MANEKCHAND MUNDHRA HUF, MUMBAI V. INCOME TAX OFFICER WARD 17(2)(3), MUMBAI

ITA 2382/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5342 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 18-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER IT A NO. 2382/MUM./2018 ( ASSESSMENT YEAR : 20 1 3 14 ) MANEKCHAND MUNDHRA (HUF) 2 ND FLOOR, ROOM NO.19/20 KANJI JADHAVJI BUILDING 29/31, KHADAK STREET MUMBAI 400 009 PAN AAAHM5382H . APP ELL ANT V/S INCOME TAX OFFICER WARD 17(2)(3), MUMBAI . RESPONDENT ASSESSEE BY : MISS DINKL E HARIYA A/W SHRI DIVYESH FOTARIA REVENUE BY : SHRI CHAITANYA ANJARIA DATE OF HEARING 16.04.2019 DATE OF ORDER 29.05.2019 O R D E R PER SAKTIJIT DEY. J.M. A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING T HE ORDER DATED 11 TH JANUARY 2018 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 57 , MUMBAI, FOR A.Y. 201 3 1 4 . 2 . THE GRIEVANCE OF THE ASSESSEE IN THE PRESENT APPEAL IS WITH REGARD TO THE DECISION OF THE DEPARTMENTAL AUTHORITIES IN TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. 2 MANEKCHAND MUNDHRA (HUF) 3 . BRIEF FACTS ARE, THE ASSESSEE IS A HINDU UNDIVIDED FAMILY (HUF). IN THE RETURN OF INCOME FILED FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE OFFERED GROSS AGRICULTURAL INCOME OF ` 22,80,470, AND AFTER CLAIMING EXPENDITURE OF ` 2,72,667, DECLARED NET AGRICULTURAL INCOME OF ` 20,07,803. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNISH VARIOUS INFORMATION TO JUSTIFY ITS CLAIM OF AGRICULTURAL INCOME. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE FILED I TS REPLY AND SUBMITTE D THAT ONE SHRI BHAIRAVSINGH BHANWARS ING H , CARRIES ON AGRICULTURAL ACTIVITY ON BEHALF OF IT AND HANDS OVER THE AGRICULTURAL PRODUCE WHICH IS SOLD THROUGH AGRICULTURAL PRODUCE MARKETING COMMITTEE. THE ASSESSEE FURTHER EXPLAINED ITS INAB ILITY TO FURNISH THE DETAILS OF AREA WISE CROP SINCE THE ACTIVITY WAS CARRIED OUT BY ANOTHER PERSON. HOWEVER, THE ASSESSEE FURNISHED THE DETAILS OF PRODUCE SOLD ALONG WITH THE ORIGINAL RECEIPTS. ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLANATION OF T HE ASSESSEE. ON VERIFICATION OF BANK ACCOUNT, HE OBSERVED THAT DURING THE YEAR, THE ASSESSEE HAD MADE CASH DEPOSITS OF ` 13 LAKH. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER WITH REGARD TO THE CASH DEPOSIT, IT WAS STATED BY THE ASSESSEE THAT F AMILY MEMBERS HAD BROUGHT CASH TO MUMBAI AND NO RECORD RELATING TO SUCH CASH BROUGHT TO MUMBAI IS AVAILABLE. THUS, ULTIMATELY, THE ASSESSING OFFICER CONCLUDED THAT ASSESSEE WAS UNABLE TO DEMONSTRATE THAT IT WAS 3 MANEKCHAND MUNDHRA (HUF) CARRYING ON ANY AGRICULTURAL ACTIVITY FROM WH ICH IT HAD EARNED THE AGRICULTURAL INCOME. FURTHER, HE OBSERVED , THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IS NOTHING BUT UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. ACCORDINGLY, HE ADDED BACK THE AMOUNT TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSEE CHALLENGED THE AFORESAID DECISION BEFORE THE FIRST APPELLATE AUTHORITY. 4 . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, LEARNED COMMISSIONER (APPEALS), HOWEVER, DID NOT FIND THEM ACCEPTABLE. SHE OBSERVED , T HE ASSESSEE COULD NOT CORROBORATE THE FACT THAT THE INCOME OF ` 20,07,803, WAS EARNED FROM AGRICULTURAL ACTIVITY. THUS, ULTIMATELY, LEARNED COMMISSIONER (APPEALS) TREATED THE CASH DEPOSIT OF ` 13 LAKH IN THE BANK AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT AND CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. AS REGARDS THE BALANCE AMOUNT OF ` 7,07,803, LEARNED COMMISSIONER (APPEALS) DIRECTED THE ASSESSING OFFICER TO TREAT IT AS INCOME FROM OTHER SOURCES. 5 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , ASSESSEE OWNS SUBSTANTIAL AGRICULTURAL LAND ADMEASURING 7.60 ACRES I N THE DISTRICT OF BIKANER, RAJASTHAN. SHE SUBMITTED , CULTIVATION ACTIVITY IN THE SAID AGRICULTURAL LAND IS CARRIED OUT THROUGH BHAIRAVSINGH BHANWARS INGH BY VIRTUE OF AGREEMENT DATED 2 ND JUNE 2011. SHE SUBMITTED , VARIOUS CROPS ARE CULTIVATED IN THE AGRICULTURA L LAND AND AGRICULTURAL PRODUCE 4 MANEKCHAND MUNDHRA (HUF) ARE SOLD THROUGH AGRICULTURAL PRODUCE COMMITTEE SET UP BY THE GOVERNMENT. TO DEMONSTRATE THAT THE ASSESSEE IS HAVING AGRICULTUR AL LAND HOLDING AND CULTIVATION ACTIVITY IS CARRIED ON THERE, LEARNED AUTHORISED REPRESENTATIVE FILED CERTAIN DOCUMENTS BY WAY OF AN ADDITIONAL EVIDENCE, SUCH AS , CULTIVATORS AFFIDAVIT, AFFIDAVIT BY KARTA OF THE ASSESSEE, CERTIFICATE ISSUED BY THE GRAM PA NCHAYAT. FURTHER, LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , IN COURSE OF PROCEEDINGS BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAD FURNISHED ORIGINAL RECEIPT FOR SALE OF AGRICULTURAL PRODUCE. THEREFORE, SHE SUBMITTED , THE DEPARTMENTAL AUTHORITIES WERE NOT CORRECT IN REJECTING ASSESSEES CLAIM OF AGRICULTURAL INCOME. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , IN VIEW OF THE FRESH EVIDENCE S FILED BY THE ASSESSEE, THE ISSUE MAY BE RESTORED BACK TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION. 7 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, ASSESSEES CLAIM OF AGRICULTURAL INCOME WAS PRIMARILY REJECTED BY THE DEPARTMENTAL AUTHORITIES ON THE GROUND OF LACK OF EVIDENCE TO DEMONSTR ATE THAT AGRICULTURAL ACTIVITIES WERE ACTUALLY CARRIED ON BY THE ASSESSEE. HOWEVER, IT IS SEEN FROM THE RECORD THAT BEFORE THE ASSESSING OFFICER THE ASSESSEE HAD FURNISHED RECEIPTS EVIDENCING SALE OF AGRICULTURAL PRODUCE. BEFORE US ALSO, THE ASSESSEE HAS F URNISHED AFFIDAVIT S BY 5 MANEKCHAND MUNDHRA (HUF) CULTIVATOR AND THE KARTA OF THE ASSESSEE ALONG WITH THE CERTIFICATE OF GRAM PANCHAYAT BY WAY OF ADDITIONAL EVIDENCE S TO DEMONSTRATE THAT AGRICULTURAL ACTIVITIES , IN FACT , WERE CARRIED ON BY THE ASS ESSEE. SINCE THESE EVIDENCES WILL HA VE A CRUCIAL BEARING IN DECIDING THE NATURE OF INCOME SHOWN BY THE ASSESSEE, WE ARE INCLINED TO ADMIT THEM. HOWEVER, CONSIDERING THE FACT THAT THESE EVIDENCES WERE NOT FILED BEFORE THE DEPARTMENTAL AUTHORITIES, IN ALL FAIRNESS , THEY HAVE TO BE EXAMINED BY THE ASSESSING OFFICER TO VERIFY THE AUTHENTICITY OF ASSESSEES CLAIM. THAT BEING THE CASE , WE ARE INCLINED TO RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION OF ASSESSEES CLAIM OF AGRICULTURAL INCOME KEEPING IN VIEW THE EVIDENCES FILED BY THE ASSESSEE. IT IS OPEN FOR THE ASSESSEE TO BRING FURTHER EVIDENCES TO DEMONSTRATE THAT IT HAD ACTUAL LY DERIVE D INCOME FROM AGRICULTURAL ACTIVITIES. NEEDLESS TO MENTION, THE ASSESSING OFFICER MUST DECIDE THE ISSUE AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 8 . IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN C OURT ON 29.05.2019 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 29.05.2019 6 MANEKCHAND MUNDHRA (HUF) COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (ASSTT. REGISTRAR) ITAT, MUMBAI