Anirudh Prasad(HUF), Patna V. DCIT, Central Circle-2, Patna

ITA 44/PAT/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2140 (ITAT-PATNA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 1996-1997
• Appeal Filed On: 06-05-2016
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH , PATNA BEFORE SHRI CHANDRA MOHAN GARG, J M AND SHRI L .P. SAHU, AM ITA NO. 44 TO 4 7 / PAT /20 1 6 ( A .Y : 199 5 - 1996 , 1996 - 199, 1998 - 1999 & 1999 - 2000 ) ANIRUDH PRASAD (HUF) ALIAS SADHU YADAV, C/O M/S ABDICO CHARTERED ACCOUNTANTS, 1C, ANAND TOWERS, EXHIBITION ROAD, PATNA - 800001 VS. DCIT, CENTRAL CIRCLE - 2, PATNA PAN NO. : A E CPP 8298 R ( APPELLANT ) .. ( RESPONDENT ) AS SESSEE BY : SHRI S.C.SANNIGRAHI , FCA REVENUE BY : SHRI ABHAY KUMAR , SR. DR DATE OF HEARING : 28 / 06/2019 DATE OF PRONOUNCEMENT : 26 /07/2019 O R D E R PER BENCH : TH E SE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - III, PATNA ALL DATED 19.02.2016 FOR THE ASSESSMENT YEARS 1995 - 1996 & 1996 - 1997 AND 1998 - 1999 & 1999 - 2000, RE SPECTIVELY. 2. AS PER THE OFFICE NOTE, THERE IS A DELAY OF 9 DAYS IN FILING THE ABOVE MENTIONED FOUR APPEALS. LD. AR HAS FILED AN APPLICATION FOR CONDONATION OF DELAY IN FILING THESE FOUR APPEALS. LD. DR HAS NO OBJECTION TO CONDONE THE DELAY OF 9 DAYS. WE HAVE GONE THROUGH THE APPLICATION OF THE ASSESSEE AND FOUND THAT THERE IS SUFFICIENT CAUSE FOR DELAY. ACCORDINGLY, WE CONDONE THE DELAY OF 9 DAYS IN THE FILING THE ABOVE FOUR APPEALS AND THE APPEALS ARE HEARD ON MERITS. 3 . IN ITA NO.44/PAT/2016 (AY : 1995 - 1996), THE ASSESSEE RAISED THE FOLLOWING GROUNDS : - ITA NO S . 44 TO 47 / PAT /201 6 2 1. THE ORDER OF THE COMMISSIONER (APPEAL - ILL) IS CONTRARY TO LAW AND FACTS OF THE CASE . 2. THE COMMISSIONER (APPEAL - ISI) OUGHT TO HAVE ACCEPTED THE FACT THAT THE CONDITIONS OF SECTION 127(1) WAS NOT FOLLOWED BY THE DEPARTMENT SO ANY ORDER PASSED WITHOUT PROPER JURISDICTION IS VOID AB - INITIO AND HAVE NO LEGAL EFFECT. IT WAS REQUESTED BY ASSESSEE VIDE HIS LETTER DATED - 01 - 06 - 2015 U/S 250 (5). 3. THAT THE COMMISSIONER (APPEALS - ILL) OUGHT TO HAVE NOT OVER LOOKED OUR LETTER DATED 29 - 05 - 2015 REGARDING CLARIFICATION OF LEASEHOLD AGREEMENTS AND APPLICATION OF GIFT. 4. THE COMMISSIONER APPEAL - ILL ERRED IN CONFIRMING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. 5 . THE COMMISSIONER (APPEAL - III) ERRED IN CONFIRMING THE ADDITIONS IN HAND OF ASSESSEE OF THE ACCRUED INTEREST RELATED TO CORPUS FUND OF MINOR DAUGHTER CREATED FOR THEIR MARRIAGE. THE DECLARATION OF GIFT WAS OVERLOOKED BY THE C I T - III WHICH IS ON RECORD . 6. LN SPITE OF DISCLOSURE OF NATURE AND S OURCES OF INCOME OF THE ASSESSEE, THE COMMISSIONER APPEAL - ILL WRONGLY APPLIED THE CASE LAW OF SUMATI DAYAL V.CIT . 7. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL. 4 . IN ITA NO.4 5 /PAT/2016 (AY : 199 6 - 199 7 ), THE ASSESSEE RAISED THE FOLLO WING GROUNDS : - 1 . THE ORDER OF THE COMMISSIONER (APPEAL - ILL) IS CONTRARY TO LAW AND FACTS OF THE CASE . 2. THE COMMISSIONER (APPEAL - ILL) OUGHT TO HAVE ACCEPTED THE FACT THAT THE CONDITIONS OF SECTION 127(1) WAS NOT FOLLOWED BY THE DEPARTMENT, SO ANY O RDER PASSED WITHOUT PROPER JURISDICTION IS VOID AB - INITIO AND HAVE NO LEGAL EFFECT. IT WAS REQUESTED BY ASSESSEE VIDE HIS LETTER DATED - 01 - 06 - 2015 U/S 250 (5). 3. THAT THE COMMISSIONER (APPEALS - ILL) OUGHT TO HAVE NOT OVERLOOKED OUR LETTER DATED 29 - 05 - 2015 REGARDING CLARIFICATION OF LEASEHOLD AGREEMENTS AND APPLICATION OF GIFT. 4. THE COMMISSIONER APPEAL - ILL ERRED IN CONFIRMING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. HUF INCOME SHOULD NOT HAVE BEEN ADDED IN THE HAND OF THE INDIVIDUAL. ITA NO S . 44 TO 47 / PAT /201 6 3 5 . THE COMMISSIONER (APPEAL - III) ERRED IN CONFIRMING THE ADDITIONS IN HAND OF ASSESSEE OF THE ACCRUED INTEREST RELATED TO CORPUS FUND OF MINOR DAUGHTER CREATED FOR THEIR MARRIAGE. THE DECLARATION OF GIFT WAS OVERLOOKED BY THE CIT - LLL WHICH IS ON RECORD . 6. LN S PITE OF DISCLOSURE OF NATURE AND SOURCES OF INCOME OF THE ASSESSEE, THE COMMISSIONER APPEAL - ILL WRONGLY APPLIED THE CASE LAW OF SUMATI DAYAL V.CIT. 7 . THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL. 5 . IN ITA NO.4 6 /PAT/2016 (AY : 1998 - 99 ) , THE ASSESSEE RAISED THE FOLLOWING GROUNDS : - 1. THE ORDER OF THE COMMISSIONER (APPEAL - ILL) IS CONTRARY TO LAW AND FACTS OF THE 2. THE COMMISSIONER (APPEAL - ILL) OUGHT TO HAVE ACCEPTED THE FACT THAT THE CONDITIONS OF SECTION 127(1) WAS NOT FOLLOWED BY THE DEPARTMENT, SO ANY ORDER PASSED WITHOUT PROPER JURISDICTION IS VOID AB - INITIO AND HAVE NO LEGAL EFFECT. IT WAS REQUESTED BY ASSESSEE VIDE HIS LETTER DATED - 01 - 06 - 2015 U/S 250 (5). 3. THAT THE COMMISSIONER (APPEALS - ILL) OUGHT TO HAVE NOT OVERLOOKED OUR LETTER DATED 29 - 05 - 2015 REGARDING CLARIFICATION OF LEASEHOLD AGREEMENTS AND APPLICATION OF GIFT. 4. THE COMMISSIONER APPEAL - ILL ERRED IN CONFIRMING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES, 5 . THE COMMISSIONER (APPEAL - III) ERRED IN CONFIRMIN G THE ADDITIONS IN HAND OF ASSESSEE OF THE ACCRUED INTEREST RELATED TO CORPUS FUND OF MINOR DAUGHTER CREATED FOR THEIR MARRIAGE. THE DECLARATION OF GIFT WAS OVERLOOKED BY THE CI T - LLL WHICH IS ON RECORD . 6. LN SPITE OF DISCLOSURE OF NATURE AND SOURCES OF I NCOME OF THE ASSESSEE, THE COMMISSIONER APPEAL - IH WRONGLY APPLIED THE CASE LAW OF SUMATI DAYAL V.C I T. 7. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL. 6 . IN ITA NO.4 7 /PAT/2016 (AY : 1999 - 2000 ), THE ASSESSEE RAISED THE FOLLOWING GROUNDS : - ITA NO S . 44 TO 47 / PAT /201 6 4 3. THE ORDER OF THE COMMISSIONER (APPEAL - ILL) IS CONTRARY TO LA W AND FACTS OF THE CASE. 4. THE COMMISSIONER (APPEAL - ILL) OUGHT TO HAVE ACCEPTED THE FACT THAT THE CONDITIONS OF SECTION 127(1) WAS NOT FOLLOWED BY THE DEPARTMENT, SO ANY ORDER PASSED WITHOUT PROPER JURISDICTION IS VOID AB - INITIO AND HAVE NO LEGAL EFFECT. IT WAS REQUESTED BY ASSESSEE VIDE HIS LETTER DATED - 01 - 06 - 2015 U/S 250 (5). 3. THAT THE COMMISSIONER (APPEALS - ILL) OUGHT TO HAVE NOT OVERLOOKED OUR LETTER DATED 29 - 05 - 2015 REGARDING CL ARIFICATION OF LEASEHOLD AGREEMENTS AND APPLICATION OF GIFT. 4. THE COMMISSIONER APPEAL - ILL ERRED IN CONFIRMING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. HUF INCOME SHOULD NOT HAVE BEEN ADDED IN THE HAND OF THE INDIVIDUAL. 5 . THE COMMISSIONER (APPEAL - III) ERRED IN CONFIRMING THE ADDITIONS IN HAND OF ASSESSEE OF THE ACCRUED INTEREST RELATED TO CORPUS FUND OF MINOR DAUGHTER CREATED FOR THEIR MARRIAGE. THE DECLARATION OF GIFT WAS OVERLOOKED BY THE CIT - III WHICH IS ON RECORD. 6. IN SPITE OF DISC LOSURE OF NATURE AND SOURCES OF INCOME OF THE ASSESSEE, THE COMMISSIONER APPEAL - ILL WRONGLY APPLIED THE CASE LAW OF SUMATI DAYAL V . CIT . 7. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL. 7 . SINCE THE ISSUES INVOLVED IN ALL THE IMPUGNED APPEALS ARE COMMON ARISING OUT OF IDENTICAL SET OF FACTS, THEREFORE, THE SAME ARE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. FOR THE SAKE OF BREVITY, WE DECIDE FIRST APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 1995 - 1996. 8 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME IN THE CAPACITY OF HUF ON 13.08.1996 DECLARING TOTAL INCOME OF RS.37,200/ - . DURING THE FINANCIAL YEAR THE ASSESSEE DECLARED INCOME FROM BANK INTEREST ON FIXED DEPOSIT AND SAVING BANK ACCOUNT A ND AGRICULTURAL OPERATIONS. ON PERUSAL OF THE BALANCE SHEET FILED BY THE ASSESSEE THE AO ITA NO S . 44 TO 47 / PAT /201 6 5 NOTICED THAT THE ASSESSEE HAD DECLARED AGRICULTURAL INCOME OF RS. 75000/ - ALONG WITH RS.25,000/ - AS GIFT RECEIVED DURING THE YEAR. THE ASSESSEE HAD ALSO FILED STATEMENT OF SAVINGS FROM THE ASSESSMENT YEAR 1985 - 86 TO 1994 - 95 IN WHICH HE HAD SHOWN ACCUMULATION OF CAPITAL OUT OF AGRICULTURE INCOME AND GIFT RECEIVED. ON THE BASIS OF ABOVE STATED FACTS, THE AO REOPENED THE CASE AND ISSUED NOTICE U/S.148 OF THE ACT DATED 06.0 7.2000, WHICH WAS ISSUED AND SERVED UPON THE ASSESSEE AND THE REASONS WERE ALSO SENT TO THE ASSESSEE AND ASSESSEE WAS ASKED TO FILE RETURN OF INCOME. IN RESPONSE TO NOTICE U/S.148 OF THE ACT, HOWEVER, THE ASSESSEE DID NOT FILE RETURN OF INCOME IN RESPONSE TO NOTICE U/S.148 OF THE ACT. THEREAFTER HE FILED OBJECTION VIDE LETTER DATED 24.07.2000 PERTAINING TO REOPENING OF THE CASE. FURTHER NOTICE U/S.142(1) OF THE ACT ALONG WITH DETAILED QUESTIONNAIRES WERE ISSUED AND SERVED ON THE ASSESSEE. THE AR OF THE ASSE SSEE SUBMITTED WRITTEN SUBMISSIONS AND ON THAT BASIS THE AO AFTER CONSIDERING THE FACTS OF THE CASE WITH REFERENCE TO THE REPLY SUBMITTED BY THE ASSESSEE , THE AO FRAMED THE ASSESSMENT AS UNDER : - 4. FROM THE ASSESSMENT PROCEEDINGS FOR THE EARLIER YEARS IT IS GATHERED THAT THE FIRST RETURN OF INCOME IN HUF CAPACITY WAS FILED BY THE ASSESSEE FOR THE AY 95 - 96 DECLARING AGRICULTURE AS THE MAIN SOURCES OF INCOME. THE ASSESSEE CLAIMED THE EXISTENCE OF THE HUF EVEN PRIOR TO THE PERIOD RELEVANT TO AY 1995 - 96. WH ILE FINALIZING THE ASSESSMENT PROCEEDINGS FOR THE AY 91 - 92 IN THE ASSESSEE'S INDIVIDUAL CASE, THE STATUS OF HIS HUF CAME UNDER THE PROBE AS THE ASSESSEE CLAIMED THAT THE EARNINGS OF HIS HUF WAS DEPOSITED IN HIS SAVINGS BANK ACCOUNT MAINTAINED WITH SBI GOPA LGANJ. ON EVALUATING THE FACTS AND THE - EVIDENCE PRODUCED IT WAS REVEALED THAT THERE WAS NO IDENTITY OF THE NUCLEUS O F T H E ASSESSEE'S HUF WITH REFERENCE TO THE PROPERTIES HELD. THE CLAIM OF THE HUF WAS FOUND TO BE NON - EXISTENT AND LEGALLY UNTENABLE. THE DET AIL FACTS EMERGING FROM ANALYSIS OF DOCUMENTS SUBMITTED BY THE ASSESSEE HAVE BEEN ELABORATELY DISCUSSED IN THE ASSESSMENT ORDERS COMPLETED FOR AYS 1997 - 98 AND 1998 - 99. ITA NO S . 44 TO 47 / PAT /201 6 6 5. DURING THE ASSESSMENT PROCEEDINGS VIDE HIS REPLY IT WAS SUBMITTED BY THE A.R. THAT THE AGRICULTURAL LAND AS CLAIMED BY THE ASSESSEE WAS SITUATED IN INDIA AND USED FOR AGRICULTURAL PURPOSES ONLY. IN SUPPORT THE CERTIFICATE OF CIRCLE OFFICER DATED 27 - 01 - 2001 AND AGREEMENT FOR LEASE OF AGRICULTURAL LAND MEASURING 30 BIGH'A SITUATED IN VILL. BAKHARI DIST. GOPALGANJ DATED 1ST APRIL 94 WAS FILED. ALSO SOME BUYERS RECEIPTS WERE FILED. SOME RECEIPTS OF FERTILIZERS USED IN THE FIELD WAS ALSO ENCLOSED. IT WAS CLAIMED THAT WAGES ARE PAID AT THE TIME OF SOWING AND NURSING OF SUGARCANES AND IT IS PAID IN CASH. SUGARCANE SEEDS ARE PRESERVED IN THE AGRICULTURAL FIELDS, HENCE THERE WAS NO PAYMENT FOR PURCHASE OF SEEDS. IT WAS CLAIMED THAT THE CONSUMPTION OF SUGARCANE ARE MADE BY NEAR BY SUGAR MILL LOCATED AT SASAMUSA. IN SUPPORT OF PROOF OF YIELD, IT WA S CLAIMED THAT THE AVERAGE YIELD PER HECTARE IS ABOUT THOUSAND QUINTALS. THE EXPENSES INCOME RATIO WAS CLAIMED TO BE ABOUT 1:4, HOWEVER, IN BATAI THE GROWER WAS CLAIMED TO GIVE 50% OF CROPS PRODUCED BY HIM TO THE LANDHOLDER. IT WAS ALSO CLAIMED THAT SINCE THERE WAS NO MATERIAL CHANGE IN THE AGRICULTURAL LAND HOLDINGS AND CROPS PRODUCED. HENCE BY SEEING THE PRESENT CROPS THE ESTIMATED INCOME OF PREVIOUS YEARS CAN BE GUESSED. THE A.R. FILED A BUNCH OF PAPERS CONSISTING OF AN INCOME CERTIFICATE DATED 27.1.2001 RELEVANT TO THE PERIOD 97 - 98 AND AN EXTRACT OF PUBLICATION OF RAJENDRA AGRICULTURAL UNIVERSITY, PUSA, SA MASTIPUR . THE LE A E DEED WITH SRI JAGDISH INDICATES A LEASE OF 13 BIGHA OF AGRICULTURAL LAND TO SRI ANIRUDH PRASAD ALIAS SADHU YADAV (HUF) FOR THE PERIO D STARTING FROM 1.4.85 TO 31.3.2005 AND HAS BEEN RECEIVING ANNUAL LEASE RENT OF RS. 13,000/ - DURING THE PERIOD 85 TO 95 AND AT A RATE OF RS. 19,500/ - THEREAFTER. THE OTHER DOCUMENT FILED BY THE AUTHORISED REPRESENTATIVE IS A PHOTOCOPY OF INCOME CERTIFICATE ISSUED BY THE CO., KUCHAIKOT, DISTT. GOPALGANJ IN THE NAME OF SRI ANIRUDH PRASAD HUF ON 27.12001 VIDE SI. NO. 68. IN THE CERTIFICATE IT HAS BEEN MENTIONED THAT THE HUF DERIVED AN ESTIMATED NET ANNUA L INCOME OF RS. 1,00,000/ - DURING THE PERIOD 1997 - 98 FROM 13 BIGHA LAND. IT HAS ALSO BEEN MENTIONED THAT AS PER THE AFFIDAVIT OF SRI JAGDISH RAI. SRI ANIRUDH PRASAD HUF HAS BEEN CULTIVATING THE AFORESAID LAND SINCE 1985 - 86 AND GROWS SUGARCANE, POTATO, ONION, PADDY ETC. 6. IT MAY BE SIGNIFICANT TO NOTE THAT T HE INCOME CERTIFICATE FILED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS FOR THE AY 1997 - 98 AND 1998 - 99 HAVE NOT BEEN FOUND TO BE AUTHENTIC AND SUPPORTED BY ANY INDEPENDENT AND VERIFIABLE EVIDENCE. THE SAME CERTIFICATE WAS FILED DURING THE COURSE OF THE A. YR 95 - 96 AND IT WAS SUBMITTED BY THE A.R THAT AGRICULTURAL INCOME IS OF THE SAME NATURE AS IN .THE PREVIOUS YEARS. THE AUTHENTICITY OF THE CERTIFICATES ISSUED BY THE CIRCLE OFFICER REGARDING THE ANNUAL AGRICULTURAL INCOME WAS DOUBTED AS IT DID NOT GIVE ANY DETAILS OF ITA NO S . 44 TO 47 / PAT /201 6 7 A) THE BASIS OF ESTIMATING THE ANNUAL INCOME. B) ASSESSEE'S SHARES AND SUCH OTHER FACTOR SUCH AS ACTUAL YIELD OF CROP, C) PATTERN OF CULTIVATION D) NO. OF CROPS IN A YEAR, NATURE OF LAND, KIND OF IRRIGATION AND AVAILABLE RES OURCES WITH THE ASSESSEE FOR THE CULTIVATION OF LAND. E) WHETHER THE INCOME ESTIMATED IN THE CERTIFICATE IS ACTUALLY GROSS RECEIPT OR NET RECEIPT. MORE OVER, IT WAS HELD THAT FOR EARNING NET AGRICULTURAL INCOME AS INDICATED IN THE CERTIFICATE, THE GROSS RECEIPT FROM SALE OF AGRICULTURAL PRODUCE WOULD BE MUCH HIGHE'R. TAKING A REASONABLE NET PROFIT RATE AT THE LEVEL OF 20%, FOR EARNING THE NET AGRICULTURAL INCOME OF RS 60,000/ - THE GROSS RECEIPT FROM SALE FROM SALE OF AGRICULTURAL PRODUCE WAS CALCULATED I N THE VICINITY OF RS 3,00,000/ - . SUCH HUGE SALES HAD NOT BEEN SUBSTANTIATED BY THE ASSESSEE BY FURNISHING EVIDENCE OF SALE IN MANDIS/ BAZAR SAMITI NETHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE EARLIER YEARS NOR DURING THE YEAR UNDER CONSIDERATI ON. HON'BLE ALLAHABAD HIGH COURT, IN THE CASE OF AWDHESH KR. JAIN VS. CJT (178 ITR 443) HAS HELD THE ASSESSING OFFICER JUSTIFIED IN NOT ACCEPTING THE ASSESSEE'S CONTENTION OF INCOME FROM AGRICULTURE IN VIEW OF THE FAILURE TO DISCLOSE NAMES OF THE PARTIES T O WHOM AGRICULTURAL PRODUCE HAD BEEN SOLD. IN THE INSTANT CASE THE ASSESSEE HAS CONSISTENTLY FROM YEAR TO YEAR HAS FAILED TO FILE ANY SUCH DETAILS TO CORROBORATE AGRICULTURAL INCOME. 7. IT WAS POINTED OUT IN THE ASSESSMENTS COMPLETED EARLIER THAT THOUGH IN THE RETURN OF THE HUF FILED THE ASSESSEE CLAIMED TO HAVE DERIVED INCOME SOLELY FROM AGRICULTURAL ACTIVITIES YET NO ASSETS IN THE FORM OF OX, TRACTORS, THRESHING MACHINE, PUMP SETS AND OTHER AGRICULTURAL IMPLEMENTS HAVE BEEN DISCLOSED IN THE STATEMENT O F ACCOUNT FILED SUCH AS BALANCE SHEET. EVEN DETAILS OF HIRING OF THE SERVICES WERE NEVER CLAIMED. NO PROOF OF EXPENSES INCURRED ON INPUTS SUCH AS PURCHASE OF HIGH YIELDING VARIETY OF SEEDS, FERTILIZERS AND PESTICIDES WERE INDICATED OR FURNISHED. THE BANK A CCOUNTS OF THE ASSESSEE DID NOT REFLECT ANY PATTERN OF DEPOSITS CORRESPONDING TO THE CROP HARVESTING SEASON. SOME SIGNIFICANT OBSERVATIONS WERE MADE BY THE A.O ON THE INCOME CERTIFICATE FURNISHED DURING THE A.YR 97 - 98 AND 98 - 99 AND THE SAME IS HELD TO BE A PPLICABLE FOR THE PRESENT A. YR ALSO . 1. WHILE THE CO. HAS ESTIMATED THE ANNUAL NET AGRICULTURAL INCOME OF RS.1,00,000/ - FOR THE PERIOD 97 - 98, THE ASSESSEE'S HUF HAS SHOWN ONLY A SUM OF RS. 75,000/ - IN HIS RETURN OF INCOME FILED. ITA NO S . 44 TO 47 / PAT /201 6 8 2. THE CO. HAS CERTIFI ED ABOUT THE INCOME FOR THE PERIOD 97 - 98 ONLY ON 27.1.2001 I.E. ALMOST AFTER 3 YEARS FROM THE END OF THE RELEVANT F.Y. IT IS NOTED THAT THE CERTIFICATE IS ISSUED ON THE BASIS OF THE REPORT SUBMITTED BY REVENUE STAFF AND CIRCLE INSPECTOR. NO BASIS OF ESTIMA TING THE LEVEL OF AGRICULTURAL INCOME AFTER A LAPSE OF 3 YEARS HAVE BEEN GIVEN. 3. THE CERTIFICATE HAS BEEN ISSUED IN RESPECT OF LAND MEASURING 13 BIGHAS LOCATED AT VILL. BAKHARI, DISTT. GOPALGANJ, CO. KUCHAIKOT DISTT. GOPALGANJ FROM WHICH NO INCOME HAVE BEEN EVER DISCLOSED IN THE RETURN OF INCOME OF HUF FILED EARLIER AND ON WHICH CULTIVATION IS CLAIMED SINCE 85 - 86. THE ASSESSEE HAD EARLIER CLAIMED TO DERIVE INCOME ONLY FROM ANCESTRAL LAND MEASURING 9.55 ACRE AT PHULWARIA, DISTT. GOPALGANJ HE HAD EVEN FUR NISHED A CERTIFICATE RELEVANT TO THE PERIOD 93 - 94 TO 95 - 96. IT DID NOT, HOWEVER, FURNISH ANY CERTIFICATE FOR ANY DETAILS OF THE AGRICULTURAL ACTIVITIES CARRIED OUT ON THE TEASED LAND. 8 . THE STATEMENT ON OATH OF SRI JAGDISH RAI RECORDED ON 19.03.01 WAS P ERUSED. IT IS TEAM* THAT IN HIS STATEMENT SRI JAGDISH RAI HAS ADMITTED TO HAVE ENTERED INTO AN AGREEMENT WITH THE ASSESSEE IN 1985 FOR GRANTING LEASE OF 13 BIGHA LAND BUT HE STATED TH AT THE COPY OF THE AGREEMENT IS NOT AVAILABLE WITH HIM. MORE SIGNIFICANTL Y SRI JAGDISH RAI FAILED TO EVEN GIVE PARTICULARS OF THE YIELD OF THE SUGAR CANE GROWN IN HIS FIELD AND CULTIVATED BY HIM OR COULD GIVE ANY DETAIL OF THE INCOME EARNED ON SALE OF AGRICULTURAL PRODUCE. IT IS INDEED SURPRISING THAT SRI JAGDISH RAI BEING A 'G RIHASF WITH ONLY SOURCE OF INCOME FROM AGRICULTURE, HAD NO IDEA ABOUT THE YIELD AND INCOME FROM AGRICULTURAL OPERATION CARRIED OUT BY HIM OR HIS SON IN HIS OWN LAND. FURTHER IT IS ALSO NOTED THAT THE LEESE - DEED IS NOT A REGISTERED DOCUMENT AND HENCE THERE IS NO DEFINITE EXISTENCE OR OTHERWISE OF DEEED ON THE DATES AS INDICATED IN IT .IT IS ALSO NOT LOGICAL TO FIND THAT WHILE SRI ANIRUDH PRASAD HAS SHOWN NET AGRICULTURAL INCOME OF RS. 1,00,000/ - FROM 13 BIGHA OF THE LAND, SRI JAGDISH RAI HIMSELF ADMITTED TO BE RECEIVING INCOME BARELY ENOUGH TO MEET THE EXPENSES OF HIS FAMILY. IF THE CERTIFICATE OF THE CO. FURNISHED BY THE ASSESSEE IS TO BE BELIEVED THEN SRI JAGDISH RAI SHOULD HAVE ALSO BEEN DERIVING INCOME IN THE VICINITY OF RS. 1,00,000/ - SINCE HE OWNED AND CULTIVATED ALMOST SIMILAR LAND HOLDING. IT IS ALSO QUITE UNUSUAL AND IMPROBABLE THAT FOR THE LAND GRANTED ON LEASE, SRI JAGDISH RAI GETS RS. 13,000/ - ANNUALLY WHILE SRI ANIRUDH PRASAD CLAIMS TO DERIVE NET ANNUAL INCOME OF RS. 1,00,000/ - THAT TOO AFTER EMPL OYING HIRED LABOUR AND SERVICES. THE ARRANGEMENT OF LEASE OF LAND THEREFORE BECOMES UNACCEPTABLE AS IT SUFFERS FACTUAL AND LEGAL FLAWS AS INDICATED ABOVE. 9. IT IS ALSO HELD THAT INCOME HAS A STRICT CONNOTATION UNDER THE INCOME TAX ACT. IT DOES NOT MEAN PRODUCTION OR RECEIPT OF A COMMODITY WHICH MAY BE CONVERTED INTO MONEY [165 ITR 437 (MP)]. INCOME REFERS TO MONETRY RETURN 'COMING IN'. ITA NO S . 44 TO 47 / PAT /201 6 9 THE ASSESSEE HAS SQUARELY FAILED TO PROVE THAT HE WAS IN RECEIPT OF SUCH MONETARY GAIN WITH ANY VERIFIABLE EVIDENCE OF SALE OF AGRICULTURAL PRODUCE. IT IS ALSO HELD THAT IF A PERSON GROWS CASH CROPS, IT IS FOR HIM TO ESTABLISH THAT HE SOLD THE CROP IN LOCAL MARKET/MANDI/MILLS ETC. AND EARNED INCOME THEREFROM. THE ONUS OF SHOWING THAT A PARTICULAR CLASS OF INCOME IS EXEMPT FROM TAXATION LIES ON THE ASSESSSE. TO EARN THE EXEMPTION, THE ASSESSEE HAS TO ESTABLISH THAT HIS CASE CLEARLY AND SQUARELY FALL WITHIN THE AMBIT OF THE PROVISION OF THE ACT. H.E.H NIZAM'S RELIGIOUS ENDOWMENT TRUST VS. CIT(1966) 59 I.T.R 582 (SC). ASSESS EE TO PROVE THAT IT IS AGRICULTURAL INCOME. CIT VS VENKATSWARNY NAIDU (1956) 29 I.T.R 529 (SC). IN VIEW OF THE FACTS DISCUSSED ABOVE, THE REAL NATURE OF THE INCOME DISCLOSED IN THE RETURN OF INCOME REMAIN ILLUSIVE AND UNPROVED. HENCE THE AGRICULTURAL INCO ME IS TREATED AS INCOME FROM UNSPECIFIED AND UNDISCLOSED SOURCES AND ASSESSED UNDER THE HEAD 'OTHER SOURCES'. THE AGRICULTURAL ACTIVITIES OF THE HUF AS PORTRAYED IS NOT ACCEPTED. 10. DURING THE A.YS. 97 - 98 AND 98 - 99 THE ENTIRE AGRICULTURAL INCOME WAS CON SIDERED FIT TO BE SUBSTANTIVELY ASSESSED IN THE HANDS OF SRI ANIRUDH PRASAD (IND.) AS INCOME FROM OTHER SOURCES. SIMILARLY, THE INTEREST INCOME DERIVED ON THE SB A/C AND FD ADMITTED IN THE RETURN OF INCOME OF HUF WAS ALSO SUBSTANTIVELY TREATED AS INCOME IN THE HANDS OF THE ASSESSEE IN INDIVIDUAL CAPACITY SINCE NO CORRELATION OF THESE WITH THE ACTIVITIES OF THE HUF WERE ESTABLISHED. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS FOR A.YR 95 - 96, IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE HUF WAS CRE ATED OUT OF THE GIFT MONEY RECEIVED FOR THE PURPOSE AND BENEFIT OF ANIRUDHA PRASAD AND HIS FAMILY. THE COMPOSITION OF HUF IS SRI ANIRUDH PRASAD HIMSELF, HIS WIFE AND HIS MINOR DAUGHTERS. THIS IS ACCORDING TO LAW (REFER GOWLI BUDDANA V CIT (1996) 60 ITR 293 (SC)). AS PER THE HINDU LAW AN HUF COME TO EXISTENCE SUO - MOTO AND MECHANICALLY. IN VIEW OF THE ABOVE THE EXISTENCE OF AN HUF AS CLAIMED BY THE ASSESSEE IS NOT DENIED. HOWEVER, THE EXISTENCE OF AGRICULTURAL INCOME TO THE EXTENT CLAIMED BY THE HUF IS NOT AC CEPTABLE. 11. SUBJECT TO THE ABOVE DISCUSSION, THE INCOME OF THE ASSESSEE IS COMPUTED AS UNDER: SL.NO PARTICULARS AMOUNT 1. AGRICULTURAL INCOME TREATED AS INCOME FROM OTHER SOURCES 75,000/ - 2. INTT. INCOME ON FD AS DISCLOSED IN THE RETURN 40,000/ - ITA NO S . 44 TO 47 / PAT /201 6 10 3 . INTT. ON SB A/C AS PER RETURN 7200/ - LESS DEDUCTION U/S.80L 10,000/ - TOTAL TAXABLE INCOME 1,08,200/ - ON THE BASIS OF ABOVE FINDINGS, THE AO COMPLETED THE ASSESSMENT ACCORDINGLY AS STATED ABOVE. 9 . FEELING AGGRIEVED FROM THE ORDER OF AO, THE ASSESS EE APPEALED BEFORE THE CIT(A) AND THE CIT(A) AFTER CONSIDERING THE ORDER OF THE AO AND SUBMISSIONS OF THE ASSESSEE DRAWN THE FOLLOWING FACTS WHICH READ AS UNDER : - AFTER GOING THROUGH THE FINDINGS OF THE A.O. IN THE ASSESSMENT ORDER AND SUBMISSION MADE BY THE APPELLANT FOLLOWING FACTS EMERGED: (I) THE APPELLANT'S CONTENTION REGARDING CREATION OF HUF OUT OF GIFTED MONEY RECEIPT IS NOT SUBSTANTIATED FROM THE EVIDENCES PRODUCED BEFORE THE A.O OR BEFORE THE UNDERSIGNED. THERE IS NO SEGREGATION OF HUF FUND EIT HER BY WAY OF VESTING OF FUNDS AND PUTTING THE SAME IN THE SEPARATE ACCOUNT OPENED FOR HUF OR ANY VESTING OF INDIVIDUALLY ACQUIRED PROPERTY IN THE FAMILY HOTCHPOTS. THERE IS NO RECEIPT OF ANY ANCESTRAL PROPERTY EITHER BY WAY OF PARTITION OR BY WAY OF FAMIL Y ARRANGEMENT THUS, THERE IS NO SEPARATE IDENTIFIABLE PROPERTY / FUND OF THE HUF. (II) THE APPELLANT'S CLAIM THAT THE LEASED AGRICULTURAL LAND WAS THE PROPERTY HELD IN THE HUF IS ALSO NOT SUSTAINABLE BECAUSE THERE IS NO IDENTIFIABLE HUF FUND WHICH CAN BE SAID TO HAVE BEEN UTILIZED IN ACQUIRING THE AGRICULTURAL LAND ON LEASE. IN THE ABSENCE OF USE OF HUF FUND FOR TAKING AGRICULTURAL LAND ON LEASE, THE HOLDING OF THE LEASED LAND CAN BE HELD TO BE FOR INDIVIDUAL CAPACITY ONLY. (III) DURING THE ASSESSMENT PRO CEEDINGS, THE A.O. HAS DISPROVED THE APPELLANT'S CLAIM OF EARNING OF AGRICULTURAL INCOME BY OBSERVING THE FOLLOWINGS : (A) THERE IS NO EVIDENCE TO SUPPORTS THE APPELLANT'S CLAIM THAT THE AGRICULTURAL ACTIVITY AND EARNING OF INCOME THERE FROM WAS AVAILABL E FROM THE YEAR 1984 - 85. (B) THE STATEMENT OF THE AGRICULTURIST SRI JAGDISH RAI (THE LESSOR OF AGRICULTURAL LAND TO THE APPELLANT) WAS RECORDED BY THE A.O. AND IT WAS CONCLUDED THAT THE EXISTENCE OF LEASE DEED FROM THE CLAIMED YEAR OF 1984 - 85 IS NOT SUPP ORTED BY ANY DOCUMENTARY EVIDENCE. ITA NO S . 44 TO 47 / PAT /201 6 11 (C) T HE A.O. NOTED THAT IT IS HIGHLY IMPROBABLE AND ILL - LOGICAL THAT THE APPELLANT HAS SHOWN NET AGRICULTURAL INCOME AT RS.L LAKH ON 13 BIGHAS OF LAND WHEREAS SHRI JAGDISH RAI HIMSELF ADMITTED TO HAVE EARNED AGRICULTUR AL INCOME YEARLY JUST ENOUGH TO MEET THE EXPENSES OF HIS FAMILY. (IV) THE DETAILED FINDING OF THE A.O. IN THE ASSESSMENT ORDER REGARDING EARNING OF THE AGRICULTURAL INCOME HAS NOT BEEN CONTROVERTED BY THE APPELLANT AT THE TIME OF APPELLATE PROCEEDINGS. ( V) AFTER GOING THROUGH THE STATEMENT OF SHRI JAGDISH RAI AND SURROUNDING CIRCUMSTANCES IN WHICH AFFIDAVITS WERE FILED BY HIM FOR THE FIRST TIME ON 29.09.2000 REGARDING LEASE OF AGRICULTURAL LAND, IT IS HIGHLY IMPROBABLE THAT ANYONE CAN TAKE AGRICULTURAL LA ND ON LEASE WITHOUT PAYMENT OF ANY LEASE RENT INITIALLY, CARRY OUT AGRICULTURAL ACTIVITIES MAKING ALL EXPENSES AND OUTSOURCING OTHER REQUIRED SERVICES FOR CULTIVATION WITHOUT MAKING ANY PAYMENTS AND ALL THESE EXPENSES COULD HAVE BEEN MADE AFTER HARVESTING OF CROP ON THE SAID AGRICULTURE LAND AND RECEIPT OF MONEY FROM THE BUYER (IN THIS CASE SUGAR MILLS WHICH GENERALLY MAKE PAYMENTS AFTER FURTHER PERIOD OF TWO - THREE MONTHS AS STATED BY SRI JAGDISH RAI IN HIS STATEMENT AS ALSO THIS IS THE COMMON PRACTICE BY T HE SUGAR MILLS). 10 . THE CIT( A ) ALSO RELIED ON THE JUDGMENT IN THE CASE OF SUMATI DAYAL VS. CIT, (1995) 214 ITR 801 (SC) AND HE FOUND THAT THE SOURCE OF EARNING OF AGRICULTURE INCOME AS SHOWN BY THE ASSESSEE WAS NOT SUSTAINABLE AND HE UPHELD THE ACTION O F AO REGARDING TREATMENT OF AGRICULTURE INCOME AS INCOME FROM OTHER SOURCES. HE FURTHER NOTED THAT THERE WAS A NON - EXISTENCE OF HUF. ACCORDINGLY HE DIRECTED THE AO TO TREAT THE INCOME OF HUF AS SHOWN BY THE ASSESSEE IN THE HANDS OF THE INDIVIDUAL CAPACITY OF ANIRUDH PRASAD. FURTHER IN RESPECT OF INTEREST EARNED ON FIXED DEPOSIT, HE F OUND THAT THERE WAS NO VALID GIFT DECLARED BY THE ASSESSEE. ACCORDINGLY, HE ALSO DISMISSED THIS GROUND. 11 . FEELING AGGRIEVED FROM THE ORDER OF CIT(A), THE ASSESSEE APPEALED BEF ORE THE INCOME TAX APPELLATE TRIBUNAL. ITA NO S . 44 TO 47 / PAT /201 6 12 12 . LD. AR REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND HE ALSO CHALLENGED THE JURISDICTION AS PER SECTION 127(1) OF THE INCOME TAX ACT, 1961. 13 . ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIES AND HE SUBMITTED THAT THERE WAS AN ORDER PASSED U/S.127(1) OF THE ACT AND HE PRODUCED THE SAME. THE ASSESSEE WAS UNABLE TO SUBSTANTIATE THE AGRICULTURAL INCOME SHOWN IN THE RETURN OF INCOME BY ANY COGENT MATERIAL. THE LOWER AUTHORITIES HA VE ALSO DOUBTED THE INCOME SHOWN BY THE ASSESSEE FROM A.Y.1985 - 86 AS INCOME FROM AGRICULTURE AND GIFTS RECEIVED . HE FURTHER SUBMITTED THAT ANIRUDH PRASAD HAS SHOWN AGRICULTURAL INCOME OF RS.1 LAKHS FROM 13 BIGHA OF LAND. O N THE OTHER HAND SHRI JAGDISH RAI HIMSELF ADMITTED TO BE RECEIVING INCOME BARELY ENOUGH TO MEET THE EXPENSES OF HIS FAMILY. THE CERTIFICATES ISSUED BY THE CIRCLE OFFICER IS ALSO NOT RELIABLE. THE LANDLORD JAGDISH RAI GETS LEASE RENT ONLY RS.13,000/ - . LD. DR FURTHER SUBMITTED THAT INCOME H AS A STRICT CONNOTATION UNDER THE INCOME TAX ACT. IT DOES NOT MEAN PRODUCTION OR RECEIPT OF A COMMODITY WHICH MAY BE CONVERTED INTO MONEY [165 ITR 437 (MP)]. INCOME REFERS TO MONETRY RETURN 'COMING IN'. THE ASSESSEE HAS SQUARELY FAILED TO PROVE THAT HE WAS IN RECEIPT OF SUCH MONETARY GAIN WITH ANY VERIFIABLE EVIDENCE OF SALE OF AGRICULTURAL PRODUCE. IT IS ALSO HELD THAT IF A PERSON GROWS CASH CROPS, IT IS FOR HIM TO ESTABLISH THAT HE SOLD THE CROP IN LOCAL MARKET/MANDI/MILLS ETC. AND EARNED INCOME THEREFROM . THE ONUS OF SHOWING THAT A PARTICULAR CLASS OF INCOME IS EXEMPT FROM TAXATION LIES ON THE ASSESSSE. TO EARN THE EXEMPTION, THE ASSESSEE HAS TO ESTABLISH THAT ITA NO S . 44 TO 47 / PAT /201 6 13 HIS CASE CLEARLY AND SQUARELY FALL WITHIN THE AMBIT OF THE PROVISION OF THE ACT. 14 . AFTER HEARI NG BOTH THE SIDES AND PERUSING THE MATERIALS AVAILABLE ON RECORD AND THE ORDERS OF AUTHORITIES BELOW, WE FIND THAT GROUND NO.2 TAKEN BY THE ASSESSEE HAS ALREADY BEEN DECIDED IN THE CASE OF ASSESSEE IN ITA NOS. 48 & 49/PAT/2016 VIDE OUR EVEN DATE. THE RELEVA NT OBSERVATIONS ARE AS UNDER: 4. GROUND NO.2 IS COMMON TO BOTH THE APPEALS THAT THE CIT(A) OUGHT TO HAVE ACCEPTED THE FACT THAT THE CONDITIONS OF SECTION 127(1) WAS NOT FOLLOWED BY THE DEPARTMENT, SO ANY ORDER PASSED WITHOUT PROPER JURISDICTION IS VOID A B - INITIO AND HAVE NO LEGAL EFFECT. 5. LD A.R. OF THE ASSESSEE SUBMITTED THAT NO ORDER HAS BEEN PASSED U/S.127 OF THE INCOME TAX ACT FOR TRANSFER AND CENTRALISATION OF THESE RELEVANT APPEALS AND SAID APPROVAL IS MANDATORY TO BE FOLLOWED. LD A.R. VEHEMENTLY POINTED OUT THAT WITHOUT FOLLOWING PROCEDURE AND CONDITIONS LAID DOWN IN SECTION 127(1) OF THE ACT, THE IMPUGNED ASSESSMENT ORDERS ARE TO BE CONSIDERED AS PASSED WITHOUT HAVING PROPER JURISDICTION AND THUS, SAME ARE VOID AB - INITIO HAVING NO LEGAL EFFECT A GAINST THE ASSESSEE. THEREFORE, ASSESSMENT ORDERS MAY KINDLY BE QUASHED ONLY ON THIS SOLE LEGAL REASON. 6. REPLYING TO ABOVE, LD D.R. SUBMITTED A COPY OF THE ORDER DATED 15.7.1999 PASSED U/S.127 OF THE ACT, WHEREIN, CASES OF 79 ASSESSEES/ENTITIES HAVE BEE N TRANSFERRED FOR THE PURPOSE OF CO - ORDINATED AND CONSOLIDATED INVESTIGATION AND ASSESSMENT, COPY OF WHICH WAS ALSO PROVIDED TO THE ASSESSEES REPRESENTATIVE BEFORE THE BENCH. 7. ON BEING ASKED BY THE BENCH, LD A.R., IN ALL FAIRNESS, SUBMITTED THAT TILL D ATE, THE ASSESSEE HAS NO INFORMATION REGARDING THIS ORDER PASSED U/S.127 OF THE ACT DATED 15.7.1999. THEREFORE, THIS LEGAL GROUND IS RAISED AND AGITATED BY THE ASSESSEE. 8. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE SATISFIED THAT THE DEP ARTMENT HAS COMPLIED WITH THE MANDATORY CONDITIONS AND PROCEDURES LAID DOWN IN SECTION 127(1) OF THE ACT FOR CENTRALISING AND TRANSFERRING THE CASE FOR THE PURPOSE OF COORDINATED AND CONSOLIDATED INVESTIGATION AND ASSESSMENT. THEREFORE, THIS GROUND OF TH E ASSESSEE BEING DEVOID ON MERITS IS DISMISSED FOR BOTH THE ASSESSMENT YEARS. ITA NO S . 44 TO 47 / PAT /201 6 14 FOLLOWING THE ABOVE QUOTED FINDINGS OF THE COORDINATE BENCH OF THE TRIBUNAL, WE DISMISS GROUND NO.2 OF ASSESSEE FOR ALL THE FOUR ASSESSMENT YEARS UNDER CONSIDERATION. 15 . IN RES PECT OF GROUND NOS.3, 4 & 6, REGARDING AGRICULTURAL INCOME AND GIFTS, WE NOTED FROM THE ORDER OF LOWER AUTHORITIES THAT THE ASSESSEE HAS FILED FIRST TIME RETURN OF INCOME IN THE IMPUGNED YEAR AND HE HAS ALSO FILED A DETAILED OF INCOME FROM AGRICULTURAL ACT IVITIES AND GIFTS RECEIVED FROM ASSESSMENT YEARS 1985 - 86 TO 1994 - 95 BE FORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS BUT HE WAS UNABLE TO SUBSTANTIATE ANY GIFTS RECEIVED IN THE IMPUGNED YEAR AS WELL AS IN THE PAST YEARS. IT IS ALSO NOTED THAT IN T HE AFFIDAVIT FILED BY SHRI JAGADISH RAI IT IS CONFIRMED THAT HE HAS GIVEN 13 BIGHA LAND TO ANIRUDH PRASAD WITHOUT ANY SUPPORTING EVIDENCES FROM 01.04.1985 TO 31.03.2005 AND RECEIVING ANNUAL LEASE RENT OF RS.13,000/ - . IN REGARD TO AGRICULTURAL INCOME THE LO WER AUTHORITIES WERE NOT SATISFIED THAT THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE HAS BEEN GENERATED OUT OF AGRICULTURAL ACTIVITIES. THE ASSESSEE HAS ALSO FILED INCOME CERTIFICATE ISSUED BY THE CIRCLE OFFICER KUCHAIKOT, DISTRICT GOPALGANJ IN THE NAME O F SHRI ANIRUDHA PRASAD HUF ON 27.01.2001 VIDE SI. NO. 68 AND IN THE CERTIFICATE IT HAS BEEN MENTIONED THAT THE HUF DERIVED AN ESTIMATED NET ANNUAL INCOME OF RS.1,00,000/ - DURING THE PERIOD 1997 - 98 FROM 13 BIGHA LAND. AS PER THE AFFIDAVIT OF SRI JAGDISH RA I. SRI ANIRUDH PRASAD HUF HAS BEEN CULTIVATING THE AFORESAID LAND SINCE 1985 - 86 AND GROWS SUGARCANE, POTATO, ONION, PADDY ETC. WE NOTED THEREON THAT THERE IS A CONTRADICTORY IN THE SUBMISSIONS OF THE ASSESSEE ITA NO S . 44 TO 47 / PAT /201 6 15 THAT ONLY SUGARCANE HAS BEEN GROWN AND SOLD T O SUGAR MILLS LOCATED AT SASAMUSA AND NO ANY PAYMENTS HAVE BEEN MADE FOR SEEDS . I N THE AFFIDAVIT THE LANDLORD SHRI JAGDISH RAI HAS STATED THAT ANIRUDH PRASAD H U F IS CULTIVATING SINCE 1985 - 86 AND GROWS SUGARCANE, POTATO, ONION, PADDY ETC. WE ALSO NOTED THAT THE CERTIFICATE HAS BEEN ISSUED BY THE CIRCLE OFFICER IN FAVOUR OF ANIRUDH PRASAD HUF ON 27.01.2001 WHEREAS THERE IS NO MENTION THAT THE LEASE DEED HAS BEEN GOT REGISTERED IN FAVOUR OF ANIRUDH PRASAD HUF THEN HOW THE CIRCLE OFFICER CAN ISSUE CERTIFICATE I N FAVOUR OF ANIRUDH PRASAD (HUF). WE FURTHER NOTICED FROM THE ASSESSMENT ORDER THAT THE PROFIT HAS BEEN SHOWN IN THE RATIO OF 1:4 WHICH IS VERY MUCH HIGHER. IT HAS BEEN DOUBTED BY THE AO AND NO ANY QUANTUM OF SALES FIGURE PROVIDED TO THE AO FOR DETERMINING THE TRUE PROFIT EARNED BY ANIRUDH PRASAD(HUF) AND THE AO HAS ALSO OBSERVED THAT THERE IS NO ANY ASSET WHICH ARE USED FOR AGRICULTURAL ACTIVITIES AND THE ASSESSEE IS UNABLE TO PRODUCE ANY EVIDENCE WITH REGARD TO CLAIM OF HIRING OF SERVICE FROM THE OUTSIDER S . WE FURTHER NOTED FROM THE ORDER OF THE AUTHORITIES BELOW THAT THE GIFTS RECEIVED BY THE ASSESSEE IS NOT A VALID GIFT. HE WAS FAILED TO SUBSTANTIATE WITH THE CREDIBLE EVIDENCE S REGARDING SOURCE OF RECEIPT AND GENUINENESS OF GIFTS. 16 . WE FURTHER NOTED FR OM THE ORDER OF CIT(A) THAT THE INCOME OF THE HUF HAS BEEN T REATED IN THE HANDS OF INDIVIDUAL. AS PER OUR CONSIDERED OPINION, LD. AO HAS RIGHTLY TREATED TO THE AGRICULTURAL INCOME AS AN INCOME FROM OTHER SOURCES FOR WANT OF THE SATISFACTION FOR PROVING THE AGRICULTURAL INCOME AS PER EVIDENCE PRODUCED BEFORE HIM BY THE ASSESSEE AND THE ITA NO S . 44 TO 47 / PAT /201 6 16 FINDINGS RECORDED AS SUPRA. THE ASSESSEE ALSO COULD NOT SUBSTANTIATE ITS CLAIM FOR AGRICULTURAL INCOME BEFORE THE CIT(A). FOR THIS REASON, THE AO HAS RIGHTLY TREATED THE AGRIC ULTURAL INCOME OF THE ASSESSEE AS INCOME FROM OTHER SOURCES AND RIGHTLY TAXED IN THE HANDS OF THE HUF. THEREFORE, THIS GROUND IS PARTLY ALLOWED. 17 . IN RESPECT OF GROUND NO.5, REGARDING ACCRUED INTEREST ON FIXED DEPOSIT, I T IS UNDISPUTED FACT THAT THE AGRI CULTURAL INCOME AND GIFT HAS BEEN HELD BOGUS BY BOTH THE AUTHORITIES BELOW, WHICH THE ASSESSEE COULD NOT REBUT IT. IT IS ALSO NOT CLEAR AS TO WHETHER THE FD HAS BEEN MADE FROM THE GIFT MONEY OR FROM AGRICULTURAL ACTIVITIES OR FROM BOTH INCOME SHOWN BY THE ASSESSEE IN THE EARLIER YEARS. THE ASSESSEE WAS ALSO UNABLE TO SUBSTANTIATE THE ABOVE CLAIM EITHER BEFORE THE AUTHORITIES BELOW OR BEFORE THE TRIBUNAL. THE AGRICULTURAL INCOME ARISING OUT OF THE LEASEHOLD LAND IN THE NAME OF HUF, THE ASSESSEE COULD NOT SUB STANTIATE WITH ANY COGENT EVIDENCE EITHER IN THE ASSESSMENT OR IN THE APPELLATE PROCEEDINGS. THE AO IN THE ASSESSMENT ORDER HAS MENTIONED THAT DURING THE YEAR UNDER CONSIDERATION THE EXISTENCE OF AGRICULTURAL INCOME TO THE EXTENT CLAIMED BY THE HUF IS NOT ACCEPTABLE. THE CIT(A) HELD THAT THE INCOME SHOWN IN THE HUF CAPACITY CANNOT BE ASSESSED AND, THEREFORE, DIRECTED THE AO TO ADD THE HUF INCOME SHOWN BY THE ASSESSEE IN HIS INDIVIDUAL CAPACITY FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION. 18 . WE OBSER VE FROM THE SUBMISSIONS OF THE AR OF THE ASSESSEE THAT FD WAS MADE OF RS.3 LAKHS IN THE NAME OF ASSESSEES MINOR DAUGHTER FOR THE PURPOSE OF MARRIAGE OUT OF HUF FUND. THE FUND GENERATED BY THE HUF ITA NO S . 44 TO 47 / PAT /201 6 17 WILL BE TAXED IN THE HANDS OF INDIVIDUAL AS THERE WAS NO VA LID GIFTS TO THE HUF WHICH HAS ALSO NOT BEEN REBUTTED BY THE ASSESSEE. THE CIT(A) FOUND THAT THE EARNING OF AGRICULTURAL INCOME AS SHOWN BY THE ASSESSEE IS NOT SUSTAINABLE AND, THEREFORE, CONFIRMED THE ACTION OF AO WITH REGARD TO THE TREATMENT OF THE AGRIC ULTURAL INCOME AS INCOME FROM OTHER SOURCES . 19 . IT IS PERTINENT TO MENTION HERE THAT THE CIT(A) FOUND THAT THE FACTS OF THE CASE DO NOT PROVE THE EXISTENCE OF HUF FUND OR PROPERTY FOR THE HUF TO EARN INCOME IN THE HUF CAPACITY , THEREFORE , TREATED THE INCO ME OF THE HUF AS INCOME OF THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. THE ASSESSEE HAS SUBMITTED THAT FOR HUF, INCOME CAN BE EARNED FROM GIFTED PROPERTY RECEIVED FROM EVEN STRANGER BUT THERE WAS NO SUCH EVIDENCE FILED IN THE CASE OF THE ASSESSEE EITHER AT TH E TIME OF ASSESSMENT OR APPELLATE PROCEEDINGS. FROM THE ASSESSMENT PROCEEDINGS FOR THE EARLIER YEARS IT IS GATHERED THAT THE FIRST RETURN OF INCOME IN HUF CAPACITY WAS FILED BY THE ASSESSEE FOR THE AY 95 - 96 DECLARING AGRICULTURE AS THE MAIN SOURCES OF INCO ME. THE ASSESSEE CLAIMED THE EXISTENCE OF THE HUF EVEN PRIOR TO THE PERIOD RELEVANT TO AY 1995 - 96. WHILE FINALIZING THE ASSESSMENT PROCEEDINGS FOR THE AY 91 - 92 IN THE ASSESSEE'S INDIVIDUAL CASE, THE STATUS OF HIS HUF CAME UNDER THE PROBE AS THE ASSESSEE CL AIMED THAT THE EARNINGS OF HIS HUF WAS DEPOSITED IN HIS SAVINGS BANK ACCOUNT MAINTAINED WITH SBI GOPALGANJ. ON EVALUATING THE FACTS AND THE - EVIDENCE PRODUCED IT WAS REVEALED THAT THERE WAS NO IDENTITY OF THE NUCLEUS OF THE ASSESSEE'S HUF WITH REFERENCE TO THE PROPERTIES HELD. THE CLAIM OF THE HUF WAS FOUND TO BE NON - EXISTENT AND LEGALLY UNTENABLE. THE DETAIL FACTS ITA NO S . 44 TO 47 / PAT /201 6 18 EMERGING FROM ANALYSIS OF DOCUMENTS SUBMITTED BY THE ASSESSEE HAVE BEEN ELABORATELY DISCUSSED IN THE ASSESSMENT ORDERS COMPLETED FOR AYS 1997 - 98 AND 1998 - 99. DURING THE A.YS. 97 - 98 AND 98 - 99 THE ENTIRE AGRICULTURAL INCOME WAS CONSIDERED FIT TO BE SUBSTANTIVELY ASSESSED IN THE HANDS OF SRI ANIRUDH PRASAD (IND.) AS INCOME FROM OTHER SOURCES. SIMILARLY, THE INTEREST INCOME DERIVED ON THE SB A/C AND FD ADMITTED IN THE RETURN OF INCOME OF HUF WAS ALSO SUBSTANTIVELY TREATED AS INCOME IN THE HANDS OF THE ASSESSEE IN INDIVIDUAL CAPACITY SINCE NO CORRELATION OF THESE WITH THE ACTIVITIES OF THE HUF WERE ESTABLISHED. DURING THE COURSE OF THE ASSESSMENT PROCEED INGS FOR A.YR 95 - 96, IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE HUF WAS CREATED OUT OF THE GIFT MONEY RECEIVED FOR THE PURPOSE AND BENEFIT OF ANIRUDHA PRASAD AND HIS FAMILY. THE COMPOSITION OF HUF IS SRI ANIRUDH PRASAD HIMSELF, HIS WIFE AND HIS MI NOR DAUGHTERS. THE CIT(A) ACCEPTED THE EXISTENCE OF AN HUF AS CLAIMED BY THE ASSESSEE , H OWEVER, DID NOT ACCEPT THE EXISTENCE OF AGRICULTURAL INCOME TO THE EXTENT CLAIMED BY THE HUF. THEREFORE, BOTH THE AUTHORITIES BELOW HAVE RIGHTLY DENIED TO BE CONSIDERED AS VALID GIFT IN THE HANDS OF HUF AS A CORPUS FUND FOR THE MARRIAGE OF THE MINOR DAUGHTER. HENCE, WE DO NOT SEE AND GOOD AND VALID REASON TO INTERFERE IN THE FINDINGS OF THE CIT(A) ON THIS GROUND AND THE SAME IS DISMISSED. 20 . THUS, APPEAL OF THE ASSESSEE IN ITA NO.44/PAT/2016 FOR A.Y.1995 - 96 IS PARTLY ALLOWED. 21 . T HE GROUNDS RAISED BY THE ASSESSEE IN OTHER APPEALS I.E. IN ITA NO.4 5 TO 4 7 /PAT/201 6 ARE IDENTICAL TO THE GROUNDS DECIDED BY US IN ITA NO S . 44 TO 47 / PAT /201 6 19 ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 199 5 - 1996(HUF) IN IT A NO.44/PAT/201 6 , WHEREIN WE HAVE PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. SINCE, THE PRESENT APPEALS OF THE ASSESSEE BEING IDENTICAL TO THE ABOVE APPEAL OF THE ASSESSEE, THEREFORE, OUR OBSERVATIONS MADE IN THE ABOVE APPEAL SHALL APPLY MUTATIS MUTANDIS T O THE GROUNDS RAISED IN THESE APPEALS I.E. ITA NOS. 45 TO 4 7 /PAT/201 6 FOR THE ASSESSMENT YEARS 1996 - 1997 , 1998 - 1999 & 1999 - 2000 (HUF) . ACCORDINGLY, THESE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED . 22 . IN THE RESULT, ALL APPEALS OF THE ASSESSEE ARE PARTLY A LLOWED. ORDER PRONOUNCED IN PURSUANCE WITH RULE 34/4 OF ITAT RULES, 1963 BY PUTTING THE COPY OF THE SAME ON NOTICE BOARD ON 26 /07/2019 AT PATNA. SD/ - ( C.M.GARG ) SD/ - ( L.P.SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER PATNA ; DATED 26 / 0 7 /201 9 PKM , S R.P.S. COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) INCOME TAX APPELLATE TRIBUNAL , PATNA 1. THE APPELLANT - 2. THE RESPONDENT - 3. THE CIT(A), 4. CIT 5. DR, ITAT, PATNA 6. GUARD FILE. //TRUE COPY//