ARVIND GAUTAM, AGRA V. ITO WARD-2(1)(2), AGRA

ITA 290/AGR/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9241 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 19-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Rule of consistency; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER I.T.A NO.290/AGRA/2018 (ASSESSMENT YEAR: 2014-15) SMT. ARVIND GAUTAM, 28, PURUSHOTTAM NAGAR, AGRA PAN: AJHPG6821B (APPELLANT) VS. INCOME TAX OFFICER, WARD-2(1)(2), AGRA (RESPONDENT) APPELLANT BY SHRI PANKAJ GARGH, AR RESPONDENT BY SHRI WASEEM ARSHAD, SR. DR ORDER PER LALIET KUMAR, J.M.: THIS APPEAL OF ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-2, AGRA, FOR THE AY.2014-15 . 2. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE, AN INDIVIDUAL, E-FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 15-10-2014, DECLARING A TOTAL INCOME OF RS.3,84,150/-. AS IN THE EARLIER A SSESSMENT YEAR, ASSESSING OFFICER TREATED THE PART OF AGRICULTURAL INCOME SHO WN BY THE ASSESSEE AS DATE OF HEARING 08-01-2020 DATE OF PRONOUNCEMENT 08-01-2020 I.T.A NO. 290/AGRA/2018 2 INCOME FROM OTHER SOURCES AND MADE AN ADDITION OF RS.32,68,500/- ON THIS ACCOUNT AND TOTAL INCOME WAS ASSESSED AT RS.36,52,6 50/-. 2.1. AGGRIEVED BY SUCH ADDITION TO THE TOTAL INCOME OF ASSESSEE, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). 3. BEFORE THE CIT(A), ASSESSEE RAISED VARIOUS GROUN DS AND ARGUED TO DELETE THE ADDITION MADE BY THE ASSESSING OFFICER. DESPITE THAT, THE LD.CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESS ING OFFICER, BY STATING AS UNDER: THE REASONING AND COMPUTATION OF THE ASSESSING OFF ICER IS SEEMS TO BE CORRECT AND HENCE, ADDITION OF RS.32,68,500/- TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES IS HEREBY CONFIRMED. 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL, RAISING THE FOLLOWING GROUNDS: 1. BECAUSE THE LD.CIT (APPEALS) HAS WRONGLY, ILLEG ALLY AND ARBITRARILY CONFIRMED ADDITION OF RS,32,68,500/- MADE BY THE ASSESSING OF FICER AS INCOME FROM UNDISCLOSED SOURCES AS AGAINST AGRICULTURAL INCOME SHOWN BY THE ASSESSEE. 2. BECAUSE WHILE CONFIRMING THE ADDITION MADE BY TH E ASSESSING OFFICER, AS ABOVE, THELD.CIT(APPEALS) HAS ERRED BOTH ON FACTS AND IN L AW IN REJECTING THE SUBMISSIONS AND DETAILS FILED BY THE APPELLANT AND HAS FURTHER ERRED IN REJECTING THE PAST HISTORY OF THE APPELLANT. 3. BECAUSE CONSIDERING THE PAST HISTORY OF THE CASE , THE FACTS OF THE CASE IN THE YEAR UNDER CONSIDERATION IT IS FULLY PROVED AND ESTABLIS HED THAT THE APPELLANT IS ENGAGED IN THE AGRICULTURAL OPERATIONS. THE LD.CIT (APPEALS ) HAS ERRED IN CONFIRMING THE I.T.A NO. 290/AGRA/2018 3 FINDING OF THE ASSESSING OFFICER THAT THE APPELLANT IS NOT ENGAGED IN LARGE SCALE AGRICULTURAL OPERATION. THE AGRICULTURAL INCOME REG ULARLY SHOWN IN EARLIER YEARS HAS BEEN ACCEPTED. 4. BECAUSE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION OF RS.32,68,500/- MADE BY THE ASSESSING OFFICER, CONFI RMED BY LD. CIT (APPEALS) BE DELETED AND THE AGRICULTURE INCOME SHOWN BE ACCEPTE D. 5. THAT THE APPELLANT CRAVES TO ADD AMEND ALTER MOD IFY OR DELETE ANY OR ALL OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE REITE RATED THE GROUNDS RAISED BY ASSESSEE AND SUBMITTED THE FOLLOWING STAT EMENT: THE DETAILS OF COMPARATIVE FIGURE OF AGRICULTURE I NCOME SHOWN AND ASSESSED ARE SUBMITTED AS FOLLOWS:- S.NO. PARTICULARS A.Y. 2014-15 A.Y, 2013-14 A.Y. 2012-13 (I) AREA OF LAND USED FOR AGRICULTURE ACTIVITY 25.946 HECTARES 6.64 HECTARES + ABOUT 7 HECTARES FROM AUGUST 2011 6.64 HECTARES (II) AGRICULTURE INCOME SHOWN 32,68,500/- 32,56,582/- 28,23,870/- (III) ACCEPTED BY A.O NIL 11,59,770/- 7,59,770/- (IV) ADDITION BY A.O 32,68,500/- 20,96,812/- 20,64,100/- (V) CIT(A) CONFIRMED DELETED DELETED NOTE:- 1. EVEN AS PER REPORT FROM THE HORTICULT URE DEPARTMENT (PAGE 18 OF ASSESSMENT ORDER), THE AGRICULTURE INCOME SHALL BE: - NET INCOME = RS.84,100/- PER HECTARE X 25.946 HECTA RES = RS. 21,82,059/- 2. IN A,Y. 2012-13, ASSESSING OFFICER HIMSELF ACCEP TED AGRICULTURE INCOME OF RS. 7,59,770/- ON AGRICULTURE LAND OF 6.64 HECTARES WHI CH WILL COME TO RS. 1,14,423/- PER HECTARE. THUS, IN A.Y. 2014-15, I.T.A NO. 290/AGRA/2018 4 NET INCOME = LAND USED 25.946 HECTARES X RS.1,14,42 3/- PER HECTARE = RS. 29,60,819/-. 3. IN A.Y. 2013-14, AGRICULTURE INCOME OF RS.32,56, 582/- ACCEPTED ON AGRICULTURAL LAND OF 13.64 HECTARES. 6. THE LD.AR HAD DRAWN OUR ATTENTION TO PARA 6.4 OF THE ORDER PASSED BY THE CIT(A), WHICH WAS TO THE FOLLOWING EFFECT: 6.4 IT IS SEEN THAT THIS ISSUE IS RECURRING IN ASS ESSEE'S CASE FROM A.Y. 2010-11, IN THAT YEAR ADDITION MADE BY THE AO WAS DELETED. IN T HE A.Y. 2013-14 AGAIN THE ASSESSEE HAD SHOWN TO HAVE TAKEN MORE LAND ON LEASE FROM AUGUST 2011 FROM SRI BRIJ MOHAN AND LALA RAM AND SRI BRIJ MOHAN, WHO HAD CONFIRMED IN THEIR STATEMENTS TO HAVE GIVEN 7 HECTARE OF LAND ON LEASE TO THE ASSESSEE AND HENCE, ADDITION OF RS.20,96,812/- MADE ON THIS ACCOUNT WAS ALSO DELETED, HOLDING THAT ASSESSEE HAD ENOUGH LAND TO CARRY OUT AGRICULTURAL ACTIVITIES. IN PRECEDING TWO YEARS AO HAS ACCEPTED AGRICULTURAL INCOME TO THE EX TENT OF RS.7,59,770/- AND RS. 11,59,770/-RESPECTIVELY. 6.1. THE LD.AR HAD ALSO DRAWN OUR ATTENTION TO THE ORDER PASSED BY THE ASSESSING OFFICER MORE PARTICULARLY AT PG.18 THE RE PORT OF THE HORTICULTURE DEPARTMENT, WHICH CONFIRMS THAT PER HECTARE INCOME OF ASSESSEE FOR GROWING THE POTATO WOULD BE RS.84,100/- PER HECTARE. PG.18 OF THE AOS ORDER WAS AS UNDER: I.T.A NO. 290/AGRA/2018 5 I.T.A NO. 290/AGRA/2018 6 6.2. IT WAS SUBMITTED THAT THE ACTIVITY OF THE ASSE SSEE WAS NOT DOUBTED BY THE AUTHORITIES IN THE PREVIOUS TWO YEARS AND THERE IS NO CHANGE IN FACTS FOR THE PRESENT ASSESSMENT YEAR. THE NATURE AND HOLDIN G OF THE LAND CONTINUES TO BE THE SAME, FURTHER, THE ASSESSEE HAD GIVEN THE AF FIDAVIT OF 40 FARMERS, TO WHOM THE SEED OF POTATOS WAS GIVEN BY THE ASSESSEE. THE DETAILS OF WHICH ARE MENTIONED BY THE AO AT PG.7 OF THE ORDER. IT W AS FURTHER SUBMITTED THAT ON ACCOUNT OF THE LETTER REPRODUCED HEREIN ABOVE FR OM THE OFFICE OF HORTICULTURE DEPARTMENT, THE PER ACRE YIELD OF POTA TO WOULD BE AN INCOME OF RS.84,100/- PER HECTARE. HOWEVER, THIS INCOME IS TH E MINIMUM AND CONSERVATIVE ESTIMATE, BUT IT DEPENDS UPON THE NATU RE OF THE SOIL THE QUALITY OF LAND, PESTICIDES USED AND AVAILABILITY OF WATER. HENCE, THE APPEAL OF ASSESSEE IS REQUIRED TO BE ALLOWED. 7. LD.DR FOR THE REVENUE, RELYING ON THE ORDERS OF AO AND CIT(A), OPPOSED THE CONTENTIONS RAISED BY THE LD.COUNSEL FO R THE ASSESSEE. HE HAS DRAWN OUR ATTENTION TO PARA 6.7 TO 6.9, WHICH WERE TO THE FOLLOWING EFFECT: 6.7 IT IS SEEN THAT IN THE EARLIER TWO ASSESSMENT YEARS, AO HAS NOT GONE INTO THE DETAILS OF AGRICULTURE ACTIVITIES CARRIED OUT BY TH E ASSESSES. HOWEVER, IN THIS YEAR AO HAS CARRIED OUT DETAILED INVESTIGATIONS AND GIVE N A SPECIFIC FINDING THAT ASSESSEE DOES NOT HAVE ANY MACHINERY EQUIPMENT AND OTHER RESOURCES / EXPENSES WHICH ARE REQUIRED AND ESSENTIAL FOR THE CULTIVATIO N OF LAND. BASED ON THE I.T.A NO. 290/AGRA/2018 7 CERTIFICATE OF AVERAGE PRODUCTION OF POTATO SEEDS T HAT HAS BEEN CLAIMED TO HAVE BEEN GROWN BY THE ASSESSEE, AO HAS WORKED OUT THAT EVEN IF THE ASSESSEE WOULD BEEN INVOLVED IN THIS AGRICULTURAL ACTIVITY, THE NE T AGRICULTURAL INCOME FROM POTATO WOULD ONLY BE RS.12,74,948/-. HOWEVER, SINCE ASSESS EE HAS NOT BEEN ABLE TO FURNISH ANY PROOF OF CARRYING OUT AGRICULTURAL ACTI VITIES BY WAY OF PURCHASE OF SEEDS, FERTILIZERS, LABOUR PAYMENT ETC, AND HAVING ANY KIND OF AGRICULTURAL EQUIPMENT OR MACHINERY TO TILL SUCH VAST PIECE OF L AND AS CLAIMED. AO IS CORRECT IN HOLDING THAT ASSESSEE IS NOT ENGAGED IN ANY LARGE S CALE AGRICULTURAL ACTIVITIES. 6.8 IT IS FURTHER SEEN THAT THE RELIEF ALLOWED BY T HE CIT(A) IN THE A.Y. 12-13 WAS BASED ON THE FACT THAT AO HAS NOT DOUBTED THE AGRIC ULTURAL INCOME. HE ONLY DOUBTED THE QUANTUM OF SAME IN LIGHT OF LESSER LAND HOLDING. THE SAME DECISION WAS FOLLOWED IN SUBSEQUENT ASSESSMENT YEAR. BUT SIN CE IN THIS ASSESSMENT YEAR DUE TO SPECIFIC REASONS OF DOUBTFUL LARGE AGRICULTURAL INCOME THE CASE WAS TAKEN IN SCRUTINYAND AO HAS MADE DETAILED INDEPENDENT VERIFI CATIONS, THEREFORE NEW FACTS HAVE COME TO THE SURFACE BASED ON WHICH AO HAS TREA TED PART OF INCOME AS AGRICULTURAL AND BALANCE AS INCOME FROM OTHER SOURC ES. 6.9 THE ONUS TO PROVE AGRICULTURAL ACTIVITIES CARRI ED OUT IS ON THE ASSESSEE BUT IN SPITE OF VARIOUS OPPORTUNITIES PROVIDED BY THE AO, ASSESSEE COULD NOT FILE ANY PROOF OF CARRYING OUT AGRICULTURAL ACTIVITIES AND F OR THE SALE OF AGRICULTURAL PRODUCE NO BILLS OF ANY AGRICULTURAL MANDI ARE PROD UCED. ASSESSEE HAS ONLY FILED AFFIDAVITS OF FARMERS TO SHOW THAT THEY HAVE PURCHA SED THE PRODUCE. HOWEVER, IT IS OBSERVED BY THE AO THAT VARIOUS AFFI DAVITS ARE NOT RELIABLE AS ALL THE AFFIDAVITS OF THE SOME OF THE FARMERS (20 I N NOS.) TO WHOM THE POTATO HAS CLAIMED TO HAVE BEEN SOLD, HAVE BEEN MADE ON 09.12. 2016, WHICH SHOWS THAT SUCH FARMERS / PERSONS HAVE PURCHASED POTATO ON A PARTIC ULAR DAY I.E. 02.10.2013 FROM THE ASSESSEE, WHEREAS IN THE CHART ENCLOSED WITH AS SESSEE'S REPLY DATED I.T.A NO. 290/AGRA/2018 8 21.10.2016, FARMERS ARE SHOWN TO HAVE PURCHASED POT ATO ON DIFFERENT DATES W.E.F. 04.04.2013 TO 28.08.2013 AND NONE HAVE PURCHASED PO TATO FROM ASSESSEE ON 02.10.2013. HENCE, THE CONTENTS OF AFFIDAVIT WERE F OUND TO BE CONTRARY TO THE DOCUMENTARY EVIDENCE AND ASSESSEE'S CLAIM MADE EARL IER AND HENCE WAS TREATED AS NOT RELIABLE. 7.1. IT WAS SUBMITTED THAT THE ASSESSEE WAS FAILED TO DISCHARGE THE PRIMARY ONUS OF CARRYING OUT THE AGRICULTURAL ACTIVITIES, T HEREFORE THE APPEAL OF ASSESSEE IS REQUIRED TO BE DISMISSED. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE THE AO, THE ASSESSEE HA D PRODUCED THE DOCUMENT SHOWING THE AGRICULTURAL LAND TO THE EXTENT OF 25.9 46 HECTARES. OUT OF THE SAID LAND, 11.13 HECTARES PERTAINS TO MR.BRIJ MOHAN AND MR.LALA RAM. FOR THE AY.2013-14 AND 2014-15, THE SAME AGRICULTURAL L AND WAS THE SUBJECT MATTER OF ENQUIRY BY THE AO AND ALSO BY THE CIT(A). THE CIT(A) IN THE ORDER IN PARA 6.4 MENTIONED THE LAND HOLDING IN THE NAMES OF MR.BRIJ MOHAN AND MR.LALA RAM AND THEREAFTER HAD ALSO RECORDED TH AT THE ADDITION MADE BY THE AO FOR THE ASSESSMENT YEAR TO THE TUNE OF RS.20 ,96,812/- WAS DELETED BY THE LD.CIT(A). THERE IS NO CHANGE IN THE FACTS SOF ARAS THE LAND HOLDINGS IS CONCERNED. IN THE PREVIOUS TWO YEARS, AS MENTIONED HEREIN ABOVE, THE ASSESSEE HAD CLAIMED THE AGRICULTURAL INCOME TO THE TUNE OF RS.21 LAKHS I.T.A NO. 290/AGRA/2018 9 APPROXIMATELY WHICH IN THE PRESENT YEAR HAD INCREAS ED TO RS.36 LAKHS APPROXIMATELY. IN OUR VIEW, THE ENDS OF JUSTICE RE QUIRED THAT THE PRINCIPLE OF CONSISTENCY IS REQUIRED TO BE FOLLOWED IN RESPECT O F PER HECTARE YIELD IN THE PREVIOUS YEARS, WHICH IS DULY SUPPORTED BY THE CERT IFICATE ISSUED BY THE HORTICULTURE DEPARTMENT, RELIED UPON BY THE AO, WHI CH ALSO SHOWS THE PER HECTARE YIELD AS RS.84,000/-. EXAMINING THE MATTER FROM ANY ANGLE I.E., EITHER FROM THE ANGLE OF PREVIOUS HISTORY OR FROM T HE ANGEL OF THE CERTIFICATE ISSUED BY THE HORTICULTURE DEPARTMENT, THE ASSESSEE WAS ABLE TO ESTABLISH THE AGRICULTURE INCOME OF RS.21 LAKHS. CONSIDERING THE PAST HISTORY OF THE CASE AND THE FA CTS OF THE CASE IN THE YEAR UNDER CONSIDERATION, WE ARE OF THE VIEW THAT I T IS FULLY PROVED AND ESTABLISHED THAT THE ASSESSEE IS ENGAGED IN THE AGR ICULTURAL OPERATIONS. THE LD.CIT (APPEALS) HAS ERRED IN CONFIRMING THE FINDIN G OF THE ASSESSING OFFICER THAT THE ASSESSEE IS NOT ENGAGED IN LARGE S CALE AGRICULTURAL OPERATION. SINCE THE AGRICULTURAL INCOME REGULARLY SHOWN BY TH E ASSESSEE IN EARLIER YEARS HAS BEEN ACCEPTED, THE SAME IS TO BE CONSIDER ED IN THE YEAR UNDER CONSIDERATION ALSO. UNDER THE FACTS AND CIRCUMSTANC ES OF THE CASE ON HAND, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION OF RS.32,68,500/- MADE BY THE ASSESSING OFFICER, CONFIRMED BY LD.CIT(A) IS WR ONG AND REQUIRED TO BE I.T.A NO. 290/AGRA/2018 10 PARTLY DELETED. HOWEVER, CONSIDERING THE PAST HIST ORY AND ALSO THE CERTIFICATE ISSUED BY THE HORTICULTURE DEPARTMENT, WE RESTRICT THE AGRICULTURE INCOME TO RS.22,68,500/- AND SUSTAIN THE ADDITION OF RS.10 LA KHS. THUS, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08-01-2020 SD/- SD/- (DR. M.L. MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUD ICIAL MEMBER TNMM COPY FORWARDED TO: 1. ASSESSEE 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT SR. PRI VATE SECRETARY ITAT AGRA