Sudarshan Zumbarlal Bafna, Ahmednagar V. ITO, Ward-4, Ahmednagar

ITA 2513/PUN/2012

• Counselvise Citation: 251324514 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-03-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 20-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: VIPIN GUJARATHI
• Keywords: Unexplained cash credit; Business income; Salary income; Source of fund; Additional evidence; Corroborative evidences; Onus to prove
• Section: 143(3); 147; 68; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.135 TO 140/PN/2013 (A.YS. 2002-03 TO 2007-08) ITO, WARD 4, AHMEDNAGAR APPELLANT VS. SHRI SUDARSHAN ZUMBARLAL BAFNA, BAFNA PETH, SHRIRAMPUR, DIST. AHMEDNAGAR. PAN: AAVPB3556D RESPONDENT ITA NOS.2510 TO 2515/PN/2012 (A.YS. 2002-03 TO 2007-08) SHRI SUDARSHAN ZUMBARLAL BAFNA, BAFNA PETH, SHRIRAMPUR, DIST. AHMEDNAGAR. PAN: AAVPB3556D APPELLANT VS. ITO, WARD 4, AHMEDNAGAR RESPONDENT ASSESSEE BY : SHRI VIPIN G UJARATHI DEPARTMENT BY : SHRI P.L. PATHADE DATE OF HEARING : 21.02.2014 DATE OF ORDER : 26.02.2014 ORDER PER BENCH: THE SIX APPEALS FILED BY THE REVENUE AND SIX CROSS APPEALS FILED BY THE ASSESSEE PERTAIN TO THE SAME ASSESSEE FOR DI FFERENT ASSESSMENT YEARS AROSE FROM THE CONSOLIDATED ORDER OF CIT(A). SO 2 THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF F BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO.140/PN/2013 FOR A.Y. 2007-08, THE REVE NUE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) G ROSSLY ERRED IN DELETING THE ADDITION OF RS.10,00,000/- M ADE IN THE ASSESSMENT U/S.68 OF THE INCOME-TAX ACT, 1961 INSTEAD OF CONFIRMING THE SAME. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) GROSSLY ERRED IN FAILING TO APPRECIATE THAT TH E ASSESSEE HAD NOT ESTABLISHED THE CREDITWORTHINESS OF SHRI. S URESH C. KANKARIYA IN WHOSE NAME THE IMPUGNED CREDIT HAD BEE N SHOWN. 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN CONSIDERING ALL THE SURROUNDING FACTS AND CIRCUMSTANCES VIZ. THE CLOSE NEXUS OF THE ASSESSE E WITH THE ALLEGED CREDITOR, LOAN OF RS.4,05,000/- SHOWN BY TH E SAID ALLEGED CREDITOR AS TAKEN FROM ANOTHER RELATIVE WIT HOUT THERE BEING ANY COMPELLING REASON TO DO SO, THE OVERALL D EFICIT OF RS.4,04,171/- ( RS.10,00,000 - 5,95,829 ) IN THE HA NDS OF THE ALLEGED CREDITOR AT THE TIME OF ADVANCING THE I MPUGNED LOAN TO THE ASSESSEE, THE ABSENCE OF ANY WITHDRAWAL IN HIS ACCOUNTS FOR HOUSE-HOLD EXPENSES DURING THE YEAR ET C., WHICH WOULD CLEARLY INDICATE THE IMPROBABILITY OF THE SAID ALLEGED CREDITOR HAVING ADVANCED THE IMPUGNED LOAN TO THE ASSESSEE. 5. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO APPLY THE RATIO OF THE DECISION S OF THE HON'BLE SUPREME COURT IN THE CASES OF SUMATI DAYAL VS. CIT (1995) 125 CTR 124 (SC) AND CIT VS. DURGA PRASA D MORE (1969) 72 ITR.807 (SC) TO THE ISSUE AT HAND. 6. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GROSSLY ERRED IN DELETING AN ADDITION OF RS.8,20,191/- F ROM OUT OF THE TOTAL ADDITION OF RS.12,99,883/- MADE IN THE ASSESSMENT BY WAY OF REJECTING THE ASSESSEE'S CLAIM TOWARDS AGRICULTURAL INCOME. 3 7. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN HOLDING THAT OUT OF THE CLAIM TOWARDS RECE IPT OF TUR-DAL ONLY 15% COULD BE DISALLOWED, WITHOUT APPRE CIATING THAT AS THE ASSESSEE HAD NOT PRODUCED ANY DETAILS O R EVIDENCES IN RESPECT OF EXPENSES AND ALSO AS THE AS SESSING OFFICER HAS ESTABLISHED IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT THAT THE YIELD ON ACCOUNT OF T UR COULD ONLY BE 54.86 QUINTALS AND NOT 240.70 QUINTALS, A SUBSTANTIALLY HIGHER DISALLOWANCE WAS VERY MUCH CAL LED FOR. 8. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN ROUTINELY HOLDING THAT 30% OF THE REMAININ G AGRICULTURAL INCOME (OTHER THAN TUR-DAL) CAN BE TR EATED AS EXCESSIVE AND ASSESSABLE UNDER THE HEAD 'OTHER SOUR CES' EVEN AFTER ACCEPTING THAT THE ASSESSEE HAD NOT MAIN TAINED REGULAR BOOKS OF ACCOUNTS IN RESPECT OF AGRICULTURE , DID NOT HAVE THE REQUIRED SUPPORTING EVIDENCES, AND ALSO TH E FACTS AND CIRCUMSTANCES OF THE CASE AVAILABLE ON RECORD W ITH REGARD TO AGRICULTURAL INCOME ARE NOT FULLY CREDIBL E. 9. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEA LS) GROSSLY ERRED IN NOT TAKING SUFFICIENT COGNI ZANCE OF THE VARIOUS FACTS AND EVIDENCES BROUGHT OUT IN THE ASSE SSMENT ORDER AS WELL AS IN THE REMAND REPORT VIZ. THE ASSE SSEE NOT OBTAINING PERMISSION FROM THE FOREST DEPARTMENT FOR CUTTING TEAK WOOD TREES, THE IMPROBABILITY OF GROWI NG TAMARIND WHICH IS NOT EVIDENCED BY THE 7/12 EXTRACT S, ABNORMAL YIELDS CLAIMED BY THE ASSESSEE AS COMPARED TO THE STANDARD YIELDS ASCERTAINED FROM THE RELIABLE AUTHORITIES, FAILURE OF THE ASSESSEE TO PRODUCE CO MPLETE DETAILS IN RESPECT OF THE ALLEGED PURCHASERS, REPOR T OF THE INSPECTORS ETC. 10. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT (APPE ALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RES TORED. 11. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 2.1 IN ITA NO.2515/PN/2012 FOR A.Y. 2007-08, THE AS SESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1) THE APPELLANT HAS SHOWN AGRICULTURAL INCOME OF RS. 4,23,200/- FROM SALE OF AGRICULTURAL PRODUCE -TUR D AL. THE LEARNED AO DISALLOWED RS.2,02,343/- OUT OF THE AGRI CULTURAL INCOME FROM SALE OF TUR DL RS.4,23,200/- ON THE GRO UND THAT THE APPELLANT HAS DECLARED EXCESSIVE AGRICULTU RAL 4 INCOME ON ACCOUNT OF MANUFACTURE/PRODUCTION/CULTIVA TION OF TUR DAL. THE HONOURABLE CIT (A) CONFIRMED THE AD DITION OF RS.63,480/- BEING 15% OF THE TOTAL RECEIPT OF RS . 4,23,200/- ON ACCOUNT OF SALE OF TUR DAL 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT(A) ERRED IN CONFIRMING THE A DDITION OF RS. 63,480/- OUT OF ADDITION OF RS.2,02,343/- TR EATING THE AGRICULTURAL INCOME ON ACCOUNT OF SALE OF OF TUR DA L AS 'INCOME FROM OTHER SOURCES' WITHOUT APPRECIATING TH E FACTS OF THE CASE. THE APPELLANT HEREBY PRAYS THAT THE AD DITION OF RS. 63,480/- MAY PLEASE BE DELETED. 3) FOR THE YEAR UNDER CONSIDERATION THE APPELLANT HAS DECLARED TOTAL RECEIPTS FROM SALE OF AGRICULTURAL PRODUCE AT RS. 18,10,574/-. THE APPELLANT HAS AGRICULTURAL INCOME FROM VARIOUS AGRICULTURAL COMMODITIES DETAILED BELOW FROM SALE OF TAMARIND RS. 5,64,200/- FROM SALE OF SURU TREE RS. 3,87,700/- FROM SALE OF TEAKWOOD TREE RS. 1,45,640/- ------------------- TOTAL RS.10,97,540/- ============ THE LEARNED ASSESSING OFFICER MADE ADDITION OF RS.1 0,97,540/- BY NOT ACCEPTING THE CLAIM OF THE APPELLANT OF THE AGRICULTURAL INCOME AND TREATING THE SAME AS 'INCOME FROM OTHER SOURCES'. THE HONOURABLE CIT (A) CONFIRMED THE DISALLOWANCE O F RS. 4,16,212/- BEING 30% OF THE TOTAL RECEIPT FROM AGRI CULTURAL PRODUCE OF RS. 13,87,374/-. THE HONOURABLE CIT (A) CONFIRMED THE PART DISALLOWA NCE OF RS. 4,16,212/- BEING 30% OF TOTAL RECEIPTS FROM SALE OF AGRICULTUR AL PRODUCE OF RS.13,87,374/- ARBITRARILY AND WITHOUT A PPRECIATING THE FACTS OF THE CASE AND LEGAL POSITION IN RESPECT OF THE SAME. THE APPELLANT HEREBY PRAYS THAT THE ADDITION MAY PL EASE BE DELETED. 3) ON THE FACTS AND IN THE CIRCUMSTANCES AND IN LAW THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEALS) PUN E ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,65,009/-BEIN G THE DIFFERENCE IN THE OPENING CAPITAL ACCOUNT BALANCE A S ON 01/04/2006 I.E. THE YEAR UNDER CONSIDERATION AND CL OSING CAPITAL ACCOUNT BALANCE (31/03/2006) OF EARLIER YEA R WITHOUT APPRECIATING THE FACT THAT THE APPELLANT WAS NOT MA INTAINING THE BOOKS OF ACCOUNTS AND THE BOOKS OF ACCOUNTS WERE PR EPARED FOR FACILITATING THE ASSESSMENT PROCEEDINGS. THE APPELL ANT HEREBY PRAYS THAT THE DISALLOWANCE MAY PLEASE BE DELETED. 5 4) THE APPELLANT HEREBY RESERVES THE RIGHT TO ADD, RAISE, DELETE ANY ADDITIONAL GROUND/GROUNDS BEFORE THE COMPLETION OF THE HEARING. 3. THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM FOLLOWING SOURCES. A. SHARE OF PROFIT AND REMAINING FROM PARTNERSHIP F IRM NAMED HINDUSTAN GUNNY BAGS & ALLIED SUPPLIERS, SHRIRAMPUR. HE IS ALSO IN RECEIPT OF INTEREST FROM CAPITAL CONTRIBUTED IN THE PARTNERSHIP FIRM. B. DIVIDEND INCOME FROM INTEREST MUTUAL FUNDS/INTER EST ON SAVING ACCOUNT. C. AGRICULTURAL INCOME THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASSESSM ENT YEAR 2007-08 DECLARING TOTAL INCOME OF 3,23,031/- ON 13.02.2008. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S.143 (3) OF I.T. ACT, THE ASSESSING OFFICER HAS MADE VARIOUS ADDITIONS. IT IS PERTINENT HERE TO MENTION THAT A.Y. 2007-08 IS TAKEN AS LEAD YEAR. IT IS SEEN FROM THE APPEALS FILED BY THE ASSESSEE FOR A.YS. 20 02-03 TO 2007-08 THAT THE ASSESSMENTS OF A.YS. 2002-03 TO 2006-07 WE RE REOPENED AFTER THE COMPLETION OF THE ASSESSMENT OF A.Y. 2007 -08, WHEREIN IN ADDITION TO MAKING CERTAIN ADDITIONS THE MAJOR ADDI TION WAS IN RESPECT OF AGRICULTURAL INCOME CLAIMED IN THAT YEAR . THE ASSESSING OFFICER FROM THE MATERIALS AVAILABLE ON RECORD IN A .Y. 2007-08 FOUND THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 13.02.2008 DECLARING A TOTAL INCOME OF 3,23,031/- AND AGRICULTURAL INCOME OF 18,10,574/-. THE ASSESSING OFFICER WHILE COMPLETIN G THE SCRUTINY ASSESSMENTS OBSERVED THAT THE ASSESSEE IS AN INDIVI DUAL WHO HAS DECLARED INCOME FROM SALARY AND INTEREST FROM THE F IRM M/S HINDUSTAN GUNNY BAGS & ALLIED SUPPLIERS, SHRIRAMPUR . IN ADDITION TO THE ABOVE, THE ASSESSEE HAS ALSO SHOWN INCOME FR OM INTEREST, DIVIDEND AND SHORT TERM CAPITAL LOSS ON SALE OF MUT UAL FUNDS. THE ASSESSING OFFICER AFTER MAKING NECESSARY INQUIRY AN D DISCUSSIONS IN 6 THE ASSESSMENT ORDER TREATED THE LOAN OF 10 LAKHS FROM SHRI SURESH KANKARIA AS UNEXPLAINED INCOME U/S.68. HE HAS FURT HER TREATED PART OF THE AGRICULTURAL INCOME RELATING TO SALE OF TAMARIND, SURU & TEAK WOOD AMOUNTING TO 10,97,540/- AS UNEXPLAINED ASSESSABLE UNDER THE HEAD OTHER SOURCES AND FURTHER TREATED TH E AGRICULTURAL INCOME FROM TURDAL EXCESSIVE TO THE EXTENT OF 2,02,343/-. THE ASSESSING OFFICER HAS ALSO MADE ADDITION OF 1,65,009/- RELATING TO DIFFERENCE IN OPENING AND CLOSING BALANCE OF CAPITA L ACCOUNT IN THIS YEARS. FOR ALL THESE ISSUES, THE MATTER WAS CARRIE D BEFORE FIRST APPELLATE AUTHORITY WHEREIN, ADDITIONAL EVIDENCES W ERE CALLED FOR WHICH REMAND REPORT WAS CALLED, LATER DISCUSSED TRE ATMENT OF DIFFERENT ADDITIONS BEFORE THE FIRST APPELLATE AUTH ORITY. 4. THE FIRST ISSUE IS WITH REGARD TO UNSECURED LOAN U/S.68. THE ASSESSING OFFICER HAS DEALT THIS ISSUE IN PARA 5(II ) OF ASSESSMENT ORDER AND THE SAME IS QUOTED BELOW FOR READY REFERE NCE. 'CONFIRMATION LETTER FROM SHRI SURESH C. KANKARIYA IN RESPECT OF UNSECURED LOAN OF RS.10,00,000/- DURING THE YEAR THE ASSESSEE HAS TAKEN UNSECURED LO AN OF RS. 10,00,000/- FROM SHRI SURESH C. KANKARIYA ON 28.3.2 007 BY CHEQUE. THE ENTRY OF THE SAME IN BANK A/C NO. 6900 OF CANARA BANK OF SURESH C. KANKARIYA RELECTED ON 28.3.2007 A ND THE CHEQUE NO. IS WRITTEN AS 69153 AND THE COPY OF A/C EXTRACT IS ENCLOSED WITH THE LOAN CONFIRMATION LETTER FILED ON 27.1,2009. HOWEVER, FURTHER IT IS SEEN THAT IN THE CONFIRMATIO N LETTER SHRI SURESH C. KANKARIYA HAS WRITTEN THE CHEQUE NO. AS 9 69153 DID. 28.3.2007 OF CANARA BANK, WHICH IS DIFFERENT FROM T HE CHEQUE NO. AS WRITTEN IN THE BANK A/C EXTRACT. FURTHER IN THE CONFIRMATION LETTER DATED 26.1.09 SHRI SURESH C. KA NKARIYA DECLARED THAT HE IS A FARMER AND HAVING NO OTHER IN COME THAN FARMING AND HAS NOT FILED RETURN OF INCOME. HE HAD GIVEN RS. 10,00,000/- OUT OF HIS AGRICULTURAL INCOME AND OUT OF SALE OF AGRICULTURAL LAND. HOWEVER ACCORDINGLY THE ASSESSEE HAS NOT PRODUCED THE EVIDENCE/ DOCUMENT SUPPORTING FOR THE CREDITWORTHINESS OF SUCH LOAN TAKEN FROM SHRI SURES H C KANKARIYA. THE A.R. OF THE ASSESSEE WAS ASKED ON 27 .1.2009 TO PRODUCE THE SAME. HE STATED THAT HE IS UNABLE TO PR ODUCE THE EVIDENCE/ DOCUMENT FOR CREDITWORTHINESS OF SHRI KAN KARIYA AS THE KAMGAR TALATHI OF THAT VILLAGE IS ON ELECTION D UTY. THE 7/12 EXTRACT COULD NOT BE OBTAINED. HOWEVER, HE HAS NOT PRODUCED 7 OTHER DETAILS/ DOCUMENT ALSO. THEREFORE, CONSIDERIN G THE ABOVE IT IS FACT THAT THE ASSESSES COULD NOT PROVED HIS CREDITWORTHINESS TO GIVE SUCH LOAN TO THE ASSESSEE AND THEREFORE RS.10,00,000 TAKEN AS A LOAN IS REQUIRED TO BE ADDE D TO THE TOTAL INCOME OF THE ASSESSEE. IT IS A SETTLED LAW T HAT IN CASE OF CASH CREDITS, ONUS IS ON THE ASSESSEE TO PROVE THE IDENTITY, CAPACITY AND GENUINENESS OF TRANSACTION. HERE, IN T HIS CASE, DESPITE GIVING MANY OPPORTUNITIES ASSESSEE HAS NOT BEEN ABLE TO PROVE THE CAPACITY OR CREDITWORTHINESS OF CREDITOR AS NO EVIDENCE REGARDING HIS SOURCE OF INCOME HAS BEEN FI LED. IT IS ALSO IMPORTANT TO NOTE THAT THE LENDER IS NOT FILIN G RETURNS OF HIS INCOME. IN SUCH A SITUATION, IT BECOMES EVEN MORE N ECESSARY FOR THE ASSESSEE TO GIVE THE EVIDENCE OF EARNINGS OF TH E LENDER TO PROVE HIS CREDITWORTHINESS. BESIDES RS.10,00,000/- IS NOT A SMALL AMOUNT ANY PERSON WHO IS GIVING SUCH A HUGE A MOUNT OF LOAN SHOULD HAVE SUBSTANTIAL SOURCES OF INCOME. AS STATED ABOVE, DESPITE GIVING OPPORTUNITIES ASSESSEE COULD NOT PROVE CAPACITY OF THE CREDITOR AS WELL AS GENUINENESS OF TRANSACTION. THEREFORE RS.10,00,000/- IS ADDED TO THE INCOME OF THE ASSESSEE U/S 68 OF I.T. ACT AS UNEXPLAINED CASH CRE DIT. THE PENALTY PROCEEDING U/S 271(1)(C) ARE SEPARATELY INI TIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME.' 4.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN, THE ASSESSEE HAS RAISED VARIOUS CONTENTIONS IN THIS REGARD. THE CIT(A) HAVING CONSIDERED THE SAME, HAS GRANTED RELI EF TO THE ASSESSEE. THE SAME HAS BEEN OPPOSED BEFORE US ON B EHALF OF REVENUE, INTER ALIA STATED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF 10,00,000/- MADE BY THE ASSESSING OFFICER U/S.68 OF I.T. ACT. THE CIT(A) GROSSLY ERRED IN FAILI NG TO APPRECIATE THAT THE ASSESSEE HAD NOT ESTABLISHED THE CREDITWORTHINE SS OF SHRI. SURESH C. KANKARIYA IN WHOSE NAME THE IMPUGNED CRED IT HAD BEEN SHOWN. ACCORDINGLY, THE ORDER OF CIT(A) GRANTING RE LIEF TO THE ASSESSEE BE SET ASIDE AND THAT OF ASSESSING OFFICER ON THE I SSUE BE RESTORED. ON THE OTHER HAND, THE AUTHORIZED REPRESENTATIVE HA S SUPPORTED THE ORDER OF CIT(A) AND SUBMITTED THAT THE CIT(A), AFTE R TAKING INTO CONSIDERATION OF THE REMAND REPORT, HAD PASSED THE REASONED ORDER AND THE SAME SHOULD BE UPHELD. 4.2 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITION IN 8 RESPECT OF LOAN OF 10.00 LACS ACCEPTED BY THE ASSESSEE THROUGH A CHEQUE FROM SHRI SURESH C. KANKARIYA, AN AGRICULTUR IST WHO WAS ALSO BROTHER-IN-LAW OF ASSESSEE. DURING THE COURSE OF ASSESSMENT WHEN THE ASSESSEE WAS CALLED UPON BY THE ASSESSING OFFICER TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND THE GE NUINITY OF THE TRANSACTION U/S 68 OF THE IT ACT, THE ASSESSEE SUBM ITTED THE LOAN CONFIRMATION ALONG WITH THE DETAILS OF THE BANK ACC OUNT AND CHEQUE NO. ETC. THE MAIN REASON FOR THE ADDITION MADE WAS THAT THE ASSESSEE FAILED TO ESTABLISH THE CREDITWORTHINESS OF THE CRE DITOR. ACCORDING TO THE ASSESSING OFFICER, THE LENDER WAS AN AGRICULTUR IST NOT ASSESSED TO TAX AND THEREFORE THE ASSESSING OFFICER ASKED FOR N ECESSARY EVIDENCES LIKE 7/12 EXTRACT ETC. WHICH COULD NOT BE FILED AS THE TALATHI WAS REPORTED TO BE ON ELECTION DUTY AT THE RELEVANT POI NT OF TIME. THEREFORE ASSESSING OFFICER ADDED THE AMOUNT U/S 68 . THERE WAS NO DISPUTE OF THE IDENTITY OF THE CREDITOR. SO FAR AS THE ISSUE OF CREDITWORTHINESS IS CONCERNED, THE ASSESSEE FILED T HE CONFIRMATION AND DETAILS OF BANK ACCOUNT BEFORE THE ASSESSING OF FICER. HOWEVER, THE ASSESSING OFFICER WANTED TO EXAMINE OTHER EVIDE NCES LIKE 7/12 EXTRACT ETC. WHICH COULD NOT BE FILED BY THE ASSESS EE AT THE RELEVANT POINT OF TIME FOR THE REASONS BECAUSE THE CONCERNED TALATHI WAS ON THE ELECTION DUTY AT THE RELEVANT POINT OF TIME. A CCORDINGLY, THE REMAND REPORT WAS CALLED BY THE CIT(A). THE CIT(A) FROM THE REMAND REPORT HAS OBSERVED THAT THE ASSESSING OFFICER HAS ASSESSED CERTAIN CASH DEPOSITS APPEARING IN THE BANK ACCOUNT, LOAN T AKEN FROM OTHER RELATIVE AND ALSO ON THE PRE-DATING OF RECEIPT FROM PURCHASER TO WHOM THE AGRICULTURE PRODUCE WAS SOLD SUBSEQUENTLY BY THE LOAN CREDITOR. THE STAND OF THE ASSESSEE FOR ALL THESE O BJECTIONS OF ASSESSING OFFICER WERE MADE AND THE ONUS OF THE ASS ESSEE WAS IN RESPECT OF THE SOURCE OF THE LOAN AND NOT ON THE SO URCE OF THE SOURCE. HAVING CONSIDERED THE SUBMISSIONS ON BEHALF OF BOTH THE PARTIES, THE CIT(A) HAS OBSERVED THAT THE ASSESSEE HAS DISCHARGE D ITS ONUS PROPERLY BY PRODUCING THE CREDITORS AND EVIDENCES O F TRANSACTION THROUGH CHEQUE, SOURCE OF DEPOSITS IN BANK ACCOUNTS , ETC. AND IN THE 9 ABSENCE OF ANY THING ON RECORD TO SUGGEST THAT LOAN IS NOT GENUINE, THE ASSESSING OFFICER WAS NOT JUSTIFIED TO HOLD THE SAME AS UNEXPLAINED U/S. 68 OF THE IT ACT, SO THE SAME WAS RIGHTLY DELETED BY CIT(A). WE UPHOLD THE SAME. 5. THE NEXT ISSUE IN REVENUE AS WELL AS ASSESSEES APPEAL IS WITH REGARD TO ADDITION ON ACCOUNT OF AGRICULTURAL INCOM E TREATING AS INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER I N THE ASSESSMENT UNDER CONSIDERATION FOUND THAT THE ASSESSEE HAS SHO WN AN AGRICULTURAL INCOME OF 18,10,574/- FROM THE SALE OF VARIOUS PRODUCE. THE ASSESSING OFFICER WAS NOT SATISFIED A BOUT THE GENUINITY OF THE CLAIM OF RECEIPT OF 5,64,200/-FROM SALE OF TAMARIND, 3,87,700/- FROM SALE OF SURU TREES AND 1, 45,640/- FROM SALE OF TEAK WOOD TREES, TOTALING TO 10,97,540/-, AND THEREFORE ADDED THIS SUM AS UNEXPLAINED INCOME. IN ADDITION TO THE SAME , OUT OF THE AGRICULTURAL INCOME SHOWN OF 4,23,200/- FROM THE SALE OF TUR DAL, THE ASSESSING OFFICER OBSERVED THAT THE EXCESSIVE A ND DISALLOWED 2,02,343/- AND TREATED IT AS INCOME FROM UNDISCLOSE D SOURCES, THUS, ADDITION MADE OF 18,10,574/- ON ALL ABOVE ACCOUNTS. 5.1 THE ASSESSING OFFICER HAS DEALT THE ISSUE RELAT ING TO ADDITION OF 10,97,540/- IN PARA 6(III) OF THE ASSESSMENT ORDER BY OBSERVING AS UNDER. 'COPY OF 7/12 EXTRACT OF AGRICULTURAL LAND HOLDING & SALE BILL OF AGRICULTURAL PRODUCE FOR RS.18,10,574/- REG. DURING THE ASSESSMENT PROCEEDING THE A.R. OF THE AS SESSEE PRODUCED THE DETAILS OF AGRICULTURAL PRODUCE SOLD T O VARIOUS PARTIES. ON VERIFICATION OF THE VOUCHERS SUBMITTED, IT WAS NOTICED THAT THE SELF MADE SALE BILL OF TAMARIND, S URU, TEAK WOOD, ETC. DOES NOT BEAR PRINTED BILL, STAMP, ADDRE SS OF THE SAFER, THE ASSESSEE WAS ALSO ASKED ON 5.11.2008 TO PRODUCE THE DETAILS OF PAN AND FULL ADDRESS TO WHOM HE HAS SOLD THE AGRICULTURAL PRODUCE IN RESPECT TAMARIND, SURU AND TEAK WOOD. IN RESPONSE TO THE ABOVE QUESTIONNAIRE THE ASSESSEE VIDE HIS LETTER DTD. 26.11.2006 REPLIED AS UNDER: 10 'IN THIS RESPECT WE WANT TO BRING TO YOUR NOTICE TH AT WE HAD ALREADY SUBMITTED THE DETAILS OF AGRICULTURAL P RODUCE AREA WISE AND CROP WISE AND SECONDLY REGARDING TRANSPORTATION AND OTHER EXPENSES WE WANT TO STATE THAT SAID AGRICULTURE PRODUCE ARE SOLD ON SITE ON CASH B ASIS SO THERE IS NO QUESTION OF ANY EXPENSES. GENERALLY THE SE PRODUCE ARE SOLD TO SMALL FARMERS, TRADERS WHICH AR E FROM OUTSIDE SO IT IS IMPOSSIBLE FOR US TO TRESS THEM AN D THEIR PAN NUMBERS. ' IN VIEW OF THE ABOVE IT IS PROVED THAT THE ASSESSEE HAS PRODUCED UNSATISFACTORY AND UNBELIEVABLE EVIDENCE AND THUS F AILURE TO DISCHARGE THE BURDEN OF PROOF WHICH LAY UPON HIM. I T IS NECESSARY TO OBTAIN FOREST PASS BEFORE CUTTING OF T RIES LIKE TEAK WOOD, SURU ETC. FROM THE CONCERNED FOREST OFFICER. IN THE INSTANT CASE THE ASSESSEE HAS FAILED TO PRODUCE SUCH FOREST PASS AND FROM REVENUE DEPARTMENT N.O.C. CERTIFICATE FOR SALE OF TEAK WOOD, SURU ETC. THE ASSESSEE HAS NOT SHOWN ANY EXPE NDITURE FOR CUTTING OF TREES, ANY TRANSPORTATION CHARGES ET C. HE HAS STATED AS ABOVE THAT THE TREES ARE SOLD ON SITE ON CASH BASIS. HOWEVER CONSIDERING THIS FACT IT IS SEEN THAT THE A SSESSEE HAS NOT MENTIONED IN THE BILL/ RECEIPT OF SUCH EXPENSES INCURRED AND ADJUSTED AGAINST SALE PRICE. HE HAS NOT MENTION ED WHETHER IT IS NET SALE. IT IS NOT CLEAR FROM SELF MADE SALE RECEIPTS PREPARED BY HIM THAT WHO HAS MADE THIS ACTUAL EXPEN DITURE WHEN THE SALES HAVE BEEN EFFECTIVE. THE INCOME/ REC EIPT FROM SALE OF AGRICULTURAL PRODUCE CANNOT PROVED. AS SUCH THE INCOME SHOWN BY THE ASSESSEE FROM SALE OF TAMARIND, OF RS. 5,64,200/- SURU TREE OF RS.3,87,700/- AND TEAKWOOD TREE OF RS. 1, 45,640 I.E. TOTAL OF RS.10,97,540/- AS AGRICULTURAL INCOME IS DENIED AND CONSIDERED IT AS INCOME FROM OTHER SOURCES AND ADDE D TO THE TOTAL INCOME OF THE ASSESSEE. THE PENALTY PROCEEDIN G U/S 271(1)(C) ARE SEPARATELY INITIATED FOR FURNISHING I NACCURATE PARTICULARS OF INCOME. 5.2 FURTHER, THE ASSESSING OFFICER HAS DEALT THE IS SUE RELATING TO ADDITION OF 2,03,343/- OUT OF THE SALE OF TUR DAL IN PARA 7 OF THE ASSESSMENT ORDER BY OBSERVING AS UNDER: 'FURTHER IN RESPECT OF SALE BILLS OF TUR IT IS SEEN THAT BILL NO. 1623 DID. 14.9.2006 DOES NOT SHOW THE DEDUCTION IN RESPECT OF ADAT AND MAJURI/HAMALI WHICH SHOULD HAVE BEEN DEDUC TED BY THE COMMISSION AGENT I.E. M/S GHEVERCHAND PANALAL K OTHARI. IT IS FURTHER OBSERVED THAT AS PER BILL NO.1623, TH E CHEQUE NO. 53017 OF UNION BANK OF INDIA IS ISSUED BY M/S GHEVE RCHAND PANALAL KOTHARI AND THE PAYMENT HAS BEEN MADE IN TH E BOOKS OF M/S GHEVERCHAND PANALAL KOTHARI ON 2.11.2006. BU T IN THE 11 BOOKS OF SUDARSHAN Z. BAFNA IT HAS SHOWN THAT ON 14 .9.2006 AS HE HAS RECEIVED RS.4,23,200/- BY CHEQUE NO.53017 . CONSIDERING THE FACT OF THE SEQUENCE OF THE TRANSAC TIONS SHOWN BY THE ASSESSEE IT CANNOT BE PROVED THAT HOW THE CH EQUE ISSUED ON 19.9.2006 ISSUED BY M/S GHEVERCHAND PANALAL KOTH ARI RECEIVED TO MR. BAFNA ON 14.9.2006. HENCE THE TRANS ACTION SEEMS TO BE FICTITIOUS ONLY AND ACCORDINGLY THE YIE LD SHOWN OF TUR IS NOT ACCEPTABLE FULLY. FURTHER IT IS OBSERVED THAT THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE FOR PURCHA SE OF SEEDS OF TUR OR OTHER EXPENSES OF SEED SOWING, WATER SUPP LY CHARGES PAID IF ANY, CULTIVATING AND CLEANING & WEEDING CHA RGES PAID, FERTILIZERS AND INSECTICIDE CHEMICAL SPRAY EXPENSES ETC. THESE ARE THE ESSENTIAL EXPENSES TO GET THE YIELD, BUT TH E ASSESSEE HAS NOT ACCOUNTED ANY SUCH EXPENSES SO FAR. THIS ALSO R AISES DOUBT ABOUT THE GENUINENESS OF AGRICULTURAL ACTIVITIES CA RRIED OUT BY THE ASSESSEE BECAUSE IT IS NOT POSSIBLE TO EARN HUG E AGRICULTURAL INCOME OF RS.18,10,574 WITHOUT INCURRING RELATED NE CESSARY EXPENSES. FURTHER THE ASSESSEE VIDE HIS LETTER DTD. 16.1.2009 STATED THAT HE HAS CULTIVATED THE IPL-87 TUR CROP. HOWEVER, AS PER STANDARD YIELD PRESCRIBED BY THE KRUSHI VIDYAPEETH, RAHURI IN THEIR DIARY-2008 AS PER ANNEXURE A, THE YIELD OF TU R AND THE INCOME EARNED BY THE ASSESSEE IS WORKED OUT AS UNDE R: AS PER ASSESSEE SUBMISSION THE TOTAL LAND IS UTILIZ ED =(2.985R + 5.27R) = 7.18 ACRS + FOR TUR CROP 13.17 A CRS = 20.35 ACRS ASSESSEE HAS SOLD TUR - 240.70 QUANTALS PER ACRE YIELD =11.82 QUANTALS AMOUNT RECEIVED @ RS. 1758 PER QTLS = RS. 4,23,200 AS PER STANDARD YIELD OF TUR GIVEN IN THE DIARY OF KRUSHI VIDYAPEETH 15 TO 16 QUINTALS PER HECTORS I.E. PER A CRES 6.4 QTLS. ACCORDINGLY, A) THE YIELD IN GAT NO. 438, 168 OF 13.17 ACRES @ 6.4 QTL = 84.28 QTLS B) THE YIELD IN GAT NO. 353 (WHICH IS TO BE REDUCED BY TAMRIND TREES AREA) USED BY 10% I.E. 0.64 QTLS = @ 5.76 QTLS FROM 6.4 QTLS). FOR THE LAND OF 7.18 ACRES AT THE RATE OF 5.76 QTLS = 41.35 QTLS A+B 12 TOTAL YIELD IN THE LAND OF 20.35 ACRES = 125.63 QTL S (84.28 + 4135 QTLS) THE RATE FOR SALE OF TUR IS TAKEN AS P ER BILL NO.1623 DTD. 14.9.2006 I.E. @ RS.1758 = AND THE TOT AL VALUE OF 125.63 QTLS COMES TO RS.2,20,857. THUS, AS THERE IS AN EXCESS YIELD WHICH COMES TO RS.2,02,34 3 (RS.4,23,200 - RS.2,20,857) AS AGAINST THE STANDARD YIELD, WHICH IS DENIED AND ACCORDINGLY, THE SAME IS CONSID ERED AS INCOME FROM UNACCOUNTED SOURCES OTHER THAN AGRICULTURE SOURCE AND SAID AMOUNT IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS NON AGRICULTURAL INCOME. THE PENALTY PROCEEDING U/S 271(1)(C) ARE SEPARATELY IN ITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME,' 5.3 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY ON BOTH ACCOUNTS, WHEREIN, VARIOUS CONTENTIONS WERE RAISED WITH REGARD TO BOTH THE ADDITIONS. THE CIT(A) HAVING CONSIDERED T HE SUBMISSIONS ON BEHALF OF ASSESSEE, SUSTAINED ADDITION OF 4,16,212/- AND 63,480/- AND GRANTED RELIEF OF 13,23,894/- OUT OF THE TOTAL AGRICULTURAL INCOME OF 18,10,574/-. THE DELETION HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE AND SUSTAINABILITY H AS BEEN OPPOSED ON BEHALF OF ASSESSEE. 5.4 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT IT UNDISPUTED THAT THE ASSESSE E OWNS LAND AND ENGAGED IN AGRICULTURAL ACTIVITY. IT HAS CULTIVATE D TREES FOR BALLIS AND TAMARIND FRUIT AND ALSO VARIOUS OTHER EDIBLE AGRICU LTURAL PRODUCTS LIKE CHANA, SOYABEAN, PIGEON PEAS, ETC. SO THERE I S NO DISPUTE IN RESPECT OF EXISTENCE OF AGRICULTURAL ACTIVITY AND I NCOME THEREOF. THE ONLY DISPUTE IS WITH REGARD TO QUANTUM THEREOF IN T HE YEAR UNDER ASSESSMENT OUT OF THE TOTAL AGRICULTURAL INCOME OF 18,10,574/-. BROADLY SPEAKING ALMOST 70% OF THE AGRICULTURAL INC OME HAS BEEN TREATED AS NON GENUINE BY THE ASSESSING OFFICER. T HIS DISALLOWANCE VARYING IN DIFFERENT ASSESSMENT YEARS ROUGHLY RANGI NG FROM 60% TO 90%. AS AGAINST THAT THE ASSESSEE HAS CONTENDED THA T THE ASSESSING OFFICER HAS DISALLOWED ONLY 6% IN A.Y. 2009-10 FOR NON MAINTENANCE OF DETAILS IN RESPECT OF EXPENSES. THE ASSESSMENT ORDER OF THE SAME YEAR HAS BEEN PLACED ON RECORD. THOUGH IT IS A SET TLED LEGAL POSITION 13 THAT EVERY ASSESSMENT YEAR IS DIFFERENT AND INDEPEN DENT UNDER THE INCOME TAX PROVISIONS AND THEREFORE RESULT OF ONE Y EAR CANNOT BE APPLIED TO THE OTHER YEAR. THE QUANTIFICATION OF A GRICULTURAL INCOME CAN BE CONSIDERED TO BE GENUINE AND CORRECT IN ITS FACTS AND CIRCUMSTANCES. THE ASSESSEE HAS NOT MAINTAINED REG ULAR AND PROPER BOOKS OF ACCOUNTS FOR AGRICULTURAL ACTIVITY ON ITS AGRICULTURAL HOLDINGS. THE MATERIAL ON RECORD ACCEPTED BY LOWER AUTHORITY SUGGESTS THAT EDIBLE AGRICULTURAL PRODUCE HAD BEEN SOLD THROUGH REGULAR VENDORS AT SHRIRAMPUR AND FOR WHICH BILLS A RE AVAILABLE AND PAYMENTS HAVE BEEN RECEIVED IN CHEQUE IN CERTAIN YE ARS. IN RESPECT OF THESE PRODUCE ALSO, THE ASSESSEE WAS FOUND TO BE NOT MAINTAINING DETAILS OF EXPENSES. FOR THE SALE OF TAMARIND AND B ALLIS ETC., GENERALLY THE ASSESSEE WAS FOUND TO BE HAVING NO BI LLS OR EVIDENCES OF RECEIPT IN CHEQUE ETC. THESE SALES WERE SUPPORTED W ITH SELF MADE VOUCHERS WHICH COULD NOT BE VERIFIED. THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH AGRICULTURAL INCOME WAS NOT FULLY B ACKED BY CLINCHING EVIDENCES WHICH COULD BE FOUND BY THE ASSESSING OFF ICER TO BE CREDIBLE AND AUTHENTIC. IT IS CORRECT THAT THE ONU S LIES ON THE ASSESSEE TO ESTABLISH THAT THE INCOME SHOWN IS EXEM PT FROM TAX AS AN AGRICULTURAL INCOME AND IN THE ABSENCE OF THE SA ME ASSESSING OFFICER HAS THE AUTHORITY TO ACCEPT, DISMISS OR MOD IFY THE CLAIM. THE DISPUTE BEFORE US RELATES TO QUANTIFICATION OF ACCE PTABLE AGRICULTURAL INCOME ONLY, THE SAME HAS TO BE ADJUDICATED IN THE FACTS AND CIRCUMSTANCES AVAILABLE ON RECORD. IT IS NOT IN DIS PUTE THAT THE ASSESSEE IS OWNING AGRICULTURAL LAND IN HIS OWN NAM E AND IN THE NAME OF THE FAMILY MEMBERS WHICH WERE BEING CULTIVA TED BY HIM ON RENT BUT WAS ALSO HOLDING LAND UNDER KABJE SATHEKHA T FROM OTHERS. IN RESPONSE TO THE QUERY, THE ASSESSEE HAS SUBMITTE D AGRICULTURAL CROP IN THE FORM OF TABLE AND ACCORDING TO THE ASSE SSEE, IT WAS CULTIVATING 37.4 ACRES OF LAND DURING A.Y. 2002-03 TO A.Y. 2004-05 AND IN THE REMAINING YEARS I.E. A.YS. 2005-06 TO 20 07-08 HE HAS CULTIVATED 28.43 ACRES OF LAND. THUS, ASSESSEE WAS HOLDING 28.43 ACRE IN LATER YEAR AND IT HAD PAID APPROX. 15% OF T HE CULTIVATION AS 14 RENT TO THE LAND LORDS. WE FIND THAT THE ADDITION OF 2,02,343/- MADE OUT OF THE SALE PROCEEDS OF TUR DAL WHICH IS O N HIGHER SIDE AS THE ASSESSEE HAD THE BILLS OF SALE AND THE PAYMENT WAS RECEIVED IN CHEQUE. HOWEVER SINCE THE NECESSARY DETAILS IN RESP ECT OF THE EXPENSES INCURRED WERE NOT PRODUCED OR ACCOUNTED FO R, 15% COULD BE REDUCED FROM THE SAME. THIS EXPENDITURE @ 15% WAS F OUND REASONABLE AS THE ASSESSEE HAS CONTENDED THAT NOT M UCH OF EXPENDITURE IS INVOLVED FOR CULTIVATING TUR DAL. TH EREFORE OUT OF THE RECEIPT OF TUR DAL OF 4,23,200/-, DISALLOWANCE OF 63,480/- WAS MADE. THE SAME WAS RIGHTLY ASSESSED UNDER THE HEAD 'OTHER SOURCES' WAS RIGHTLY UPHELD BY THE CIT(A) AND THE REMAINING TUR DAL RECEIPT WAS RIGHTLY DIRECTED TO BE ACCEPTED AS 'AGRICULTURA L INCOME'. THIS REASONED FACTUAL FINDING OF CIT(A) NEEDS NO INTERFE RENCE FROM OUR SIDE. WE UPHOLD THE SAME. 5.5 FOR THE PROFITS SHOWN ON TAMARIND, SURU TREES A ND TEAK WOOD TREES OF 10,47,540/-, WHICH WERE NOT ACCEPTED BY THE ASSESS ING OFFICER AS GENUINE AND HAS REACHED TO FIND A CONCLU SION WITHOUT PROPERLY CONSIDERING THE MATERIALS AVAILABLE ON REC ORD IN THIS REGARD. THE PHOTOGRAPHS, INSPECTOR'S REPORT, OTHER EVIDENCE S PRODUCED ON BEHALF OF ASSESSEE REVEALS THAT ASSESSEE HAS RECEIV ED INCOME FROM SALE OF THESE PRODUCE. THEREFORE IT WAS NOT JUSTIF IED THAT THE ENTIRE RECEIPT OF 10,47,540/- BE TREATED AS UNEXPLAINED. ON THE OTH ER HAND, WE FIND THE ASSESSEE DOES NOT HAVE THE REQUIR ED SUPPORTING EVIDENCES BUT IT WAS NOT JUSTIFIED TO DISALLOW THE ENTIRE INCOME AND TREAT THE SAME AS UNEXPLAINED. CONSIDERING THE TOT ALITY OF THE FACTS AND CIRCUMSTANCES AVAILABLE ON RECORD WHICH ARE UND ISPUTEDLY NOT COMPLETE AND FULLY CREDIBLE AS FAR AS THE COMPUTATI ON IS CONCERNED, 30% OF REMAINING RECEIPTS EXCEPT TUR DAL RECEIPT ( 18,10,574/- - 4,23,200/-) OF 13,87,374/- AMOUNTING TO 4,16,212/-, WAS RIGHTLY TREATED AS EXCESSIVE AND ASSESSABLE UNDER THE HEAD OTHER SOURCES. THEREFORE ADDITION OF 4,16,212/- AND 63,480/- WAS RIGHTLY SUSTAINED BY THE CIT(A) AND THE REMAINING AMOUNT OF 13,23,894/- 15 OUT OF THE TOTAL AGRICULTURAL INCOME OF 18,10,574/- WAS RIGHTLY HELD TO BE ACCEPTABLE AS AGRICULTURAL INCOME BY THE CIT( A). THIS REASONED FACTUAL FINDING OF CIT(A) NEEDS NO INTERFE RENCE FROM OUR SIDE. WE UPHOLD THE SAME. 6. THE NEXT ISSUE AS RAISED BY THE ASSESSEE IN GROU ND NO.3 IS WITH REGARD TO DISALLOWANCE OF 1,65,009/- BEING THE DIFFERENCE IN OPENING CAPITAL ACCOUNT BALANCE AS ON 01.04.2006 I. E. THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER HAS DEA LT THIS ISSUE IN PARA 8 OF THE ASSESSMENT ORDER, WHICH IS REPRODUCED AS UNDER: 'ON VERIFICATION OF THE BALANCE SHEET AS ON 31.3.20 07 THE OPENING BALANCE OF CAPITAL ACCOUNT IS TAKEN @ RS.1, 51,66,427/- AS AGAINST THE CLOSING BALANCE SHOWN IN THE BALANCE SHEET AS ON 31.3.2006 IS OF RS.1,50,01,319/-. THUS THERE IS DIF FERENCE OF RS.1,65,009/- WHICH IS SHOWN AS AN EXCESS LIABILITI ES AND THEREFORE ADDED TO THE TOTAL INCOME OF THE ASSESSEE . THE PENALTY PROCEEDING U/S 271(1)(C) ARE SEPARATELY INITIATED F OR FURNISHING INACCURATE PARTICULARS OF INCOME.' 6.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN IT WAS STATED THAT THE RELEVANT BALANCE SHEET WAS N OT TRACEABLE TO SUBSTANTIATE HIS CLAIM. SO THEY COULD NOT BE PRODU CED EVEN BEFORE CIT(A), SO CIT(A) SUSTAINED THE ADDITION MADE BY TH E ASSESSING OFFICER OF 1,65,009/- WHICH WAS SHOWN AS EXCESS LIABILITY AND THEREFORE ADDED TO THE TOTAL INCOME OF THE ASSESSEE . THIS REASONED FACTUAL FINDING OF CIT(A) NEEDS NO INTERFERENCE FRO M OUR SIDE. WE UPHOLD THE SAME. 7. AS A RESULT, THE REVENUES APPEAL AND ASSESSEES APPEAL FOR A.Y. 2007-08 ARE DISMISSED. 8. IN ITA NO.135/PN/2013 FOR A.Y. 2002-03, THE REVE NUE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1 THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND C IRCUMSTANCES OF THE CASE. 16 2 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN DELETING AN ADDITION OF RS.14,8 0,645/- OUT OF THE TOTAL ADDITION OF RS.20,31,245/- MADE IN THE ASSESSMENT ON ACCOUNT OF THE ASSESSEE'S CLAIM TOWAR DS AGRICULTURAL INCOME. 3 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GR OSSLY ERRED IN ROUTINELY HOLDING THAT WHERE THE ASSESSEE HAS REASONABLE SUPPORTING DOCUMENTS FOR SALE, THE DISAL LOWANCE WOULD BE LIMITED TO 15% AND IN ANY OTHER CASES WHER E THE SALES ARE BASED ON SELF-MADE VOUCHERS OF UNVERIFIABLE NAT URE, THE DISALLOWANCE WOULD BE OF 30%. 4 THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GROSSLY ERRED IN MAKING ESTIMATED ALLOWANCE AND DIS ALLOWANCES AS ABOVE BY ROUTINELY FOLLOWING THE STAND TAKEN BY HIM IN THE APPELLATE ORDER FOR THE A.Y. 2007-08 INSTEAD OF VER IFYING THE RELEVANT FACTS AND EVIDENCES WHICH HAD BEEN BROUGHT OUT IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT. THIS WAS GROSSLY ERRONEOUS MORE SO WHEN THE COMMISSIONER OF INCOME- TAX(APPEALS) ACCEPTED THAT THE EVIDENCES AS WERE AV AILABLE IN THE A.Y. 2007-08 FOR SALE OF EDIBLE ITEMS WERE NOT AVAILABLE IN THIS YEAR. 5 THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN DECIDING ON THE ALLEGED TRANSACTION WITH P ADMASHREE V.V. PATIL SAHAKARI SAKHAR KARKHANA ON THE BASIS OF FRESH EVIDENCES WITHOUT PUTTING THE SAME ACROSS TO THE AS SESSING OFFICER, THEREBY VIOLATING RULE 46A OF THE INCOME-T AX RULE, 1962. 6 THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO CONSIDER THE ISSUE ON THE TOTAL ITY OF THE FACTS AND SURROUNDING CIRCUMSTANCES OF THE CASE WHICH WOU LD CLEARLY INDICATE THAT THE ASSESSEE HAD NOT B EEN ABLE TO PROVE RECEIPT OF SUCH HUGE AGRICULTURAL INCOME D URING THE RELEVANT PREVIOUS YEAR. 7 FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT (APPE ALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 8 THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 8.1 IN ITA NO.2510/PN/2012 FOR A.Y. 2002-03, THE AS SESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 17 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER OF REOPENING THE ASSESSME NT U/S 148 R.W.S. 147 OF THE I. T. ACT, 1961. THE ASSESSMENT U /S 143 (3) R.W.S. 147 IS BAD IN LAW. THE APPELLANT HEREBY PRAY S THAT THE ASSESSMENT ORDER MAY PLEASE BE QUASHED. 2) FOR THE YEAR UNDER CONSIDERATION THE APPELLANT HAD DECLARED AGRICULTURAL INCOME FROM VARIOUS AGRICULTU RAL COMMODITIES AS DETAILED BELOW FROM SALE OF SURU TREES RS. 15,17,860/- FROM SALE OF TAMARIND RS. 3,20,200/- FROM SALE OF TOOR RS. 49,500/- FROM SALE OF CHANA (HARBHARA) RS. 1,43,685/- -------------------- TOTAL RS. 20,31,245/- ============= THE LEARNED ASSESSING OFFICER MADE ADDITION OF RS. 20,31,245/- BY NOT ACCEPTING THE CLAIM OF THE APPELLANT OF THE AGRICULTURAL INCOME AND TREATING THE SAME AS 'INCOME FROM OTHER SOURCES'. THE HONOURABLE CIT (A) CONFIRMED THE DISALLOWANCE O F RS. 5,44,600/- AS DETAILED BELOW DISALLOWANCE OF 15% OF VERIFIABLE SALES OF RS. 13, 38,700 RS. 2,00,805/- DISALLOWANCE OF 30% OF SALES OF UNVERIFIABLE NATURE OF RS. 11,45,983 RS. 3,43,795/- ------------------ TOTAL RS. 5,44,600/- ============ ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE DISA LLOWANCE OF RS.5,44,600 OUT OF THE TOTAL DISALLOWANCE OF AGRICU LTURAL INCOME OF RS. 20,31,245/- WITHOUT APPRECIATING THE FACTS O F THE CASE IN PROPER PERSPECTIVE. THE APPELLANT HEREBY PRAYS THAT THE DISALLOWANCE OF RS. 5,44,600/- MAY PLEASE BE DELETE D. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ADDI TION OF RS. 1,00,000/- MADE BY THE LEARNED ASSESSING OFFICER AS UNEXPLAINED CASH CREDITS U/S 68 OF THE INCOME TAX A CT, 1961 WITHOUT APPRECIATING THE FACT THAT THE APPELLANT WA S NOT MAINTAINING THE REGULAR BOOKS OF ACCOUNTS. THE BOOK S OF ACCOUNTS PRODUCED AT THE TIME OF ASSESSMENT WERE PR EPARED FOR 18 FACILITATING THE ASSESSMENT PROCEEDINGS. THE APPELL ANT PRAYS THAT THE ADDITION MAY PLEASE BE DELETED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ADDI TION OF RS. 20,000/- MADE BY THE LEARNED ASSESSING OFFICER LEAR NED ASSESSING ON ACCOUNT OF EXPENDITURE INCURRED TO EAR N THE BUSINESS INCOME FROM MANGAL KARYALA TO COVER UP THE OMISSIONS, COMMISSIONS, AND DEFECTS WITHOUT APPRECI ATING THE FACTS OF THE CASE. THE APPELLANT PRAYS THAT THE ADD ITION MAY PLEASE BE DELETED. 5. THE APPELLANT HEREBY RESERVES THE RIGHT TO ADD, RAISE, DELETE ANY ADDITIONAL GROUND/GROUNDS BEFORE THE COMPLETION OF THE HEARING. 9. THE FIRST ISSUE RELATES TO REOPENING WHICH WAS N OT ADDRESSED BEFORE US AMOUNTS TO NOT PRESSING. ACCORDINGLY, TH E SAME IS DISMISSED AS NOT PRESSED. 9.1 THE NEXT ISSUE WITH REGARD TO ADDITION OUT OF A GRICULTURAL INCOME SHOWN IN THE RETURN. THE ASSESSING OFFICER MADE THE FOLLOWING ADDITIONS OUT OF AGRICULTURAL INCOME SHOW N IN THE RETURN. FROM SALE OF SURU TREES RS. 15,17,860 FROM SALE OF TAMARIND RS. 3,20,200 FROM SALE OF TOOR RS. 49,500 FROM SALE OF CHANA (HARBHARA) RS. 1,43,685 TOTAL RS. 20,31,245 9.2 THE SAME WAS AGITATED BEFORE THE FIRST APPELLAT E AUTHORITY AND IN APPEAL, THE CIT(A) GAVE PART RELIEF TO THE ASSES SEE. THE REVENUE HAS AGITATED AGAINST THE RELIEF GRANTED BY CIT(A) A ND ASSESSEE HAS OPPOSED THE PART SUSTENANCE OF THE SAME. 9.3 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS SHOWN TOTAL A GRICULTURAL INCOME OF 24,84,683/- IN THIS ASSESSMENT YEAR WHICH COMPRISED OF 19 AGRICULTURAL INCOME IN HIS OWN HAND OF 19,95,700/- AND IN THE HANDS OF HIS MINOR DAUGHTER 4,88,983/-FROM THE SALE OF SURU TREES (TOTAL 15,36,254/-), TAMARIND FRUIT (TOTAL 4,26,958/-), TUR DAL (TOTAL 2,36,105/-) AND CHANA (TOTAL 2,85,366/-). OUT OF THE ABOVE SALE RECEIPTS FROM SURU, TAMARIND, TUR AND CHANA TOTALIN G TO 24,84,683/-, SALE OF 20,31,245/- COMPRISING OF SURU - 15,17,860/-, TAMARIND - 3,20,200/-, TUR - 49,500/- AND CHANA 1,43,685/- WERE NOT ACCEPTED TO BE GENUINE. IN APPE AL, THE CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAS GIVEN MORE OR LESS SIMILAR REASONS AS GIVEN IN THE A.Y. 2007-08 EXCEPT IN RESP ECT OF SALE OF SURU TREES OF 13,38,700/- TO PADMASHREE V.V. PATIL SAHAKARI SAKHA R KARKHANA, IN RESPECT OF THIS SALE THE ASSESSEE HAD SUBMITTED EVIDENCES FOR SALE, TRANSPORT CHALLAN, RECEIPT FROM THE PURCHASER, ETC. BUT THE ASSESSING OFFICER DID NOT ACCEPT THE SAME T O BE CORRECT ONLY BECAUSE HE OBSERVED SOME OVER WRITINGS ON THESE DOC UMENTS AND WAS OF THE OPINION THAT THE TRANSACTION IS DATED 15 .02.2001 AND THEREFORE NOT RELEVANT TO THIS ASSESSMENT YEAR. TH E ASSESSEE HAD ALSO MADE THEIR SUBMISSIONS MORE OR LESS IN THE SIM ILAR MANNER AS WAS DONE IN A.Y. 2007-08 EXCEPT FOR SUBMITTING DETA ILS AND EVIDENCES TO ESTABLISH THAT THE FINDING OF THE ASSE SSING OFFICER IN RESPECT OF DATE WAS INCORRECT. THE ASSESSEE GAVE SO ME DOCUMENTS WHICH REVEALS THAT THE TRANSACTION TOOK PLACE ON 15 .12.2001. 9.4 THE CIT(A) HAVING CONSIDERED THE MATERIAL AVAIL ABLE ON RECORD OBSERVED THAT THEY ARE MORE OR LESS SAME AS WAS AVA ILABLE IN A.Y. 2007-08. AS ALREADY DISCUSSED THE AREA UNDER CULTI VATION IN THIS YEAR WAS 37.4 ACRES AND THE ASSESSEE HAD PROPER VER IFIABLE EVIDENCE IN RESPECT OF SALE OF SUM BALLIS MADE TO THE AFORES AID SUGAR FACTORY. HOWEVER, THE MATERIALS AVAILABLE FURTHER SHOW THAT ADEQUATE EVIDENCES AS WAS AVAILABLE IN A.Y.2007-08 FOR SALE OF EDIBLE ITEMS WERE NOT AVAILABLE IN THIS YEAR. IN VIEW OF THE DIS CUSSIONS MADE ABOVE AND AFTER PLACING THE RELIANCE ON THE FINDING GIVEN IN A.Y. 2007-08, CIT(A) HELD THAT IN THE FACTS AND CIRCUMST ANCES OF THIS 20 CASE, WHERE THE ASSESSEE HAS REASONABLE SUPPORTING DOCUMENTS FOR SALE, THE DISALLOWANCES WOULD BE LIMITED TO 15% AND IN OTHER CASES WHERE THE SALES ARE BASED ON SELF MADE VOUCHERS OF UNVERIFIABLE NATURE, THE DISALLOWANCE WOULD BE OF 30%. THEREFORE IN THIS ASSESSMENT YEAR CIT(A) HELD THAT OUT OF THE TOTAL A GRICULTURAL INCOME OF 24,84,683/- SHOWN BY THE ASSESSEE IN THE RETURN, TH E SALE OF 13,38,700/- WAS OF VERIFIABLE NATURE AND THEREFORE 15% DISALLOWANCE OF THIS AMOUNT WOULD BE MADE WHICH COMES TO 200,805/-. ON THE REMAINING AGRICULTURAL INCOME OF 11,45,983/-, THE DISALLOWANCE @ 30% AMOUNTING TO 3,43,795/- WAS RETAINED. THUS, THE TOTAL DISALLOWANCE RETAINED OF 5,44,600/-. THUS, DISALLOWANCE OF THIS AMOUNT AND ITS ASSESSMENT AS UNDISCLOSED INCOME UND ER THE HEAD OTHER SOURCES WAS RIGHTLY SUSTAINED AND REMAINING A GRICULTURAL INCOME WAS RIGHTLY DIRECTED TO BE DELETED. UNDER T HE FACTS AND CIRCUMSTANCES, THIS REASONED FACTUAL FINDING OF CIT (A) WHO HAS GIVEN PARTIAL RELIEF TO THE ASSESSEE AS DISCUSSED ABOVE, NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 10. THE NEXT ISSUE IN ASSESSEES APPEAL WITH REGARD TO ADDITION OF 1 LAKH MADE U/S 68 OF THE IT ACT AS UNEXPLAINED INC OME. IN APPEAL, THE ASSESSEE OPPOSED THE SAME. THE ASSESSING OFFIC ER IN PARA 10 IN ASSESSMENT ORDER FOUND FROM THE BALANCE SHEET OF TH E ASSESSEE THAT AN LIABILITY OF 1 LAKH HAS BEEN SHOWN IN THE NAME OF HIS MINOR DAUGHTER MS. ULKA BAFNA AND ON BEING ASKED TO EXPLA IN THE SAME, IT WAS CLAIMED THAT MS ULKA BAFNA HAS AGRICULTURAL INC OME WHICH HAS BEEN RECEIVED BY THE ASSESSEE. HOWEVER, THE ASSES SEE COULD NOT SUBMIT THE NECESSARY SUPPORTING EVIDENCES BEFORE TH E ASSESSING OFFICER AND THEREFORE THIS AMOUNT WAS TREATED AS UN EXPLAINED U/S 68 OF THE IT ACT. THE ASSESSEE COULD NOT GIVE COGENT REASONING FOR THE ABOVE SAID ADDITION BEFORE THE AUTHORITIES BELOW. SO, THE CIT(A) RIGHTLY UPHELD THE SAME, WHICH NEEDS NO INTERFERENC E FROM OUR SIDE. WE UPHOLD THE SAME. 21 11. THE NEXT ISSUE IN ASSESSEES APPEAL IS ADDITION OF 20,000/- OUT OF EXPENSES INCURRED OF 2,78,509/- FOR THE RUNNING OF MANGAL KARYALAYA. THE ASSESSING OFFICER HAS MADE THIS AD DITION BECAUSE THE ASSESSEE HAD NOT MAINTAINED PROPER SUPPORTING D OCUMENTS IN RESPECT OF THIS ACTIVITY. UNDER THE FACTS AND CIRC UMSTANCES, THE ADDITION CANNOT BE FOUND REASONABLE IN THE ABSENCE OF REASONABLE EXPLANATION ON BEHALF OF ASSESSEE, SO SAME NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 12. AS A RESULT, THE REVENUES APPEAL AS WELL AS AS SESSEES APPEAL FOR A.Y. 2002-03 ARE DISMISSED. 13. IN ITA NO.136/PN/2013 FOR A.Y. 2003-04, THE REV ENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1 THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND C IRCUMSTANCES OF THE CASE. 2 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) G ROSSLY ERRED IN DELETING AN ADDITION OF RS.4,98,024/- OUT OF THE TOTAL ADDITION OF RS.9,49,990/- MADE IN THE ASSESSMENT ON ACCOUNT OF THE ASSESSEE'S CLAIM TOWARDS AGRICULTURAL INCOME . 3 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GR OSSLY ERRED IN ROUTINELY HOLDING THAT 30% OF THE GROSS AG RICULTURAL INCOME COULD BE TREATED AS UNEXPLAINED INCOME. 4 THE LEARNED COMMISSIONER OF INCOME-TAX(APPE ALS) GROSSLY ERRED IN MAKING ESTIMATED ALLOWANCE A ND DISALLOWANCES AS ABOVE BY ROUTINELY FOLLOWING THE S TAND TAKEN BY HIM IN THE APPELLATE ORDER FOR THE A.Y. 2007-0 8 INSTEAD OF VERIFYING THE RELEVANT FACTS AND EVIDENCES WHICH HA D BEEN BROUGHT OUT IN THE ASSESSMENT ORDER AS WELL AS IN T HE REMAND REPORT. 5 THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO CONSIDER THE ISSUE ON THE TOTAL ITY OF THE FACTS AND SURROUNDING CIRCUMSTANCES OF THE CASE WHICH WOU LD CLEARLY INDICATE THAT THE ASSESSEE HAD NOT BEEN ABLE TO PROVE RECEIPT OF SUCH HUGE AGRICULTURAL INCOME D URING THE RELEVANT PREVIOUS YEAR. 22 6 HAVING ACCEPTED THAT ALL THE SUPPORTING DOCUMENTS F OR THIS ASSESSMENT YEAR ARE FULLY IN THE NATURE OF SELF- MADE VOUCHERS ETC. WHICH ARE MOSTLY UNVERIFIABLE , THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN ALLOWI NG 70% OF THE ASSESSEE'S CLAIM IN AN ARBITRARY MANNER. 7 THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GR OSSLY ERRED IN DELETING THE ADDITION OF RS.45,000/- MAD E IN THE ASSESSMENT ON ACCOUNT OF CULTIVATION OF GHANA. 8 FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT (APPE ALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 9 THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 13.1 IN ITA NO.2511/PN/2012 FOR A.Y. 2003-04, THE ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER OF REOPENING THE ASSESSME NT U/S 148 R.W.S. 147 OF THE I. T. ACT, 1961. THE ASSESSMENT U /S 143 (3) R.W.S. 147 IS BAD IN LAW. THE APPELLANT HEREBY PRAY S THAT THE ASSESSMENT ORDER MAY PLEASE BE QUASHED. 2) DURING THE YEAR UNDER CONSIDERATION THE APPELLANT H AD DECLARED AGRICULTURAL INCOME FROM VARIOUS AGRICULTU RAL COMMODITIES AS DETAILED BELOW FROM SALE OF SURU TREES RS. 6,67,000/- FROM SALE OF TAMARIND RS. 1,60,000/- FROM SALE OF TOOR RS. 77,090/- -------------------- TOTAL RS. 9,04,090/- ============= THE LEARNED ASSESSING OFFICER MADE ADDITION OF RS.9 ,04,090/- BY NOT ACCEPTING THE CLAIM OF THE APPELLANT OF THE AGR ICULTURAL INCOME AND TREATING THE SAME AS 'INCOME FROM OTHER SOURCES'. THE HONOURABLE CIT (A) CONFIRMED THE DISALLOWANCE O F RS. 4,51,966/- BEING 30% OF THE TOTAL RECEIPT FROM AGR ICULTURAL PRODUCE OF RS.15,06,554/- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE DISA LLOWANCE OF 23 RS.4,51,966/- OUT OF THE TOTAL DISALLOWANCE OF AGRI CULTURAL INCOME OF RS.9,04,090/- WITHOUT APPRECIATING THE FA CTS OF THE CASE IN PROPER PERSPECTIVE. THE APPELLANT HEREBY PR AYS THAT THE DISALLOWANCE OF RS.4,51,966/- MAY PLEASE BE DELETED . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ADDI TION OF RS. 30,000/- MADE BY THE LEARNED ASSESSING OFFICER LEAR NED ASSESSING ON ACCOUNT OF EXPENDITURE INCURRED TO EAR N THE BUSINESS INCOME FROM MANGAL KARYALA TO COVER UP THE OMISSIONS, COMMISSIONS, AND DEFECTS WITHOUT APPRECI ATING THE FACTS OF THE CASE. THE APPELLANT PRAYS THAT THE ADD ITION MAY PLEASE BE DELETED. 4. THE APPELLANT HEREBY RESERVES THE RIGHT TO ADD, RAISE, DELETE ANY ADDITIONAL GROUND/GROUNDS BEFORE THE COMPLETION OF THE HEARING. 14. IN THIS YEAR, THE MAIN ISSUE IS WITH REGARD TO REASSESSMENT MADE U/S 143(3) R.W.S. 147 ON 30.12.2009 ON TOTAL I NCOME OF 10,78,730/- AND AGRICULTURAL INCOME OF 6,95,104/- AGAINST THE RETURNED INCOME OF 93,740/- AND AGRICULTURAL INCOME OF ASSESSEE OF 11,65,972/- AND MINOR DAUGHTER'S AGRICULTURAL INCOM E OF 3,40,582/-. THE ORIGINAL ASSESSMENT WAS COMPLETED U/S.143(3) ON 20.12.2005 ACCEPTING THE RETURNED INCOME. THE ASSESSING OFFICER HAS NOTED IN THE ASSESSMENT ORDER THAT AFTE R COMPLETING THE ASSESSMENT U/S 143(3) FOR A.Y. 2007-08, IT WAS FOUN D THAT THE ASSESSEE HAS BEEN INFLATING THE AGRICULTURAL INCOME AND THEREFORE HE DERIVED HIS SATISFACTION FOR ESCAPEMENT OF INCOME A S A RESULT OF WHICH NOTICE U/S 148 WAS ISSUED. IN THIS CASE ALS O ON 31.03.2009 AND THE ASSESSEE VIDE HIS LETTER DTD. 21.5.2009 REQ UESTED THE ASSESSING OFFICER TO TREAT THE ORIGINAL RETURN AS R ETURN IN RESPONSE TO NOTICE U/S 148. 15. THE ISSUE OF REOPENING AS HAD NOT PRESSED BY TH E ASSESSEE BEFORE US, WHICH AMOUNTS TO NOT PRESSED, SAME IS DI SMISSED AS NOT PRESSED. COMING TO THE MERIT, AFTER REOPENING, THE ASSESSING OFFICER DISALLOWED PART OF THE AGRICULTURAL INCOME OUT OF S URU TREE, TAMARIND, TUR DAL AND CHANA. HE HAS ALSO MADE 24 ADHOC ADDITION OUT OF THE MANGAL KARYALAYA EXPENSES OF 35,000/- IN THIS YEAR. THE FACTS AND CIRCUMSTANCES OF THE CA SE ARE SIMILAR TO THE FACTS AND CIRCUMSTANCES IN A.Y. 2002-03 AND A.Y . 2007-08. THE GROUNDS RAISED BY BOTH PARTIES ARE SIMILAR TO THAT OF A.Y. 2002-03 AND A.Y. 2007-08, THEREFORE, PLACING RELIANCE ON TH E DISCUSSIONS MADE IN A.YS. 2002-03 & 2007-08, THE GROUNDS RAISED BY THE ASSESSEE IN THIS ASSESSMENT YEAR ARE ALSO DECIDED A CCORDINGLY. THE MAIN DISALLOWANCE RELATING TO AGRICULTURAL INCOME O F 9,04,090/- OUT OF TOTAL AGRICULTURAL INCOME OF 15,06,554/- SHOWN IN THIS YEAR IN ASSESSEE'S OWN NAME AS WELL AS IN THE NAME OF HIS D AUGHTER. IT IS NOTED FROM THE DETAILS SUBMITTED DURING APPEAL THAT THE RECEIPTS ARE FROM THE SALE OF SURU TREES, TAMARIND FRUIT, TUR AN D GHANA IN THIS ASSESSMENT YEAR. THE SUPPORTING DOCUMENTS AVAILABLE IN RESPECT OF THE AGRICULTURAL INCOME SHOWN IN THIS ASSESSMENT YE AR ARE FULLY OF THE NATURE OF SELF MADE VOUCHERS ETC. WHICH ARE MOS TLY UNVERIFIABLE. HOWEVER, CONSIDERING THE AREA UNDER CULTIVATION AND OTHER EVIDENCES AVAILABLE ON RECORD, AS WAS DONE IN A.YRS. 2007-08 & 2002-03, 30% OF 15,06,554/- WAS TREATED AS UNEXPLAINED WHICH COMES TO 451,966/-. THUS, THE CIT(A) SUSTAINED THIS AMOUNT OUT OF THE TOTAL AGRICULTURAL INCOME OF 15,06,554/-. UNDER THE FACTS AND CIRCUMSTANCES AND ON THE REASONING OF A.Y. 2007-08 AND 2002-03, FINDING OF THIS CONCLUSION OF CIT(A) HELD AS REASON ABLE. ACCORDINGLY, THE SAME NEEDS NO INTERFERENCE FROM OUR SIDE. WE U PHOLD THE SAME. 16. THE NEXT ISSUE RELATES TO ADDITION OF 4 5,000/- MADE OUT OF EXPENSES CLAIMED FROM THE CULTIVATION OF CHANA. AS THE ADDITION HAS BEEN COMPUTED ON AN ESTIMATE BASIS AFTER EXCLUDING ALL THE EXPENSES, THIS SEPARATE ADDITION OF ASSESSING OFFICER COULD N OT BE SUSTAINED. SO, THE CIT(A) GRANTED RELIEF TO THE ASSESSEE AND T HE SAME NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 17. THE NEXT ISSUE RELATES TO ADHOC ADDITION OF 35,000/- MADE OUT OF MANGAL KARYALAYA EXPENSES. SINCE, NO DETAILS WE RE FILED IN RESPECT 25 OF THIS GROUND, THE CIT(A) UPHELD THE SAME. AGAIN, THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SI DE. WE UPHOLD THE SAME. 18. AS A RESULT, REVENUES APPEAL AS WELL AS ASSESS EES APPEAL FOR THE A.Y. 2003-04 ARE DISMISSED. 19. IN ITA NO.137/PN/2013 FOR A.Y. 2004-05, THE REV ENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1 THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND C IRCUMSTANCES OF THE CASE. 2 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) G ROSSLY ERRED IN DELETING AN ADDITION OF RS.12,27,884/- OUT OF THE TOTAL ADDITION OF RS.18,35,102/- MADE IN T HE ASSESSMENT ON ACCOUNT OF THE ASSESSEE'S CLAIM TOWARDS AGRICULT URAL INCOME. 3 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GR OSSLY ERRED IN ROUTINELY HOLDING THAT 30% OF THE GROSS AG RICULTURAL INCOME COULD BE TREATED AS UNEXPLAINED INCOME. 4 THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN MAKING SUCH ESTIMATED ALLOWANCE AND DISA LLOWANCES AS ABOVE BY ROUTINELY FOLLOWING THE STAND TAKEN BY HIM IN THE APPELLATE ORDER FOR THE A.Y. 2007-08 INSTEAD OF VER IFYING THE RELEVANT FACTS AND EVIDENCES WHICH HAD BEEN BROUGHT OUT IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT. 5 THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO CONSIDER THE ISSUE ON THE TOTAL ITY OF THE FACTS AND SURROUNDING CIRCUMSTANCES OF THE CASE WHICH WOU LD CLEARLY INDICATE THAT THE ASSESSEE HAD NOT BEEN ABLE TO PROVE RECEIPT OF SUCH HUGE AGRICULTURAL INCOME DURING THE RELEVANT PREVIOUS YEAR. 6 FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT (APPE ALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 7 THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 26 19.1 IN ITA NO.2512/PN/2012 FOR A.Y. 2004-05, THE ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER OF REOPENING THE ASSESSME NT U/S 148 R.W.S. 147 OF THE I. T. ACT, 1961. THE ASSESSMENT U /S 143 (3) R.W.S. 147 IS BAD IN LAW. THE APPELLANT HEREBY PRAY S THAT THE ASSESSMENT ORDER MAY PLEASE BE QUASHED. 2) THE APPELLANT HAD DECLARED AGRICULTURAL INCOME AS D ETAILED BELOW FROM SALE OF SURU TREES RS. 9,97,000/- FROM SALE OF TAMARIND RS. 3,83,100/- FROM SALE OF TOOR RS. 1,92,330/- FROM SALE OF CHANA (HARBHARA) RS. 2,62,672/- -------------------- TOTAL RS. 18,35,102/- ============= THE LEARNED ASSESSING OFFICER MADE ADDITION OF RS. 18,35,102/- BY NOT ACCEPTING THE CLAIM OF THE APPELLANT OF THE AGRICULTURAL INCOME AND TREATING THE SAME AS 'INCOME FROM OTHER SOURCES'. THE HONOURABLE CIT (A) CONFIRMED THE DISALLOWANCE O F RS. 6,07,218/- BEING 30% OF THE TOTAL RECEIPT FROM AGR ICULTURAL PRODUCE OF RS. 20,24,062/- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE DISA LLOWANCE OF RS.6,07,218 OUT OF THE TOTAL DISALLOWANCE OF AGRICU LTURAL INCOME OF RS. 18,35,102/- WITHOUT APPRECIATING THE FACTS O F THE CASE IN PROPER PERSPECTIVE. THE APPELLANT HEREBY PRAYS THAT THE DISALLOWANCE OF RS.6,07,218/- MAY PLEASE BE DELETED . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ADDI TION OF RS. 25,000/- MADE BY THE LEARNED ASSESSING OFFICER LEAR NED ASSESSING ON ACCOUNT OF EXPENDITURE INCURRED TO EAR N THE BUSINESS INCOME FROM MANGAL KARYALA TO COVER UP THE OMISSIONS, COMMISSIONS, AND DEFECTS WITHOUT APPRECI ATING THE FACTS OF THE CASE. THE APPELLANT PRAYS THAT THE ADD ITION MAY PLEASE BE DELETED. 4. THE APPELLANT HEREBY RESERVES THE RIGHT TO ADD, RAISE, DELETE ANY ADDITIONAL GROUND/GROUNDS BEFORE THE COMPLETION OF THE HEARING. 27 20. THE FIRST ISSUE IS WITH REGARD TO REOPENING WHI CH HAS NOT BEEN ADDRESSED, SO THE SAME IS DECIDED AGAINST THE ASSES SEE. COMING TO THE MERIT, WE FIND THAT THE ASSESSING OFFICER MADE REASSESSMENT U/S 143(3) R.W.S. 147 ON 30.12.2009 ON THE TOTAL INCOME OF 19,55,975/- AND AGRICULTURAL INCOME OF 27,606/- AGAINST THE RETURNED INCOME OF 95,873/- AND AGRICULTURAL INCO ME OF 19,28,369/- INCLUDING THAT OF HIS MINOR DAUGHTER. IT WAS FURTHER NOTED THAT ALL OTHER FACTS RELATING TO REOPENING AN D ASSESSMENT ARE SIMILAR TO EARLIER ASSESSMENT YEARS DISCUSSED ABOVE . THEREFORE PLACING RELIANCE ON THE SAME, THE GROUNDS RAISED IN THIS YEAR ARE DEALT AS UNDER: 21. FIRST ISSUE AS DISCUSSED ABOVE, NOTHING HAS BEE N ADDRESSED ON REOPENING, SO THIS ISSUE IS DECIDED AGAINST THE ASS ESSEE. THE NEXT ISSUE RAISED BY REVENUE AS WELL AS ASSESSEE WITH RE GARD TO AGRICULTURAL INCOME. FROM THE DETAILS SUBMITTED BY THE ASSESSEE IT IS SHOWN THAT THE TOTAL AGRICULTURAL INCOME SHOWN WAS OF 17,32,499/- AFTER DEDUCTING EXPENDITURE OF 2,91,563/-. HOWEVER THE ASSESSING OFFICER TREATED 18,35,102/- AS UNEXPLAINED. THE RECEIPTS SHOWN ARE FROM SURU TREES, TAMARIND FRUIT, TUR AND CHANA. THE NATURE OF DETAILS MAINTAINED BY THE ASSESSEE WE RE UNDISPUTEDLY OF UNVERIFIABLE NATURE ON WHICH DISALLOWANCE OF 30% HAS BEEN MADE IN EARLIER ASSESSMENT YEARS AND THEREFORE IT IS HEL D THAT SIMILAR DISALLOWANCE WILL BE REQUIRED TO BE MADE IN THIS YE AR ALSO ON THE SAME BASIS. THE LAND UNDER CULTIVATION IN THIS YEAR ALSO REMAINS AT 37.4 ACRES AS PER THE ASSESSEE. IN VIEW OF THE FAC TS AND CIRCUMSTANCES OF THIS CASE AND PLACING THE RELIANCE ON THE DISCUSSIONS MADE IN EARLIER YEARS, 30% OF THE GROSS AGRICULTURAL RECEIPT OF 20,24,062/- (NET RECEIPT OF 17,32,499/- + EXPENSES OF ` , 2,91,563/- REDUCED FOR ARRIVING AT THE NET FIGURE OF 17,32,499/-), WAS TREATED AS UNEXPLAINED INCOME ASSESSABLE UNDER THE HEAD OTHER SOURCES, WHICH COMES TO 6,07,218/-. THE REMAINING AGRICULTURAL INCOME WAS ACCEPTED BY CIT(A). THIS REASONED FINDI NG ON PARITY OF 28 EARLIER YEARS NEEDS NO INTERFERENCE FROM OUR SIDE, WHEREBY CIT(A) HAS CONFIRMED THE ADDITION TO THE TUNE OF 6,07,218/-. WE UPHOLD THE SAME. 22. THE NEXT ISSUE IN ASSESSEES APPEAL IS WITH REG ARD TO ADDITION OF 25,000/- FROM THE EXPENSES ON MANGAL KARYALAYA. SI NCE, NO DETAILS WERE FILED IN RESPECT OF THIS GROUND, THIS ADDITION OF 25,000/- MADE FROM THE EXPENSES ON MANGAL KARYALAYA NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 23. AS A RESULT, REVENUES APPEAL AS WELL AS ASSESS EES APPEAL FOR A.Y. 2004-05 ARE DISMISSED. 24. IN ITA NO.138/PN/2013 FOR A.Y. 2005-06, THE REV ENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANC ES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) G ROSSLY ERRED IN DELETING AN ADDITION OF RS.9,90,502/- OUT OF THE TOTAL ADDITION OF RS.14,53,705/- MADE IN T HE ASSESSMENT ON ACCOUNT OF THE ASSESSEE'S CLAIM TOWARDS AGRICULT URAL INCOME. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GR OSSLY ERRED IN ROUTINELY HOLDING THAT 30% OF THE GROSS AG RICULTURAL INCOME COULD BE TREATED AS UNEXPLAINED INCOME. 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN MAKING SUCH ESTIMATED ALLOWANCE AND DISALLOWANC ES AS ABOVE BY ROUTINELY FOLLOWING THE STAND TAKEN BY HIM IN THE APPELLATE ORDER FOR THE A.Y. 2007-08 INSTEAD OF VER IFYING THE RELEVANT FACTS AND EVIDENCES WHICH HAD BEEN BROUGHT OUT IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT. 5. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO CONSIDER THE ISSUE ON THE TOTALITY OF THE FACTS AND SURROUNDING CIRCUMSTANCES OF THE CASE WHICH WOULD CLEARLY INDICATE THAT THE ASSESSEE HAD NOT BEEN ABLE TO 29 PROVE RECEIPT OF SUCH HUGE AGRICULTURAL INCOME DURING THE RELEVANT PREVIOUS YEAR. 6. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT (APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 24.1 IN ITA NO.2513/PN/2012 FOR A.Y. 2005-06, THE ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ACTI ON OF THE LEARNED ASSESSING OFFICER OF REOPENING THE ASSESSME NT U/S 148 R.W.S. 147 OF THE I. T. ACT, 1961. THE ASSESSMENT U /S 143 (3) R.W.S. 147 IS BAD IN LAW. THE APPELLANT HEREBY PRAY S THAT THE ASSESSMENT ORDER MAY PLEASE BE QUASHED. 2. THE APPELLANT HAD DECLARED AGRICULTURAL INCOME AS D ETAILED BELOW FROM SALE OF SURU TREES RS. 6,36,995/- FROM SALE OF TAMARIND RS. 7,74,082/- FROM SALE OF SOYABIN RS. 17,128/- FROM SALE OF CHANA (HARBHARA) RS. 25,500/- -------------------- TOTAL RS. 14,53,705/- ============= THE LEARNED ASSESSING OFFICER MADE ADDITION OF RS. 14,53,705/- BY NOT ACCEPTING THE CLAIM OF THE APPELLANT OF THE AGRICULTURAL INCOME AND TREATING THE SAME AS 'INCOME FROM OTHER SOURCES'. THE HONOURABLE CIT (A) CONFIRMED THE DISALLOWANCE O F RS. 4,63,203/- BEING 30% OF THE TOTAL RECEIPT FROM AGR ICULTURAL PRODUCE OF RS.15,44,012/- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE DISA LLOWANCE OF RS.4,63,203 OUT OF THE TOTAL DISALLOWANCE OF AGRICU LTURAL INCOME OF RS.14,53,705/- WITHOUT APPRECIATING THE FACTS OF THE CASE IN PROPER PERSPECTIVE. THE APPELLANT HEREBY PRAYS THAT THE DISALLOWANCE OF RS.6,07,218/- MAY PLEASE BE DELETED . 30 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ADDI TION OF RS. 35,000/- MADE BY THE LEARNED ASSESSING OFFICER LEAR NED ASSESSING ON ACCOUNT OF EXPENDITURE INCURRED TO EAR N THE BUSINESS INCOME FROM MANGAL KARYALA TO COVER UP THE OMISSIONS, COMMISSIONS, AND DEFECTS WITHOUT APPRECI ATING THE FACTS OF THE CASE. THE APPELLANT PRAYS THAT THE ADD ITION MAY PLEASE BE DELETED. 4. THE APPELLANT HEREBY RESERVES THE RIGHT TO ADD, RAISE, DELETE ANY ADDITIONAL GROUND/GROUNDS BEFORE THE COMPLETION OF THE HEARING. 25. THIS APPEAL ALSO RELATES TO THE REASSESSMENT MA DE BY THE ASSESSING OFFICER U/S 143(3) R.W.S.147 ON 30.12.200 9 ON A TOTAL INCOME OF 16,15,647/- AND AGRICULTURAL INCOME OF 5,64,299/- AGAINST THE RETURNED INCOME OF 1,26,942/- AND AGRICULTURAL INCOME OF 16,70,904/- ALONG WITH THAT OF THE MINOR DAUGHTER. THE FACTS AND CIRCUMSTANCES OF THIS CASE AND THE GROUNDS RAIS ED ARE SIMILAR TO EARLIER ASSESSMENT YEARS AND THEREFORE AFTER PLACIN G RELIANCE ON THE DISCUSSIONS MADE ABOVE, THE CIT(A) DECIDED THE ISSU E AS UNDER: 26. FIRST ISSUE RELATES TO REASSESSMENT WHICH IS D ISMISSED AS PER DISCUSSIONS MADE ABOVE. WE UPHOLD THE SAME BECAUSE NOTHING HAS BEEN ADDRESSED BEFORE US ON THIS ACCOUNT WHICH AMOU NTS TO NOT PRESSING THE SAME. THE NEXT ISSUE RELATES TO A SSESSMENT OF AGRICULTURAL INCOME OF 14,53,705/- AS UNDISCLOSED INCOME ASSESSABLE UNDER THE HEAD OTHER SOURCES OUT OF THE TOTAL AGRICULTURAL INCOME OF 15,44,062/-( IN THE ASSESSMENT ORDER HAS SHOWN THE AGRICULTURAL INCOME AS 16,70,904/-) AFTER DEDUCTING AN EXPENDITURE OF 14,000/-. THESE AGRICULTURAL RECEIPTS ARE ALSO SH OWN FROM SURU TREES, TAMARIND, SOYABEAN AND CHANA. THE AGRICUL TURAL LAND IN THIS ASSESSMENT YEAR HAS REDUCED TO 28.43 ACRES AS PER ASSESSEE'S TABLE. FROM THE DETAILS AVAILABLE IT I S NOTED THAT THE EXPENSES MAINTAINED ARE OF SIMILAR NATURE FOR WHICH DISALLOWANCE OF 30% HAS BEEN SUSTAINED IN EARLIER YEARS AND THEREFO RE APPLYING THE SAME PRINCIPLE 30% OF 15,44,012/- IS TREATED AS UNEXPLAINED WHICH 31 COMES TO 4,63,203/- AND REMAINING AGRICULTURAL INCOME ACCEPT ED BY CIT(A). THIS REASONED FINDING OF CIT(A) NEEDS N O INTERFERENCE FROM OUR SIDE, SO SAME IS UPHELD. 27. NEXT ISSUE RAISED BY ASSESSEE IN ITS APPEAL IS WITH REGARD TO ADDITION OF 35,000/- MADE BY THE ASSESSING OFFICER OUT OF THE ACTIVITY OF MANGAL KARYALAYA. IN THE ABSENCE OF DE TAILS, THEREFORE, AGAIN THE CIT(A) WAS JUSTIFIED IN SUSTAINING THIS A DHOC ADDITION OF 35,000/- OUT OF MANGAL KARYALAYA. WE UPHOLD THE SA ME. 28. IN THE RESULT, REVENUES APPEAL AS WELL AS ASSE SSEES APPEAL ARE DISMISSED FOR A.Y. 2005-06 AS INDICATED ABOVE. 29. IN ITA NO.139/PN/2013 FOR A.Y. 2006-07, THE REV ENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANC ES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) G ROSSLY ERRED IN DELETING AN ADDITION OF RS.15,27,034/- OU T OF THE TOTAL ADDITION OF RS.23,01,561/- MADE IN T HE ASSESSMENT ON ACCOUNT OF THE ASSESSEE'S CLAIM TOWARDS AGRICULT URAL INCOME. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GR OSSLY ERRED IN ROUTINELY HOLDING THAT 30% OF THE GROSS AG RICULTURAL INCOME COULD BE TREATED AS UNEXPLAINED INCOME. 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN MAKING SUCH ESTIMATED ALLOWANCE AND DISALLOWANC ES AS ABOVE BY ROUTINELY FOLLOWING THE STAND TAKEN BY HIM IN THE APPELLATE ORDER FOR THE A.Y. 2007-08 INSTEAD OF VER IFYING THE RELEVANT FACTS AND EVIDENCES WHICH HAD BEEN BROUGHT OUT IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT. 5. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO CONSIDER THE ISSUE ON THE TOTALITY OF THE FACTS AND SURROUNDING CIRCUMSTANCES OF THE CASE WHICH WOULD CLEARLY INDICATE THAT THE ASSESSEE HAD NOT BEEN ABLE TO PROVE RECEIPT OF SUCH HUGE AGRICULTURAL INCOME DURING THE RELEVANT PREVIOUS YEAR. 32 6. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT (APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 29.1 IN ITA NO.2514/PN/2012 FOR A.Y. 2006-07, THE ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ACTI ON OF THE LEARNED ASSESSING OFFICER OF REOPENING THE ASSESSME NT U/S 148 R.W.S. 147 OF THE I. T. ACT, 1961. THE ASSESSME NT U/S 143 (3) R.W.S. 147 IS BAD IN LAW. THE APPELLANT HER EBY PRAYS THAT THE ASSESSMENT ORDER MAY PLEASE BE QUASHED. 2. THE APPELLANT HAD DECLARED AGRICULTURAL INCOME AS D ETAILED BELOW FROM SALE OF SURU TREES RS. 12,40,124/- FROM SALE OF TAMARIND RS. 5,18,500/- FROM SALE OF CHANA (HARBHARA) RS. 4,97,937/- -------------------- TOTAL RS. 22,56,561/- ============= THE LEARNED ASSESSING OFFICER MADE ADDITION OF RS.2 2,56,561/- BY NOT ACCEPTING THE CLAIM OF THE APPELLANT OF THE AGRICULTURAL INCOME AND TREATING THE SAME AS 'INCOME FROM OTHER SOURCES'. THE HONOURABLE CIT(A) CONFIRMED THE DISALLOWANCE OF RS.7,74,527/- BEING 30% OF THE TOTAL RECEIPT FROM AGRICULTURAL PRODUCE OF RS.25,81,759/-. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE DISA LLOWANCE OF RS.7,74,527 OUT OF THE TOTAL DISALLOWANCE OF AGRICU LTURAL INCOME OF RS.22,56,561/- WITHOUT APPRECIATING THE FACTS OF THE CASE IN PROPER PERSPECTIVE. THE APPELLANT HEREBY PRAYS THAT THE DISALLOWANCE OF RS.7,74,527/- MAY PLEASE BE DELETED . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE HONOURABLE CIT (A) ERRED IN CONFIRMING THE ADDI TION OF RS. 35,000/- MADE BY THE LEARNED ASSESSING OFFICER LEAR NED ASSESSING ON ACCOUNT OF EXPENDITURE INCURRED TO EAR N THE 33 BUSINESS INCOME FROM MANGAL KARYALA TO COVER UP THE OMISSIONS, COMMISSIONS, AND DEFECTS WITHOUT APPRECI ATING THE FACTS OF THE CASE. THE APPELLANT PRAYS THAT THE ADD ITION MAY PLEASE BE DELETED. 4. THE APPELLANT HEREBY RESERVES THE RIGHT TO ADD, RAISE, DELETE ANY ADDITIONAL GROUND/GROUNDS BEFORE THE COMPLETION OF THE HEARING. 30. THIS APPEAL ALSO RELATES TO THE REASSESSMENT MA DE BY THE ASSESSING OFFICER U/S. 143(3) R.W.S.147 ON 30.12.20 09 ON A TOTAL INCOME OF 23,75,635/- AND AGRICULTURAL INCOME OF 2,54,961/- AGAINST THE RETURNED INCOME OF 39,074/- AND AGRICULTURAL INCOME OF 25,56,522/- ALONG WITH THAT OF THE MINOR DAUGHTER. THE FACTS AND CIRCUMSTANCES OF THIS CASE AND THE GROUND S RAISED ARE SIMILAR TO EARLIER ASSESSMENT YEARS AND THEREFORE A FTER PLACING RELIANCE ON THE DISCUSSIONS MADE ABOVE, THE GROUNDS RAISED BY THE ASSESSEE AS WELL AS REVENUE ARE DEALT BY CIT(A) AS UNDER: 31. FIRST ISSUE RAISED BY ASSESSEE RELATES TO REASS ESSMENT WHICH IS DISMISSED AS THE SAME WAS NOT ADDRESSED. WE UPHOLD THE SAME. THE NEXT ISSUE RELATES TO ASSESSMENT OF AGR ICULTURAL INCOME OF 22,56,561/- AS UNDISCLOSED INCOME ASSESSABLE UNDER THE HEAD OTHER SOURCES OUT OF THE TOTAL AGRICULTURAL INCOME OF 21,59,546/- AFTER DEDUCTING AN EXPENDITURE OF 4,22,212/-. THESE AGRICULTURAL RECEIPTS ARE ALSO SHOWN FROM SURU TREES, TAMARIND, SOYABEAN AND CHANA. THE AGRICULTURAL LAND IN THIS ASSESSMENT YEAR HAS REDUCED TO 28.43 ACRES AS PER ASSESSEE'S TABLE. FROM THE DETAILS AVAILABLE IT IS NOTED THAT THE EXPENSES MAINTAINED ARE OF SIMILA R NATURE FOR WHICH DISALLOWANCE OF 30% HAS BEEN SUSTAINED IN EARLIER Y EARS AND THEREFORE APPLYING THE SAME PRINCIPLE 30% OF 25,81,759/- (NET AGRICULTURAL RECEIPT OF RS.21,59,547/- + EXPENSE OF RS.4,22,212/-) WAS TREATED AS UNEXPLAINED WHICH COMES TO 7,74,527/- AND REMAINING AGRICULTURAL INCOME ACCEPTED BY CIT(A). FOLLOWING THE REASONING FOR EARLIER YEARS, AGAIN THIS FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE, WHEREIN UNEXPLAINED INC OME HAS BEEN 34 SUSTAINED AT 7,74,527/- AND REMAINING AGRICULTURAL INCOME WAS RIGHTLY DIRECTED TO BE ACCEPTED. WE UPHOLD THE SAM E. 32. NEXT ISSUE RAISED BY ASSESSEE IN ITS APPEAL IS WITH REGARD TO ADHOC ADDITION OF 35,000/- MADE BY THE ASSESSING OFFICER OUT OF THE ACTIVITY OF MANGAL KARYALAYA. THE SAME WAS SUS TAINED BY CIT(A) BECAUSE DETAILS WERE NOT FILED TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. IN THE RESULT, REVE NUES APPEAL AS WELL AS ASSESSEES APPEAL ARE DISMISSED FOR THE A.Y . 2006-07 AS INDICATED ABOVE. 33. IN THE RESULT, ALL THE APPEALS FILED BY THE REV ENUE AS WELL AS ASSESSEE ARE DISMISSED AS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 26 TH DAY OF FEBRUARY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 26 TH FEBRUARY, 2014 GCVSR COPY TO:- 1. DEPARTMENT 2. ASSESSEE 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE DR, A BENCH, I.T.A.T., PUNE. 6. GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE