Sh. Jawahar Lal Jain, Chandigarh V. ACIT, Chandigarh

ITA 205/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80927 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-10-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 03-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Income from undisclosed sources; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NOS. 205 TO 208/CHD/2014 ASSESSMENT YEARS: 2001-02 TO 2004-05 SHRI JAWAHAR LAL JAIN, V THE ACIT, SCF 18-19, CENTRAL CIRCLE I, SECTOR 22-D, CHANDIGARH. CHANDIGARH. PAN: ABHPJ7613E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AG GARWAL RESPONDENT BY : SHRI J.S.NAGAR DATE OF HEARING : 08.10.2014 DATE OF PRONOUNCEMENT : 10.10.2014 O R D E R PER BHAVNESH SAINI,JM ALL THE APPEALS BY ASSESSEE ARE DIRECTED AGAINST CO MMON ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATED 10 .01.2014 FOR ASSESSMENT YEARS 2001-02 TO 2004-05. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSI DERED THE MATERIAL AVAILABLE ON RECORD. 3. IN ALL THE APPEALS, GROUND NO. 1 IS GENERAL AND IS ACCORDINGLY, DISMISSED. 4. ON GROUND NO. 2 IN ALL THE APPEALS, THE ASSESSEE CHALLENGED THE ORDER OF THE LD. CIT(APPEALS) IN CON FIRMING 2 AGRICULTURAL INCOME OF RS. 62,514/-, RS. 89,954/-, RS. 42,200/- AND RS.1,24,789/- AS INCOME FROM UNDISCLOS ED SOURCES. 5. THE ASSESSING OFFICER HAD ADDED THE AGRICULTURAL INCOME AS NO SUPPORTING EVIDENCES WERE FILED AND SO ASKED THE ASSESSEE TO FURNISH THE FOLLOWING INFORMATION; (I) OWNERSHIP PAPER OF LAND (II) PROOF THAT AGRICULTURAL ACTIVITI ES WERE DONE ON THE SAID LAND (III) A COPY OF JAMABANDI AND FURD GIRDAWARI OF LAND (IV) DETAIL, LOCATION AND SIZE OF THE LAND. T HE LD. CIT(APPEALS) FOUND FROM THE IMPUGNED ORDER THAT ASS ESSEE WAS NOT ABLE TO FURNISH THE REQUISITE INFORMATION/DOCUM ENTS AS EVIDENT FROM THE WRITTEN SUBMISSIONS FILED IN WHICH THE ASSESSEE HAS EXPLAINED THAT AGRICULTURAL INCOME HAS BEEN SHOWN FROM FARM HOUSE AT VILLAGE RAMGARH, DISTRICT PANCHKULA, HARYANA. COPY OF THE OWNERSHIP PAPER WA S SUBMITTED. IT IS STATED SINCE IT IS AN OLD MATTER, ASSESSEE HAS NOT RETAINED THE JAMABANDI/KHASRA GIRDAWARI WITH HI M. LAND WAS STATED TO BE TILLED BY HIM AND WAS NOT GIVEN ON LEASE. THE ASSESSING OFFICER NOTED THAT DESPITE SEVERAL OPPORT UNITIES AFFORDED, THE ASSESSEE COULD ONLY SUPPLEMENT HIS CL AIM BY FILING LEDGER ACCOUNT OF AGRICULTURAL INCOME. SHOW CAUSE NOTICE WAS ALSO ISSUED. IN THE ABSENCE OF DETAILS/D OCUMENTS CALLED FOR TO PROVE CARRYING ON OF ANY AGRICULTURAL OPERATION, ASSESSING OFFICER PROCEEDED TO EXAMINE THE NATURE O F LAND AS PER THE REGISTERED DEED OF THE SAID AGRICULTURAL LA ND OF THE ASSESSEE WHICH PROVIDED AS UNDER: (I) TOTAL LAND HOLDING = 31 KANAL, 7 MARLA 3 (II) BARANI LAND = 7 KANAL 7 MARLA (III) BANJAR LAND = 24 KANAL 6. THE ASSESSING OFFICER REFERRED TO OFFICIAL WEBSI TE OF HARYANA GOVERNMENT TO UNDERSTAND THE VERNACULAR WOR DS USED FOR REVENUE RECORDS AND IT EMERGES THAT BARANI AN D BANJAR ARE SUCH LANDS WHERE NO CULTIVATION WAS POSSIBLE. IN OTHER WORDS, THE CULTIVATION OF THE LAND OF THE ASSESSEE IN THE REGISTERED DEED AS BARANI AND BANJAR CLEARLY SHOWED THAT LAND IN REFERENCE WAS NOT CULTIVABLE. THIS FINDING LED THE ASSESSING OFFICER TO HOLD THAT ASSESSEE HAD EARNED THE INCOME FROM UNDISCLOSED SOURCES AND HAS TRIED TO COLOUR THIS IN COME AS AGRICULTURAL INCOME SO AS TO AVOID TAXATION. CONSE UENTLY, THE AGRICULTURAL INCOME DECLARED IN THESE YEARS WAS ADD ED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 7. THE LD. CIT(APPEALS), ON CONSIDERATION OF THE FI NDING OF FACT RECORDED BY THE ASSESSING OFFICER NOTED THAT I T WAS A CASE OF THE ASSESSEE THAT THE AGRICULTURAL PRODUCE FROM THE FARM LAND AT VILLAGE RAMGARH WAS SOLD TO LOCAL AHRATIA B UT NOTHING WAS PROVED BEFORE HIM. THE LD. CIT(APPEALS) FOUND THAT SINCE ASSESSEE CLAIMED TO HAVE EARNED AGRICULTURAL INCOME , THEREFORE ONUS WAS UPON HIM TO ESTABLISH CORRECTNESS OF HIS C LAIM BY FURNISHING NECESSARY DOCUMENTS WHICH IN THIS CASE, THE ASSESSEE HAS MISERABLY FAILED TO DO SO. THE LD. CI T(APPEALS), IN THE ABSENCE OF ANY MATERIAL IN FAVOUR OF THE ASS ESSEE CONFIRMED THE ADDITIONS AND DISMISSED THE APPEALS O F THE ASSESSEE IN ALL THE YEARS ON THIS ISSUE. 4 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THESE GROUNDS OF APPEAL OF THE ASSESSE E. THE ASSESSEE CLAIMED THE EARNING OF THE AGRICULTURAL IN COME, THEREFORE ONUS UPON ASSESSEE WAS THERE TO ESTABLISH EARNING OF THE AGRICULTURAL INCOME. THE ASSESSEE HAS FAILED T O PRODUCE JAMABANDI AND GIRDAWARI BEFORE THE AUTHORITIES BELO W AND AS PER MATERIAL COLLECTED BY THE ASSESSING OFFICER, TH E LAND OF THE ASSESSEE WAS FOUND TO BE NOT UNDER CULTIVATION. TH US, ASSESSEE FAILED TO PROVE BASIC REQUIREMENTS OF PRO VING THAT AGRICULTURAL ACTIVITIES WERE DONE IN THE SAID LAND. KHASRA GIRDAWARI ARE RELEVANT DOCUMENTS TO PROVE CULTIVATI ON OF THE LAND WHICH ARE ALWAYS IN POWER AND POSSESSION OF TH E OWNER OF THE LAND, THEREFORE, NON PRODUCTION OF THE SAME BEF ORE THE ASSESSING OFFICER/LD. CIT(APPEALS) CLEARLY PROVE TH AT ASSESSEE HAS FAILED TO PROVE ITS CASE TO THE SATISFACTION OF THE AUTHORITIES BELOW OF EARNING OF THE AGRICULTURAL IN COME. EVEN BEFORE US, ASSESSEE FAILED TO CONTRADICT THE FINDIN GS OF FACT RECORDED BY THE AUTHORITIES BELOW, THEREFORE IN THE ABSENCE OF SPECIFIC MATERIAL IN FAVOUR OF THE ASSESSEE ON RECO RD, WE DO NOT FIND ANY MERIT IN THESE GROUNDS OF APPEAL OF THE AS SESSEE. THESE ARE, ACCORDINGLY DISMISSED IN ALL THE APPEALS UNDER CONSIDERATION. 9. IN ASSESSMENT YEAR 2004-05, THE ASSESSEE RAISED GROUND NO. 3 AS WELL IN WHICH THE ASSESSEE CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN CONFIRMING ADDITION OF RS. 3,28,782 /- ON ACCOUNT OF UNREALIZED LAND FROM INDUSTRIAL BUILDING AT CHANDIGARH. THE LD. CIT(APPEALS) FOUND THAT UNREAL IZED RENTAL INCOME OF RS. 4,69,689/- FROM PROPERTY 27/1, INDUST RIAL AREA, 5 PHASE-II, CHANDIGARH HAS BEEN CLAIMED BY THE ASSESS EE. IT FURTHER TRANSPIRED FROM THE IMPUGNED ORDER THAT NO EXPLANATION IN THIS REGARD, DESPITE VARIOUS REMINDE RS WAS FURNISHED. THIS PERSUADED THE ASSESSING OFFICER TO REFER SECTION 22 AND 23(1)(B) OF THE INCOME TAX ACT TO HO LD THAT ASSESSEE WAS NOT ABLE TO PROVE THAT THE RENT WAS AC TUALLY PAYABLE BY THE TENANT BUT WAS NOT PAID AND THAT THE ASSESSEE DID NOT FULFIL THE CONDITIONS LAID DOWN IN RULE 4A OF THE IT RULES. IT WAS CONTENDED BEFORE LD. CIT(APPEALS) TH AT GROSS RENT AS DISCLOSED IN THE RETURN OF INCOME, STANDS U NDISPUTED AND IN SUPPORT OF HIS CLAIM, THE ASSESSEE HAS ENCLO SED COPY OF THE BANK ACCOUNT TO SHOW THAT RENT OF ONLY TWO MONT HS WOULD BE RECOVERED FROM THE TENANTS DUE TO DISPUTE. HOWE VER, NO DETAILS, NO RENT AGREEMENT NOR THE NATURE OF DISPUT E AND FORUM WHERE AGITATED, HAVE BEEN SUBMITTED. THE LD. CIT(APPEALS), THEREFORE, FOUND THAT ASSESSEE HAS NO T FULFILLED THE CONDITIONS OF RULE 4 OF IT RULES AND CONSEQUENT LY SUSTAINED THE ADDITION ON ACCOUNT OF UNREALIZED REN T AND SUSTAINED THE ADDITION AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 10. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE ASSE SSEE CLAIMED IN THE RETURN OF INCOME UNREALIZED RENTAL I NCOME OF RS. 4,69,689/- FROM THE PROPERTY NO. 27/1, INDUSTRI AL AREA, CHANDIGARH AND CLAIMED DEDUCTION FOR THE SAME. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS NOT OFFER ED ANY EXPLANATION ON THIS ISSUE WITH REFERENCE TO SECTIO N 22 AND 23(1)(B) OF THE INCOME TAX ACT. THE ASSESSING OFFI CER REFERRED TO EXPLANATION TO SECTION 23(1) OF THE INCOME TAX A CT WHICH 6 PROVIDES THAT FOR THE PURPOSE OF CLAUSE (B) OR CLAUSE (C) OF THI S SUB-SECTION, THE AMT OF ACTUAL RENT RECEIVED OR REC EIVABLE BY THE OWNER SHALL NOT INCLUDE, SUBJECT TO SUCH RULES AS M AY BE MADE IN THIS BEHALF, THE AMOUNT OF RENT WHICH THE OWNER CANNOT REALIZE. THE ASSESSING OFFICER ALSO REFERRED TO RULE 4 OF IT RULES, 1962 WHICH PROVIDES THE DEFINITION OF UNREA LIZED RENT AND READS AS UNDER : FOR THE PURPOSES OF THE EXPLANATION BELOW SUB-SECTION (1) OF SECTION 23, THE AMOUNT OF RENT WHICH THE OWNER CANN OT REALISE SHALL BE EQUAL TO THE AMOUNT OF RENT PAYABLE BUT NOT PA ID BY A TENANT OF THE ASSESSEE AND SO PROVED TO BE LOST AND IRRECOVERABLE WHERE, (A) THE TENANCY IS BONA FIDE; (B) THE DEFAULTING TENANT HAS VACATED, OR STEPS HAVE BEE N TAKEN TO COMPEL HIM TO VACATE THE PROPERTY; (C) THE DEFAULTING TENANT IS NOT IN OCCUPATION OF ANY O THER PROPERTY OF THE ASSESSEE; (D) THE ASSESSEE HAS TAKEN ALL REASONABLE STEPS TO INSTITU TE LEGAL PROCEEDINGS FOR THE RECOVERY OF THE UNPAID RENT OR SATISFIES THE ASSESSING OFFICER THAT LEGAL PROCEEDING S WOULD BE USELESS.] 11. THE CONDITIONS OF RULE 4 OF THE IT RULES ARE V ERY SPECIFIC AND THE ASSESSEE BEFORE CLAIMING THE DEDUCTION ON A CCOUNT OF UNREALIZED RENT, SHALL HAVE TO SPECIFY THE CONDITIO NS OF RULE 4 OF THE IT RULES. THUS, THE ASSESSEE SHALL HAVE TO P ROVE THAT TENANCY IS BONAFIDE, THE DEFAULTING TENANT HAS VACA TED OR STEPS HAVE BEEN TAKEN TO GET THE PROPERTY VACATED, THE DE FAULTING TENANT IS NOT IN OCCUPATION OF OTHER PROPERTY OF TH E ASSESSEE AND THAT ASSESSEE HAS TAKEN ALL REASONABLE STEPS TO INSTITUTE LEGAL PROCEEDINGS FOR RECOVERY OF UNPAID RENT OR SA TISFIED THE ASSESSING OFFICER THAT LEGAL PROCEEDINGS WOULD BE U SELESS. IN THIS CASE, THE ASSESSEE HAS FAILED TO PROVE ANY OF THE ABOVE 7 CONDITIONS BEFORE THE AUTHORITIES BELOW. THUS, THE CRITERIA FOR CLAIMING DEDUCTION ON ACCOUNT OF UNREALIZED RENT HA VE NOT BEEN PROVED BY THE ASSESSEE THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. WE, THEREFORE, DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE, THE SAME IS ACCORDINGLY DISMISSED. 12. NO OTHER POINT/ISSUE IS ARGUED. 13. IN THE RESULT, ALL APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER,2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH OCTOBER,2014. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH