMEN T YEAR 2000-01, WHEREIN THE ISSUE AHS BEEN DISCUSSED ELABO RATELY. I FIND IN THAT ORDER MY PREDECESSOR HAS DISCUSSED THE REPORT OF THE INSPECTOR WHO HAD CONSULTED THE PATWARI OF THE VILLAGE, THE EXTRACT OF THE REPORT AS QUOTED BY MY PREDECESSOR I N THAT ORDER IS REPRODUCED BELOW: 3 THE PATWARI WAS ASKED TO SEE HIS RECORD AND CONFIR M WHETHER THERE WAS ANY MENTION OF SAFFEDA TREES IN GIRDAWARI. HE STATED THAT REVENUE RECORD IS SILENT ABOUT THE CROP IN THE LAND IN THE YEAR 19999-2000 AND EAR LIER YEARS. HE FURTHER DEPOSED THAT HE PERSONALLY DO NOT KNOW ABOUT THE CROP ON ASSESSEES LAND BECAUSE HE WAS NO T POSTED IN THAT VILLAGE IN 1999-2000. SO THERE IS NO MATERIAL ON REVENUE RECORD FOR VERIFICATION OF ASSE SSEES CLAIM OF HAVING CULTIVATED SAFFEDA TREES. IN THE AB SENCE OF ANY AUTHENTIC GOVT. RECORDS, THE CONCLUSION MAY KIN DLY BE DRAWN AT YOUR END ON CIRCUMSTANTIAL OR SUPPLEMEN TARY EVIDENCE AVAILABLE ON RECORD. 5.2. SINCE NO NEW FACTS HAVE BEEN BROUGHT ON RECORD S AND COUPLED WITH THE FACT THAT THE MOST OF THE LAND OWN ED BY THE ASSESSEE IS A PAHARI LAND, WHEREIN THE CULTIVATION OF SAFFEDA TREES IS NEARLY AN IMPOSSIBILITY. I HAVE NO REASON TO DIFFER FROM THE CONCLUSION DRAWN BY MY PREDECESSOR IN APPEAL NO . 08/03-04 ORDER DATED 13-01-2004 AND IN THIS YEAR ALSO THE AP PELLANT HAD FAILED TO ESTABLISH THE CULTIVATION OF SAFFEDA TREE S AND HAS ALSO FAILED TO ESTABLISH THAT THE CASH RECEIPTS WERE ON ACCOUNT OF THE SALE OF SAFFEDA TREES. HENCE, UNDER THE CIRCUMSTANC ES, THE ACTION OF THE AO HOLDING THE INCOME OF RS. 8 LAKHS FROM UNDISCLOSED SOURCES IS UPHELD. AGGRIEVED, ASSESSEE IS BEFORE US. 3. IN THE MEANWHILE APPEAL FOR A.Y. 2000-01 CAME TO BE DECIDED BY THE ITAT VIDE ORDER DATED 30 TH JUNE 2008 IN ITA NO. 1419/DEL/2004. THE ITAT UPHELD THE FINDING OF LOWER AUTHORITIES IN THIS BEH ALF BY FOLLOWING OBSERVATIONS: 14. .. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE AND ESTABLISH T HAT THE SAFFEDA TREES WORTH RS. 5 LAC WERE ACTUALLY SOLD BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION, PARTICULARLY IN VI EW OF THE FACT THAT NO SUCH SALE OF SAFFEDA TREES WORTH RS. 5 LAC COULD BE MADE 4 FROM ANY PRODUCE OF 13 ACRE OF LAND, WHEN THE ASSES SEE HAS ALREADY CLAIMED TO HAVE EARNED RS. 8 LAC AND RS. 9 LAC IN IMMEDIATELY TWO PRECEDING YEARS. WITHOUT GIVING ANY FINDING AS TO WHETHER THE ASSESSEE COULD HAVE EARNED AGRICULTU RAL INCOME TO THE EXTENT OF RS. 8 LAC AND RS. 9 LAC IN TWO PRE CEDING YEARS FROM THE LAND OWNED BY THE ASSESSEE, IT IS CLEAR TH AT THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH AND PROVE T HAT THE ASSESSEE HAS ACTUALLY SOLD SAFFEDA TREES WORTH RS. 5 LAC IN THE YEAR UNDER CONSIDERATION EVEN IF THE ASSESSEES CLA IM OF HOLDING THE LAND OF 13 ACRES OF LAND IS ACCEPTED. FOR THE R EASONS GIVEN ABOVE BY US WE UPHOLD THE ORDERS OF CIT(A) IN CONFI RMING AO'S ACTION IN ASSESSING A SUM OF RS. 5 LAC AS INCOME FR OM UNDISCLOSED SOURCES AS AGAINST AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE IN AS MUCH AS THE ASSESSEE HAS NOT B EEN ABLE TO EXPLAIN THE SOURCE AND NATURE OF THE AFORESAID SUM OF RS. 5 LAC SHOWN AS ALLEGED AGRICULTURAL INCOME IN THE RETURN OF INCOME. THE ORDER OF THE CIT(A) IS, THUS, UPHELD. 4. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT ONE O F THE REASONS IN HOLDING THAT THERE WAS NO AGRICULTURE INCOME IN A.Y . 2000-01 IS OBSERVED IN THIS PART OF THE ITATS ORDER IS TO THE EFFECT THA T ASSESSEE HAS ALREADY CLAIMED TO HAVE EARNED RS. 8 LAC AND RS. 9 LACS IN IMMEDIATELY TWO PRECEDING YEARS WHICH INCLUDES A.Y. 1998-99 AND HEN CE IS NO SPECIFIC FINDING HAS BEEN GIVEN ABOUT THERE BEING NO SAFFEDA TREES OR NO AGRICULTURAL INCOME IN EARLIER YEARS. THEREFORE, THE ITATS FIND ING IMPLIEDLY SUPPORTS ASSESSEES CLAIM THAT AGRICULTURE INCOME WAS EARNED IN PRECEDING YEARS AND AS THE TREES WERE HELD TO CUT, NO AGRICULTURE INCOM E WAS ALLOWED IN A.Y. 2000-01. LD. ASSESSING OFFICER AND CIT(A) HAVE RELI ED ON THE REPORT OF AN INSPECTOR WHO WAS SENT TO VERIFY THE STATUS OF THE AGRICULTURE INCOME OF THE ASSESSEE IN THE YEAR 2000-01. THE INSPECTOR SUBMIT TED A REPORT ON 18-12- 2003 ON THE BASIS OF LOCAL INQUIRES I.E. AFTER 5 YE ARS FROM THE LAST DAY OF FINANCIAL YEAR 1997-98, WHICH ALSO STATES THAT SAFF EDA TREES WERE PLANTED BUT 5 CUT DOWN 4-5 YEARS EARLIER. THE PATWARI HAS ALSO N OT DENIED THE EXISTENCE OF SAFFEDA TREES ON THE LAND. SHRI KHUBI RAM, NAMBARDA R, SH. BALAK RAM, TULA RAM AND JAISE RAM, RESIDENTS OF VILLAGE ANANGPUR HA VE STATED THAT THE ASSESSEE HAD CULTIVATED SAFFEDA TREES ON ROAD SIDE WHICH HE HAD CUT ABOUT 4- 5 YEARS BACK. ON THE BASIS OF THESE FACTS, IT EMERG ES THAT DURING THE EARLIER TIME PERIOD OF 4-5 YEARS I.E. AROUND A.Y. 1998-99 S AFFEDA TREES WERE THERE, CUT AND SOLD. THE ASSESSEES AGRICULTURE INCOME MA Y NOT HAVE BEEN ACCEPTED IN SUBSEQUENT YEARS ON THE OBSERVATION THAT WHEN AS SESSEE HAD ALREADY CUT AND SOLD SAFFEDA TREES IN EARLIER YEARS THERE CAN B E NO AGRICULTURE INCOME IN SUBSEQUENT YEARS, BUT AT THE SAME TIME THIS OBSERVA TION ITSELF IMPLIEDLY ACCEPTS THAT 4-5 YEARS BACK ASSESSEE HAD SOLD SAFFE DA TREES GROWN ON 7 ACRES OF PAHARI LAND. LD. COUNSEL THUS CONTENDS THAT: (I) THERE IS NO ADVERSE STATEMENT GIVEN BY THE PATWARI OR REPORTED BY THE INSPECTOR FOR A.Y. 1998-99. (II) THE ABOVE RESIDENTS OF THE VILLAGE HAVE CORROBORATE D THAT 4-5 YEARS BACK THE ASSESSEE HAD CUT AND SOLD SAFFEDA TREES GR OWN ON 7 ACRES OF PAHARI LAND. (III) A FINDING OF A.Y. 2000-01 ABOUT NON-AGRICULTURAL IN COME CANNOT BE RELIED TO HOLD THAT HER WAS NO AGRICULTURE ACTIV ITY OR INCOME AT ALL IN A.Y. 1998-99, MORE SO, WHEN ASSESSING OFFICE R ACCEPTS THAT THE ABOVE VILLAGERS HAD GIVEN STATEMENT TO THE INSP ECTOR ABOUT SALE OF SAFFEDA TREES WHICH PERTAINED TO IMPUGNED YEAR. 4.1. IN VIEW OF THESE FACTS, LD. COUNSEL CONTENDS T HAT ASSESSEES AGRICULTURE INCOME MAY BE ACCEPTED OR IN ALTERNATE REASONABLY E STIMATED. AT THE TIME OF REASSESSMENT ALREADY LONG TIME HAVING ELAPSED BE TWEEN THE EARNING OF AGRICULTURE INCOME AND THE INSPECTORS INQUIRIES, A SSESSEE WAS NOT ABLE TO 6 PRODUCE THE RELEVANT RECORD. THE ABOVE FACTS CLEARL Y ESTABLISH THAT ASSESSEE HAD CUT AND SOLD THE SAFFEDA TREES FROM THE 7 ACRES OF AGRICULTURE LAND. 5. LD. DR VEHEMENTLY SUPPORTS THE ORDERS OF LOWER A UTHORITIES AND CONTENDS THAT ITAT HAS ALREADY HELD THAT THERE WAS NO AGRICULTURE INCOME, THE ADDITION SHOULD BE SUSTAINED. BESIDES, THE ASSE SSEE HAS FAILED TO PRODUCE ANY RECORD WHATSOEVER IN SUPPORT OF ACTIVITY OR QUA NTITY OF AGRICULTURAL OPERATIONS. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. FROM THE INSPECTORS REPORT DA TED 18-12-2003 IT EMERGES THAT THE VILLAGERS S/SHRI KHUBI RAMM, NAMBARDAR, B ALAK RAM, TULA RAM AND JAISE RAM, WHO WERE RESIDENTS OF VILLAGE ANANGP UR HAD CONFIRMED THAT ASSESSEE HAS CULTIVATED SAFFEDA TREES ON 7 ACRES OF AGRICULTURAL ROAD SIDE LAND, WHICH WERE SOLD ABOUT 4-5 YEARS BACK. THESE CONFIRM ATIONS DO INDICATE THAT ASSESSEE IN THIS YEAR HAD SOLD SAFFEDA TREES AND EA RNED AGRICULTURE INCOME. PATWARI ALSO HAS SUPPORTED THEIR STATEMENTS AND INS PECTORS REPORT HAS NOT GIVEN ANY ADVERSE COMMENT ABOUT A.Y. 1998-99 RATHER IT CORROBORATES LD. COUNSELS CONTENTION. ASSESSEE HAS PLEADED HIS INA BILITY IN PRODUCING THE DETAILS OF AGRICULTURE INCOME BEFORE LOWER AUTHORIT IES DUE TO LAPSE OF TIME. NO ADDITIONAL EVIDENCE IS FILED BEFORE US, HOWEVER, A PRAYER IS MADE THAT THE FACTS ON RECORD INDICATE THE ASSESSEE HAVING EARNED AGRICULTURE INCOME, ALTERNATIVELY AGRICULTURAL INCOME MAY BE ESTIMATE D. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE RECORD DEMONSTRATES A FACT THAT ASSESSEE HAD GROWN AND SOLD SAFFEDA TREES ON 7 ACRES OF THIS ROAD SIDE LAND DURING THE PERIOD RELEVANT TO A.Y. 1998- 99. IN VIEW OF THESE FACTS, CIRCUMSTANCES AND OBSERVATIONS, INTEREST OF JUSTICE WILL BE SERVED THAT NET 7 AGRICULTURE INCOME OF THE ASSESSEE IN THIS YEAR IS ESTIMATED AT RS. 4,00,000/-. WE ORDER ACCORDINGLY. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN OPEN COURT ON 06-09-2013. SD/- SD/- ( B.C. MEENA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6 TH SEPT. 2013. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR