Shri Mahavir Singh, Yamunanagar V. ITO, W-2, Yamunanagar

ITA 281/CHANDI/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6727 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 13-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRAKANTA SR DR
• Section: 69; 148

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BEN CHES, SMC CHANDIGARH .., ! BEFORE: SHRI. N.K.SAINI, VICE PRESIDENT ITA NO. 281/CHD/2019 ASSESSMENT YEAR : 2010-11 SHRI MAHAVIR SINGH #19, VILL: SAIDUPUR, PO: SADHAURA, THE: BILASPUR YAMUNANAGAR, HARYANA THE ITO WARD-2 YAMUNANAGAR, HARYANA PAN NO: DRAPS9228A APPELLANT RESPONDENT !' ASSESSEE BY : SHRI SUDHIR SEHGAL, ADVOCATE #!' REVENUE BY : SMT. CHANDRAKANTA, SR. DR $ %! & DATE OF HEARING : 15/07/2019 '()*! & DATE OF PRONOUNCEMENT : 01/08/2019 '#/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 18/01/2019 OF LD. CIT(A)-4, LUDHIANA. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEA L RELATES TO THE SUSTENANCE OF ADDITION OF RS. 13,68,850/- OUT OF TH E TOTAL ADDITION OF RS. 26,68,850/- MADE BY THE A.O. ON ACCOUNT OF CASH DEP OSITS IN THE BANK ACCOUNT. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. ON THE BASIS OF INFORMATION THAT THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS. 26 ,68,850/- IN HIS SAVINGS BANK ACCOUNT WITH AXIS BANK LIMITED, SADHAURA, INIT IATED THE PROCEEDINGS UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTE R REFERRED TO AS ACT). IN RESPONSE THE ASSESSEE FILED THE RETURN OF INCOME ON 03/07/2017 DECLARING NIL INCOME ALONGWITH AGRICULTURE INCOME OF RS. 25,27,80 0/-. THE ASSESSEE EXPLAINED THAT HE ALONGWITH HIS FAMILY MEMBERS HAS 27.5 ACRES OF AGRICULTURE LAND AND THERE WERE POPULAR TREES ON 20 ACRES OF LAND AND THAT THE TREES WERE ALSO PLANTED ON THE PERIPHERY OF THE FIELD WHICH WERE SO LD FOR RS. 20.65 LACS DURING APRIL AND MAY 2009. HOWEVER THE A.O. WAS OF THE VIE W THAT THE ASSESSEE HAD FAILED TO ESTABLISH THAT POPULAR TREES WERE PLANTED IN THE LAND AREAS SPECIFIED BY HIM. HE THEREFORE REJECTED THE PLEA OF THE ASSESSEE FOR RECEIPT OF CASH ON SALE OF POPULAR TREES. ACCORDINGLY AN ADDITION OF RS. 20.95 LACS WAS MADE. 2 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: ' TO SUMMARIZE THE ABOVE SUBMISSIONS; IT IS SUBMITT ED THAT THE ORDER OF THE LD. AO IS BASED ONLY ON ONE POINT THAT THE LAND ON WHICH T HE TREES WERE PLANTED AS PER GIRDAWARI IS LESSER AND THERE CANT BE ENOUGH TREES WHICH MAY BE SOLD FOR ' TWENTY LAKHS OR SO HENCE THE AGRICULTURAL INCOME SH OULD BE TAKEN AS INCOME FROM OTHER SOURCES. HE HAS FAILED TO POINT OUT EVEN A SINGLE INSTANCE WHICH AT LEAST POINTS THAT THE ASSESSEE WAS DOING SOME BUSIN ESS ALSO; HE DID NOT BOTHER TO ESTIMATE THE INCOME OF THE ASSESSEE FROM AGRICULTUR E AND IGNORED ALL THE FACTS INCLUDING THE FACT THAT THE ASSESSEE WAS NOT UNDER ANY OBLIGATION TO MAINTAIN ANY RECORDS AND IGNORED ALL THE EVIDENCES TO MAKE T HE IMPUGNED ADDITIONS. ALSO, IN A HURRY TO PASS THE ORDER; HE INVOKED SECT ION 69 IN PLACE OF SECTION 69A. ' 4.1 LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE SUSTAINED THE ADDITION OF RS. 13,68,850/- BY OBSERVING AS UNDER: 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CAS E AND SUBMISSIONS OF THE APPELLANT. AS PER THE ASSESSMENT ORDER, THE ASSESSE E AND HIS FAMILY OWNS 27.5 ACRES OF LAND. THE ASSESSEE HAS DECLARED AGRICULTUR E INCOME OF RS. 25,27,800/-. SINCE, THE ASSESSEE FAILED TO SUBSTANTIATE INCOME F ROM SALE OF POPULAR TREES, THEREFORE, THE ASSESSING OFFICER HAS REJECTED CLAIM OF THE ASSESSEE REGARDING SALE OF POPULAR TREES AND TREATED THE SAME AS INCOME FRO M UNDISCLOSED SOURCES. THE ASSESSING OFFICER HAS REDUCED AGRICULTURE INCOME TO RS. 4,32,800/-. THE LD. COUNSEL HAS SUBMITTED THAT THE ASSESSEE HAS EARNED AGRICULT URAL INCOME AS PER KHASRA GIDAWARI SUBMITTED BEFORE THE ASSESSING OFFICER. AS PER THESE RECORDS, THE ASSESSEE IS CULTIVATING W HEAT, RICE, VEGETABLES ETC. IN HIS FIELDS. THE ASSESSEE HAS NOT SUBMITTED J FORMS OR ANY OTHER RECORD IN SUPPORT OF CLAIM OF AGRICULTURAL INCOME. THE ASSESS ING OFFICER HAS NOT DISPUTED THE LAND OWNERSHIP BY THE ASSESSEE. THE ASSESSEE HAS FA ILED TO SUBSTANTIATE SALE OF POPULAR TREES. HOWEVER, THE RECORDS INDICATED THAT THE ASSESSEE HAS BEEN DOING AGRICULTURAL OPERATIONS ON 27.5 ACRES OF LAND. IT W ILL BE FAIR TO ESTIMATE INCOME OF THE ASSESSEE FROM AGRICULTURAL OPERATIONS AT THE RA TE OF RS. 40,000/- PER ACRE. THUS TOTAL AGRICULTURAL INCOME IS ESTIMATED AT RS. 11,00 ,000/- AS AGAINST RS. 25,27,800/- DECLARED BY THE ASSESSEE. FURTHER FROM THE REVENUE RECORDS, IT IS ALSO APPARE NT THAT POPULAR TREES WERE THERE ON THE LAND OF THE ASSESSEE, WHICH HE HA S CLAIMED BEFORE THE ASSESSING OFFICER TO HAVE SOLD DURING THE YEAR. IN THE ABSENCE OF ANY PROOF, A CREDIT OF RS. 2 LAKHS ON AN ESTIMATED BASIS IS ALLO WED TO THE ASSESSEE. COMPUTING THE SAME ADDITION ON ACCOUNT CASH DEPOSITS IS REDUC ED TO RS. (26,68,850 - 11,00,000 - 2,00,000 = 13,68,850/-) 13,68,850/- UND ER SECTION 69A OF THE INCOME TAX ACT, 1961. THE ASSESSMENT ORDER PASSED BY THE ASSES SING OFFICER IS MODIFIED ACCORDINGLY. GROUNDS OF APPEAL NO. 1 TO 3 ARE THUS PARTLY ALLOWED. 5. NOW THE ASSESSEE IS IN APPEAL. 6. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AS SESSEE FURNISHED ALL THE DOCUMENTS BEFORE THE A.O. AND EXPLAINED THAT THERE WAS CULTIVATION OF WHEAT & PADDY ON APPROXIMATELY EIGHT ACRES OF LAND, WHERE A S THE LAND UNDER POPULAR PLANTATION WAS APPROXIMATELY ELEVEN ACRES AND THE W HEAT WAS ALSO SOWN ON THE SAID ELEVEN ACRES OF LAND. IT WAS STATED THAT I N ADDITION TO THE PLANTATION OF THE POPULAR TREES, ASSESSEE ALSO FURNISHED COPY OF THE GIRDAWARI OF THE LAND FOR 3 THE PLANTATION OF TWO CROPS RELATING TO THE YEARS 2 007-08 TO 2009-10. IT WAS ALSO STATED THAT IF POPULAR IS GROWN ON THE PERIPHERY OF THE FIELD THERE IS NO MENTION OF THE SAME IN THE GIRDAWARI AND THIS FACT WAS VERIFIE D FROM HALKA PATWARI ALSO. IT WAS SUBMITTED THAT THE ASSESSEE FURNISHED THE AFFID AVIT OF THE PURCHASER OF POPULAR TREES BEFORE THE A.O., MY ATTENTION WAS DRA WN TOWARDS PAGE NO. 6 & 7 OF THE ASSESSEES COMPILATION WHICH ARE THE COPY OF THE AFFIDAVIT OF SHRI ZILEDAR ALI S/O MOHD. ISLAM ALI R/O CHUHADPUR KALAN PO- MAL AKPUR KHADAR, YAMUNANAGAR WHERE IN IT HAS BEEN STATED THAT HE HAD PURCHASED POPULAR FOR RS. 10,40,000/- FROM THE ASSESSEE, THE ANOTHER AFFI DAVIT AT PAGE NO. 7 IS OF SHRI MOHAN WALIA S/O SH. BALWANT SINGH R/O KHIJARI, PO K HIJRABAD, YAMUNANAGAR, IN THE SAID AFFIDAVIT IT IS STATED THAT HE HAD PURCHAS ED POPULAR OF RS. 10.25 LAKH FROM THE ASSESSEE. IT WAS STATED THAT BOTH THE PURC HASER WERE PRODUCED BEFORE THE A.O. WHO RECORDED THEIR STATEMENTS WHICH ARE PL ACED AT PAGE NO. 9 TO 21 OF THE ASSESSEES COMPILATION. IT WAS POINTED OUT THAT IN THE STATEMENT RECORDED BY THE A.O. SHRI MOHAN WALIA ACCEPTED THAT HE HAD PURC HASED THE POPULAR TREES FROM THE ASSESSEE FOR APPROXIMATELY RS. 10,00,000/- THE SAID STATEMENT DATED 06/10/2017 IS PLACED ON PAGE NO. 9-14 OF THE ASSESS EES PAPER BOOK. IT WAS CONTENDED THAT THE POPULAR TREE WERE ALSO THERE IN THE EARLIER YEARS WHICH WERE SOLD BY THE ASSESSEE DURING THE YEAR UNDER CONSIDER ATION AND THE SALE PROCEEDS WERE UTILIZED FOR DEPOSITING IN THE BANK ACCOUNT, T HE SOURCE OF DEPOSITS IN THE SAVING BANK ACCOUNT MAINTAINED WITH AXIS BANK, SADH AURA WAS FULLY EXPLAINED. THEREFORE, THE ADDITION MADE BY THE A.O. AND SUSTAI NED BY THE LD. CIT(A) WAS NOT JUSTIFIED. 7. IN HER RIVAL SUBMISSIONS THE LD. SR. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AS SESSEE COULD NOT PRODUCE THE EVIDENCE FOR MAKING DEPOSIT IN HIS BANK ACCOUNT AND EVEN THE PURCHASER IN HIS STATEMENT COULD NOT POINT OUT THE SPECIFIC AMOUNT, HE ONLY STATED ABOUT THE APPROXIMATE AMOUNT FOR WHICH THE POPULAR TREES WERE PURCHASED. SHE STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT( A). 8. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE IT APPEARS THAT THE A.O. MADE THE ADDITION AND REJECTED THE EXPLANATION OF T HE ASSESSEE THAT THE POPULAR TREES WERE ALSO PLANTED ON THE PERIPHERY OF THE FIELD HAVING THE CROPS OF WHEAT AND PADDY. THE A.O. DID NOT DOUBT THE CROPS S OWN BY THE ASSESSEE BUT HAD NOT ACCEPTED THIS CONTENTION THAT THE POPULAR T REES PLANTED ON THE LAND AND ON THE PERIPHERY OF THE FIELD WERE SOLD FOR RS. 20.65 LAKHS. LD. CIT(A) 4 ESTIMATED THE AGRICULTURE INCOME AT RS. 11,00,000/- FROM 27.5 ACRES OF LAND @ RS. 40,000/- PER ACRE AND ALSO ACCEPTED THE INCOME FROM SALE OF POPULAR TREES AT RS. 2,00,000/- ON ESTIMATE BASIS. HOWEVER WHILE ACC EPTING THE INCOME AT RS. 2,00,000/- NO COGENT REASON HAS BEEN GIVEN, ON THE CONTRARY THE ASSESSEE FURNISHED THE AFFIDAVIT OF SHRI ZILEDAR ALI AND SHR I MOHAN WALIA COPIES OF WHICH ARE PLACED AT PAGE 6 TO 8 OF THE ASSESSEES COMPILA TION. IN THE SAID AFFIDAVITS BOTH THE PERSONS ACCEPTED THAT THEY PURCHASED POPUL AR TREES FROM THE ASSESSEE. SHRI ZILEDAR ALI STATED IN HIS AFFIDAVIT THAT HE PURCHASED THE POPULAR TREES FOR RS. 10.40 LAKHS, SIMILARLY SHRI MOHAN WAL IA IN HIS AFFIDAVIT STATED THAT HE PURCHASED THE POPULAR TREES FOR A SUM OF RS. 10.25 LAKHS. SHRI MOHAN WALIA ALSO ACCEPTED IN HIS STATEMENT BEFORE THE A.O. THAT HE P URCHASED POPULAR TREES FROM THE ASSESSEE FOR APPROXIMATELY RS. 10,00,000/- . THE ASSESSEE ALSO FURNISHED THE COPY OF GIRDAWARI BEFORE THE A.O. AND MENTIONED THE KHASRA NUMBER, ON WHICH THE POPULAR TREES WERE PLANTED. IN THE PRESEN T CASE, THE A.O. WHILE OBSERVING THAT TREES WERE ALREADY CUT IN THE EARLIE R YEARS HAD NOT BROUGHT ANY EVIDENCE ON RECORD TO REBUT THIS CONTENTION OF THE ASSESSEE THAT THE POPULAR TREES WERE ALREADY PLANTED ON THE PERIPHERY OF THE FIELD. THEREFORE, BY CONSIDERING THE TOTALITY OF THE FACTS, PARTICULARLY THE ACCEPTANCE GIVEN BY THE PURCHASERS OF THE POPULAR TREES IN THEIR RESPECTIVE AFFIDAVITS, I AM OF THE VIEW THAT THE SALE PROCEEDS AMOUNTING TO RS. 20.65 LAKHS FROM SHRI ZILEDAR ALI AND SHRI MOHAN WALIA APART FROM THE AGRICULTURE INCOME ESTIM ATED BY THE LD. CIT(A) AT RS. 11,00,000/- WAS SUFFICIENT TO MAKE THE DEPOSIT OF RS. 26,68,850/- IN THE BANK ACCOUNT OF THE ASSESSEE. IN THAT VIEW OF THE MATTER THE ADDITION SUSTAINED BY THE LD. CIT(A) IS DELETED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE OPEN COURT ON 01/08/2019 ) SD/- .., ( N.K. SAINI) ! / VICE PRESIDENT AG DATE: 01/08/2019 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE