Shesha Naik Ramappa S/o Shesha Naik , Shivamogga V. The Income Tax Officer Ward-3 , Shivamogga

ITA 2570/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7570 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-03-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 11-09-2018
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI G MANJUNATHA, ACCOUNTANT MEMBER ITA NO.2570/BANG/2018 ASSESSMENT YEAR : 2014-15 SHESHA NAIK RAMAPPA, S/O SHESHA NAIK, SIGANDURU HOSAHALLI, THUMARI POST SAGAR TALUK, SHIVAMOGGA-577 401. PAN BAZPR 7247A. VS. THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-7(1)(1), BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI SRINIVASA KAMATH, C.A RESPONDENT BY : SHRI M NARASIMHA RAJU, JDIT DATE OF HEARING : 14.03.2019 DATE OF PRONOUNCEMENT : .04. 2019 O R D E R PER G MANJUNATHA, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A)-7, BENGALURU DATED 14/6/2018 AND IT PER TAINS TO ASST. YEAR 2014-15. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AR E OPPOSED TO THE LAW AND FACTS OF THE CASE. ITA NO.2570/B/2017 PAGE 2 OF 12 2. THE IMPUGNED ORDERS ARE AGAINST THE PROVISIONS O F LAW/ACT AND HAS BEEN MADE IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND EQUITY. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN PASSING EXPARTE ORDER DT 14-06-2018 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER AND IN ESTIMATING AGRICULTURAL PRODUCE AND EXPENSES. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF AGRICULTURAL INCOME OF RS.32,41 450/- AS INCOME FRO M OTHER SOURCES. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF T HE ADDITION OF RS.10,75,000I- 7. THE APPELLANT CRAVES FOR LEAVE TO, ADD TO, DELET E FROM OR AMEND THE GROUNDS OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL FIELD HIS RETURN OF INCOME FOR ASST. YEAR 2014-15 O N 26/2/2015 DECLARING A TOTAL INCOME OF RS.9,72,130/- AND AGRICULTURAL INCO ME OF RS.55,19,900/-. THE CASE HAS BEEN SELECTED FOR SCRUTINY AND NOTICES U/S 143(2) AND 142(1) OF THE ACT, WERE ISSUED. IN RESPONSE TO NOTI CES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME T O TIME AND FILED VARIOUS DETAILS, AS CALLED FOR. DURING THE COURSE OF ASST. PROCEEDINGS, THE AO NOTICED THAT THERE WAS AN DRASTIC RAISE IN THE A GRICULTURAL INCOME DECLARED FOR THE ASST YEAR 2014-15 WHICH WAS AT RS. 55,19,900/- WHEN COMPARED TO PREVIOUS YEAR WHEREIN THE ASSESSEE HAD DECLARED AGRICULTURAL INCOME OF RS.3,90,000/-. THE AO FURTH ER NOTICED THAT THERE WAS NO SUBSTANTIAL ADDITION TO THE LAND HOLDINGS OF THE ASSESSEE DURING THE RELEVANT ASST. YEAR WHEN COMPARED TO THE PREVIO US YEAR, THEREFORE, ITA NO.2570/B/2017 PAGE 3 OF 12 CALLED UPON THE ASSESSEE TO FURNISH BILLS AND VOUCH ERS IN RESPECT OF AGRICULTURAL INCOME. IN RESPONSE, THE ASSESSEE HAS FURNISHED 4 BILLS FROM M/S JAGADAMBA TRADING COMPANY, SAGAR AND M/S ACHAL TRADERS, SAGAR AND CLAIMED THAT THE AGRICULTURAL INCOME CONSIST OF SALE OF PEPPER AND ARECANUT. THE AO ISSUED LETTERS TO THE PURCHASERS A SKING FOR CONFIRMATION FOR SALES MADE BY THE ASSESSEE, BUT LETTERS ISSUED BY THE AO RETURNED UNANSWERED WITH REMARK NO SUCH ADDRESS THE AO AFT ER CONSIDERING THE DETAILS FILED BY THE ASSESSEE CAME TO THE CONCLUSIO N THAT EVEN THOUGH THERE IS NO INCREASE IN THE EXTENT OF LAND HOLDINGS BY THE ASSESEE FOR THE YEAR UNDER CONSIDERATION, BUT THERE IS A DRASTIC IN CREASE IN AGRICULTURAL INCOME DECLARED WHICH IS DISPROPORTIONATE TO THE LA ND HOLDING AND ACCORDINGLY, CAME TO THE CONCLUSION THAT AGRICULTUR AL INCOME DECLARED BY THE ASSESSEE IS EXCESSIVE AND UNREASONABLE AND HENC E, DETERMINED AURICULAR INCOME ON THE BASIS OF HIS ESTIMATION BY TAKING INTO ACCOUNT LAND HOLDINGS IN THE NAME OF THE ASSESSEE AND DETER MINED TOTAL AGRICULTURAL INCOME OF RS.25,75,450/-. THE BALANCE AMOUNT OF RS.32,42,450/- HAS BEEN TREATED AS INCOME FROM OTHE R SOURCES. THE RELEVANT FINDINGS OF THE AO ARE AS UNDER:- '4C. IT IS PERTINENT TO MENTION HERE THAT THE ORIGI NAL BILLS FURNISHED WERE WITH REGARD TO SALE OF PEPPER AND ARECANUT. HOWEVER, WHEN THE LETTERS TO THE PURCHASE RS WERE RETURNED UNSERVED, THE ASSESSEE HAS BEEN NOW CLAIMING THAT THE PRODUCE IS RUBBER, WHICH IS NOT ACCEPTABLE IN THE ABSENCE OF ANY CONCLUSIVE EVIDENC E FURNISHED. IT IS TO BE MENTIONED HERE THAT THE ASSE SSEE HAS ONLY FURNISHED COPIES OF RTCS WHEREIN THE ASSES SEE HAS GROWN RUBBER IN ONLY ABOUT 9 ACRES ALTOGETHER. IN THE BALANCE OF LANDS ONLY ARECANUT IS GROWN. ON THE BAS IS OF RTCS FURNISHED, IT IS SEEN THAT THE ASSESSEE HAS LA ND HOLDINGS OF ABOUT 16.05 ACRES ONLY ALTHOUGH THE ASS ESSEE CLAIMS THAT HE HAS LAND HOLDINGS OF 30 ACRES 36 GUN TAS. IT IS SEEN THAT IN RESPECT OF ABOUT 14 ACRE 31 GUNTA O F LAND OF LAND BELONGING TO SMT. JAYAMMA AND THE AGRICULTURAL ITA NO.2570/B/2017 PAGE 4 OF 12 INCOME IS ALSO OFFERED FOR TAX BY HER IN HER RETURN OF INCOME. 4D. IN THE ABSENCE OF ANY BILLS AND VOUCHERS IN RES PECT OF THE SALE OF AGRICULTURAL PRODUCE, ONLY ESTIMATION O F AGRICULTURAL INCOME CAN BE MADE AS THE BILLS PRODUC ED ARE NOT GENUINE. RUBBER FARMING HAS NOT BEEN COMMERCIAL LY VIABLE FOR THE PART MANY YEARS. HENCE, EVEN IF HIGH ER ESTIMATE OF 1 LAKH PER ACRE IS CONSIDERED, THE ASSE SSEE WILL BE GETTING A GROSS INCOME OF RS. 1,00,000/- ON RUBBER GROWN OF 1 ACRE OF LAND. ALTHOUGH THE ASSESSEE HAS FURNISHED RTCS IN RESPECT OF RUBBER BEING GROWN IN 9 ACRES OF LAND, IT IS PERTINENT TO MENTION HERE THAN IN RESPECT OF 8 ACRES OF LAND, THE ASSESSEE IS NOT THE OWNER AND THE LAND BELONGS TO SMT. JAYAMMA. HENCE, O NLY I ACRE OF LAND IS BELONGING TO THE ASSESSEE WHERE RUB BER IS GROWN BY HIM. CONSIDERING THE POSSESSION OF THE LAN DS OF THE ASSESSEE, WHICH IS IN AND AROUND SAGAR TALUK, H IGHER QUALITY ARECANUTS ARE NOT GROWN. IT IS ONLY RED GOT U AND RASHI WHICH ARE OF INFERIOR QUALITY. IN THE BALANCE OF 15 ACRES 05GUNTAS OF LAND, IT IS ESTIMATED THAT THE AS SESSEE HAS GROWN ABOUT 150 QUINTALS OF ARECANUT ESTIMATING 10 QUINTALS OF YIELD PER ACRE. EVEN AT THE HIGHEST MAR KET RATE OF RS. 23,890/- PER QUINTAL, THE GROSS RECEIPTS FRO M ARECANUT COMES TO ONLY RS. 35,83,5001-. THUS, THE ASSESSEE'S GROSS RECEIPTS FROM AGRICULTURAL ACTIVIT IES CAN BE FAIRLY ESTIMATED TO BE IN THE RANGE OF ABOUT RS.36,83,5001-. EXPENSES AT THE RATE 30% OF THE GRO SS RECEIPTS HAS TO BE EXCLUDED FROM THE AMOUNT ARRIVED AT. THUS, THE ASSESSEE'S NET AGRICULTURAL INCOME CAN BE FAIRLY ESTIMATED TO BE ABOUT RS.25, 78,450/- R'S.36,83,500 /- - RS.11,05,050/-). NO AGRICULTURAL INCOME FROM PEPPER IS CONSIDERED FOR THE ESTIMATION OF THE AGRICULTURAL I NCOME OF THE ASSESSEE, AS THE RTCS FURNISHED DO NOT MENTION ANYTHING ABOUT THE PEPPER CROP BEING GROWN AND IT H AS ALREADY BEEN ESTABLISHED THAT NO SUCH SALES OF PEPP ER HAS BEEN MADE BY THE ASSESSEE AS THE BILLS FURNISHED DU RING THE COURSE OF ASSESSMENT PROCEEDINGS HAVE BEEN PROV ED NOT GENUINE. 4E. IT IS SEEN THAT IN THE COMPUTATION STATEMENT FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS WORKED OUT THE ITA NO.2570/B/2017 PAGE 5 OF 12 AGRICULTURAL INCOME G A'S. 58,19,9001- AND IN THE RETURN OF INCOME FILED, THE SAME HAS BEEN SHOWN AT A'S. 5, 19,900/-. HENCE, AGRICULTURAL INCOME OFFERED BY THE ASSESSEE IS TAKEN AT A'S. 58,19,9001- ONLY. THUS, AN AMOUNT OF ONLY A'S.25, 78,450/- CAN BE FAIRLY ESTIMATED TO BE THE AGRICULTURAL INCOME OF THE ASSESSEE. THE BALANCE OF A'S. 32,41,450/- HAS TO BE TREATED AS INCOME FROM OTHER SOURCES.' 4. FURTHER, THE AO HAS ALSO MADE ADDITIONS TOWARDS UNEXPLAINED CASH DEPOSITS IN SB ACCOUNT MAINTAINED AT VIJAYA BA NK ULAVI I BRANCH ON THE GROUND THAT THE ASSESSEE HAS FAILED TO EXPLAIN SOURCES FOR CASH DEPOSITS FOUND IN BANKING ACCOUNT. THE RELEVANT OB SERVATIONS OF THE AO ARE AS UNDER:- '5 ON VERIFICATION OF THE DETAILS FURNISHED DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE WAS HAVING AN SE ACCOUNT VIDE A/C NO.121401010001065 AT VIJAYA BANK ULAVI BRANCH. WHE N THE ASSESSEE WAS REQUESTED TO FURNISH DETAILS OF SO URCES FOR THE CASH DEPOSITS AMOUNTING TO RS.10,75,000/- M ADE IN THIS PARTICULAR ACCOUNT, VIDE LETTER DATED 25112120 16, THE ASSESSEE HAS STATED THAT - 'WHATEVER DEPOSITED IN V IJAYA BANK, U/A VI IS PART OF THE CASH IN HAND OF THE GRO UP. IT MIGHT BE BY OVERSIGHT NOT ACCOUNTED FULLY. THEY ARE NOT MAINTAINING ANY ITEM WISE ACCOUNT BOOKS AND ARE ONL Y NOTES WHICH ARE PRESENTED TO US AND SOMETIMES THEY FORGET ONE OR TWO ITEMS AND THIS IS ONE OF THEM. THIS IS T HE MONEY OF EACH MEMBER OF THE FAMILY JOINTLY HELD BY SRI RA MAPPA WHO WILL MANAGE THE TOTAL AFFAIRS WITH THE ASSISTAN CE OF SRI RAVIKUMAR, HIS ONLY SON'. FROM THE EXPLANATION OFFE RED IT IS CLEAR THAT NEITHER THE BANK ACCOUNT NOR THE SOURCES FOR THE DEPOSITS ARE AVAILABLE WITH THE ASSESSEE AND THE AS SESSEE IS TRYING TOPASS THE ONUS ON TO THE MEMBERS OF THE FAMILY, FOR SUCH CASH DEPOSITS. IN THE ABSENCE OF ANY CONCL USIVE EVIDENCE TO THE CONTRARY FURNISHED BY THE ASSESSEE, THE CASH DEPOSITS AMOUNTING TO RS. 10,75,000/- MADE IN THE SAID BANK ACCOUNT WHICH HAS NOT BEEN REFLECTED IN T HE ITA NO.2570/B/2017 PAGE 6 OF 12 BALANCE SHEET OF THE ASSESSEE, HAS TO BE TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE FOR THE A Y 2014 - 15.' 5. AGGRIEVED BY THE ASST. ORDER, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A). 6. BEFORE THE CIT(A), THE ASSESSEE NEITHER APPEARED NOR FURNISHED ANY DETAILS DESPITE THE CIT(A) HAS GIVEN OPPORTUNIT Y OF HEARING TO THE ASSESSEE. THEREFORE THE CIT(A) DISMISSED THE APPEA L FILED BY THE ASSESSEE AND UPHELD THE FINDINGS OF THE LD AO FOR D ISALLOWANCE OF AGRICULTURAL INCOME AND ALSO ADDITIONS MADE TOWARDS CASH DEPOSITS FOUND IN SAVINGS BANK ACCOUNT MAINTAINED AT VIJAYA BANK. THE RELEVANT OBSERVATION OF THE LD CIT(A) ARE AS UNDER:- 5A. I HAVE PERUSED THE ORDER OF THE AO. AS SAID EAR LIER, THERE HAS BEEN NO COMPLIANCE FROM THE APPELLANT NOR ANY WRITTEN SUBMISSIONS FILED BUT FOR RAISING A GROUND THAT 'ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER, ERRED IN ESTIMATING THE AGRICULT URAL PRODUCE AND ALSO IN ESTIMATING AGRICULTURAL EXPENSE S OF 30%'. THE ORDER OF THE AO IS VERY DETAILED AND SELF - EXPLANATORY. THE REASONS AS TO WHY HE HAD TO ESTIMA TE INCOMES AND THE BASIS ON WHICH THE SAME WAS DONE IS VERY CLEARLY EXPLAINED. THE APPELLANT HAS CHALLENGED THI S ACTION, BUT HAS NOT BEEN ABLE TO BRING ON RECORD AS TO WHY THE ORDER OF THE AO SHOULD BE DISTURBED. THE ORDER OF THE AO IS VERY COGENT AND REASONED ORDER. IN MY OPINION, NO DISTUR BANCE IS CALLED FOR. THUS, THE GROUND FAILS. 6A. I HAVE PERUSED THE ORDER OF THE AO. AS SAID EAR LIER, THERE HAS BEEN NO COMPLIANCE FROM THE APPELLANT NOR ANY WRITTEN SUBMISSIONS FILED BUT FOR RAISING A GROUND THAT 'ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER, ERRED IN ADDING CASH DEPOSITS OF RS.10, 75,000/- AS UNEXPLAINED INCOME.' ITA NO.2570/B/2017 PAGE 7 OF 12 NO OTHER WRITTEN MATERIAL OR COPY OF THE BANK STATE MENTS NOR ANY AVERMENT HAS TO THE NATURE OF THE DEPOSITS HAVE BEEN FURNISHED. 7. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM ASSESSEES APPEAL IS ADDITIONS TOWARDS AGRICULTURAL INCOME. T HE LD AR FOR THE ASSESSEE SUBMITTED THAT THE LD CT((A) HAVING ACCEPT ED THE FACT THAT THE ASSESSEE HAS CARRIED OUT AGRICULTURAL OPERATIONS I N LAND MEASURING 30 ACRES 16 GUNTAS, BUT FAILED TO CONSIDER THE LAND HO LDINGS IN THE NAME OF BROTHERS WIFE OF ASSESSEE MERELY FOR THE REASON T HAT THE LAND HOLDINGS IS NOT IN THE NAME OF THE ASSESSEE. THE AR FURTHER SUB MITTED THAT THE ASSESSEE HAS FILED COMPLETE DETAILS OF LAND HOLDING S AS PER WHICH THE ASSESSEE HAS CULTIVATED AGRICULTURAL OPERATIONS IN AN EXTENT OF 30 ACRES 16 GUNTAS, WHICH INCLUDES 16 ACRES LAND IN THE NAME OF HIS BROTHERS WIFE. THE ASSESEE BEING MEMBER OF JOINT FAMILY CULTIVATED LAND BELONGING TO HIS BROTHERS WIFE AND RESULTED AGRICULTURAL INCOME HAS BEEN OFFERED IN HIS INDIVIDUAL CAPACITY. IN THIS REGARD, HE HAD FILED COPIES OF SALE BILLS OF AGRICULTURAL PRODUCE TO LOCAL SALES MEN. ALTHOUGH, THE LETTERS ISSUED TO THE TRADERS HAVE RETURNED BANK, BUT FACT REMAINS TH AT THE ASSESSEE RESIDES IN THE REMOTE PLACE WHERE THE AGRICULTURAL PRODUCE WERE SOLD IN THE PLACE OF THE ASSESEE. HE, FURTHER SUBMITTED THA T WHEN LAND HOLDINGS DETAILS ALONG WITH SALE BILL ARE FILED TO PROVE AGR ICULTURAL INCOME, MERELY FOR THE REASON LETTER ISSUED TO THE TRADERS HAVE BE EN RETURNED, THE GENUINE AGRICULTURAL INCOME DECLARED BY THE ASSESSE E WHICH IS SUPPORTED BY NECESSARY EVIDENCES CANNOT BE CONSIDERED AS INCO ME FROM OTHER SOURCES. 8. THE LD DR, ON THE OTHER HAND STRONGLY SUPPORTED THE ORDERS OF THE LD CIT(A). ITA NO.2570/B/2017 PAGE 8 OF 12 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. ADMITTEDLY THE AO HAS NEVER DISPUTED THE FACT THAT THE ASSESSE E HAS CARRIED OUT AGRICULTURAL OPERATIONS WHICH IS EVIDENT FROM THE F INDINGS OF THE AO, WHERE HE HAD PARTIALLY ACCEPTED AGRICULTURAL INCOME DECLARED BY THE ASSESSEE, BUT, SCALED DOWN AGRICULTURAL INCOME DECL ARED BY THE ASSESSEE FOR THE REASON THAT ALTHOUGH THE ASSESSEE CLAIMS TO HAVE OWNED 30 ACRES 16 GUNTA LAND, IN FACT ACTUAL LAND HOLDING IS 14 AC RES AND 16 GUNTAS ONLY. THE AO DID NOT CONSIDERED 16 ACRES LAND IN THE NAME OF ASSESSEE BROTHER WIFE SMT. JAYAMMA, WHO IS A WIDOW AND LIVIN G WITH ASSESSEE AS JOINT FAMILY MEMBER. EXCEPT THIS, NO OTHER ADVERSE COMMENTS HAD BEEN MADE IN RESPECT OF ACTUAL AGRICULTURAL OPERATIONS C ARRIED OUT BY THE ASSESSEE. THE AO HAS ALLOWED A SUM OF RS. 25, 78, 4 50/- (NET OF EXPENSES) OUT OF SUM OF RS. 55,19,000/- AGRICULTURA L INCOME DECLARED BY THE ASSESSEE. THE AO HAD ARRIVED AT ABOVE FIGURE ON THE BASIS OF HIS OWN CALCULATIONS BY TAKING INTO ACCOUNT LAND HOLDINGS I N THE NAME OF THE ASSESSEE IGNORING LAND HOLDING IN THE NAME OF ASSES SEE BROTHER WIFE SMT. JAYAMMA. FURTHER, HE HAD TAKEN 10 QUINTAL AVERAGE Y IELD OF ARECANUT PER ACRE AND THEN ADOPTED AVERAGE RATE OF RS. 23, 890/- PER QUINTAL TO ARRIVE AT GROSS INCOME OF RS. 35,83,5001/-. OUT OF GROSS I NCOME, ALLOWED 30% DEDUCTION TOWARDS EXPENSES TO DETERMINE NET AGRICUL TURAL INCOME OF RS.25,78,450/-. WE FIND THAT, THE AO HAD RESORTED T O HIS OWN METHOD OF DETERMINATION OF AGRICULTURAL INCOME WITHOUT SPECIF YING THE BASIS FOR HIS ESTIMATION AND ALSO SOURCE OF INFORMATION. FURTHER, ARECANUT CROP IN THE LOCALITY IS NOT UNIFORM AND WHICH IS DEPEND UPON VA RIOUS FACTORS INCLUDING TYPE OF LAND AND INTENSITY OF AGRICULTURAL OPERATIO NS CARRIED OUT BY THE ASSESSEE. SIMILARLY, THE AO HAS TAKEN AVERAGE RATE OF RS. 23,890/- PER QUINTAL WITHOUT SPECIFYING ANY BASIS AND SOURCE OF INFORMATION. IN OUR VIEW AND AS PER THE SUBMISSION OF THE D. AR FOR THE ASSE SSEE, AVERAGE YIELD ITA NO.2570/B/2017 PAGE 9 OF 12 AND RATE CONSIDERED BY THE AO IS QUITE CONTRARY TO THE PREVAILING SITUATION IN THE FIELD OF ARECANUT CROP, BECAUSE WHICH IS CON SIDERED ONE OF MOST PROFITABLE CROP AND WHICH GIVES VERY GOOD YIELD AND RATE TO THE FARMERS. IN FACT, ONE GO BY CONSERVATIVE ESTIMATE, ONE ACRE OF ARECANUT PLANTATION WOULD GIVE NET INCOME OF RS. 2,50,000 TO RS. 3,00,0 00/- PER ANNUM. FURTHER, THE AO HAVING BEEN ACCEPTED THE FACT THAT THE ASSESSEE HAS CULTIVATED AGRICULTURAL OPERATIONS, BUT FAILED TO C ONSIDER THE LAND HOLDINGS IN THE NAME OF ASSESSEES BROTHERS WIFE WHO IS RES IDING ALONG WITH THE ASSESSEE BEING A MEMBER OF JOINT FAMILY. ON THE OTH ER HAND, THE ASSESSEE HAS FILED COMPLETE DETAILS INCLUDING LAND HOLDING RECORDS TO PROVE THAT THE ASSESSEE IS CARRYING OUT AGRICULTURA L OPERATIONS IN THE LAND BELONGS TO HIS BROTHERS WIFE. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO MERIT IN THE FINDINGS OF THE AO WH ILE DISALLOWING PART OF AGRICULTURAL INCOME. FURTHER, UNLESS THE AO BROUGHT OUT SOME MATERIAL TO PROVE THAT THE ASSESSEE HAS CONVERTED HIS UNACCOUNT ED INCOME IN THE FORM OF AGRICULTURAL INCOME, GENUINE AGRICULTURAL I NCOME WHICH IS SUPPORTED BY NECESSARY EVIDENCES CANNOT BE DISREGAR DED MERELY FOR THE REASON THAT THE LAND HOLDING IS NOT IN THE NAME OF THE ASSESSEE, WHEN THERE IS NO DISPUTE WITH REGARD TO CARRYING OUT AGR ICULTURAL OPERATIONS. THE CIT(A) WITHOUT APPRECIATING THESE FACTS SIMPLY UPHELD THE FINDINGS OF THE AO. HENCE, WE REVERSE THE FINDINGS OF THE LD C IT(A) AND DIRECT THE AO TO DELETE THE ADDITIONS MADE TOWARDS DISALLOWANC E OF AGRICULTURAL INCOME 10. THE NEXT ISSUE THAT CAME UP FOR CONSIDERATION I S ADDITIONS TOWARDS CASH DEPOSITS OF RS.10,75,000/- FOUND IN SAVINGS BA NK ACCOUNT AT VIJAYA BANK ULAVI BRANCH. THE AO HAS MADE ADDITIONS TOW ARDS CASH DEPOSITS ON THE GROUND THAT THE ASSESSEE HAS FAILED TO EXPLA IN SOURCE FOR SUCH CASH DEPOSITS. IT IS THE CLAIM OF THE ASSESSEE THA T CASH DEPOSITS FOUND IN ITA NO.2570/B/2017 PAGE 10 OF 12 SAVINGS BANK AT ULAVI BRANCH IS OUT OF AGRICULTURAL INCOME AND COLLECTION FROM MARRIAGE HALL AND WHICH CANNOT BE INDIVIDUALLY IDENTIFIED AS RECEIVED FROM AGRICULTURAL OPERATIONS AND RECEIPTS FROM MARR IAGE HALL. 11. HAVING HERD BOTH THE SIDES AND CONSIDERED THE M ATERIAL ON RECORD, WE FIND MERITS IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT WHEN ASSESSEE IS HAVING HUGE RECEIPTS FROM AGRICULTURAL OPERATIONS, THE AO OUGHT TO HAVE GIVEN CREDIT FOR INCOME DECLARED UNDE R THE HEAD AGRICULTURAL INCOME TO CASH DEPOSITS FOUND AT VIJ AYA BANK ULAVI BRANCH. IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE IS N OT HAVING ANY SOURCE OF INCOME TO EXPLAIN CASH DEPOSITS FOUND IN BANK ACCOU NT. ADMITTEDLY, THE ASSESSEE HAS DECLARED HUGE AGRICULTURAL INCOME OF R S.55,19,900/- FOR THE YEAR UNDER CONSIDERATION. THE ASSESEE HAS ALSO DEC LARED BUSINESS INCOME OF RS.9,72,130/- FROM MARRIAGE CONTRACTS. W HEN SOURCE IS AVAILABLE IN THE FORM OF AGRICULTURAL INCOME AND BU SINESS INCOME, UNLESS THE AO ESTABLISHES WITH EVIDENCES THAT THE SOURCE H AS BEEN DEPLOYED ELSEWHERE, THE AVAILABILITY OF SOURCE TO EXPLAIN CA SH FOUND IN BANK ACCOUNT CANNOT BE IGNORED. IN THIS CASE ,THE ASSES SEE HAS DEPOSITED A SUM OF RS.10,75,000/- TO THE SB ACCOUNT MAINTAINED AT VIJAYA BANK AS AGAINST THIS THE ASSESSES TOTAL INCOME FOR THE YEA R UNDER CONSIDERATION IS RS.55,19,900/- FROM AGRICULTURAL INCOME AND RS.9,72 ,130/- FROM BUSINESS INCOME. THE INCOME EARNED FOR THE YEAR IS MUCH MOR E THAN THE AMOUNT OF CASH DEPOSITS FOUND IN BANK ACCOUNT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS ERRED IN MAKING ADD ITIONS TOWARDS CASH DEPOSITS FOUND AT VIJAYA BANK BRANCH, DESPITE THE A SSESEE HAS EXPLAINED SOURCE FOR SUCH CASH DEPOSITS. THE LD CIT(A) WITHO UT APPRECIATING THESE FACTS SIMPLY UPHELD THE ADDITIONS MADE BY THE AO. HENCE, WE REVERSE THE FINDINGS OF THE LD CIT(A) AND DIRECT THE AO TO DELETE THE ADDITIONS MADE TOWARDS CASH DEPOSITS FOUND AT VIJAYBA BANK, U LAVI BRANCH. ITA NO.2570/B/2017 PAGE 11 OF 12 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED PRONOUNCED IN THE OPEN COURT ON APRIL, 2019 . ( N.V VASUDEVAN) ( G MANJUNATHA) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED, APRIL, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE. ITA NO.2570/B/2017 PAGE 12 OF 12 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR. P. S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..