The Asstt. Commissioner of Income-tax, Srinagar V. Mrs. Ghulam Fatima, Srinagar

ITA 409/ASR/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8691 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 18-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Principle of natural justice; Assessment record; Condonation of delay
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 234B; 143(1); 274; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO.409(ASR)/2014 ASSESSMENT YEAR: 2007-08 ACIT, CIRCLE SRINAGAR, KASHMIR. VS. MRS. GHULAM FATIMA PROP. M/S SHAFIEE DRUG STORE, BARZULLA, SRINAGAR. PAN:AAGPF-2097M (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAHUL DHAW AN (DR) RESPONDENT BY: NONE . DATE OF HEARING: 16.02.2017 DATE OF PRONOUNCEMENT: 3 0.03.2017 ORDER PER N. K. CHOUDHRY (JM): THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE OR DER OF LD. CIT(A)-JAMMU, DATED 26.03.2014 FOR ASST. YEAR:2007-08 . 2. THE REVENUE DEPARTMENT HAS RAISED THE FOLLOWING G ROUNDS OF APPEAL. (I.) WHETHER THE COMMISSIONER OF INCOME TAX (APPEA LS), JAMMU WAS RIGHT IN LAW DELETING THE ADDITION ON ACCOUNT O F SUNDRY CREDITORS. (II) WHETHER THE COMMISSIONER OF INCOME TAX (APP EALS), JAMMU WAS RIGHT IN LAW DELETING THE ADDITION ON ACCOUNT O F DISALLOWANCE OF AGRICULTURAL INCOME. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: RETURN DECLARING AN INCOME OF RS. 5.61,523/- HAS BE EN FILED ON 25-10-2007 AND PROCESSED U/S 143(1) OF THE INCOM E TAX ACT. 1961 ON 26-03-2008.THE CASE WAS TAKEN UP FOR SCRUTI NY UNDER THE COMPULSORY SCRUTINY GUIDELINES ISSUED BY CENTRAL BO ARD OF DIRECT TAXES, NEW DELHI. ACCORDINGLY NOTICE U/S 143(2) OF THE I. T. ACT. 1961 HAD BEEN ISSUED ON 17-09-2008 AND THE SAME WAS DULY SERVED UPON THE ASSESSEE ON 25-09-2009. I TA NO.409(ASR)/2014 ASST. YEAR: 2007-08 2 A DETAILED QUESTIONNAIRE DATED 09-07-2009 WAS ISSUE D ALONG WITH NOTICE U/S 142(1)/129 OF THE I. T. ACT, 1961 A ND WAS DULY SERVED UPON THE ASSESSEE ON 18-07-2009 FIXING THE C ASE FOR HEARING ON 20-07-2009. ON 20-07-2009, THE ASSESSEE APPLIED FOR ADJOURNMENT AND ASSESSEES REQUEST HAD BEEN CONSIDE RED AND CASE ADJOURNED TO 27-07-2009. SUBSEQUENTLY MS. AZRA, ITP ATTENDED FURNISHED REPLIES THAT HAVE BEEN PLACED ON RECORDS AND THE CASE WAS DISCUSSED WITH HER. 2. THE ASSESSEE IS IN THE BUSINESS OF DRUG STORE (P HARMACEUTICALS) UNDER THE NAME AND STYLE OF M/S SHAFIEE DRUG STORE. BARZULLA, SRINAGAR. THE COMPARATIVE G.P RESULTS AS SUBMITTED BY THE ASSESSEE ARE AS UNDER: ASSTT YEAR SALES (IN LACS) GP(IN LACS) GP RATE (IN % 2004-05 21.40 2.83 13.26 2005-06 88.33 12.41 14.05 2006-07 117.81 16.45 14.00 2.1 APART FROM THE BUSINESS INCOME, THE ASSESSEE HA S ALSO DECLARED RECEIPTS FROM AGRICULTURAL INCOME AT RS.11,40,000/- . 3.3. ACCORDINGLY, I HOLD THAT NO AGRICULTURAL O PERATION WHAT- SO-EVER WAS CARRIED ON BY THE ASSESSEE AND THE AGRI CULTURAL INCOME SHOWN IS THE ASSESSEES OWN MONEY BROUGHT IN TO BOOKS IN THE GARB OF AGRICULTURAL INCOME. ACCORDINGLY, TH E CREDITS OF RS.11,40,000/- IN THE BANK ACCOUNT NO. 0396CD44-REM AIN UNEXPLAINED AND ARE HEREBY ADDED TO THE INCOME OF T HE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES. INITIATE PENALTY U/S 271(1) OF THE INCOME TAX ACT, 1961 AS THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HI S INCOME. 4.1 IN THE ABSENCE OF ANY COMPLETE INFORMATION, NO CONCLUSION REGARDING THE GENUINENESS OF THE CREDITORS AND THEI R PROXIMATE NEXUS WITH THE BUSINESS ACTIVITY OF THE ASSESSEE CO ULD BE ARRIVED AT. ACCORDINGLY, VIDE ORDER SHEET ENTRY DATED 20-08-200 9; THE ASSESSEE WAS GIVEN A SHOW CAUSE AS UNDER: IT IS SEEN THAT THE COMPLETE ADDRESSES IN RESPECT OF SUNDRY CREDITORS ABOVE RS.20,000/- HAS STILL NOT BEEN FURN ISHED IN RESPECT OF ALL THE SUNDRY CREDITORS.' THE ASSESSEE WAS FURTHER CALLED UPON TO EXPLAIN AS UNDER: I TA NO.409(ASR)/2014 ASST. YEAR: 2007-08 3 ALSO EXPLAIN THE NATURE OF TRANSACTIONS ENTERED IN TO WITH THE SUNDRY CREDITORS ABOVE RS.50.000/- AND WHEN THE PAYMENTS H AVE BEEN MADE TO THEM / GOODS SUPPLIED. IN REPLY DATED 25/08/2009, NO SUBMISSION WHATSOEVER WAS MADE REGARDING THE DETAILS OF THE SUNDRY CREDITORS. MEAN ING THEREBY, THAT THE ASSESSEE HAS NOTHING FURTHER TO STATE IN THE MA TTER. ACCORDINGLY, THIS ISSUE IS BEING FINALIZED ON MERITS AND ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORDS. THE CREDITS IN THE N AME OF PARTIES WHOSE ADDRESSES HAVE BEEN FURNISHED ARE AS UNDER AS PER THE REPLY DATED 27-07-2009 OF THE ASSESSEE: NAME OF PARTY AMOUNTS ALMED AGENCIES 76494/- ALLAMGIR AGENCIES 72361/- NOR TH POINT 63007/- I CRESCENT TRADERS 53256/- CAPRICORN PHARMACEUTICALS 42782/- DELTA PHARMACEUTICALS 36583/- EFFAAY TRADERS 15239 DR. FRIENDS ENTEPRISES 80,990/- M.I. ENTERPRISES 83,311/- M/S M.R. ENTERPRISES 56,732/- MAQBOOL AGENCIES 6124/- R.G.PHARMACEUTICALS 66808/- TOTAL 6,38,448/- 4.2 IT IS SEEN THAT THE ASSESSEE HAS SUBMITTED THE DETAILS ONLY IN RESPECT OF SUNDRY CREDITORS AMOUNTING TO RS.6,38,44 8/- AS AGAINST THE TOTAL OF CREDITORS WHOSE DETAILS HAVE BEEN CALL ED FOR (ABOVE RS. 20,000/-) AT RS.31,10,721/-. THEREFORE THE ASSESSEE HAS FAILED TO FURNISH THE DETAILS IN RESPECT OF THE BALANCE I.E A T RS.24,72,273/-. THIS SUM OF RS.24,72,273/-CORRESPONDS TO THE LIABIL ITY WHICH THE ASSESSEE HAS FAILED - TO SUBSTANTIATE BY PROVIDING THE COMPLETE DETAILS OF THE PARTIES TO WHOM THESE SUMS ARE PAYABLE. ACCO RDINGLY, THE SAME IS TREATED AS UNEXPLAINED AND ADDED BACK TO TH E TOTAL INCOME OF THE ASSESSEE. INITIATE PENALTY U/S 271(1) OF THE INCOME TAX ACT, 1961 AS THE ASSESSEE HAS FURNISHED INACCURATE PARTICULAR S OF HIS INCOME. WITH THESE REMARKS, TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER: INCOME FROM BUSINESS (AS SHOWN) 5,61,523/- ADD ADDITION ON ACCOUNT OF UNEXPLAINED SUNDRY CREDITORS AS DISCUSSED IN PARA 3 ABOVE 24,72,273 INCOME FROM OTHER SOURCES AS DISCUSSED IN PARA 3.3 ABOVE. 11,40.000 I TA NO.409(ASR)/2014 ASST. YEAR: 2007-08 4 TOTAL INCOME 41,73,796/- OR SAY U/S 288A 41,73,800/- ASSESSED AS ABOVE ON TOTAL INCOME OF RS.41,73,800/- ISSUE NOTICE OF DEMAND AND CHALLAN. CHARGE INTEREST U/S 2 34A, 234B AND 234C AS PER LAW. GIVE CREDIT FOR PRE-PAID TAXES. PE NALTY PROCEEDINGS U/S 271(1)(C) ARE INITIATED SEPARATELY. ISSUE NOTIC E U/S 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT 1961. 4. FEELING AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, THE ASSESSEE PREFERRED THE FIRST APPEAL BEFORE THE LD. CIT(A) AN D THE LD. CIT(A) DELETED THE DISALLOWANCES OF AGRICULTURAL INCOME AND ADD ITION ON ACCOUNT OF SUNDRY CREDITORS BY HOLDING AS UNDER: I HAVE CONSIDERED THE FINDINGS OF THE ASSESSING OF FICER IN THE ASSESSMENT ORDER, SUBMISSION OF THE APPELLANT AND R EMAND REPORT ON THE SUBMISSION MADE BY THE APPELLANT. 5.1. GROUND OF APPEAL NO. 1&2: THE SECOND GROUND IS AGAINST THE ADDITION ON ACCOUNT OF AGRICULTURAL INCOME OF RS. 1 1,40,000/-. THE BASIS GIVEN BY THE ASSESSING OFFICER IN THE ASSESSM ENT ORDER WAS THAT 'PERFORMANCE OF BASIC OPERATION ON LAND IS MUS T. TILLING, SOWING, SEEDS PLANTING ETC IS SINE QUA-NON OF ANY AGRICULTU RAL OPERATION. LABOUR/SKILL SPENT ON BASIC OPERATIONS ONLY CAN OR SAID TO SPENT ON LAND. IF THESE BASIC OPERATIONS ARE WANTING, SUBSEQ UENT OPERATIONS DO NOT ACQUIRE THE CHARACTER OF AGRICULTURE, EVEN I F IT PRESERVES, FORTIFIES AND REGENERATES THE PRODUCT OF LAND.' THE APPELLANT, ON THE OTHER HAND, ARGUED THAT THE APPELLANT HAD ADEQUATE LAND (33 KANAL) AND THE APPELLANT HAD GIVEN ITS LAND ON 'GOL THEKA' AFTER BASIC OPERATION OF TILLING, PRUNING, SPRAYING OF PESTICID ES. THE CONTRACTOR TAKES THE LAND FOR HARVESTING THE CROP. AFTER HARVE STING BY THE CONTRACTOR THE INCOME GENERATED HAD BEEN RECEIVED T HROUGH BANKING CHANNEL. IN THE REMAND REPORT THE AO HAS ACCEPTED T HIS PRACTICE IN THE KASHMIR VALLEY FOR HARVESTING APPLE, CHERRY, AL MOND IN THE VALLEY AND HE HAS OBSERVED AS UNDER: 'REGARDING THE ADDITION MADE ON ACCOUNT OF AGRICULT URAL INCOME AT RS.11,40,000/- IT IS A COMMON PRACTICE OF GIVING A CONTRACT ON GOLE THEKA TO SOMEBODY ELSE FOR HARVESTING APPLE , CHERRIES AND ALMONDS IN THE VALLEY, HOWEVER, AT THE SAME TIME TH E PERSON IS HIMSELF ALSO ASSOCIATED WITH THE PROCESS BY DOING D IFFERENT AGRICULTURAL ACTIVITY AS LIKE TILLING, PRUNING, SPR AYING OF PESTICIDES ETC. IN THE NORMAL PARLANCE PLUCKING OF FRUIT/ GRAD ING AND PACKING IS DONE BY THEKEDARS WHICH IS AN ACCEPTED PRACTICE IN THIS LINE OF ACTIVITY. THE CONTENTION OF THE APPELLANT THAT THE AGRICULTURAL I TA NO.409(ASR)/2014 ASST. YEAR: 2007-08 5 PRODUCTS ARE NOT ONLY FROM APPLE BUT FROM OTHER CRO PS LIKE ALMOND AND CHERRIES SEEMS PLAUSIBLE FOR THE FACT THAT THE AGRICULTURAL RECEIPTS DEPOSITED IN THE BANK AT DIFFERENT OCCASIO NS IN TUNE WITH THE RIPENING SEASONS OF THE CROP.' THE AO HAS NOT EXAMINED THE CONTRACTOR OF 'GOL THEK A' TO ASCERTAIN THAT THE MONEY RECEIVED THROUGH BANKING C HANNEL HAS NOT COME THROUGH THEM. IN VIEW OF ABOVE I AM OF THE OPI NION THAT THE AO HAS ERRED IN NOT TREATING THE INCOME AS AGRICULTURE INCOME. EVEN INCOME FROM LEASE OR SHARE OF PROFIT FROM TEA ESTAT E IS AN AGRICULTURAL INCOME (CIT VS HAROOCHARI TEA CO [1978], 111 ITR,49 5 (GAUHATI). THE OWNER OF THE FIELD MAY NOT HAVE TO WORK PERSONALLY IN FIELD IN ORDER TO HAVE AGRICULTURAL INCOME. THE ONLY REQUIREMENT I S THAT BASIC OPERATION IS DONE ON THE FIELD. AFTER CONSIDERING T HE SUBMISSION AND REMAND REPORT, I AM OF THE VIEW THAT THE ADDITIONS ON ACCOUNT OF AGRICULTURAL INCOME FOR RS. 11,40,000/- BY CHANGING ITS HEAD TO INCOME FROM OTHER SOURCES IS NOT IN ORDER AND THUS DELETED. HOWEVER THE AGRICULTURAL INCOME SHALL BE TAKEN FOR RATES PU RPOSES WHILE DETERMINING THE TAX. 5.2. GROUND OF APPEAL NO.3,4&5: THE ASSESSING OFFIC ER HAS MADE AN ADDITION OF RS. 24,72,273/- ON ACCOUNT OF SUNDRY CR EDITORS ON THE BASIS THAT DETAILS FURNISHED BY THE APPELLANT WAS N OT COMPLETE PARTICULARLY WITH REFERENCE TO ADDRESSES. THE AO HA S HELD THAT IN ABSENCE OF INFORMATION, THE PROXIMATE NEXUS WITH TH E BUSINESS ACTIVITY OF THE APPELLANT COULD NOT BE ESTABLISHED. THE AO HAS OBSERVED THAT THE APPELLANT HAS ONLY SUBMITTED DETA ILS WITH REGARD TO SUNDRY CREDITORS FOR RS.6,38,448/- AGAINST THE T OTAL CREDITORS FOR RS. 31,10,721/-. THE APPELLANT FAILED TO FURNISH TH E DETAILS IN RESPECT OF CREDIT OF RS.24,72,273/- AND HENCE ADDED BACK. IN THE REMAND REPORT, THE ASSESSING OFFICER HAS STA TED THAT FROM THE ASSESSMENT RECORD IT IS REVEALED THAT THE APPELLANT HAS FURNISHED A LIST OF 78 SUNDRY CREDITORS ALONG WITH THE LEDGER ACCOUNT OF ALL PARTIES WHICH AMOUNT TO RS.31,10,721/-. OUT OF THIS AMOUNT THE OPENING BALANCE OF SUNDRY CREDITORS WERE RS.29, 22,397/-. THE AO HAS NOT VERIFIED AS TO WHETHER THESE CREDITO RS ARE OLD OR NEW. ANY CREDITOR BEING BOGUS HAS NOT BEEN BROUG HT OUT IN THE ASSESSMENT ORDER. THE THEN AO HAS NOT VERIFIED THE ABOVE POINTS AND JUMPED TO A CONCLUSION WITHOUT EXERCISING DUE D ILIGENCE AND INVESTIGATION THAT SUNDRY CREDITORS AMOUNTING TO RS . 24,72,273/- ARE UNEXPLAINED AND LIABLE FOR ADDITION. I, THEREFORE, DO NOT AGREE WITH SUCH ADDITION AND DELETE THE SAME. THIS GROUND OF APPEAL IS ALLOWED. I TA NO.409(ASR)/2014 ASST. YEAR: 2007-08 6 5. FEELING AGGRIEVED BY THE ORDER OF LD. CIT(A), TH E REVENUE/DEPARTMENT PREFERRED THE INSTANT APPEAL AND WE REALIZE THAT THERE IS FOUR DAYS DELAY IN FILING OF THE INSTANT PETI TION AND THE LD. DR SUBMITTED THAT VIDE APPLICATION DATED 5 TH JANUARY, 2015, THE CONDONATION OF DELAY HAS BEEN PROPERLY DESCRIBED . RELE VANT CONTEXTS OF THE APPLICATION OF CONDONATION OF DELAY ARE REPROD UCED HEREIN BELOW. NO.ACIT/C-III/SGR/2014-15/959 DATED SGR. THE 05.01.2015. TO THE ASSISTANT REGISTRAR, HON'BLE INCOME TAX APPELLATE TRIBUNAL (ITAT), AMRITSAR BENCH, AMRITSAR. SUBJECT:- APPLICATION SEEKING CONDONATION OF DELAY IN FILING OF APPEAL AGAINST THE ORDER DATED 26-03-2014 PASSED BY THE LD . CIT(A) ,VIDE APPEAL NO. 23/09-10 DATED 26.03.2014 IN THE C ASE OF MRS. GH. FATIMA PROP. M/S SHAFIEE DRUG STORE, BARZULLA, SRINAGAR ASSESSMENT YEAR 2007-08 REG. SIR KINDLY REFER TO THE AFOREMENTIONED SUBJECT. IN THIS CONTEXT, IT IS SUBMITTED THAT DUE TO BUN D/HARTAL IN KASHMIR VALLEY THE RECORDS COULD NOT BE SUBMITTED I N TIME, THEREFORE, DELAY IN FILING OF APPEAL FOR FOUR DAYS HAS OCCURRE D. IT IS THEREFORE, REQUESTED THAT CONDONATION OF DELAY IN FILING OF AP PEAL AGAINST THE ORDER DATED 26-03-2014 PASSED BY THE LD. CIT(A) ,VIDE APP EAL NO. 23/09-10 IN THE CASE OF MRS. GH. FATIMA PROP M/S SHAFIEE DRUG S TORE, BARZULLA, SRINAGAR ASSESSMENT YEAR 2007-08 MAY KINDLY BE GRANT ED. YOURS FAITHFULLY, (GULZAR AHMAD WANI), IRS ASST. COMMISSIONER OF INCOME TAX, CIRCLE, SRINAGAR. 6. THE RESPONDENT/ASSESSEE DID NOT APPEAR PERSONALLY OR THROUGH HER COUNSEL TO REPRESENT THEIR CASE, HOWEVER THROUGH SPEE D POST SUBMITTED WRITTEN ARGUMENTS AND PRAYED THAT HER CASE CAN BE DECIDED ON THE BASIS OF WRITTEN ARGUMENT AND DID NOT RAISE ANY OBJECTION WITH REGARD TO THE DELAY OF FOUR DAYS IN FILING OF THE IN STANT APPEAL BY THE REVENUE/DEPARTMENT. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND A LSO REASON MENTIONED IN THE APPLICATION AS GENUINE BECAUSE DUE TO I TA NO.409(ASR)/2014 ASST. YEAR: 2007-08 7 BUND/HARTAL IN KASHMIR VALLEY THE RECORDS COULD NOT BE SUBMITTED IN TIME, THEREFORE, DELAY IN FILING OF APPEAL OF FOUR DAYS HAS OCCURRED, IN ORDER TO GIVE NATURAL JUSTICE AND TO FOLLOW SETTLED LA W THAT NO ONE REMAINED UNHEARD , WE FEEL IT APPROPRIATE TO ALLOW CONDONATION OF DELAY OF FOUR DAYS IN FILING OF INSTANT APPEAL. NOW, LET US PROCEED WITH THE MERIT OF THE CASE. 7. AT THE OUTSET, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO DEMONSTRATE QUA AGRICULTURAL ACTIVITIES AND NO RECORD S HAS BEEN GIVEN WITH REGARD TO THE SUNDRY CREDITORS AND REMAND R EPORT IS NOT MATCHING WITH THE ASSESSMENT ORDER AND IN THE ABSENCE OF G IVING DETAILS OF THE SUNDRY CREDITORS, THE AO WAS NOT IN POSIT ION TO VERIFY THE SAME AND THE REMAND REPORT SAYS THAT THE ASSESSEE HAS GIVEN THE LIST, BUT IN REAL FACT, IT RELATES TO THE OLD SUNDRY CREDIT ORS BUT NO NEW SUNDRY CREDITORS DETAILS HAVE BEEN GIVEN. 8. BY WRITTEN SUBMISSIONS, THE ASSESSEE HEAVILY RELIED UP ON THE REMAND REPORT DATED 18.03.2014. FOR THE SAKE OF CONVE NIENCE AND BREVITY THE REMAND REPORT IS REPRODUCED HEREIN BELOW. REMAND REPORT DATED 18.03.2014 KINDLY REFER YOUR OFFICE LETTER NO. CIT(A)/JMU/2013 /2635 DATED 15.01.2014 AND SUBSEQUENT REMINDER LETTER NO. F.NO.CIT(AO/JMU/2013/3127 DATED 03.03.2014 ON THE A BOVE CITED SUBJECT. THE REQUISITE REMAND REPORT AS DESIRED BY YOUR GOOD SELF IS SUBMITTED AS UNDER: 4.1. ADDITIONS ON ACCOUNT OF SUNDRY CREDITORS OF RS .24,72,273/- REGARDING THE ADDITION MADE ON ACCOUNT OF SUNDRY CR EDITORS AT RS.24,72,273/- VIDE ORDER PASSED BY MY PREDECESSOR ON 5-9-2009 U/SL43 (3) OF THE INCOME TAX ACT, 1961,IT IS SUBMITTED THA T PERUSAL OF THE ASSESSMENT RECORDS REVEALS THAT THE ASSESSES HAS FU RNISHED A LIST OF 78 SUNDRY CREDITORS ALONG WITH THE LEDGER ACCOUNT OF A LL PARTIES WHICH AMOUNTS TO RS31,10,721/-. OUT OF THIS THE OPENING B ALANCE OF SUNDRY CREDITORS IS RS.29,22,397/-. 4.2. ADDITIONS ON ACCOUNT OF AGRICULTURAL INCOME OF RS.L 1. 40.000/- I TA NO.409(ASR)/2014 ASST. YEAR: 2007-08 8 REGARDING THE ADDITION MADE ON ACCOUNT OF AGRICULTU RAL INCOME AT RS. 11,4000/- VIDE ORDER PASSED BY MY PREDECESSOR ON 5- 9-2009 U/S 143 (3) OF THE INCOME TAX OF ACT, 1961, IT IS SUBMITTED THA T IT IS A COMMON PRACTICE OF GIVING A CONTRACT ON GOLE THEKA * TO SOMEBODY E LSE FOR HARVESTING APPLE, CHERRIES AND ALMONDS IN THE VALLEY HOWEVER, AT THE SAME TIME THE PERSON IS HIMSELF ALSO ASSOCIATED WITH THE PROCESS BY DOIN G DIFFERENT AGRICULTURAL ACTIVITY AS LIKE TILLING, PRUNING, SPRAYING OF PEST ICIDES ETC IN THE NORMAL PARLANCE PLUCKING OF FRUITS/GRADING AND PACKING IS DONE BY THEKEDARS WHICH IS AN ACCEPTED PRACTICE IN THIS LINE OF ACTIV ITY. THE CONTENTION OF THE APPELLANT THAT THE AGRICULTURAL PRODUCTS ARE NOT ON LY FROM APPLE BUT FROM OTHER CROPS LIKE ALMOND AND CHERRIES SEEMS PLAUSIBL E FOR THE FACT THAT THE AGRICULTURAL RECEIPTS DEPOSITED IN THE BANK AT DIFF ERENT OCCASIONS ARE IN TUNE WITH THE RIPENING SEASONS OF THE CROP. YOUR HONOR- AS WILL BE SEEN THE WORTHY CIT(A) HAS M ADE A SPEAKING ORDER SPANNING OVER SIX PAGES. HE HAS NOT ONLY CONSIDERED THE ARGUMENTS OF THE ASSESSEE BUT ALSO OBTAINED A REMAND REPORT FROM LD. AO. HE HAS BASED HIS ORDER AFTER CONSIDERING THE SAID REMAND REPORT. IT, THEREFORE STANDS TO REASON THAT HIS APPELLATE ORDER DOES NOT NEED ANY I NTERFERENCE AND MAY BE UPHELD IN TOTO. FURTHER IT IS MENTIONED IN THE WRITTEN SUBMISSION TH AT THE WORTHY CIT(A) HAS MADE SPEAKING ORDER AND HE HAS NOT ONLY CON SIDERED THE ARGUMENT OF THE ASSESSEE BUT ALSO OBTAINED A REMAND REP ORT FROM THE LD. AO, AND AFTER CONSIDERING THE SAID REMAND REPORT BASED HIS ORDER, THEREFORE, THE ORDER UNDER CHALLENGE DOES NOT REQUIRE ANY INTERFERENCE AND LIABLE TO BE UPHOLD IN TOTO. 9. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RIVAL SUBMISSIONS OF THE PARTIES AS IT REFLECT S FROM THE REMAND REPORT THAT A LIST OF 78 SUNDRY CREDITORS ALONG WITH THE LEDGER ACCOUNT OF ALL PARTIES WHICH AMOUNT TO RS.31,10,721/- H AD BEEN PROVIDED BY THE ASSESSEE TO ASSESSING OFFICER AND OUT OF TH IS, THE OPENING BALANCE OF SUNDRY CREDITORS IS 29,22,397/- . ACCORDING TO THE ASSESSING OFFICER , THE COMPLETE ADDRESSES IN RESPECT OF SOME SUNDRY CREDITORS ABOVE RS.20,000/- HAS NOT BEEN FURNISHED AND ALSO FAILED TO EXPLAIN THE NATURE OF TRANSACTIONS ENTERED INTO WITH THE SOME SUNDR Y CREDITORS I TA NO.409(ASR)/2014 ASST. YEAR: 2007-08 9 ABOVE RS.50.000/- AND WHEN THE PAYMENTS HAVE BEEN MAD E TO THEM / GOODS SUPPLIED. THE A.O. ALSO HELD THAT THE ASSESSEE FAILED TO SUBSTANTIATE BY PROVIDING THE COMPLETE DETAILS OF THE P ARTIES TO WHOM THESE SUMS ARE PAYABLE THEREFORE THE SAME WAS TREATED AS UNEXPLAINED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT , HOWEVER RELYING UPON THE REMAND REPO RT DELETED THE ADDITION QUA UNEXPLAINED SUNDRY CREDITORS IN RESPECT OF RS. RS.24,72,273/- IN TOTO. FROM REMAND REPORT , IT REFLECTS THAT A LIST OF 78 SUN DRY CREDITORS ALONG WITH THE LEDGER ACCOUNT OF ALL PARTIES WHICH AMO UNT TO RS.31,10,721/- HAD BEEN PROVIDED BY THE ASSESSEE TO ASSESSIN G OFFICER AND OUT OF THIS, THE OPENING BALANCE OF SUNDRY CREDITORS IS 29,22,397/-, HOWEVER THE ASSESSING OFFICER CLEARLY OBSERV ED IN ASSESSMENT ORDER THAT I N REPLY DATED 25/08/2009 OF THE ASSESSEE , NO SUBMISSION WHATSOEVER WAS MADE REGARDING THE DETAIL S OF THE SUNDRY CREDITORS. MEANING THEREBY, THAT THE ASSESSEE HAS N OTHING FURTHER TO STATE IN THE MATTER. ACCORDINGLY, THIS ISSUE IS BEING FIN ALIZED ON MERITS AND ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORDS. IT IS SEEN THAT THE ASSESSEE HAS SUBMITTED THE DETAILS ONLY IN RESPECT OF SUNDRY CREDITORS AMOUNTING TO RS.6,38,448/- AS AGAINST THE TOTAL OF CREDITORS WHO SE DETAILS HAVE BEEN CALLED FOR (ABOVE RS. 20,000/-) AT RS.31,10,721/-. THEREFORE THE ASSESSEE HAS FAILED TO FURNISH THE DETAILS IN RESPECT OF THE BALANCE I.E AT RS.24,72,273/-. THIS SUM OF RS.24,72,273/-CORRESPON DS TO THE LIABILITY WHICH THE ASSESSEE HAS FAILED - TO SUBSTANTIATE BY PROVIDING THE COMPLETE DETAILS OF THE PARTIES TO WHOM THESE SUMS ARE PAYAB LE. ACCORDINGLY, THE SAME IS TREATED AS UNEXPLAINED AND ADDED BACK TO TH E TOTAL INCOME OF THE ASSESSEE. CONSIDERING OVERALL FACTS AND CIRCUMSTANCES AND ORDERS PASSE D BY AUTHOURIES AS IN THE INSTANT ISSUE BECAUSE THERE ARE TWO CONTRARY I TA NO.409(ASR)/2014 ASST. YEAR: 2007-08 10 VIEWS OF ASSESSING OFFICERS, ONE IN ASSESSMENT ORDER AND SECOND IN REMAND REPORT, THEREFORE, IN OUR CONSIDERED OPINION IT WOULD BE APPROPRIATE AND PROPER TO REMAND THE CASE TO THE FILE OF ASSESSING OFFICER TO DECIDE AFRESH WHILE TAKING INTO CONSIDERATIO N THE REMAND REPORT AND DOCUMENTS SUBMITTED ALONG WITH. HENCE ISSUE RAISED IN GROUND NO. 1 BY REVENUE DEPARTMENT IS REMANDED BACK TO THE FILE OF ASSESSING OFFICER IN TERMS OF AFORESAID OBSERVATION AND DIRECTIONS. 10. NOW COMING TO THE SECOND GROUND WITH REGARD TO THE A DDITION ON ACCOUNT OF AGRICULTURAL INCOME TO THE TUNE OF RS.11,40,0 00/-, IT REFLECTS FROM THE REMAND REPORT THAT IT IS COMMON PRACTICE OF GI VING A CONTRACT ON GOLD THEKA TO SOMEBODY ELSE FOR HARVESTING APPLES, CHERRIES AND ALMONDS IN THE VALLEY. HOWEVER, AT THE SAME TIME, THE PERSON IS HIMSELF ALSO ASSOCIATED WITH THE PROCESS BY DOING DIFFERENT AGRICULTURAL ACTIVITY AS TILLING, PRUNING, SPRAYING OF PESTICIDES ETC. IN THE NORMAL PARLANCE PLUCKING OF FRUITS/GRADING AND PACKING IS DONE BY THEKEDARS WHICH IS AN ACCEPTED PRACTICE IN THIS LINE OF ACTIVITY. IT WAS FURTHER SUBMITTED IN THE REMAND REPORT THAT THE CONTENTION OF THE APPELLANT THAT THE AGRICULTURAL PRODUCTS ARE NOT ONLY FROM APPLE BUT FROM THE OTHER CROPS LIKE ALMOND AND CHERRIES SEEMS PLAUSIBLE FOR T HE FACT THAT THE AGRICULTURAL RECEIPTS DEPOSITED IN THE BANK AT DIFF ERENT OCCASIONS ARE IN TUNE WITH THE RIPENING SEASONS OF THE CROP. IN OUR CONSIDERED OPINION, THE ASSESSING OFFICER WRONGLY HOLD THAT THAT NO AGRICULTURAL OPERATION WHAT-SO-EVER WAS CA RRIED ON BY THE ASSESSEE AND THE AGRICULTURAL INCOME SHOWN IN THE ASSESSEES O WN MONEY BROUGHT INTO BOOKS IN THE GARB OF AGRICULTURAL INCOME AND TILLING, SOWING SEEDS, PLANTING ETC. IS SINE QUA NON ON AGRICULTURAL OPERATION AND THE PERFORMANCE OF BASIC OPERATION ON LA ND IS MUST. WE DO NOT HAVE ANY DOUBT AND HESITATION TO HOLD THAT THE ASSESSEE HAS I TA NO.409(ASR)/2014 ASST. YEAR: 2007-08 11 CARRIED OUT AGRICULTURAL ACTIVITIES HERSELF WITH ASSOCIAT ION OF DIFFERENT AGRICULTURAL ACTIVITY AND WITH THE HELP OF OTHER PERSO N. EVEN OTHERWISE, WE DO NOT FIND ANY CONTRARY MATERIA L TO DIFFER THE OBSERVATION IN REMAND REPORT, THEREFORE, WE DO N OT FIND ANY REASON TO INTERFERE WITH THE FINDING ARRIVED AT BY THE LD. CIT(A) IN DELETION OF THE SAID ADDITION QUA AGRICULTURAL ACTIVITIES. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE/D EPARTMENT IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.03. 2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED:30.03.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER