Shri Surender Kumar Aggarwal, Sriganganagar V. ITO, Ward-3, Sriganganagar

ITA 228/JODH/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3380 (ITAT-JODHPUR)
• Duration Of Justice: 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-01-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 26-06-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Charitable institution; Principle of natural justice; Opportunity of cross examination; Earning of tax free income; Third party statement; Validity of assessment; Onus to prove; Set aside
• Section: 69C; 143(3); 142(1); 234B; 274; 143(2); 69A; 207; 208; 139(1); 139(4); 64; 43; 13; 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 Surender Kumar Aggarwal O H Garden, Karni Marg, Sri Ganganagar [PAN: AAGHS 4053 R] (Appellant) Vs. ITO, Ward-03, Sri Ganganagar (Respondent) Appellant by Sh. Rajendra Jain, Adv.& Smt. Raksha Birla, CA Respondent by Smt. Alka Rajvanshi Jain, CIT DR Date of Hearing 30.01.2024 Date of Pronouncement 15.03.2024 ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by assessee is arising out of the order of National Faceless Appeal Centre, Delhi dated 01/05/2023 [here in after ‘NFAC’] for assessment year 2017-18 which in turn arise from the order dated 30.12.2019 passed under section 143(3) of the Income Tax Act, by ITO, Ward-3, Sri Ganganagar, Rajasthan. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 2 2. In this appeal, the assessee has raised following grounds: - “1. That on the facts and in the circumstances of the case the ld. CIT (A) erred in upholding validity and legality of assessment order passed by the ld. AO. 2. That on the facts and in the circumstances of the case the ld. CIT(A) erred in upholding estimation of agriculture income without rejecting agriculture account. 3. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in sustaining addition of Rs. 3,05,86,372/- out of agriculture income declared by assessee u/s 69A of the Act. 4. That on the facts and in the circumstances of the case the ld. CIT(A) upholding the provision of section 69A without analyzing the provisions of section 69A without analyzing the provisions of the law in right perspective and judicious manner. 5. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in computing the agriculture income on arbitrarily manner. 6. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in not examining the matter in its entirely, objectively and correct perspective. The finding recorded by ld. CIT(A) ex facie contrary to facts and law. 7. That on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in not taken to consider the credible evidence and information furnished by assessee during the appellate proceedings. 8. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing. 9. The petitioner prays for justice & relief.” 3. Succinctly, the fact as culled out from the records is thatin this case, the assessee filed his return of income for A.Y. 2017-18 on 08/03/2018 anddeclared income to the tune of Rs. 59,080/- and agriculture income of Rs. 10,75,00,000/-. The casewas selected for through CASS for limited scrutiny to examine the issue of "Large Agricultural Incomeand Cash Deposited during the demonetization I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 3 period. Subsequently, statutory notice u/s 143(2) ofthe Income Tax Act, 1961 generated through ITBA portal was issued on 31/08/2018 through ITBAportal to facilitate e-assessment and later notice u/s 142(1) with detailed questionnaire was alsoissued through ITBA and were duly served upon the assessee through e-proceedings. In response tothe statutory notices issued, initially filed an objection regarding the validity of notice & the same were withdrawn vide its letterdated:-11.12.2019. Thereafter, furnished relevant documents/explanation such as bank statements,details of land holding, Girdawri report, bills and voucher to substantiate the large agricultural incomeelectronically in E-Proceeding facility through his account in e-filling website of income tax department,which were examined on test check basis. 3.1 The assessee is a HUF engaged in the agricultural activity and has also rental income. The case of the assessee was selected for scrutiny on two grounds i.e. cash deposited during the period of demonetization and the large agriculture income. During the period of demonetization period the assessee has deposited only Rs.20,00,000/- in his bank account which is accepted by the learned A.O. In the year under assessment the assessee has declared the total sale of crop at Rs. 10,75,46,112/-. Out of which the A.O. has rejected the crop of I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 4 Rs.4,18,45,572/- and added the same to the declared income treating the same as unexplained income by applying the provisions of section 69A. 4. Aggrieved from the above order of the assessment the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised by the assessee in first appeal, the relevant finding of the ld. CIT(A) is reiterated here in below: “The issue pertains to production of Kinnow, excess claim of agricultural income and expenses thereof. As per the facts, the appellant has orchard in the 350 bigha of land. The karta ofHUF, Sh. Suraj Agarwal in his statement submitted per bigha yield is 102 Qtlwhereas AO based on the investigation during the assessment proceedings stated that the production has been considered as 96 Qtl. per bigha. AO called the information from Asst. director, Horticulture, Sriganganagar, w.r.t. yield, who has furnished information that agriculture production per tree in the range of 150 kg to 175 kgs. The information received is reiterated as below:-” I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 5 The appellant also furnished a certificate during the assessment proceedings regarding production of kinnow, issued by the Department of horticulture, which show agriculture production per tree in the range of 150 kg to 175 kgs, this is reiterated as follows:- I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 6 AO during the assessment has taken maximum realizable production per tree available for sale as 150 kilogram. The appellant’s orchard had 64 tree per bigha, thus the total production per bigha has been worked out as 96.00 Qtl (150*64). The total yield of the kinnow determined by the AO as under:- Fruit Per Tree = 150 Kg No. of Tree in a Bigha 64 Total Production in a bigha 150*64 = 96.00 Qtl Total Production in 350 Bigha = 33600 Qtls. The total production of kinnow determined at 33,600 qtls During the assessment proceedings, the fact submitted by Asst. director, Horticulture, Sriganganagar and by Agricultural Research Station, Sriganganagarw.r.t. yield is that the production per tree in the range of 150 kg to 175 kgs. The appellant during the various submissions has furnished affidavit of various Kinnow growers of the same area who states that the average yield ranges from 150 to 170 kg per plant which is as per the government the lowest yield whereas practically they are getting yield 100 to 300 kg per plant of Kinnow. The affidavitshave been accompanied by identity proofs of the growers. Considering all these aspects, I am of the view that realizable production per treeestimated by AO at 150 Kilogram per plant is less, it can safely be estimated at 160 kg per plant. The total yield of the kinnow is determined as under:- Fruit Per Tree 160 Kg No. of Tree in a Bigha 64 Total Production in a bigha 160*64 = 102.40 Qtl Total Production in 350 Bigha = 35840 Qtls. The total production of kinnow is determined at 35,840 qtls. In the assessment order, AO observed that the appellant did not furnish any bills/vouchers or any evidence like transportation etc. to substantiate the claim of kinnow sales to the following parties:- I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 7 During the assessment proceeding, the appellant submitted that the order for these parties was placed on telephone and the payment was received in advance The appellant further submitted that the truck freight was also to be paid by the buyer,hence no bill has been received by the purchaser. The assertion of the appellant has been rejected by the AO. On further examination, it has also been found that the average sale price to these nine parties has been 36.96 per kg as compared to Rs. 20.68 per kg those parties to whom sale is supported by bills and other evidences. In my considered opinion, even in normal parlance, the variation in sale price is absurd. The appellant has given frivolous reasons for not producing any evidence for sale to these parties. Only receipts claimed on account of sale being received in bank account cannot be the sufficient evidence for sale to these parties. AO's action is upheld for considering the sale to these parties as non-genuine. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 8 AO has considered the total production in 350 bighas of land at 33600 Qtls whereas as per the findings given in preceding paras, the production in 350 bighas of land is to be taken as 35840 Qtls. The average sale price taken by AO is Rs.20.68 per kg based on the bills produced for sale of Kinnow. However, the weighted mean has been calculated for considering the sale price from the sale price given to the parties whom the sale bills have been issued by the appellant. This has come out to be Rs.21.05 per kg against Rs.20.68 per kg taken by AO. Considering this, total agriculture receipts from kinnow sales are reworked as under.- Total production in 350 Bigha of land 35840 Qtls Average sale price: Rs.21.05 per kg Total receipts from kinnow sale: Rs.7,54,43,200/- The AO has worked out total receipts from kinnow sale at Rs.6,85,44,000/-. The addition to the extent of ( Rs * 0.7, 54 ,43,200- Rs.6,85,44,000)=68,99,200/- is deleted. Further AO has made addition of Rs. 33,60,000/- considering Rs.1 per kg for production of 33600 Qtls and also Rs. 10,00,000/- on account of additional agricultural expenses incurred on Kinnow sales by stating that expenses on account of labour for maintenance, packaging boxes, crates and other packing material has not been deducted by the appellant. The perusal of the assessment order, in Table-A-1 shows that the appellant has deducted expenses on each detail of sale. These expenses amount to Rs. 1,64,22,092/-. The appellant has considered net sale as the Kinnow sale receipts. Hence, the AO's proposal of making the above addition of Rs. 43,60,000/- on account of additional expenses various post plucking activities is without any basis. Hence, the addition of Rs. 43,60,000/- on account of agricultural expenses is deleted. The agricultural income is re-calculated as follows: - Total agricultural receipts From kinnow sale = Rs.7,54,43,200/- From other crops = Rs.15,16,540/- (same as in assessment order) Total = Rs. 7,69,59,740/- Total expenses = Rs. 61,60,382/- Net agricultural income = Rs. 7,07,99,358/- The appellant had shown net agricultural income of Rs.10,13,85,730/- whereas in this order net agricultural income has been worked out as Rs.7,07,99,358/-, hence addition to the extent of Rs.3,05,86,372/- has been upheld out of Rs.4,18,45,572/- as proposed by the AO. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 9 The appellant has also raised ground of appeal regarding application of the provisions of section 69A and of section 115BBE. In my considered opinion, the application of section 69A is based on the fact that the appellant could not produce the necessary evidence in support of excessive claim of agricultural income. The ground of appeal on this account is not allowed. The application of section 115BBE is consequential in nature. Hence, ground no.2 to 7 is partly allowed.” 5. Since the ld. CIT(A) has partly allowed and has not considered the aspect of the merits of the case in full the assessee preferred the present appeal on the ground as stated hereinabove. In support of the various grounds so raised by the assessee the ld. AR of the assessee has relied upon the detailed submission made before the ld. CIT(A)and the same is reproduced herein below:- Submission dated 19.08.2022 Before proceeding with the grounds of appeal the appellant would like to bring to your kind knowledge the brief facts of the case. The appellant is a Hindu Undivided Family (HUF) headed by Sh. Surender Kumar Aggarwal, as Karta and having the Wife Smt. Veena Gupta, two sons S/Sh. Suraj Aggarwal and Gaurav Gupta and two daughters Smt. Gunjan Poddar and Smt. Vandana Gupta, as coparceners and members of HUF. Besides petty rental income of Rs.82000/- and saving bank account interest of Rs.1690/- the major source of income of the appellant HUF is agriculture income. There is no other source of income and the fact is also accepted by the learned A.O. in his assessment order. In support of the same the assessee is attaching herewith the copy of the Computation of Total income which is placed on page 2 and 3 of the paper book. The case of the appellant HUF, for the year under consideration, was selected by CASS for limited scrutiny. The point of scrutiny were “Cash deposited during the period of demonetization” and the “Large agriculture income”. During the period of I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 10 demonetization period the appellant has deposited Rs.20,00,000/- in it’s bank account. The appellant has explained the source of the same which is accepted by the A.O. which is quite apparent from the assessment order. Regarding the second point it is stated that in the year under consideration the appellant has declared the Gross sale of crop at Rs.10,75,46,112/- (by mistake without claiming the agriculture expenses on the same). The appellant HUF was having 362.07 Bighas or say 91.58 Hector of fully irrigated agriculture land, the details of which were filed before the learned A.O. and the same has been accepted by the learned A.O. and so this point is not under dispute. On this agriculture land the appellant has planted the orchard of fruit Kinoow. Sri Ganganagar is the area which produced the highest crop of Kinoow in India. Out of the total sale of crop amounting to Rs.10,75,46,112/- learned A.O. has rejected the crop of Rs.4,18,45,572/- and added the same to the declared income by treating the same as unexplained income of the appellant. The addition is made by applying the provisions of section 69A. Consequential to the application of provisions of section 69A, learned A.O. have charged the tax as per the provisions of section 115BBE. Both the sections are not applicable in the case of the appellant. Section 69A is not applicable as the assessee is maintaining the books of accounts which were produced before the learned A.O. and once it is established that the provisions of section 69A are not applicable then the question of application of section 115BBE does not arise at all. From the assessment order your good self will please find that in the whole assessment proceeding learned A.O. could not bring any evidence or concrete finding on record and all the observations of the learned A.O. are based on estimate, suspicion and surmises. Whereas all the transactions of the assessee were through the banking channel, the assessee has supplied the complete where about of all the parties through whom he has received the money. Learned A.O. without making any enquiry from any party have ignored and rejected the whole submission of the appellant on some flimsy grounds and on suspicion and surmises. The present appeal is filed against the order without providing the proper opportunity, without following the procedure of law and against the making of addition of Rs.4,18,45.572/- on suspicion and surmises. In view of the above brief facts the grounds of appeal are dealt as under:- GROUND No. 1 :- That the order passed by the A.O. is against the law and facts applicable in the case of the assessee. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 11 SUBMISSIONS :- This is the general ground of appeal and the mistake of law and facts will be discussed in the forthcoming grounds of appeal. GROUND No. 9 :- That the learned A.O. has erred in passing the order without providing the proper opportunity of hearing to the assessee. The order passed without proper opportunity is bad in law. SUBMISSIONS :- Before giving the submissions on the other grounds of appeal, the assessee will like to bring to your kind notice that the learned A.O. has not provided the proper opportunity to the assessee. Though the assessee was remained cooperative in the proceedings but due to shortage of time could not procure the necessary evidence and documents and also could not plead his case properly. Similarly the show cause notices given in the case have never intimated the true and correct intention of the A.O. The fact is very clear from the copy of both the show cause notices and the assessment order. (Paper Book Page No. 14, 34 & 35). The show cause notice was on the other footing and the assessment order passed was on the other footing. For your ready reference the chart showing the sequence of the notices and the time allowed by the A.O. is attached at the end of this letter. From the chart you will please observe that in the very first notice the time allowed was 7 days which is not sufficient. After that in one notice the time allowed was 4 days and after that no time was allowed to the notice i.e. the hearing was fixed on the next date of the date on which the notice was issued. From the study of the chart given above your good self will please observe that the case was selected for scrutiny on 11.08.2018 but after that the AO kept mum for about 15 months and then suddenly he realized that the case is going to be time barred on 31.12.2019 and so on 18.11.2019 he started the assessment proceedings in the case. You will please agree with the assessee that it is not the fault of the assessee that the A.O. could not get time to hear the case. From the chart you will please appreciate that the assessee remained full cooperative in the whole proceedings though in most of the notice the AO has not allowed any time. In his letter dated 30.12.2019 on page 4 at the end of the para 3 the assessee has requested for making the enquiries from the parties the bills of whom could not I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 12 be produced by the assessee. (Paper bookNo. 36 to 40) In spite of the specific request AO has not tried to confirm the fact of selling the goods to these parties but have taken the easy way to reject the amounts received from these parties. For your ready reference the relevant part of the letter is reproduced here below:- “The amounts are through the banking channel and so it cannot be said that these parties are bogus parties or the fake parties. The assessee is providing the names of these parties also providing the bank account from where the necessary enquiry could have been made. It is therefore requested that before drawing any adverse inference the necessary enquiries may please be made from these parties.” From the above your good self will please find that the assessee has specifically asked the AO to conduct the enquiry before taking any adverse inference but the AO ignored the request of the assessee and passed the assessment order without accepting the contention of the assessee and by refusing to accept these receipts as genuine and making the addition of the same. Besides the above the assessee has filed the detailed reply to the show cause notices issued by the AO but while framing the assessment order learned AO has not considered the reply of the assessee. This act of the AO also amount to not provide the proper opportunity of hearing. This type of action on the part of the learned AO amounts to act of not providing the proper opportunity of hearing to assessee to explain his case which is against law and the order passed without providing the proper opportunity is bad in law and may please be cancelled. In this regard the legal position is also in favour of the assessee. The relevant case laws are given below. In the appeal of Nedunchezhian (Dr. K) V. DCIT reported in (2005) 274 ITR 37 honourable Madras High Court have observed that opportunity should be reasonable one. Where time is too short for compliance or the assessee has some reasons to require more time, reasonable time should be given for compliance. In the appeal of Bhagat Dharam Chand Prem Sagar Charitable Trust V. CIT reported in (2005) 274 ITR 443 honourable Punjab & Haryana High Court have observe that an opportunity, which is earlier granted cannot justify lack of reasonable opportunity during last occasion. In the appeal of Karti P. Chidambaran Vs. Ad. CIT &Ors reported in (2021 322 CTR Reports-189 honourable Madras High Court have held as under:- I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 13 “Only two days time had been given to the assessee to file replies and establish their case; assessees’ request for providing reasonable time was also not accepted; respondent could not be able to establish that reasonable opportunity has been afforded to the assessee to defend their case in the manner known to law.” In the case of Pichila Jayachandra Reddy Vs. NFAC and Ors. reported in (2022) 140 taxmann.com 138 honourable Karnataka High Court have held as under:- “Where no reasonable opportunity of hearing had been accorded to assessee before passing impugned faceless assessment order, said order was to be set aside and matter was to be remanded back to revenue to consider assessee's request of affording a reasonable opportunity of hearing.” CROSS EXAMINATION ON STATEMENT NOT ALLOWED:- During the course of assessment proceedings learned A.O. recorded the statement of the Assistant Director Horticulture, Sri Ganganagar. Who in her statement have estimated the production of Kinoow per plant in orchard at 150 KG per tree. The AO has relied on this statement heavily. In his letter dated 30.12.2019 on page one para 3, (Paper Book page 36 to 40) the assessee has demanded the cross examination of the Assistant Director Horticulture, Sri Ganganagar. The relevant part of the letter is reproduced here below for your convenience. “Regarding your observation that the Assistant Director Horticulture, Sri Ganganagar, in her statement recorded U/s. 131, have estimated the production of Kinoow per plant in our orchard at 150 K.G. In this regard it is informed that you have not confronted the assessee about the fact that you have recorded the statement of Assistant Director Horticulture U/s. 131. The statement given by the Assistant Director is not correct. The assessee do not agree with her observation given in the statement. The assessee request you to call the Assistant Director Horticulture for cross examination by the assessee. You have not informed that how the Assistant Director Horticulture have reached the conclusion that the production of Kinoow in our orchard was 150 KG per Plant. Whether she have informed the period in which she has inspected the garden of the assessee. Have she informed that how she has estimated the production of 150 KG per plant. Whether she was present at the time when the fruit were plucked from the tree and weighed. The estimate given by her that also in the absence of the assessee has got no meaning. The estimate given is without any base or evidence. Itis merely a guess work. Have she checked all the plant in the 350 bighas of orchard or she has I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 14 estimated the production after inspection of only some of the plants. In view of the above the assessee is not agree with the observation of the Assistant Director of Horticulture and again demand that she may please be called U/s. 131 for cross examination by the assessee. Untill that her statement may not be please considered fit for deciding the case of the assessee.” From the above your good self will please find that neither the learned A.O. provided the copy of the statement of the Assistant Director Horticulture, Sri Ganganagar to the assessee nor allowed to cross examine to the assessee on the statement. Your good self will please agree that it is the settled principal of law that without providing the opportunity of making the cross examination on the statement which the AO is trying to use against the assessee, no reliance can be placed on the statement in the assessment order. In the appeal of CIT Vs. Dharam Pal Prem Chand Ltd. reported in (2007) 295 ITR 105 honourable Delhi High Court have observed as under: “Where cross examination was not made available to counter a report from the analyst of a research institute, such assessment cannot be valid in law.” In the appeal of CIT Vs. Sanjeev Kumar Jain reported in (2009 310 ITR 178 honourable Punjab & Haryana High Court have observed as under:- “An assessment without giving opportunity to cross-examine witnesses is not valid for failure to observe principle of natural justice.” Sir, you will please appreciate that a fair opportunity is one, where the assessee is faced with the tentative conclusion of the AO for rebuttal. Merely giving opportunity to give information is not by itself good enough to justify the inference of a fair hearing. Such a fair opportunity is a basic principle of natural justice. Now the question arise that what could be the consequences of violation of principles of natural justice. This is an important question which needs to be examined often, say, when third party statement are relied upon by the A.O. to draw adverse inference to support additions. In this regard the view of the honourable Supreme Court and the House of Lords are in favour of the assessee. In the appeal of Shreeram Durga Prasad (RB) V. Settlement Commission reported in (1989) 176 ITR 169 (S.C.) and in the appeal of Ridge v Boldwin (1964) Ac 40 and Anisminic Ltd. V Foreign Compensation Commission (1969) 2 AC 147 House of Lords have have held that the order made in violation of principles of natural justice is void and a nullity. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 15 Principles of natural justice has found its application mainly on the requirement of opportunity of hearing, audi alteram partem. The principle is so fundamental that it is not to be construed as a mere formality. Where the materials relied upon are not enclosed in a show cause notice, there is no sufficient opportunity. This view is expressed by the honourable Supreme Court in the case of Appropriate Authority V. Vijay Kumar Shara reported in (2001) 249 ITR 554. This right is so fundamental that the failure to observe the principles of natural justice cannot be made good in appeal. Lack of opportunity before the AO cannot be rectified by the appellate authority by giving such opportunity. This view is also expressed by the honourable Supreme Court in the case of Tin Box Co. V. CIT reported in (2001) 249 ITR 216. In the case of Ritu Devi V. CIT reported in (2004) 271 ITR 466 honourable Madras High Court have observed as under:- “Notwithstanding a long line of decisions requiring adequate time for compliance writs are continued to be filed for lack of adequate opportunity and invariably found against the revenue with the matter being remitted back for opportunity earlier denied. Where opportunity is given for appearance and hearing at 10.30 a.m. to appeal on 31 st March 2000 by a notice served on the afternoon of 20 th March, there was clearly violation of principles of natural justice, so that the assessment order passed was quashed. In view of the above it is requested that the learned A.O. has not provided the proper opportunity to the assessee and so the assessment order passed without providing the proper opportunity to the assessee may please be quashed. GROUND No. 2 :- That the learned A.O. has erred in making an addition of Rs.4,18,45,572/- to the declared income without any cogent reason. SUBMISSIONS :- The merit of the case are lengthy and the appellant is separately preparing the matter on the same which will take some time and so it is requested that 10 days time may please be allowed to the assessee to file the submissions on this ground of appeal. GROUND No. 3 :- I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 16 That the learned A.O. has erred in applying the provisions of section 69A which are not applicable in the case of the assessee as the assessee was maintaining the books of account. SUBMISSIONS :- In this regard it is stated that the learned A.O. has made the addition by applying the provisions of section 69A. For applying the provisions of section 69A learned A.O., on page 21 last para, has observed as under:- “It is pertinent to mention here that “if AO finds any unexplained transaction in the bank pass book of the assessee then same can be taxed as unexplained money under section 69A of the I.T. Act 1961” CIT Poona Vs. Bhaichand H. Gandhi ITR 67 (Bom.)” After that the learned A.O., in the assessment order, has reproduced the language of section 69A of the I.T. Act, 1961. For your ready reference and convenience the language of section 69A is reproduced here below:- 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article3 may be deeme3d to be the income of the assessee for such financial year. From the above the basis conditions for application of section 69A are as under:- 1. Assessee is found to be the owner of any money, bullion, jewellery or other valuable article and 2. Such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income and 3. Assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article or I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 17 4. The explanation offered by the assessee is not, in the opinion of the assessing officer, satisfactory 5. The money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. In the case of the appellant out of the 5 limbs of the section 1 st limb that the appellant was found to be the owner of the money received in his bank account is correct. The second limb that such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income is not looked into by the learned A.O. On the page 18, para 14 of the order learned A.O. has observed that the assessee has produced the books of accounts which were examined by the learned A.O. on test check basis. There is no adverse finding by the learned A.O. that the entries of receipt on account of sale of fruit is not recorded in the books of accounts. It clearly indicate that all the entries received by the assessee from the sale of fruits have been duly recorded in the books of accounts maintained by the assessee. Once the fact of entry in the regular books of accounts is established then it is but natural that the provisions of section 69A are not applicable in the case of the assessee. Here it would not be out of place to mention that the section 69A was introduced in the Act for the purposes of money, bullion, jewellery and other valuable article which are found during the course of search or survey which are though found in possession of the assessee but not found recorded in the regular books of assessee. In the case of the assessee, the money received by assessee is duly recorded in the books of accounts of the assessee and hence these provisions of section 69A are not meant for the type of case of assessee and are not applicable in the case of the assessee. Once it is established that all the entries of money were found entered in the bank account as well as the regular books of accounts of the assessee then the matter of furnishing the explanation to the satisfaction of the A.O. has got no meaning as the primary condition of the section is not fulfilled. Here regarding the 3 rd point it is stated that the assessee has entered the amounts in the books of account and also offered the explanation of the same which is not accepted by the AO. Learned A.O. has erred in making the addition by applying the provisions of section 69A which is against the law and hence the addition made under the wrong section and without pointing out the correct section under which the learned A.O. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 18 could have made the addition is bad in law and the addition made may please be cancelled. GROUND No. 4 :- That the learned A.O. has erred in applying the provisions of section 115BBE which are not applicable in the case of the assessee as the case of the assessee is not a case of money laundering. SUBMISSIONS :- Learned A.O. made the addition to the income by applying the provisions of section 69A and accordingly also applied the provisions of section 115BBE. In the ground No. 3 the assessee has challenged the applicability of section 69A in the case of the assessee. If your good self concurs with the view of the assessee then it is requested that when the addition is not under the provisions of section 69A then the provision of section 115BBE are also not applicable in the case of the assessee and so the same may pleases be cancelled. GROUND No. 5 :- That the learned A.O. has erred in observing that the assessee has arranged the accommodating entries but could not give a single reason for obtaining the accommodating entries. GROUND No. 6 :- That the learned A.O. has erred in ignoring the fact that there was no end use of the money which required the assessee to arrange for the accommodating entries. SUBMISSION OF GROUND No. 5 & 6 Both the grounds of appeal are interlinked and so the submissions are given jointly. In the assessment order learned AO has observed that the assessee has arranged the accommodating entries but could not give a single reason that why the assessee has obtained the accommodating entries. Sir in this regard it is stated that there is always the reason for doing something wrong or rights. In the case of the assessee the assessee has filed the chart showing the final use of the amount of agriculture produce which are attached herewith for your ready reference and I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 19 records.(Paper Book page No. 21). From the same your good self will please find that there is no such investment made by the assessee which require the assessee to manage the accommodating entries. Without any need and unnecessarily why the assessee will obtain the accommodating entries. From the chart your good self will please observe that out of the total crop sold amounting to Rs.10,62,61,806/-, the assessee has used Rs.1,80,22,587/- for the payment of the KCC loan taken for agriculture; Rs. Rs.16546385/- has been divided in the members of the HUF which remained within the books of HUF; Rs.42,53,000/- was utilized in purchase of agriculture land; Rs.13980090/- was used in purchase of Jewellery; Rs.44,02,631/- used for house hold and personal expenses of members; Rs.41,94,214/- was spend on the agriculture expenses and rest of the spare amounts were given to near relatives for their needs. In this way there was no need of money to the assessee for which he was required to arrange the accommodating entries. The story cooked up by the AO is baseless. AO could not understand the difference between the agriculture income shown by a businessman and by an agriculturist. There is motive with the businessman to show higher agriculture to convert his black money into white whereas the agriculturist have no motive as he has no source to earn the black money. Here it would be pertinent to bring to your kind knowledge that the assessee is an agriculturist and had the assessee was in need of any white money then in spite of showing the higher income on his own land, the assessee could have very easily arrange the bogus contracts of the orchards of other farmers and could have shown to have sold their crop in his own name. In this way the total land of the assessee could have been increased from 362 bighas to 500 bighas or 700 bighas. If the assessee had done this practice then the learned AO might have satisfied because then the average crop per bigha have reduced from 175 KG per plant to 90 KG per plant which was acceptable to the AO. Your officers are ready to accept the false and made up stories but are not ready to accept the fact or real thing. Had the assessee have cooked up the story of taking the land on contract and have filed the false affidavit of the other agriculturist certifying that they have given their orchard on contract to assessee then your AO would have accepted the same without any hitch and would have framed the assessment without making any addition. Sir, this act of the learned A.O. is of promoting the assessee to do the wrong in place of declaring the original and true facts. The addition made on suspicion, surmises, presumption and on the basis of a cooked up story is bad in law and addition made to the declared income may please be deleted. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 20 The assessee has filed the chart showing the year wise crop sale from A.Y. 2014-15 to 2020-21.(Paper Book page No. 70). From the chart your good self will please observe that there is vast variation in the sale of crop year wise. Your good self will please appreciate that the agriculture income is dependent on several natural factors and the crop cannot be same in every year. It is not the procedure of manufacturing in which the results are same every time. From the chart you will please find that in the assessment year 2014-15 the total crop sold by the assessee was amounting to Rs.7,82,65,086/-; in A.Y. 2015-16 Rs.5,06,66,522/-; in A.Y. 2016- 17 Rs.6,59,00,825/-; in 2017-18 (Year under assessment) Rs.10,60,29,571/- in A.Y. 2018-19 Rs.5,20,06,980/-; in A.Y. 2019-20 Rs.1,22,81,928/- and in A.Y. 2020-21 Rs.5,12,22,525/-. From the chart you will please see that about four year back from the year under assessment the assessee has sold the crop of Rs.7.82,65,086/- which looking to the cost index may be more than the crop in the year under assessment. After the assessment year 2014-15 there was steep fall in the crop and the total realization is far less. After the year under assessment the total crop further went down and the assessee could not obtain even the figure sale of crop for the assessment year 2014-15 to 2016-17. In the assessment year 2019-20 the income from crop touched the bottom line of Rs.1,22,81,928/- which is almost 12% of the crop sold in the year under assessment. From the same your good self will please find that the assessee is not doing any manipulation in the sale of the agriculture produce and the sale is shown as per the crop procured in a particular year. From the above the contention of the assessee is that the assessee has no motive or use of arranging the accommodating entries and the assessment framed by the AO on suspicion, surmises and presumptions and by making the jugglery of figures is bad in law and required to be dismissed. It is therefore requested that the addition made to the declared income may please be cancelled. GROUND No. 7 :- That the learned A.O. has erred in making the addition without establishing any other taxable source of income except the agriculture income which is declared by the assessee. SUBMISSIONS :- From the whole assessment order your good self will please find that the learned AO could not establish that the assessee had any other source of income except the agriculture income. The assessee is maintaining the complete books of accounts, though in the form of memorandum of books, as the assessee is not I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 21 required to maintain the books of accounts under any law. All most all the transactions are through the banking channel and the assessee has not transacted in cash except some payments to the labourers in the agriculture work and some other petty work. Learned AO could not find or point out even a single entry which could suggest that the assessee is doing anyother work or had any other source of income. Without establishing that the assessee had any other source of income simply by stating “I am not agree with the contention of the assessee”, learned AO cannot make addition of income by changing the head of agriculture income to income from other sources. Simply because the figure of agriculture income do not suits to the imagination of the AO it cannot be said that the assessee had other source of income which brought in the records by showing the same as the agriculture income. Here it would not be out of place to mention that the assessee is an agriculturist and it was very easy for him to plead that he has taken the other orchard on contract and sold the fruits of those orchards also. The assessee has shown the agriculture produce of 362.07 bighas of orchard but by showing the contracts of other orchards the land holding could have been increased to 500 or 700 bighas which was not very much difficult for the assessee. It was the fault of the assessee that he has honestly without making any adjustment have declared the true and correct income for which the learned AO is punishing the assessee. Sir, if a person is filing return of income and declaring its income sincerely and honestly then he should not be punished by harassing him and by torturing him by making the false assessment. The act of the AO is arbitrary and without any base and the assessment made on suspicion, surmises and presumptions may please be cancelled. GROUND No. 8 :- That the learned A.O. has erred in charging the interest U/s. 234A and 234B which are not chargeable in the case of assessee. SUBMISSIONS :- Sir, the interest charged U/s. 234B in the assessment order is against the provisions of law. In the year under consideration the assessee has filed the return of income showing total income at Rs. 57400/- and agriculture income at Rs.10,75,00,000/-on which the total tax payable comes NIL. In this way, as per the provisions of section 208 the assessee was not liable for suo moto payment of any advance tax and demand U/s. 210 has not been raised against the assessee. Once as per the return of income if the assessee is not liable to pay any advance tax as I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 22 per the provisions of section 208 or 210 then the provisions of section 234A and 234B does not become operative. For your ready reference and the clear understanding of the relevant provisions the assessee is reproducing the language of the section 234B, 208 and 210 which are as under:- 234B. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month ...........................” 208. Advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during the year, as computed in accordance with the provisions of this Chapter, is ten thousand rupees or more.” 210. (3) In the case of a person who has been already assessed by way of regular assessment in respect of the total income of any previous year, the Assessing Officer, if he is of opinion that such person is liable to pay advance tax may, at any time during the financial year but not later than the last day of February, by order in writing, require such person to pay advance tax calculated in the manner laid down in section 209, and issue to such person a notice of demand under section 156 specifying the installment or installments in which such tax is to be paid.” From the above your good self will please find that the operative part of section 234B has the following three conditions:- 1. Where in any financial year, an assessee who is liable to pay advance tax under section 208; 2. failed to pay such tax or 3. Where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed income. As stated earlier, in the year under assessment the total income of the assessee was Rs.57400/- on which the tax payable was NIL. You will please appreciate that as per the provisions of section 208, the assessee was liable for the payment of advance tax only when the estimated tax on his income is Rs.10000/- or more. When the total tax on the returned income of the assessee was NIL then the I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 23 section 208 does not become operative and when the assessee has not committed any default U/s. 208 then the provisions of section 234B do not become operative and hence the assessee is not liable for the interest U/s. 234B. As far as the matter of section 210 is concerned in this regard it is stated that in the financial year relevant to the assessment year under consideration, the assessee was never served with any notice of demand U/s. 156 as per the provisions of section 210 and hence the question of payment of less than 90% of the advance tax demanded U/s. 210 does not arise at all. Here the question may arise that what is the meaning of “and where a regular assessment is made, to the date of such regular assessment on an amount equal to the assessed tax .................” In this regard it is stated that this part of the section 234B becomes operative only in case where as per the provisions of section 208 or 210, there was liability of advance tax on the assessee at the time of filing the return of income. When as per the returned income there is no liability of advance tax then the section 234B does not become operative and the assessee is not liable for the interest U/s. 234B. In this regard the assessee would rely on the case of Emem Freight Forwarders Vs. D.C.I.T. reported in (2017) 80 taxmann.com 294 in which the Mumbai Bench of honourable ITAT have held as under:- “Where neither assessee could foresee accrual of certain income in relevant year nor Assessing Officer could require assessee to pay advance tax on said income in pursuance of order made under section 210, interest under section 234B could not be levied in respect of same. Section 234B, read with sections 208 and 210 of the Income-tax Act, 1961 - Interest - Chargeable as (Applicability of) - Assessment year 2006-07 - Whether provisions of section 234B are applicable only if an assessee is liable to pay advance tax under section 208 and has failed to pay same or where advance tax paid by assessee under provisions of section 210 is less than ninety per cent of assessed tax - Held, yes Whether since neither assessee could foresee accrual of income which had arisen on date of survey, nor Assessing Officer could have required assessee to pay advance tax in pursuance of order made under section 210, interest could not be levied under section 234B from assessee - Held, yes.” In the case of Deputy Director of Income-tax Circle 3(1) Vs. MGB Metro Group Buying HK Ltd. reported in (2013) 29 taxmann.com 164 the Delhi bench of honourable ITAT have held that where assessee was not liable to deposit advance tax no interest under section 234B could be charged. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 24 In the case of Emami Ltd. Vs. CIT, Centgral-I, Kolkata reported in (2011) 12 taxmann.com 64 the honourable Calcutta High court have held where assessee had no liability to pay any advance tax under section 208 on any of due dates for payment of advance tax installments assessee could not be branded as a defaulter in payment of advance tax and no interest could be imposed upon it under sections 234B In the case of Rollon Containers Vs. ITO, Ward 8(3), Hyderabad reported in (2012) 52 SOT 168 the Hyderabad Bench of honourable ITAT have held where there is no liability under section 208, provisions of section 234B are not attracted. In the case of Director of Income-tax, International Taxation, Delhi-II Vs. Maersk Co. Ltd. reported in (2011) 10 taxmann.com 269 honourable Uttaranchal high court have held as under:- “Whether liability to pay interest under section 234B arises only if assessee, who is liable to pay advance tax under section 208, has failed to pay such tax or where advance tax paid by assessee under provisions of section 210 is less than 90 per cent of assessed tax - Held, yes” In the case of Buland Motor & Land Finance (P) Ltd. Vs. ACIT reported in 247 ITR 701 honourable Allahabad High Court have held as under:- “Whether since amount assessed for 1989-90 was a loss, there was no liability on assessee to pay advance tax on basis of his estimate of his current income for following year, i.e., 1990-91 - Held, yes - Whether also in absence of any order under section 210(3), no interest was payable under section 234B, and, thus, demand notice was liable to be quashed - Held, yes” In view of the above it is requested that the interest charged by the learned A.O. by applying the provisions of section 234B is against the law and facts applicable in the case of the assessee and so the interest charged by the learned A.O. U/s. 234B may please be cancelled. Regarding the interest U/s. 234A is concerned it is stated that the interest charged by the learned A.O. for 8 months whereas the same should have been charged for one month only. For the better understanding of the matter the relevant part of the section 234A is reproduced as under:- “234A. (1) Where the return of income for any assessment year under sub-section (1) or sub-section (4) of section 139, or in response to a notice under sub-section (1 of section 142, is furnished after the due date, or is not furnished, the I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 25 assessee shall be liable to pay simple interest at the rate of one percent for every month or part of a month comprised in the period commencing on the date immediately following the due date, and, (a) where the return is furnished after the due date, ending on the date of furnishing of the return; or .............................................” The assessee is an agriculturist and besides some petty rental income and interest from saving bank account has the main source of income as agriculturist. As the assessee was not having any income which exceed the maximum amount which is not chargeable to tax and hence the assessee was not required to file the return of income as the provisions of section 139(1) were not applicable in the case of the assessee. After receipt of some information learned A.O. issued the notice U/s. 142(1) to the appellant to file the return of income.(Paper book page No. 1) The notice was issued on 30.01.2018 allowing the time upto 01.03.2018 but due to delay in compiling the records the return could be filed only on 08.03.2018. From the above your good self will please appreciate that the assessee was not required to file the return U/s. 139(1), 139(4) but was asked to file the return by issuing the notice U/s. 142(1). Section 234A speaks that where the assessee furnish the return after the due date only then the interest U/s. 234A could have been changed. As stated already as the assessee was not required to file the return of income as per the provisions of section 139(1) or 139(4) but was required to file the return U/s. 142(1) in which the due date given was 01.03.2018 and the return was filed on 08.03.2018 and hence the assessee was liable for the interest U/s. 234A for one month only and not the 8 months as charged by the assessee. In view of the above it is requested that the interest charged by the learned A.O. by applying the provisions of section 234A is against the law and facts applicable in the case of the assessee and so the interest charged by the learned A.O. U/s. 234A may please be reduced suitably. GROUND No. 10 :- That the assessee crave the leave to add, amend, alter or delete any of the grounds of appeal. SUBMISSIONS :- I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 26 This is the general ground of appeal and the assessee do not feel that there is any need of any change in any ground of appeal. CHART SHOWING SEQUENCE OF NOTICES AND TIME ALLOWED Section of notice Date of issue of notice Date of hearing fixed Time allowed Response file on 143(2) 11.08.2018 24.08.2018 13 days 16.08.2018 143(2) 31.08.2018 14.09.2018 13 days 17.09.2018 142(1) 18.11.2019 25.11.2019 07 days 28.11.2019 asking for time upto 03.12.2019. Reply filed on 04.12.2019 Letter 12.12.2019 16.12.2019 04 days 16.12.2019 asking for two days time. Summons 17.12.2019 18.12.2019 No time Attended SCN 17.12.2019 18.12.2019 No time 18.12.2019 balance information and documents supplied on 20.12.2019 Some documents filed on 21.12.2019 SCN 23.12.2019 24.12.2019 No time 25.12.2019 two letters filed SCN 27.12.2019 28.12.2019 No time 30.12.2019 but A.O. closed the proceedings and so assessee filed the reply physically. Submission dated 08.11.2022 Previously the assessee has filed the detailed submissions on the ground No. 1 to 10 except the ground No. 2 which was against the addition of Rs.4,18,45,572/- on account of agriculture income which is treated by the A.O. as income from other sources. This ground is on merit of the case whereas all the other grounds are either technical or against the other matter. Though the brief facts of the case have already been given in the earlier letter but for your convenience it is mentioned that the assessee is an agriculturist and the only source of income of the assessee is agriculture income. The assessee was cultivating total land of about 363 Bighas and out of the total land the assessee has orchard of Kinoow on 350 bighas. In the year under consideration the assessee has declared the total sale consideration of the Kinoow at Rs.10,60,29,572/-. As per the version of the A.O. the agriculture crop shown by the assessee is on higher side and the assessee has introduced his unaccounted income in books by showing the I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 27 higher crop of Kinoow. On this ground the A.O. has made the addition to the declared income of the assessee and the present appeal is against this addition. Now in light of the above the remaining ground No 2 of appeal is dealt as under:- “That the learned A.O. has erred in making an addition of Rs.4,18,45,572/- to the declared income without any cogent reason.” SUBMISSIONS :- The facts are that the assessee is an agriculturist and except the agriculture income had some petty rental income and some interest from bank saving account. In this way the assessee was purely agriculturist and having no other source of income except the agriculture income. This fact is never contradicted by the A.O. and from the whole assessment order your good self will please find that the A.O has not given any such findings which suggest that the assessee had any other activity or the source of income. First of all the assessee would like to bring to your kind notice that for changing the head of income it is the duty of the A.O. to establish that there is any possibility that the assessee is having any income under the other head. In the case of the assessee the only source of income is agriculture and A.O. has no where established that the assessee had any other source of income. You will please appreciate that the word “source” indicates a thing from which something originates or from which something arises. Source, thus, is an originating cause. Source is not a legal concept, but is something which a particular man would regard as a real source of income to be ascertained as hard matter of fact. In the case of the assessee the only source of income is the agriculture income and if the learned A.O. holds that the assessee has shown the income on higher side even then the same could not be assessed as income from other sources as the established source of income of the assessee is only the agriculture income and nothing else. In the case of CIT Vs. Shaw Wallace & Co. reported in (1932) ILR 59 Cal 1343, the honourable High Court have held that the source of income is relevant for determining first whether it is assessable or non-assessable, and if it is not exempt from assessment, for deciding next under which of the heads enumerated in section 14 the income has to be assessed. In the case of CIT Vs. Justice R. M. Datta reported in (1989) 180 ITR 86 Calcutta High Court have observed that if any receipt could not be brought to tax by I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 28 computation under those sections, they would not be included in the total income for the purpose of chargeability. Sir, you will please appreciate that when it is a established fact that the appellant had no other source of income except the agriculture income then the learned A.O. has no power to change the head of income to bring the exempt income under the tax net of taxable income. In this regard the appellant would like to draw your kind attention towards the appeal in the case of Gaurish Steels P Ltd. Vs. ACIT reported in (2015) 43 ITR (Trib) 414 Chandigarh bench of honourable ITAT have observed as under:- “Where additions were made for cash found during survey apart from unproved expenses and unaccounted investments, the additions could pertain to business income, since the assessee had no other source and the discovery was of materials in assessee’s business premises, so that it could be accepted to be relating to business and set off against business losses as per books, which were otherwise acceptable.” In the appeal of CIT Vs. Daulat Ram Rawatmull reported in (1973) 87 ITR 349 honourable Apex court have observed that the onus to prove that the apparent is not the real is on the party who claims it to be so. As it was the Department which claimed that the amount of fixed deposit receipt belonged to the respondent firm even though the receipt had been issued in the name of Biswanath, the burden lay on the Department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of Biswanath. A simple way of discharging the onus and resolving the controversy was to trace the source and origin of the amount and find out its ultimate destination. The Source of the funds explained by the assessee are from the sale of the agriculture produce and the ultimate destination of the funds are also explained. Learned A.O. has neither denied the source of receipts of the funds nor contradicted the ultimate use of the funds nor could establish that the appellant was in need of recorded money very urgently for which the appellant has arranged the accommodating entries. Learned A.O., on some imaginary or estimated figures have made the addition without going into the ground reality of the matter. In view of the above it is stated that simply by rejecting the explanation of assessee and just on the suspicion and surmises the A.O. is not empowered to treat any part of the exempt income as the taxable income and so the act of the A.O., by treating the agriculture income as income from other source is bad in law and the addition made may please be deleted. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 29 Secondly here the question may arise that the deeming provisions of section 69 to 69C may apply in the case in which there is no need to establish the head of income for taxing the income. In this regard it will not be out of place to mention that the learned A.O. has added the amount by resorting to the provisions of section 69A treating the same as unexplained money etc. In this regard it is stated that in the submissions dated 19.08.2022, under the Ground of appeal No. 3 of the appellant has filed the detailed submissions about the non applicability of the provisions of section 69A. In this regard the assessee further wants to submit that the section 69A starts with the wording that if the assessee is found in ‘possession’ of any ....... From the word ‘Possession’ it is clear that this section can be used in case of search or survey when the assessee was found in possession of some cash or other valuable. From the bank entries which are duly entered in the books of accounts can’t be said that the assessee is found in possession of any money bullion etc. The second condition of section 69A is that the money etc. are not entered into the books of accounts maintained by the assessee for any source of income. This clearly suggest that this section can be applied only on the receipts which are not recorded in the books of accounts maintained by the assessee. In the case of the assessee, the assessee has maintained the detailed books of accounts and all the entries received in the bank account, from the sale of Kinoow was entered in the books of accounts. The fact that the appellant was maintaining the books of accounts and all the entries were made in the books of account are accepted by the learned A.O. in the assessment order itself. From the same your good self will please find that the entries which are recorded in the books of accounts maintained by the assessee can’t be assessed by applying the provisions of section 69A as the operative part of the section does not apply in the case of the assessee. In this regard the assessee would like to draw your kind attention towards some of the relevant case laws. In the appeal of Ibrahim Vittal Alias K.V. Ibrahim Vs. ITO reported in (2009) 312 ITR (AT) 87 honourable Baglore High Court have observed that where an assessee had received funds from abroad from his brothers and brother-in-law allegedly for construction of house, there can be no inference of unexplained money so as to be taxable in the assessee’s case, merely because it was found to have been received in violation of the Foreign Exchange Management Act, 1999. In the appeal of ITO Vs. Vinod Chadha reported in (2016) 50 ITR (Trib) 119 honourable Delhi High court have observed that where cash deposits in saving bank account in assessee’s name was explained to be monies transferred from the account of the firm, such explanation cannot be rejected when the amount is reflected in the firm’s book. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 30 In the appeal of CIT Vs. Sonia Dhillon reported in (2012) 207 Taxman 67 honourable Punjab & Haryana High Court have held that amount received by the assessee on maturity of certain policies by cheque could not be treated as unexplained moneys U/s. 69A merely because assessee could not furnish necessary information before AO due to some unavoidable circumstances. In the appeal of CIT Vs. Jawaharlal Oswal reported in (2016) 382 ITR 453 honourable Punjab & Haryana High Court have held that where assessee received gifts from two persons on behalf of his daughters on occasion of their marriage since said gifts were made by demand drafts and genuineness of same was confirmed by bank in which person making gifts had their accounts, impugned addition made U/s. 69A was to be set aside. In view of the above it is requested that the addition made to the declared income is against the provisions of law and based on the suspicion and surmises and without any cogent reason or evidence is bad in law and may please be cancelled. Now coming to the facts of the addition made by the learned A.O. For making the addition and rejecting the agriculture income, the main objections of the learned A.O. are as under:- 1. That the assessee has not filed the confirmation or any supporting documents towards the sale of the Kinoow to the 9 parties as per the table ‘B’ in the assessment order. 2. The production of Kinoow per bigha cannot be more than 96 Qtls. and hence the assessee has shown the production on higher side. 3. The average rate is taken Rs. 20.40 per Kg. whereas the assessee has claimed the price at Rs.25/- per Kg. 4. Expenses show by the assessee are on lower side. On the basis of the above observations the A.O. on some imaginary basis has estimated the total production of the Kinoow at 33600/- Qtls. For making the addition the A.O. has added the amounts received from the 9 parties given in the table ‘B’ in the assessment order which comes to Rs.4,16,22,732/-. After that the learned A.O. assumed that these are the accommodating entries. After that the learned A.O. has started the exercise to fit this figure in his estimation by estimating the reduced production of the Kinoow, by reducing the average rate of sale of Kinoow and finally when with this exercise the figure could not be matched then estimated the I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 31 imaginary expenses on the sale of Kinoow and ultimately estimated the higher income at Rs.4,18,45,572/-. This whole exercise was done by the jugglery of the figures by reducing the production of Kinoow per bigha, by reducing the sale price per KG., by estimating the expenses on sale etc. After setting all the figures, when he has arrived at the figure of Rs.4,18,45,572/- which almost near to the figure of amount received from 9 parties, have finalized the assessment by treating these entries as accommodating entries. It is true that the learned A.O. has put a lot of labour in matching the figures but from the order your good self will please find that all the figures taken by the learned A.O. are either imaginary or based on suspicion and surmises. Learned A.O. could not bring anything concrete on the records to support his contention. Now the assessee will give the point wise reply to the main objections of the learned A.O. as given above. 1. First objection of A.O. for treating the amounts received from 9 parties mentioned in the table ‘B’ of the assessment order was that the assessee has not filed the confirmation or any supporting documents towards the sale of the Kinoow to the 9 parties as per the table ‘B’ in the assessment order. In this regard it is stated that as stated already the A.O. has never allowed sufficient time to the assessee to submit the evidence or the submissions. One or two days were allowed in every notice and even in some notices even the one day time was also not allowed. In spite of short time the assessee has supplied as much information as he could manage in such a short time. The assessee asked the A.O. to allow the time to arrange the confirmations from these 9 parties but the time was not allowed. Anyhow now the assessee has obtained the confirmations from these parties which have already been filed with the earlier submissions of the assessee. The copies are laying on the page No. 71 to 79 of the paper book. As far as the matter of non filing of the supporting documents of sale to these parties is concerned in this regard it is stated that the assessee has sold the goods to 18 parties. Out of which 9 parties have send the account statement and the bills of sale due to the reason that the assessee has send the goods to these parties on sale basis. These parties have sold the goods in the market on behalf of the assessee and after selling the goods send the amount after deducting the amount of expenses and so in these transactions the assessee could get the bills and the account statements. Whereas regarding the 9 parties in the table ‘B’ the assessee has send the goods to these parties on their demand and the goods were send against the advance payment and on the condition that the parties will pick the Kinoows from the orchard of the assessee. You will please appreciate that the assessee is not a traders but agriculturist and do not maintain the bill books. In the I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 32 transaction with these 9 parties the parties have not issued the bills as these parties have purchased the goods for their own directly from the Orchard of the assessee. Without understanding the modes operandy, Learned A.O. has treated that there is no supporting documents of these transactions. All the transactions are through the banking channel and the assessee has now, before your goodself, have submitted the confirmation of all these parties which are on page 71 to 79 of the paper book. In this way there is no base with the A.O. to treat these entries as the bogus or accommodating entries but as the A.O. was adamant to add this amount to the declared income and so without affording proper opportunity and without considering the ground reality of the matter have added this amount to the declared income which is against the law and facts. 2. The second observation of the A.O. is that the production of Kinoow per bigha cannot be more than 96 Qtls. and hence the assessee has shown the production on higher side. In this regard it is stated that the observation of the A.O. is baseless but as the figure of 96 Qlts. Per Bighas suits the line of action of the A.O. that is why the learned A.O. have adopted this figure. In this regard the assessee has filed the Certificate from the Agriculture Research Station who have certified that the productions can be upto 175 KG. per tree which if calculated in bighas by multiplying 64 (number of tree per Bigha) comes to 112 Qtls. The certificate is filed with the paper book and placed at page No. 18. In this regard the A.O. has relied upon the statement of the Assistant Director Horticulture Department, Sri Ganganagar, in which the A.O. has somehow managed them to state the lower figure of production. In this regard first of all, with the certificate of Agriculture Research Station, the assessee has also filed the certificate of Assistant Director of Horticulture Department, Sri Ganganaga (page No. 24, 25 of paper book) alongwith the inspector report, who after physical inspection of the orchard of the assessee have submitted the report that the garden of the assessee is capable of producing the Kinoow from 150 Kg. to 175 Kg. per plant. You will please appreciate that the case of the assessee is for the period relevant to F.Y. 2016-17 whereas all the reports etc. were obtained in 2019 i.e after 3 years. Every year the climate and other factors effects the crop. Here it would not be out of place to mention that these department surveys the crop of whole of the District in which every type of orchards are included, these may be of younger gardens, older gardens or poorly maintained gardens. Thus if it is presumed that both the agencies have given the average figure of the produce then the same could not have been applied on the garden of the assessee. The assessee is farming in a very managed way and maintaining the garden by machines and using the pesticides and fertilizers timely. The assessee was doing the farming in scientific way with the help of the machines etc. In this regard the assessee has submitted one detailed letter before the A.O. stating the ultra modern facilities available in the garden of the assessee. The letter is place on page No. 22- I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 33 23 of the paper book. From the same you will please appreciate that if the average crop in the district range between 150 KG to 175 Kg. per tree or say 96 Qtls. to 112 Qtls per bighas then why it is not possible that in the scientifically maintained mechanized farm of the assessee crop cannot be more than 175 Kg. per tree. The figures were manipulated by the A.O. just for his convenience to make the base for making the additions as desired by him. In this regard on page No. 58 of the paper book the assessee has filed a cutting of the Newspaper report in which it is clearly written that last year the average crop of Kinoow was 125 Qtls. per Bighas which has reduced to 40 to 50 Qtls per Bighas in the year. From the report your good self will please appreciate that on the basis of some survey the news paper is giving the report that the average crop last yeare was 125 Qtls. per Bighas. These are the public data. The assessee is not asking for the 125 Qtls. but the learned A.O. is saying that the crop cannot be more than 96 Qtls. per Bighas which is against the facts and the ground reality and hence not acceptable and the same being the estimation of the A.O. cannot be accepted in the eye of law. From the chart given in the assessment order page 6 as Table A-1 you will please find that the assessee has claimed the total weight of the Kinoow sold to the 18 parties at 42,39,610 Kg. or say 42396 Qtls. from the orchard of 350 Bighas thus giving an average crop of 121 Qtls. per bighas. Looking to the above submissions and the evidences filed by the assessee you will please appreciate that the crop of 121 Qtls. per bighas in the garden of the assessee is not a figure which is impossible to achieve. The view taken by the A.O. is bad in law and not based on the facts of the case and hence liable to be cancelled. 3. The third observation of the learned A.O. is that the average rate of Kinoow per Kg. on the basis of the sales to the 9 parties from whom the assessee has received the bills comes to Rs.20.68 per Kg. and on the basis of the certificate of the Krishi Upaj Mandi Samity comes lessor and so the average rate is estimated at Rs. 20.40 per Kg. In his accounts the assessee has claimed the average price at Rs.25/- Kg. considering the sales to the 9 parties from whom the assessee could not receive the bills or the statement of accounts. In this regard it is stated that the Krishi Upaj Mandi Samity gives the rates in the local market. Kinoow is the local fruit and so it is but natural that the rates of this fruit in the local market is less in comparison to the other part of the country where this becomes the rare fruit and so the comparison of the rates of the assessee with the local market is totally out of question and these rates cannot be applied in the case of the assessee. Here it would not be out of place to mentioned that the Kinoow sold to the parties related to the Calcutta were for exporting the Kinoow to Bangladesh and so it is but natural that the fruits send to these parties were of top quality and accordingly the rates charged were also higher and due to this the assessee has claimed the average rate to these parties higher ranging from Rs.32.47 to Rs.38.11 per Qtl. whereas the rates to the other parties to I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 34 whom the assessee has send Kinoow on sale basis were ranging from Rs.11.25 to 41.87 per Qtls. As far as the matter of average rate of Rs.20.68, from the parties who have send the bills and account statement to the assessee, is concerned in this regard it is stated that the assessee has send the mixed quality of the fruits to these parties and the same was sold in the open market of those stations and they have charged the heavy expenses from the total sale consideration. Learned A.O. has given the Table A-1 on page 6 of the Assessment order. From the same your good self will please observe that these 9 parties have received the gross price ranging from Rs.11.24 per KG. to 41.86 per KG. and net price after deducting the expenses ranges between Rs.9.19 per KG to 33.41 per KG. according to the above the average gross rates comes to 24.38 per KG and the net rates comes to Rs. 19.08 per KG. From the same your good self will please observe two things. First is that the prices of the Kinoow in the other part of the country may be upto Rs.42 per KG and net price may also be upto Rs. 33/- per KG. whereas after comparing the average rate with the rate of the local market the learned A.O. has estimated the average rat at Rs.20.40. which grossly on under estimated. From the above discussion it is clear that the whole story cooked by the A.O. is based on imagination, suspicions, estimation and surmises and without understanding the ground reality of the matter and are not reliable but the submissions of the assessee are fully supported by the documents and the evidences and so the same may please be accepted and the addition made without any base may please be cancelled. 4. Next for arriving at the figure of estimate which suits to the story of the A.O. the plea of the A.O. is that the expenses show by the assessee are on lower side. In this regard I would like to bring to your kind notice that the parties of the out stations to whom the assessee has send the goods on sale basis were purchasing the goods from the other parties of the area also and they use the Carats for carrying the goods from the field of the assessee and so there is no separate expenses of the assessee as mentioned by the learned A.O. in the assessment order. The whole estimation is imaginary work and have got not sound basis and just a guess work without any evidence and hence cannot be relied. From the table A-1 on the page 6 of the assessment order your good self will please find that the dealers have deducted about Rs.1,64,22,092 from the sale consideration on account of the expenses on the sale of the Kinoows which includes all the expenses which are mentioned by the learned A.O. in the Assessment order. From the chart your goodself will please observe that to the nine parties, who have charged the expenses to the tune of Rs.1,64,22,092/-The assessee has send the 3113690 KG goods thus giving the average expenses of Rs.5.27 per KG or say 25% of the sale price which is not proper or possible if it is presumed that these are the selling expenses of the Fruits. These expenses includes the expenses on the loading and unloading of trucks and I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 35 carats etc. which the learned A.O. has considered in the hands of the assessee separately. Before concluding the submissions the assessee could like to bring to your kind notice that it is the human nature that he do something with a good or bad motive but motive is must for doing any act or work. Now a days the Department as well as the courts are giving stress on the ‘Human Probability’. This concept is also applicable in the case of the assessee. If it is presumed that the assessee has brought it’s undisclosed income in the books of account, by treating the same or say by introducing the same as agriculture income even then what was the motive behind the same. The assessee has filed before the learned A.O., the detailed chart of the end use of the income. The chart showing the end use of the funds was under the knowledge of the A.O. as is quite apparent from the assessment order itself in which the learned A.O. himself have mentioned about the chart of end use of the funds. But to the utter surprise of the assessee, after considering the chart, learned AO have nowhere given any comment on this matter. The only reason behind it seems that the same goes against to the wish of the learned A.O. Anyhow without going into the details of this aspect, the assessee request your good self to consider the submissions of the assessee filed in response to the ground No. 5 and 6 filed earlier with my previous submissions. In view of the above submissions your good self will please agree with the assessee that the assessment order passed is totally based on estimate and the guess work which is not sustainable in the eye of law. Even the basic principles of law have not been kept in mind while deciding the case of the assessee. There are several lacunas in the order either on law or on the facts of the case and the same are not supported by anything except the estimation of the A.O. and so the addition made to the declared income may please be deleted and the returned income may please be accepted. 6. To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions: I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 36 7. The ld. AR of the assessee in addition to the detailed written submission vehemently argued that the assessee has submitted a chart showing the summary of the land in the name of the members of the HUF and the parties from whom land has been taken on lease. The copies of the revenue records in support of the land holdings were submitted and the same was not disputed. The income so earned by the assessee has been utilized and was demonstrated with the source of the agricultural income and the same is duly recorded in the order of the ld. AO at page 8. Referring to the Table -A-1 wherein the assessee has I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 37 submitted the gross amount received from each party and the expense rate per kg. all these details were submitted and there is no adverse finding on it. The ld. AR of the assessee submitted that ld. AO has not appreciated that the assessee has not sold the agricultural goods on cash sales but the same is received by an account payee cheque/ RTGS nothing adverse brough on record by the revenue but only the presumption and assumption the addition was made. The ld. AO has reduced the price and that difference is added which is not the correct approach denying the claim of the assessee. The assessee has filed the confirmation before the ld. CIT(A) and the same is discussed by the ld. CIT(A). The ld. AO has made the addition considering the yield at 150 whereas CIT(A) considered at 160 and that too without any basis and even the price is slightly made varied by the ld. CIT(A). Therefore, the addition sustained is required to be deleted. 8. The ld. DR is heard who has relied on the findings of the lower authorities. The ld. DR also submitted that the ld. CIT(A) has after considering the plea of the assessee has given the relief on quantity as well as on rate and therefore, she relied upon the order of the lower authority. I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 38 9. In the rejoinder the ld. AR of the assessee submitted that how the addition be sustained u/s. 69A considering the part of the explanation. To support the ld. AR of the assessee relied upon the decision ofKamal Kishore Chandak vs. Income Tax Officer (2006) 103TTJ(Jodh)843(Jodhpur), Shri Madhusudan Dhakad Harda vs. ITO-1, Harda in ITA No. 9/Ind/2022 dated 28.06.2022 (Indore), Nitta Jatiya (Alias Nita Jatia), Mumbai vs. DCIT, Central Range-7(1), Mumbai in ITA Nos. 4883 & 4884/Mum/2019 dated 02/03/2021 (Mumbai) and Smt. Annakkalanjiam Mathivanan, Chennai vs. ACIT, Non-Corporate Circle- 13, Chennai in ITA No. 2451/Chny/2018 (Chennai) 10. We have heard the rival contentions and perused the material placed on record. The only issue raised in this appeal whether the ld. & CIT(A) is correct in holding the price and production of agriculture produced shown by the assessee is correct or not. While the proceeding before the ld. AO considering the all the evidences and submissions made by the assessee he taken a view that the assessee has inflated the production of fruits as against actual production as well as price of the products. On analysing the information provided by the department of Horticulture and other relevant information available on record, the production of agriculture receipt from kinnowwas calculated by the ld. AO I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 39 by observing that the assessee has orchard in the 350 bigha of land. The Karta of HUF, Shri Suraj Agarwal in his statement submitted that per bigha yield of 102 Qtl. The assessee also furnished a certificate regarding production of Kinnow, issued by the department of horticulture, which show agriculture production per tree in the range of 150 kg to 175 kgs. On being examined u/s 131, Assistant Direcor, Horticulture, Sriganganagar explained that the certificate issued to assessee pertains to current financial year. Whereas production in F.Y.2016-17 remained at estimate of 150 kg/tree. It is also a admit facts some part of the fruits destroy in the process of plucking, carrying, packing, possibility of personal and social use also exists. The ld. AO in the assessment proceeding noted that the assessee has shown total weight of kinnow at 38,39,265/- Kilogram and he stated that the assessee has not declared the correct weight of the fruits sold and in respect of the two parties he made inquiry [ i.e. MV Raghunandan, Hydrabad and Govind Ram & Broth, Muhan Mandi ] and called for the explanation on the weight of the kinnow and noted that the assessee has not declared the correct weight and taken a view that the box of kinnow was 10 Kg and the assessee claimed at 16kg and the assessee has claimed the production and sale of Kinnow at 42,39,610 kilograms from 350 bighas. Therefore, considering all these aspect of the matterhe has taken a view that I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 40 maximum realizable production per tree available for sale is not more than 150 Kilogram on assessee orchard. As assessee had 64 tree per bigha, thus the total production per bigha comes to 96.00 Qtl (150 * 64) On the basis of this total production of the orchards calculated at 33,60,000/- kilogram ( 96 * 350 * 100) the production of Kinnow by inflating the crop yield per Bigha. Out of the total sale of 33,60,000 kgs, the sale 31,13,690 effected through various 9 parties. Total production in 350 Bigha of land, 33600 Qtls, Average sale price, Rs. 20.40 per kg, the total of receipts come to Rs. 6,85,44,000/-. On the other part of the expenditure the ld. AO noted that the assessee has claimed total expenses 61,60,382/- on agriculture activities ofkinnow and other agro products. The assessee has mainly earned income from kinnow sales.The expenses claimed by the assessee is very low in the nature of activities. Assessee hasnot deducted expenses on account of labour for maintenance, plucking and packaging,vexing. Considering all these aspect Rs. 1 per kg additional expenses computed and accordingly Rs. 33,60,000/- added as expenses on fruit yield of 33,600 qtls. Further, no expenses on account of boxes, crates and other packing material has been deducted by the assessee, hence an amount of Rs. 10,00,000/- further deducted on this account. Thus, theamount of the total expenses I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 41 determined at Rs. 105,20,382/-. and accordingly he determinedthe net agricultural income as under : Total Agriculture Receipts Rs. 7,00,60,540/- Less :- Total Expenses Rs. 105,20,382/- Net Agriculture Income Rs. 5,95,40,158/- The assessee has shown net agriculture income of Rs. 10,13,85,730/- as against actual agriculture income determined at Rs. 5,95,40,158/-. Thus, the agriculture income to the extent of 4,18,45,572/- inflated in its ITR for A.Y. 2017-18 to conceal his income from other sources. The figure of undisclosed income arrived at Rs.4,18,45,572/- and treated as unexplained income u/s 69A of IT. Act, 1961. In the first appeal the ld. CIT(A) noted that AO has considered the total production in 350 bighas of land at 33600 Qtls whereas as per the findings given in his order the production in 350 bighas of land is to be taken as 35840 Qtls. The average sale price taken by AO is Rs.20.68 per kg based on the bills produced for sale of Kinnow, he has derived the weighted mean for considering the sale price from the sale price given to the parties whom the sale bills have been issued by the assessee and calculated to be Rs.21.05 per kg against Rs 20.68 per kg considered by the ld. AO. Considering these aspect of the matter he reworked the production in I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 42 350 Bigha of land at 35840 Qtis, price at Rs. 21.05 per kg and considered the total receipts from kinnow saleat Rs.7,54,43,200/-. Further AO has made addition of Rs.33,60,000/- considering Rs.1 per kg for production of 33600 Qtlsand also Rs. 10,00,000/- on account of additional agricultural expenses incurred on Kinnow sales by stating that expenses on account of labour for maintenance, packaging boxes, crates and other packing material has not been deducted by the appellant. The ld. CIT(A) noted the assessee has deducted expenses on each sale these expenses amount to Rs. 1,64,22,092/-. The assessee has considered net sale as of Kinnow sale receipts and therefore, the ld. CIT(A) deleted the addition of Rs.43,60,000/- on account of additional expenses various post plucking activities and therefore, the ld. CIT(A) directed to delete the addition of Rs. 43,60,000/- on account of agricultural expenses. Based on these observations the ld. CIT(A) worked out as Rs. 7,07,99,358/- as agricultural income and addition to the extent of Rs. 3,05,86,372/- has been upheld out of Rs. 4,18,45,572/- as made by the ld. AO. The assessee has challenged the finding of the lower authority sustaining the addition u/s. 69A of the Act. Before we deal with the facts of the case, since the addition is made u/s. 69A of the Act the provision the section is reproduced here in below: I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 43 Unexplained money, etc. 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. Thus, the bench noted that the assessee has already recorded the receipt of income as agricultural income and the same has been considered in part and therefore, the attracting the provision of the section 69A of the Act in this case is not applicable as the assessee has already explained the credit of money in the books of account which has accepted in part and the same is not doubted but the production of the agricultural produced is doubted and the same cannot be considered as unexplained money within the provision of section 69A of the Act partly as accepted and partly not on the same set of evidence. Based on these observation ground no. 3 & 4 is allowed. Apropos to the ground no. 2, 5 6 and 7 the bench noted that both the orders of the lower authority are based on suspicion and surmises nothing concrete brought on records against the set of evidence placed on record by the assessee. The bench also noted that when all the I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 44 transactions of the assessee were through normal banking channel and the whereabout of all the parties to whom the sales were made available, without making any enquiry action of theld. AO rejecting the agriculture income on suspicion and surmises is not correct. The ld. AR of the assessee submitted that the claim of agricultural income of the assessee is duly supported from the Girdavari report and the details of the holding of the land and the same is not under dispute. The assessee has produced all the details proving the name of party to whom the receipt of the Kinnow is claimed to be received and there is no contrary finding recorded in the orders of the lower authority. The income of agricultural produced received by the assessee by in the normal banking channel and the same is also not under dispute. The details of the parties to whom these agricultural items sold are also placed on records giving the details comprising of name of the party, amount receivable on sale, quantity in terms of kilo gram sold to each party, average sale price per kg. All these parties have remitted the money by the regular banking channel and these receipts of each of the parties were not disputed. Thus, when all these details are available the sale of Kinnow to the third party and the receipt of the money from these parties are partly accepted and partly disputed by the revenue and that too without bringing anything contrary to the records produced by the assessee is I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 45 nothing but denying the benefit of the assessee partly on the same material and partly not.In view of all these facts available on record we are of the considered opinion that the AO has merely based on the analysis of choose and pick method denial the actual result shown by the assessee. The assessee has disclosed all the details related to the kinnow sold,thereby giving the details of receipt of each party, consisting name, amount received and the sale price per kg realised. The bench noted from that chart available in the assessment order that assessee has realised the different grade rate and the price per kg is varying from 11.35 per kg to 41.86 per kg. These details of the sales itself suggest the truth that the assessee has sold the different type of kinnu to each different seller in different city. How the sale of these parties are to be correct partly and how not and there is no finding in the orders of the lower authority. Therefore, the conclusions drawn by the lower authority is against the correct records placed on record. Merely the assessee has agricultural income supported by the holding of land and production of the agricultural items and it related expenditure when doubted the result in the form of receipt cannot be accepted partly and cannot be denied partly in the absence of any cogent material and evidently clear finding contrary to the facts on record. Thus we are of the considered view that the findings of the lower authority is against the correct facts available on I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 46 record and the same is not disputed and therefore, the sales made by the assessee to each party on account of agricultural activity cannot be accepted in part and cannot be denied in part, either the same is correct in full or not. Therefore, we are of the considered view that the even the ld. CIT(A) erred in holding that the income to the extent of Rs. 3,05,86,372 is required to be sustained and therefore, based on the observation and finding recorded herein above we direct the ld. AO to consider the sum of Rs. 3,05,86,372/- as income arising out of the agricultural activities and the same cannot be sustained u/s. 69A of the Act. We draw support of our view from the decision relied by the ld. AR of the assessee and the finding of in these decision are cited here in below : a) Kamal Kishore Chandak vs. Income Tax Officer (2006) 103TTJ(Jodh)843(Jodhpur) 12. The assessee is the owner of the agricultural land whose details are available in the paper bookand the same were filed before the AO. The assessee has submitted the complete details ofagricultural holding along with the activities carried out by him during the relevant period and thesame were duly supported by the revenue records and the certificate issued by the agriculturaloffice. In our opinion when the Revenue has itself accepted the factum of agricultural income, thesame cannot be reduced only on whims in the absence of any concrete evidence on record to reach aparticular conclusion The assessee had also filed evidences in support of agricultural income, copiesof which are also filed before us. The averments of the affidavit filed in support of the agriculturalincome remained uncontroverted throughout. In view of these facts, we are of the consideredopinion that the AO was not justified in making additions by rejecting a part of the I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 47 agriculturalincome simply on the basis of non-availability of sale vouchers because an agriculturist is notrequired to maintain any books of account. Copies of Girdawari are on record, which prove thatcrops were grown on the land belonging to the assessee. The statement of the assessee that heprovided irrigation facility to his neighbours on cash payment, also in a way, supports the case of theassessee as from this fact it is proved that the assessee had enough irrigation facility to grow crops.The assessee has also filed a certificate of Assistant Agricultural Officer wherein the averageproduction of particular crop in the area in which agricultural land of the assessee are situated havebeen given. These facts also support the version of the assessee. The sum total of the abovediscussion is that the assessee has been able to establish his case and the Department has not beenable to rebut the same. Therefore, this ad hoc addition cannot survive and hence we order to deletethe addition of Rs. 1,00,000. b) Shri Madhusudan Dhakad Harda vs. ITO-1, Harda in ITA No. 9/Ind/2022 dated 28.06.2022 (Indore) 8. Lastly the Ld. AR stressed that the assessee is a full time agriculturist as is evident from several certificates and awards received and news items published in the media. Ld. AR submitted that the assessee does not have any income except agricultural income. Ld. AR submitted that when there is no source of income except agricultural income, it is but natural that the assessee has made cash-deposits in the bank account out of agricultural income only. According to Ld. AR, agricultural income is non-taxable and hence there cannot be any addition on account of taxable income u/s 69A. Ld. AR relied upon the decision of Indore Bench in ITO Vs. Smt. Shahnaj Bano, ITA No. 443/Ind/04 order dated 07.01.2005 and claimed it to be directly applicable to the assessee: “8. As regards investment in flat, the AO has not brought on record any source of income except the income from agriculture claimed by the assessee. If a person has only agricultural income and no other income, then no addition can be made to the total income unless and until the AO proves that the assessee has any other source of income which is taxable under the Income-tax Act. The AO has not brought on record any material or evidence to show that the assessee was having any other source of income except agricultural income which is not taxable. CIT(A) was, therefore, justified in deleting the addition of Rs. 3,45,356/- to the total income made by the AO because the assessee has no income taxable and agricultural income is not taxable.” I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 48 c) Nitta Jatiya (Alias Nita Jatia), Mumbai vs. DCIT, Central Range-7(1), Mumbai in ITA Nos. 4883 & 4884/Mum/2019 dated 02/03/2021 (Mumbai) 5. After hearing the rival parties, in this case, we notice that undisputedly, the assessee is the owner of the land measuring 22.82acres in Panvel, District Raigad. We note that the 7/12 extracts downloaded from the official website of Government of Maharashtra has categorized 70% of the land as not fit for agricultural operation. However, it is also undisputed that there were substantial plantations of mango trees and also seasonable vegetables being grown in the said land. The only objection of the AO is that the assessee is having a farmhouse and income was received from the natural activity which is not agricultural activity as per the provisions of the Act and AO has merely acted on the basis of surmises and conjuncture in estimating 20% of the total receipt as unexplained cash credit without carrying out any further verification from the buyer/purchasers of these agricultural products/produce. The ld. CIT(A) affirmed the order of the AO on the ground that the assessee has incurred a very meager expenses of 2% on agricultural expenses and thus sustained the addition as stated hereinabove. In this case, we note that both of the authorities have failed to discharge their duties properly as none of the parties have brought any substantial material on record to prove that assessee has incurred expenses over and above what has been stated by the assessee. The AO has made a ground that some income received by the assessee was in the nature of non-agriculture and substantial too in nature, whereas ld. CIT(A) has gone on a different footing that assessee has incurred expenses to earn the said income which seems to be understated . Under these circumstances, we are not in a position to sustain the order of the ld. CIT(A) as the same appeared to be a guess work to sustain the addition made by the AO and therefore, we are inclined to set aside the order of first appellate authority and direct the AO to delete the addition of Rs. 10,30,694/-. Accordingly, the appeal of the assessee is allowed. d) Smt. Annakkalanjiam Mathivanan, Chennai vs. ACIT, Non- Corporate Circle-13, Chennai in ITA No. 2451/Chny/2018 (Chennai) 6. Moreover, for yield, there cannot be any other evidence other than estimation. A coconut tree may yield 100-120 nuts in a year. Now the Agriculture Department and Agriculture University invented hybrid coconut varieties which give 150-200 nuts in a year. Therefore, estimation of yield in agriculture is something difficult and which needs to be appreciated by the authorities who are performing judicial function. When agricultural produce including coconuts is traded in unorganized market like UzhavarSandhai and I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 49 other local market, expecting the assessee to produce bills and vouchers is nothing but asking the assessee to perform an impossible task. Therefore, this Tribunal finds no reason to disallow any claim of the assessee. Had the Assessing Officer found thatthe assessee has no land or he has not cultivated as claimed, the matter might have stood in a different foot. In this case, the Assessing Officer accepted the fact that the assessee has cultivated the land. The only reason for disallowance is that the assessee could not produce bills and vouchers for sale of agricultural produce and receipts for expenses. Apart from that, the assessee has established by producing copy of adangal extract that the land in question was subject to cultivation. In those circumstances, this Tribunal is of the considered opinion that there is no reason to disallow any part of claim. Therefore, this Tribunal is unable to uphold the order of the lower authority. Accordingly, orders of both the authorities below are set aside and the Assessing Officer is directed to delete the addition of ₹8,00,000/-. Based on the detailed finding recorded here in above the ground no. 2, 5, 6 & 7 raised by the assessee is allowed. Ground no. 1, 8 and 9 being general in nature does not require our adjudication. 11. In the result, the appeal of the assessee is allowed. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) Judicial Member Accountant Member Ganesh Kumar, PS Copy of the order forwarded to: I.T.A. No. 228/Jodh/2023 Assessment Year: 2017-18 50 (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order Date Initial 1. Draft dictated on Sr.PS/PS 2. Draft placed before author Sr.PS/PS 3. Draft proposed & placed before the Second Member JM/AM 4. Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr. P.S./P.S. Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8. Date on which file goes to the Head Clerk 9. Date on which file goes to the AR 10. Date of dispatch of Order