Sh. Gurmail Singh Bajwa, Barnala V. ITO Ward-1, Barnala

ITA 276/CHANDI/2021

AI Insights

The case revolves around an appeal by Shri Gurmail Singh Bajwa against the order of the Ld. CIT(A), which sustained the addition of Rs. 6,07,000 made by the Assessing Officer (AO) as unexplained investment. The AO had initially treated this amount as unexplained due to insufficient documentary evidence of the assessee's agricultural income and other sources. However, during the appellate proceedings, the Tribunal reviewed the assessment records and found substantial documentary evidence supporting the assessee's claims of funding the land purchase from agricultural income and past savings. The Tribunal's decision to allow the appeal was based on the reassessment of the evidence, which contradicted the AO's initial findings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127563 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 23-05-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 11-10-2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Assessment record
• Section: 148; 64

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “एस.एम.सी” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES, “SMC” CHANDIGARH ी व म संह यादव, लेखा सद%य BEFORE: SHRI. VIKRAM SINGH YADAV, AM ITA No. 276/Chd/2021 Assessment Year : 2011-12 Shri Gurmail Singh Bajwa H.NO. 206 VPO Sehjara, PS Mehal Kalan, Barnala 148101, Punjab The ITO Ward, 1, Barnala, Punjab PAN NO: AYYPB6058P Appellant Respondent ! " Assessee by : Shri Raman Seth, C.A # ! " Revenue by : Smt. Amanpreet Kaur, Sr. DR $ % ! & Date of Hearing : 24/05/2023 '()* ! & Date of Pronouncement : 08/08/2023 आदेश/Order PER VIKRAM SINGH YADAV, AM: This is an appeal filed by the Assessee against the order of the Ld. CIT(A), NFAC, Delhi dt. 13/08/2021 pertaining to A.Y. 2011-12. 2. In the present appeal, the assessee has taken various grounds of appeal challenging the sustenance of addition of Rs. 6,07,000/- made by the AO on account of unexplained investment. 3. Briefly the facts of the case are that the case of the assessee was opened by issuance of notice under section 148 in order to examine the source of investments made by the assessee jointly with certain other people for purchase of a piece of land situated at Radha Rani Enclave, Barnala. Thereafter, the 2 assessee filed his return of income declaring NIL income and agriculture income of Rs. 10,90,000/-. 3.1 During the course of assessment proceedings, the Ld. AR on behalf of the assessee submitted that the assessee has held 1/3 rd share in the said transaction which comes to Rs. 11,67,000/- and not Rs. 51,25,000/- as so stated in the reasons recorded under section 148 of the Act. Thereafter, the assessee was directed to produce documentary evidence with regard to source of investment of Rs. 11,67,000/- for making advance payment towards purchase of land. 3.2 In response, the assessee submitted that he alongwith his wife owns 14 acres of agriculture land and the amount of Rs. 11,67,000/- has been paid out of his agriculture income as well as past savings from agricultural activities and assessee does not have any other source of income except agriculture income. It was submitted that the assessee also borrowed a sum of Rs. 10,00,000/- from Smt. Jaswinder Kaur during the year. 3.3 The submissions so filed by the assessee were considered by the AO. As per the AO, the assessee has not produced any documentary evidence with regard to his total receipt from sale of agriculture produce i.e; Form J and copy of account of commission agent to whom agriculture produce has been sold by the assessee. Further the assessee has not produced any documentary evidence of agriculture land given on lease measuring 14 acres. In absence of any documentary evidence and basis jamabandi of agriculture land filed by the assessee, the AO held that where the income from lease of the land measuring 14 acres was taken at Rs. 40,000/- per acre, it comes to Rs. 5,60,000/- and therefore the claim of agriculture income was restricted to Rs. 5,60,000/-. As far as the submissions of the assessee regarding amount borrowed from Smt. Jaswinder Kaur, the same was rejected and therefore out of total advance of 3 Rs. 11,67,000/-, an amount of Rs. 5,60,000/- was treated as explained source out of agriculture receipts of the assessee during the year under consideration and the balance amount of Rs. 6,07,000/- was treated as unexplained advance and same was brought to tax as unexplained investment made by the assessee from undisclosed source and added to the returned income of the assessee. 4. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) who has since sustained the said addition. 5. During the course of hearing, the Ld. AR submitted that the assessee is an agriculturist and does not have any income other than receipts from agriculture and other allied activities and the amount of Rs, 11,67,000/- has been paid out of agriculture receipts and past savings of the assessee. It was submitted that during the course of assessment proceedings, the details of land holding which is self cultivated has been filed before the AO which are placed at page 64 to 65 of the assessee’s paper book. It was submitted that the assessee is a self cultivator and owner of entire piece of 14 acres of agriculture land alongwith his wife and no portion of land has ever been leased out for cultivation as wrongly presumed by the AO. It was further submitted that there is also no basis for the AO to estimate the agriculture income @ Rs 40,000 per acre and without prejudice, even if the said estimate so made by the AO which is in the context of agriculture land given on lease is accepted, where the land is self-cultivated, it can be easily stated that income from self-cultivated land would atleast be two times of the said estimate and the same would thus explain the nature and source of investment. It was submitted that the assessee has also furnished an affidavit that he is only an agriculturist and has no other income and the said affidavit has not been rebutted by the AO. It was further submitted that the AO has wrongly held that the necessary evidence in terms of sale of agriculture produce has not been submitted during the course of assessment proceedings. 4 It was submitted that the assessment record may be called for and on perusal, it would be evident that the necessary Form J are very much on record and which have apparently not been considered by the AO. 6. Subsequently, during the course of hearing, the assessment records were called for and the Ld. DR has also filed copy of the documentation which form part of the assessment record vide her letter dt. 25/05/2023 and on perusal thereof, I find that these are documentation in terms of Girdavari records of agriculture land cultivated by the assessee and copies of Form J issued by the M/s Sehjra Trading Co. Commission Agents Branch Mehal Kalan giving details of the agriculture produce sold by the assessee through the said agent and total of the sale produce for the F.Y 2010-11 comes to Rs. 12,15,736/-. 7. After hearing both the parties and considering the material available on the record, I find that firstly there is no dispute that the assessee alongwith his wife owns 14 acres of agriculture land which has also not been disputed by the AO. However the basis of holding that the assessee has leased out the said piece of land and has earned only Rs. 40,000/- per acre is not borne out from the record, in fact the AO himself states that there is no proof that the assessee has given agriculture land on lease to any third party. As far as the quantum of the agriculture sale produce sold by the assessee during the year, I find that there are Form Js which are available on the record which have been submitted during the course of proceedings before us and which shows that the assessee has earned agriculture income of Rs. 12,15,736/- and the same therefore clearly demonstrate and corroborate the explanation submitted by the assessee that the amount of advance which has been given by the assessee for purchase of land has been paid out from the agriculture produce during the year under consideration. Therefore I have no hesitation in accepting the explanation of the assessee in terms of regular source of his income from agriculture operations and the source of the advance towards the purchase of 5 land which is clearly corroborated by the land holding and cultivation/produce records as well as copies of Form J which are very much part of the assessment records. In the result, the addition of Rs. 6,07,000 is hereby directed to be deleted. 8. In the result, appeal of the assessee is allowed. (Order pronounced in the open Court on 08/08/2023 ) Sd/- व म संह यादव (VIKRAM SINGH YADAV) लेखा सद%य / ACCOUNTANT MEMBER AG Date: 08/08/2023 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. - 0 ग 2 3 & 2 3 456 ग7 DR, ITAT, CHANDIGARH 5. ग 6 8 % Guard File