Appeal Details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 9809 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 3 month(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
08-07-2016
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
05-08-2015
Assessment Year
2003-2004
Appeal Filed On
13-03-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 267/CHD/2014 (ASSESSMENT YEAR : 2003-04) SH.BALWINDER SINGH, VS. THE INCOME TAX OFFICER, S/O SH.KULDEEP SINGH, WARD 1, VPO SIRTHALA, TEHSIL PAYAL, KHANNA. MALLOUD, LUDHIANA. PAN: ASSPS1087R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.C. GOYAL RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 04.07.2016 DATE OF PRONOUNCEMENT : 08.07.2016 O R D E R THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II, LUDHIANA DATED 10.1.2014 FOR ASSESSME NT YEAR 2003-04 ON THE FOLLOWING GROUNDS : 1. THAT THE LD. CIT (A) -II, LUDHIANA HAS WRONGLY HELD TH AT APPELLANT HAS FAILED TO EXPLAIN THE CLAIM OF AGRICULTURAL IN COME ON 16-1 BIGHA TAKEN ON LEASE. 2. THAT THE LD. CIT (A)- II, LUDHIANA HAS WRONGLY HELD THAT TOTAL AREA OF LAND, OWNED BY THE APPELLANT AND THE LESSORS, COVERED BY THE POPULAR TREES, WORKED OUT TO 3 BIGHAS 5 BISWA S AND NOT 29 BIGHAS AS CLAIMED BY THE APPELLANT. 3. THAT THE LD. CIT (A)-II, LUDHIANA HAS WRONGLY HELD THAT MERE FILLING OF AN AFFIDAVIT FROM S.AMARJIT SINGH DOES NO T ESTABLISH THAT THE APPELLANT HAD EARNED AGRICULTURAL INCOME OF 2 RS.1625000/- IGNORING THE FACT THAT STATEMENT OF S. A MARJIT SINGH WAS ALSO RECORDED BY LD. A.O. ON 29.11.2005 AF TER SUBMISSION OF AFFIDAVIT DT. 24.11.2005. 4. THAT THE LD. CIT (A)-II, LUDHIANA HAS IGNORED TH E FACT THAT AGRICULTURAL INCOME IS NOT ONLY FROM SALE OF POPULA R TREES INSTEAD IT WAS ALSO FROM SALE OF GREEN FODDER ETC., DESCRIPTION OF WHICH WAS DULY GIVEN IN COPY OF JAMABANDI/ GIRD AWARI ISSUED BY PATWARI. 5. THAT THE LD. CIT (A)-II, LUDHIANA HAS IGNORED THE FAC T THAT EVEN IN IMMEDIATE PREVIOUS YEAR I.E. (IN ASS. YEAR 2002-03 ) APPELLANT EARNED AN AGRICULTURAL INCOME OF RS.325000/-. 6. THAT THE ORDER PASSED BY THE CIT (APPEALS)-II, LUD HIANA IS AGAINST THE SPIRIT OF LAW & FACTS OF THE CASE. 7. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUND OF APPEAL BEFORE THE APPEAL IS HEARD AND FIN ALLY DISPOSED OF. 2. I HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. 3. IN THE PRESENT APPEAL, THE ASSESSEE IS MAINLY IN APPEAL CHALLENGING THE ADDITION OF RS.15,60,000/ - AS AGAINST THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.29,60,000/-. 4. THE BRIEF FACTS ARE THAT RETURN DECLARING TOTAL INCOME OF RS.1,23,623/- AND AGRICULTURAL INCOME OF RS.30,25,500/- WAS FILED ON 07.11.2003. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFI CER ASKED THE ASSESSEE TO FURNISH THE DETAILS OF LAND H OLDING ALONGWITH THE PROOF OF LAND HOLDING. THE ASSESSING OFFICER ALSO ASKED THE ASSESSEE TO FURNISH DETAILS OF 3 AGRICULTURAL INCOME ALONGWITH VOUCHERS OF RECEIPTS AND EXPENSES. THE ASSESSEE SUBMITTED THAT THE LAND HOL DING OF THE FAMILY WAS 29 BIGHA 17 BISWA WHICH WAS OWNED BY THE HIM AND HIS TWO BROTHERS. THE ASSESSEE ALSO SUBMITTED THAT THE LAND BELONGING TO HIS TWO BROTHE RS AND TWO UNCLES WAS TAKEN ON FAMILY LEASE AT A RENT OF RS.2,000/- PER BIGHA PER YEAR. THE ASSESSEE FURTHER SUBMITTED THAT POPLAR TREES WERE PLANTED ON THIS LA ND IN THE YEAR 1998-99 WHICH WERE SOLD DURING THE YEAR 20 03 FOR NET PROFIT OF RS.30.01 LACS. THE ASSESSING OFFICER RECORDED THE STATEMENT OF THE ASSESSEE. IN THIS STATEMENT, THE ASSESSEE STATED AS UNDER: I) HE OWNED 3 BIGHAS LAND IN HIS NAME. II) HE PLANTED POPLAR TREES IN FEB-MARCH, 1998. III) SH. AMARJIT SINGH S/O SH. MASAT RAM LOOKED AFTER THESE PLANTS. IV) THESE POPLAR TREES WERE SOLD IN THE YEAR 2002-03 TO THE FOLLOWING PERSONS: A) SHRI AJMER SINGH B) SHRI ANWAR ALI C) SHRI MOHD. SAWAR 5. THE ASSESSING OFFICER ALSO ASKED THE ASSESSEE T O FILE COPY OF THE KHASRA GIRDAWRI FOR THE PERIOD OF FIVE YEARS STARTING FROM MARCH, 1998 TO MARCH 2004. AS PER TH IS KHASRA GIRDAWRI ISSUED BY THE REVENUE PATWARI ON 10.8.2005, DURING THE YEAR 1999-2000 TO 2003-04, PO PLAR 4 TREES WERE SHOWN TO HAVE BEEN GROWING ONLY ON 8 BIG HAS 5 BISWAS OF LAND. OUT OF THIS, THE TOTAL AREA OF LAN D, OWNED BY THE ASSESSEE AND THE LESSORS, COVERED BY THE POPLAR TREES, WORKED OUT TO 3 BIGHAS 5 BISWAS AND NOT 29 B IGHAS AS CLAIMED BY THE ASSESSEE. THE ASSESSING OFFICER IN ORDER TO FURTHER VERIFY THE FACTS OF THE CASE, RECORDED T HE STATEMENT OF SHRI AMARJIT SINGH, WHO THE ASSESSEE H AD CLAIMED TO HAVE LOOKED AFTER THE PLANTS. DURING TH E STATEMENT RECORDED BY THE ASSESSING OFFICER, SHRI A MARJIT SINGH FLATLY REFUSED TO HAVE EVER DONE SUCH A JOB F OR SHRI BALWINDER SINGH. THE ASSESSING OFFICER ALSO RECOR DED THE STATEMENT OF SHRI AJMER SINGH TO WHOM THE ASSESSEE HAD CLAIMED TO HAVE SOLD ALL POPLAR TREES. SHRI AJMER S INGH FILED AN AFFIDAVIT BEFORE THE ASSESSING OFFICER IN WHICH HE AFFIRMED THAT HE DOES NOT EVEN KNOW SHRI BALWINDER SINGH, THE ASSESSEE AND ALSO DENIED PURCHASE OF ANY POPLAR TREES FROM THE ASSESSEE. SHRI AJMER SINGH ALSO AFFIRMED T HESE FACTS DURING HIS CROSS EXAMINATION. DETAILS OF OTHE R PERSONS NOT FURNISHED. NO VOUCHERS OF SALE PRODUCED . KEEPING IN VIEW THE AFORESAID FACTS, THE ASSESSING OFFICER HELD THAT THE CLAIM OF THE ASSESSEE OF AGRICULTURAL INCOME OF RS.30,25,500/- WAS NOT GENUINE. THE ASSESSING OF FICER HELD THAT THE TOTAL AGRICULTURAL INCOME OF THE ASSE SSEE FROM CULTIVATION OF 3 BIGHAS 5 BISWAS OF LAND, WHICH TH E ASSESSEE WAS SHARING EQUALLY WITH HIS TWO BROTHERS WAS RS.65,500/-. THE ASSESSING OFFICER ACCORDINGLY, MAD E AN ADDITION OF RS.29,60,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 5 6. THE ADDITION WAS CHALLENGED BEFORE THE LEARNED CIT (APPEALS). DURING THE COURSE OF APPELLATE PROC EEDINGS, THE LEARNED CIT (APPEALS) ADMITTED ADDITIONAL EVIDE NCE FILED BY THE ASSESSEE UNDER RULE 46A OF THE INCOME TAX RU LES. VIDE THE ADDITIONAL EVIDENCE FILED BEFORE THE LEARN ED CIT (APPEALS), THE ASSESSEE CONTENDED THAT HE HAD RECEI VED RS.14 LACS FROM ONE SHRI GURMUKH SINGH ON ACCOUNT O F SALE OF ANIMALS KEPT BY HIM FOR DAIRY FARMING WHICH WAS BEING RUN BY HIM FROM THE YEAR 1997-98. THE ASSESSE E FURTHER CONTENDED THAT LAND MEASURING 27 BIGHAS 6 B ISWAS WAS USED BY HIM FOR PLANTATION OF POPLAR TREES. AFT ER CONSIDERING THE FACTS OF THE CASE, THE DOCUMENTS AN D THE EVIDENCES FILED BY THE ASSESSEE INCLUDING THE REMAN D REPORT RECEIVED FROM THE ASSESSING OFFICER, THE LEARNED CI T (APPEALS) HELD THAT THE ASSESSEE WAS CARRYING ON DA IRY FARMING AND HAD EARNED INCOME ON ACCOUNT OF SALE OF ANIMALS DURING THE YEAR. THE LEARNED CIT (APPEALS) ACCORDINGLY ACCEPTED THE CONTENTION OF THE ASSESSEE THAT HE HAD RECEIVED RS.14 LACS ON ACCOUNT OF SALE PROCEEDS OF THE DAIRY ANIMALS FROM SHRI GURMUKH SINGH. REGARDING T HE CLAIM OF AGRICULTURAL INCOME FROM CULTIVATION OF 27 BIGHAS 7 BISWAS OF LAND, AFTER CONSIDERING THE EVIDENCES FIL ED BY THE ASSESSEE AND AFTER REFERRING TO THE REPORT OF PAU, THE LEARNED CIT (APPEALS) ACCEPTED THE CONTENTION OF TH E ASSESSEE OF HAVING EARNED RS.11.20 LACS OF AGRICULT URAL INCOME DURING THE YEAR. THE ADDITION MADE BY THE ASSESSING OFFICER WAS ACCORDINGLY REDUCED FROM RS.29,60,000/- TO RS.5,25,300/-. 6 7. BOTH, THE REVENUE AND THE ASSESSEE FILED APPEAL S BEFORE THE HON'BLE ITAT. THE HON'BLE ITAT VIDE ITS ORDER DATED 24.09.2009 RESTORED CASE TO THE FILE OF THE L EARNED CIT (APPEALS), OBSERVING AS UNDER: IN THIS CONNECTION IT MAY BE NOTICED THAT THE ASSESSEE CONTENDED THAT HE WAS NOT GUIDED PROPERLY BY HIS COUNSEL AT T HE TIME OF THE ASSESSMENT PROCEEDINGS. THE CONTENTION OF THE ASSESSEE IS THAT THE ASPECT OF THE ASSESSEE DRIVING INCOME FR OM THE SALE OF DAIRY ANIMALS WAS NOT RAISED BEFORE THE AO BECAUSE O F THE ADVICE OF THE THEN COUNSEL. WE HAVE CAREFULLY CONSIDERE D THIS SUBMISSION. FIRSTLY, IT IS THE ASSESSEE WHO HAS SIGNE D THE RETURN OF INCOME WHICH CONTAINED AGRICULTURAL INCOME OF RS.3 0,25,500/- FURTHER, IT WAS THE ASSESSEE WHO WAS EXAMINED ON OATH AND IN THE COURSE OF SUCH DEPOSITION, THE ASSESSEE EXPLAINED IN DETAIL THE SOURCE OF AGRICULTURAL INCOME. THE ASSESSEE EXP LAINED THE CROP GROWN, THE PERSONS INVOLVED IN THE AGRICULTURAL OPERATIONS, PERSONS TO WHOM TO PRODUCE WAS SOLD ETC. ALL SUCH INFO RMATION WAS IN THE PERSONAL KNOWLEDGE OF THE ASSESSEE, WHO M ADE THE DEPOSITION. MOREOVER, THE MANNER AND THE MODE OF EARN ING SUCH INCOME WAS IN THE EXCLUSIVE KNOWLEDGE OF THE A SSESSEE HIMSELF AND, THERE IS NO REASON TO INFER THAT ON SUC H MATTERS ALSO THE ASSESSEE WAS GUIDED BY HIS THEN COUNSEL INF ACT THE ASSESSEE DID FURNISH AN AFFIDAVIT IN THIS REGARD BEFO RE THE CIT(A) BUT IN THE ABSENCE OF CLINCHING... .....EVIDENCE, I N THE SHAPE OF A CONFIRMATION FROM THE THEN COUNSEL, SUCH AFF IDAVIT CAN ONLY BE SEEN AS A SELF SERVING APPROACH. THE C1T(A) HA S ACCEPTED THE CONTENTS OF THE AFFIDAVIT WITHOUT CRITIC ALLY EXAMINING AS TO WHETHER THE SAME WAS BONAFIDE AND P ROPER. THE CONDUCT OF THE ASSESSEE, AS MENTIONED EARLIER OF HAVING SIGNED THE RETURN OF INCOME AND THE DEPOSITION BEFO RE THE AO OUGHT TO HAVE BEEN TAKEN INTO CONSIDERATION BEFORE A CCEPTING THE REVISED PLEA IN THE AFFIDAVIT. INFACT, THE BEST EVIDE NCE IN SUCH A SITUATION WAS NEITHER LED BY THE ASSESSEE AND NOR HAS BEEN CALLED FOR BY THE CIT(A) IN ORDER TO VERIFY THE TRUE STATE OF AFFAIRS. SUCH EVIDENCE WAS IN THE SHAPE OF THE FORMER COUNSE L OF THE ASSESSEE WHO IS PURPORTED TO HAVE GUIDED THE ASSESS EE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. NECESSARY VERI FICATION FROM SUCH PERSON OUGHT TO HAVE BEEN CARRIED OUT BY THE CIT(A) TO ARRIVE AT APPROPRIATE CONCLUSIONS. THE ACTION OF THE C IT(A) IN ADMITTING THE REVISED PLEA, WITHOUT PUTTING THE SAME T O INDEPENDENT VERIFICATION AND APPRAISAL, IN OUR VIEW, IS NOT 7 JUSTIFIED. THEREFORE, CONSIDERING THE OVERALL CIRCUMST ANCES OF THE CASE AND IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE D EEM IT PROPER TO SET ASIDE THE ORDER OF THE CIT(A) AND REST ORE THE MATTER BACK TO HIS FILE TO BE ADJUDICATED AFRESH. AP ART THEREFROM THE CIT(A) HAS ALSO ACCEPTED AGRICULTURAL INCOME TO THE EXTENT OF RS. 11,20,000/- FROM 27 BIGHAS 7 BIS WAS WHICH SHOWED AS PLANTING AS POPULAR TREES. IN OUR VIEW THE ENTIRE ISSUE RELATING TO THE DETERMINATION OF INCOME FROM AGRICU LTURAL INCOME IS REQUIRED TO BE REVISITED BY THE CIT(A). NOT ABLY THE AO HIMSELF ADMITTED AGRICULTURAL INCOME OF RS. 65,000/ - INSTEAD OF RS. 30,25,500/- DECLARED BY THE ASSESSEE. THIS ACTION WAS ALSO IN CHALLENGE BEFORE THE CIT(A). WE THEREF ORE REMAND THE MATTER TO THE FILE OF THE CIT(A) WHO SHA LL CONSIDER THE EFFICACY OF THE ACTION OF THE AO IN E STIMATING THE AGRICULTURAL INCOME AT RS.65,500/- AS AGAINST RS.30,50,500/- DECLARED BY THE ASSESSEE AFRESH. 8. THE LEARNED CIT (APPEALS) AS PER DIRECTIONS OF THE TRIBUNAL RE-FIXED THE APPEAL FOR HEARING. 9. THE LEARNED COUNSEL FOR THE ASSESSEE VIDE WRI TTEN SUBMISSIONS DATED 18.03.2013 SUBMITTED AS UNDER: FIRST, TO SUPPORT THE CONTENTION OF THE ASSESSEE T HAT HIS EARLIER COUNSEL GUIDED HIM FOR HIS RETURN, WE SUBMIT THAT S H. RAKESH KUMAR ADVOCATE EARLIER FILED THE INCOME TAX RETURN OF THE ASSESSEE. WHO BY MISTAKE CONSIDERED THE RECEIPT OF RS.14 LACS FROM SALE OF DAIRY ANIMALS AS AGRICULTURAL INCOME A ND ENHANCED THE AGRICULTURAL INCOME TO THAT EXTENT. NOW TO SUPP ORT THE CONTENTION OF THE ASSESSEE WE ARE ENCLOSING HEREWITH AN AFFIDAVIT FROM THE SAID ADVOCATE TO THE EFFECT OF THIS MISTAKE OCCURRED FRO M HIM IN ADVERTENTLY. COPY OF AFFIDAVIT OF ADVOCATE SH. RAKE SH KUMAR IS ENCLOSED FOR YOUR GOOD SELFS KIND PERUSAL MARKED A S ANNEXURE 'A '. IN VIEW OF THIS AFFIDAVIT AND OTHER RELEVANT EVI DENCE YOUR GOOD SELF IS REQUESTED TO PLEASE CONSIDERED THE SUBMISSI ON OF THE APPELLANT. WE FURTHER SUBMIT THAT THE ASSESSEE WAS HAVING AGRICULTURAL INCOME IN EARLIER YEARS AS WELL AND IN THE IMMEDIATE PREVIOUS ASSESSMENT YEAR, 2002-03 HAD SHO WN AGRICULTURAL INCOME OF RS.3 50,000/- IN HIS RETURN FILED. 8 PHOTOCOPY OF WHICH IS ENCLOSED FOR YOUR KIND PERUSA L MARKED AS ANNEXURE 'B'. AS SUBMITTED EARLIER BEFORE CIT(A)-II,, THAT IN THE COURSE OF ASSESSMENT PROCEEDING ON 03.08,2005, STATEMENT OF S . BALWINDER SINGH THE APPELLANT WAS RECORDED BY THE LD. A. O. W HEREIN HE HAS CATEGORICALLY STATED, AGAINST THE QUESTION RAISED B Y A. O. I. E. QUES:- WHAT IS YOUR PROFESSION AS UNDER ? ANS. FOR THE LAST THREE YEARS, I AM RUNNING A RICE SHELLER UNDER THE NAME AND OF SIRTHALA RICE MILLS, VILLAGE SIRTHA LA, TEHSIL PAYAL. BEFORE THIS, 1 WAS DOING AGRICULTURE AND DA IRY FARMING. EVEN IN THE STATEMENT OF S. RAKESH KUMAR BROTHER OF THE APPELLANT RECORDED BY THE LD. A.O. ON 12.08.2005 HE HAS SPECIFICALLY STATED THAT HE OWNS 3 BIGAS OF LAND VI LLAGE AT SIRTHALA WHICH IS GIVEN TO HIS ELDER BROTHER TO BAL WINDER SINGH IN MARCH 1998. EVEN AGAINST ANOTHER QUESTION RAISED BY THE A. O. TO HIS BROTHER- QUES. FROM THE PERUSAL OF THE NAKALZAMAWANDI FILED BY S, BAHVINDER SINGH IT HAS BEEN MENTIONED THAT YOU ALON G WITH OTHER BROTHERS HAVE TAKEN LOAN FROM BANK OF INDIA PAYAL A MOUNTING TO RS.2200000/- WHAT WAS ITS PURPOSE? ANS. THE LOAN WAS RAISED BY MY BROTHER S. BALWINDER SINGH ARE DAIRY FARMING IN THE YEAR 1997. QUES. DO YOU KNOW FOR WHAT PURPOSE THE LAND WAS USE D BY S.BALWINDER SINGH YOUR BROTHER? ANS. YES, HE PLANTED POPLAR TREE IN THIS LAND. AS SUCH, THIS FACT WAS BEFORE THE A.O. THAT THE AP PELLANT WAS HAVING INCOME FROM AGRICULTURE FROM PLANTATION OF P OPLAR TREE AND DAIRY FARMING. EVEN THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCE EDING SUBMITTED THAT POPLAR TREES WAS PLANTED IN THE YEAR 1998-1999 AND THIS FACT WAS GOT CONFIRMED BY THE A.O. FROM PA TWARI. WE ARE ALSO ENCLOSING HEREWITH AN PLANTATION INSPECTION RE PORT GIVEN BY POPLAR NURSERIES & FARMS ON 28/08/2009 WHICH CON FIRMED THAT 2800 PLANTS OF POPLAR TREES WAS PLANTED BY S. BALWINDER 9 SINGH OF SIRTHALA, THERE IN 1999 AND ALSO COMMENTS ON THE GENERAL HEALTH OF THOSE PLANTS BEING IN VERY GOOD S TATE CONFIRMED BY THE NURSERY AFTER INSPECTION. COPY OF INSPECTION REPORT IS ALSO ENCLOSED MARKED AS ANNEXURE 'C' FOR YOUR KIND PERUSAL AND ORIGINAL REPORT PRODUCED FOR VERIFICATI ON. THE ASSESSEE ALSO PROVIDED TO THE A.O. COPY OF A LE ASE AGREEMENT DATED 15/03/2008 IN RESPECT OF LAND TAKEN ON LEASE BY THE ASSESSEE FROM MUNISH KUMAR & OTHERS FO R THE PERIOD FROM 15/03/1998 TO 14/03/2008 IN THE COURSE OF ASSESSMENT PROCEEDINGS. AS PER THIS LEASE AGREEMENT ASSESSEE HAS CULTIVATED LAND MEASURING 16-1 BIGHAS TAKEN ON LEA SE AND LAND MEASURING 9 BIGHA & 19 BISWA OF LAND OWNED BY CHACH A (UNCLE OF ASSESSEE) S. SHAM LAL WHOSE POWER OF ATTORNEY IS WITH THE ASSESSEE AND 3 BIGHAS 5 BISWA LAND OF HIS BROTHER W HO CONFIRMED THE SAME WHEN A.O. RECORDED HIS STATEMENT ON 12.08. 2005. AS SUCH, ASSESSEE WAS HAVING 29 BIGHAS 17 BISWA OF LAN D FOR CULTIVATION DURING THE PERIOD FROM 15/03/1998 TO 14 /03/2008 ON WHICH HE CULTIVATED POPLAR TREE & GREEN FODDER. CER TIFIED PHOTOCOPY OF LEASE AGREEMENT DULY CERTIFIED BY THE ASSESSEE OFFICER IS ENCLOSED MARKED AS ANNEXURE 'D' FOR YOUR KIND PERUSAL. ORIGINAL COPY OF LEASE AGREEMENT ALONG WIT H ORIGINAL CERTIFIED COPY, THAT WAS BEFORE THE A. O. PRODUCED FOR YOUR KIND PERUSAL. IN THE COURSE OF EARLIER SUBMISSION BEFORE THE CIT (A), THE APPELLANT FILED A COPY OF CONFIRMATION OF HAVING RE CEIVED A SUM OF RS.L400000/- FROM S. GURMUKH SINGH S/O SH. NIRANJAN SINGH VILLAGE GAJJAN MAJRA TEHSIL MALERKOTLA DISTT. SANGR UR AGAINST SALE OF DAIRY FARM ANIMALS. HE IS AN INCOME TAX ASSESSEE AND HIS INCOME IS ASSESSED U/S 143(3) AND HIS PAN: IS AZBES 5241 B . PHOTOCOPY OF HIS CONFIRMATION GIVEN EARLIER IS ALSO ENCLOSED MAR KED AS ANNEXURE 'E' FOR YOUR KIND PERUSAL & ORIGINAL PRODUCED FOR V ERIFICATION. IN THE COURSE OF ASSESSMENT PROCEEDING AN AFFIDAVIT OF S. AMARJIT SINGH S/O MAST RAM R/O VILLAGE KAPOORGARG P .O. BHARPURGARH, TEHSIL AMLOH, DISTT. FATEHGARH SAHIB W AS ALSO FILED BEFORE THE A.O. DT.24.11.2005 WHEREIN HE HAS CATEGO RICALLY ADMITTED THAT HE HAS PURCHASED POPLAR WOOD TO THE TUNE OF RS .125000/-FROM THE APPELLANT WEIGHING 250 QTLS @ RS.450/- TO RS.50 0/-PER QTLS. AND THE PAYMENT WAS MADE IN CASH. AS SUCH, THE FACT REGARDING DAIRY FARMING AS WELL AS SALE OF POPULAR WOOD WAS B EFORE THE A.O. AT THE TIME OF ASSESSMENT PROCEEDINGS. PHOTOCOPY OF AF FIDAVIT GIVEN 10 EARLIER IS ALSO ENCLOSED MARKED AS ANNEXURE 'F' FOR YOUR KIND PERUSAL. THE LD. A.O. MADE THE ADDITIONS U/S 68 IGNORING THE FACT THAT THE EXISTENCE OF BOOKS OF ACCOUNTS IS A CONDIT ION PRECEDENT FOR INVOKING POWER, DISCHARGING THE BURDEN IS A SUB SEQUENT CONDITION. SECTION 68 IS APPLICABLE ONLY WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE A SSESSEE OF THAT PREVIOUS YEAR. IN VIEW OF THE FACTS SUBMITTED ABOVE, AS WELL AS IN THE COURSE OF OUR EARLIER PROCEEDINGS BOTH BEFORE THE HON 'BLE CIT (A)-I1 LUDHIANA & BEFORE THE A.O. IT IS HUMBLY PRAY THAT T HE RETURNED INCOME OF THE ASSESSEE BE ACCEPTED. 10. THE ASSESSEE ALSO FILED AFFIDAVIT OF SHRI RAKE SH KUMAR, ADVOCATE. THE SUBMISSIONS OF THE ASSESSEE W ERE FORWARDED TO THE ASSESSING OFFICER. THE ASSESSING OFFICER VIDE HIS REPORT DATED 8.4.2013 SUBMITTED AS UNDER : 2. INCOME FROM DAIRY FARMING: THE ASSESSEE HAS TAKEN NEW PLEA THAT HE WAS CARRYIN G ON BUSINESS OF DAIRY FARMING SINCE 1997 AND CONTENDED THAT HE WAS NOT PROPERLY ADVISED BY HIS EARLIER COUNSEL. FROM T HE PERUSAL OF ASSESSMENT RECORDS IT WAS NOTICED THAT NEITHER THE ASSESSEE HAD DECLARED SUCH INCOME IN THE RETURN OF A. Y. UNDER R EFERENCE NOR ADMITTED DURING THE ASSESSMENT PROCEEDINGS. THE MAT ERIAL AVAILABLE ALSO DOES NOT CONTAIN DETAILS ABOUT THE D AIRY FARMING OPERATION UNDERTAKEN BY THE ASSESSEE DURING THE YEA R, AND IT IS HARDLY POSSIBLE THAT SUCH INCOME WAS EARNED WITHOUT INCURRING ANY EXPENDITURE. IN THE BACKGROUND OF HUGE AMOUNTS CLAIMED AS DAIRY FARMING INCOME DURING THE YEAR, THE WRITTEN S UBMISSION IS SILENT ABOUT THE FOLLOWING: (I) DOCUMENTARY EVIDENCE IN SUPPORT OF DAIRY FARMING INCOME EARNED. 11 (II) PARTICULARS OF THE PERSONS WHO ENGAGED FOR LOOKING AFTER THE DAIRY FARMING ACTIVITIES. (III) EXPENDITURE INCURRED ON FOOD/CATTLE FEED FOR THE BUFFALOES. (IV) WHETHER RECORD OF MILK PRODUCED AND SALE THEREOF IS MAINTAINED? (V) WHETHER SUCH INCOME HAS BEEN DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FOR THE YEAR UNDER REFERENCE. (VI) COMPLETE BILLS/VOUCHERS AND BOOKS OF ACCOUNTS THEREOF. VICE WRITTEN SUBMISSION THE ASSESSEE HAS CONTENDED THAT SAID INCOME WAS INADVERTENTLY UNDER THE HEAD AGRICULTURA L INCOME. BUT, IN THE ABSENCE OF ANY EVIDENCE FROM THE ASSESSEE, I T IS DIFFICULT TO ACCEPT THAT SUCH HUGE OF DAIRY INCOME AS CLAIMED WA S IN FACT ENJOYED BY HIM DURING THE YEAR. IF HE WAS HAVING SU CH INCOME, WHO PREVENT HIM TO DISCLOSE THE SAME IN THE ITR OR BEFORE THE AO. WITHOUT PREJUDICE TO THE CLAIMS OF THE ASSESSEE REGARDING HUGE DAIRY FARMING INCOMES VIS-A-VIS HUGE INVESTMEN TS BY AVAILING LOAN OF RS. 22 LACS FROM BANK, IT COULD NO T BE DENIED THAT IT WAS INCUMBENT UPON THE ASSESSEE TO PRODUCE THE D ETAILS OF NECESSARY EXPENDITURE INCURRED ON VARIOUS ITEMS REQ UIRED FOR CONDUCTING SAID OPERATIONS, THE YIELD RECEIVED AND SALE PROCEEDS REALIZED. THE ATTITUDE OF THE ASSESSEE IN ALL THESE FOR NOT PROVIDING REQUIRED DETAILS IS NOT UNDERSTOOD. SO MUCH SO, NO SUCH INCOME HAS BEEN SHOWN BY THE ASSESSEE IN THE PRECEDING YEA R ALSO, WHICH WOULD HAVE BEEN HELPFUL IN THROWING SOME LIGHT ON T HE DAIRY FARMING INCOME CLAIMED BY THE ASSESSEE DURING THE Y EAR. THE PROCESS ADOPTED BY THE ASSESSEE IS PUTTING HIM IN C IRCLE OF DOUNT, AS THE EXPLANATION OFFERED BY THE ASSESSEE ON THIS ACCOUNT IS AN AFTER THOUGHT AND NOT FOUND CREDIBLE. IN THE AFORES AID BACKGROUND, THERE DOES NOT APPEAR ANY MERIT IN THE CONTENTION OF THE ASSESSEE. 2.2. IT IS PERTINENT TO SUBMIT HERE THAT IN THE CAS E OF AVDESH KUMAR JAIN VS. CIT (1989), 178 ITR 443 (ALL.) THE C LAIM OF THE ASSESSEE HAD BEEN REJECTED BECAUSE THERE WAS NO PRO OF AT ANY STAGE AND IN FACT A CONCURRENT FINDINGS AT EVERY ST AGE THAT THE ASSESSEE HAD NOT FILED ANY PROOF IN SUPPORT OF HIS CLAIM THAT HE 12 WAS ACTIVELY ENGAGED IN AGRICULTURAL ACTIVITY. IN T HE INSTANT CASE ALSO, THE ASSESSEE DID NOT PRODUCE ANY MATERIAL TO SHOW THAT THE INCOME RECEIVED BY HIM FROM DAIRY FARMING AND MEREL Y STATED THAT HE HAD DAIRY FARMING INCOME, WHICH CANNOT BE S AID TO BE EVIDENCE FOR THE INCOME CLAIMED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. IN RESPECT OF WHAT THE ASSESSE E CONSIDERED DAIRY FARMING INCOME, HE WAS REQUIRED TO PUT PROPER MATERIAL BEFORE THE AO TO EXAMINE/ COME TO ANY CONCLUSION. I T WAS NOT FOR THE REVENUE TO PROVE THAT HE WAS NOT HAVING DAIRY F ARMING INCOME. THE ASSESSEE HAD FAILED TO FURNISH PROPER M ATERIALS AND HAD FAILED TO DISCHARGE THE BURDEN WHICH LAY ON IT TO PROVE THAT THE HE INDEED DERIVED ANY INCOME FROM SAID SOU RCE. W.R.T. DAIRY FARMING BUSINESS, THE ASSESSEE WAS TO MAINTAI N PROPER RECORDS/BOOKS OF ACCOUNTS AS PRESCRIBED UNDER THE L T. ACT. IN VIEW OF THE ASSESSEE 'S MERE CLAIM, IT IS DIFFICULT TO CONSIDER THE GENUINENESS/AGREE WITH THE CONTENTION OF THE ASSESS EE. 3. SALE OF FARM ANIMALS TO SH. GURMUKH SINGH: THE ASSESSEE HAS CONTENDED THAT DURING THE YEAR UND ER CONSIDERATION HE WAS HAVING RECEIPT/SALE OF DAIRY F ARM ANIMALS. IN SUPPORT OF IT, HE HAS FILED AN AFFIDAVIT FROM SH . GURMUKH SINGH CONFIRMING THAT AN AMOUNT OF RS. 14 LACS WAS PAID B Y HIM TO THE ASSESSEE ON SALE OF HIS FARM ANIMALS. BUT NEITHER S H. GURMUKH SINGH WAS EXAMINED NOR HIS STATEMENT RECORDED, HOWE VER THE ENTIRE RELIANCE WAS PLACED ON HIS AFFIDAVIT. ALSO N O SALE BILL WAS PRODUCED FOR VERIFICATION. ON AN AVERAGE BASIS THE SALE VALUE OF ONE BUFFALO/COW WAS RS.4000/-. THIS MEANS THAT 350 DAIRY ANIMALS WERE SOLD BY THE ASSESSEE. SOURCE AND GENUINENESS O F OWNERSHIP OF ANIMALS WAS NEVER INVESTIGATED. FURTHER, IT WAS NOT ICED THAT NO EXPENSES WHATSOEVER RELATING TO SALE OF FARM ANIMAL S WERE CLAIMED. ALSO TRANSPORTING OF ANIMALS TO AND FROM R EQUIRES LARGE EXPENDITURE WHICH HAS NOT BEEN CLAIMED BY THE ASSES SEE. FURTHER, IF ONE ANIMAL GIVES ANNUAL RETURN OF RS.1000/- ALSO THEN ASSESSEE SHOULD HAVE SHOWN DAIRY FARMING INCOME OF RS.3.5 LA CS IN EARLIER YEARS WHICH WAS NOT DECLARED. THE WRITTEN S UBMISSION IS ALSO SILENT ABOUT THE PRIMARY RECORD OF DAY TO DAY EXPENSES, SALES, PURCHASES AS WELL AS THE BILLS/VOUCHERS AS FOLLOWS: (I) MONTHWISE RECORD OF BUFFALOES/COW PURCHASED AND PERIOD OF HOLDING OF EACH BUFFALO WHETHER IDENTICAL ? (II) VALUE OF EACH BUFFALO/COW AND PARTICULARS F ROM WHOM PURCHASED WHETHER ASCERTAINED? 13 (III) CONFIRMATION/RECEIPT OF PURCHASE OF BUFFALOES/ANIMA LS (IV) TRANSPORTATION BILLS FOR BUFFALOES PURCHASED/SOLD. (V) DETAILS OF THE PREMISES WHERE BUFFALOES KEPT. 3.2. RELIANCE WAS PLACED ON THE FACT THAT SH, GURMU KH SINGH HAD SURRENDERED AN AMOUNT OF RS. 8.25 LACS IN SURVE Y U/S 133A ON 08.06.2004 WHEREAS THE ASSESSMENT YEAR UNDER CONSID ERATION IS A.Y. 2003-04 I.E. EARLIER A.Y. BY NO STRETCH OF IMA GINATION CAN IT BE BELIEVED THAT THIS AMOUNT OF RS. 8.25 LACS IS TH E SAME THAT WAS GIVEN TO THE ASSESSEE ON SALE OF ANIMALS. IT PERTAI NS TO A.Y. 2004- 05 AND NOT A.Y, 2003-04. FURTHER THE AMOUNT IN QUES TION IS RS.8.25 LACS AND NOT 14 LACS AS SUBMITTED BY THE AS SESSEE TO EXPLAIN HIS AGRICULTURAL INCOME. FOR THE BUSINESS/P ROFESSION OF SALE-PURCHASE OF FARM ANIMALS ALSO THE ASSESSEE WAS REQUIRED TO BE MAINTAINED THE PROPER RECORDS/BOOKS OF ACCOUNTS UND ER THE RELEVANT PROVISIONS OF THE IT, ACT. 4. ISSUE OF LAND HOLDING/OWNERSHIP OF AGRICUL TURAL LAND: THE VERY BASIC FACT IN THE ASSESSMENT ORDER WAS THA T THE ASSESSEE CULTIVATED POPLAR TREES ONLY ON AN AREA OF 3 BIGHA AND 5 BISWAS BASED ON KHASRA GIRDAWARIS. THE THEN AO ENQUIRED IN TO THE MATTER AND IT WAS OBSERVED THAT THE AGRICULTURAL IN COME SHOWN BY THE ASSESSEE WAS NOT COMMENSURATE TO THE AGRICULTUR AL LAND HOLDING THE ASSESSEE WAS HAVING. IT WAS NOTED THAT TOTAL LA ND HOLDING OF THE FAMILY WAS SHOWN MEASURING 29 BIGHAS 17 BISWAS AS CLAIMED/OWNED BY THE ASSESSEE, HIS TWO BROTHERS IN EQUAL SHARE AND HIS TWO UNCLES IN EQUAL SHARES. THE LAND OF TWO BROTHERS AND TWO UNCLES WAS TAKEN ON LEASE. ON PERUSAL OF THE KH ASRA GIRDAWARI, THE AO FOUND THAT LAND IN RESPECT OF TWO KHASRAS ON WHICH POPLAR TREES WERE PLANTED NEITHER BELONGED THE ASSESSEE NO T THE LESSORS. THEREFORE, TOTAL LAND OWNED BY THE ASSESSEE AND LES SORS ON WHICH POPLAR TREES PLANTED WERE REMAINED/WORKED OUT TO 3 BIGHAS 5 BISWAS I.E. LESS THAN ONE ACRE OF LAND ONLY AND NOT 29 BIGHAS AS CLAIMED BY THE ASSESSEE. 4.2 NO NEW DOCUMENTS SUPPORTING THE LAND HOLDING HA S BEEN FURNISHED WITH THE WRITTEN SUBMISSION TO ESTABLISH THAT THE AGRICULTURAL LAND IN QUESTION WAS REALLY BELONGED/O WNED TO HIM. IN THE ABSENCE OF NECESSARY RECORDS, ASSESSEE IS NOT E NTITLED TO AVAIL THE BENEFIT OF THE ENTIRE LAND HOLDING FOR THE PURPOSE. SINCE THE ABOVE SAID PERSONS OWNED ONLY CERTAIN ACRE OF AGL. LAND A ND HAVING 14 ONLY AGRICULTURAL INCOME, THEN THE QUESTION ALSO AR ISES HOW CAN OTHER FAMILY MEMBERS/CO-OWNERS/LESSORS MAKE POSSIBL E TO MAINTAIN THEIR RESPECTIVE FAMILY DURING THE YEAR. 5. AGRICULTURE INCOME : THE ASSESSING OFFICER -WITH REGARD TO AGRICULTURAL INCOME WAS OF THE VIEW THAT THE ASSES SEE COULD HAVE EARNED ONLY RS. 65,500/-. HOWEVER, WITH RESPECT TO THE REMAINING AMOUNT OF RS . 29,60,000/- BEING UNSUBSTANTIATED, THE AO TREATED THE SAME TO B E INCOME FROM OTHER SOURCES AND MADE AN ADDITION OF THIS AMO UNT TO BE RETURNED INCOME. HOW FAR THE ASSESSEE HAS SUCCEEDED IN DISCHARGING HIS BURDEN OF PROOF CAN BE SEEN THAT TH E ASSESSEE FAILED TO PRODUCE THE REQUISITE RECORDS/ACCOUNT BOO KS OF AGRICULTURAL OPERATIONS CLAIMED FOR THE YEAR. IT IS WORTHWHILE TO SUBMIT THAT IT IS FOR A PERSON WHO CLAIMS EXEMPTION TO ESTABLISH IT, AND THERE IS NO REASON WHY IT SHOULD BE OTHERWI SE WHEN THE EXEMPTION IS CLAIMED UNDER THE I.T. ACT, 1961. ACCO RDINGLY, IT WAS FOR THE ASSESSEE TO PROVE THAT THE INCOME SOUGH T TO BE TAXED WAS AGRICULTURAL INCOME EXEMPT FROM TAXATION UNDER THE I. T. ACT, 1961. THE HON 'BLE ALLAHABAD HIGH COURT IN THE CASE OF AVDESH KUMAR JAIN VS. CIT (1989), 178 ITR 443 IT HA S BEEN HELD THAT IN THE ABSENCE OF EVIDENCE ABOUT THE AGRICULTU RAL INCOME, THE AO'S ASSESSMENT OF SUCH INCOME AS INCOME FROM OTHER SOURCES WAS JUSTIFIED, AND ACCORDINGLY ASSESSMENT MADE BY T HE AO WAS CONFIRMED. IN THE INSTANT CASE ALSO THE ASSESSEE HA S FAILED TO PROVE THAT HIS INCOME INCLUDED DAIRY FARMING INCOME . 6. WRONG ADVICE BY THE COUNSEL/ADVOCATE: THE ASSESSEE HAS TAKEN A PLEA THAT HE DID NOT HAVE AGRICULTURAL INCOME OF RS.30,25,500/- DURING THE A.Y. 2003-04 AS SHOWN IN THE RETURN OF INCOME ON THE GROUND THAT HE WAS HAYING D AIRY FARMING INCOME ALSO. HE FURTHER CONTENDED THAT THESE FACTS WERE TOLD BY HIM TO HIS EARLIER COUNSEL AND RETURN WAS SIGNED BY HIM WITH BELIEF THAT WHATEVER WAS NARRATED BY HIM WAS INCORP ORATED IN THE RETURN BY HIS COUNSEL. THE ASSESSEE HAS ALSO CONTEN DED THAT HE WAS NOT PROPERLY GUIDED/WRONGLY ADVISED BY HIS PREV IOUS COUNSEL ON THE ISSUE OF DAIRY FARMING BUSINESS. IN SUPPORT THEREOF THE ASSESSEE HAS FILED AN AFFIDAVIT DATED 13.03.2013 OF SH. RAKESH KUMAR, ADVOCATE AFFIRMING THAT WHILE FILING THE INC OME TAX RETURN OF SH. BALWINDER SINGH, ASSESSEE FOR THE A. Y. 2003-04 INADVERTENTLY BY MISTAKE, HE CONSIDERED THE INCOME OF RS.14 LACS 15 FROM SALE OF DAIRY ANIMALS SOLD BY THE ASSESSEE IN THAT YEAR AS AGRICULTURAL INCOME, CONSIDERING IT BEING EXEMPT IN COME AND FALLS IN THE CATEGORY OF AGRICULTURAL INCOME AND ONLY ON HIS ADVICE THE ASSESSEE STRESSED IN THE ASSESSMENT PROCEEDINGS THAT HIS RECEIPT IS FROM AGRICULTURAL INCOME. 6.2. IN VIEW OF THE ASSESSEE'S COUNSEL AFFIDAVIT UN DER REFERENCE, THE SANCTITY OF THE VERIFICATION SIGNED BY THE ASSE SSEE IN THE RETURN HAS BEEN ERODED. THIS SHALL LEAD TO CERTAIN UNCALLE D FOR RAMIFICATIONS. THE ASSESSEE CAN WRITE ANY BOGUS INC OME IN THE RETURN AND LATERONE IN THE APPELLATE PROCEEDINGS TH ROW THE ENTIRE RESPONSIBILITY ON HIS COUNSEL FROM WRONG ADVISE AND FILE ADDITIONAL EVIDENCES AND SEEK RELIEF. IN THIS WAY T HE INCOME SHOWN IN THE RETURN DULY SIGNED BY THE ASSESSEE HOL DS NO SANCTITY AND THE SAME CAN BE CHANGED AT THE APPELLATE PROCEE DINGS. BY DOING SO, THE ASSESSEE CAN GO SCOT FREE SHIFTING AL L BLAME ON HIS COUNSEL. THE ACCEPTANCE OF COUNSEL'S AFFIDAVIT WILL GIVE LEGITIMATE RISE THAT THE ASSESSEE, SH. BALWINDER SINGH WHO HAD VERIFIED THE RETURN OF INCOME FALSELY KNOWING THE SAME TO BE FAL SE OR DID NOT BELIEVE THE SAME TO BE TRUE AT THE TIME OF MAKING T HE VERIFICATION. IT WILL ALSO EMERGED THAT THE ASSESSEE HAD WILLFULL Y GIVEN/MADE FALSE/WRONG VERIFICATION UNDER THE INCOME TAX ACT. THE ASSESSEE HAS SIGNED THE RETURN FILED FOR THIS YEAR CONFIRMIN G THE CONTENTS THEREOF, WHICH LATERON STATED THAT THE CONTENTS OF THE RETURN WERE WRONG AS HE WAS WRONGLY ADVISED BY HIS EARLIER COUN SEL. THIS IS A CLEAR CUT ADMISSION OF GUILT. THE AO AFTER MAKI NG NECESSARY ENQUIRIES CONCLUDED THAT THE AGRICULTURAL INCOME SH OWN WAS BOGUS. AS A PART OF AFTER THOUGHT THE ASSESSEE TRI ED TO COVER UP THE SAME BY THROWING ALL THE ONUS ON HIS EARLIER CO UNSEL AS A DAMAGE CONTROL EXERCISE BY HIM. THUS, THE ASSESSEE INTER ALIA MADE AN ATTEMPT SO THAT HE WOULD HAVE BEEN TO GET A WAY WITH HIS NEFARIOUS OF EVADING THE INCOME TAX. SINCE THE ASSESSEE HAS TAKEN THE SERVICES OF HIGHLY QUALIFIED ADVOCATE, THEREFORE, IT CANNOT BE ACCEPTED THAT MIS TAKE WAS OCCURRED IN IGNORANCE OF LAW OR DUE TO KNOWLEDGE AN D IS BONA FIDE ONE. THE IGNORANCE OF LAW AS CLAIMED BY THE AS SESSEE IS NOT AN EXCUSE. FURTHER, THE AFFIDAVIT TO THE EFFECT THAT THE MISTAKE OCCURRED ON ACCOUNT OF WRONG ADVICE OF THE COUNSEL COULD NOT BY ITSELF CONSTITUTE EVIDENCE TO BE CONSIDERED. IN THE CASE OF BABU RAM VS. DEVINDER MOHAN KAURA & OTHERS, AIR 1981 DEL HI 14 IT HAS BEEN HELD THAT THE COUNSEL MUST DISCLOSE THE CI RCUMSTANCES IN WHICH INCORRECT ADVICE WAS GIVEN. WHETHER ANY COMPL AINT/PETITION HAS BEEN FILED BY THE COUNSEL FOR HIS SAID ACTION I S ALSO NOT 16 MENTIONED IN THE WRITTEN SUBMISSION. THE CONTENTS O F AFFIDAVITS FILED BY, THE ASSESSEE HAS NOT BEEN VERIFIED FROM T HE SAID COUNSEL. NOW IT IS TO BE ASCERTAINED THAT WHICH VERSION OF T HE ASSESSEE IS CORRECT OUT OF (I) WHETHER THE RETURN WAS SIGNED BY THE ASSESSEE WITH BELIEF THAT WHATEVER WAS NARRATED BY HIM WAS INCORPORATED IN THE RETURN BY THE COUNSEL (II) THE ASSESSEE WAS NOT PROPERLY GUIDED/WRONGLY ADVISED BY HIS PREVIOUS COUNSEL ON THE ISSUE OF DAIRY FARMING BUSINESS (HI) OR INAD VERTENTLY BY MISTAKE, THE COUNSEL CONSIDERED THE INCOME OF RS . 14 LACS FROM SALE OF DAIRY ANIMALS SOLD BY THE ASSESSEE IN THAT YEAR AS AGRICULTURAL INCOME. IN THAT VIEW OF THE MATTER, TH E PLEA TAKEN BY THE ASSESSEE DID NOT PREVAIL OVER THE ON GOING PROC EEDINGS, AND NOT MAINTAINABLE. 7. APPLICABILITY OF SECTION 68 OF THE I.T. AC T, 1961:- THE ASSESSEE HAS FURTHER CONTENDED THAT THE PROVISI ONS OF SECTION 68 OF THE I.T. ACT ARE NOT APPLICABLE TO HIS CASE, AS IT ORDAINS THAT WHERE THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE, THE SUM SO CREDITED MAY BE CHARGED U/S 68 O F THE I.T. ACT, 1961. IT IS SUBMITTED THAT THE PROVISION OF SECTION 68 OF THE I.T. ACT, 1961 HAVE BEEN INVOKED BY THE THEN AO BECAUSE THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE WAS FOUND TO BE BOGUS. FURTHER IT IS WORTHWHILE TO SUBMIT HERE THA T DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNIS HED HIS CAPITAL ACCOUNT, PROFIT AND LOSS ACCOUNT FOR THE YE AR 1998-99 TO 2001-02, BALANCE SHEET AS ON 31.03.2003 IN WHICH SH OWN NET PROFIT TO TUNE OF RS.30,25,500/-. IN ADDITION TO, H E HAD SHOWN INVESTMENTS, CASH AND DEPOSIT AMOUNTING TO RS. 9,50 ,197/-. ALSO WHEN ANY ASSESSEE CARRYING ON ANY BUSINESS OR PROFE SSION OF DAIRY FARMING AND SALE/PURCHASE OF ANIMALS HE WAS R EQUIRED TO MAINTAIN PROPER RECORDS/ BOOKS OF ACCOUNTS THEREOF. 7.2. FURTHER, DURING THE YEAR UNDER REFERENCE ALL T HE TRANSACTIONS INCLUDING OF CAPITAL INTRODUCTION BY T HE ASSESSEE IN FIRM M/S SIRTHALA RICE MILLS AS PARTNER WERE MADE I N CASH. DURING THE ASSESSMENT PROCEEDINGS HE WAS CATEGORICA LLY ASKED TO EXPLAIN AS TO WHY AN ADDITION OF RS. 30,25,500/-MAY NOT BE MADE U/S 68 ON ACCOUNT OF BOGUS AGRICULTURAL INCOME SHOW N BY HIM, BUT HE FAILED TO SUBSTANTIATE HIS CLAIM. THEREFORE, OUT OF RS. 30,25,500/-AFTER ALLOWING BENEFIT OF AGRICULTURAL I NCOME TO THE EXTENT OF RS. 65,500/-, THE REMAINING AMOUNT OF RS. 29,60,000/- WAS TREATED BY THE A.O. FROM THE SOURCES NOT DISCLO SED TO THE DEPARTMENT AND ASSESSED U/S 68 OF THE I.T. ACT, 196 1. PROPER 17 RECORD/THE BOOKS OF ACCOUNTS EVEN IN CASE OF AGRICU LTURAL INCOME IS TO BE MAINTAINED JUST LIKE IN CASE OF BUS INESSMEN. IT IS NOT OUT OF PLACE TO SUBMIT HERE THAT THE CIT(A)-II, LUDHIANA VIDE APPELLATE ORDER DATED 06.02.2008 THOUGH DELETE D AN ADDITION OF RS.25,00,200/- AND CONFIRMED THE ADDITI ON OF RS. 5,25,300/-, YET DID NOT SEE ANY REASON TO INTERFERE WITH THE FINDINGS OF THE A.O. ON THIS ACCOUNT. 8. SALE POPLAR TREES: THE ASSESSEE HAD CLAIMED THAT POPLAR TREES WERE PLA NTED IN 1998-99 AND SOLD IN 2002-03 AT NET PROFIT OF RS.30. 01 LACS OUT OF WHICH RS. 25.19 LACS WAS INVESTED IN THE RICE SHELL ER. ON BEING CONVINCED BY THE ASSESSEE, INCOME OF RS.11 LACS FRO M POPLAR TREES WAS CONSIDERED BY THE LD. CIT(A). DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN HIS STATEMENT THE ASSESSE E HAS STATED THAT SH.AMARJIT SINGH LOOKED AFTER THE WORK OF POPL AR TREES TILL THEIR SALE. BUT, WHEN SH. AMARJIT SINGH CONFRONTED BY THE A.O., HE CATEGORICALLY REFUSED THAT HE NEVER LOOKED AFTER TH E POPLAR TREES OF THE ASSESSEE. THE THEN AO FURTHER ENQUIRED INTO THE VERSION OF SH. AMARJIT SINGH, AND INSPECTOR OF INCOME TAX WAS DEPUTED, WHO REPORTED THAT SH. AMARJIT SINGH WAS NOT MAN OF MEANS AND USED TO EARN LIVELIHOOD FROM REARING FIVE BUFFALOES AND HE WAS NEVER IN THE BUSINESS OF PURCHASE & SALE OF POPLAR TREES AS CLAIMED BY THE ASSESSEE. SO AS TO COPY OF AFFIDAVIT DATED 24.11.2005 OF SH. AMARJEET SINGH NOW FURNISHED BY T HE ASSESSEE IS CONCERNED, IT IS SUBMITTED THAT THERE IS NOTHING NEW IN SAID DOCUMENT AND THE SAME HAS ALREADY BEEN CONSIDERED/EXAMINED BY THE AO DURING THE ASSESSME NT PROCEEDINGS. 8.2. FURTHER, IT WAS STATED BY THE ASSESSEE THAT H E SOLD PART OF POPLAR TREES TO SH. AJMER SINGH S/O SH.LACHMAN SING H, R/O BHARTHALA. BUT IN THE AFFIDAVIT DATED 21.-11.2005 S H. AJMER SINGH HAD DECLINED OF HAVING ANY PURCHASE OF POPLAR S TREES FROM THE ASSESSEE AND AFFIRMED THAT HE DOES NOT KNOW THE ASSESSEE. FURTHER, ON 30.12.2005 WHEN SH. AJMER SINGH WAS CRO SS EXAMINED BY THE AO, HE AGAIN CONFIRMED THE CONTENTS OF HIS AFFIDAVIT THAT HE NEVER PURCHASED POPLAR TREES FROM THE ASSESSEE. WITH REGARD TO OTHER TWO PERSONS TO WHOM THE POPLAR TREES WERE ALLEGEDLY SOLD BY THE ASSESSEE IS CONCERNED, IT IS SUBMITTED THAT SAID PERSONS WERE NEITHER PRODUCED BEFORE THE AO NO R THEIR PARTICULARS FURNISHED BY THE ASSESSEE TO AVOID FURT HER INVESTIGATION IN THE MATTER. AS PER GIRDAWARI, POPL AR TREES WERE 18 PLANTED ONLY ON 3 BIGHA 5 BISWAS LAND ONLY. AS THE ALLEGED SALES WERE MADE IN CASH AND NO PROOF OF SALE PROCEEDS HAS BEEN FILED, THEREFORE, THE GENUINENESS OF THE CASH TRANSACTIONS REMAINED UNVERIFIED. ALSO NEITHER THE PERSON TO WHOM THE ASS ESSEE CLAIMED TO HAVE LOOKED AFTER THE POPLAR TREES HAS CONFIRMED THE CLAIM OF THE ASSESSEE NOR THE PERSONS TO WHOM HE STATED TO HAVE SOLD POPLAR TREES HAS CONFIRMED OF HAVING PURCHASED POPL AR TREES FROM THE ASSESSEE. AS REGARDS THE PLANTATION INSPECTION REPORT DATED 28.08.1999 ISSUED BY M/S POPLAR NURSERIES AND FARMS FURNISHED BY THE ASSESSEE ALONGWITH WRITTEN SUBMISSION IT IS SUBMITTED THAT IT IS NOTHING BUT A SELF SERVING DOCUMENTS FOR WANT OF VERIFICATION OF THE SAME. THUS, IN THE ABSENCE OF A NY CORROBORATIVE EVIDENCE IN SUPPORT OF ITS CONTENTION AND SALE OF POPLAR TREES OUT OF WHICH THE INCOME AS SHOWN WAS E NJOYED, THE ASSESSEE'S CLAIM CANNOT BE RELIED UPON. 9. FURTHER, WITHOUT PREJUDICE TO ABOVE IF THE EX PLANATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SATISFACT ORY, THERE IS PRIMA FACIE EVIDENCE AGAINST THE ASSESSEE, AND IF H E FAILS TO REBUT THE SAME, THE SAID EVIDENCE BEING UNREBUTTED CAN BE USED AGAINST HIM. THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING THE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVE D BY AN ASSES SEE IS ON HIM. WHERE THE NATURE AND SOURCE OF A RECEIPT, WHETHER IT BE OF MONEY OR OTHER PROPERTY, CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPE N TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND N O FURTHER BURDEN LIES ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE - ROSHAN DI HATTI VS. CIT (1977), 107 ITR 938 (SC)/ KALE KHAN MOHAMMAD HANIF VS. CIT (1963) 50 IT R 1 (SC). FURTHER, WHERE THE ASSESSEE HAS FAILED TO PROVE SAT ISFACTORY THE SOURCE AND NATURE OF A CREDIT ENTRY IN HIS BOOKS, A ND IT IS HELD THAT THE RELEVANT AMOUNT IS THE INCOME OF THE ASSESSEE, IT IS NOT NECESSARY FOR THE DEPARTMENT TO LOCATE ITS EXACT SO URCE - CIT VS. M. GANPATHI MUDALIAR (1964), 53 ITR 623 (SC)/ A. GOVINDARAJULU MUDALIAR VS. CIT (1958), 34 ITR 807 ( SC). 10. I HAVE GONE THROUGH THE WRITTEN SUBMISSION/ CONTENTIONS OF THE ASSESSEE AND ON CAREFUL CONSIDER ATION IT WAS FOUND THAT THESE ARE MERE REPETITIONS OF THE VERSIO N/FACTS ALREADY EXAMINED DURING THE ASSESSMENT PROCEEDINGS. THE AO IN THE BODY OR ORDER HAS CLEARLY OUTLINED THE VARIOUS INSTANCES ON WHICH THE ASSESSEE HAS GIVEN WRONG STATEMENTS/FACTS AND NOT P RODUCED CORRECT STATE OF AFFAIRS/FACTS OF THE CASE ONLY TO MISLEAD THE 19 DEPARTMENT. AS THE ASSESSEE HAS FAILED TO BRING ON RECORD THE NEW SUPPORTING AND COGENT EVIDENCES, IT IS SUBM ITTED THAT THE ADDITIONS WERE MADE ON THE BASIS OF EXAMINATION/VERIFICATION OF MATERIAL AVAILABLE ON R ECORDS AND WHICH LED THE ASSESSING OFFICER TO REACH THAT C ONCLUSION. 11. THE REPORT OF THE ASSESSING OFFICER WAS FORWAR DED TO THE LEARNED COUNSEL FOR THE ASSESSEE, WHO HAS FI LED HIS WRITTEN SUBMISSIONS DATED 24.9.2013, IN WHICH IT WA S SUBMITTED AS UNDER : 1. IN PARA 2 INCOME FROM DAIRY FARMING. IN THIS PARA THE LD. A.O. HAS WRONGLY OBSERVED THAT THE ASSESSEE HAS EARNED DAIRY FARMING INCOME DURING THE YEAR AND THE SAME IS NEITHER DECLARED IN THE RETURN FILED NO R ADMITTED DURING THE ASSESSMENT YEAR. IN THIS REGARDS IT IS SUBMITTED THAT ASSESSEE IS NO T CLAIMING ANY INCOME EARNED FROM DAIRY FARMING DURING THE YEAR UN DER APPEAL, INSTEAD HE IS SAYING THAT HE RECEIVED A SUM OF RS.1400000/- FROM S. GURMUKH SINGH S/O SH. NIRANJAN SINGH VILLAGE GAJJANMAJRA TEHSIL MALERKOTLA DISTT. SANGRU R AGAINST SALE OF DAIRY FARM ANIMALS AND IN THE COURSE OF EAR LIER SUBMISSION BEFORE THE CIT (A), THE APPELLANT FILED A COPY OF CONFIRMATION OF HAVING RECEIVED A SUM OF RS.1400000 /- FROM S. GURMUKH SINGH S/O SH. NIRANJAN SINGH VILLAGE GAJJAN MAJRA TEHSIL MALERKOTLA DISTT. SANGRUR AGAINST SALE OF DA IRY FARM ANIMALS. HE IS AN INCOME TAX ASSESSEE AND HIS INCOM E IS ASSESSED U/S 143(3) AND HIS PAN: IS AZBES 5241 B. PHOTOCOPY OF HIS CONFIRMATION GIVEN EARLIER IS ALSO ENCLOSED MARKED AS ANNEXURE 'E' WITH OUR REPLY DATED 18/03/2013. AS SUCH, ASSESSEE IS ONLY HIGHLIGHTING HIS SOURCE T HAT AN AMOUNT OF RS.14 LACS IS RECEIVED FROM SALE OF DAIRY FARM ANIMALS (WHICH IS A CAPITAL RECEIPT) NOT INCOME FROM DAIRY FARMING AS UNDERSTOOD BY THE LD. A. O. NO FURTHER COMMENTS IS REQUIRED ON THE OBSERVATIONS OF THE LD. A.O. IN PARA 2.2 OF HIS LETTER DATED 08/04/2013 AS WELL. 20 IN PARA 3 THE LD. A. O. HAS ASSUMED THAT AVERAGE SA LE VALUE OF ONE BUFFLOW/COW IS ONLY RS.4000/- AS SUCH IT MEA NS 350 DAIRY ANIMALS WAS SOLD. FROM COPY OF BANK STATEMEN T FILED AS ANNEXURE, 'A ' AS REFERRED BELOW YOUR GOOD SELF WILL FIND THAT BANK DISPERSED LOAN AFTER CONSIDERING VALUE OF RS.1 1200/- PER ANIMAL. AS SUCH, THE OBSERVATIONS ARE BASED WITHOUT ANY LOGIC AND ONLY ON PRESUMPTION. ALL THE OTHER OBSERVATIONS LI KE GENUINENESS OF OWNERSHIP OF ANIMALS WAS NEVER INVES TIGATED, NO EXPENDITURE RELATING TO SALE OF ANIMALS WERE CLAIME D, ALSO TRANSPORTING OF ANIMALS TO &FRO REQUIRE LARGE EXPEN DITURE WHICH HAS NOT BEEN CLAIMED ARE IRRELEVANT OBSERVATIONS. ABOUT GENUINENESS OF OWNERSHIP OF ANIMALS, IT IS SU BMITTED THAT ASSESSEE RUN DAIRY FARM UNDER THE NAME MOHAN DAIRY HOUSE AT VPO SIRTHALA AND FOR PURCHASE OF ANIMALS HE TOOK LO AN FROM BANK OF INDIA PAYAL BRANCH. WHILE GOING THROUGH THE BANK LOAN STATEMENT YOUR GOOD SELF WILL FIND THAT, THE DETAIL OF PURCHASE OF ANIMALS IS ALSO GIVEN IN THE BANK STATEMENT ITSELF. AS PER THE SAID STATEMENT THE ASSESSEE, PURCHASE 75 BUFFLOWS, 40 CO WS, 1 BULL AND I COW BULL. AS SUCH TOTAL ANIMAL PURCHASED WERE 117 . THEREFORE, COPY OF BANK STATEMENT WHEREIN DETAILS OF ANIMALS A RE PROVIDED IS ITSELF SUFFICIENT TO JUSTIFY THE SOURCE AND GENUINE NESS OF OWNERSHIP OF ANIMALS. COPY OF BANK LOAN STATEMENT I S ENCLOSED FOR YOUR KIND PERUSAL MARKED AS ANNEXURE 'A '. FURTHER, IN PARA 3.2 THE LD. A. O. HAS STATED THAT - RELIANCE WAS SUPPORTED ON THE FACT THAT S. GURMUKH SINGH HAD SUR RENDERED AN AMOUNT OF RS.8.25 LACS IN SURVEY U/S 133A ON 08/06/ 2004 WHEREAS ASSESSMENT YEAR UNDER CONSIDERATION IS 2003 .04 I.E. EARLIER ASSESSMENT YEAR. IN THIS REGARDS WE SUBMIT AND PLACE RELIANCE ON THE OBSERVATIONS GIVEN IN PARA 12(PAGE 4-5) IN HIS ORDER DATED 06/02/2008 BY THE HON'BLE CIT (APPEALS) -11 AND RELEVANT EXTRACT OF WHICH IS REPRODUCED HERE UNDER- PARA 12.I HAVE GONE THROUGH THE RELEVANT RECORD, THE REPORTS OF THE ASSESSING OFFICER AND THE SUBMISSION S MADE BY THE APPELLANT DISCUSSED ABOVE. I HAVE ALSO CAREF ULLY CONSIDERED THE CONTENTION OF THE LD. COUNSEL FOR TH E APPELLANT. I AGREE WITH THE LD. COUNSEL THAT ULTIMATELY TAXES SHOULD BE LEVIED OR NOT LEVIED UPON THE APPELLANT KEEPING IN VIEW THE TRUE AND CORRECT POSITION AND STATE OF AFFAIRS. THE FACT THAT THE APPELLANT WAS CARRYING ON THE BUSINESS OF DAIRY FAR MING SINCE 1997 DULY BROUGHT OUT EVEN IN THE STATEMENT OF SH.R AKESH KUMAR, THE BROTHER OF THE APPELLANT RECORDED BY THE A.O. ON 21 12.08.2005. IN THIS STATEMENT, SH. RAKESH KUMAR HA D DULY STATED THAT THE LOAN OF RS.22 LACS WAS RAISED BY TH E APPELLANT FOR DAIRY FARMING. FURTHER, THE SALE OF THE ENTIRE ANIMALS OF THE DIARY FARM TO SH. GURMUKH SINGH S/O SINGH V.P. O. GAJJANMAJRA, TEHSIL MALERKOTLA IS ALSO BROUGHT OUT AND EVIDENCED FROM HIS STATEMENT MADE DURING THE COURS E OF SURVEY BY THE DEPARTMENT IN HIS CASE. SH. GURMUKH S INGH IS SHOWN TO BE ASSESSED TO TAX WITH PERMANENT ACCOUNT NUMBER (PAN) : AZBES5241B. IN THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT AN AFFIDAVIT OF SH. GURMUKH SINGH WAS ALSO SUBMITTED WHEREIN HE WAS SWO RN THAT A SURVEY WAS MADE ON HIS BUSINESS PREMISES ON 08.06.2004 U/S 133A OF THE INCOME TAX ACT, 1961 AND THAT WHEREIN HE HAD MADE VOLUNTARY SURRENDER OF RS.82500 0/~ TOWARDS INCOME IN HIS NAME. IN THIS AFFIDAVIT SH, G URMUKH SINGH HAD CONFIRMED HAVING PAID RS.14 LACS DURING THE FIN ANCIAL YEAR 2002-03 TO THE APPELLANT AGAINST THE PURCHASE OF DA IRY FARMING ANIMALS. THIS AFFIDAVIT WAS ALSO INCLUDED IN THE ADDITIONAL EVIDENCE FORWARDED TO THE A. O. FOR HIS REPORT. KEEPING IN VIEW THE ABOVE EVIDENCE AND THE AFFIDAVI T OF THE APPELLANT ALSO IN THIS RESPECT, THE CONTENTION OF T HE APPELLANT APPEARS TO BE CORRECT AND THE SUBMISSIONS AS ABOVE APPEAR TO BE DEPICTING TRUE STATE OF AFFAIRS. ON THE STRENGTH OF SUCH EVIDENCE ITSELF IN THE REPORT OF THE A. O. MENTIONED ABOVE, HE HAS ALSO OPINED THAT APPELLANT'S CONTENTION THAT HE WAS NOT PROPERL Y GUIDED BY THE THEN COUNSEL AND C.A. MIGHT HAVE SOME SUBSTANCE AND IS A MATTER OF OPINION. KEEPING IN VIEW THE ABOVE DISCUSSION TH E CLAIM OF THE APPELLANT THAT HE WAS HAVING RS.14 LACS OUT OF THE SALE PROCEEDS OF THE DIARY ANIMALS AS RECEIVED FROM SH. GURMUKH SING H HAS TO BE ACCEPTED. IN VIEW OF THE FACTS, WHICH ARE DULY VERIFIED EVEN BY THE HON'BLE CIT (APPEALS)-II IN HIS ORDER, DATED 06/02/ 2008 IT CANNOT BE STATED THAT S. GURMUKH SINGH HAD GIVEN TH E AMOUNT OUT THE SURRENDERED AMOUNT OF RS.8.25 LACS. IN OU R WRITTEN SUBMISSION DATED 18/03/2013 WE HAVE ONLY STATED THA T ASSESSEE HAD RECEIVED A SUM OF RS.1400000/- FROM S. GURMUKH SINGH S/O SH.NIRANJAN SINGH VILLAGE GAJJANMAJRA TEHSIL M ALERKOTLADISTT. SANGRUR AGAINST SALE OF DAIRY FARM ANIMALS. HE IS A N INCOME TAX ASSESSEE AND HIS INCOME IS ASSESSED U/S 143(3) AND HIS PAN: IS AZBES 5241 B. PHOTOCOPY OF HIS CONFIRMATION GIVEN EARLIER IS ALSO ENCLOSED MARKED AS ANNEXURE 'E' FOR YOUR KIND PERUSAL & 22 ORIGINAL PRODUCED FOR VERIFICATION. AS OBSERVED BY THE HON 'BLE CIT (APPEALS)-II IN HIS ORDER, DATED 06/02/2008 S. GURMUKH SINGH EVEN CONFIRMED HAVING PAID RS.14 LACS DURING THE F.Y.2002.03 TO THE APPELLANT AGAINST PURCHASE OF DA IRY FARMING ANIMALS. AS SUCH, THE VERSIONS GIVEN BY THE LD. A. O. IN THIS PARA ARE MISLEADING. 3. IN PARA 4 OF HIS LETTER THE LD. A.O. HAS RAISED THE ISSUE OF LAND HOLDING/OWNERSHIP OF AGRICULTURAL LAND AND CON CLUDED THAT THE ASSES SEE HAD ONLY 3 BIGHAS 5 BISWAS I.E. LESS THAN ONE ACRE OF LAND ONLY AND NOT 29 BIGHAS AS CLAIMED; BY THE A SSES SEE AND IN PARA 5 REGARDING AGRICULTURAL INCOME. IN THIS REGARD WE DRAW YOUR HONOR'S KIND INTENTION TO PARA 13 OF EARLIER ORDER OF CIT(A) DATED. 06/02/2008, WH EREIN IT IS SPECIFICALLY STATED THAT - THE FACT WITH REGARD TO THE APPELLANT USING AREA OF 5-1/2 ACRES (27 BIGHAS AND 7 BISWAS) IS APPARENT FROM THE KHASRAGIRDAWRI AND FARDJAMABANDI ETC. DULY SHOWING THE PLANTING OF POPLAR TREES. THOUGH IN THE ORIGINAL ORDER THE ASSESSING OFFICER HAS OBSERVED THAT THE APPELLANT H AD ONLY 3 BIGHAS AND 5 BISWAS OF LAND WHICH WAS USED FOR PLAN TATION OF POPLAR TREES, ON THE STRENGTH OF THE ADDITIONAL EVI DENCE FILED BY THE APPELLANT IN THE REPORT DATED 28.06,2007, TH E A.O. HAS DULY OBSERVED THAT ALTHOUGH THE APPELLANT'S CONTENT ION REGARDING PLANTATION OF POPLAR TREES IN 27 BIGHAS AND 6 BISWA S SEEMS TO BE IN ORDER BUT THE SALE OF POPULAR WOOD @ RS.300/- PE R QUINTAL IS WITHOUT ANY DOCUMENTARY EVIDENCE. THEREFORE, FROM THE REPORT OF THE A.O. DATED 28.06.2007 IT IS ALSO CLEAR THAT HE HAS ALSO ACCEPTED THE CLAIM THAT THE POPLAR TREES WERE PLANT ED BY THE APPELLANT IN 27 BIGHAS AND 6 BISWAS OF AGRICULTURAL LAND. 3. FURTHER, THE LD. A. O. HAS IGNORED THE FACT THAT AS SESSEE HAS TAKEN LAND 16-BIGHA ON LEASE FROM SH.MUNISH KUMAR, RAKESH KUMAR & PARSHOTAM LAL, (COPY OF LEASE DEED WAS PRO VIDED IN THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL. EVEN NOW ENCLOSED MARKED AS ANNEXURE 'B', ORIGINAL PRODUCED FOR YOUR KIND PERUSAL ). EVEN THE REFERENCE TO THE HOLDING OF LA ND MEASURING 9- 19 OF SH. SHAM LAL THROUGH HIS POWER OF ATTORNEY (MUKHTIYARNAMA) BISHKA NO. 98 DATED 05/12/1996 BY T HE ASSESSEE IS ALSO GIVEN IN THE SAID LEASE AGREEMENT. THE HON'BLE CIT (APPEALS) IN HIS EARLIER ORDER PARA 13 ALSO OBSERVED THAT -'THOUGH IN HIS REPORT DATED 28. 06.2007 THE A.O. HAS DOUBTED THE GENERATION OF AGRICULTURE INCOME OF RS. 23 12 LACS FROM 27 BIGHAS AND 6 BISWAS AGRICULTURE LAN D. IT IS SEEN THAT IN THE ORIGINAL ASSESSMENT ORDER ITSELF THE ASSESSI NG OFFICER HAS WORKED OUT THE AGRICULTURE INCOME OF RS.65,500/- FR OM 3 BIGHAS AND 5 BISWAS WHICH WAS SHARED BY THE APPELLANT EQUALLY WITH HIS TWO BROTHERS. THEREFORE, THE A. O. HAS ESTIMATED THE TO TAL INCOME FROM 3 BIGHAS AND 5 BISWAS AT RS. (65500 * 3) = RS. 196,50 0/-. IF THIS RATE IS APPLIED TO THE TOTAL AGRICULTURE LAND OF 27 BIGHAS AND 6 BISWAS ACCEPTED BY THE A.O. IN HIS REPORT AS ABOVE, THE GR OSS INCOME SHOWN BY THE APPELLANT AT RS.1200,000/- DOES NOT AP PEAR TO BE ONE THE HIGHER SIDE. EVEN OTHERWISE, AS EXPLAINED WITH THE HELP OF EVIDENCE IN THE SHAPE OF REPORTS OF PAU, LUDHIANA, FILED IN THE ADDITIONAL EVIDENCE AND WHICH IS DISCUSSED IN PARA 10 OF THIS ORDER ALSO, THE APPELLANT COULD GET 1100 TREES FROM 27 BI GHA AND 6 BISWAS OF AGRICULTURE LAND @ 200/- TREES PER ACRE. TAKING INTO ACCOUNT THE SURVIVAL RATE OF 90% THE MATURE PLANTS, AT THE END OF PERIOD OF 5 YEARS WOULD WORK OUT TO 1000. AS PER TH ESE REPORTS OF PAU, THIS COULD GIVE 4000 QUINTALS OF WOOD @ 400/- QUINTALS PER TREE, AND APPLYING THE RATE OF RS.300/-PER QUINTAL, THE TOTAL SALE PROCEEDS OF POPULAR TREES AS WORKED OUT BY THE APPE LLANT AT RS. 1200,000/- APPEARS TO BE JUSTIFIED. FURTHER R EDUCING EXPENSES OF RS.1LAC FROM THIS INCOME AND TAKING INTO ACCOUNT RS.20,000/- CLAIMED TO BE EARNED BY THE APPELLANT FROM THE PADD Y SOWN IN HIS OWN AGRICULTURE LAND, THE AGRICULTURAL INCOME WO RKED OUT AT RS.11.20 LAC APPEARS TO BE JUSTIFIED AND ACCEPTABLE . KEEPING IN VIEW THE ABOVE DISCUSSION, THE EVIDENCE BROUGHT ON RECORD AND PARTICULARLY REPORT OF THE A.O., THE CLAIM OF THE A PPELLANT WITH RESPECT TO EARNING OF AGRICULTURE INCOME OF RS.11.2 0 LAC IS ACCEPTED. AS SUCH, IT IS QUITE CLEAR THAT FROM THE LD. A.O. HAS ACCEPTED THE CLAIM THAT THE ASSESSEE ON LAND MEASUR ING 27 BIGHAS AND 6 BISWAS PLANTED POPLAR TREES. -AS PER THE REPO RT OF PAU, THIS COULD GIVE 4000 QUINTALS OF WOOD @ 400/~ QUINTALS P ER TREE, AND APPLYING THE AVERAGE SALE RATE OF RS.375/- PER QUIN TAL, THE TOTAL INCOME FROM AGRICULTURAL COMES TO RS.1500,000/- AS AGAINST THE DECLARED INCOME OF RS.1645,300/'. EVEN, IN THE COUR SE OF PROCEEDINGS THE MARKET RATE OF WOOD DURING THE YEAR JANUARY TO DECEMBER 2001 WAS GIVEN AS PER THE CHART IN THE MON TH OF MARCH THE RATE WAS RS. 420-450 AND IN DECEMBER 300-320. A S SUCH THE AVERAGE RATE IS TAKEN THE SALE RATE SELL BE NOT LES S THAN RS.375/-. COPY OF CHART IS ENCLOSED MARKED ANNEXURE 'C'. EVEN S. AMARJIT SINGH ON HIS AFFIDAVIT FILED WITH OUR EARLI ER REPLY DATED L8/03/2013 MARKED AS ANNEXURE 'E', HAS CONFIRMED TH E SALE RATE OF POPLAR TREES OF RS.450/- TO RS.500/- PER QTLS. I N VIEW OF THE ABOVE FACTS & SUBMISSIONS THE AGRICULTURE INCOME DE CLARED BY 24 ASSESSEE COMES TO RS.1645, 300/- BE ACCEPTED INSTEA D OF RS.1120,000/- ACCEPTED EARLIER BY THE CIT-(A) AS TH E DIFFERENCE IS WITHIN 10% PLUS/MINUS ESTIMATION. 4. IN PARA 6 THE LD. A.O. HAS GIVEN HIS OBSERVATION S REGARDING THE WRONG ADVICE OF THE COUNSEL/ADVOCATE. HOWEVER, HE HAS IGNORED THE FACT THAT THE HON'BLE I TAT IN ITS ORDER AT PAGE 14 OBSERVED THAT - INFACT THE ASSESSES DID FURNISH AN AFFIDAVIT IN THIS REGARD BEFORE THE CIT(A) BUT I N THE ABSENCE OF CLINCHING CORROBORATIVE EVIDENCE, IN THE SHAPE O F A CONFIRMATION FROM THE THEN COUNSEL, SUCH AFFIDAVIT CAN ONLY BE SEEN AS A SELF SERVING APPROACH. THE CIT-(APPEALS) HAS ACCEPTED THE CONTENTS OF THE AFFIDAVIT WITHOUT CRITICALLY EX AMINING AS TO WHETHER THE SAME WAS BONAFIDE AND PROPER. AS SUCH, THE ASSESSEE FILED CONFIRMATION IN THE SHAPE OF AN AFFI DAVIT OF HIS EARLIER COUNSEL WHO ADVISED & FILED THE RETURN TO SUPPORT HIS CONTENTION GIVEN EARLIER BEFORE THE HON'BLE CIT- (A PPEALS). THEREFORE IT IS QUITE CLEAR THAT IN HIS EARLIER ORD ER DATED 06/02/2008, THE HON'BLE CIT (APPEALS) HAS RIGHTLY A CCEPTED THE RECEIPT OF RS.14 LACS FROM SALE OF DAIRY ANIMALS A ND WE RELY ON THAT ORDER. IN VIEW OF THE FACTS STATED ABOVE IN THIS APPEAL AN D FILLING OF THE EVIDENCE ARE SECURELY COVERED UNDER RULE 46 A O F THE INCOME TAX RULES, 1962 AND IS SUPPORTED BY THE JUDGMENTS O F THE HON'BLE SUPREME COURT & VARIOUS HIGH COURTS AS STATED UNDER :- 1. JUTE CORP. OF INDIA VS CIT (1991) 187 ITR 688 (S C) 2. CIT V. KULDEEP INDUSTRIAL CORPORATION (2007) 209 CTR (P&H) 400 3. CIT V. PODDAR SWADESH UDYOG P LTD. (2007) 295 ITR 252 (GAU) 4. CIT V. PARIMAL KANTI CHANDA (2007) 291 ITR 77 (GAU) 5. SMT. PARABHAVATI S. SHAH V. CIT (1998) 231 ITR 1 (BOM) 6. CIT V. SURETECH HOSPITAL AND RESEARCH CENTRE LTD 293 ITR 53 (BOM- NAGPUR BENCH) 7. CIT V. VALIMOHMED AHMEDBHAI (1981) 134 ITR 214 (GUJ) 25 THE HON'BLE SUPREME COURT IN THE CASE OF JUTE CORPO RATION HELD THAT AN APPELLANT AUTHORITY HAS ALL THE POWERS , WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECIDING THE QUESTIO N BEFORE IT. A PERUSAL OF SECTION 250 OF THE INCOME TAX ACT, 1961, MAKES IT CLEAR THAT THE COMMISSIONER (APPEALS) HAS POWERS TO MAKE SUCH FURTHER ENQUIRY AS HE THINKS FIT OR, ALTERNATIVELY, HE MAY REQUIRE THE ASSESSING OFFICER TO MAKE SUCH FURTHER ENQUIRY AND TO REPORT THE RESULT OF THE SAME TO HIM. IT IS CLEAR FROM THE ABO VE PROVISION THAT IN EXERCISE OF POWERS UNDER THIS SECTION, THE COMMI SSIONER OF APPEALS IS ALSO ENTITLED TO ADMIT ADDITIONAL EVIDEN CE, WHICH HE MAY THINK NECESSARY FOR FACILITATING FURTHER ENQUIR Y. THE POWERS OF THE COMMISSIONER (APPEALS) ARE UNDOUBTEDLY VERY WID E. EVEN OTHERWISE, THE POWERS OF THE STATUTORY APPELLA TE AUTHORITY ARE CO-TERMINUS WITH THE POWERS OF THE AU THORITIES AT THE FIRST INSTANCE. SECTION 250 OF THE INCOME TAX A CT, 1961, PROVIDES FOR THE PROCEDURE FOR HEARING OF APPEAL AN D IT PROVIDES, INTER ALIA, THAT DURING THE COURSE OF HEA RING OF THE APPEAL, THE APPELLATE AUTHORITY MAY MAKE FURTHER IN QUIRY AS IT DEEMS FIT AND ALLOW APPELLANT TO TAKE FRESH GROUND S OF APPEAL NOT RAISED BY IT. RULE 46A OF THE INCOME TAX RULES, 196 2, PROVIDES FOR ADDUCING OF ADDITIONAL EVIDENCE 'AT THE STAGE OF AP PEAL HEARING. ON A PLAIN READING OF RULE 46A OF THE INCOME TAX RU LES, 1962, IT IS CLEAR THAT THE RULE IS INTENDED TO PUT FETTER S ON THE RIGHT OF THE ASSESSEE TO PRODUCE BEFORE THE APPELLATE ASSISTANT COMMISSIONER ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER TH AN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF THE P ROCEEDINGS BEFORE THE INCOME TAX OFFICER, EXCEPT IN CIRCUMSTAN CES SET OUT THEREIN. IT DOES NOT DEAL WITH THE POWERS OF THE AP PELLANT ASSISTANT COMMISSIONER TO MAKE FURTHER ENQUIRY OR TO DIRECT T HE INCOME TAX OFFICER TO MAKE FURTHER ENQUIRY AND TO REPORT THE R ESULT OF THE SAME TO HIM. THIS POSITION HAS BEEN MADE CLEAR BY S UB-RULE (4) OF RULE 46A WHICH SPECIFICALLY PROVIDES THAT THE RE STRICTIONS PLACED ON THE PRODUCTION OF ADDITIONAL EVIDENCE BY THE APPELLANT WOULD NOT AFFECT THE POWERS OF THE APPELL ANT ASSISTANT COMMISSIONER TO CALL FOR THE PRODUCTION OF ANY DOCU MENT OR THE EXAMINATION OF ANY WITNESS TO ENABLE HIM TO DISPOSE OF THE APPEAL. THE HON'BLE BOMBAY HIGH COURT NAGPUR BENCH IN THE C ASE OF CIT VS SURETECH HOSPITAL AND RESEARCH CENTRE LTD (2007) 293 ITR 53 HELD THAT EVEN THOUGH THE VITAL EVIDENCE WHICH WAS REQUIRED TO BE PRODUCED BY THE ASSESSEE AT INITIAL STAGE AND WAS NOT PRODUCED BY HIM THE APPELLANT AUTHORITY CAN PER MIT 26 PRODUCTION OF DOCUMENTS WHICH ENABLE HIM TO DISPOSE OF THE APPEAL BECAUSE RULE 46A(4) PROVIDES THAT NOTWITHSTA NDING RULE 46A(1) THE APPELLANT AUTHORITY CAN PERMIT PRODUCTIO N OF DOCUMENTS WHICH ENABLE HIM TO DISPOSE OF THE APPEAL . 5. IN PARA 7 THE LD. A.O. HAS STATED APPLICABILITY OF SECTION 68- IN THIS REGARDS IT IS SUBMITTED THAT ASSESSEE W AS A PARTNER IN SIRTHALA RICE MILL IN WHICH HE INTRODUCED CAPITAL. THE SOURCE OF THAT INTRODUCTION OF CAPITAL WAS AGRICULTURAL INCOM E FROM SALE OF POPLAR TREE AS WELL AS SALE OF DAIRY FARM ANIMALS. THE ASSESSEE BEING AN AGRICULTURIST & A PARTNER IN FIRM IS NEITH ER MAINTAINING NOR REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS AS SUCH IN THE ABSENCE OF BOOKS OF ACCOUNTS PROVISIONS OF SECTION 68 ARE NOT APPLICABLE. 6. FURTHER, IN PARA 8 OF HIS REPORT THE LD. A.O. HA S STATED THAT ON BEING CONVINCED BY THE ASSESSEE, INCOME OF RS. 11 LACS FROM POPLAR TREES WAS CONSIDERED BY THE LD. CIT (A). THI S CLEARLY MEANS THAT THE LD. A.O. HIMSELF AGREE THAT THE THEN HON'BLE CIT- (A) WAS CONVINCED THAT ASSESSEE HAD AGRICULTURAL IN COME OF RS.11 LACS NOT RS.65500/- AS DETERMINED BY HIM EARL IER. HE HAS FURTHER STATED THAT IN THE AFFIDAVIT OF S. AMARJIT SINGH DT. 24/11/2005 NOW FURNISHED BY THE ASSESSEE, THERE IS NOTHING NEW AND IT WAS ALREADY EXAMINED. HOWEVER HE HAS IGNORED THE FACT THAT AS PER HIS AFFIDAVIT HE HAS PURCHASED THE POPLAR WOOD FOR RS.125000/- FROM THE ASSESSEE AND THIS FACT CANNOT BE IGNORED TO HIGH LIGHT THE POINT THAT AGRICULTURAL INCOME IS NO T RS. 65,500/- AS DETERMINED BY THE A. O. FURTHER THE EVIDENCE OF RECEIPT OF RS.14 LACS FROM SALE PROCEEDS OF DAIRY ANIMALS WAS DULY PROVIDED AS STAT ED SUPRA AND AS EARLIER ACCEPTED BY THE THEN CIT-(A). IT FUL LY JUSTIFY THAT ASSESSEE WAS HAVING AT LEAST RS.25.20 LACS OF HIS O WN FUNDS I.E. RS.11.20 LACS OUT OF AGRICULTURAL INCOME AND RS.14 LACS OUT OF SALE OF ANIMALS(WHICH IS CAPITAL RECEIPT HENCE NOT TAXABLE). HOWEVER, THE THEN ADVOCATE OF THE ASSESSE E WRONGLY CONSIDERED THE AMOUNT OF RS.14 LACS AS AGRICULTURAL INCOME INSTEAD OF CONSIDERING IT AS CAPITAL RECEIPT BEING EXEMPT INCOME. THAT IS WHY THE ADDITIONAL EVIDENCES WAS GIVEN BEFO RE THE THEN HON'BLE CIT-(A) WHO ACCEPTED THE SAME AFTER GIVING OPPORTUNITY TO THE A. O. FURTHER, THE LD. A. O. HAS WRONGLY STATED THAT PLAN TATION INSPECTION REPORT OF POPLAR NURSERIES AND FARMS DT. 28.08.1999 27 FURNISHED BY THE ASSESSEE WITH THE WRITTEN SUBMISSI ON IS NOTHING WHAT A SELF-SERVING DOCUMENTS FOR WANT OF VERIFICAT ION OF THE SAME. IN THIS REGARD, IT IS SUBMITTED THAT IN THE I NSPECTION REPORT COMPLETE ADDRESS OF THE SAID INSPECTING AGENCY ALON G WITH ITS PHONE NUMBER IS GIVEN INSTEAD OF SAYING THAT IT IS SELF-SERVING DOCUMENTS. HE SHOULD HAVE VERIFIED FROM THAT AGENCY REGARDING GENUINENESS OF THE INSPECTION REPORT GIVEN. WE ARE FAILED TO UNDERSTAND WHAT OTHER CORROBORATIVE EVIDENCE THE LD . A.O. WANTS IN SUPPORT OF CONTENTION OF THE ASSESSEE. 7. THE SUPREME COURT IN A PRETTY OLD CASE OF KESHAV MILLS CO. LTD. VS. CIT (1956) 56 ITR 365 (SC), IN THE CONTEX T OF RULE 29 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1946 (CO RRESPONDING TO RULE 29 OF THE PRESENT INCOME-TAX (APPELLATE TRI BUNAL) RULES, 1963 AS IT STOOD PRIOR TO THE INSERTION MADE IN THA T RULE OF THE WORDS 'FOR REASONS TO BE RECORDED IN WRITING' HAD E XPRESSLY RECOGNIZED THE DISCRETIONARY POWER OF THE COMMISSIO NER OF INCOME-TAX (APPEALS) TO TAKE ADDITIONAL EVIDENCE AN D TO MAKE FURTHER INQUIRY, OF COURSE, UNDER SECTION 31(2) OF THE 1922 ACT. IN THE ABSENCE OF ANY BAR STIPULATED BY SECTION 250 (4) ITSELF (AND ITS CORRESPONDING OLD PROVISION OF SECTION 31(2), T HE COURTS HAVE UPHELD AN UNCONTROLLED AND UNHAMPERED DISCRETI ON OF THE COMMISSIONER OF INCOME-TAX (APPEALS) TO ADMIT ADDIT IONAL EVIDENCE WHICH HE FINDS NECESSARY FOR DISPOSAL OF APPEAL OR FOR MAKING FAIR ASSESSMENT. WE RELY ON , HANUTRAMRAMPRASAD VS. CIT 1977 CTR (GAU) 91 : (1978) 114 ITR 19 (GAU) SHANKAR KHANDASA RI SUGAR MILLS VS. CIT (1991) 97 CTR (KAR) 16 : (1991) 193 I TR 669 (KAR) : TC 11R.275, ARJANDASS VS. CIT 1977 CTR (P&H) 195 : (1978) 112 ITR 480 (P&H) : AND TAR A DEVI GOENKA VS. CIT (1980 ) 122 ITR 14 (CAL). FURTHER, THE HON'BLE DELHI HIGH COURT IN THE CASE O F CIT, DELHI-IV VS. HEWLETT PACKARD INDIA (P.) LTD[2008] 1 73 TAXMAN 162 HELD 'IT APPEARED THAT THE ASSESSEE WANT ED TO LEAD ADDITIONAL EVIDENCE BEFORE THE COMMISSIONER (APPEAL S) BUT THE REQUEST WAS DECLINED. AGAINST THAT VIEW OF THE COMM ISSIONER (APPEALS), THE ASSESSEE APPROACHED THE TRIBUNAL, WH ICH HELD THAT THE COMMISSIONER (APPEALS) .OUGHT TO HAVE TAKEN THE ADDITIONAL EVIDENCE ON RECORD. NO SUBSTANTIAL QUESTION OF LAW WOULD ARISE FOR CONSIDERATION OUT OF THAT FINDING. THAT APART, AS A RESULT OF THE TRIBUNAL PERMITTING THE ASSESSEE TO LEAD ADDITIONAL EVIDENCE, THE MATTER WAS REMANDED TO THE FILE OF THE ASSESSIN G OFFICER AND THEN, THE ASSESSING OFFICER HAD AFTER TAKING THE AD DITIONAL 28 EVIDENCE ON RECORD, PASSED A FRESH ASSESSMENT ORDER ACCEPTING THE CONTENTION OF THE ASSESSEE ON MERITS. THE ASS ESSMENT ORDER APPEARED TO HAVE BEEN ACCEPTED BY THE REVENUE AND, THEREFORE, THE ENTIRE EXERCISE IN THAT REGARD HAD BECOME ACADE MIC. HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF ACIT V . S.S. PHARMACEUTICALS (P.) [2003] 87 ITD 119 (ALL.) HELD THAT WHERE COMMISSIONER (APPEALS) ALLOWED ASSESSEE TO LE AD ADDITIONAL EVIDENCES AND ALL SUCH EVIDENCES WERE, BEFORE ADMIS SION, REFERRED TO ASSESSING OFFICER FOR HIS OBJECTION, ASSESSING OFFI CER HAVING FAILED TO SEEK CROSS-EXAMINATION OF ANY OF THOSE AFFIDAVIT S AND EVIDENCES, CONTENTS OF AFFIDAVITS OF CREDITORS AND DIRECTORS O F ASSESSEE WOULD BE DEEMED TO HAVE BEEN ADMITTED BY ASSESSING OFFICER - HELD, YES IN VIEW OF OUR SUBMISSION & FACTS OF THE CASE IT IS HUMBLY PRAYED THAT APPEAL BE ALLOWED. 12. THE LEARNED CIT (APPEALS), ON PERUSAL OF THE R EPORT OF THE ASSESSING OFFICER AND CONTENTION OF THE ASSE SSEE, NOTED THAT THERE WERE CERTAIN ISSUES WHICH REQUIRED TO BE EXAMINED AS PER THE DIRECTIONS OF THE TRIBUNAL REGA RDING THE EVIDENCE IN THE SHAPE OF CONFIRMATION FROM ASSESSEE S COUNSEL. ACCORDINGLY, THE MATTER WAS REMANDED TO T HE ASSESSING OFFICER AND THE ASSESSING OFFICER WAS DIR ECTED TO RECORD STATEMENTS OF S/SHRI GURMUKH SINGH AND RAKES H KUMAR TO VERIFY THE VERACITY OF THE CLAIMS MADE IN THE AFFIDAVITS. THE ASSESSING OFFICER WAS ALSO DIRECTE D TO MAKE NECESSARY ENQUIRIES IN ORDER TO VERIFY THE GENUINEN ESS OF THE ASSESSEES CLAIM REGARDING FOLLOWING ISSUES : I) INCOME FROM SALE OF DAIRY FARMING ANIMALS II) INCOME FROM AGRICULTURAL ACTIVITIES. 13. THE ASSESSING OFFICER VIDE HIS REPORT DATED 22.8.2013 SUBMITTED AS UNDER : 29 I. STATEMENT OF SH. GURMUKH SINGH SIR, SHRI GURMUKH SINGH S/O SH. NIRANJAN SINGH, VIL LAGE GAJJA MAJRA, TEHSIL MALERKOTLA, IS MORE THAN 84 YEARS OF AGE AND WAS NOT IN A POSITION TO ATTEND THIS OFFICE TO RECORD HIS STATEMENT. THEREFORE, INSPECTOR OF THIS WARD WAS DIRECTED TO VISIT THE RE SIDENCE OF SH. GURMUKH SINGH AT VILL. GAJJAN MAJRA AND RECORD HIS STATEMENT TO VERIFY THE VERACITY OF THE CLAIMS MADE IN THE EARLI ER AFFIDAVITS, SUBMITTED BEFORE THE CIT(A) IN PAPER BOOK AT PAGE N O.137 (VIDE RECEIPT NO. 61 DATED 14.05.2007). HIS STATEMENT WAS RECORDED ON 07.08.2013. DURING THE COURSE OF RECORDING OF STATEMENT, INSPEC TOR PARTICULARLY CONFRONTED SH. GURMUKH SINGH THE ABOVE SAID AFFIDAVIT WHEREIN HE HAS ADMITTED THAT HE HAD PURCHASED DAIRY FARM ANIMALS WORTH RS. 14 LACS FROM SH. BALWINDER SINGH C/O MOHA N DAIRY FARM VILL. SIRTHALA IN THE F. Y. 2002-03, SH, GURMUKH SI NGH ADMITTED THAT HE HAD PURCHASED DAIRY FARM ANIMALS FOR TOTAL VALUE OF RS. 14 LACS AND HE IS A REGULAR INCOME TAX ASSESSEE WITH I .T.O., MALERKOTLA HAVING PAN AZBES5241B, PHOTOCOPY OF STAT EMENT RECORDED BY INSPECTOR IS ALSO SUBMITTED HEREWITH. B ESIDES ABOVE, SH. GURMUKH SINGH ALSO INFORMED THE INSPECTO R THAT THIS AMOUNT HAS DULY BEEN ACCOUNTED FOR IN THE RETURN FO R THE A.Y. 2003-04. SIR, IT IS MADE CLEAR THOUGH SH. GURMUKH SINGH HAS ADMITTED THAT CONTENTS OF THE AFFIDAVIT ARE TRUE BU T HE FAILED TO ADVANCE ANY DOCUMENTARY PROOF OF THE DEALING, EXCEP T ADMITTING THAT CONTENTS OF THE AFFIDAVITS ARE CORRECT AND THE AMOUNT HAS BEEN DULY ACCOUNTED FOR IN THE INCOME TAX RETURN FO R THE A. Y. 2003-04 TAKING THE PLEA THAT THE ISSUE IS MORE THAN 13 YEARS OLD, THEREFORE, HE IS UNABLE TO SUBMIT THE DOCUMENTARY P ROOF EXCEPT THAT THE CONTENTS OF AFFIDAVIT ARE TRUE. (PHOTOCOPY OF STATEMENT IS ENCLOSED AS ANNEXURE 'A'). II) STATEMENT OF SH. RAKESH KUMAR AS DIRECTED STATEMENT OF SH. RAKESH KUMAR, ADVOCATE WAS ALSO RECORDED ON 25.07.2013. IN REGARD TO HIS A FFIDAVIT DATED 13.03.2013 FORWARDED TO THIS OFFICE VIDE YOUR OFFICE LETTER NO. 2207 DATED 22.03.2013, WHEREIN HE HAS ADMITTED THAT WHILE FILING THE INCOME TAX RETURN OF S. BALWINDER SINGH FOR A.Y. 2003-04 INADVERTENTLY BY MISTAKE CONSIDERED THE INC OME OF RS.14 30 LACS FROM SALE OF DAIRY FARM ANIMALS SOLD BY HIM IN THAT YEAR AS AGRICULTURE INCOME... ...' SIR, AFFIDAVIT DATED 13.03.2013 WAS SPECIFICALLY CO NFRONTED TO HIM AND DETAILED QUESTION WAS ASKED IN RESPECT T O ASSESSEE'S VERSION THAT HIS COUNSEL STRESSED UPON HIM NOT TO D ISCLOSE SALE OF DAIRY ANIMALS AND AGRICULTURAL INCOME SEPARATELY BE FORE INCOME TAX AUTHORITIES THE PARTICULAR QUESTION NO. 9 IN TH IS REGARD IS REPRODUCED HERE AS UNDER: Q.9 IN YOUR AFFIDAVIT AT POINT NO. 3, YOU HAVE MEN TIONED THAT INADVERTENTLY BY MISTAKE I CONSIDERED THE INCOME OF RS. 14 LACS FROM SALE OF DAIRY ANIMALS SOLD BY THE ASSESSEE AS AGRICULTURE INCOME. HOWEVER, THE ASSESSEE SHRI BALWINDER SINGH BEFORE THE WORTHY CIT(A) HAS ADMITTED THAT HE HAS NARRATED THE FULL FACTS IN RESPECT OF HIS INCOME I. E. SALE FROM ANIMALS SO LD AND AGRICULTURAL INCOME SEPARATELY WHEREAS HIS COUNSEL AND C.A. ADVISED HIM NOT TO MENTION HIS FACTS THAT IT WAS VE RY MUCH RELEVANT FOR EXPLAINING THE INVESTMENT MADE BY HIM IN M/S SI RTHALA RICE MILLS DURING THE RELEVANT PREVIOUS YEAR, HOW YOU WI LL JUSTIFY THAT THIS MISTAKE WAS COMMITTED INADVERTENTLY. PL. JUSTI FY. ANS. NO DOUBT, SH. BALWINDER SINGH NARRATED THE WH OLE RECEIPT I.E. RECEIPT FROM SALE OF ANIMALS AS WELL AS AGRICU LTURAL INCOME BUT DUE TO LACK OF CLARITY OF CLASSIFICATION OF CAPITAL RECEIPT FROM SALE OF ANIMALS VIZ A VIZ AGRICULTURE INCOME I TOOK THE ENTIRE RECEIPTS AS AGRICULTURE INCOME AND I ALSO STRESSED HIM TO ST ICK TO HIS STAND. I ADMIT MY MISTAKE WHICH HAS HAPPENED DUE TO LACK OF KNOWLEDGE OF INCOME TAX PROVISIONS IN THE INITIAL Y EARS OF MY INCOME TAX PRACTICES. INCOME/RECEIPT FROM SALE OF DAIRY FARMING ANIMALS FROM THE DOCUMENTS AVAILABLE AND RECORDS WHICH WERE SUBMITTED BEFORE THE THEN CIT(A) BY THE ASSESS EE, IT WAS OBSERVED THAT THE ASSESSEE HAD PURCHASED 117 DAIRY FARM ANIMALS AT A COST OF RS.13,10,400/- @ 11,200/- PER ANIMAL AND ALSO SPENT RS.6,69,600/- ON SHEDS OF THE ANIMALS. ALL THE MONE Y FOR PURCHASE OF ANIMAL AND CONSTRUCTION OF SHED WAS RAISED THROU GH LOAN FROM BANK OF INDIA ON 24.04.1998. THEREFORE, INCOME FROM DAIRY FARM CAN'T BE DENIED. AS FAR AS RECEIPT FROM SALE OF DAIRY FARM ANIMALS I S CONCERNED, IT IS INFORMED THAT THIS ISSUE WAS NEVER RAISED BY THE 31 ASSESSEE DURING THE COURSE OF PROCEEDINGS BEFORE TH E THEN AO, HOWEVER AT THE APPELLATE STAGE HE SUBMITTED AFFIDAV IT OF SH. GURMUKH SINGH S/O SH.NIRANJAN SINGH, AS PER YOUR DI RECTORS, THE STATEMENT OF SH. GURMUKH IN THE LIGHT OF HIS AFFIDA VIT SUBMITTED EARLIER WAS RECORDED BY INSPECTOR AT HIS HOUSE IN W HICH HE HAS ADMITTED THAT HE HAD PURCHASED DAIRY FARM ANIMALS F ROM SH. BALWINDER SINGH IN THE F. Y. 2002-03, WHICH HAS DUL Y BEEN TAKEN INTO ACCOUNT WHILE FILING I. T. RETURN FOR THE YEAR 2003-04. HE IS BEING ASSESSED TO TAX WITH I. T. O. MALERKOTLA. IT IS FURTHER INFORMED THAT SH. GURMUKH SINGH IS STILL IN THE BUSINESS OF DAIRY FARMING. FROM THE DOCUMENTS AVAILABLE ON RECORD AND ON THE B ASIS OF STATEMENT OF SH. GURMUKH SINGH RECORDED BY THE INSP ECTOR, IT MAY BE CONCLUDING THAT THE ASSESSEE WAS HAVING INCOME F ROM DAIRY FARMING AND RECEIPT FROM SALE OF DAIRY FARM ANIMALS . INCOME FROM AGRICULTURE ACTIVITIES RESPECTED SIR, THERE IS NO DOUBT THAT THE ASSESSEE IS IN RECEIPT OF INCOME FROM AGRICULTURAL ACTIVITIES. THE MAIN IS SUE OF DISPUTE IN A.Y. 2003-04 IS REGARDING AGRICULTURAL INCOME. THE THEN AO VIDE ORDER DATED 30.12.2005 PASSED U/S 143(3) OF L.T. AC T HAD DISALLOWED AGRICULTURE INCOME OF RS.29,60,000/- AS AGAINST DECLARED INCOME OF RS.30,25,500/- FROM POPULAR TREE S. THIS VERY ISSUE IS UNDER DISPUTE BEFORE YOUR GOODSELF. HOWEV ER, AS PER DOCUMENTS SUBMITTED BY THE ASSESSEE DURING ASSESSME NT PROCEEDINGS AS WELL AS BEFORE 1 ST APPELLATE AUTHORITIES, REVEALS THAT THE ASSESSEE WAS HAVING INCOME FROM AGRICULTUR AL ACTIVITIES. HOW MUCH INCOME HE DRAWS FROM SUCH ACT IVITIES IS STILL UNDER DISPUTE BEFORE YOUR GOODSELF IN VIEW OF DISALLOWANCE OF INCOME OF RS.29,60,000/- AGAINST AG RICULTURE INCOME OF RS.30,25,500/- BY THE THEN A.O. 14. THE ASSESSING OFFICER ALSO FORWARDED COPIES OF STATEMENTS OF S/SHRI GURMUKH AND RAKESH KUMAR TO TH E LEARNED CIT (APPEALS) FOR HIS PERUSAL. THE COPY OF THE REPORT OF THE ASSESSING OFFICER WAS FORWARDED TO TH E ASSESSEE, WHO HAS FILED WRITTEN SUBMISSIONS DATED 18.9.2013, IN WHICH IT WAS SUBMITTED AS UNDER : 32 WE REFER TO THE COPY OF REPORT SENT BY THE ITO, WAR D-I KHANNA VIDE HIS LETTER DATED 22 /08/2013, AFTER GOI NG THRU THE SAME WE SUBMIT AS UNDER :- A. IN PARA I) THE LD. A.O. HAS ADMITTED THAT STATEM ENT OF S. GURMUKH SINGH WAS RECORDED ON 07/08/2013, WHO CONFI RMED HIS AFFIDAVIT AS WELL AS THE PURCHASE OF ANIMALS FOR RS .14 LACS FROM THE APPELLANT IN THE FINANCIAL YEAR 2002.03 RELEVAN T TO A.Y. 2003.04 AS SUCH THE CONTENTION OF THE APPELLANT GIV EN IN THE COURSE OF EARLIER APPELLANT PROCEEDINGS THAT HE REC EIVED RS.14 LACS FROM SALE OF ANIMAL STANDS VERIFIED AND FOUND CORRECT. B. FURTHER, THE LD. A.O. HAS ADMITTED THAT FROM TH E DOCUMENTS AVAILABLE AND RECORDS SUBMITTED BEFORE TH E THEN CIT (A) BY THE ASSESSEE, IT WAS OBSERVED THAT THE ASSES SEE HAD PURCHASED 117 DAIRY FARM ANIMALS AT COST OF RS.1310 400/- @ 11200/- PER ANIMAL AND ALSO SPENT RS.669600/- ON SH EDS AFTER RAISING LOAN FROM BANK OF INDIA AND THE SALE OF THO SE ANIMALS TO S. GURMUKH SINGH WAS ALSO VERIFIED & CONFIRMED BY T HE LD. A.O. THEREFORE CONTENTION OF THE APPELLANT GIVEN IN THE COURSE OF EARLIER APPELLANT PROCEEDINGS THAT HE RECEIVED RS.1 4 LACS FROM SALE OF ANIMAL STANDS FURTHER VERIFIED OF HAVING TH E ANIMALS WHICH WAS SOLD. C. IN PARA II) THE LD. A.O. HAS ADMITTED THAT STATE MENT OF SH.RAKESH KUMAR ADVOCATE WAS ALSO RECORDED ON 25/07 /2013, WHO CONFIRMED HIS AFFIDAVIT AS WELL AS ADMITTED IN RESPONSE TO Q.9 PUT BY THE LD. A.O. TO HIM THEN NO DOUBT, SH. B ALWINDER SINGH NARRATED THE WHOLE RECEIPTS I. E. RECEIPTS FROM SAL E OF ANIMALS AS WELL AS AGRICULTURAL INCOME BUT DUE TO LACK OF CLAR ITY OF CLASSIFICATION OF CAPITAL RECEIPTS FROM SALE OF ANI MALS VIZ A VIZ AGRICULTURAL INCOME I TOOK THE ENTIRE RECEIPTS AS A GRICULTURAL INCOME AND I ALSO STRESSED HIM TO STICK TO HIS STAN D. I ADMIT MY MISTAKE WHICH WAS HAPPENED DUE TO LACK OF KNOWLEDGE OF INCOME TAX PROVISIONS IN THE INITIAL YEARS OF MY INCOME TA X PRACTICE. FURTHER IN RESPONSE TO Q10 THE ADVOCATE CATEGORICAL LY ADMITTED THE CONTENTS OF THE AFFIDAVIT GIVEN BY HIM AND STATED T HAT THE ASSESSEE WAS ADVISED BY ME AND HE ACTED UPON MY ADVICE. D. REGARDING AGRICULTURAL INCOME THE LD. A.O. HAS A DMITTED THAT NO DOUBT THAT THE ASSESSEE IS IN RECEIPT OF IN COME FROM AGRICULTURAL ACTIVITIES, HOW MUCH INCOME HE DRAWS I S A MATTER STILL IN DISPUTE. THE A. O. CALLED UPON THE ASSESSEE VIDE HIS LETTER DATED 33 19/07/2013 DETAILS REGARDING INCOME FROM AGRICULTUR AL AND IN RESPONSE THERE TO WE SUBMITTED AS UNDER:- THE ASSESSEE EARNED AGRICULTURAL INCOME OF RS.16255 00/- FROM SALE OF GREENPODDER/POPLAR TREES. THE AGRICULTURAL INCOME WAS EARNED FROM OWN LAND AS WELL AS LAND TAKEN ON LEASE . COPY OF LEASE AGREEMENT WAS EARLIER FILED IN THE COURSE OF ASSESSMENT PROCEEDING & EVEN STATEMENT WAS RECORDED BY THE THA N A.O. COPIES OF GIRDAWARI ETC., WAS ALSO FILED EARLIER WH ICH COMPLETELY JUSTIFIED THE AGRICULTURAL INCOME. WE HAVE ALREADY FILED A CHART OF AGRICULTURAL LAND OWNED BY ASSESSEE AND HIS FAMILY MEMBER WHICH IS CULTIVATED BY THE ASSESSEE COPY OF WHICH I S ALSO ENCLOSED FOR YOUR READY REFERENCE MARKED AS ANNEXURE 'A' WE FURTHER SUBMIT THAT THE ASSESSEE WAS HAVING AGRI CULTURAL INCOME IN EARLIER YEARS AS WELL. IN THE IMMEDIATE P REVIOUS ASSESSMENT YEAR, 2002-3 HE HAD SHOWN AGRICULTURAL I NCOME OF RS.350,000/- IN HIS RETURN FILED, PHOTOCOPY OF WHI CH IS ENCLOSED FOR YOUR KIND PERUSAL MARKED AS ANN. 'B '. WE ARE ALSO ENCLOSING HEREWITH THE COPIES OF BOTH T HE SAID ANNEXURE A & B FOR YOUR KIND PERUSAL. IN VIEW OF THE ABOVE FACTS IT IS HUMBLY PRAYED THAT THE APPEAL OF THE ASSESSEE BE ALLOWED AND HIS AGRICULT URAL INCOME OF RS.1625500/- BE ACCEPTED. 15. THE LEARNED CIT (APPEALS) IN VIEW OF THE DIREC TIONS OF THE TRIBUNAL ASKED THE ASSESSEE TO PRODUCE SHRI RAKESH KUMAR, ADVOCATE FOR VERIFICATION OF FACTS AS CONTEN DED BY THE ASSESSEE. SHRI RAKESH KUMAR, ADVOCATE, WHO HAS ATTENDED THE PROCEEDINGS BEFORE THE LEARNED CIT (A PPEALS), CONFIRMED THE CONTENTS OF HIS AFFIDAVIT. THE LEAR NED CIT (APPEALS) CONSIDERING THE RIVAL SUBMISSIONS AND MAT ERIAL ON RECORD, DECIDED THE APPEAL OF THE ASSESSEE AND ACCE PTED THE EARNING OF RS.14 LACS BY THE ASSESSEE ON ACCOUNT OF SALE OF DAIRY FARM ANIMALS. HOWEVER, AS REGARDS THE EARNING OF AGRICULTURAL INCOME, THE LEARNED CIT (APPEALS) CONF IRMED THE 34 ORDER OF THE ASSESSING OFFICER AND THUS REDUCED THE ADDITION OF RS.29,60,000/- TO RS.15,60,000/- AND PARTLY ALLO WED THE APPEAL OF THE ASSESSEE. THE FINDINGS OF LEARNED C IT (APPEALS) IN PARAS 3.21 TO 3.23 ARE REPRODUCED AS U NDER : 3.21. I HAVE CAREFULLY CONSIDERED THE RIVALS SUBMIS SIONS. FROM THE FACTS DISCUSSED ABOVE AND THE VARIOUS CONTENTIONS R AISED BY THE APPELLANT AND THE REPORTS OF THE AO, IT EMERGES THA T THE TWO ISSUES TO BE CONSIDERED IN THIS CASE ARE: 1. WHETHER THE APPELLANT EARNED ANY INCOME ON ACCOU NT OF SALE OF ANIMALS PERTAINING TO DAIRY FARMS DURING TH E YEAR AND IF YES THE QUANTUM OF SUCH INCOME. 2. WHETHER THE APPELLANT EARNED ANY AGRICULTURAL IN COME DURING THE YEAR, AND IF SO THE QUANTUM OF SUCH AGRI CULTURAL INCOME. 3.22. EACH OF THE ISSUES IS BEING DISCUSSED AS UN DER: 1. WHETHER THE APPELLANT EARNED ANY INCOME ON ACCO UNT OF SALE OF ANIMALS PERTAINING TO DAIRY FARMS DURING TH E YEAR AND IF YES THE QUANTUM OF SUCH INCOME. ALTHOUGH IN THE ORIGINAL RETURN OF INCOME FILED BY THE APPELLANT, WHOLE OF THE INCOME WAS CLAIMED UNDER THE HEAD AGRI CULTURAL INCOME AND NO INCOME ON ACCOUNT OF SALE OF ANIMALS RELATED TO DAIRY FARMS WAS SHOWN, IF EMERGES FROM THE SUBMISSI ONS OF THE APPELLANT, THE AFFIDAVIT FILED BY THE ADVOCATE OF T HE APPELLANT SH. RAKESH KUMAR, THE STATEMENT OF SH. GURMUKH SING H AND SH. RAKESH KUMAR AS WELL AS FROM THE REPORT OF THE AO THAT THE APPELLANT HAD EARNED INCOME ON ACCOUNT OF SALE OF A NIMALS RELATED TO DAIRY FARMS DURING THE YEAR. THE AO IN H IS REPORT DATED 22.08.2013 HAS CATEGORICALLY STATED THAT FROM THE DOCUMENTS AVAILABLE ON RECORD AND ON THE BASIS OF T HE STATEMENT OF SH. GURMUKH SINGH RECORDED BY THE INSPECTOR IT M AY BE CONCLUDED THAT THE APPELLANT WAS HAVING INCOME FROM DIARY FARM RECEIVED FROM SALE OF DAIRY FARM ANIMALS DURIN G THE YEAR. FURTHER, AS PER THE REPORT OF THE A.O, STATEM ENT OF S. GURMUKH SINGH WAS RECORDED ON 07/08/2013, WHO CONFIRMED HIS AFFIDAVIT AS WELL AS THE PURCHASE OF ANIMALS FOR 35 RS.14 LACS FROM THE APPELLANT IN THE FINANCIAL YEAR 2002-03 RELEVANT TO A.Y. 2003-04. AS SUCH, THE CONTENTION O F THE APPELLANT THAT HE RECEIVED RS.14 LACS FROM SALE OF ANIMALS STANDS VERIFIED AND FOUND CORRECT. KEEPING IN VIEW OF THE AFORESAID FACTS THE APPELLAN T'S CONTENTION THAT HE HAD EARNED RS. 14,00,000/- ON AC COUNT OF SALE OF DAIRY FARM ANIMALS IS ACCEPTED. 2. WHETHER THE APPELLANT EARNED ANY AGRICULTURAL I NCOME DURING THE YEAR, AND IF SO THE QUANTUM OF SUCH AGRI CULTURAL INCOME. ON THIS ISSUE, THE FOLLOWING FACTS BROUGHT OUT IN THE ASSESSMENT ORDER MAY BE REFERRED TO:- (I) THE AO RECORDED THE STATEMENT OF THE APPELLANT . IN THIS STATEMENT APPELLANT STATED AS UNDER: HE OWNED 3 BIGHAS LAND IN HIS NAME. HE PLANTED POPLAR TREES IN FEB-MARCH, 1998. SH. AMARJIT SINGH S/O SH. MASAT RAM LOOKED AFTER TH ESE PLANTS. THESE POPLAR TREES WERE SOLD IN THE YEAR 2002-03 TO THE FOLLOWING PERSONS: > SH. AJMER SINGH. > SH. ANWAR ALI. > SH. MOHD. SAWAR. (II) THE AO ALSO ASKED THE APPELLANT TO FILE COPY O F THE KHASRA GIRDAWRI FOR THE PERIOD OF 5 YEARS STARTING MARCH 1998 TO MARCH 2004. AS PER THIS KHASRA GIRDAW RI ISSUED BY THE REVENUE PATWARI ON 10.08.2005, DURING THE YEAR 1999-2000 TO 2003-04 POPLAR TREES WERE SHOWN T O HAVE BEEN GROWING ONLY ON 8 BIGHAS 5 BISWAS OF LAND . OUT OF THIS, THE TOTAL AREA OF LAND, OWNED BY THE APPEL LANT AND THE LESSORS, COVERED BY THE POPLAR TREES, WORKED OU T TO 3 BIGHAS 5 BISWAS AND NOT 29 BIGHAS AS CLAIMED BY THE APPELLANT. (III) TO FURTHER VERIFY THE FACTS OF THE CASE, THE AO RECORDED THE STATEMENT OF SH. AMARJIT SINGH, WHO THE APPELLA NT HAD CLAIMED TO HAVE LOOKED AFTER THE PLANTS. DURING THE STATEMENT RECORDED BY THE AO SH. AMARJIT SINGH FLAT LY 36 REFUSED THAT HE HAS EVER DONE SUCH A JOB FOR SH. BA LWINDER SINGH. (IV) THE AO ALSO RECORDED THE STATEMENT OF SH. AJMER SIN GH TO WHOM THE APPELLANT HAD CLAIMED THAT HE HAD SOLD ALL POPLAR TREES. SH. AJMER SINGH FILED AN AFFIDAVIT BE FORE THE ASSESSING OFFICER IN WHICH HE AFFIRMED THAT HE DOES NOT EVEN KNOW SH. BALWINDER SINGH, THE APPELLANT, A ND ALSO DENIED PURCHASE OF ANY POPLAR TREES FROM THE APPELLANT. SH. AJMER SINGH ALSO AFFIRMED THESE FACT S DURING THE CROSS EXAMINATION. (V) THE APPELLANT HAD NOT GIVEN THE ADDRESS OF THE OTHE R PERSONS TO WHOM HE HAD CLAIMED TO HAVE SOLD POPLAR TREES. THEREFORE, THE AO COULD NOT VERIFY THE GENU INENESS OF THESE TRANSACTIONS. NO VOUCHERS/JOURNAL FORMS FO R SALE OF POPLAR TREES WERE PRODUCED BY THE APPELLANT. ALL THE TRANSACTIONS WERE STATED TO BE IN CASH. IN VIEW OF THE SPECIFIC FINDINGS AND EVIDENCES RECO RDED BY THE AO AS REFERRED TO ABOVE, IT IS EVIDENT THAT THE CLAIM OF THE APPELLANT REGARDING INCOME FROM SALE OF POPLAR TREES DURING T HE YEAR IS NOT GENUINE. THE APPELLANT HAS NOT BEEN ABLE TO CO NTROVERT ANY OF THE FINDINGS RECORDED BY THE AO IN THE ASSESSMEN T ORDER. MERE FILING OF AFFIDAVIT FROM SH. AMARJIT SINGH THAT HE HAD PURCHASED POPLAR TREES HOLD FOR RS.1,25,000/- FROM THE APPELL ANT DOES NOT ESTABLISH THE FACT THAT THE APPELLANT HAD EARNED AG RICULTURAL INCOME OF RS.16,25,000/- ON THIS ACCOUNT. THE AO TH ROUGH HIS DETAILED INVESTIGATIONS AND ENQUIRIES HAS ESTABLISH ED BEYOND DOUBT THAT THE CLAIM OF THE APPELLANT WAS NOT A GEN UINE CLAIM AND WAS A MERE ATTEMPT BY THE APPELLANT TO ROUTE HIS UN ACCOUNTED INCOME IN THE GARB OF AGRICULTURAL INCOME. THE CLAIM OF THE APPELLANT THAT HE HAD TAKEN 16-1 B IGHA ON LEASE FROM VARIOUS PERSONS DOES NOT EXPLAIN THE CLAIM OF AGRICULTURAL INCOME BY THE APPELLANT. THE APPELLANT HAD CLAIMED THAT HE HAD GROWN POPLAR TREES ON 27 BIGHAS AND 7 BISWAS WHEREA S FROM THE KHASRA GIRDAWRI ISSUED BY THE REVENUE PATWARI, DURI NG THE PERIOD 1999-2000 TO 2003-04, POPLAR TREES WERE SHOWN TO HA VE BEEN GROWN ONLY ON 8 BIGHAS 5 BISWAS OF LAND. OUT OF THI S, THE TOTAL AREA OF LAND, OWNED BY THE APPELLANT AND THE LESSOR S, COVERED BY THE POPLAR TREES, WORKED OUT TO 3 BIGHAS 5 BISWAS A ND NOT 27 BIGHAS AS CLAIMED BY THE APPELLANT. THE APPELLANT H AS THUS NOT BEEN ABLE TO SUBSTANTIATE ITS CLAIM OF CULTIVATING POPLAR TREES ON 37 ANY LAND TAKEN ON LEASE. THE PLANTATION INSPECTION REPORT DATED 28.08.2009 OF POPLAR NURSERY AND FARMS FILED BY THE APPELLANT CONFIRMING THAT 2800 PLANTS OF POPLAR TREES WERE PL ANTED BY SARDAR BALWINDER SINGH, THE APPELLANT, IN 1999 IS A MERE SELF SERVING STATEMENT. THIS IS EVIDENT FROM THE FACT TH AT THE REPORT OF THE REVENUE OFFICER REFERRED TO ABOVE CLEARLY SHOWS THAT DURING THE YEAR 1999-2000 TO 2003-04 THE TOTAL AREA BELONG ING TO SARDAR BALWINDER SINGH AND LESSORS, ON WHICH POPLAR TREES WERE CULTIVATED WORKED OUT TO 3 BIGHAS AND 5 BISWAS. MOREOVER, THE APPELLANT HAS NOT FURNISHED ANY EVIDENCE REGARDING THE BASIS OF REPORT DATED 28.08.2009 REGARDING THE PLANTS GROWN IN 1999. THE TWO REPORTS I.E KHASRA GIRDAWARI FROM REVENUE P ATWARI AND THE PLANTATION INSPECTION REPORT DATED 28.08.20 09 OF POPLAR NURSERY AND FARMS BEING AT VARIANCE, THE OFF ICIAL REPORT FROM REVENUE PATWARI IS HELD TO BE AUTHENTIC AND RE LIABLE. KEEPING IN VIEW THE AFORESAID FACTS AND CIRCUMSTANC ES OF THE CASE, I SEE NO REASON TO INTERFERE WITH THE ESTIMAT ION OF AGRICULTURAL INCOME OF THE APPELLANT BY THE AO AT R S. 65,500/-. 3.23. KEEPING IN VIEW THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE THE ADDITION OF RS. 29,60,000/- MADE BY TH E AO STANDS REDUCED TO RS.15,60,000/-. THESE GROUNDS OF APPEAL ARE ACCORDINGLY PARTLY ALLOWED. 16. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED TO THE REPORT OF THE ASSESSING OFFICER DATED 28.6.2 007, AS IS REFERRED TO IN THE ORDER OF THE LEARNED CIT (APPEAL S) DATED 6.2.2008, WHICH HAVE BEEN SET ASIDE BY THE TRIBUNAL AND CONTENDED THAT THE ASSESSING OFFICER ACCEPTED THE C LAIM OF THE ASSESSEE. HE HAS ALSO SUBMITTED THAT THE POPLA R TREES WOULD BE BROUGHT UP WITHIN SHORT SPAN OF YEARS AND REFERRED TO SYNOPSIS OF AGROFORESTRY A VIABLE OPTION FOR C ROP DIVERSIFICATION IN PUNJAB ISSUED BY THE DEPARTMENT OF FORESTS & WILDLIFE PRESERVATION, PUNJAB. HE HAS SUB MITTED 38 THAT THE ASSESSING OFFICER SHOULD HAVE ACCEPTED THE SALE CONSIDERATION RECEIVED ON ACCOUNT OF SALE OF POPLAR TREES. 17. ON THE OTHER HAND, THE LEARNED D.R. RELIED ON THE ORDER OF THE LEARNED CIT (APPEALS) AND REFERRED TO SPECIFIC FINDINGS OF FACT RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE LEARNED D.R. SUBMITTED THAT THE ASSESSEE WAS HAVING ONLY MEAGER LAND HOLDING, WHICH WAS CONFIRMED IN HIS STATEMENT. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD JUST 3 BIGHAS 5 BISWAS OF AGR ICULTURAL LAND AND CORRECTLY RESTRICTED THE AGRICULTURAL INCO ME TO RS.65,500/-. THE OTHER LAND ON WHICH POPLAR TREES WERE CLAIMED TO HAVE BEEN RAISED NEITHER BELONGED TO THE ASSESSEE, NOR TO THE LESSORS. SHRI AMARJIT SINGH, WHO HAS STATED TO HAVE LOOKED AFTER THE POPLAR TREES, DENIE D THIS FACT IN HIS STATEMENT. THE ASSESSEE HAD CLAIMED TO HAVE SOLD POPLAR TREES TO SHRI AJMER SINGH, WHO HAD DENIED TO PURCHASE ANY OF POPLAR TREES AND OTHER PERSONS DID NOT APPEAR AND NO DETAILS WERE FURNISHED. NO DETAILS A ND EVIDENCE OF SALE OF POPLAR TREES OR ANY FORM J HA VE BEEN PRODUCED BEFORE THE AUTHORITIES BELOW. THE TRANSACT IONS ARE IN CASH, WHICH ARE HIGHLY DOUBTFUL. THEREFORE, NO FURTHER INTERFERENCE IS REQUIRED IN THE MATTER. 18. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ASSESSEE MADE A CLAIM OF EARNING OF AGRICULTURAL IN COME ON ACCOUNT OF SALE OF POPLAR TREES. THE ONUS IS, THE REFORE, UPON THE ASSESSEE TO PROVE THAT THE ASSESSEE IN FAC T, EARNED AGRICULTURAL INCOME, WHICH IS EXEMPT FROM TAX. THE 39 STATEMENT OF THE ASSESSEE WAS RECORDED BY THE ASSES SING OFFICER, IN WHICH HE HAS CONFIRMED TO HAVE OWNED 3 BIGHAS OF LAND AND CLAIMED THAT THE POPLAR TREES WE RE PLANTED IN FEB-MARCH, 1998. SHRI AMRAJIT SINGH WAS STATED TO HAVE LOOKED AFTER THESE PLANTS AND THESE PLANTS WERE SOLD IN ASSESSMENT YEAR UNDER APPEAL TO S/SHRI AJMER SIN GH, ANWAR ALI AND MOHD. SAWAR. THE ASSESSEE ALSO PROD UCED COPY OF KHASRA GIRDAWRI FOR FIVE YEARS STARTING FRO M MARCH, 1998 TO MARCH, 2004. AS PER THE KHASRA GIRDAWRI, D URING THE YEARS 1999-2000 TO 2003-04, POPLAR TREES WERE S HOWN TO HAVE BEEN GROWING ONLY ON 8 BIGHAS 5 BISWAS OF LAND . OUT OF THIS, TOTAL AREA OF LAND OWNED BY THE ASSESSEE A ND THE LESSORS COVERED BY THE POPLAR TREES WORKED OUT TO 3 BIGHAS 5 BISWAS AND NOT 29 BIGHAS, AS CLAIMED BY THE ASSESSE E. THE STATEMENT OF SHRI AMARJIT SINGH, WHO IS STATED TO H AVE LOOKED AFTER THE PLANTS, WAS RECORDED BY THE ASSESS ING OFFICER, IN WHICH HE HAS REFUSED TO HAVE DONE ANY J OB FOR THE ASSESSEE. THEREFORE, THE CLAIM OF THE ASSESSEE THAT THE POPLAR TREES WERE TILTED AND SOLD, WAS FOUND TO BE WRONG, INCORRECT AND FRIVOLOUS. THE ASSESSEE WAS ALLOWED CROSS EXAMINATION OF SHRI AMARJIT SINGH, IN WHICH ALSO, H E COULD NOT SUPPORT THE CASE OF THE ASSESSEE. THE ASSESSIN G OFFICER ALSO RECORDED THE FACT THAT IN ORDER TO VERIFY THE AFFIDAVIT OF SHRI AMARJIT SINGH REGARDING DOING DAIRY BUSINESS O R BUSINESS OF SALE/PURCHASE OF TIMBER, ETC., INSPECTO R WAS DEPUTED TO FIND OUT THE ANTECEDENTS OF SHRI AMARJIT SINGH, WHO HAS REPORTED THAT SHRI AMARJIT SINGH IS MAN OF NO MEANS AND EARN HIS LIVELIHOOD BY REARING 5-6 BUFFALOES A ND HE WAS 40 NEVER IN THE BUSINESS WHAT-SO-EVER. THE CLAIM OF T HE ASSESSEE THAT THE POPLAR TREES WERE SOLD TO SHRI AJ MER SINGH, HE WAS SUMMONED, WHO HAS FILED HIS AFFIDAVIT CONFIRMING THAT HE DOES NOT EVEN KNOW THE ASSESSEE AND DECLINED PURCHASE OF POPLAR TREES FROM THE ASSESSEE . THE CROSS EXAMINATION OF SHRI AJMER SINGH WAS ALLOWED, IN WHICH HE HAS CONFIRMED THE CONTENTS OF HIS AFFIDAVI T AFFIRMING THAT HE DOES NOT KNOW THE ASSESSEE AND NO T PURCHASED ANY POPLAR TREE FROM THE ASSESSEE. THE A SSESSEE HAS NOT GIVEN THE ADDRESSES OF OTHER TWO PERSONS TO WHOM HE HAS ALLEGEDLY SOLD THE POPLAR TREES. THEREFORE, THE TILTING OF POPLAR TREES ON ANY LAND OR LOOKING AFTER BY SHR I AMARJIT SINGH AND SALE OF POPLAR TREES TO SHRI AJMER SINGH AND OTHERS, HAVE NOT BEEN PROVED BY THE ASSESSEE THROUG H ANY EVIDENCE OR MATERIAL ON RECORD. THE CLAIM OF THE A SSESSEE WAS, THEREFORE, FOUND FALSE AND BOGUS. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE REPORT OF THE ASSE SSING OFFICER FROM THE ORDER OF THE CIT (APPEALS) DATED 6 .2.2008, IN WHICH THE LEARNED CIT (APPEALS) GRANTED SOME SUB STANTIAL RELIEF TO THE ASSESSEE BUT THIS ORDER OF THE CIT (A PPEALS) HAS BEEN SET ASIDE BY THE TRIBUNAL IN EARLIER PROCEEDIN GS BY REMANDING THE MATTER TO THE CIT (APPEALS) FOR FRESH ADJUDICATION. THEREFORE, NO RELIANCE ON SUCH REPOR T OF THE ASSESSING OFFICER COULD BE GIVEN AT THIS STAGE. TH E ASSESSEE THUS, HAS NOT BEEN ABLE TO SUBSTANTIATE HIS CLAIM T O CULTIVATE POPLAR TREES ON ANY LAND TAKEN ON LEASE. KHASRA GIRDAWRI REPORT FURNISHED BY THE ASSESSEE DOES NOT SUPPORT THE CASE IN ANY MANNER. NO FORM J OF SALE OF POPLAR TREES 41 HAVE BEEN PRODUCED. SO THE ASSESSEE FAILED TO PROV E THE SALE CONSIDERATION OF POPLAR TREES. THEREFORE, THE RE IS NO MATERIAL AVAILABLE ON RECORD IN FAVOUR OF THE ASSES SEE TO PROVE ANY AGRICULTURAL INCOME ON ACCOUNT OF SALE OF AGRICULTURAL PRODUCE. THEREFORE, THE FINDINGS OF F ACT RECORDED BY THE ASSESSING OFFICER AND LEARNED CIT ( APPEALS) CLEARLY REVEAL THAT THE CLAIM OF THE ASSESSEE EARNI NG OF AGRICULTURAL INCOME WAS TOTALLY BOGUS AND FALSE. T HE SYNOPSIS OF DEPARTMENT OF FORESTS & WILDLIFE PRESER VATION, PUNJAB WOULD NOT SUPPORT THE CASE OF THE ASSESSEE B ECAUSE IT REVEALS ONLY ACADEMIC AREA FOR GROWING POPLAR TR EES, ETC. BUT THE REPORT WOULD NOT PROVE WHETHER THE ASSESSEE IN FACT, HAS GROWN ANY POPLAR TREE ON ANY LAND WHAT-SO-EVER. IT IS A CASE WHERE EARLIER THE TRIBUNAL HAS REMANDED THE MA TTER TO THE FILE OF THE CIT (APPEALS) FOR DECIDING THE ISSU E AFRESH BRINGING SUFFICIENT EVIDENCE ON RECORD. THE LEARNE D CIT (APPEALS) HAS ALREADY GRANTED RELIEF TO THE ASSESSE E IN SUM OF RS.14 LACS FROM SALE OF ANIMALS. THE ASSESSEE H AS MISERABLY FAILED TO PROVE EARNING OF ANY AGRICULTUR AL INCOME ON ACCOUNT OF SALE OF POPLAR TREES. THEREFORE, THE CLAIM OF THE ASSESSEE IS WHOLLY BOGUS AND UNJUSTIFIED. WHAT EVER CONTENTION RAISED BY THE ASSESSEE SPEAKS AGAINST TH E ASSESSEE HIMSELF AND FURTHER NOT SUPPORTED BY ANY C OGENT EVIDENCE. NO VOUCHERS OF SALE OF POPLAR TREES PROD UCED BEFORE THE ASSESSING OFFICER. ALLP CASH TRANSACTIO NS CAST DOUBT IN EXPLANATION OF THE ASSESSEE. PART RELIEF IS ALREADY GRANTED BY THE ASSESSING OFFICER. 42 19. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW IN RESTRICTING THE ADDITIO N TO RS.15,60,000/-. THERE IS THUS, NO MERIT IN THE APP EAL OF THE ASSESSEE AND THE SAME IS ACCORDINGLY, DISMISSED. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF JULY, 2016. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 8 TH JULY, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH
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