ITO, New Delhi V. Shri Malvinder Singh Garwal, Rampur

ITA 3647/DEL/2011

• Counselvise Citation: 364720114 RSA 2011
• Duration Of Justice: 3 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 29-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 27-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA SENIOR
• Keywords: Business income; Source of fund; Additional evidence
• Section: 142(1); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.3647/DEL./2011 (ASSESSMENT YEAR : 2008-09) ITO, WARD 42 (3), VS. SHRI MALVINDER SINGH GARWAL , NEW DELHI. C/O BHARAYA CO-OP. FARMS, P.O. RUDRA BILAS MILL, BILASPUR, DISTT. RAMPUR (U.P.) (PAN : ACZPG2829C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.V.S. GUPTA, FCA REVENUE BY : SHRI P. DAM KANUNJNA, SENIOR DR DATE OF HEARING : 29.04.2015 DATE OF PRONOUNCEMENT : .04.2015 ORDER PER H.S. SIDHU, JUDICIAL MEMBER : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER OF THE CIT (APPEALS) -XXX, NEW DELHI DATED 13.05.2011 FOR THE ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN :- DELEING THE ADDITION OF RS.23,57,000/- MADE BY A.O. IN DELETING THE ADDITION THE CIT (A) HAS FAILED TO APPRECIATE THE FACT THAT ON A SMALL LAND HOLDING OF 1.262 HECTARE OF LAND AGRICULTURAL PRODUCE TO THE T UNE OF RS.25 LACS CANNOT BE GROWN. ITA NO.3647/DEL./2011 2 THE APPELLANT CRAVES THE RIGHT TO ALTER, AMEND, AD D OR SUBSTITUTE THE GROUNDS OF APPEAL. 2. THE FACTS RELATING TO THE ISSUE IN DISPUTE ARE T HAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 25.08.2008 DECLARING TOTAL INCOME AT RS.3,04,713/- AND THE AGRICULTURAL INCOME OF RS.25 LACS. THE ASS ESSING OFFICER PROCESSED THE SAME U/S 143(1) OF THE INCOME-TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) AT THE RETURNED INCOME. LATER ON, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ON THE BASIS OF AIR INFORMATION THAT THE ASSESSEE HAS DEPOSITED CASH OF RS.57,57,000/- IN HI S BANK ACCOUNT NO.083000100084898 WITH PUNJAB NATIONAL BANK, RUDRA PUR, UTTARAKHAND. THE ASSESSING OFFICER ISSUED NOTICE U/S 143(2) OF T HE ACT ON 03.09.2009 FIXING THE CASE OF THE ASSESSEE FOR 14.09.2009. IN RESPONSE TO THE SAME, THE ASSESSEES AUTHORIZED REPRESENTATIVE APPEARED. THE ASSESSING OFFICER AGAIN ISSUED NOTICE U/S 143(2) AND 142(1) OF THE AC T ALONG WITH A QUESTIONNAIRE ON 01.09.2010 FIXING THE CASE OF THE ASSESSEE FOR 10.09.2010. IN RESPONSE TO THE SAME, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FILED NECESSARY DETAILS WHICH WERE EXAMINED BY THE ASSESSING OFFICER. THE MAIN SOURCE OF THE INCOME OF THE ASSESSEE IS PE NSION FROM AIR FORCE, AGRICULTURAL INCOME AND INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE CASH DEPOSIT OF R S.57,57,000/- IN THE SAID BANK ACCOUNT. IN RESPONSE TO THE SAME, THE ASSESSE E SUBMITTED THAT RS.34,00,000/- WAS RECEIVED ON SALE OF ANCESTRAL PR OPERTY IN PUNJAB FOR ITA NO.3647/DEL./2011 3 WHICH NECESSARY DETAILS AND DOCUMENTS WERE FILED. REGARDING BALANCE AMOUNT OF RS.23,57,000/-, THE ASSESSEE SUBMITTED TH AT THIS DEPOSIT IS FROM SALE PROCEEDS OF AGRICULTURAL PRODUCE. THE ASSESSE E HAS ALSO FILED THE DETAILS OF SALE PROCEEDS OF RS.7 LACS FROM POPLAR T REES FROM ONE ATTIM KHAN AND HAMID KHAN, SONS OF SABIR KHAN, RESIDENT O F BILASPUR, DISTT. RAMPUR. THE DETAILS OF RS.4,02,000/- WERE ALSO SU BMITTED BEFORE THE ASSESSING OFFICER BEING RECEIVED ON ACCOUNT OF GIVI NG HIS AMRUD BAGH ON LEASE TO JAMIL KHAN, S/O SHER KHAN, RUDERPUR, UTTRA KHAND AND AS REGARDS TO RS.70,000/-, THE ASSESSEE HAS NOT SUBMITTED ANY EXPLANATION. THE ASSESSING OFFICER ISSUED NOTICE U/S 133 (6) OF THE ACT FOR SEEKING THE INFORMATION FROM TWO PARTIES WHICH WERE RECEIVED BA CK TO THE ASSESSING OFFICER WITH REMARKS NO SUCH PERSON AT THE GIVEN A DDRESS. LASTLY, THE ASSESSING OFFICER, AFTER EXAMINING THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE, COMPLETED THE ASSESSMENT AND MADE AN ADDI TION OF RS.23,57,000/- WHILE PROCESSING THE RETURN U/S 143 (3) OF THE ACT ON 27.12.2010. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED THE APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO BY IMPUGNED ORDER DATED 13.05.2011 DELETED THE ADDITION IN DISPUTE BY ALLOWING THE APPEAL FILED BY THE ASSESSEE. 3. NOW, THE REVENUE BEING AGGRIEVED BY THE IMPUGNED ORDER DATED 13.05.2011 HAS FILED THE PRESENT APPEAL BEFORE US. ITA NO.3647/DEL./2011 4 4. AT THE TIME OF HEARING, LD. DR RELIED UPON THE O RDER PASSED BY THE ASSESSING OFFICER. ON THE CONTRARY, LD. AR RELIED ON THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY. HE DREW OUR ATTENTION T O THE PAPER BOOK FILED BY THE ASSESSEE CONTAINING PAGES 1 TO 75 IN WHICH ASSE SSEE HAS ATTACHED COPY OF F.NO. 35 DATED 24.01.2011 ALONG WITH STATEMENT O F FACTS & GROUNDS OF APPEALS, COPY OF BANK A/C IN PNB NO. 84898 RUDRAPUR IN THE NAME OF MR. M S GREWAL & MANDEEP GREWAL, COPY OF RECONCILIATION OF AIR WITH CASH DEPOSIT EXCEEDING RS.10 LAKHS IN PNB A/C NO. 84898 SUBMITTED BEFORE ASSESSING OFFICER, COPY OF IKRARNAMA OF ASSESSEE SU BMITTED BEFORE ASSESSING OFFICER WITH LETTER DATED 23.11.2010 REG ARDING SALE PROCEEDS OF POPLAR TREES, RS.7,00,000/- TO SH. ATTIM KHAN & HAM ID KHAN AND RS.11,85,000.00 TO SH. MURTJA KHAN, CONFIRMATION L ETTER DATED 16.12.2010 ISSUED BY TEHSILDAR, ALONGWITH CROPWISE DETAIL ISSU ED BY PATWARI FOR RANBIR COLLECTIVE CO-OP. FARMING SOCIETY LTD FILED BEFORE ASSESSING OFFICER, KISAN BAHI I.E. EVIDENCE OF LAND OWNERSHIP FILED BEFORE ASSESSING OFFICER REGARDING LAND OWNED BY ASSESSEE IN INDIVID UAL CAPACITY (1.262 HECTARE) AND LAND OWNED BY RANBIR COLLECTIVE CO-OP FARMING SOCIETY LTD FILED BEFORE A.O. (42.12 HECTARE), EVIDENCE REGARDI NG AGRICULTURAL INCOME OF RANBIR COLLECTIVE CO-OP FARMING SOCIETY LTD FILE D BEFORE ASSESSING OFFICER, LETTER DATED 04.01.2011 SENT BY ASSESSEE T O ASSESSING OFFICER REGARDING CONTRACTORS I.E. SH. MURTJA KHAN, SH. ATT IM KHAN & HAMID KHAN AND COPY OF LETTER DATED 23.02.2011 FILED BEFORE LD . CIT(A). LD. AR FOR ITA NO.3647/DEL./2011 5 THE ASSESSEE ARGUED THAT IN VIEW OF THE ORDER PASSE D BY LD. FIRST APPELLATE AUTHORITY AS WELL AS THE DOCUMENTARY EVIDENCES FILE D BY THE ASSESSEE BEFORE THE REVENUE AUTHORITIES, THE IMPUGNED ORDER PASSED BY LD. FIRST APPELLATE AUTHORITY MAY BE UPHELD BY DISMISSING THE APPEAL FILED BY THE REVENUE. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES AS WELL AS THE DOCUMENTA RY EVIDENCES IN THE SHAPE OF PAPER BOOK CONTAINING PAGES 1 TO 75. IT I S VERY MUCH NECESSARY TO REPRODUCE THE RELEVANT PORTION OF THE ASSESSMENT OR DER AND FOR THE SAKE OF CONVENIENCE, THE SAME IS REPRODUCED AS UNDER :- THE ASSESSEE'S MAIN SOURCES OF INCOME ARE PENSION F ROM AIR FORCE, AGRICULTURAL INCOME AND INCOME FROM OTHER SO URCES. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF CA SH DEPOSIT AMOUNTING TO RS.57,57,000/- IN HIS BANK ACCOUNT MAI NTAINED WITH PNB, RUDRAPUR. THE A R OF THE ASSESSEE SUBMITT ED THAT RS.34,00,000/- WAS RECEIVED ON SALE OF ANCESTRAL PR OPERTY IN PUNJAB FOR WHICH NECESSARY DETAILS/DOCUMENTS HAVE B EEN FILED. REGARDING BALANCE AMOUNT OF RS.23,57,000/-, THE AR SUBMITTED THAT THIS DEPOSIT IS FROM SALE PROCEEDS O F AGRICULTURAL PRODUCE. THE DETAILS OF THIS SALE PROC EEDS WERE FILED I.E. A SUM OF RS.7 LACS ON ACCOUNT OF SALE PR OCEEDS OF POPLAR TREES FROM ONE SH ATTIM KHAN AND HAMID KHAN SONS OF SABIR KHAN, RESIDENT OF BILASPUR, DISTT. REMPUR AND RS.4,02,000/- ON ACCOUNT OF GIVING HIS 'AMRUD BAGH' ON LEASE TO SH JAMIL KHAN S/O SHER KHAN, RUDERPUR, UTT RAKHAND AND ABOUT BALANCE AMOUNT OF RS.70,000/-, NO EXPLANA TION HAS BEEN FURNISHED. ON TEST CHECKING THE TRUTH THE ASSE SSEE, INFORMATION U/S 133(6) WAS SOUGHT FROM TWO PARTIES I.E. MURTZA KHAN AND SH ATIM KHAN & HAMID KHAN AT THE GI VEN ADDRESSES. THE LETTER SENT TO MURTZA KHAN HAS BEEN RECEIVED BACK UNSERVED WITH THE REMARKS OF THE POSTAL AUTHOR ITY' NO SUCH PERSON AT THE GIVEN ADDRESS'. SH ATIM KHAN AN D HAMID KHAN DID NOT FURNISH THE REQUIRED INFORMATION SOUGH T FOR IN ITA NO.3647/DEL./2011 6 THE LETTER. THE A R OF THE ASSESSEE WAS ALSO INFORM ED ABOUT THE FACTS THAT THE REQUIRED INFORMATION HAS NOT BEE N FURNISHED BY THESE TWO PERSONS. HE WAS FURTHER SHOW CAUSED TH AT THE DEPOSITS IN CASH OF RS.23,57,000/- ALLEGED TO HAVE BEEN FROM SALE OF AGRICULTURE PRODUCE SHALL BE TREATED AS INC OME FROM UNDISCLOSED SOURCES AND ADDED TO THE TOTAL INCOME O F THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 24.12.2010. T HE A R OF THE ASSESSEE DID NOT FURNISH ANY REPLY TO THIS QUER Y. FURTHER, I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCU RATE PARTICULARS OF HIS INCOME, HENCE PENALTY PROCEEDING S U/S 271 (1)( C) HAVE BEEN INITIATED SEPARATELY. AFTER PERUSING THE AFORESAID RELEVANT PORTION OF TH E ASSESSMENT ORDER, WE ARE OF THE VIEW THAT ON THE BASIS OF AIR INFORMATIO N, THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DE POSIT AMOUNTING TO RS.57,57,000/- IN HIS BANK ACCOUNT NO.0830001000848 98 MAINTAINED WITH PUNJAB NATIONAL BANK, RUDRAPUR, UTTARAKHAND. IN RE SPONSE TO THE SAME, THE ASSESSEE FILED THE EVIDENCE OF SALE PROCEEDS OF PROPERTY IN PUNJAB FOR RS.34,00,000/- WHICH WAS ACCEPTED BY THE ASSESSING OFFICER. AS REGARDS TO THE BALANCE AMOUNT OF RS.23,57,000/- WHICH THE A SSESSEE HAS DEPOSITED IN CASH IN HIS AFORESAID BANK ACCOUNT, NO DOUBT THE ASSESSEE HAS PRODUCED SOME DOCUMENTARY EVIDENCE BEFORE THE ASSESSING OFFI CER AS WELL AS BEFORE THE LD. FIRST APPELLATE AUTHORITY BUT ASSESSEE COUL D NOT SUBSTANTIATE HIS VERSION BEFORE THE ASSESSING OFFICER. SECONDLY, TH E ASSESSEE HAS STATED THAT A SUM OF RS.7 LACS WAS RECEIVED ON ACCOUNT OF SALE PROCEEDS OF POPLAR TREES FROM ONE ATTIM KHAN AND HAMID KHAN, SONS OF S ABIR KHAN, RESIDENT OF BILASPUR, DISTT. RAMPUR AND RS.4,02,000/- WERE R ECEIVED ON ACCOUNT OF GIVING HIS AMRUD BAGH ON LEASE TO JAMIL KHAN, S/O S HER KHAN, RUDERPUR, ITA NO.3647/DEL./2011 7 UTTRAKHAND AND AS REGARDS TO RS.70,000/-, THE ASSES SEE HAS NOT SUBMITTED ANY EXPLANATION TO THE ASSESSING OFFICER. ON THE B ASIS OF THIS INFORMATION, THE ASSESSING OFFICER ISSUED NOTICE U/S 133(6) OF T HE ACT TO TWO PARTIES, NAMELY, MURTZA KHAN AND ATIM KHAN & HAMID KHAN AT T HE GIVEN ADDRESSES. THE LETTER SENT TO SHRI MURTZA KHAN HAS BEEN RECEIVED BACK UNSERVED WITH THE REMARKS OF POSTAL AUTHORITIES NO SUCH PERSON AT THE GIVEN ADDRESS. ATIM KHAN AND HAMID KHAN DID NOT F URNISH THE REQUIRED INFORMATION SOUGHT FOR BY THE ASSESSING OFFICER. T HE ASSESSING OFFICER HAS GIVEN ANOTHER OPPORTUNITY TO ASSESSEE BY ISSUIN G A SHOW-CAUSE NOTICE REGARDING SOURCE OF CASH DEPOSIT OF RS.23,57,000/- ALLEGED TO HAVE BEEN RECEIVED FROM SALE OF AGRICULTURAL PRODUCE. BUT TH E ASSESSEE FAILED TO SUBSTANTIATE WITH ANY SOLID EVIDENCE BEFORE THE ASS ESSING OFFICER AND LASTLY, THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS.23,57,000/- AS UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE AND COMPLETED THE ASSESSMENT ON 27.12.2010. BUT THE LD . FIRST APPELLATE AUTHORITY HAS DELETED THE ADDITION IN DISPUTE WITHO UT ANY BASIS AND WITHOUT ANY EVIDENCE. THE LD. FIRST APPELLATE AUTHORITY HA S BELIEVED THE VERSION OF THE ASSESSEE WHICH IS CONTRARY TO THE LAW AND FACTS ON THE FILE. FOR THE SAKE OF CONVENIENCE, IT IS VERY MUCH RELEVANT TO REPRODU CE THE RELEVANT PORTION OF THE IMPUGNED ORDER PASSED BY THE LD. FIRST APPEL LATE AUTHORITY WHICH IS AT PARAS 3 & 4 AT PAGES 2 TO 7 AND THE SAME IS REPR ODUCED AS UNDER :- ITA NO.3647/DEL./2011 8 3. THE APPELLANT WAS A GALLANTRY AWARD WINNER FROM AIRFORCE. HE RETIRED FROM AIRFORCE IN THE YEAR 1985 AND SETTLED IN A PLA CE IN BILASPUR NEAR RUDERPUR OF NAINITAL DISTRICT OF UTTRAKHAND. HIS PENSION INC OME FROM MILITARY IS EXEMPT U/S 10(18) OF THE I.T. ACT BEING A GALLANTRY AWARDE E RECEIVER. IN THE 1970 WAR THE APPELLANT WAS IMPRISONED BY PAKISTAN FOR ONE YE AR AND WHEN HE CAME BACK TO INDIA HE WAS AWARDED A GALLANTRY AWARD. THE ASSE SSEE WITH HIS FAMILY IS DOING AGRICULTURAL OPERATION IN ABOUT 53 HECTRES OF AGRICULTURAL LAND WHERE HE HAD MULTIPLE CROPS AND MANGO, GUAVA, ORCHARD. HE GREW POPLAR TREES FOR PLYWOOD INDUSTRIES ON WHICH THE TEHSILDAR/ PATWARI OF THE LOCAL AREA HAD GIVEN A CERTIFICATE OF AGRICULTURAL RECEIPTS OF RS.30 LAK HS PER YEAR. THIS CERTIFICATE TRANSLATION IS PRODUCED AS UNDER:- 'SH.MALVINDER SINGH GREWAL S/O SH.MEHRA SINGH GREWA L IS A PERMANENT RESIDENT AND AGRICULTURIST OF GRAM KOTA ALI NAGAR, TEHSIL BILASPUR, DISTT.RAMPUR. HE IS A SECRETARY IN RANVIR CO-OPERAT IVE FARMING SOCIETY LTD. HE IS THE AUTHORIZED PERSON FOR DOING ALL THE AGRICULTURAL ACTIVITIES ON THE LAND AND HAVING INCOME OF RS.30,00,000/-. AN OATH LETTER IS ENCLOSED. SUBMITTED. THE APPELLANT HAD GIVEN EXPLANATION ABOUT AGRICULTU RAL INCOME, RECONCILIATION AND AGRICULTURAL EXPENSES MADE DURING THE YEAR WHIC H ARE REPRODUCED FOR READY REFERENCE:- 'ON THE BASIS OF ALL THE KHASARA, KHATAUNI DOCUMENT S DULY CERTIFIED BY PATWA:, BANK STATEMENTS AND EXPLANATION PROVIDED BY THE MR. MELVINDER SINGH GAREW WE ARE CERTIFYING FOLLOWING: A) AGRICULTURAL INCOME RECONCILIATION: I. CASH DEPOSITED IN BANK (DECLARED AS AGRICULT URAL RECEIPTS) DATE MODE AMOUNT NARRATION 18-MAY-07 CASH 300,000.00 SALE PROCEEDS 28 MAY-07 CASH 200,000.00 SALE PROCEEDS 04-JUN-07 CASH 100,000.00 SALE PROCEEDS 26-JUL-07 CASH 200,000.00 SALE PROCEEDS 30-JUL-07 CASH 100,000.00 SALE PROCEEDS 08-AUG-07 CASH 100,000.00 SALE PROCEEDS 26-0CT-07 CASH 165,000.00 SALE PROCEEDS 02-NOV-07 CASH 120,000.00 SALE PROCEEDS 28-NOV-07 CASH 100,000.00 SALE PROCEEDS 01-DEC-07 CASH 300,000.00 SALE PROCEEDS 07-DEC-07 CASH 250,000.00 SALE PROCEEDS 17-DEC-07 CASH 225,000.00 SALE PROCEEDS 13-FEB-08 CASH 39,000.00 SALE PROCEEDS 04-MAR-08 CASH 38,000.00 SALE PROCEEDS 11-MAR-08 CASH 200,000.00 SALE PROCEEDS 25-MAR-08 CASH 100,000.00 SALE PROCEEDS 23,57,000.00 ITA NO.3647/DEL./2011 9 2. CHEQUE DEPOSITED IN BANK (DECLARED AS AGRICULTUR AL RECEIPTS) DATE MODE AMOUNT NARRATION 20-JUN-07 CHEQUE 64,140.00 CROPS SALE PROCEEDS 27-JUL-07 CHEQUE 21,640.00 CROPS SALE PROCEEDS 04-AUG-07 CHEQUE 213,800.00 CROPS SALE PROCEEDS 17-0CT-07 CHEQUE 20,000.00 CROPS SALE PROCEEDS 22-0CT-07 CHEQUE 49,000.00 CROPS SALE PROCEEDS 22-MAR-08 CHEQUE 19,526.00 CROPS SALE PROCEEDS 3,88,106.00 3. CASH WITHDRAWAL FROM BANK (FOR AGRICULTURAL EXPE NSES) DATE MODE AMOUNT NARRATION 01-JUN-07 SELF CHEQUE 48,804.00 DIESEL PAYMENT 19-JUN-07 SELF CHEQUE 100,000.00 WITHDRAWAL FOR AGRICULTURAL EXP. 20-JUN-07 SELF CHEQUE 100,000.00 EXPENSES TOWARDS FARMING AGRICULTURAL 21-JUN-07 SELF CHEQUE 100,000.00 EXPENSES TOWARDS FARMING AGRICULTURAL 04-JUL-07 SELF CHEQUE 10,000.00 EXPENSES TOWARDS FARMING AGRICULTURAL 12-JUL-07 SELF CHEQUE 100,000.00 EXPENSES TOWARDS FARMING AGRICULTURAL 12-JUL-07 SELF CHEQUE 100,000.00 EXPENSES TOWARDS FARMING AGRICULTURAL 14-JUL-07 SELF CHEQUE 35,000.00 EXPENSES TOWARDS FARMING AGRICULTURAL 22-AUG-07 SELF CHEQUE 213,800.00 EXPENSES TOWARDS FARMING AGRICULTURAL 29-AUG-07 SELF CHEQUE 20,000.00 EXPENSES TOWARDS FARMING AGRICULTURAL 31-AUG-07 SELF CHEQUE 22,850.00 DIESEL PAYMENT 18-SEP-07 SELF CHEQUE 50,000.00 EXPENSES TOWARDS FARMING AGRICULTURAL 26-0CT-07 SELF CHEQUE 14,000.00 WITHDRAWAL FOR AGRICULTURAL EXP 01-NOV-07 SELF CHEQUE 27,333.60 WITHDRAWAL FOR AGRICULTURAL EXP 03-NOV-07 SELF CHEQUE 100,000.00 WITHDRAWAL FOR AGRICULTURAL EXP 29-JAN-08 SELF CHEQUE 20,175.00 WITHDRAWAL FOR AGRICULTURAL EXP 10,61,962.60 ITA NO.3647/DEL./2011 10 PAYMENT FROM BANK (FOR AGRICULTURAL EXPENSES) DATE MODE AMOUNT NARRATION 30-MAR-07 CHEQUE 46,860.00 PAYMENT FOR FERTILIZER 29-AUG-07 CHEQUE 20,000.00, PURCHASE OF SEEDS 20-NOV-07 CHEQUE 42,718.00 PAYMENT FOR SEEDS 20-FEB-07 CHEQUE 7,158.00 AGRICULTURAL EXP. 27-MAR-08 CHEQUE 28,753.20 AGRICULTURAL EXP. 1,45,490.00 AGRICULTURAL INCOME : CASH DEPOSITED IN BANK (AS PER POINT NO.1) 2,357,000.00 CHEQUE DEPOSITED IN BANK (AS PER POINT NO.2 388,106.00 2,745,106.00 AGRICULTURAL INCOME : CASH WITHDRAWL BY BANK (AS PER POINT NO.1) 1,091,962.60 PAYMENT BY CHEQUE (AS PER POINT NO.4) 145,490.00 1,237,452.60 NET AGRICLUTURAL INCOME (CALCULATED ON THE BASIS OF BANK STATEMENT) 1,507,653.40 AGRICULTURAL INCOME DECLARED IN INCOME TAX RETURN 25,00,000.00 B) LAND USED BY ASSESSEE IN AGRICULTURAL ACTIVITIES OWNER NAME HECTARE LAND IN THE NAME OF MALVINDER SINGH GAREWAL 1,262 LAND IN THE NAME OF RANBIR COLLECTIVE CO-OPERATIVE FARMING SOCIETY 41,264 LAND IN THE NAME OF MINI COLLECTIVE CO-OPERATIVE FARMING SOCIETY 12.6 TOTAL LAND 55.126 1) MR. MALVINDER SINGH GRWAL IS THE SECRETARY IN RA NBIR COLLECTIVE CO- OPERATIVE FARMING SOCIETY LTD. HE IS THE AUTHORIZED PERSON FOR DOING ALL THE AGRICULTURAL ACTIVITIES ON THE LAND. ITA NO.3647/DEL./2011 11 2) FURTHER ALSO, MR.GREWAL IS ALSO AUTHORIZED PERSO N FOR DOING ALL AGRICULTURAL ACTIVITIES ON THE LAND RELATED TO MINI COLLECTIVE CO-OPERATIVE SOCIETY. ENCLOSED DOCUMENTS A. CERTIFICATE BY ASSESSEE, PATWARI B. COMPUTATION OF INCOME 3) ACCORDING TO SIGNED CERTIFICATE AND AFFIDAVIT DU LY CERTIFIED BY ASSESSEE, PATWARI OF LKEHAPAL, AROUND 30 LACS AGRICULTURAL RE CEIPTS FROM LAND DURING THE F.Y. 4) ASSESSEE SHOWS APPROXIMATELY AGRICULTURE NET INC OME RS.25 LACS IN HIS INCOME TAX RETURN. 4. FROM THE COMPUTATION OF AGRICULTURAL INCOME MADE BY THE APPELLANT AND HIS AR, IT IS FOUND THAT THE NET AGRICULTURAL INCOM E OF THE ASSESSEE IS AROUND RS.15 LAKHS IN THE PREVIOUS YEAR RELATED TO ASSESSMENT YE AR 2008-09. THE ASSESSEE HAD RETURNED AGRICULTURAL INCOME OF RS.25 LAKHS IN HIS RETURNED OF INCOME WHICH IS ON THE EXCESSIVE SIDE. SINCE THE ASSESSEE HAD A SOURCE OF CASH RECEIPTS OF RS.30 LAKHS FROM AGRICULTURAL AS RECEIPTS CERTIFIED BY THE LOCA L TEHSILDAR, CASH DEPOSIT OF RS.23,57,0001- IN THE BANK ACCOUNT OF THE ASSESSEE STANDS EXPLAINED. HOWEVER, THE INCOME COMPUTATION MADE BY THE ASSESSEE WILL BE CHANGED TO THE EXTENT OF TOTAL INCOME OF RS.3,04,710/- + AGRICULTURAL INCOME OF RS.15 LAKHS AND OTHER INCOME EXEMPT U/S 10 (18) PENSION FROM AIRFORCE FOR GALLANTRY AWARD OF RS.2,30,942/-. THUS THE AO IS DIRECTED TO RECOMPUTE D THE TAX LIABILITY AND CHARGE INTEREST IN ACCORDANCE WITH THE LAW. SINCE THE ASSE SSEE IS INVOLVED WHOLLY IN AGRICULTURAL OPERATION AND HE IS NOT HAVING ANY OTH ER BUSINESS ACTIVITY, EXCESS AGRICULTURAL INCOME RETURNED BY THE APPELLANT IN HI S RETURN OF INCOME SHOULD NOT BE TAKEN AS UNEXPLAINED BUSINESS INCOME. IN FUTURE THE APPELLANT IS ADVISED TO KEEP AN ACCOUNTANT TO MAINTAIN HIS BOOKS OF ACCOUNT FROM ALL SOURCES OF INCOME SO THAT HE SHALL BE ABLE TO PRODUCE AUDITED BOOKS O F ACCOUNTS BEFORE AO AND THE DEPARTMENT IN FUTURE. SINCE THE ASSESSEE IS MANAGI NG CO-OPERATIVE SOCIETY FOR COOPERATIVE FARMING, HE SHOULD MAINTAIN BOOKS OF AC COUNTS AUDITED FOR SUCH PURPOSES. WHENEVER, THE PROFESSIONAL RECEIPTS EXCEE DS RS.I0 LAKHS, HE SHOULD MAINTAIN BOOKS OF ACCOUNTS UNDER SECTION 44AA OF TH E I.T.ACT. THE AR SHOULD GUIDE THE APPELLANT IN MAINTAINING BOOKS OF ACCOUNT IN FUTURE FOR AGRICULTURAL INCOME AND OTHER INCOME SEPARATELY. WE FIND THAT THE ASSESSEE HAS GIVEN HIS EXPLANATION ABOUT THE AGRICULTURAL INCOME, RECONCILIATION AND AGRICULTURAL EXPENSES MA DE DURING THE YEAR WHICH THE LD. FIRST APPELLATE AUTHORITY HAS REPRODU CED IN PAGES 3 TO 6 OF ITA NO.3647/DEL./2011 12 HIS ORDER. AFTER REPRODUCING OF THE SAME, THE LD. FIRST APPELLATE AUTHORITY HAS GIVEN HIS FINDING IN PARA NO.4 AT PAGES 6 & 7 O F HIS ORDER AND DELETED THE ADDITION IN DISPUTE WHICH WE HAVE REPRODUCED IN THE FOREGOING PARAGRAPH. AFTER GOING THROUGH THE EXPLANATION OF THE ASSESSEE ALONG WITH THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND T HE FINDING OF THE LD. FIRST APPELLATE AUTHORITY, WE ARE OF THE CONSIDERED VIEW THAT ASSESSEE HAS FILED ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME-TA X RULES, 1962 AND THE ASSESSING OFFICER ON 14.03.2011 HAS ALSO GIVEN REMA ND REPORT IN THE CASE OF ASSESSEE AND STRONGLY OBJECTED THE ADMISSION OF ADDITIONAL EVIDENCE. THE ASSESSING OFFICER HAS GIVEN SUFFICIENT OPPORTUN ITY TO THE ASSESSEE TO FURNISH DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAI M OF SALE OF AGRICULTURAL PRODUCES GROWN ON THE LAND OWNED BY TH E ASSESSEE BUT ASSESSEE DID NOT FILE ANY DOCUMENTARY EVIDENCE IN S UPPORT OF ADDITIONAL EVIDENCE. WE FIND THAT LD. FIRST APPELLATE AUTHORIT Y DID NOT EVEN INDICATED/ DISCUSSED ABOUT THE ADDITIONAL EVIDENCE AND THE REM AND REPORT OF THE ASSESSING OFFICER DATED 14.03.2011 WHICH THE ASSESS EE HAS ATTACHED IN THE PAPER BOOK AT PAGES 53 TO 55 OF THE PAPER BOOK AND REBUTTAL BY THE ASSESSEE TO THE REMAND REPORT OF THE ASSESSING OFFICER DATED 20.04.2011 WHICH IS AT PAGES 56 TO657 OF THE PAPER BOOK. MEANING THEREBY, THE LD. FIRST APPELLATE AUTHORITY HAS NOT APPLIED HIS MIND WHILE DELETING T HE ADDITION IN DISPUTE AND THE ADDITION WAS DISMISSED MERELY ON THE BASIS OF SURMISES AND ITA NO.3647/DEL./2011 13 CONJECTURES WITHOUT ANY EVIDENCE. THEREFORE, THE I MPUGNED ORDER IS NOT SUSTAINABLE IN THE EYE OF LAW. 5.1 WE FURTHER FIND THAT NO DOUBT, THE ASSESSEE WAS A GALLANTRY AWARD WINNER FROM AIR FORCE AND HAS BEEN RETIRED FROM AIR FORCE IN THE YEAR 1985 AND IS SETTLED IN A PLACE IN BILASPUR NEAR RUD ERPUR OF NAINITAL DISTRICT OF UTTRAKHAND. HIS MAIN SOURCE OF INCOME IS PENSIO N FROM AIR FORCE, AGRICULTURAL INCOME AND INCOME FROM OTHER SOURCES. AS PER THE RECORD, THE ASSESSEE IS AN OWNER OF 1.262 HECTARES OF LAND (AS STATED ABOVE) BUT THE REST OF THE LAND BELONGS TO RANBIR COLLECTIVE COOPERATIV E FARMING SOCIETY IS 42.92 HECTARES. IN THE NUTSHELL, THE ASSESSEE IS O WNER OF ONLY 1.262 HECTARES. AS REGARDS TO THE SALE PROCEEDS OF RS.7 LACS FROM POPLAR TREES FROM ONE ATTIM KHAN AND HAMID KHAN, SONS OF SABIR K HAN, RESIDENT OF BILASPUR, DISTT. RAMPUR AND RS.4,02,000/- ON ACCOUN T OF GIVING HIS AMRUD BAGH ON LEASE TO JAMIL KHAN, S/O SHER KHAN, RUDERPU R, UTTRAKHAND, THE ASSESSEE HAS SUBMITTED SOME DETAILS BUT THE SAME WE RE NOT SUBSTANTIATED WITH CORROBORATING EVIDENCES. BUT THE LD. FIRST AP PELLATE AUTHORITY HAS DELETED THE ADDITION IN DISPUTE MERELY ON THE BASIS OF PRESUMPTIONS AND ASSUMPTIONS AND KEEPING IN VIEW OF THE BACKGROUND O F THE ASSESSEE WHICH IS NOT PERMISSIBLE UNDER THE LAW. AS REGARD RS.70 ,000/-, THE ASSESSEE HAS NOT SUBMITTED ANY EXPLANATION BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE LD. FIRST APPELLATE AUTHORITY. KEEPING IN VIEW OF THE IMPUGNED ORDER REPRODUCED ABOVE, WE ARE OF THE VIEW THAT LD. FIRST APPELLATE ITA NO.3647/DEL./2011 14 AUTHORITY MERELY REPRODUCE THE EXPLANATION OF THE A SSESSEE REGARDING AGRICULTURAL INCOME AND AGRICULTURAL EXPENSES MADE DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS ALSO SUBMITTED HIS CASH FLOW STATEMENT BEFORE THE LD. FIRST APPELLATE AUTHORITY WHICH ESTA BLISHES THAT ASSESSEE HAS DEPOSITED CASH FREQUENTLY IN HIS BANK ACCOUNT ALLEG ING THAT THESE CASH HE HAS RECEIVED ON ACCOUNT OF SALE PROCEEDS AND CROP S ALE PROCEEDS. THE ASSESSEE HAS ALSO PLEADED BEFORE THE REVENUE AUTHOR ITIES THAT HE HAS INCURRED SOME EXPENSES TOWARDS FARMING AGRICULTURE BUT HE HAS NOT ESTABLISHED THAT THESE EXPENSES HAVE BEEN INCURRED BY THE ASSESSEE ON ACCOUNT OF EARNING AGRICULTURAL INCOME. BUT LD. FI RST APPELLATE AUTHORITY HAS DELETED THE ADDITION IN DISPUTE WITHOUT ANY BAS IS MERELY ON THE BASIS OF PRESUMPTION AND ASSUMPTION AND KEEPING IN VIEW OF T HE STATUS OF THE ASSESSEE BEING A RETIRED AIR FORCE OFFICER, WHICH I S NOT PERMISSIBLE UNDER THE LAW. FROM THE DOCUMENTARY EVIDENCE FILED BY TH E ASSESSEE BEFORE THE LD. FIRST APPELLATE AUTHORITY I.E. CASH STATEMENT, THE ASSESSEE HAS NOT ESTABLISHED THAT ASSESSEE HAS DEPOSITED THE CASH ON ACCOUNT OF SALE PROCEEDS OF AGRICULTURAL CROPS. THE ASSESSEE HAS A LSO NOT ESTABLISHED THAT HE HAS RECEIVED RS. 7 LACS ON ACCOUNT OF SALE OF PO PLAR TREES FROM ATIM KHAN AND HAMID KHAN AND RS.4,02,000/- ON ACCOUNT OF GIVING HIS AMRUD BAGH ON LEASE TO JAMIL KHAN. AS REGARDS TO THE LAN D MEASURING 42.92 HECTARES BELONGING TO RANBIR COLLECTIVE COOPERATIVE FARMING SOCIETY, THE ASSESSEE HAS NOT ESTABLISHED THAT HE HAS RECEIVED A GRICULTURAL INCOME FROM ITA NO.3647/DEL./2011 15 THIS FARMING SOCIETY IN SPITE OF THE FACT THAT THIS LAND IS BELONGING TO RANBIR COLLECTIVE COOPERATIVE FARMING SOCIETY. THE ASSESS EE HAS ALSO NOT PRODUCED ANY LEASE DEED ESTABLISHING THAT HE IS DOI NG AGRICULTURE ON THE LAND MEASURING 42.92 HECTARES. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ORDER PAS SED BY THE REVENUE AUTHORITIES AS WELL AS THE EVIDENCES PRODUCED BY TH E ASSESSEE BEFORE THE LD. FIRST APPELLATE AUTHORITY IN THE SHAPE OF PAPER BOO K, WE ARE OF THE VIEW THAT LD. FIRST APPELLATE AUTHORITY HAS DELETED THE ADDITION MERELY ON THE BASIS OF SURMISES AND PRESUMPTIONS WHICH IS NOT PER MISSIBLE UNDER THE LAW. IN OUR CONSIDERED VIEW, THE IMPUGNED ORDER IS NOT S USTAINABLE IN THE EYES OF LAW, THEREFORE, WE CANCEL THE IMPUGNED ORDER DAT ED 13.05.2011 PASSED BY THE LD. FIRST APPELLATE AUTHORITY AND UPHELD THE ASSESSMENT ORDER DATED 27.12.2010 PASSED BY THE ASSESSING OFFICER U/S 143( 3) OF THE ACT BY ALLOWING THE APPEAL FILED BY THE REVENUE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 30 TH DAY OF APRIL, 2015. SD/- SD/- (R.S. SYAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 30 TH DAY OF APRIL, 2015 TS ITA NO.3647/DEL./2011 16 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXX, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.