Shri Ashok Kumar Garg, New Delhi V. ITO, New Delhi

ITA 1329/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4947 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 13-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN SR D R D O H D O O
• Keywords: Additional evidence
• Section: 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC BENCH, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 1329 /DEL/17 A.Y. 2008 - 09 SH. ASHOK KUMAR GARG VS. ITO, WARD 8(1) C/O SANDEEP SAPRA, ADV. NEW DELHI C 763, NEW FRIENDS COLONY NEW DELHI 110 025 PAN: AAKPG 5945 L (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SANDEEP SAPRA, ADV. RESPONDENT BY : SH. T.VASANTHAN, SR.D.R. D.O.H : 1 6 .08.2017 D.O.O.: 24. 08.2017 ORDER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD.CIT(A) - 15 , NEW DELHI DATED 30.12.2016 PERTAINING TO THE ASSESSMENT YEAR (AY) 20 08 - 09. 2. THE LD.COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 1 AND 3 OF THE APPEAL OF THE ASSESSEE, THESE GROUNDS ARE DISMISSED AS NOT PRESSED . 2 3. IN GROUND NO.2 THE ASSESSEE CHALLENGED THE ADDITION OF RS. 14 ,48, 800 / - OUT OF TOTAL AD DITION OF RS.15,23, 500 / - MADE ON ACCOUNT OF CASH DEPOSIT IN ASSESSEE S BANK ACCOUNT . 4. B RIEFLY STATED THE FACT OF THE CASE ARE THAT THE ASSESSEE FILE D RETURN OF INCOME DECLARING INCOME OF RS.1,09,260/ - ON 31ST MARCH , 2009 . THE A SSESSING O FFICER (AO) IN THIS CASE RECEIVE D AIR INFORMATION THAT THE ASSESSEE HAD DEPOSITED CASH OF RS. 15 , 23 , 500 / - IN HIS BANK ACCOUNT ON 31 .3 .200 2. D URING THE COURSE OF ASSESSMENT PROCEEDINGS , SINCE THE QUERIES RAISED BY THE AO WE RE NOT ANSWERED AND NO DETAILS OR DOCUMENTARY EVIDENCES WERE FILED , THEREFORE , THE AO MADE AN ADDITION OF R S.15,23,500/ - AN ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE . 5. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD.CIT(A) AND ALSO FI LED AN APPLICATION UNDER RULE 46 A FOR ADMISSION OF ADDITIONAL EVIDENCE S . IT WAS SUBMITTED BY THE ASSESSEE THAT CASH OF RS.15,23,500/ - WAS DEPOSITED IN HIS SAVINGS BANK ACCOUNT OUT OF SALE PROCEEDS FROM CUTTING OF POPLAR TREES GROWN ON AGRICULTURAL LAND BELONGING TO THE ASSESSEE . THE ASSESSEE INHERITED AGRICULTURAL LAND ALONG WITH HIS BROTHER FROM HIS MOTHER. THE ASSESSEE FURTHER SUBMITTED THAT AS PER REPORT OF THE A GRICULTURAL F OREST AND N ATURAL R ESOURCES M ANAGEMENT , D EPARTMENT OF G OVERNMENT OF UP , POPLAR 3 TREES ARE CULTIVATED DO NOT GROW SPONTANEOUSLY AND THEREFORE GROWING , CUTTING AND S ELLING OF POPLAR T REE IS AN AGRICULTURAL ACTIVITY AND INCOME GENERATED FROM SUCH ACTIVITY IS AGRICULTURAL INCOME . IT WAS SUBMITTED BY THE ASSESSEE THAT ONE MR .SALIM HASAN WAS ENGAGED BY HI M TO CUT THE TREES DURING THE PERIOD @ RS. 2 , 300 / - PER TREE . A COPY OF CERTIFICATE DATED 18.12.2005 FROM THE VALUER SHRI RAKESH MOHAN GUPTA WAS ALSO SUBMITTED CERTIFYING THAT 1055 POPLAR TREES WERE LIVE AND STANDING AS ON 21.6.2005 IN THE AGRICULTURAL FIEL D BELONGING TO THE ASSESSEE. THE ASSESSEE SUBMITTED THAT AGRICULTURAL INCOME OF RS.78,700/ - WAS FROM SALE OF AGRICULTURAL CROP AS REPORTED IN RETURN . INCOME FROM CUTTING OF POPLAR TREES WAS IN ADDITION TO THE AGRICULTURAL INCOME REPORTED. THE INCOME FROM CUTTING OF POPLAR TREES REMAINED TO BE REPORTED IN HIS ITR DUE TO HIS SERIOUS ILLNESS, AS HE SUFFERED A BRAIN STROKE ON 12.5.2006 IN WHICH HE SUFFERED A MEMORY LOSS AND PARALYSIS FOR WHICH TREATMENT WAS CONTINUING. THE ADDITIONAL EVIDENCES WERE FORWARD ED TO THE AO FOR FILING THE REMAND REPORT. THE AO EXAMINED MR.SALIM HASAN IN THE REMAND PROCEEDINGS IN WHICH HE EXPLAINED TO CUT 1000 TREES OF POPLAR @ RS.2300/ - FOR ASSESSEE AND HE HAS SUBMITTED THAT NO PERMISSION WAS OBTAINED FROM GOVERNMENT AUTHORITIE S TO CUT DOWN THE POPLAR TREES AND THAT ACTUAL EXPECTED PRICE IN THE MARKET DURING 4 THAT PERIOD WAS RS.500/ - PER QU INTAL OF GOOD QUALITY. THE AO REPORTED THAT SINCE THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME OF RS.78,700/ - ONLY IN RETURN OF INCOME TH EREFORE TO THAT EXTENT AGRICULTURAL INCOME MAY BE ACCEPTED AND REMAINING ADDITION MAY BE CONFIRMED. THE LD.CIT(A) CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF MATERIAL PLACED ON RECORD CONFIRMED THE ADDITION OF RS.14,44,800/ - AFTER GIVING CREDIT OF RS.78,700/ - . HIS FINDINGS IN PARA 8 OF THE APPELLATE ORDER ARE REPRODUCED WHICH IS AS UNDER. 8. I SHALL NOW BE DEALING WITH THE MAIN ISSUE INVOLVED IN THIS APPEAL REGARDING ADDITION ON ACCOUNT OF UNEXPLAINED CASH OF RS.15,23,500/ - DEPOSITED IN THE SAVINGS BANK ACCOUNT OF THE APPELLANT . D URING THE COURSE OF ASSESSMENT PROCEEDINGS , APPELLATE MADE NO MENTION ABOUT SOURCE OF CASH FROM SALE OF POPULAR TREES AND ASSESSMENT WAS COMPLETED UNDER SECTION 144 . F ROM THE AFFIDAVIT FILED BY SH. SALEEM HASAN IT IS SEEN THAT CONTRACT OF CUTTING POPULAR TREES WAS GIVEN TO HIM ON 22.03.2007 AND HE HAD PAID AN ADVANCE OF RS. 1 LAKH IN CASH ON 22 . 03 . 2007 . T HERE IS NO MENTION ABOUT THE OTHER PAYMENT MADE BY HIM ALONG WITH DATE S AND IT IS SIMPLY STATED THAT THE B ALANCE AMOUNT WAS PAID AS AND WHEN TREES WERE CUT . FROM THE BANK STATEMENT FILED IT IS SEEN THAT THE CASH OF 5 RS.10,000/ - WAS DEPOSITED 18.4.2007 AND RS.1,65,000/ - WAS DEPOSITED ON 22.4.2007 AS AGAINST THE INITIAL ADVANCE OF RS.1,00,000/ - RECEIVED FROM SRI SALIM HASAN ON 22.3.2007. THEREAFTER, LUMP SUM CASH AMOUNTS WERE DEPOSITED BY THE APPELLANT IN THIS ACCOUNT ON VARIOUS DATES E.G. CASH OF RS.75,000/ - DEPOSITED ON 21.5.2007, RS.1,20,000/ - DEPOSITED ON 22.5.2007, RS.70,000/ - ON 23.5.2007, RS.32,000/ - ON 22.6.2007, RS.1,00,000/ - EACH ON 16.8.2007, 17.8.2007, 10.09.2007 AND ON 14.9.2007. AS THE AMOUNTS DEPOSITED ARE IN LUMP SUM AND ROUND FIGURE, IT DOES NOT REFLECT THAT THE AMOUNT WA S RECEIVED BY CUTTING TREES AS AND WHEN THE TREES WERE CUT. FURTHER, TH E APPELLANT HIMSELF HAS DECLARED AGRICULTURAL INCOME OF RS.78,700/ - ONLY WHICH HE CLAIMS TO BE OUT OF SALE OF CROP. I T IS DIFFICULT TO ACCEPT THE PROPOSITION THAT THE APPELLANT COULD REMEMBER AND DECLARE AGRICULTURAL INCOME OF RS. 78 , 700 / - BUT FORGOT ALL TOGETHER THE MAJOR PART LUMP SUM AMOUNT RECEIVED BY HIM FROM CUTTING OF POPULAR TREES . I N THE LIGHT OF THE ABOVE I AM NOT IN AGREEMENT WITH THE SUBMISSION / EXPLANATIONS FILED BY THE APPELLANT WITH REGARD TO THE SOURCE OF CASH OF RS.15,23,500/ - . AFTER GIVING CREDIT FOR THE AGRICULTURAL INCOME OF RS.78,700/ - DISCLOSED BY HIM IN THE RETURN OF 6 INCOME FILED, ADDITION OF THE BALANCE AMOUNT OF RS.14,44,800/ - IS HEREBY CONFIRMED. 6. AFTER CONSIDERING RIVAL SUBMISSIONS I AM NOT INCLINED TO INTERFERE WITH THE ORDER OF LD.CIT(A). THE LD.COUNSEL FOR THE ASSESSEE REITERATED SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. THE ASSESSMENT ORDER REVEALED THAT THE AO ISSUED SPECIFIC SHOW CAUSE NOTICE TO THE ASSESSEE TO FILE DETAILS OF A GRICULTURAL INCOME OF RS.78,700/ - ALONG WITH COPIES OF DOCUMENTS OF AGRICULTURAL LAND, BILLS AND OTHER DOCUMENTS OF CULTIVATION AND HARVESTING ACTIVITIES , PURCHASE OF SEEDS AND SALE OF AGRICULTURAL CROP ETC. IT WAS DIRECTED THAT IN CASE IF THE ASSESSEE W OULD NOT SUBMIT THE DOCUMENTARY EVIDENCES, AGRICULTURAL INCOME DECLARED RS.78,700/ - WILL BE CONSIDERED AS INCOME FROM OTHER SOURCES. THE ASSESSEE HAS NOT FURNISHED ANY DETAILS OR DOCUMENTS IN SUPPORT OF EARNING OF AGRICULTURAL INCOME. THEREFORE THE ADDITI ON OF RS.78,700/ - WAS MADE ON ACCOUNT OF TAXABLE INCOME . IT IS SIGNIFICANT TO NOTE THAT THIS ADDITION WAS NOT CHALLENGED BY THE ASSESSEE BEFORE THE LD.CIT(A) AND NO GROUND OF APPEAL HAS BEEN RAISED, SIMILARLY NO SUCH GROUND HAS BEEN RAISED BEFORE THE TRIBUNAL. I T IS THEREFORE PROVED THAT THE ASSESSEE FAILED TO FURNISH EVIDENCE TO PROVE THAT THE ASSESSEE 7 PERFORMED BASIC AGRICULTURAL OPERATIONS FOR EARNING AGRICULTURAL INCOME. THE ASSESSEE MERELY FILED COPY OF AGREEMENT DT. 22 ND MARCH, 2007 BETWEEN THE ASSESSEE AND SRI SALIM HASAN FOR SALE OF 100 0 POPLAR TREE S WHICH DO NOT FALL IN ASSESSMENT YEAR UNDER APPEAL, B EFORE THE LD.CIT(A) WHICH WOULD NOT SUPPORT THE CASE OF THE ASSESSEE AT ALL FOR EARNING AGRICULTURAL INCOME BECAUSE ASSESSEE DID NOT PROVE ANYTHING OR DO ANY PRIMARY ACTIVITIES FOR EARNING AGRICULTURAL INCOME. THE ASSESSEE SUBMITTED BEFORE THE LD.CIT(A) THAT AS PER THE REPORT OF AGRICULTURAL FOREST AND NATURAL RESOURCES MANAGEMENT DEPT. GOVT. OF UP, POPLAR TREES ARE CULTIVATED AND THEREFORE GROWING, CUTTING AND SELLING OF POPLAR TREE IS AGRICULTURAL A CTIVITY. HOWEVER NO EVIDENCE HAS BEEN FILED IF THE ASSESSEE HAS CULTIVAT ED ANY POPLAR TREES IN ANY OF THE YEARS. THEREFORE IN THE ABSENCE OF ANY EVIDENCE OF CULTIVATING POPLAR TREE OR DOING ANY PRIMARY ACTIVITY TO EARN AGRICULTURAL INCOME, THE CLAIM OF THE ASSESSEE CAN NOT BE ACCEPTED FOR EARNING AGRICULTURAL INCOME. IT MAY A LSO BE NOTED HERE THAT WHEN NOTICE WAS GIVEN BY THE AO TO PROVE EARNING OF AGRICULTURAL INCOME OF RS.78,700/ - , THE ASSESSEE DID NOT EVEN EXPLAIN THE SALE OF POPLAR TREES THROUGH MR.SALIM HASAN AT ANY POINT OF TIME. ADVANCE AGAINST SALE OF POPLAR TREE IS ALLEGED TO BE RECOVERED IN PRECEDING A.Y. NO EVIDENCE OF RECEIPT OF 8 ANY SUCH AMOUNT IN ASSESSMENT YEAR IN APPEAL HAS BEEN FILED. NO EVIDENCE OF CUTTING OF POPLAR TREE ARE FILED. NO INCOME FROM SALE OF POPLAR TREE HAS BEEN DISCLOSED IN RETURN OF INCOME. THEREFORE THE STORY SET UP BEFORE THE LD.CIT(A) FOR SELLING POLAR TREES IS CLEARLY AN AFTERTHOUGHT AND RIGHTLY HAVE BEEN REJECTED. HOWEVER THE AO AND LD.CIT(A) WITHOUT ANY BASIS ACCEPT ED THE AGRICULTURAL INCOME OF RS.78,700/ - FOR WHICH EVEN NO GROUND OF APPEAL HAS BEEN RAISED BY THE ASSESSEE BEFORE THE LD.CIT(A). THE LD.CIT(A) IN HIS FINDINGS HAS GONE THROUGH THE EXPLANATION OF THE ASSESSEE REGARDING CASH DEPOSITS IN THE BANK ACCOUNT AND RECEIPT OF ADVANCE FROM SRI SALIM HASAN WHICH DID NOT MATCH WIT H THE CASH DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. IN ABSENCE OF ANY RELIABLE AND COGENT MATERIAL , CLAIM OF ASSESSEE FOR SALE OF POPLAR TREE FOR EXEMPT AGRICULTURAL INCOME CANNOT BE ACCEPTED. THE HON BLE SUPREME COURT IN THE CASE OF DURGA PRASAD MORE REPORTED IN 82 ITR 540 AND SUMATI DAYAL REPORTED IN 214 ITR 801 , WHEREIN IT WAS HELD THAT THE COURTS/TRIBUNALS HAVE TO JUDGE THE EVIDENCE BEFORE THEM BY APPLYING THE TEST OF HUMAN PROBABILITY AFTER CONSIDERING SURROUNDING CIRCUMSTANCES. IF THE SA ME RULE IS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THE CASE ON HAND, IT WOULD LEAD TO THE CONCLUSION THAT THE ASSESSEE HAS NOT EARNED ANY AGRICULTURAL INCOME 9 OF RS.78,700/ - FOR WHICH CREDIT HA S BEEN GIVEN BY THE LD.CIT(A), THE ASSESSEE HAS ALSO NOT EARN ED ANY INCOME ON SALE OF POPLAR TREES. IN ABSENCE OF EVIDENCE, CASE LAW CITED IN SUBMISSIONS DO NOT APPLY TO THE FACTS OF THE CASE. I THEREFORE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE AND THE SAME IS ACCORDINGLY DISMISSED. 7. IN THE RESULT THE APPEAL BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/ - (BHAVNESH SAINI) JUDICIAL MEMBER DATED : THE 24 TH AUGUST, 2017 *GMV 10 COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE.