Mukesh Gupta, V. ITO, Ward 27 (4),

ITA 2439/DEL/2005

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3713 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-06-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 18-05-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY
• Assessee Lawyers: T R TALWAR
• Keywords: Income from undisclosed sources
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NOS.2439 & 2440/DEL/2005 ASSESSMENT YEARS : 1999-2000 & 1996-97 MR. MUKESH GUPTA, B-6/40, DDA FLATS, SAFDARJUNG ENCLAVE, NEW DELHI. VS. ITO, WARD 27(4), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI T.R. TALWAR, ADVOCATE REVENUE BY : SMT. MONA MOHANTY, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND THEY AR E DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY THE CIT ( A) DATED 3 RD DECEMBER, 2004 FOR ASSESSMENT YEARS 1996-97 AND 1999-200 0. THE GROUNDS OF APPEAL READ AS UNDER:- ITA NO.2439/DEL/2005 (A.Y.1999-2000) 1. BOTH THE LEARNED ASSESSING OFFICERS AND THE C.I.T. (APPEALS) HAS ERRED BOTH IN FACTS AND IN LAW IN DETERMINING OF TO TAL INCOME AT RS.9,08,670/- AS AGAINST THE RETURN NON-TAXABLE AGRIC ULTURAL INCOME OF RS.1,45,669/-. 2. BECAUSE AN APPROPRIATE OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE TO PRESENT ITS CASE AND THE A.O. HAS MISDIRECTE D HIMSELF IN ARRIVING AT THE AFORESAID CONCLUSION. 3. BECAUSE THE A.O. WAS NOT JUSTIFIED IN ADDING AN AM OUNT OF RS.6,50,000/- PAID IN CASH IN MAY, 1998 FOR THE PURC HASE OF HOUSE NO.6/110, SECTOR -2, RAJINDER NAGAR, SAHIBABAD , GHAZIABAD AND AN AMOUNT OF RS.1,13,000/- FOR PURCHAS ING THE STAMP DUTY, WHICH WAS PURCHASED BY THE ASSESSEE OUT OF HIS LIFE ITA NO.2439 & 2440/DEL/2005 2 SAVINGS AND A COPY OF THE BALANCE SHEET CONFIRMING THE SAID AMOUNTS WHICH WERE RECOVERABLE FROM ARTHIYA FIRM M/S BADRIPRASAD RAMNATH AND CO., NAVIN MANDI, AGRA WAS A LSO FURNISHED 4. BECAUSE THE ASSESSEE IS AN AGRICULTURIST AND HAS TA KEN THE AGRICULTURE LAND AS KASHAT-KAR IN DISTRICT AGRA. THE A .O. HAS ERRED BOTH IN FACTS AND IN LAW IN TREATING THE AGRICULTUR AL INCOME IS TAXABLE INCOME AT RS.1,45,669/-. 5. BECAUSE THE A.O. HAS ADDING RS.9,08,670/- INCOME BY ARBITRARILY ASSESSING THE PROPERTY INVESTMENT OF RS.6,50 ,OOO/- AND RS.1,13,OOO/- FOR PURCHASING STAMP DUTY AND TREATIN G THE SAME AS UNEXPLAINED INCOME WITHOUT ANY CORROBORATIVE EVIDENCE. 6. BECAUSE IN ORDER TO CONSTITUTE AGRICULTURE INCOME TWO CONDITIONS MUST BE FILLED. (I). LAND MUST BE USED FOR GROWING CROP ETC . THERE SHALL BE NEXUS BETWEEN LAND, INCOME & AGRICULTU RE OPERATION. AN INCOME SHOULD BE DERIVED FROM LAND AND THE LAND SHOULD BE USED FOR AGRICULTURE PURPOSES. IN OTHER WOR DS SOMETHING BY HUMAN OR MECHANICAL ACTIVITIES SHALL BE TR IED TO PRODUCE CROP ETC. ON THE LAND. THE LESSEE AS PER THE A GREEMENT HAS DONE THE HUMAN OPERATION DERIVED INCOME FROM THE USE OF LAND. (II). INCOME SHOULD BE DERIVED FROM LAND BY AGRICUL TURE AGRICULTURE INCOME CANNOT BE SAID TO ACCRUE TO EVERY PE RSON INTO WHOSE HAND THE PRODUCE OF LAND PASSES. IT IS THE OWNER , LANDLORD OR PERSON HAVING A DERIVATE INTEREST IN LAND. INCOME SO REALIZED BY THE LESSEE WAS AGRICULTURE INCOME AND THE LESSEE HA S USED OPERATION OF SOWING, GROWING AND PROTECTING THE CROP THE REFORE DERIVE INCOME AS AGRICULTURE INCOME. ITA NO.2440/DEL/2005 (A.Y.1996-97) A. UNDISCLOSED INVESTMENT OF RS.7,OO,OOO/-. 1. BECAUSE AS PER SECTION 147 OF THE INCOME TAX ACT, TH ERE MUST BE ESCAPING ASSESSMENT FOR A PARTICULAR YEAR, AND THE AGREEMENT EXECUTED ON 12 TH JULY, 1994 IS RELEVANT TO ASSESSMENT YEAR 1995-96 AT RS.1,OO,OOO/-. THE ASSESSING OFFICER S' ASSESSMENT IN ASSESSING THE SAME AS AN INCOME FOR UND ISCLOSED SOURCES FOR THE ASSESSMENT YEAR 1996-97 IS NOT CORRECT. THE WHOLE EXERCISE UNDER SECTION 147 IS MAINLY BASED ON THE FACT THAT THERE MUST BE ONE ASSESSMENT AND ONE ASSESSMENT ALON E ITA NO.2439 & 2440/DEL/2005 3 OF THE INCOME, AND THEREFORE EACH ASSESSMENT YEAR IS INDEPENDENT OF ITSELF. THEREFORE, THE ACTION OF THE A.O. FOR ASSESSING THE TRANSACTION IN THE A. Y. 1996-97, IS INCO RRECT, AS A TRANSACTION HAS TAKEN PLACE IN THE A.Y. 1996-97. 2. BECAUSE THE ADDITION HAS BEEN MADE ONLY ON THE BASI S OF THE INFORMATION GIVEN BY THE ASSISTANT DIRECTOR OF INCOME TAX, INV, GHAZIABAD, THAT THE PROPERTY BEARING NO.225, KAMAL PLAZA BUILDING, GURDWARA ROAD, NEW DELHI HAS BEEN PURCHAS ED BY SRI MUKESH GUPTA AT RS.7,OO,OOO/- DURING THE YEAR 1995-96. THE A.O. IS EMPOWER TO ESTIMATE UNDISCLOSED INCOME EARNED BY THE ASSESSEE BUT ESTIMATE IS POSSIBLE ONLY WHEN THERE IS MA TERIAL EVIDENCE FOUND DURING SEARCH TO SHOW THAT SUCH INCOME HAS BEEN EARNED. THE A.O. CANNOT PRESUME THAT THERE MUST BE SOME OTHER MATERIAL EVIDENCE THAT IS NOT FOUND DURING SEARCH AND ASSESSEE MUST HAVE DERIVED UNDISCLOSED INCOME THERE F ORM. 3. BECAUSE THE ASSESSEE FILED SALE DEED EXECUTED ON 1 2 TH JULY, 1994 PREPARED BY NARENDRA KUMAR HUF THROUGH ITS KARTA NARENDRA KUMAR JAIN S/O MAHAVIR PRASAD JAIN. THE SA LE CONSIDERATION THEREIN WAS STATED AT RS.1 LAC. THE A.O. H AD CONCLUDED THAT THE ASSESSEE WANTED TO CONCEAL THE AMOUNT O F RS.7 LACS. PAID FOR THE SAID PROPERTY DURING THE YEAR AND THE CONTENTION OF ASSISTANT DIRECTOR (INV), GHAZIABAD HAS IN FORMED BY THE ADI, GHAZIABAD AND ADDED TO THE INCOME FROM UNDISCLOSED SOURCES. 4. BECAUSE IN THE PRESENT CASE THE A.O. HAS PASSED THE ORDER ONLY UPON THE REPORT OF ADIT-INV. THE ASSESSEE HAS PR OVIDED THE SALE DEED TO THE A.O. WHICH CLEARLY INDICATES PURCHASE CONSIDERATION OF THE PROPERTY AT RS.1 LAC. THE A.O. HAS FAILED TO PROVE THAT THE RELEVANT PURCHASE CONSIDERATION OF THE PRO PERTY IS RS.7 LACS. 5. BECAUSE THE ONLY CONTENTION STATED BY THE A.O. IN THE ASSESSMENT ORDER IS THAT THE VENDEE'S NAME IS NOT MENTION ED THEREIN, WHICH APPEARS TO BE A PHOTOCOPY / TYPOGRAPHIC ERROR. IT IS SUBMITTED THAT THE ASSESSEE HAD PRODUCED A CERTIFIED C OPY OF THE SALE DEED TO SHOW THE SALE CONSIDERATION AT RS.1 LAC IN THE PROCEEDINGS WHICH WERE CONDUCTED BEFORE THE CIT (APPE ALS). B. AGRICULTURAL INCOME : 1. BECAUSE IN ORDER TO CONSTITUTE AGRICULTURE INCOME TWO CONDITIONS MUST BE FILLED. (I). LAND MUST BE USED FOR GROWING CROP ETC. THERE SHALL BE NEXUS BETWEEN LAND, INCOME & AGRICULTU RE OPERATION. AN INCOME SHOULD BE DERIVED FROM LAND AND THE LAND SHOULD BE USED FOR AGRICULTURE PURPOSES. IN OTHER WOR DS ITA NO.2439 & 2440/DEL/2005 4 SOMETHING BY HUMAN OR MECHANICAL ACTIVITIES SHALL BE TR IED TO PRODUCE CROP ETC. ON THE LAND. THE LESSEE AS PER THE A GREEMENT HAS DONE THE HUMAN OPERATION DERIVED INCOME FROM THE U SE OF LAND. (II). INCOME SHOULD BE DERIVED FROM LAND BY AGRICUL TURE AGRICULTURE INCOME CANNOT BE SAID TO ACCRUE TO EVERY PE RSON INTO WHOSE HAND THE PRODUCE OF LAND PASSES. IT IS THE OWNER , LANDLORD OR PERSON HAVING A DERIVATE INTEREST IN LAND. INCOME SO REALIZED BY THE LESSEE WAS AGRICULTURE INCOME AND THE LESSEE HA S USED OPERATION OF SOWING, GROWING AND PROTECTING THE CROP THE REFORE DERIVE INCOME AS AGRICULTURE INCOME. 2. BECAUSE THE ASSESSEE HAS PROVIDED SATISFACTORY EVID ENCE ABOUT HIS BEING ENGAGED IN AGRICULTURE ACTIVITY. (A) KHASRA NO.52/242 IN VILLAGE FATHEBAD DIST. FATHEB AD DULY CERTIFIED BY LOCAL PETWARI INDICATING THE DIMENSION & L OCATION OF LAND (B) SALE OF AGRICULTURE ONE PRODUCE IN FAVOUR OF MR . MUKESH GUPTA FROM MIS. RAMNARAYAN HAMARAYAN, GALLA MANDI, FATEABAD, AGRA REGARDING SALE OF PRODUCE NO.1161 & 1 154 DATE 30-06-2000 & 20-05-2000. (C) THE IKARNAMA ENTERED BETWEEN MR. RAMESH CHANDRA & MR. MUKESH GUPTA CONFIRMING THAT MR. RAMESH CHANDRA HAS PROVIDED AGRICULTURE LAND ON LEASE TO MR. MUKESH GUPTA . 3. BECAUSE THE A. O. HAS ERRED IN ASSESSING THE INCOM E AS INCOME FROM UNDISCLOSED SOURCES, IN OTHER WARDS THE A SSESSING HAVING PRODUCED THE PROOF OF HAVING SOLD THE AGRICULTU RE PRODUCE, IT WOULD BE SUFFICIENT PROOF AS INCOME FROM AGRICULTURE ACTIVITIES. 4. BECAUSE THE ASSESSEE ALSO PRODUCED BEFORE THE A.O. THE BILL OF M/S RAMNARAYAN HAMARAYAN, GALLA MANDI, FATEA BAD, AGRA REGARDING SALE OF PRODUCE NO.1161 & 1154 DATED 30-06 -2000 & 20-05-2000. 5. BECAUSE THE CONTENTION OF THE A.O. THAT PROPER DOCUMENTARY EVIDENCE REGARDING 'AGRICULTURAL HOLDINGS , IRRIGATED THE LAND, CROPS CULTIVATED EXPENSES INCURRED ON SEEDS AND OTHER INPUTS OF AGRICULTURAL OPERATION GENUINENESS OF AGRICU LTURAL PRODUCE HAVE NOT BE CERTIFIED BY THE LOCAL PATWARI, BES IDES THIS, THE BILLS REGARDING SALES PROCEEDS OF AGRICULTURAL PR ODUCE NOT RELEVANT FOR ASSESSMENT YEAR UNDER CONSIDERATION' WAS NOT PRODUCED IS NOT CORRECT. FOR CLAIMING AN OPTION OF AGR ICULTURES ACTIVITIES IT IS NOT NECESSARY FOR HIM TO HAVE EITHER BOO KS OF ACCOUNT OR RELEVANT RECORDS. SINCE THE RECORDS PERTAINS OF A.Y. ITA NO.2439 & 2440/DEL/2005 5 1996-97, MORE THAN SIX YEARS THE ASSESSEE HAS NOT BEEN ABLE TO LOCATE THE RELEVANT RECORDS AS ASKED BY THE A.O. THE A. O. IS EMPOWERED TO ASK FOR DOCUMENTARY EVIDENCE OF THE SAID DOCUMENT ARE NECESSARY FOR THE PURPOSE OF MAKING THE ASSESSMENT UNDER THE ACT. HOWEVER, THERE MUST BE APPLICA TION OF MIND BY A.O. BEFORE MAKING AN ORDER TO THE REQUIRE MENT OF THE DOCUMENT. 6. BECAUSE THE DOCUMENT I.E. 'AGRICULTURAL HOLDINGS, I RRIGATED THE LAND, CROPS CULTIVATED EXPENSES INCURRED ON SEEDS AND OTHER INPUTS OF AGRICULTURAL OPERATION GENUINENESS OF AGRICU LTURAL PRODUCE HAVE NOT BE CERTIFIED BY THE LOCAL PATWARI' HAV E NO RELEVANCE TO THE ASSESSMENT PROCEEDING OR CONSIDERATION AS AGRICULTURE INCOME. THE A.O. BY ASKING FOR RECORD AS OLD AS SIX YEAR THAT TOO FROM ON AGRICULTURIST IS UNCALLED FOR. 7. BECAUSE THE A.O. WAS PROVIDED WITH THE IKARNAMA DUL Y NOTARIZED WHICH IS A CONCLUSIVE PROOF OF THE AGRICULTU RE HOLDINGS. THE KHASRA IS DULY CERTIFIED THE PATWARI. THE KHASRA A LSO CLEARLY INDICATE THAT THE LAND BELONGS TO THE LANDLORD MR. RAMESH CHANDRA S/O. SHRI TRIBUVAN SINGH VILLAGE FATEABAD DI ST. FATEABAD AGRA. THE IKAMAMA ENTERED BETWEEN MR. RAMESH CHANDRA & MR. MUKESH GUPTA FURTHER CONFIRM THAT MR. RAMESH CHANDRA HA S BEEN PROVIDED WITH AGRICULTURAL LAND ON LEASE. THE RE LEVANT SALE BILL FOR AGRICULTURE FOR THE F.Y.2001-01 ARE ENCLOSED HEREWITH WHICH CONFIRM THAT THE ASSESSEE DERIVED AGRICULTURE INC OME BY WAY OF AGRICULTURE PRODUCE. 2. BOTH THESE APPEALS HAVE COMMON GROUNDS AND THEY WER E ARGUED BY BOTH THE PARTIES TOGETHER. HENCE, FOR THE SAKE OF CONVENIENCE, BOTH THESE APPEALS ARE DISPOSED OF BY THIS CONSOLIDATED ORDER. THOUGH THE GROUNDS OF APPEAL IN BOTH THE APPEALS ARE NARRATIVE A ND EXHAUSTIVE, BUT THE ISSUES ARE TWO ONLY; ONE IS REGARDING AGRICULTU RAL INCOME ASSESSABLE IN THE HANDS OF THE ASSESSEE AND THE OTHER IS REGA RDING UNDISCLOSED INVESTMENTS TREATED AS INCOME IN BOTH THE YE ARS UNDER CONSIDERATION. THOUGH THERE IS MENTION OF RE-ASSESSMENT PROCEEDINGS, BUT, AT THE TIME OF HEARING LD. AR DID NOT PRESS GROU ND REGARDING VALIDITY OR OTHERWISE OF RE-ASSESSMENT PROCEEDINGS. 3. ON THE ISSUE OF AGRICULTURAL INCOME, IT IS THE CASE OF LD. AR THAT IT IS UNDISPUTED THAT THE ASSESSEE DOES NOT OWN ANY AGRICULTU RAL LAND. THE AGRICULTURAL INCOME HAS BEEN SHOWN ON THE BASIS OF IKRARNAMA ITA NO.2439 & 2440/DEL/2005 6 ENTERED INTO BY THE ASSESSEE BY TAKING LAND ON BATAI BA SIS . THE COPY OF SUCH IKRARNAMA IS PLACED AT PAGE 3 OF THE PAPER BO OK RELATING TO ASSESSMENT YEAR 1996-97. IT IS THE CASE OF THE ASSESSEE THAT VIDE AFOREMENTIONED IKRARNAMA THE ASSESSEE HAS BEEN CULTIVATI NG ON THE LAND BELONGING TO SHRI RAMESH CHAND S/O SHRI TRIBHUV AN SINGH SINCE 18 TH MAY, 1991. NOT ONLY THE AFOREMENTIONED IKRARNAMA IS THERE, IT IS THE CASE OF THE ASSESSEE THAT THE SAID IKRARNAMA IS SUPPORT ED BY THE JAMABANDI WHICH SHOWS THE EXISTENCE OF AGRICULTURAL LA ND IN THE NAME OF SHRI RAMESH CHAND S/O SHRI TRIBHUVAN SINGH AND TH E SALE PROCEEDS OF AGRICULTURAL PRODUCE ARE ALSO SUPPORTED BY VOUCHER OF KACHHA ARTIYA WHEREBY THE AGRICULTURAL PRODUCE WERE SOLD. IN VIEW OF THESE EVIDENCES, IT IS THE CLAIM OF THE ASSESSEE THAT HIS AGRICU LTURAL INCOME WHICH IS SHOWN TO BE ` 1,31,473/- AND ` 1,45,669/- FO R ASSESSMENT YEARS 1996-97 AND ASSESSMENT YEAR 1999-2000 RESPECTIVELY SHOULD BE ACCEPTED. THE ASSESSING OFFICER AS WELL AS LD. CIT (A) H AS NOT ACCEPTED SUCH CLAIM OF THE ASSESSEE. THE ASSESSING OFFICER IS DISCUSSING ABOUT THE IKRARNAMA ENTERED INTO BY THE ASSESSE E AND ALSO THE PHOTO COPY OF THE BILLS REGARDING SALE OF AGRICUL TURAL PRODUCE, BUT, HE DENIED TO ADMIT THESE DOCUMENTS AS A PROOF OF HAVIN G EARNED AGRICULTURAL INCOME BY THE ASSESSEE ON THE GROUND THAT THOSE DOCUMENTS ARE NOT CERTIFIED BY THE LOCAL PATWARI. T HE SALE OF AGRICULTURAL PRODUCE REMAINED UNEXPLAINED AND, THER EFORE, THIS INCOME IS NOT AGRICULTURAL INCOME OF THE ASSESSEE. IN THIS MANN ER, THE ASSESSING OFFICER HAS TREATED THE AFOREMENTIONED AMOUNT AS NON- AGRICULTURAL INCOME OF THE ASSESSEE AND ADDED THE SAME T O THE INCOME OF THE ASSESSEE. SIMILAR ARE THE FACTS WITH REGARD TO A SSESSMENT YEAR 1999-2000. 4. THE OTHER ADDITION IN ASSESSMENT YEAR 1996-97 IS A SUM OF ` 7 LAC WHICH HAS BEEN ADDED TO THE INCOME OF THE ASSESSEE A S INVESTMENT IN PROPERTY. THE ASSESSMENT OF THE ASSESSEE WAS REOPENED BY ISSUE OF ITA NO.2439 & 2440/DEL/2005 7 NOTICE U/S 148. IT CAME TO THE NOTICE OF THE DEPARTM ENT THAT THE ASSESSEE HAD INVESTED ` 7 LAC IN THE PURCHASE OF PROPERTY BEARING NO.205, KAMAL PLAZA BUILDING, GURUDWARA ROAD, KAROL BAGH, NEW DELHI AND THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE SAID INVESTMEN T. ACCORDING TO THE INFORMATION RECEIVED BY THE DEPART MENT, THE ASSESSEE HAD MADE SUCH INVESTMENT OF ` 7 LAC DURING THE YEAR 1 995-96. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE HAD FILED COPY OF SALE DEED EXECUTED ON 12 TH DAY OF JULY, 1994 WHEREIN SELLER NARENDER KUMAR JAIN, HUF THROUGH ITS KARTA NAR ENDER KUMAR JAIN, S/O SHRI MAHABIR PRASAD JAIN, R/O 1223, MAHABIR BHAW AN, CHAN RANET, NEAR JAMA MASJID, DELHI-6 HAD SOLD THE SAID PROPERTY. THE COPY OF THE SAID SALE DEED WAS SUBMITTED BY THE ASSESSEE AND THE SAID PR OPERTY IS SHOWN TO BE PURCHASED FOR ` 1 LAC. IN VIEW OF THESE F ACTS, LD. ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CONCEALED THE AMOU NT OF ` 7 LAC PAID FOR THE SAID PROPERTY DURING THE YEAR UNDER CON SIDERATION AND HAS ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE. 5. FOR THE ASSESSMENT YEAR 1999-2000, SIMILAR INFORMATIO N WAS RECEIVED BY THE ASSESSING OFFICER OF THE ASSESSEE FROM ASSTT. DIRECTOR OF INCOME-TAX (INV.), GHAZIABAD REGARDING PURCHASE O F PROPERTY NO.6/110, SECTOR 2, RAJINDER NAGAR, SAHIBABAD, DISTT . GHAZIABAD, UP WHICH WAS PURCHASED FOR A SUM OF ` 6,50,000/-. THE ASSE SSEE WAS ASKED TO EXPLAIN THE INVESTMENT IN THE PROPERTY. IT WAS SUBMITTED THAT THE SAID AMOUNT WAS INVESTED BY THE ASSESSEE FROM THE AMOU NT RECEIVED FROM M/S BADRI PRASAD RAM NATH & CO., A-2, N AVEEN MANDI, KUNDLA ROAD, AGRA, WHERE THE ASSESSEE WAS DEPOSITING HIS SA VINGS FROM YEAR TO YEAR OF THE AGRICULTURAL INCOME AND IT WAS SUBMITTED THAT THE SAID ACCOUNT WAS MAINTAINED BY THE ASSESSEE SINCE 1990 . THE ASSESSING OFFICER DID NOT ACCEPT SUCH EXPLANATION OF THE ASSESSEE TO BE SATISFACTORY AND ADDED THE SAID AMOUNT TO THE INCOME O F THE ASSESSEE BEING UNEXPLAINED. IN THIS MANNER, THE SAID ADDITION HAS BEEN MADE. ITA NO.2439 & 2440/DEL/2005 8 6. THE ADDITIONS MADE BY THE ASSESSING OFFICER FOR BOTH THE YEARS HAVE BEEN CONFIRMED AND THE ASSESSEE IS AGGRIEVED, HENCE , IN APPEAL BEFORE US. 7. AFTER NARRATING THE FACTS, IT WAS VEHEMENTLY PLEAD ED BY LD. AR THAT THE ASSESSEE HAD PRODUCED COGENT EVIDENCES TO SUPPOR T THE CASE OF AGRICULTURAL INCOME AS WELL AS THE PURCHASE OF THE PROPERTY. THE ASSESSING OFFICER DID NOT ACCEPT SUCH EVIDENCES AND WITHO UT ANY REASON HE HAS REJECTED THE EVIDENCES PRODUCED BY THE A SSESSEE. HE SUBMITTED THAT THE ADDITIONS ARE NOT SUSTAINABLE IN LAW , HENCE, ARE PLEADED TO BE DELETED. WITH REGARD TO EACH ADDITIO N, THE SUBMISSIONS OF LD. AR ARE AS UNDER:- THE AGRICULTURAL INCOME 8. LD. AR DREW OUR ATTENTION TO THE COPY OF IKRARNA MA PLACED AT PAGE 3 OF THE PAPER BOOK WHEREIN THE ASSESSEE HAS TAKEN AGRICULTURAL LAND RELATING TO SHRI RAMESH CHAND, S/O SHRI TRIBHUV AN SINGH. THE SAID IKRARNAMA IS SUPPORTED BY THE JAMABANDI WHEREIN THE SA ID OWNER OF THE LAND HAS BEEN STATED TO BE THE OWNER OF THE PROPE RTY MENTIONED IN THE IKRARNAMA. HE ALSO DREW OUR ATTENTION TO THE SAL E PROCEEDS OF THE AGRICULTURAL PRODUCE SOLD BY THE ASSESSEE TO M/S RAM NARA YAN HARNARAYAN AS EVIDENCE TO SHOW THAT THE ASSESSEE HAD BEEN SELLING THE AGRICULTURAL PRODUCE PROCURED OUT OF THE LAND T AKEN ON BATAI AND THESE EVIDENCES ARE FILED AT PAGES 8-12 OF THE PAPER B OOK. HE SUBMITTED THAT FROM YEAR TO YEAR THE ASSESSEE HAD BEEN C ULTIVATING THE LAND BELONGING TO SHRI RAMESH CHAND AND SELLING THE A GRICULTURAL PRODUCE THE PROCEEDS OF WHICH WERE KEPT WITH M/S BADR I PRASAD RAM NATH & CO. HE SUBMITTED THAT ALL THESE EVIDENCES WERE PRODUCED BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS A LSO REFERRED TO THESE EVIDENCES IN THE ASSESSMENT ORDER. HE SUBMITTED THAT WITHOUT MAKING ANY INQUIRY THE ASSESSING OFFICER HAS RE JECTED THE ITA NO.2439 & 2440/DEL/2005 9 EVIDENCE FILED BY THE ASSESSEE AND LD. CIT (A) HAS ALSO C OMMITTED AN ERROR IN NOT APPRECIATING THE AFOREMENTIONED EVIDEN CE AND IN UPHOLDING THE ADDITION IN A ROUTINE MANNER. HE SUBM ITTED THAT IN VIEW OF THESE EVIDENCES THE CLAIM OF THE ASSESSEE REGARDING A GRICULTURAL INCOME SHOULD BE ACCEPTED. 9. WITH REGARD TO ADDITION OF ` 7 LAC FOR ASSESSMENT YE AR 1996-97, IT WAS PLEADED BY LD. AR THAT THE AFOREMENTIONED PROPER TY NO.205 IN KAROL BAGH WAS PURCHASED BY THE ASSESSEE VIDE SALE DEED DA TED 12 TH DAY OF JULY, 1994 WHICH IS RELEVANT FOR ASSESSMENT YEAR 1995-96. IT WAS SUBMITTED THAT THE INVESTMENT WAS MADE IN 1995-96 A ND IT DOES NOT RELATE TO ASSESSMENT YEAR 1996-97. HE IN THIS REGAR D REFERRED TO THE COPY OF THE SALE DEED WHICH IS PLACED AT PAGES 13 -22 OF THE PAPER BOOK. HE SUBMITTED THAT THE SAID PROPERTY WAS PURCHASE D FOR A SUM OF ` 1 LAC. THE COPY OF THE SALE DEED WAS DULY PRODUCED BEFORE THE ASSESSING OFFICER. THE PAYMENT WAS MADE BY BANKERS CHEQ UE DATED 11 TH JULY, 1994 AS MENTIONED IN THE SALE DEED. BUT, HE SU BMITTED THAT THE INVESTMENT DOES NOT RELATE TO THE ASSESSMENT YEAR 199 6-97 AND, HENCE, THE ADDITION HAS WRONGLY BEEN MADE AND SUSTAINE D. HE, THEREFORE, PLEADED THAT THE ADDITION OF ` 7 LAC SHOU LD BE DELETED. 10. SO AS IT RELATES TO THE ADDITION OF ` 6,50,000/-, IT WAS SUBMITTED BY LD. COUNSEL OF THE ASSESSEE THAT THE IMPUGNED PROPERT Y WAS PURCHASED BY THE ASSESSEE FOR A CONSIDERATION OF ` 6,50,0 00/- AND ` 1,13,000/- WAS PAID FOR STAMP DUTY OUT OF HIS LIFE SAVI NGS AND LOANS FROM FRIENDS. HE SUBMITTED THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS CLEARLY RECORDED THE REPLY OF THE A SSESSEE THAT HE WAS KEEPING THE SALE PROCEEDS OF AGRICULTURAL PRODU CE WITH M/S BADRI PRASAD RAM NATH & CO. OUT OF WHICH THE SAID AMO UNT OF ` 6,50,000/- WAS PAID. LD. AR ALSO DREW OUR ATTENTION TOWARDS STATEMENT OF FACTS FILED BEFORE THE CIT (A) IN WHICH IT WAS CLE ARLY STATED THAT IT IS APPARENT FROM THE RETURN FILED FOR ASSESSMENT YEAR 1999 -2000 THAT THE ITA NO.2439 & 2440/DEL/2005 10 ASSESSEE WAS DEPOSITING HIS SAVINGS WITH LOCAL ARTIYA FIRM M /S BADRI PRASAD RAM NATH & CO. AND HAS REFLECTED ` 6,50,000/- AS LOAN AND ADVANCES FOR THE PERIOD ENDING ON 31 ST MARCH, 1998 WHICH IS NIL FOR THE PERIOD ENDING 31 ST MARCH, 1999. THUS, HE SUBMITTED THAT CREDIBLE EVIDENCE WAS PRODUCED BY THE ASSESSEE WHICH HAS BEEN DISCA RDED BY THE ASSESSING OFFICER WITHOUT ASSIGNING ANY REASON AND THE CASE OF THE ASSESSEE SHOULD BE ACCEPTED. 11. ON THE OTHER HAND, LD. DR, RELYING UPON THE ORD ER OF THE ASSESSING OFFICER AND CIT (A), PLEADED THAT THE ADDITIO NS HAVE RIGHTLY BEEN SUSTAINED BY THE CIT (A) AND HIS ORDER SHOULD UPHE LD. 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS I N THE LIGHT OF THE MATERIAL PLACED BEFORE US. SO AS IT RELATES TO AG RICULTURAL INCOME, THE ASSESSEE HAS SUBMITTED THE EVIDENCE BEFORE THE ASSESSING OFFICER WHICH HAS BEEN REJECTED BY HIM WITHOUT MAKING ANY IN QUIRY. THE ASSESSEE HAS SUBMITTED THE COPY OF THE AGREEMENT AND ALSO JAMABANDI OF THE AGRICULTURAL LAND. WITHOUT MAKING ANY INQUI RIES LD. ASSESSING OFFICER HAS REJECTED THE CLAIM OF THE ASSESSEE. THE CASE IS VERY OLD AND SIMPLY FOR THE REASONS THAT THE ASSESSING OFFICER DID NOT MAKE INQUIRY, THE PROCEEDINGS CANNOT BE RESTORED TO THE FI LE OF ASSESSING OFFICER AS NOW NO USEFUL PURPOSE WILL BE SERVED. THERE FORE, IT CANNOT BE SAID THAT FOR THE FAILURE OF THE ASSESSEE TO SUBMIT TH E PARTICULARS, THE ADDITION WAS SUSTAINABLE. THE LACKING IS ON THE PA RT OF THE ASSESSING OFFICER THAT HE DID NOT MAKE INQUIRY AND THE MATTER BEING OLD IT ALSO CANNOT BE RESTORED BACK. THEREFORE, WE D O NOT SEE ANY JUSTIFICATION IN SUSTAINING SUCH ADDITION FOR WHICH THE EVIDENCE WAS SUBMITTED BY THE ASSESSEE AND WHICH WAS DISCARDED BY THE A SSESSING OFFICER WITHOUT ASSIGNING ANY REASON AND WITHOUT MAKIN G ANY FURTHER INQUIRY. ITA NO.2439 & 2440/DEL/2005 11 THE ADDITION REGARDING ` 7 LAC 13. THE ASSESSEE HAS CLEARLY DEMONSTRATED THAT THE RELEVA NT PROPERTY WAS PURCHASED ON 12 TH JULY, 1994 WHICH PERIOD DOES NOT FALL WITHIN THE ASSESSMENT YEAR 1996-97. HENCE, THE ADDITIO N FOR THAT COULD NOT BE MADE IN THE YEAR UNDER CONSIDERATION. THE ADDITION HAS BEEN MADE WITHOUT APPLICATION OF MIND. THE ADDITIO N, IF ANY, COULD BE MADE ONLY IN ASSESSMENT YEAR 1995-96 RELEVANT TO THE DA TE OF PURCHASE OF IMPUGNED PROPERTY WHICH IS 12 TH JULY, 1994. THEREFORE, THE ADDITION IS DELETED. THE ADDITION REGARDING A SUM OF ` 6,50,000/- AND ` 1 ,13,000/- 14. IT HAS BEEN THE CASE OF THE ASSESSEE THAT FROM YEAR T O YEAR HE HAS BEEN DEPOSITING THE SALE PROCEEDS OF AGRICULTURAL P RODUCE WITH M/S BADRI PRASAD RAM NATH & CO. AND YEAR TO YEAR BALANCE WAS ALSO SHOWN IN THE DOCUMENTS FILED BY THE ASSESSEE ALONG WITH THE RE TURN OF INCOME AND SUCH FACT IS CLEAR FROM THE STATEMENT OF FACTS FILE D BEFORE THE CIT (A) WHICH READ AS UNDER:- THE UNDISPUTED HOWEVER ARE THAT THE ASSESSEE DID PURCHA SE HOUSE NO. 6/110,SECTOR-2, RAJINDER NAGAR, GHAZIABAD, UP FOR A TOTAL CONSIDERATION OF RS. 6,50,000/- AND PAID RS.1, 1 3,000/- FOR PURCHASES, STAMP DUTY OUT OF HIS LIFE SAVING AND LOAN FROM FRIENDS. FURTHER, IT IS APPARENT FROM THE RETURN FILED F OR ASSESSMENT YEAR 992000 THAT THE ASSESSEE WAS DEPOSITING HIS SAVINGS WITH LOCAL ARTHIYA FIRM M/S BADRI PRASAD RAM NATH & CO., A-2 NAVEEN MANDI, KUNDLA ROAD, AGRA AND HAS REFLECTE D RS.650000/- AS LOAN AND ADVANCES FOR THE PERIOD ENDI NG 31-03- 1998 & RS NIL FOR THE PERIOD ENDING 31-03-1999 RECOV ERABLE FROM THE AARTHIYAS FIRM IN HIS BALANCE SHEET FILED BEF ORE THE ASSESSING AUTHORITY. ASSESSEE IN HIS REPLY HAS ALSO S TATED 'I HAVE LITTLE EDUCATION AND IS NOT FAMILIAR WITH BANKING AND KE EPING MY SAVING WITH LOCAL AARTIYAS FIRM M/S BADRI PRASAD RAM NATH & CO., A-2 NAVEEN MANDI, KUNDLA ROAD, AGRA. I WAS DEPOSITI NG MY SAVING WITH HIM ON YEAR TO YEAR BASIS OUT OF MY AGRICU LTURAL INCOME.' THE ASSESSMENT ADDING THE TOTAL INCOME OF RS. 6, 50,000/- AND RS. 1,13,000/- FOR PURCHASE OF STAMP DU TY IN THE ABOVE CIRCUMSTANCES IS ARBITRARY AND IS UNCALLED FOR. ITA NO.2439 & 2440/DEL/2005 12 15. IF THE AFOREMENTIONED SUBMISSIONS OF THE ASSESSEE ARE K EPT IN VIEW, THEN, IT WILL BE CLEAR THAT THE EXPLANATION O F THE ASSESSEE HAS BEEN REJECTED WITHOUT COGENT REASONS. THE ASSESSEE WAS HA VING A SUM OF `6,50,000/- STANDING TO HIS CREDIT WITH M/S BADR I PRASAD RAM NATH & CO. WHICH WAS WITHDRAWN FOR THE PURCHASE OF TH E IMPUGNED PROPERTY. THE BALANCE SUM OF ` 1,13,000/- WAS STATED TO BE MADE FROM LIFE SAVINGS AND LOANS FROM FRIENDS. THEREFORE, THE SAID MATTER IS NOT UNDER DISPUTE. THE DEPARTMENT HAS NOT MADE OUT A CASE FOR SUSTENANCE OF ADDITION OF ` 6,50,000/-. THE ADDITION OF `1,13,000/- HAS BEEN DELETED BY THE CIT (A) ON THE GROUND THAT THE STAMP DUTY WAS PURCHASED IN THE MONTH OF MAY/JULY, 1999 WHICH DOES N OT PERTAIN TO THE ASSESSMENT YEAR 1999-2000 AND IS RELEVANT FOR ASSESSMENT YEAR 2000-01. THEREFORE, WE DO NOT SEE ANY JUSTIFICATION IN SUSTAINING THIS ADDITION. THE SAME IS DELETED. 16. WITH THESE OBSERVATIONS, THE APPEALS FILED BY THE A SSESSEE ARE ALLOWED IN THE MANNER AFORESAID. THE ORDER PRONOUNCED IN THE OPEN COURT ON 10.06.20 11. SD/- SD/- [SHAMIM YAHYA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED,10.06.2011. DK ITA NO.2439 & 2440/DEL/2005 13 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES