Anjum Shoukat Bagwan, Ichalkaranji V. DCIT, Central Circle, Kolhapur

ITA 221/PUN/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7094 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 21-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Business income; Income from undisclosed sources; Search and seizure; Document seized; Deemed to accrue or arise in india; Cost of acquisition; Difference of opinion; Documents seized
• Section: 40A(3); 143(3); 153A; 68; 132

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , ' , % BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVE DI, AM . / ITA NOS.215 TO 225/PUN/2013 ' ' / ASSESSMENT YEARS : 1999-2000 TO 2009-10 ANJUM SHOUKAT BAGWAN, 6/464, NEAR JAYASHREE SIZING, SANGLI ROAD, ICHALKARANJI 416 115 . / APPELLANT PAN NO.ABPAB9820C VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR . / RESPONDENT . / ITA NOS.467 TO 477/PUN/2013 ' ' / ASSESSMENT YEARS : 1999-2000 TO 2009-10 THE INCOME TAX OFFICER, CENTRAL, KOLHAPUR . / APPELLANT VS. ANJUM SHOUKAT BAGWAN, 6/464, NEAR JAYASHREE SIZING, SANGLI ROAD, ICHALKARANJI 416 115 . / RESPONDENT PAN NO.ABPAB9820C . / ITA NOS.171 TO 181/PUN/2013 ' ' / ASSESSMENT YEARS : 1999-2000 TO 2009-10 ARISH SHOUKAT BAGWAN, 6/464, NEAR JAYASHREE SIZING, SANGLI ROAD, ICHALKARANJI 416 115 . / APPELLANT PAN NO.ABYPB5125F VS. 2 ANJUM AND GROUP THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR . / RESPONDENT . / ITA NOS.489 TO 499/PUN/2013 ' ' / ASSESSMENT YEARS : 1999-2000 TO 2009-10 THE INCOME TAX OFFICER, CENTRAL, KOLHAPUR . / APPELLANT VS. ARISH SHOUKAT BAGWAN, 6/464, NEAR JAYASHREE SIZING, SANGLI ROAD, ICHALKARANJI 416 115 . / RESPONDENT PAN NO. ABYPB5125F . / ITA NOS.182 TO 192/PUN/2013 ' ' / ASSESSMENT YEARS : 1999-2000 TO 2009-10 SHAHNAZ SHOUKAT BAGWAN, 6/464, NEAR JAYASHREE SIZING, SANGLI ROAD, ICHALKARANJI 416 115 . / APPELLANT PAN NO.ABYPB5123DF VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR . / RESPONDENT . / ITA NOS.478 TO 488/PUN/2013 ' ' / ASSESSMENT YEARS : 1999-2000 TO 2009-10 THE INCOME TAX OFFICER, CENTRAL, KOLHAPUR . / APPELLANT VS. SHAHNAZ SHOUKAT BAGWAN, 6/464, NEAR JAYASHREE SIZING, SANGLI ROAD, ICHALKARANJI 416 115 . / RESPONDENT PAN NO.ABYPB5123DF 3 ANJUM AND GROUP . / ITA NOS.204 TO 214/PUN/2013 ' ' / ASSESSMENT YEARS : 1999-2000 TO 2009-10 KAISH SHOUKAT BAGWAN, 6/464, NEAR JAYASHREE SIZING, SANGLI ROAD, ICHALKARANJI 416 115 . / APPELLANT PAN NO.AFWPB6636C VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR . / RESPONDENT . / ITA NOS.456 TO 466/PUN/2013 ' ' / ASSESSMENT YEARS : 1999-2000 TO 2009-10 THE INCOME TAX OFFICER, CENTRAL, KOLHAPUR . / APPELLANT VS. KAISH SHOUKAT BAGWAN, 6/464, NEAR JAYASHREE SIZING, SANGLI ROAD, ICHALKARANJI 416 115 . / RESPONDENT PAN NO. AFWPB6636C . / ITA NOS.226 & 227/PUN/2013 ' ' / ASSESSMENT YEARS : 2004-05 & 2005-06 SONIYA NAGARI VINKAR & VINKAR VYAVASAIK SAH. PAT SANSTHA LTD., H.NO.193, W.NO.9, NEAR JAYASHREE SIZING, SANGLI ROAD, ICHALKARANJI 416 115 . / APPELLANT PAN NO.AAAJS2234E VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR . / RESPONDENT 4 ANJUM AND GROUP . / ITA NOS.445 & 446/PUN/2013 ' ' / ASSESSMENT YEARS : 2004-05 & 2005-06 THE INCOME TAX OFFICER, CENTRAL, KOLHAPUR . /APPELLANT VS. SONIYA NAGARI VINKAR & VINKAR VYAVASAIK SAH. PAT SANSTHA LTD., H.NO.193, W.NO.9, NEAR JAYASHREE SIZING, SANGLI ROAD, ICHALKARANJI 416 115 . / RESPONDENT PAN NO.AAAJS2234E / APPELLANT BY : SHRI M.K. KULKARNI / RESPONDENT BY : SHRI O.A. MAO / ORDER PER SUSHMA CHOWLA, JM : THIS BUNCH OF APPEALS FILED BY THE ASSESSEE AND RE VENUE ARE AGAINST CONSOLIDATED ORDERS OF CIT(A) KOLHAPUR RELATING TO ASSESSMENT YEARS 1999- 2000 TO 2009-10 AGAINST RESPECTIVE ORDERS PASSED UN DER SECTION 143(3) R.W.S. 153A/147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE IN ITA NO.216/PUN/2013 RELATING TO ASSESSMENT YEAR 2000-2001 HAS RAISED THE FOLLOWING GROUNDS OF APPEA L:- UNDER FACTS & UNDER THE CIRCUMSTANCES OF THE CASE 1. HON . CIT [A] HAS GROSSLY ERRED IN NOT ACCEPTING THE BOOK RESULTS FOR AGRICULTURE INCOME O F THE APPELLANT . WHEREAS, LEARNED CIT[A] HAS ADOPTED FOLLOWING METHODOLOGY FOR ESTIMATING INCOME FROM SU GARCANE AND VEGETABLE /F RUITS ETC : / DATE OF HEARING :08.12.2016 / DATE OF PRONOUNCEMENT: 15.02.2017 5 ANJUM AND GROUP FROM SUGARCANE GROSS RECEIPTS , 54 % IS DEDUCTED TOWARDS A GRICULTURE EXPENSES AND AMOUNT PAID TOWARDS CONTRACTUAL FARMIN G [BATAI] . FOR ARRI V ING AT THIS CONCLUSION , HON CIT[ A ] HAS TOT A LL Y RELI E D ON THE FACT S O F TH E CA SE O F B A D S HAH BA GW AN , AND REFERRING TH E FACTS O F BADSHAH BAGWAN 'S CA S E , TH E FORMULA OF 54 % DEDUCTION I S APPLIED . WHEREAS, IN THE CA S E OF APPELLANT , NOT A SINGLE DOCUMENT HAS BEEN FOUND AND SEIZED TO ES TABLISH AND SUB S TANTIATE TH A T TH E APPELLANT H A D GIVEN HIS LAND ON CONTRACTUAL [BATAI] FARMING. HEN CE, DEDUCTION ON ACCOUNT O F ESTIMATED E X PENDITURE AND CONTRACTUAL FARMING I S PUREL Y ON A SSUMPTION AND PR E SUMPTION , HENCE NEED S TO B E DI S APPROVED. IT IS HUMBLY PRAYED THAT, THE BOOK RESULT S OF THE APPELLANT MAY KINDLY BE APPROVED . NON SUGARCANE SALES FOR VEGETABLE / FRUIT S ETC ARE E STIMAT E D @ 150 % O F NOTIONAL INCOME FROM SUGARCANE SALE. FROM SAID GROS S R E CEIPTS , 50% IS DEDUCTED TOWARDS AGR I CULTUR E EXPENSES AND AMOUNT PAID TOW A RD S C ONTR A CTUAL F A RMING [BATAI] , UNDER TH E FOLLO W ING CAPTION ' MENTIONED IN THE TABULATION - T A BLE II [P A R A 30 OF THE ORDER ]' L . LESS: EXPENSES & CONTRACTUAL FARMING FACTOR @ 50 % FOR ARRIVIN G AT THIS CON C LUSION , HON CIT[ A ] H AS TOT A LLY R E LI E D ON THE FA CT S OF C ASE OF BADSHAH BAGWAN , AND REFERRING THE FACTS OF B A DSHAH B A G WA N ' S CASE , THE FORMULA O F 50 % D E DU C TION IS APPLIED. WH E REAS , IN CA SE O F APP E LLANT , N O T A SINGLE DOCUMENT H AS BEEN FOUND AND SEIZED TO ESTABLISH AND SUB S TANTIATE THAT , A PP E LLANT HAD GIVEN HI S LAND ON CONTRACTUAL [BATAI] FARMING . FURTHER, IN PARA 25 OF THE ORDER, HON CIT[A] HA S MENTIONED THAT, 'IT IS ALSO WELL-KNOWN THAT, NORMALLY VEGETABLES AR E NOT GROWN ON SHARING SYSTEM OR BATAI BASIS' IN VIEW OF THE REMARKS MENTIONED ABOVE, THE DISALLO WANCE MADE ON ACCOUNT OF CONTRACTUAL FARMING [BATAI] IS UNCALLED FOR AND NEEDS TO BE DISAPPROVED. HENCE, DEDUCTION ON ACCOUNT OF ESTIMATED EXPENDITUR E AND CONTRACTUAL FARMING IS PURELY ON ASSUMPTION AND PRESUMPTION, HE NCE NEEDS TO BE DISAPPROVED. IT IS HUMBLY PRAYED THAT, THE BOOK RE SULTS OF THE APPELLANT MAY KINDLY BE APPROVED. 2. THE APPELLANT MAY BE ALLOWED TO ADD / RECTIFY T HE GROUNDS OF APPEAL. 3. SIMILAR GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN ITA NO.215/PUN/2013, RELATING TO ASSESSMENT YEAR 1999-2 000. 4. THE REVENUE IN ITA NO.468/PUN/2013, RELATING TO ASSESSMENT YEAR 2000-2001 HAS RAISED THE FOLLOWING GROUNDS OF APPEA L:- 6 ANJUM AND GROUP 1. CIT(A) ERRED IN NOT CONFIRMING THE ADDITIONS MA DE BY THE A.O . ON THE ISSUE OF AGRICULTURAL INCOME FROM SALE OF SUGARCANE , VEGETABLES & OTHER AGRICULTURAL INCOME FROM FLOWERS, FRUITS , COCONUTS ETC . IN TOTO DISREGARDING THE EVIDENCES BROUGHT OUT IN THE ASSESSMENT ORDER . 2. THE LD . CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE SOUGH T TO EXPLAIN THE SOURCE OF THE ASSETS FOUND DURING SEARCH THROUG H AGRICULTURAL INCOME AND THEREFORE ADDITION ON THE ISSUE OF AGRICULTURAL INC OME IS IN ESSEN C E ADDITION OF UNEXPLAINED INVESTMENT OF THE ASSESSEE IN VARIOUS A SSETS . 3. THE LD . CIT(A) FAILED TO APPRECIATE THAT ONUS IS ON THE ASS ESSEE TO EXPLAIN THE SOURCE OF THE ASSETS AND ASSESSEE FAILE D TO DISCHARGE THE ONUS CAST ON HIM THROUGH DOCUMENTARY EVIDENCE . 4. THE LD. CIT FAILED TO APPRECIATE THAT THE ASSESS EE IS A NON-FILER, NO BOOKS OF ACCOUNT HAVE BEEN MAINTAINED AND THE ASSET S HAVE BEEN UNEARTHED ONLY AS A RESULT OF SEARCH ACTION. THEREFORE, ALLOW ING CLAIM OF EXEMPT AGRICULTURAL INCOME AS SOURCE OF ASSETS WITHOUT DOC UMENTARY EVIDENCE WOULD BE GIVING UNDUE ADVANTAGE TO THE ASSESSEE VIS - A-VIS LAW ABIDING ASSESSEES . 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN PARTIALLY DELETING T HE ADDITION ON THE ISSUE OF AGRICULTURAL INCOME IGNORING THE FACT THAT THE SHAR E OF 46% OF NET AGRICULTURAL INCOME TO ASSESSEE IN BATAI/ ADHELI SYSTEM MEANS 46 % OF NET AGRICULTURAL INCOME TO FARMER ALSO, WHICH LEAVES ONLY 8% TOWARDS AGRICULTURAL EXPENSES FOR ALL THE ABOVE ASSESSMENT YEARS, WHICH IS NOT ACCEPT ABLE. 6. THE APPELLANT PRAYS THAT , THE ORDER OF THE LD. CIT(A) BE VACATED AND THAT OF THE AO'S ORDER MAY BE RESTORED . 7 . THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY ANY OF THE ABOVE GROUNDS RAISED, ANY OTHER GROUNDS AT THE TIME OF PROCEEDINGS BEFORE THE HON'BLE TRIBUNAL WHICH MAY PLEASE BE GRANTED . 5. SIMILAR GROUNDS HAVE BEEN RAISED BY THE REVENUE IN ITA NO.467/PUN/2013, RELATING TO ASSESSMENT YEAR 1999-2 000. 6. BRIEFLY, IN THE FACTS OF THE CASE, SEARCH AND SE IZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED AT THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF BAGWAN GROUP ON 18.05.2006. THE ASSESSEE BEING ONE OF THE GROUP WAS ALSO COVERED UNDER SEARCH AND CERTAIN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. CONSEQUENT THERETO, THE ASSESSING OFFI CER ISSUED NOTICE UNDER SECTION 153A OF THE ACT REQUIRING THE ASSESSEE TO F URNISH THE RETURN OF INCOME. IN RESPONSE THERETO, THE ASSESSEE HAD FILED THE RET URN OF INCOME DECLARING TOTAL 7 ANJUM AND GROUP INCOME OF RS.75,670/- AND AGRICULTURAL INCOME OF RS .5,20,315/-. THE SAID INCOME WAS ALSO DECLARED BY THE ASSESSEE IN THE RET URN OF INCOME FILED UNDER SECTION 139(1) OF THE ACT. THE ASSESSEE HAD BIFURC ATED THE AGRICULTURAL INCOME AS UNDER:- SUGARCANE PROCEEDS -- NON-SUGARCANE PROCEEDS (VEGETABLES, FLOWERS, FRUITS, COCONUT) 681058 TOTAL 681058 LESS AGRICULTURAL EXPENSES 160743 NET AGRICULTURAL INCOME 520315 7. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF AGRICULTURAL EXPENSES ALONG WITH BILLS, SALE BILLS OF CROPS, DETAILS OF A GRICULTURAL OPERATIONS, 7/12 EXTRACT OF THE AGRICULTURAL LAND OWNED BY THE ASSES SEE, CROP-WISE AREA OF LAND UNDER CULTIVATION AND THE AVERAGE YIELD OF ALL THE CROPS. THE ASSESSEE WAS ALSO ASKED TO FURNISH CHART IN RESPECT OF ALL THE F AMILY MEMBERS SHOWING CROP- WISE AREA OF LAND UNDER CULTIVATION AS PER 7/12 EXT RACT. THE ASSESSING OFFICER FROM THE DETAILS SUBMITTED BY THE ASSESSEE OBSERVED THAT THE GROSS RECEIPTS FROM SUGARCANE AND NON-SUGARCANE CROPS (VEGETABLES) DIFFER IN CASE OF ALL FAMILY MEMBERS AS FAR AS YIELD PER ACRE WAS CONCERN ED. THE ASSESSEE CLAIMED THAT THE AGRICULTURAL LAND OWNED BY THE FAM ILY MEMBERS WAS CULTIVATED COLLECTIVELY. THE CROPS RAISED FROM THE LANDS WERE SOLD IN THE NAMES OF FAMILY MEMBERS RANDOMLY AND THERE WAS NO CLEAR-CUT BIFURCA TION AS TO CULTIVATION OF CROPS AND ITS SALES AMONGST THE FAMILY MEMBERS. TH E ASSESSEE THUS, REQUESTED TO CONSIDER THE AGRICULTURAL INCOME FOR T HE FAMILY AS A WHOLE. THE ASSESSING OFFICER ACCEPTED THE SAID PLEA OF THE ASS ESSEE AND PROCEEDED TO ALLOCATE THE AGRICULTURAL INCOME IN THE NAMES OF VA RIOUS FAMILY MEMBERS ACCORDING TO THEIR AGRICULTURAL LAND HOLDINGS. 8 ANJUM AND GROUP 8. THE ASSESSING OFFICER ON PERUSAL OF DETAILS NOTE D THAT THE TOTAL SUGARCANE SALE PROCEEDS OF RS.8,98,591/- AND NET SU GARCANE SALE PROCEEDS AFTER CONSIDERING THE AGRICULTURAL EXPENSES WERE ON LY 23.30% AS COMPARED TO 40% OF EXPENSES REQUIRED FOR ANY CROP. THE ASSESSI NG OFFICER ALSO NOTED THAT THE AGRICULTURAL EXPENSES FOR SUGARCANE IN THE CASE OF SHRI BADSHAH A. BAGWAN, ASSESSEES OWN REAL BROTHER HAD BEEN SHOWN AT 40% TO 50% OF GROSS RECEIPTS. THE ASSESSEE WAS SHOW CAUSED AS TO WHY THE AGRICULTURAL INCOME SHOULD NOT BE CONSIDERED AT 40% OF GROSS REC EIPTS. THE ASSESSEE POINTED OUT THAT THE AVERAGE EXPENSES FOR AGRICULTU RAL ACTIVITIES RANGES BETWEEN 23.07% TO 36.59%. HE ALSO POINTED OUT THAT REGULAR BOOKS OF ACCOUNT FOR EXPENSES WERE BEING KEPT AND THE DETAIL S OF EXPENSES COULD BE VERIFIED. THE OBSERVATION OF AGRICULTURAL EXPENSES AT ABOUT 40% OF THE RECEIPTS WAS IN CONNECTION WITH FIELD SIZE OF 1-5 ACRES, WHE REAS FIELD SIZE OF AGRICULTURAL LANDS OWNED BY THE ASSESSEE WAS BIG I.E. RANGING BE TWEEN 25-60 ACRES. THE ASSESSEE ALSO POINTED OUT THAT MULTIPLE AND SUB-CRO PS WERE REGULARLY TAKEN AND HENCE, THE YIELD RATIO WAS HIGH. THE ASSESSEE ALSO CLAIMED THAT ITS IRRIGATION FACILITY WAS UNIQUE AND ALSO HUGE WATER STORAGE CAPACITIES WERE CREATED ON FIELD FOR CONSTANT WATER SUPPLY AND HENC E, EXTRAORDINARY RESULTS OF OUTPUT. THE ASSESSING OFFICER HOWEVER, DID NOT ACC EPT THE CONTENTION OF ASSESSEE, WHERE THE ASSESSEE HIMSELF HAD AGREED THA T IN NORMAL COURSE THE AGRICULTURAL EXPENSES FOR CROP WERE ATLEAST 40%. T HE ASSESSING OFFICER THUS, RE-COMPUTED NET SUGARCANE RECEIPTS IN ASSESSEES FA MILY CASE BY ALLOWING 40% OF AGRICULTURAL EXPENSES. IN RESPECT OF AGRICU LTURAL INCOME FROM VEGETABLES, THE ASSESSING OFFICER NOTED THAT THE AS SESSEE HAD SHOWN GROSS RECEIPTS FROM VEGETABLES ON VERY HIGH SIDE AS COMPA RED TO NORMAL AGRICULTURISTS. THE ASSESSING OFFICER HAS TABULATE D THE AVERAGE GROSS RECEIPTS PER ACRE VIS--VIS AREA UNDER VEGETABLES AS PER 7/1 2 EXTRACT, WHICH READS AS UNDER:- 9 ANJUM AND GROUP ASST. YEAR AVERAGE GROSS RECEIPTS PER ACRE AREA UNDER VEGETABLES AS PER 7/12 EXTRACTS 2000-01 RS 1,81,639/- 28.13 ACRES 2001-02 RS 91,110/- 57.31 ACRES 2002-03 RS 1,43,372/- 74.29 ACRES 2003-04 RS 1,24,428/- 77.05 ACRES 2004-05 RS 1,89,337/- 80.21 ACRES 2005-06 RS 1,69,684/- 87.05 ACRES 2006-07 RS 55,280/- 112.19 ACRES 9. THE ASSESSING OFFICER FURTHER NOTED CERTAIN DISC REPANCIES AS REGARDS THE RECEIPTS FROM VEGETABLES WHICH ARE SUMMED UP AT PAGES 5 AND 6 OF THE ASSESSMENT ORDER. IN VIEW OF THE SAID FACTS, THE A SSESSING OFFICER WAS OF THE VIEW THAT THE AGRICULTURAL INCOME SHOWN BY THE ASSE SSEE WAS NOT CORRECT AND THE ASSESSEE HAD INFLATED HIS AGRICULTURAL INCOME T O EXPLAIN INVESTMENT IN UNEXPLAINED ASSETS. HOWEVER, CONSIDERING THE FACTS THAT SOME VEGETABLES WOULD HAVE BEEN GROWN BY THE ASSESSEE, THE NET AGRI CULTURAL INCOME OF THE ASSESSEE FROM VEGETABLES WAS CONSIDERED AT RS.6,000 /- PER ACRE AFTER DEDUCTING 40% OF EXPENSES FROM GROSS RECEIPTS OF RS .10,000/- PER ACRE AND THE ASSESSEE WAS SHOW CAUSED IN THIS REGARD. THE A SSESSEE FURNISHED ITS REPLY TO THE SAID PROPOSITION RAISED BY THE ASSESSI NG OFFICER WHICH IS INCORPORATED UNDER PARA 14 AT PAGES 6 AND 7 OF THE ASSESSMENT ORDER. THE ASSESSEE ALSO FILED XEROX COPIES OF AFFIDAVIT OF RE TAIL VENDORS, CONFIRMING THAT THE SAID VENDORS HAD PURCHASED VEGETABLES FROM THE ASSESSEE GROUP AND LETTERS FROM THE FARMERS CARRYING ON AGRICULTURAL A CTIVITY ADJACENT TO THE ASSESSEES FIRM, CONFIRMING THAT THE ASSESSEE WAS C ARRYING ON AGRICULTURAL ACTIVITY ON THE SAID FARMS. THE ASSESSING OFFICER REJECTED THE CONTENTION OF ASSESSEE AS PER PARA 15 AT PAGES 7 TO 11 OF THE ASS ESSMENT ORDER. THE ASSESSING OFFICER WAS OF THE VIEW THAT IN THE ABSEN CE OF ANY SUPPORTING BILLS FOR INPUTS FOR VEGETABLES GROWN AND IN THE ABSENCE OF ANY EVIDENCE FILED BY THE ASSESSEE WITH REGARD TO TRANSPORT FOR INPUT OR OUTP UT, WEIGH BILL EXPENSES AND IN THE ABSENCE OF NARRATION ON 7/12 EXTRACT AMONGST OTHER REASONS ESTABLISHES 10 ANJUM AND GROUP THAT THE ASSESSEE HAD INFLATED HIS AGRICULTURAL INC OME FROM NON-SUGARCANE CROPS AS PER HIS CONVENIENCE. THE ASSESSEE AGAIN W AS ASKED TO FURNISH THE DETAILS CROP-WISE AREA UNDER CULTIVATION WHICH THE ASSESSEE HAD FAILED TO FURNISH AND IN THE ABSENCE OF THE SAME, SINCE THE A SSESSEE WAS HAVING AGRICULTURAL INCOME FROM VEGETABLES, THE SAME WAS E STIMATED AT RS.6,000/- PER ACRE AND REJECTING THE CONTENTION OF ASSESSEE O F PAYING 50% OF THE AGRICULTURAL RECEIPTS TO THE FARMERS, THE AGRICULTU RAL INCOME OF THE ASSESSEE WAS WORKED OUT UNDER PARA 20 OF THE ASSESSMENT ORDE R AT PAGES 12 AND 13 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER THUS, COMPUTED THE AGRICULTURAL INCOME IN THE HANDS OF ASSESSEE IN EACH OF THE YEAR S AND WORKED OUT THE EXCESS AGRICULTURAL INCOME SHOWN BY THE ASSESSEE YE AR-WISE. THE ASSESSING OFFICER ALSO NOTED THAT THE CAPITAL OF ASSESSEE AS SHOWN IN THE BALANCE SHEET WAS INCLUSIVE OF AGRICULTURAL INCOME AND WHERE THE ASSESSEE HAD INFLATED THE AGRICULTURAL INCOME, THEN IN TURN, THE ASSETS SHOWN THROUGH BALANCE SHEET TO THAT EXTENT BECAME UNEXPLAINED AND ADDITION OF THE SAID AMOUNT WAS MADE TO THE TAXABLE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER YEAR-WISE HAS WORKED OUT THE QUANTUM OF UNEXPLAINED ASSETS AND MA DE THE ADDITION ACCORDINGLY. 10. BEFORE THE CIT(A) THE ASSESSEE MADE ELABORATE S UBMISSIONS, VIS--VIS ITS LAND HOLDINGS AND THE INCOME GENERATED FROM AGR ICULTURAL OPERATIONS. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE ALSO POINTED OUT THAT THERE WAS NO MERIT IN THE ORDER OF THE ASSESSING OFFICER TO ESTIMATE THE AGRICULTURAL INCOME IN THE HANDS OF THE ASSESSEE WHEREAS THE SAI D INCOME WAS CORRECTLY SHOWN BY THE ASSESSEE IN THE RESPECTIVE HANDS IN TH E RESPECTIVE YEARS. THE ASSESSEE ALSO AGITATED THE ORDER OF ASSESSING OFFIC ER IN ESTIMATING THAT 50% OF THE AGRICULTURAL RECEIPTS WERE GIVEN TO THE FARM ERS BECAUSE OF THE STATEMENT OF ONE SHRI NAMDEO BUVA WHO IN HIS STATEMENT RECORD ED ON 18-05-2005 HAD 11 ANJUM AND GROUP STATED THAT HE CULTIVATED SUGARCANE ON 9 ACRES OF A SSESSEES LAND FOR 1/4 TH SHARE. THE ASSESSING OFFICER APPLIED THE SAID PROP OSITION TO THE WHOLE LAND HOLDING OF THE ASSESSEE AND ESTIMATED THE INCOME IN THE HANDS OF THE ASSESSEE. BEFORE THE CIT(A) THE LD. AUTHORISED REP RESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE SAID STATEMENT HAS BE EN WITHDRAWN BY SHRI NAMDEO BUVA AND HENCE NO MERIT IN ESTIMATING THAT 5 0% OF THE AGRICULTURAL PRODUCE HAS BEEN PAID TO THE FARMERS. THE CIT(A) AF TER CONSIDERING THE DETAILED SUBMISSIONS MADE BY THE ASSESSEE SUMMARIZE D THE SAME UNDER DIFFERENT HEADS AS UNDER : I. AGRICULTURAL INCOME FROM SUGARCANE II. AGRICULTURAL INCOME FROM VEGETABLES III. PAYMENT OF 50% OF AGRICULTURAL RECEIPTS TO FAR MERS 11. THE ASSESSEE ALSO CONTENDED THAT THE CROPS WERE CULTIVATED NOT AS PER NOTINGS IN THE 7/12 EXTRACTS BUT AS PER WEATHER CON DITIONS, MARKET SITUATIONS ETC. THE ASSESSEE FILED THE DETAILS OF LAND FOR SU GARCANE AND NON SUGARCANE CULTIVATION BEFORE THE CIT(A) AND THE BASIS FOR CAL CULATION WAS ALSO EXPLAINED. THE SUBMISSIONS OF THE ASSESSEE WERE FORWARDED TO T HE ASSESSING OFFICER ALONG WITH THE STATEMENTS RECORDED DURING CROSS EXA MINATION IN RESPECT OF THE COMMISSION AGENTS AND SHRI NAMDEO BUVA. THE ASSESSI NG OFFICER IN THE REMAND REPORT STATED THAT THE STATEMENTS GIVEN BY C OMMISSION AGENT DURING CROSS EXAMINATION WERE AFTERTHOUGHT AND COULD NOT B E RELIED UPON. SIMILARLY, THE STATEMENT OF SHRI NAMDEO BUVA WAS ALSO APPLIED BY THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS. THE CIT(A) NOTED THAT T HOUGH ELABORATE SUBMISSIONS WERE MADE BY THE ASSESSEE IN RESPECT OF AGRICULTURAL INCOME, IT WAS A FACT THAT THERE WAS NO DETAILS OF INPUTS FOR CONDUCTING AGRICULTURAL ACTIVITY AND THERE WERE NO DETAILS OF DAILY EXPENSES INCURRE D ON AGRICULTURAL ACTIVITY IN THE FORM OF LABOUR, POWER, WATER OR OF SEEDS AND FE RTILIZERS ETC. FURTHER AREA- 12 ANJUM AND GROUP WISE LAND CULTIVATION DETAILS WERE NOT AVAILABLE, S ALES OF VEGETABLES WERE ALL IN CASH AND THE SALE BILLS WERE NOT SERIALLY NUMBERED AND WERE SOMETIMES WITHOUT DATES ETC. THE CIT(A) WAS OF THE VIEW THAT IN THE ABOVE SAID CIRCUMSTANCES THERE WERE NOT SUFFICIENT REASONS TO ESTIMATE THE AGRICULTURAL INCOME IN THE MANNER THAT THE ASSESSING OFFICER HAS DONE. HOWEVER, IN THE ABSENCE OF RELIABLE DATA MAINTAINED BY THE ASSESSEE THE INCOME HAS TO BE ESTIMATED IN THE HANDS OF THE ASSESSEE. THE CIT(A) CONSIDERED THE LAND HOLDINGS OF THE ASSESSEE GROUP AND OBSERVED THAT TH E LAND HOLDING HAD INCREASED MORE THAN 3 FOLD DURING THE PERIOD 1999-2 000 TO 2005-06. FURTHER, THE ENTIRE LAND HOLDING HAD INCREASED IN RURAL AGRI CULTURAL AREAS. THE CIT(A) THUS INFERRED THAT THE AGRICULTURAL ACTIVITY HAD BE EN ADOPTED BY THE ASSESSEE AND FAMILY MEMBERS AS PRIME EARNING ACTIVITY OF THE GROUP. ANOTHER POINT NOTED BY THE CIT(A) AS PER TABLE NO.1 OF PAGE 13 OF THE APPELLATE ORDER WAS THAT THE ASSESSEE HAD ALWAYS UTILIZED MORE LAND FOR CULTIVATION AND GROWING OF VEGETABLES THAN THE LAND UTILIZED FOR CULTIVATION A ND GROWTH OF SUGARCANE. 12. THE CIT(A) UNDER PARA 26 NOTED THE CONTENTION O F THE ASSESSEE IN SUPPORT OF ITS INCOME FROM AGRICULTURAL ACTIVITIES BY CREATING ELABORATE INFRASTRUCTURE BY WAY OF LAYING OF DIRECT PIPELINES OF 8 AND 6 INCHES FROM THE PANCHGANGA RIVER AND CREATION OF HUGE WATER STORAGE FACILITIES IN THEIR FARM, WHICH WAS CAPABLE OF STORING FEW LAKHS OF LITRES OF WATER. THE ASSESSEE HAD ALSO INTRODUCED DRIP IRRIGATION FACILITIES FOR IRRI GATION OF VEGETABLES AND FLOWERS. FURTHER THE ASSESSEE USED MECHANIZED AND AUTOMATED FARMING EQUIPMENTS FOR SOWING, CUTTING SPRAYING OF PESTICIDES ETC. TH E CIT(A) ALSO NOTED THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE HAD UN DERTAKEN SYSTEMATIC AND SCIENTIFIC PROCEDURES TO SELECT THE CROP PATTERN AN D ALSO EMPLOYED THE SERVICES OF EXPERTS FOR OPTIMIZED AGRICULTURAL ACTIVITY. SI NCE THE PIECE OF LAND WAS VERY BIG, THE ASSESSEE CONTENDED THAT THE AGRICULTURAL A CTIVITIES COULD BE CARRIED OUT 13 ANJUM AND GROUP BY USING AUTOMATED MECHANICAL DEVICES AND SCIENTIFI C METHODS. THE CIT(A) ACKNOWLEDGED THAT IT COULD NOT BE DENIED THAT THE A SSESSEE WOULD NOT HAVE TAKEN TO GROWING VEGETABLES ON LARGE TRACT OF LAND UNLESS IT WAS PROVIDING VERY GOOD RETURNS OR YIELD. THE CIT(A) THUS HELD THAT T HERE WAS NECESSITY OF APPROXIMATION AND ESTIMATION. HOWEVER, THE CIT(A) HELD THAT THE AGRICULTURAL RESULTS SHOWN BY THE ASSESSEE COULD NOT BE ACCEPTED AS SACROSANCT AND CORRECT. THE OBSERVATION OF THE ASSESSING OFFICER THAT SALE OF VEGETABLES WAS NOT EFFECTED THROUGH BROKERS OR MARKETING COMMITTEE WAS HELD TO BE NOT RELEVANT BY THE CIT(A). THE CIT(A) ACKNOWLEDGED TH AT THE ASSESSEE BELONG TO BAGWAN COMMUNITY WHICH WAS TRADITIONALLY A GROWER A ND SELLER OF VEGETABLES AND FLOWERS. SINCE THE COMMUNITY WHICH WERE LARGELY CONNECTED WITH RETAIL VENDING OF VEGETABLES AND FRUITS ETC. THE CIT(A) OB SERVED THAT THE PRODUCE COULD BE DIRECTLY PURCHASED FROM THE ASSESSEE RATHE R THAN FROM PURCHASING THROUGH MARKETING COMMITTEE. EVEN OTHERWISE THE CU RRENT BUSINESS TREND OF MARKETING AGRICULTURAL COMMODITIES WAS DIRECT SALE TO ORGANIZED VENDORS AND IN VIEW THEREOF THE CONTENTION OF THE ASSESSEE WAS ACCEPTED. HOWEVER, THE OBSERVATIONS MADE BY THE ASSESSING OFFICER IN RESPE CT OF SALE BILLS, STATEMENTS GIVEN BY PERSONS INCLUDING SHRI HARUNBHAI ABDULGANI BAGWAN, SHRI ZAKHIR HUSSEIN, ABDULHAQ ABDULHAMEED BAGWAN AND SHRI NAMDE O BUVA AS PER THE CIT(A) APPEARS TO BE IN ORDER. THEREFORE, THE BOOK S OF ACCOUNT MAINTAINED WERE HELD TO BE UNRELIABLE AND INACCURATE. FURTHER THE INCOME WAS ESTIMATED IN THE HANDS OF THE ASSESSEE BY APPLYING RATIO AS I N THE CASE OF ASSESSEES BROTHER SHRI BADSHAH A. BAGWAN AND THE AVERAGE AGRI CULTURAL INCOME PER ACRE WAS COMPUTED AS PER TABLE NO.2 AT PAGE 25 OF THE AP PELLATE ORDER. THE CIT(A) ACCORDINGLY ESTIMATED THE YIELD OF SUGARCANE PER ACRE AND ALSO THE TOTAL ACREAGE WAS DETERMINED. THE CIT(A) ALSO DETERMINED TOTAL ACREAGE UNDER THE VEGETABLES AND FLOWERS AND REJECTING THE CLAIM OF T HE ASSESSEE AND DID NOT ACCEPT THE ASSESSING OFFICERS VIEW THAT UNDER THE BATAI SYSTEM, GROSS 14 ANJUM AND GROUP PRODUCE IS DIVIDED BETWEEN THE OWNER OF THE LAND AN D THE TENANT. THE CIT(A) ACKNOWLEDGED THAT IN RESPECT OF GROSS INCOME FROM S UGARCANE CULTIVATION THERE WAS NO DISPUTE AS THE SAME WAS OBTAINED FROM SUGAR MILLS. HOWEVER, THE METHODOLOGY OF ALLOCATION OF EXPENSES AS HELD IN SH RI BADSHAH BAGWANS CASE WAS ADOPTED IN THE INSTANT CASE ALSO IN RESPE CT OF THE INCOME FROM VEGETABLES AND FRUITS ETC. THE QUANTUM OF INCOME D ETERMINED BY THE ASSESSING OFFICER @ RS.6000/- PER ACRE WAS HELD TO BE ABYSMALLY LOW AND THE CIT(A) HELD IT REASONABLE AND ESTIMATED THE GROSS Y IELD FROM THE SALE OF VEGETABLES, FRUITS, FLOWERS IN THE RUPEE TERMS AT 1 50% OF THE YIELD OF MONETARY TERMS OF SUGARCANE CULTIVATION. FROM THIS FIGURE O F GROSS YIELD, THE CIT(A) HELD THAT 50% HAD TO BE REDUCED TO ACCOUNT FOR EXPENSES AND CONSEQUENT THEREOF THE INCOME PER ACRE FOR NON SUGARCANE PRODUCE WAS T ABULATED IN TABLE NO.3. ACCORDINGLY, THE INCOME OF THE ASSESSEE FOR AGRICUL TURAL ACTIVITIES, I.E. HOLDING OF 9 ACRES WAS COMPUTED IN TABLE NO.4 AT PAGE 27 OF THE APPELLATE ORDER AND THE ASSESSING OFFICER WAS DIRECTED TO ADOPT THE FIG URES IN THE COLUMN AGRICULTURAL INCOME AND TAX THE DIFFERENCE BETWE EN THE AGRICULTURAL INCOME WORKED OUT ABOVE AND THE INCOME DECLARED IN THE RET URN OF INCOME, IF ANY, AS ASSESSEES UNEXPLAINED INCOME DURING THE RESPECTIVE ASSESSMENT YEARS. 13. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN ESTIMATING THE INCOME IN THE HANDS OF THE ASSESSEE. THE REVENUE H AS ALSO FILED AN APPEAL AGAINST THE ORDER OF CIT(A) IN REWORKING THE AGRICU LTURAL INCOME IN THE HANDS OF THE ASSESSEE AS AGAINST THE ORDER OF THE ASSESSING OFFICER IN ADOPTING THE SAME @ RS.6,000/- PER ACRE. 14. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT THE ESTIMATION OF INCOME AND EXPENSES RELATING TO T HE AGRICULTURAL ACTIVITIES BY THE ASSESSEE GROUP WAS ESTIMATED BY THE ASSESSING O FFICER AGAINST WHICH THE CIT(A) GAVE RELIEF BUT THE ESTIMATION OF INCOME WAS ON LOWER SIDE THAN THE 15 ANJUM AND GROUP MARKET TREND, I.E. THE DATA AVAILABLE AGAINST YIELD OF VEGETABLES, FRUITS AND FLOWERS. OUR ATTENTION WAS DRAWN TO THE ORDER OF C IT(A) WHEREIN YEAR-WISE NET AGRICULTURE INCOME HAS BEEN COMPUTED IN THE HANDS O F THE ASSESSEE. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE CASE OF REVENUE WAS THAT THE ASSESSEE HAD INFLATED THE AGRI CULTURAL INCOME IN ORDER TO JUSTIFY THE COST OF ACQUISITION OF VARIOUS ASSETS F OUND DURING THE COURSE OF SEARCH, HOWEVER, THE SAME WAS NOT TRUE. HE VEHEMEN TLY STATED THAT THE ASSESSEE WAS HOLDING BIG SIZE OF AGRICULTURAL LAND RANGING BETWEEN 25 TO 60 ACRES AND WAS WHOLETIME ENGAGED IN AGRICULTURAL ACT IVITIES. MULTIPLE AND SUB- CROPS WERE REGULARLY TAKEN AND CONSEQUENTLY THE INC OME IN THE FORM OF GROSS RECEIPTS WAS HIGHER AND IN PROPORTION TO THE LOW PE RCENTAGE OF EXPENDITURE. HE FURTHER POINTED OUT THAT WHERE CONTINUOUS WATER SUPPLY WAS AVAILABLE TO THE FARM OF THE ASSESSEE FROM PANCHGANGA RIVER WITH SEP ARATE PIPELINE AND HIGHER WATER STORAGE CAPACITIES WERE CREATED FOR CONSTANT WATER SUPPLY TO FIELDS, RESULTED IN GIVING EXTRAORDINARY PROFITS WHICH MERI TS TO BE ACCEPTED. THE ASSESSEE CLAIMS THAT IT WAS MAINTAINING PROPER BOOK S OF ACCOUNT IN RESPECT OF THE EXPENSES. THE ASSESSEE POINTED OUT THAT THERE WAS NO MERIT IN THE ORDERS OF THE AUTHORITIES BELOW IN MAKING THE ESTIMATION W HEREIN THE ASSESSING OFFICER HAD ESTIMATED YIELD @ RS.6,000/- PER ACRE W HEREIN THE CIT(A) HAD INCREASED THE YIELD PER ACRE TO RS.25,605/-. 15. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT IN THE AGRICULTURAL OPERATIONS CARRIED OUT BY THE ASSE SSEE THE YIELD COULD NOT BE CONSTANT BECAUSE IT DEPENDS ON VARIOUS FACTORS, I.E . WATER SUPPLY, WEATHER, NATURE OF SEEDS ETC. OUR ATTENTION WAS DRAWN TO TH E TABULATED DETAILS FILED IN THIS REGARD AND IT WAS POINTED OUT BY THE ASSESSEE THAT WHERE THE ASSESSEE HAS BEEN SHOWING THE RESULTS WHICH VARY FROM YEAR T O YEAR, THE SAME SHOULD BE ACCEPTED. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE FURTHER 16 ANJUM AND GROUP FAIRLY ADMITTED THAT IT WAS NOT MAINTAINING PROPER VOUCHERS AND BECAUSE OF THE HUGE LAND HOLDING EXACT DETAILS IN RESPECT OF EACH CO-OWNER WERE NOT AVAILABLE. HE FAIRLY AGREED THAT SOME ESTIMATION H AS TO BE MADE, HOWEVER, THE ESTIMATION MADE BY THE REVENUE AUTHORITIES WAS ON L OWER SIDE. 16. IN RESPECT OF THE SUGARCANE PRODUCE, THE LD. AU THORISED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THERE WAS NO MER IT IN ESTIMATING THE EXPENDITURE AT 40%. HE ALSO POINTED OUT THAT THE A SSESSING OFFICER HAD RELIED ON THE ORDER OF SHRI BADSHAH BAGWAN TO ESTIMATE EXP ENDITURE AT 40% WHICH WAS NEVER CONFRONTED TO THE ASSESSEE AND THE SAME C OULD NOT BE RELIED UPON. HE POINTED OUT THAT IN THE CASE OF ANJUM SHOUKAT BA GWAN THERE WAS ONLY INCOME FROM SALE OF VEGETABLES AND FLOWERS AND FOR YIELD IN VEGETABLE ACTIVITIES ICAR HAD LAID DOWN VARIOUS NORMS. IN THIS REGARD, HE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL I N THE CASE OF VENKATESHWARA AGRICULTURAL FARM IN ITA NOS.753 TO 7 59/PN/2009 RELATION TO ASSESSMENT YEARS 2001-02 TO 2006-07 ORDER DATED 23- 09-2011 WITH LEAD ORDER IN THE CASE OF SHRI BABULAL LAXMINARAYAN MALU IN IT A NOS. 241 TO 243/PN/2009 RELATING TO ASSESSMENT YEARS 2001-02, 2 002-03 & 2006-07 WHEREIN SIMILAR ESTIMATION OF AGRICULTURAL INCOME W AS MADE IN THE HANDS OF ASSESSEE. 17. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT THERE WAS NO FRUITS ON THE LAND GROWN BY THE ASSESS EE. DURING THE COURSE OF HEARING THE LD. AUTHORISED REPRESENTATIVE FOR THE A SSESSEE FURTHER FILED DETAILS OF COPY OF BOOKS OF MAHATMA PHULE KRISHI VIDYAPEETH , RAHURI (MKVP) GIVING FULL DETAILS OF FRUITS, SUGARCANE, VEGETABLES AND I NFORMATION AS TO ITS CULTIVATION, WATER REQUIREMENT AND IRRIGATION OF PLANT IN MARATH I. NO ENGLISH TRANSLATION OF THE SAID DOCUMENT WAS FILED. 17 ANJUM AND GROUP 18. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE STRESSED THAT IN THE ABSENCE OF PROPER DOCUMENTATION BEING MAINTAINE D BY THE ASSESSEE THERE WAS NO MERIT IN THE CLAIM OF THE ASSESSEE. HE STRE SSED THAT EVEN THE 7/12 EXTRACT OF THE LAND HOLDING OF THE ASSESSEE DOES NO T REFLECT THE CLAIM OF THE ASSESSEE. THE ASSESSEE CLAIMS THAT IT HAD SOLD THE VEGETABLES, FLOWERS/FRUITS THROUGH CASH BUT NO SALE HAS BEEN MADE THROUGH AGRI CULTURAL PRODUCE MARKET COMMITTEE (IN SHORT APMC) OR COMMISSION AGENT. H E REFERRED TO THE VARIOUS DEFECTS POINTED OUT BY THE ASSESSING OFFICER IN TH E CLAIM OF THE ASSESSEE AND THE DOCUMENTATION MAINTAINED BY THE ASSESSEE BUT HE FAIRLY AGREED THAT THE REASONABLE ESTIMATE MERITS TO BE MADE IN THE CASE O F ASSESSEE. 19. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT THE HONBLE SUPREME COURT IN THE CASE OF DHAKESWARI COTTON MILLS VS. CIT REPORTED IN 26 ITR 775 HELD THAT EVEN WHEN ESTIMATI ON IS TO BE MADE, NO GUESS WORKING COULD BE APPLIED AND THE ESTIMATION S HOULD BE ON SOME BASIS. OUR ATTENTION WAS FURTHER DRAWN TO THE DECISION IN THE CASE OF SUJAN SINGH BUNDELA VS. ACIT REPORTED IN 3 SOT 0491 AND THE DEC ISION IN THE CASE OF LATE S.M. BASHIR VS. ITO REPORTED IN 13 TTJ 0236 WHEREIN ASSESSING OFFICER ESTIMATED THE INCOME IN THE HANDS OF THE ASSESSEE. 20. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT THE ESTIMATION MADE BY THE ASSESSING OFFICER WAS PU RELY ON GUESS WORK AND THE SAME COULD NOT HAVE BEEN APPLIED. HE ALSO REFER RED TO THE COPY OF 7/12 EXTRACTS FILED WHEREIN A NOTING WAS MADE AS TO BHAG GI PALLA, I.E.VEGETABLES. HE STRESSED THAT WHEN THERE IS LARGE LAND HOLDING, THEN MANY A TIMES THE REVENUE AUTHORITIES MAKE GENERAL REFERENCE BUT DO N OT MENTION THE CROP PARTICULARLY AND ESPECIALLY IN THE CASE OF VEGETABL ES WHERE OVERLAPPING CROPS ARE GROWN, THEN IT IS DIFFICULT TO KEEP TRACK OF TH E VEGETABLES GROWN BY THE OWNER OFF THE AGRICULTURAL LAND AND HENCE NO MENTIO N IN THE 7/12 EXTRACT. 18 ANJUM AND GROUP HOWEVER, HE POINTED OUT THAT IT DOES NOT MEAN THAT THE ASSESSEE IS NOT ENGAGED IN CARRYING ON THE AGRICULTURAL ACTIVITIES ON THE SAID LAND. 21. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. THE DISPUTE WHICH ARISES IN THE PRESENT BUNCH OF APPEALS ARE AG AINST THE ESTIMATION OF AGRICULTURAL INCOME IN THE HANDS OF THE ASSESSEE. THE FAMILY OF THE ASSESSEE IS ENGAGED IN AGRICULTURAL OPERATIONS ON THE AGRICU LTURAL LAND WHICH IS JOINTLY OWNED BY THE FAMILY MEMBERS. UNDOUBTEDLY, THE FAMI LY MEMBERS ARE AWARE OF THE PERCENTAGE OF THEIR LAND HOLDING BUT SINCE T HE AGRICULTURAL OPERATIONS ARE BEING CARRIED OUT JOINTLY ON THE SAID PIECE OF LAND WHICH RANGES BETWEEN 25 TO 60 ACRES OVER THE PERIOD OF YEARS AND WHERE MULTIPL E AND SUB-CROPS OF VEGETABLES WERE REGULARLY UNDERTAKEN, THE ASSESSEE SHOWS HIS INABILITY TO CONCRETELY PROVE THE RECEIPTS ARISING IN THE INDIVI DUAL LANDS. THE CLAIM OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND EVEN BEFO RE US IS THAT THE GROSS AGRICULTURAL RECEIPTS EARNED BY THE ASSESSEE WERE H IGH BECAUSE OF THE SITUATION OF THE LAND AND ALSO BECAUSE OF VARIOUS O THER FACTORS. THE ASSESSEE CLAIMS THAT IT HAS CONTINUOUS WATER SUPPLY AVAILABL E FROM PANCHGANGA RIVER WITH SEPARATE DEDICATED PIPELINE TO ITS LAND. FURT HER THE ASSESSEE HAS CREATED HIGH WATER STORAGE CAPACITIES FOR CONSTANT WATER SU PPLY TO ITS FIELD WHICH IN TURN GIVES EXTRAORDINARY RESULTS. THE ASSESSEE HAD ALSO INTRODUCED DRIP IRRIGATION FACILITIES FOR IRRIGATION TO VEGETABLES AND FLOWERS . FURTHER USED MECHANIZED AND AUTOMATED FARMING EQUIPMENT FOR SOWING, CUTTING AND SPRAYING PESTICIDES ETC. WAS ALSO CLAIMED BY THE ASSESSEE. IN SUCH CIR CUMSTANCES, WHERE THE SIZE OF THE AGRICULTURAL LAND OWNED BY THE ASSESSEE AND ITS FAMILY WAS VERY BIG AS COMPARED TO THE NORMAL LAND HOLDINGS, THERE IS MERI T IN THE CLAIM OF THE ASSESSEE THAT IT CAN CARRY OUT THE AGRICULTURAL ACT IVITIES BY USING AUTOMATED MECHANICAL DEVICES AND SCIENTIFIC METHODS. THE ASS ESSEE HAD ALSO EMPLOYED THE SERVICES OF EXPERTS FOR OPTIMIZED AGRICULTURAL ACTIVITY WHERE THE ASSESSEE 19 ANJUM AND GROUP HAS UNDERTAKEN SYSTEMATIC AND SCIENTIFIC PROCEDURES TO CARRY OUT THE AGRICULTURAL ACTIVITIES ON ITS LAND HOLDING. WE FI ND MERIT IN THE CLAIM OF THE ASSESSEE THAT IT WOULD YIELD HIGHER RESULTS. IN SU CH CIRCUMSTANCES THE YIELD FROM SUCH BIG FARMS WOULD BE MORE THAN THE YIELD OF AN ORDINARY FARMER WHO OPERATES ON A SMALLER FIELD. THE CIT(A) HAD ACKNOW LEDGED THAT THE ASSESSEES FAMILY IS KNOWN IN THE AREA TO BE ENGAGE D IN THE CULTIVATION OF VEGETABLES AND FRUITS AND WHERE THE ASSESSEE IS UND ERTAKING SUCH ACTIVITY ON A LARGE PIECE OF LAND AND WHERE THE ASSESSEE IS AGGRE GATING THE AGRICULTURAL LAND FROM YEAR TO YEAR. UNTIL AND UNLESS THE SAID ACTIVITY WAS GIVING GOOD RETURNS OR YIELDS THE ASSESSEE WOULD NOT CONTINUOUS LY BE ENGAGED IN SUCH OPERATION. ACCORDINGLY, THE ESTIMATION MADE BY THE ASSESSING OFFICER BY ADOPTING THE YIELD @ RS.6,000/- PER ACRE IS DEFINIT ELY ON THE LOWER SIDE. THE ASSESSING OFFICER HAD REJECTED THE CLAIM OF THE ASS ESSEE AS NO ORGANIZED SALES ACTIVITY WAS UNDERTAKEN BY THE ASSESSEE. THE ASSESSEE CLAIMED THAT IT WAS SELLING THE AGRICULTURAL PRODUCE IN CASH TO VAR IOUS PERSONS AND IT WAS NOT SELLING THROUGH AGRICULTURE PRODUCE MARKET COMMITTE E OR ANY BROKERS. IT IS NOT RELEVANT AND NOT NECESSARY FOR A FARMER TO COMPULSO RILY SELL HIS PRODUCE THROUGH THE BROKER OR THE MARKETING COMMITTEE ESPEC IALLY IN TODAYS SCENARIO WHERE THE AGRICULTURAL COMMODITIES ARE BEING DIRECT LY SOLD IN THE DEDICATED MARKETS OR TO ORGANIZED VENDORS. SINCE THE ASSESSE E IS ENGAGED IN THE SAID ACTIVITY ON A LARGE SCALE AND WHERE HIS RELATIVES ARE ALSO ENGAGED IN SIMILAR ACTIVITY, THE OPTION IS AVAILABLE TO THE ASSESSEE T O SELL THE SAID PRODUCE DIRECTLY IN THE MARKET AND SAVE THE COST OF COMMISSION WHEN SOLD THROUGH BROKERS AND ALSO NEGOTIATE THE RATES OF PRODUCE SOLD BY IT. THE DIRECT MARKETING APPROACH ADOPTED BY THE ASSESSEE CANNOT BE FAULTED WITH ESPE CIALLY WHERE THE ASSESSEE AND HIS FAMILY OWNS SUCH A LARGE AREA OF LAND FOR CULTIVATION. IT IS NOT THE CASE OF THE REVENUE AUTHORITIES THAT THE AS SESSEE IS NOT ENGAGED IN AGRICULTURAL ACTIVITIES ON ITS LAND HOLDING. THE D ISPUTE WHICH HAS ARISEN IN THE 20 ANJUM AND GROUP PRESENT APPEALS IS THE YIELD FROM THE AGRICULTURAL ACTIVITY UNDERTAKEN BY THE ASSESSEE WHERE THE ASSESSING OFFICER HAS ESTIMATED THE YIELD AT RS.6,000/- PER ACRE AND THE CIT(A) HAS ENHANCED THE SAME TO RS .25,605/- PER ACRE. THE YEAR-WISE DETAILS OF AGRICULTURAL INCOME DECLARED B Y ASSESSEE, ASSESSED BY ASSESSING OFFICER AND CIT(A) ARE AS UNDER : SMT. ANJUM SHOUKAT BAGWAN A.Y. 1999-00, 2000-01 TO 2009-10 AGRICULTURAL INCOME NO. A.Y AGRICULTURAL INCOME DECLARED BY THE ASSESSEE % OF DECLARED INCOME AGRICULTURAL INCOME ASSESSED BY THE A.O % OF DECLARED INCOME AS PER LD. CIT (A) ORDER ADDITION ON ACCOUNT OF UNEXPLAINED ASSETS INFLATED AGR. INCOME 1 1999-00 310,000.00 22.31 69,154.00 71.32 221,088. 00 --- 2 2000-01 520,315.00 9.57 49,777.00 44.29 230,445.0 0 --- 3 2001-02 730,250.00 6.21 45,339.00 30.89 225,549.0 0 684,911.00 4 2002-03 970,490.00 3.17 30,789.00 22.60 219,375.0 0 939,701.00 5 2003-04 615,345.00 7.91 48,648.00 34.63 213,075.0 0 566,697.00 6 2004-05 769,180.00 6.98 53,709.00 29.58 227,502.00 713,471. 00 7 2005-06 950,531.00 4.80 45,638.00 34.88 331,542.0 0 904,983.00 8 2006-07 606,038.00 15.08 91,385.00 60.96 369,432. 00 514,653.00 9 2007-08 286,826.00 32.50 93,218.00 72.90 209,098. 00 --- 10 2008-09 309,928.00 50.00 154,964.00 74.92 232,21 0.00 --- 11 2009-10 194,368.00 50.00 97,184.00 79.61 154,741 .00 --- 22. THE ASSESSEE FOR THE YEAR UNDER APPEAL, I.E. A. Y. 2000-20001 HAD DECLARED THE GROSS AGRICULTURAL INCOME AT RS.6,81,0 58/- AGAINST WHICH IT HAD CLAIMED AGRICULTURAL EXPENSES AT RS.1,60,743/- AND DECLARED THE NET AGRICULTURAL INCOME AT RS.5,20,315/-. THE ASSESSIN G OFFICER HAD ESTIMATED THE AGRICULTURAL INCOME AT RS.49,777/- AND THE CIT(A) H AD ESTIMATED THE SAME AT RS.2,30,445/-. NO PROPER BASIS HAS BEEN ADOPTED BY EITHER OF THE AUTHORITIES TO WORK OUT THE AGRICULTURAL YIELD IN THE HANDS OF THE ASSESSEE AND WORK OUT THE INCOME THEREAFTER. THE CASE OF THE ASSESSEE IS TWOF OLD THAT NOT ONLY IT HAS HIGHER YIELD BECAUSE OF VARIOUS FACTORS BUT ALSO TH E EXPENSES ON AGRICULTURAL ACTIVITIES WERE CONTROLLED BECAUSE OF COLLECTIVE A GRICULTURAL OPERATIONS CARRIED BY IT. WE FIND MERIT IN THE PLEA OF THE ASSESSEE IN THIS REGARD. HOWEVER, IN THE 21 ANJUM AND GROUP ABSENCE OF COMPLETE DATA BEING MAINTAINED BY THE A SSESSEE IT IS A FIT CASE FOR ESTIMATING THE INCOME IN THE HANDS OF THE ASSESSEE. 23. BEFORE WORKING OUT THE ESTIMATION IN THE HANDS OF THE ASSESSEE ONE MORE ASPECT WHICH IS TO BE KEPT IN MIND IS THE INFE RENCE DRAWN BY THE ASSESSING OFFICER ON THE BASIS OF CERTAIN STATEMENT S RECORDED DURING THE COURSE OF SEARCH AND THEREAFTER. SINCE THE INCOME H AS BEEN ESTIMATED IN THE HANDS OF THE ASSESSEE NO RELEVANCE IS TO BE ATTACHE D TO THE SAID STATEMENTS. ONE OF THE PERSON SHRI NAMDEO BUVA DURING THE ASSES SMENT PROCEEDINGS HAD WITHDRAWN HIS STATEMENT THAT HE WAS BEING PAID 50% OF THE AGRICULTURAL PRODUCE FOR SOWING THE LAND. IN THE SAID CONTRADIC TION IN THE STATEMENTS RECORDED IN THE CASE, CANNOT BE RELIED UPON TO ESTI MATE THE INCOME IN THE HANDS OF THE ASSESSEE. IN ANY CASE AGRICULTURAL EX PENSE @50% IS HIGH. 24. WE FIND SIMILAR ISSUE OF ESTIMATION OF AGRICULT URAL INCOME AROSE BEFORE THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF VENKA TESHWARA AGRICULTURAL FARM IN ITA NOS. 386 TO 390/PN/2009 (LEAD APPEAL BE ING SHRI BABULAL LAXMINARAYAN MALU- ITA NOS. 241 TO 243/PN/2009) ORD ER DATED 23-09-2011 WHEREIN ALSO THE COMPLETE DETAILS WERE NOT BEING MA INTAINED AND THE ASSESSEE WAS ALSO SELLING THE VEGETABLES AND FRUITS IN CASH. THE 7/12 EXTRACTS DID NOT HAVE CLEAR MENTION OF THE VEGETABLES AND FR UITS BUT THE ASSESSEE CLAIMED TO HAVE SOLD THE SAME. THE ASSESSING OFFIC ER HAD ESTIMATED THE INCOME IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF A GRICULTURE AND THE BALANCE INCOME DECLARED BY THE ASSESSEE WAS HELD TO BE INCOME FROM UNDISCLOSED SOURCES, AS IN THE CASE OF THE ASSESSEE . THE CASE OF THE ASSESSEE BEFORE THE TRIBUNAL WAS THAT THE 7/12 EXTR ACTS COULD NOT DECIDE THE ISSUE OF THE ACTUAL CROPS BEING GROWN BY THE ASSESS EE AND SIMPLY BECAUSE CROPS WAS SOLD IN CASH IT COULD NOT BE SAID THAT IT WAS A BOGUS SALE. THE 22 ANJUM AND GROUP TRIBUNAL ACCEPTED THE PLEA OF THE ASSESSEE THAT THE SALES OF AGRICULTURAL PRODUCE INCLUDING THE VEGETABLES AND FRUITS WERE NO RMALLY MADE IN CASH AND SUCH A CLAIM OF THE ASSESSEE COULD NOT BE TOTALLY D ENIED. BUT SINCE THE BOOKS OF ACCOUNT HAVE NOT BEEN MAINTAINED PROPERLY THE TR IBUNAL HELD TO BE A FIT CASE TO ESTIMATE THE INCOME FROM THE ACTIVITIES UNDERTAK EN BY THE ASSESSEE ON LAND HOLDING OF 74.32 ACRES. THE TRIBUNAL THUS DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE INCOME FROM FRUITS AND VEGETABLES UPTO 80% OF THE STANDARD YIELD REPORTED BY THE NHB IN THE CASE OF FRUITS AND ICAR IN THE CASE OF VEGETABLES. THE TRIBUNAL FURTHER HELD THAT WHERE THE ASSESSEE H AD ALREADY SHOWN THE YIELD BELOW 80% OF THE STANDARD YIELD REPORTED BY THE ABO VE GOVERNMENT BODIES, THE ASSESSING OFFICER SHOULD NOT DISTURB THE SAME A ND ACCEPT IT. THE RELEVANT FINDING OF THE TRIBUNAL AT PARA 66 READS AS UNDER : 66. CONSIDERING THE ABOVE SUBMISSIONS, THERE IS NO DOUBT ON THE CONTENTION OF THE LD. A.R. THAT BOOKS OF ACCOUNT MAI NTAINED BY THE ASSESSEE IN REGULAR COURSE OF THE BUSINESS CANNOT BE OUTRIG HTLY REJECTED WITHOUT ASSIGNING PROPER REASON FOR THE SAME BUT IN THE PRESENT CASE BEFORE US, THE AVAILABILITY OF BOOKS OF ACCOUNT REGUL ARLY MAINTAINED REMAINED DOUBTFUL AS THE SAME WAS NOT FOUND DURING THE COURSE OF SEARCH AND SEIZURE OR SURVEY OPERATIONS. THE A.O NOWHERE HAS ACCEPTED ANY SPECIFIC WORDING THAT BOOKS OF ACCOUNTS WERE FOUND DUR ING THE COURSE OF SEARCH OR SURVEY OPERATION , HENCE EXISTENCE OF THE SA ME ALWAYS REMAINED IN DOUBT. UNDER THESE CIRCUMSTANCES, THE ONLY OPTION LEFT WITH THE AUTHORITIES BELOW WAS TO EXAMINE THE POSSIBILITY OF ACC EPTANCE OF THE CLAIMED AGRICULTURE INCOME BY THE ASSESSEE ON ESTIMATE BASIS KEEPING IN MIND THE AREA OF LAND HELD BY THE ASSESSEE AND AGRICULT URAL ACTIVITIES, SHOWN BY THE ASSESSEE THEREON SUPPORTED WITH EVIDENCE. T HE A.O NOTED THAT THERE WAS SUBSTANTIAL CASH DEPOSITS IN THE ACCOUNT O F THE ASSESSEE WHICH WERE STATED TO BE OUT OF AGRICULTURAL INCOME. FROM THE DETAILS FURNISHED OF AGRICULTURAL INCOME, IT WAS SEEN THAT WHI LE PART OF AGRICULTURAL PRODUCE WAS PROPERLY BILLED, SOME OF VEGETABLES AND FR UITS WERE SHOWN TO HAVE BEEN SOLD IN CASH, THESE SALES WERE NOT SUPPORTED BY THIRD PARTY EVIDENCE. OTHER SALES OF SOYABEEN, ONION, RICE, SUGAR CANE ETC., WERE SUPPORTED BY THIRD PARTY EVIDENCE. VEGETABLES AND FRU ITS WHICH WERE SOLD IN CASH WERE NOT MENTIONED IN 7/12 EXTRACTS. THE A.O. ACCEPTED ONLY THOSE SALES WHICH WERE SUPPORTED BY EVIDENCE AS GENUINE SALES O F AGRICULTURAL PRODUCE. THE A.O NOTED THAT NO BOOKS WERE FOUND DURI NG THE COURSE OF SEARCH/SURVEY. HE ALSO NOTED THAT THE VERY FACT THAT B OOKS WERE MAINTAINED WAS NOT SUFFICIENT TO ACCEPT THE AGRICULTU RAL INCOME DECLARED. WE THUS FIND THAT THE A.O HAS SAID SO IN DIFFERENT CONT EXT, FIRSTLY THE ASSESSEE HAD NOT MAINTAINED BOOKS OF ACCOUNT REGARDING T HE AGRICULTURAL ACTIVITIES AS THE SAME WAS NOT FOUND DURING THE COURSE O F SEARCH/SURVEY 23 ANJUM AND GROUP AND SECONDLY; EVEN IF THE BOOKS WERE MAINTAINED IT WA S NOT SUFFICIENT TO ACCEPT THE AGRICULTURAL INCOME DECLARED SINCE INCOME IN CASH WAS NOT SUPPORTED BY EVIDENCE. THE A.O ACCORDINGLY CONCLUDED THAT THE CASH SALES SHOWN AS AGRICULTURAL INCOME WAS BOGUS AND IT REPRESENTE D THE INCOME FROM UNDISCLOSED SOURCES. THE CONTENTION OF THE ASSESSEE BE FORE THE LD CIT(A) REMAINED THAT THE CULTIVATION OF FRUIT WAS A FACT WHICH WAS DULY MENTIONED IN 7/12 EXTRACTS. HOWEVER, NO MENTION OF SU CH PRODUCTS CANNOT LEAD TO CONCLUSION THAT SUCH PRODUCTS WERE NEVER CULTI VATED. IT WAS AGAIN CLAIMED THAT BOOKS HAVE BEEN REGULARLY MAINTAINED AN D AVAILABLE FOR VERIFICATION. THE FURTHER CONTENTION REGARDING 7/12 EXTRACTS REMAINED THAT ON MANY OCCASIONS, 7/12 EXTRACTS CONTAINS THE SAME NOTAT IONS FROM YEAR TO YEAR AS INFORMATION IS SIMPLY COPIED FROM YEAR TO Y EAR WITHOUT ACTUAL VERIFICATION. IT WAS FURTHER CONTENDED THAT SIMPLY BE CAUSE CROPS ARE SOLD IN CASH, IT CANNOT BE SAID THAT IT WAS A BOGUS SALE. IN NORMAL PRACTICE, AGRICULTURAL PRODUCE ARE MOSTLY SOLD IN CASH AT THE SPO T. IT IS THE REASON THAT PROVISIONS OF SECTION 40A(3) DOES NOT APPLY WHERE THE PAYMENT IN CASH IS FOR PURCHASE OF AGRICULTURAL PRODUCE FROM THE FARMERS. REGARDING VEGETABLES, THE ASSESSEE SUBMITTED THAT VEGETABLES ARE NOR MALLY GROWN AS INTER CROPS BETWEEN TWO MAIN CROPS AND GENERALLY THE CULTIVATION OF VEGETABLES IS NOT MENTIONED IN 7/12 EXTRACTS. THE LD C IT(A) HAS OBSERVED THAT FINDING OF THE A.O WITH REGARD TO SALE OF FRUIT S IS NOT CORRECT SINCE THE COPIES OF 7/12 EXTRACTS FURNISHED BY THE ASSESSEE CONTAIN ED DETAILS OF FRUITS GROWN ON THE LAND. THE FRUITS ARE DESCRIBED AS M ANGOES, CHIKKU, BANANA, COCONUT, PAPAYA, LEMON ETC., REGARDING VEGE TABLE, THE LD CIT(A) HAS OBSERVED THAT COMPARED TO THE LAND HOLDING THE SAL E OF VEGETABLES AT RS. 15 LAKHS OVER THE PERIOD OF 7 YEARS CANNOT BE SAID TO BE AN UNLIKELY SUM ESPECIALLY WHEN THE ASSESSEE IS PRIMARILY AN AGRICULTU RAL FARM WHICH HAS BEEN SET UP FOR THE AGRICULTURAL ACTIVITIES. HE HA S FURTHER NOTED THAT THE A.O HAS ADDED THE ENTIRE AMOUNT SHOWN AS CASH SALES AS IN COME OF THE ASSESSEE FROM UNDISCLOSED INCOME WITHOUT APPRECIATING THA T IF THIS INCOME IS REMOVED FROM THE AGRICULTURAL RECEIPT, A PECULIAR SITUATION EMERGES IN WHICH IN ALMOST ALL THE YEARS, THE INCOME IS LOWER THA N THE TOTAL EXPENDITURE DEBITED TO THE BOOKS RESULTING IN LOSS FROM AGRICULTURAL ACTIVITIES, WHICH IS UNUSUAL TO SAY. HE HAS ALSO NOTED T HAT THE PRODUCTION OF FRUITS IS WITHIN THE STANDARDS PUBLISHED BY INDIAN GOVE RNMENT BODIES. HE HAS ALSO NOTED THAT YIELD OF FRUITS AND VEGETABLES PER UNIT AREA WAS COMPARED WITH THE STANDARDS EVOLVED BY THE NATIONAL H OUSING BANK FOR THE PURPOSE OF AGRICULTURAL CREDIT. HE NOTED THAT EX CEPT IN THE CASE OF BANANA THE STANDARDS OF YIELD FOLLOWED BY NHB ARE MUC H HIGHER THAN THE ACTUAL YIELD OBTAINED BY THE ASSESSEE. HE HAS NOTED FURT HER THAT IN CASE OF BANANA ALSO WHILE ASSESSEE'S YIELD IS ACTUALLY HIGHER THA N THE STANDARDS, THE AVERAGE YIELD OVER THE PERIOD WORKS OUT TO 56 AS AGAINST THE STANDARD OF 65. THE LD CIT(A) HAS NOTED FURTHER THAT THE ASSESSEE WAS ASKED TO PRODUCE THE CASH BOOKS, SALES LEDGER ETC., EXAMINATION OF THESE DOCUMENTS SHOWED THAT THE CASH DEPOSITS WHICH HAVE BEEN FOUND BY THE A.O VARY FROM VERY SMALL FIGURES TO LITTLE ABOVE RS. 1,00,000/- . IT IS NOT AS IF THE CASH DEPOSITS ARE OF LARGE AMOUNTS IN ONE LUMPSUM. SECONDLY, THE DEPOSITS ARE WELL PLACED WHICH LAYS SUPPORT TO THE ASSESSEES' CONTENTIO N THAT THE AMOUNT DO NOT REPRESENT EACH AND EVERY SALE BUT CONSOL IDATED FIGURES OF SALE OVER A CERTAIN NUMBER OF DAYS. IT WAS ALSO STATED T HAT CERTAIN CASH EXPENSES ARE ALSO INCURRED FROM THE CASH RECEIPTS AND ON LY THE NET AMOUNT REMAINING IS DEPOSITED IN THE ACCOUNT. THE DISTRIBUTIO N OF THE CASH DEPOSITS, THE MAGNITUDE OF THE DEPOSIT DO NOT APPEAR T O BE SUCH AS TO CONCLUDE THAT THESE ARE NOT AMOUNTS RECEIVED BY WAY O F CASH SALES BUT 24 ANJUM AND GROUP UNACCOUNTED INCOME INTRODUCED INTO THE BOOKS. THE LD CIT(A) HAS ALSO NOTED IN PARA NO. 11 THAT ASSESSEE HAS MAINTAINED BOOKS O F ACCOUNT WHERE EACH AND EVERY ITEMS OF PURCHASE AND SALE AND OTHER EX PENSES WERE RECORDED. WE DO NOT AGREE WITH THIS NOTING OF THE LD CIT(A) AS NOWHERE IN THE ASSESSMENT ORDER NOR IT IS THE CASE OF THE LD CIT(A) THAT BOOKS OF ACCOUNTS WERE FOUND AVAILABLE DURING THE COURSE OF SEA RCH OR SURVEY OPERATION. NO PLAUSIBLE REASONS HAS BEEN ASSIGNED BY THE ASSESSEE REGARDING THE NON-AVAILABILITY OF BOOKS OF ACCOUNTS DURING THE COURSE OF SEARCH OR SURVEY. THUS, RELIABILITY OF SUCH BOOKS OF ACC OUNT EVEN IF FURNISHED AT LATER STAGE IS ALWAYS QUESTIONABLE. UNDER T HESE CIRCUMSTANCES, WE DO NOT FULLY AGREE WITH THE CONCLUSI ON OF THE LD CIT(A) THAT THE ADDITION MADE BY THE A.O ON ACCOUNT OF CASH SALES OF FRUITS AND VEGETABLES ARE LIABLE TO BE DELETED. AT THE SAME TIME , WE AGREE WITH THE CONTENTION OF THE LD. A.R. WHICH HAS ALSO BEEN ACCEPT ED BY THE LD CIT(A) THAT SALES OF AGRICULTURAL PRODUCE INCLUDING FRUITS AN D VEGETABLES ARE ALSO NORMALLY MADE IN CASH, HENCE SUCH CLAIM OF THE ASSESSEE C ANNOT BE TOTALLY DENIED. SINCE THE BOOKS OF ACCOUNT REGARDING THE AGR ICULTURAL ACTIVITY ESPECIALLY SPECIFIC ABOUT FRUITS AND VEGETABLES, QUESTI ONED BEFORE US HAVE NOT BEEN MAINTAINED IN THE REGULAR COURSE OF THE AFF AIRS, THUS CORRECT INCOME CANNOT BE DEDUCED THEREFROM. WE ARE THEREFOR E OF THE VIEW, THAT IT IS A FIT CASE TO ESTIMATE THE INCOME FROM THESE ACTIVIT IES OF THE ASSESSEES AS HOLDING OF LAND OF 74.32 ACRES BY THE ASSESSEE HAS NOT BE EN DENIED NOR THIS FACT HAS BEEN DENIED THAT THE ASSESSEE IS PRIMARILY AN A GRICULTURE FARM WHICH HAS BEEN SET UP FOR THE BUSINESS OF AGRICULTURE. W E ARE OF THE VIEW THAT UNDER THE CIRCUMSTANCES OF THE CASE, IT WOULD BE REASONABLE TO ESTIMATE THE CLAIMED INCOME FROM FRUITS AND VEGETABLE S BY ACCEPTING THE CLAIM OF THE ASSESSEE IN THIS REGARD UPTO THE 80 % OF TH E STANDARD YIELD REPORTED BY NHB IN THE CASE OF FRUITS AND OF ICAR IN CASE OF VEGETABLE YIELD. WHERE THE ASSESSEE HAS ALREADY SHOWN THE YIELD BELOW 80% OF THE STANDARD YIELD REPORTED BY THE ABOVE GOVERNMENT BODI ES, A.O SHOULD NOT DISTURB THE SAME AND ACCEPT IT. IT IS ORDERED ACCORDIN GLY. THE GROUND IS THUS PARTLY ALLOWED. DAIRY INCOME. THE ISSUE WHICH IS ARISING IN THE PRESENT CASE BEFO RE US IS ON SIMILAR FOOTING AS BEFORE THE TRIBUNAL IN THE CASE OF SHRI VENKATESHWA RA AGRICULTURAL FARM (SUPRA). THE ASSESSEES LAND HOLDING IS LARGE AND THE FAMILY MEMBERS OF THE BAGWAN GROUP ARE ENGAGED IN CULTIVATION OF VEGETABL ES AND FLOWERS AND IN SOME CASES IN FRUITS ON THE SAID LAND. MAJORLY THE AGRICULTURAL LAND HOLDING IS CULTIVATED WITH VEGETABLES AND FLOWERS. THE ASSESS EE IS NOT MAINTAINING THE BOOKS OF ACCOUNT REGULARLY. WE HAVE ALREADY HELD TH AT THERE IS NEED FOR ESTIMATION FOR AGRICULTURAL INCOME IN THE HANDS OF THE ASSESSEE. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE BEFORE U S AGREED TO THE PROPOSITION LAID DOWN BY THE PUNE BENCH OF THE TRIB UNAL THAT 80% OF THE 25 ANJUM AND GROUP STANDARD YIELD REPORTED BY ICAR IN THE CASE OF VEGE TABLE YIELD BE ADOPTED TO WORK OUT THE INCOME FROM VEGETABLES AND FLOWERS IN THE HANDS OF THE ASSESSEE ON THE BASIS OF INDIVIDUAL LAND HOLDINGS. ACCORDINGLY, WE HOLD SO. NECESSARY EVIDENCE WOULD BE FURNISHED IN THIS REGAR D BY THE ASSESSEE. THE ASSESSING OFFICER SHALL GIVE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN CASE THERE IS YIELD FROM FRUITS, TH EN 80% OF THE STANDARD YIELD REPORTED BY NHB SHOULD BE ADOPTED TO WORK OUT THE I NCOME IN THE HANDS OF THE ASSESSEE BASED ON THEIR LAND HOLDING. HOWEVER, IN CASE THE ASSESSEE HAS ALREADY SHOWN THE YIELD BELOW 80% OF THE STANDARD Y IELD REPORTED BY THE ABOVE SAID GOVERNMENT BODIES, THEN THE ASSESSING OF FICER IS DIRECTED NOT TO DISTURB THE SAME AND ACCEPT IT. 25. ANOTHER ISSUE WHICH WAS CONSIDERED BY BOTH THE ASSESSING OFFICER AND THE CIT(A) WAS THE EXPENSES ON CONTRACTUAL FACTOR. WHILE ESTIMATING THE AGRICULTURAL INCOME THE ASSESSING OFFICER/COMMISSIO NER OF INCOME TAX (APPEALS) HAD TAKEN NOTE OF THE FACTS OF SHRI BADSH AH BAGWAN, WHEREIN THE STATEMENT OF ONE PERSON WAS RECORDED WHO STATED THA T FOR CARRYING ON THE AGRICULTURAL ACTIVITIES ON PART OF THE LAND, HE WAS GETTING BATAI @50% OF THE RECEIPTS. THE SAID STATEMENT WAS WITHDRAWN ON A L ATER STAGE. HOWEVER, THE SAID FACT WAS ADOPTED BY THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS) IN ORDER TO ESTIMATE THE INCOM E IN THE HANDS OF THE ASSESSEE. WE HAVE ALREADY DECIDED THE ISSUE OF EST IMATION IN THE HANDS OF THE ASSESSEE IN THE PARAS HEREINABOVE WITH OUR DIRE CTIONS. WE FURTHER HOLD THAT NO FURTHER DEDUCTION IS TO BE MADE ON ACCOUNT OF CONTRACTUAL FARMING FACTOR @50%. THE BASIS FOR THE SAID ESTIMATION IS PURSUANT TO THE FACTS OF SHRI BADSHAH BAGWAN AND WHERE THE STATEMENT OF THE SAID PERSON WAS NEVER CONFRONTED TO THE ASSESSEE NOR THE INFORMATION SUPP LIED TO THE ASSESSEE, THE SAID INFORMATION CANNOT BE APPLIED TO DECIDE THE IS SUE AGAINST THE ASSESSEE. 26 ANJUM AND GROUP IN ANY CASE, IN THE FACTS OF THE CASE, THE ASSESSEE HAS CLAIMED THAT IT HAS GROWN VEGETABLES ON ITS AGRICULTURAL LAND HOLDING A ND HE PLEADS THAT THE SAID VEGETABLES ARE NOT GROWN ON SHARING SYSTEM BASIS. W E FIND MERIT IN THE PLEA OF THE ASSESSEE IN THIS REGARD AND ACCORDINGLY WE HOLD SO. 26. THE SECOND ESTIMATION OF AGRICULTURAL INCOME IN THE HANDS OF THE ASSESSEE IS ON ACCOUNT OF SUGARCANE WHEREIN PART OF THE LAND WAS UNDER THE CROP OF SUGARCANE FROM A.Y. 2001-02 ONWARDS. THE Q UESTION AROSE OF ESTIMATION OF THE SAID AGRICULTURAL INCOME FROM SUG ARCANE PRODUCE RELYING ON THE FACTS OF SHRI BADSHAH BAGWAN AND 50% WAS DEDUCT ED TOWARDS AGRICULTURAL EXPENSES AND PAID TOWARDS CONTRACTUAL FARMING. SINC E THE FACTS OF THE PRESENT CASE ARE AT VARIANCE TO THE FACTS IN SHRI BADSHAH B AGWAN, WE FIND NO MERIT IN DEDUCTING ANY AMOUNT TOWARDS BATAI EXPENSES IN RESP ECT OF THE ESTIMATION OF INCOME ARISING FROM SUGARCANE PLANTATION. WE DIREC T THE ASSESSING OFFICER TO APPLY 80% OF THE RATES AVAILABLE TO THE SURGARCANE PRODUCE AS SUGARCANE IS SOLD TO MILLS. NECESSARY EVIDENCE WOULD BE FURNISH ED BY THE ASSESSEE TO ESTABLISH ITS CASE. THE ASSESSING OFFICER SHALL GI VE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE ADJUDICATING THE ISS UE OF INCOME ARISING FROM SUGARCANE PRODUCE AND ALSO AS HELD IN THE CASE OF V EGETABLES AND FLOWERS. 27. BEFORE ADJUDICATING OTHER ISSUES WHICH ARE RAIS ED IN THE PRESENT BUNCH OF APPEALS WE MAY ALSO ADDRESS THE ISSUE RAISED BY THE ASSESSING OFFICER ON UNACCOUNTED INVESTMENT IN ASSETS FOUND DURING THE C OURSE OF SEARCH WHICH THE ASSESSEE CLAIMS THAT IT HAS SOURCED THROUGH AGRICUL TURAL INCOME BUT THE REVENUE IS OF THE VIEW THAT SAID CLAIM OF THE ASSES SEE IS ILL-FOUNDED AS THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE IS HIG HER THAN WHAT IS ACTUALLY EARNED BY THE ASSESSEE. 27 ANJUM AND GROUP 28. THE NEXT ASPECT OF THE ISSUE IS THAT THE ASSESS EE HAD DECLARED THE AMOUNT AS AGRICULTURAL INCOME, PART OF WHICH HAS BE EN ACCEPTED AS AGRICULTURAL INCOME BY THE AUTHORITIES BELOW AND THE BALANCE AMO UNT HAS BEEN ASSESSED AS INCOME FROM OTHER SOURCES IN THE HANDS OF THE AS SESSEE. ONCE THE AMOUNT HAS BEEN SO ASSESSED, I.E. ON ACCOUNT OF AGRICULTUR AL INCOME AND/OR ON ACCOUNT OF INCOME FROM OTHER SOURCES THEN THE SOURC E OF THE AFORESAID ASSETS FOUND DURING THE COURSE OF THE SEARCH, STAND EXPLAI NED. HOWEVER, WE HAVE ALREADY ADJUDICATED THE ISSUE OF ESTIMATION OF AGRI CULTURAL INCOME IN THE HANDS OF THE ASSESSEE IN THE RESPECTIVE YEARS IN THE PARA S HEREINABOVE AND THE ASSESSING OFFICER IS DIRECTED TO VERIFY AS TO WHERE THE SAID AGRICULTURAL INCOME ASSESSED IN THE HANDS OF THE ASSESSEE JUSTIFIES THE SOURCE OF ACQUISITION OF THE ASSETS FOUND DURING THE COURSE OF SEARCH. ONCE THE INCOME IS ESTIMATED IN THE HANDS OF THE ASSESSEE THE SAME IS PRESUMABLY HELD T O HAVE BEEN UTILIZED FOR THE ACQUISITION OF THE ASSETS AND THERE IS NO MERIT IN ANY OTHER ADDITION IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED INV ESTMENT IN ASSETS FOUND DURING THE COURSE OF SEARCH. WE HOLD SO. THE APPE AL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. 29. NOW COMING TO THE APPEAL OF THE REVENUE IN ITA NO.473/PUN/2013, RELATING TO ASSESSMENT YEAR 2005-06 THE REVENUE HAS RAISED THE FOLLOWING ADDITIONAL GROUNDS OF APPEAL:- 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITI ON TOWARDS INVESTMENT IN BENAMI FDRS AND INTEREST CHARGED THEREON FOR A.Y. 2 005-06 IGNORING THE FACT THAT ASSESSEE COULD NOT EXPLAIN SOURCES FOR THE SAI D INVESTMENTS. 7. THE ORDER OF LD. CIT(A) DELETING THE ADDITION TO WARDS UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE HOLDING THAT THE SU BSTANTIVE ADDITIONS HAVE BEEN CONFIRMED IN THE HANDS OF RESPECTIVE PAT SANST HA/ BANKS IS ERRONEOUS, AS SUBSTANTIVE ADDITIONS WERE NOT ACTUALLY CONFIRME D IN THE HAND OF RESPECTIVE PATSANSTHAS/ BANKS AS CLAIMED OF THE SAID PATSANSTH A U/S 80P(2)(A)(I) HAS BEEN ALLOWED BY THE CIT(A) BY WHICH ENTIRE ADDITION S U/S 68 OF THE ACT NULLIFIED. 28 ANJUM AND GROUP 8. WITHOUT PREJUDICE TO THE ABOVE GROUND LD. CIT(A) HAS ERRED IN NOT EXERCISING HIS PLENARY POWERS WHICH ARE CONTERMINOU S WITH THAT OF A.O AS PER RATIO LAID DOWN BY CIT VS. KANPUR COAL SYNDICATE (1 964) 53 ITR 225, 229 (SC). 9. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN GIVING RELIEF TO TH E ASSESSEE FOR A.Y 2005-06 ON THE ISSUE OF NEGATIVE CASH BALANCE BY REWORKING THE CASH FLOW STATEMENTS IGNORING THE EVIDENCES IN RESPECT OF INVESTMENTS AN D EXPENSES OF THE ASSESSEE BROUGHT OUT IN THE ASSESSMENT ORDER? 10. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN GIVING RELIEF TO TH E ASSESSEE FOR A.Y. 2005-06 ON THE ISSUE OF SUO MOTO DECLARATION OF RS. 15,00,000/ - WHICH WAS MADE BY THE ASSESSEE TO COVER UP ANY DISCREPANCIES, WHEN THE A. O. HAS ALREADY CONSIDERED WHILE WORKING OUT THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE.? 30. THE NEXT ISSUE WHICH IS RAISED BY WAY OF GROUND S OF APPEAL NO.6 TO 8 IN ASSESSMENT YEAR 2005-06 BY REVENUE IS AGAINST DELE TION OF ADDITION MADE TOWARDS INVESTMENT IN BENAMI FDRS AND INTEREST CHAR GED THEREON FOR ASSESSMENT YEAR 2005-06 ONLY. 31. BRIEFLY IN THE FACTS OF THE CASE, DURING THE CO URSE OF SEARCH AT THE RESIDENCE OF THE ASSESSEE, A NOTEBOOK WAS FOUND AND SEIZED. ON ITS VERIFICATION, IT WAS NOTED THAT THERE WERE DETAILS OF FDRS MADE IN VARIOUS BANKS AND PAT SANSTHA. FROM THE NOTINGS, IT WAS SE EN THAT THE FDRS WERE KEPT WITH VARIOUS DIFFERENT ENTITIES AND FROM THE DETAILS, THE NAME OF THE PERSON THROUGH WHOM THE DEPOSIT WAS PREPARED WAS AL SO WRITTEN. HOWEVER, NO SUCH DEPOSITS IN THE NAME OF ANJUM SHOUKAT BAGWA N OR HIS FAMILY MEMBERS WAS MADE IN THE SAID PAT SANSTHA/BANKS ON T HE RESPECTIVE DATES. THE DETAILS OF FDRS AS PER THE SEIZED INVENTORY NO. 11 ARE TABULATED UNDER PARA 22 AT PAGE 15 OF THE ASSESSMENT ORDER. THE A SSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID INVESTMENT IN THE FDR SH OULD NOT BE ADDED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. T HE EXPLANATION OF THE 29 ANJUM AND GROUP ASSESSEE WAS GROUP OF PERSONS HAD PLANNED TO BID FO R OCTOROI CONTRACT OF SANGLI MUNICIPAL CORPORATION, WHICH REQUIRED BANK C ARRYING ON A SUBSTANTIAL AMOUNT OF MORE THAN RS.400 LAKHS. IN VIEW THEREOF, AN ATTEMPT WAS MADE TO NOTE DOWN THE INVESTMENTS HELD BY EACH OF THE GROUP WHICH CAN BE UTILIZED FOR SECURING BANK GUARANTEE. THE ASSESSEE FURTHER EXPL AINED THAT DUE TO DIFFERENCE OF OPINION THE VENTURE DID NOT TAKE PLAC E AND NO BID WAS MADE. THE EXPLANATION OF THE ASSESSEE WAS REJECTED AS NO DOCU MENTARY EVIDENCE WAS FILED IN SUPPORT OF THE CLAIM THAT NOTINGS WERE JUS T MADE FOR GETTING BANK GUARANTEE BEFORE GIVING TO SANGLI MUNICIPAL CORPORA TION FOR OCTROI CONTRACT. ANOTHER REPLY WAS GIVEN BY THE ASSESSEE SAYING THAT THE INSTITUTE/BANKS WERE IN WORKING CONDITION AND WERE FUNCTIONING AND THE S AID FDRS WERE BENAMI. IT WAS VEHEMENTLY ARGUED THAT MERELY ON THE BASIS OF C HIT OF PAPER OWNERSHIP COULD NOT ASSIGNED TO A PARTICULAR PERSON WHERE THE TOTAL RECORD OF THE INSTITUTE FROM WHOM THE FDR WAS ISSUED WAS AVAILABLE FOR VERI FICATION. THE ASSESSEE EXPLAINED THE NATURE OF THE ENTRIES ON THE SAID FDR S AND POINTED OUT THAT PARTLY THE AMOUNTS HAVE BEEN SHOWN BY THE RESPECTIV E PERSONS AND THE BALANCE BELONGS TO THE INSTITUTE. THE CONTENTION O F THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER IN VIEW OF THE NOTINGS IN THE DIARY. FURTHER THE ASSESSING OFFICER OBSERVED THAT AS THE ASSESSEE HAD SHOWN BOGUS AGRICULTURAL INCOME THEN THE SAME COULD NOT HAVE BE EN UTILIZED FOR INVESTMENT IN FDRS. ACCORDINGLY, ADDITION WAS MADE OF RS.8,28 ,981/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FDRS IN SONIYA PAT SANSTH A. 32. FURTHER FROM THE PERUSAL OF THE CASH FLOW STATE MENT, THE ASSESSING OFFICER NOTED THE INVESTMENTS MADE BY THE ASSESSEE DURING THE YEAR AND AGAIN GAVE A FINDING THAT IN ORDER TO SOURCE THE SA ID INVESTMENTS THE ASSESSEE HAD INFLATED THE AGRICULTURAL INCOME. REFERENCE WA S MADE TO THE SEIZED DOCUMENTS AND THE ASSESSING OFFICER CAME TO THE CON CLUSION THAT THE MAIN 30 ANJUM AND GROUP SOURCE OF INCOME OF THE ASSESSEE WAS FROM MONEY LEN DING BUSINESS WHICH IN TURN WAS UTILIZED FOR INVESTMENT IN ASSETS AND BENA MI FDRS INCLUDING NEGATIVE CASH IN HAND AND HENCE THE ASSESSING OFFICER TREATE D THE SAID INVESTMENTS AS UNEXPLAINED, THOUGH ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED OF THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE. 33. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE HO LDING THAT THE PRIMARY RESPONSIBILITY OF PROVING THE DEPOSIT WAS OF THE PA T SANSTHA OR THE COOPERATIVE BANKS WHERE THE DEPOSITS WERE FOUND. THE CIT(A) NO TED THAT THE ADDITIONS HAVE BEEN MADE IN THE CASE OF PAT SANSTHA SINCE THE INITIAL BURDEN HAS NOT BEEN DISCHARGED WHERE THE PAT SANSTHA WAS UNABLE TO ESTABLISH THE IDENTITY OF THE DEPOSITOR AND HENCE THE GENUINENESS OF THE TRAN SACTION WAS NOT PROVED. THE CIT(A) THUS OBSERVED THAT THE CONTENTS OF THE L OOSE SHEET SHOWING DEPOSITS IN VARIOUS PAT SANSTHA WERE NOT SUBSTANTIV E PROOF OF THE FACT THAT THE AMOUNTS MENTIONED IN THE SAID PAGE BELONGS TO THE A SSESSEE AND IN ANY CASE IF THE SAID FDRS WERE UNEXPLAINED THEN THEY WOULD C ONSTITUTE THE BUSINESS INCOME IN THE HANDS OF THE RESPECTIVE PAT SANSTHA O R THE COOPERATIVE BANKS AND THE ASSESSEE WOULD NOT BE LIABLE TO BE HELD AS OWNER OF THESE AMOUNTS. THE CIT(A) ALSO NOTED THAT THE AMOUNTS MENTIONED AG AINST SONIYA NAGARI VINKAR & VINKAT VYAVSAIK SAHAKARI PAT SANSTHA HAS A LREADY BEEN ADDED IN THE ASSESSMENT OF THE SAID CONCERN AND HENCE NO MERIT I N MAKING ANY ADDITION IN THE HANDS OF THE ASSESSEE. FURTHER, THE ADDITION M ADE ON ACCOUNT OF INTEREST ON FDRS WAS ALSO DELETED BY THE CIT(A). 34. THE REVENUE IS IN APPEAL AGAINST THE AFORESAID FINDING OF THE CIT(A). 3 5 . THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSE E POINTED OUT THAT THE AFORESAID FDRS ARE NOT IN THE NAME OF THE ASSES SEE BUT BELONG TO THE PAT SANSTHA AND IS TO BE INCLUDED IN THE HANDS OF PAT S ANSTHA. THE LD. 31 ANJUM AND GROUP AUTHORISED REPRESENTATIVE FOR THE ASSESSEE WHILE AR GUING THE APPEALS OF THE PAT SANSTHA, I.E. SONIYA NAGARI VINKAR & VINKAR VYAVASAIK SAH. PAT SANSTHA LTD., HAD ALSO WITHDRAWN THE APPEALS FILED AGAINST ADDITI ON U/S.68 OF THE I.T. ACT ON ACCOUNT OF INVESTMENT IN FDRS. IN OTHER WORDS, WHER E THE ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSITS HAS ALREADY BEEN MADE IN TH E HANDS OF PAT SANSTHA THERE IS NO MERIT IN MAKING ANY FURTHER ADDITION IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF SAME FDRS. ACCORDINGLY, WE UPHOLD TH E ORDER OF THE CIT(A) IN THIS REGARD AND DISMISS THE GROUNDS OF APPEAL RAISE D BY THE REVENUE. CONSEQUENTLY NO ADDITION IS WARRANTED ON ACCOUNT OF INTEREST CHARGEABLE ON THE SAID FDRS. 36. THE REVENUE HAS FAILED TO ADDRESS THE ISSUE RAI SED BY WAY OF GROUNDS OF APPEAL NOS.9 TO 11 AND ALSO IN THE ABSENCE OF AN Y ADDITION MADE BY THE ASSESSING OFFICER ON ANY OTHER ACCOUNT EXCEPT NON A CCEPTANCE OF AGRICULTURAL INCOME AND THE ADDITION ON ACCOUNT OF FDRS THERE IS NO MERIT IN THE OTHER GROUNDS OF APPEAL RAISED AND THE SAME ARE DISMISSED . ITA NOS. 171 TO 181/PUN/2013 - ARISH SHOUKAT BAGWAN - (ASSESSEES APPEAL) ITA NOS. 489 TO 499/PUN/2013 - ARISH SHOUKAT BAGWAN - (REVENUES APPEAL) 37. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT FACTS AND ISSUE IN BUNCH OF APPEALS RELATING TO A RISH SHOUKAT BAGWAN FOR ALL THE RESPECTIVE YEARS ARE SAME, I.E. ESTIMATION OF A GRICULTURAL INCOME AND ALSO GROUND OF APPEAL NO.6 IN ASSESSMENT YEAR 2005-06 WH ERE ADDITION WAS MADE ON ACCOUNT OF FDRS AND OTHER INVESTMENTS, WHICH WAS DELETED BY CIT(A) AND REVENUE IS IN APPEAL. HOWEVER, NO ADDITION IS WARR ANTED ON ACCOUNT OF FDRS AS AMOUNT IS ADDED IN THE HANDS OF PAT SANSTHA. FUR THER FUNDS ARE AVAILABLE 32 ANJUM AND GROUP WITH THE ASSESSEE FOR THE RESPECTIVE INVESTMENTS AN D NO FURTHER ADDITION IS WARRANTED IN THE HANDS OF THE ASSESSEE. 38. WE FIND THAT THE ISSUE RAISED IN THIS BUNCH OF APPEALS FILED BY THE ASSESSEE AND THE REVENUE FOR ASSESSMENT YEARS 1999- 2000 TO 2009-10 ARE IDENTICAL TO THE ISSUES RAISED IN ANJUM SHOUKAT BAG WAN AND OUR DECISION ON ALL THE ISSUES WOULD APPLY MUTATIS MUTANDIS. ITA NOS. 182 TO 192/PUN/2013 - SHAHANAZ SHOUKAT BAG WAN - (ASSESSEES APPEAL) ITA NOS. 478 TO 488/PUN/2013 SHAHANAZ SHOUKAT BAG WAN (REVENUES APPEAL) ITA NOS. 204 TO 214/PUN/2013 - KAISH SHOUKAT BAGWA N - (ASSESSEES APPEAL) ITA NOS. 456 TO 466/PUN/2013 KAISH SHOUKAT BAGWAN (REVENUES APPEAL) 39. SIMILARLY THE ISSUE RAISED IN THE APPEALS FILED BY THE ASSESSEE IN THE CASE OF SHAHANAZ SHOUKAT BAGWAN AND KAISH SHOUKAT B AGWAN ARE IDENTICAL TO THE ISSUES RAISED IN THE CASE OF ANJUM SHOUKAT B AGWAN AND ALSO ADDITION MADE ON ACCOUNT OF NOTINGS MADE OF INVESTMENT IN FD RS IN ASSESSMENT YEAR 2005-06, IS SAME AND OUR DECISION IN ANJUM SHOUKAT BAGWAN ON ALL ISSUES WOULD APPLY MUTATIS MUTANDIS. 40. NOW COMING TO THE APPEALS FILED BY THE PAT SANS THA SONIYA NAGARI VINKAR AND VINKAR VYAVSAIK SAHAKARI PAT SANSTHA LTD . THE ASSESSEE IS IN APPEAL FOR ASSESSMENTS YEARS 2004-05 AND 2005-06 AG AINST THE ORDER PASSED UNDER SECTION143(3) R.W.S. 153A OF THE ACT. 41. THE ASSESSEE HAS RAISED COMMON GROUNDS IN BOTH THE APPEALS IN ITA NOS. 226 & 227/PUN/2013 RELATING TO ASSESSMENT YEAR S 2004-05 AND 2005-06 AND GROUNDS IN ITA NO.226/PUN/2013 READ AS UNDER : 33 ANJUM AND GROUP UNDER FACTS & UNDER THE CIRCUMSTANCES OF THE CASE - 1. LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION M ADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN THE FORM OF FDRS LYING IN VARIOUS INDIVIDUAL NAMES U/S.68 OF THE I.T. ACT, 1961. THE REQUISITE DETAILS AND DOCUMENTS AS REQUIRED TO SUBSTANTIATE THE CREDIT WORTHINESS OF THE DEPOSIT WERE DULY SUBMITTED. HEN CE, THE ADDITION U/S.68 IS UNCALLED FOR. IT IS HUMBLY PRAYED THAT, THE ADDITION U/S.68 OF TH E I.T. ACT, 1961 WRONGLY MADE MAY PLEASE BE DELETED. 2. THE APPELLANT MAY BE ALLOWED TO ADD/RECTIFY THE GROUNDS OF APPEAL. 42. THE REVENUE HAS RAISED COMMON GROUNDS IN BOTH T HE APPEALS IN ITA NOS. 445 & 446/PUN/2013 RELATING TO ASSESSMENT YEAR S 2004-05 AND 2005-06 AND GROUNDS IN ITA NO.445/PUN/2013 READ AS UNDER : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD . CIT(A) WAS JUSTIFIED IN HOLDING ON ONE HAND THAT TH E ADDITION OF UNEXPLAINED FDRS U/S. 68 OF THE ACT WAS CORRECTLY M ADE BY A.O AND DECIDING ON THE OTHER HAND THAT THE SAID UNEXPLAINED INCOME IS ELIGIBLE FOR DEDUCTION U/ S. 80P(2)(A)(I)? 2. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FA CTS THAT ADDITION MADE U/S. 68 OF THE ACT IS NOT INCOME UNDER THE HEAD 'PR OFITS AND GAIN OF BUSINESS' AND HENCE . IS INELIGIBLE FOR DEDUCTION U/S. 80P(2)(A)(I). 3.(I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCTION U/S. 80P(2)(A)(I) TO THE ASSESSEE IGNORING THE DECISION OF HON'BLE SUPREME C OURT IN THE CASE OF THE TOTGARS CO OPERATIVE SALE SOCIETY LTD VS. ITO, 332 ITR 283 HELD THAT DEDUCTION U/S. 80P(2)(A)(I) AS ALLOWABLE ONLY ON BU SINESS INCOME (II) IT HAS BEEN HELD BY HON'BLE GUJARAT HIGH COUR T IN THE CASE OF FAKIR MOHEMAD HAJI HASAN VS. CIT (2001) 247 ITR 290 THAT INCOME U/S. 68 OF THE ACT IS A DEEMED INCOME AND IS NOT TO BE COMPUTED UN DER ANY OF THE FIVE HEADS OF INCOME CLASSIFIED IN SECTION 14 OF THE ACT . THIS VIEW HAS BEEN REITERATED BY HORI'BLE CHATTISGARH HIGH COURT IN TH E CASE OF DHANUSH GENERAL STORES VS. CIT (2011) 339 ITR 651. 4(I) THE LD. CIT(A) ERRED IN RELYING ON THE DECISIO N OF ITAT PUNE IN THE CASE OF SHRI. MAHAVEER NAGARI SAHAKARI PAT SANSTHA IGNORING THE FACTS THAT THE SAID DECISION IS DISTINGUISHABLE ON FACTS IN AS MUCH AS IN THE SAID CASE THE UNEXPLAINED DEPOSITS WERE OWNED WERE UP BY THE DEPO SITORS AS UNDISCLOSED INCOME WHEREAS IN THE PRESENT CASE NO ONE HAS OWNED UP TO THE UNEXPLAINED FDRS. (II) WITHOUT PREJUDICE, THE ITAT, PUNE WHILE RENDER ING THE DECISION IN THE CASE OF SHRI MAHAVEER NAGARI SAH. PAT SANSTHA DID N OT CONSIDER THE JUDICIAL PRECEDENTS MENTIONED AT GROUND NO.3 SUPRA. THEREFO RE, THE SAID DECISION OF ITAT IS NOT BINDING ON CIT(A) AS RULE OF SUB-SILENT IO IS APPLICABLE (SHANMUGVEL NADIR VS. TAMIL NADU & ANOTHER 263 ITR 658 (SC). 34 ANJUM AND GROUP 5. WITHOUT PREJUDICE TO THE ABOVE GROUNDS LD CIT(A) SHOULD HAVE RELIED ON THE JUDICIAL PRECEDENTS MENTIONED AT GROUND NO.3 SUPRA AND BY NOT DOING SO HE HAS ERRED IN NOT EXERCISING HIS PLENARY POWER S WHICH ARE CONTERMINOUS WITH THAT OF ASSESSING OFFICER AS PER THE RATIO LAI D DOWN BY CIT VS. KANPUR COAL SYNDICATE (1964) 53 ITR 225, 229 (SC). 6. THE APPELLANT PRAYS THAT HE ORDER OF THE LD CIT( A) BE VACATED AND THAT OF THE AO'S ORDER MAY BE RESTORED. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY ANY OF THE ABOVE GROUNDS RAISED, ANY OTHER GROUNDS AT THE TIME OF PROCEEDINGS BEFORE THE HON 'BLE WHICH MAY PLEASE BE GRANTED. 43. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT THE ONLY ADDITION MADE WAS ON ACCOUNT OF UNEXPLAINE D CASH CREDITS IN THE FORM OF FDRS LYING IN VARIOUS NAMES IN THE PREMISES OF T HE PAT SANSTHA, WHICH WAS MADE UNDER SECTION 68 OF THE ACT. THE LD. AUTHORIS ED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE WANTS TO WIT HDRAW THE APPEALS FILED AGAINST THE AFORESAID ADDITIONS MADE UNDER SECTION 68 OF THE ACT RELATING TO ASSESSMENT YEARS 2004-05 & 2005-06. IN VIEW THEREO F, THE ADDITIONS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FDRS IS UPHELD IN THE HANDS OF THE ASSESSEE AND THE APPEALS FILED BY THE ASSESSEE ARE DISMISSED AS WITHDRAWN. 44. IN THE APPEALS FILED BY THE REVENUE RELATING TO ASSESSMENTS YEARS 2004- 05 AND 2005-06 THE LD. AUTHORISED REPRESENTATIVE FO R THE ASSESSEE POINTED OUT THAT THE ONLY ISSUE WAS THE CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT ON SUCH ADDITION MADE ON ACCOUNT OF UNEXPLA INED FDRS UNDER SECTION 68 OF THE ACT. THE LD. AUTHORISED REPRESENTATIVE F OR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER HAD DENIED THE SAID CLAI M, HOWEVER THE CIT(A) HAD ALLOWED THE CLAIM OF THE ASSESSEE BY ALLOWING DEDUC TION U/S.80P OF THE ACT IN RESPECT OF SUCH ADDITIONS. THE CIT(A) HELD THE ASS ESSEE TO BE ELIGIBLE TO THE SAID CLAIM OF DEDUCTION U/S.80P(2)(A)(I) OF THE ACT SINCE THE CASH CREDITS WERE TAXED IN THE HANDS OF THE ASSESSEE AS INCOME FROM O THER SOURCES, I.E. 35 ANJUM AND GROUP PROVIDING CREDIT FACILITY TO ITS MEMBERS. FOR THIS PROPOSITION, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT, CIRCLE-3(1) DHULE VS. SHRI AGRASEN SAHAKARI P AT SANSTHA MARYADIT VIDE ITA NO.1459/PN/2005 ORDER DATED 30-06-2011. 45. THE REVENUE IS IN APPEAL AGAINST THE AFORESAID FINDINGS OF THE CIT(A). 46. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. 47. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT THE ISSUE STANDS COVERED BY THE ORDER OF THE TRIBUN AL IN THE CASE OF SHRI MAHAVIR NAGARI SAHAKARI PAT SANSTHA LTD. VS. DY.CIT REPORTED IN 74 TTJ 793 AND IN THE CASE OF CIT VS. PRAGATI CO.OP. BANK LTD. REPORTED IN (2008) 278 ITR 170. 48. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN SHRI MAHAVIR NAGA RI SAHAKARI PAT SANSTHA LTD. VS. DCIT HAS HELD THAT CASH CREDITS ON ACCOUNT OF VARIOUS DEPOSITS IN BENAMI/BOGUS NAMES, EVEN IF, TAXED, WOULD BE CONSID ERED AS INCOME OF THE SAME BUSINESS, I.E. PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND ACCORDINGLY WOULD BE ENTITLED TO DEDUCTION U/S.80P OF THE ACT. FOLLOWING THE SAME PROPOSITION AS LAID DOWN BY THE PUNE BENCH OF THE T RIBUNAL IN VARIOUS CASES WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDU CTION U/S.80P OF THE ACT ON THE AFORESAID ADDITION MADE UNDER SECTION 68 OF THE ACT EVEN IF CERTAIN ERRORS WERE FOUND IN THE EXPLANATION OF THE ASSESSEE. ACC ORDINGLY WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE GROUNDS OF APPE AL RAISED BY THE REVENUE IN BOTH THE APPEALS 36 ANJUM AND GROUP 49. IN THE RESULT ALL THE APPEALS OF DIFFERENT ASSE SSEES ARE PARTLY ALLOWED AND THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 15 TH DAY OF FEBRUARY, 2017. SD/- SD/- (ANIL CHATURVEDI) (SUSH MA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER PUNE; DATED : 15 TH FEBRUARY, 2017. SATISH ) *+, -, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. THE CIT(A) KOLHAPUR. THE CIT-I/II, KOLHAPUR / CIT (CENTRAL), PUNE ! $$%, %, / DR, ITAT, B PUNE; + / GUARD FILE / BY ORDER, ! $ // TRUE COPY // / ASSISTANT REGISTRAR, % , / ITAT, PUNE