Sri. K. Shankar Naik, Davangere V. Income Tax Officer, Ward- 3, Davangere

ITA 454/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6834 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-08-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 29-05-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN
• Keywords: Gift; Recovery proceedings; Tangible material; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 143(1); 143(2); 48; 13; 22; 147

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL BENG A LURU B ENCH, BANGALORE (SMC) BEFOR E SHRI CHANDRA POOJARI , AM I .T . A. NO. 4 54 / BANG / 20 20 ASSESSMENT YEAR : 2009 - 10 SHRI K SHANKAR NAIK, 873 - 7 - 23, JAYANAGAR, C BLOCK, NITUVALLI, DAVANAGARE. [PAN:CNZPS 2435M] VS. THE ITO WARD - 3, DAVANAGARE (ASSESSEE - APPELLANT) ( REVENUE - RESPONDENT) ASSESSEE BY SHRI V SRINIVASAN,ADVOCATE. REVENUE BY SHRI GANESH R GHALE, STANDING COUNSEL. D ATE OF HEARI NG 07 /09/20 20 DATE OF PRONOUNCEMENT 11 /09/20 20 O R D E R PER CHANDRA POOJARI, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE OR DER OF THE CIT(A) , BENG A LURU DATED . THE RELEVAN T ASSESSMENT YEAR IS 2009 - 10. 1.1 THERE IS A DELAY OF 51 DAYS IN FILING THIS APPEAL BEFORE THE TRIBUNAL. THE DELAY OCCURRED ON ACCOUNT OF LOCK DOWN DECLARED BY THE CENTRAL GOVERNMENT DUE TO COVID - 19 PANDEMIC. 1.2 I HAVE HEARD THE RIVAL PARTIES. I FIND THAT THERE IS SUFFICIENT CAUSE FOR THE DELAY IN FILING THE APPEAL AND HENCE, CONDONE THE DELAY OF 51 DAYS AND ADMIT THE APPEAL FOR ADJUDICATION. I.T.A. NO.454 / BANG/ 2020 2 2. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS WHETHER THE INCOME DECLARED BY THE ASSESSEE IS D ERIVED FROM AGRICULTURE ACTIVITY OR NOT, AS THE TREATMENT GIVEN BY THE ASSESSING OFFICER AS INCOME FROM OTHER SOURCES AND BRING IT TO TAX. 2. 1 THE FIRST GROUND IS WITH REGARD TO RE - OPENING OF THE ASSESSMENT ON THE REASON THAT THERE IS NO JUSTIFICATION A S IT WAS ONLY A CHANGE OF OPINION. HOWEVER, AT THE TIME OF HEARING, THIS GROUND WAS NOT PRESSED. HENCE, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. 3. THE NEXT GROUND IS WITH REGARD TO ADDITION OF RS.8,29,245/ - TREATING THE DIFF ERENCE BETWEEN THE FUNDS FROM HUF AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE AS SOURCE OF INVESTMENT, THOUGH THE ASSESSING OFFICER ACCEPTED THE AMOUNT OF RS.8,55,755/ - AS EXPLAINED SOURCE OF INVESTMENT. 4. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE H AD MADE INVESTMENT IN CONSTRUCTION OF HOUSE AT RS.39 LAKHS AS FOLLOWS: I) HOUSE LOAN FROM BANK OF BARODA RS.19 LAKHS II) FUNDS FROM HUF AGRICULTURAL INCOME RS.16.85 LAKHS III) SALARY SAVINGS RS. 3.15 LAKHS TOTAL RS.39 LAKHS THE ASSESSING OFFICER VERIFIED THE CLAIM OF THE ASSESSEE AS REGARDS SOURCE OF RS.16.85 LAKHS BEING AGRICULTURAL INCOME AND DID NOT ACCEPT ESTIMATION OF AGRICUL TURAL INCOME FOR THE PERIOD 1990 - 91. THE ASSESSING OFFICER OBSERVED THAT AS PER REPORT OF AGRICULTURAL CONSULTANT, AGRICULTURAL INCOME FOR THE PERIOD 2003 - 04 TO 2008 - 09 WAS ESTIMATED AT RS.40,02,145/ - WHEREAS THE SAME IS SUBSTANTIALLY LESS AT RS.36,96,162/ - FOR THE PERIOD 1990 - 91 TO 2002 - 03 . THUS, THE I.T.A. NO.454 / BANG/ 2020 3 ASSESSING OFFICER ESTIMATED THE NET INCOME OF THE HUF AT RS.8,55,755/ - FOR THE PERIOD 2003 - 04 TO 2008 - 09. 5. ON APPEAL , THE CIT(A) FOUND THAT THE MAJOR LAND HOLDING OF 9.06 ACRES ARE IN THE NAME OF MRS. SHILPA SHANKAR, WIFE OF THE ASSESSEE. CONSIDERING THAT THE ASSESSEE WAS 48 YEARS OLD AS ON THE DATE OF AFFIDAVIT I.E., 01/02/2018 AND JOINED SERVICE IN 1997, THE LANDS IN THE NAME OF HIS WIFE MRS. SHILPA SHANKAR MUST HAVE OBVIOUSLY BEEN ACQUIRED MUCH LATE R. THEREFORE, THE CLAIM OF THE ASSESSEE THAT HUF WAS GETTING SUBSTANTIAL AGRICULTURAL INCOME EVEN FROM THE DAYS OF HIS FATHER DOES NOT APPEAR TO BE CORRECT. ACCORDING TO THE CIT(A), THE ASSESSEE ESTIMATED NET AGRICULTURAL INCOME OF THE HUF AT RS.76,98,30 7/ - FROM 1990 - 91 TO 2009 - 10. HOWEVER, THE CIT(A) FOUND THAT AS THE ASSESSEE DOES NOT MAINTAIN ANY DETAILS AS REGARDS SALE PROCEEDS FROM THE CROPS, EXPENDITURE INCURRED, EXPENDITURE FOR MAINTENANCE OF THE FAMILY MET OUT OF AGRICULTURAL INCOME, THE ACCURACY AND CORRECTNESS OF ESTIMATE PREPARED BY THE ASSESSEE REMAINS UNVERIFIABLE. THE CIT(A) SUMMARIZED THE REASONS FOR REJECTION OF ASSESSEES CONTENTIONS AS FOLLOWS: I) THE ASSESSEE ESTIMATED INCOME FROM THE LANDS FOR THE YEARS FOR WHICH NO CROP INFORMATION I S AVAILABLE IN RTC. II) THE ASSESSEE CONSIDERED PEAK RATE FOR VALUATION OF CROP WHICH IS FAR FROM REALITY. III) THE FACTORS SUCH AS VARIATION IN YIELD, QUALITY OF THE CROP AND FLUCTUATION IN PRICE ARE NOT FACTORED IN THE REPORT. 5.1 IN VIEW OF T HE ABOVE, THE CIT(A) JUSTIFIED THE DECISION OF THE ASSESSING OFFICER TO REJECT THE ESTIMATION OF NET AGRICULTURAL INCOME MADE BY THE ASSESSEE. I.T.A. NO.454 / BANG/ 2020 4 ACCORDINGLY, THE CIT(A) HELD THE DECISION OF THE ASSESSING OFFICER TO ADOPT THE NET AGRICULTURAL INCOME OF HUF AT RS.8,55,755/ - WHICH WAS ESTIMATED OVER A PERIOD OF 2003 - 04 TO 2008 - 09 AS REASONABLE. 5.2 REGARDING CHARGING OF INTEREST U/S. 234A/234B, THE CIT(A) OBSERVED THAT THE CHARGING OF INTEREST IS MANDATORY AND CONSEQUENTIAL. THERE IS NO DISCRETION IN THE MAT TER AS HELD BY THE SUPREME COURT IN THE CASE OF ANJUM M.H. GHASWALA (252 ITR 1). THEREFORE, THE CIT(A) HELD THAT NO APPEAL CAN LIE AGAINST THE ORDER CHARGING INTEREST UNLESS IT CONCERNS A PERCEIVED OR APPARENT NON - APPLICATION OF MIND. 6. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE ME. THE LD. AR SUBMITTED THAT ASSESSEE HUF IS HAVING 35 ACRES OF LAND AND INCOME FROM SUCH LAND WAS ACCUMULATED FROM YEAR TO YEAR AND OUT OF THIS, THE ASSESSEE RECEIVED RS.16.85 LAKHS. THE ASSESSING OFFICER ACCEPTED ONLY RS.8,55,755/ - AS INCOME FROM HUF FROM 2003 - 04 TO 2008 - 09 AND HE HAS NOT ACCEPTED RS.8,29,245/ - , THOUGH HE HAS NO EVIDENCE TO SHOW THAT IT IS FROM OTHER SOURCES. ACCORDING TO THE LD. AR, THE LOWER AUTHORITIES HAD ACCEPTED THAT THE ASSESSEE IS OWNING AGRIC ULTURAL LAND AND DERIVED INCOME. THE ASSESSING OFFICER ACCEPTED ONLY PARTIAL AGRICULTURAL INCOME WITHOUT ANY BASIS. THE LD. AR DREW OUR ATTENTION TO THE RECORDING OF RIGHTS ISSUED BY REVENUE AUTHORITIES IN RESPECT OF AGRICULTURAL PROPERTIES OWNED BY THE H UF. THE LD. AR DREW OUR ATTENTION TO T HE AFFIDAVITS MADE BY SMT. DEVIB AI, S MT. VENKIBAI, SMT. PARVATHIBAI, SMT. ROOPALIBAI, SMT. SITHABAI, SMT. SAROJABAI, SHRI THIPPESWAMY AND SHRI RAMASWAMY AS FOLLOWS: I.T.A. NO.454 / BANG/ 2020 5 I.T.A. NO.454 / BANG/ 2020 6 I.T.A. NO.454 / BANG/ 2020 7 6.1 FURTHER, HE DREW OUR ATTENTION TO T HE AFFIDAVIT BY SHANKAR NAIK. THUS, THE LD. AR SUBMITTED THAT THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN REJECTING THE AFFIDAVITS FILED BY THE ASSESSEE WHICH IS IN CONTRARY TO THESE DOCUMENTS WHICH READ AS UNDER : I.T.A. NO.454 / BANG/ 2020 8 I.T.A. NO.454 / BANG/ 2020 9 I.T.A. NO.454 / BANG/ 2020 10 I.T.A. NO.454 / BANG/ 2020 11 I.T.A. NO.454 / BANG/ 2020 12 I.T.A. NO.454 / BANG/ 2020 13 6.1 THE LEARNED AUTHORISED REPRESENTATIVE HAS ALSO RELIED ON THE ORDER OF THE TRIBUNAL IN ITA NO.1492/MAD/2013 & OTHERS DT.18.11.2014 IN THE CASE OF SHRI JUSTICE P.D. DINAKARAN FOR THE PROPOSITION THAT WHEN THERE IS NO EVIDENCE IN THE DEPARTMENT CONTRARY TO T HE SUBMISSIONS MADE BY THE ASSESSEE WITH REGARD TO EXEMPTED INCOME, IT HAS TO BE ACCEPTED. 6.2 THE LD. AR ALSO RELIED ON THE DECISION OF TRIBUNAL IN THE CASE OF SHRI JUSTICE P.D. DINAKARAN IN ITA NOS.110 & 111/MAD/2015 DT.20.08.2015. 7. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE ASSESSEE DECLARED RS.16.85 LAKHS RECEIVED FROM HUF AS AGRICULTURAL INCOME OUT OF CULTIVATION OF 28.05 ACRES OF LAND. HOWEVER, THE ASSESSEE HAS NOT PRODUCED DIRECT EVIDENCE FOR CULTIVATION OF AGRICULTURAL PRODUCTS OR A NY EVIDENCE FOR SALE OF AGRICULTURAL PRODUCTS. IN VIEW OF THIS, THE ASSESSING OFFICER ACCEPTED THE SUM OF RS.8,55,755 / - AS AGRICULTURAL INCOME AND BALANCE RS.8,29,245/ - WAS CONSIDERED I.T.A. NO.454 / BANG/ 2020 14 AS INCOME FROM OTHER SOURCES. ACCORDING TO THE LD. DR, THE ASSESSING OFFICER HAS GIVEN VERY REASONABLE AMOUNT AS AGRICULTURAL INCOME INSPITE OF NO EVIDENCE PRODUCED BY THE ASSESSEE. HE REQUESTED THE BENCH TO SUSTAIN THE ADDITION MADE BY THE ASSESSING OFFICER WHICH IS VERY REASONABLE. 7.1 THE LEARNED DEPARTMENTAL REPRE SENTATIVE RELIED ON THE DECISION OF TRIBUNAL IN THE CASE OF MADHUSUDHANA REDDY VS. DCIT IN ITA NO. 1601/CHNY/2016 DATED 17/03/2017 WHEREIN IT WAS HELD AS FOLLOWS: 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE THE ASSESSEE STATED THAT HE OWNS VAST AREA OF AGRICULTURAL LAND. THERE WAS NO IOTA OF EVIDENCE REGARDING CULTIVATION CARRIED ON BY THE ASSESSEE WITH REFERENCE TO NATURE OF CROP GROWN, LABOURERS EMPLOYED OR ANY DETAILS OF EXPENDITURE INCURRED OR PRODUCTS SOLD. IN THE ABSENCE OF THESE PARTICULARS IT IS NOT POSSIBLE FOR DEPARTMENT TO GIVE BENEFIT OF AGRICULTURAL INCOME TO THE ASSESSEE. SINCE THE ASSESSEE PLACED NO EVIDENCE REGARDING AGRICULTURAL INCOME THE BURDEN CAST UPON THE ASSESSEE NOT SHIFTED TO THE REVENUE A UTHORITY AS TO PROVE THAT THER E I S NO AGRICULTURAL INCOM E . ACCORDINGLY WE UPHELD THE ORDER OF LOWER AUTHORITIES. THEREFORE THIS GROUND RAISED BY THE ASSESSEE IS DISMISSED. THUS THE APPEAL IN ITA NO. 1726/MDS/16 IS DISMISSED. 8. I HAVE HEARD THE R IVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. T HE FACT THAT THE HUF WAS OWNING AGRICULTURAL LAND MEASURING 28.05 ACRES OF LAND IS NOT DOUBTED. THIS IS ALSO EVIDENCED BY RECORDING OF RIGHTS FROM REVENUE AUTHORITIES FILED BY THE ASSESSEE AND THE EV IDENCES FILED BY THE ASSESSEE WERE NOT EXAMINED BY THE ASSESSING OFFICER. UNLESS IT IS EXAMINED BY THE ASSESSING OFFICER, THE ASSESSING OFFICER CANNOT TAKE ANY DECISION AGAINST THE ASSESSEE. IN INDIA IT CANNOT BE EXPECTED THAT EVERY AGRICULTURIST WILL MA INTAIN THE RECORDS OR PRODUCE DETAILS OF THE EXPENDITURE INCURRED BY HIM. WHEN THE ASSESSING OFFICER I.T.A. NO.454 / BANG/ 2020 15 ACCEPTED RS.8,55,755/ - AS AGRICULTURAL INCOME OUT OF RS.16.85 LAKHS, THERE IS NO REASON TO DISBELI EVE RS.8,29,245/ - . THE HUF IS HAVING VAST AREA OF AGRI CULTURAL LAND WHICH IS SUBJECT TO CULTIVATION AND IT IS EVIDENCED BY THE REVENUE RECORD S. 8.1 FURTHER, THE LD AR SUBMITTED THAT THE ASSESSEE IS A MEMBER IN THE HUF AGRICULTURAL LAND WHICH WAS USED YEAR TO YEAR FOR AGRICULTURAL OPERATION AND DERIVED AGR ICULTURAL INCOME. THE ASSESSING OFFICER HAVING NOT BROUGHT ON RECORD ANY CONTRARY EVIDENCE, THE ASSESSEES CLAIM OF AGRICULTURAL INCOME IS TO BE ACCEPTED. ACCORDINGLY, THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS NO RIGHT TO REDUCE IT WITHOUT BRIN GING ON RECORD ANY MATERIAL AGAINST THE ASSESSEE. FOR THIS PURPOSE, THE LD. AR RELIED ON THE ORDER OF THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF JUSTICE P.D. DINAKARAN & OTHERS IN ITA NOS. 110 & 111/MAD/2015 DATED 28/08/2015 WHEREIN IT WAS HELD AS F OLLOWS: 39. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. A SIMILAR ISSUE WAS CONSIDERED BY THE TRIBUNAL IN ITA NO.1857 TO 1868/MDS/2013 FOR THE ASSESSMENT YEARS 2007 - 08 TO 2009 - 2010, DATED 18.11.2014, WHEREIN IT WAS HELD AS UNDER: - 14.1 IN ALL THE APPEALS, THE REVENUE HAS RAISED COMMON ISSUE. THE ASSESSING OFFICER HAD DIS - ALLOWED PART OF AGRICULTURE INCOME RETURNED BY THE ASSESSEE COMPANIES AND TREATED THE SAME AS INCOME FROM OTHER SOURCES/UN - EXPLAINED INCOME. THE ASSESSING OFFIC ER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE COMPANIES HAVE SHOWN SUBSTANTIAL AMOUNT OF AGRICULTURE INCOME IN THEIR RESPECTIVE RETURNS OF INCOME FOR THE AYS.2007 - 08, 2008 - 09 & 2009 - 10. THE ASSESSING OFFICER HELD THAT THE AGRIC ULTURE INCOME SHOWN BY THE ASSESSEE COMPANIES ARE EXCESSIVE AND UN - REASONABLE AND HENCE, TREATED THE PART OF AGRICULTURE INCOME AS INCOME FROM OTHER SOURCES. THE DETAILS OF AGRICULTURE INCOME RETURNED BY THE COMPANIES AND THE DIS - ALLOWANCE MADE BY THE AS SESSING OFFICERS IN CASE OF RESPECTIVE COMPANIES ARE AS UNDER : I.T.A. NO.454 / BANG/ 2020 16 NAME OF THE COMPANY ASSESSING OFFICER ASST. YEAR AGRI. INCOME SHOWN BY THE COMPANY AGRI. INCOME ACCEPTED BY THE ASSESSING OFFICER TREATED AS INCOME FROM SOURCES M/S. DEARLANDS (I) P. LTD. ITO, COMPANY WARD - 1(1), CHENNAI 2007 - 08 2008 - 09 2009 - 10 5,11,710 8,00,110 11,48,800 2,80,542 2,99,600 3,75,780 2,31,168 5,00,510 7,73,020 M/S. CANAAN GARDENS P. LTD. ITO, COMPANY WARD - 1(1), CHENNAI 2007 - 08 2008 - 09 2009 - 10 7,86,000 11,06,300 11,71,3 00 1,53,330 3,59,153 3,58,810 6,32,670 7,47,147 8,12,490 M/S. AMUDHAM GARDENS P. LTD. ITO, COMPANY WARD - 1(1), CHENNAI 2007 - 08 2008 - 09 2009 - 10 7,86,000 5,27,350 13,14,160 ( - )4,68,032 ( - )8,85,040 ( - )3,36,135 12,54,032 14,12,390 16,50,295 M/S. AMIR THAM GARDENS P. LTD. ITO, COMPANY WARD - 1(1), CHENNAI 2007 - 08 2008 - 09 2009 - 10 75,800 4,03,973 11,36,106 ( - )11,54,886 ( - ) 9,13,471 ( - ) 2,80,484 12,30,686 13,17,444 14,16,590 THE COMPANIES WERE FLOATED IN THE YEAR 2005 AND THE LANDS WERE TRANSFERR ED TO THE ABOVE COMPANIES BY THE RELATIVES OF SHRI P.D.DINAKARAN. THE EXTENT OF LAND TRANSFERRED BY VARIOUS PERSONS TO THESE COMPANIES AND CROPS GROWN THEREON ARE AS UNDER : NAME OF THE COMPANY LAND TRANSFERRED BY EXTENT OF LAND TRANSFERRED TO CO. (IN AC RES) CROPS GROWN M/S. CANAAN GARDENS P. LTD. K. RAJA RABIDEV SHANTI SANGHAMITHRA 20.42 27.85 48.27 MANGO INTER CROP AND VEGETABLES M/S. AMUDHAM GARDENS P. LTD. JACOB WILLIAMS DR. PKA CHANDRASEKAR 16.49 04.75 7,86,000 MANGO, GROUNDNUT, VEGETABLES AND I.T.A. NO.454 / BANG/ 2020 17 M.G. PARIPOORNAM K. RAJA RABIDEV 20.83 1 5.91 57.98 PADDY M/S. AMIRTHAM GARDENS P. LTD. DR. PKA CHANDRASEKAR JACOB WILLIAMS M.G. PARIPOORNAM K. RAJA RABIDEV 13.72 16.59 18.21 03.34 51.86 MANGO, INTER CROP, PADDY , GROUND NUT AND VEGETABLES M/S. DEAR LANDS INDIA P. LTD. JACOB WILLIAMS K. RAJA RABIDEV SHANTI SANGAMITHRA 13.42 08.49 18.37 40.28 VEGETABLES, MANGO AND GROUND NUT THE SHARES IN COMPANIES WERE ALLOTTED TO THE PERSONS WHO TRANSFERRED THEIR LAND TO THE COMPANIES. THE SHARES WER E ALLOTTED IN THE PROPORTION OF LANDHOLDINGS TRANSFERRED. SUBSEQUENTLY, THE COMPANIES LEASED OUT AGRICULTURAL LANDS TO SOME OF ITS SHAREHOLDERS. M/S.CANAAN GARDENS P. LTD. LEASED OUT ITS LAND TO SMT.M.G.PARIPOORNAM, M/S.AMUDHAM GARDENS P.LTD. LEASED OUT IT S LAND TO SHRI K.RAJA RABIDEV AND M/S.DEAR LANDS (INDIA) P.LTD. LEASED OUT ITS LAND TO SHRI JACOB WILLIAMS. AS PER THE LEASE AGREEMENTS, THE PROCEEDS OF AGRICULTURE PRODUCE FROM THE LANDS WAS TO BE SHARED BETWEEN THE COMPANY AND THE LESSEES IN THE RATIO OF 1:2. SINCE, THE ASSESSING OFFICER IN CASE OF THE COMPANIES AND THE LESSEES WERE DIFFERENT, THE ASSESSING OFFICERS FOLLOWED DIFFERENT CRITERIA FOR ASSESSING AGRICULTURE INCOME OF THE COMPANIES AND THE ASSESSEES. THE SAME IS EVIDENT FROM THE TABLE GIVEN AS UNDER: NAME OF THE INDIVIDUAL (LESSEES OF THE LANDS HOLD ASSESSING OFFICER ASST. YEAR AGRI. INCOME SHOWN BY THE LESSEE AGRI. INCOME ACCEPTED BY THE ASSESSING OFFICER TREATED AS INCOME FROM SOURCES I.T.A. NO.454 / BANG/ 2020 18 BY THE COMPANIES) J.WILLIAMS (LESSEE FOR THE LAND S OF M/S. DEARLANDS (I) P. LTD. ITO, COMPANY WARD - 1(6), VELLORE 2007 - 08 2008 - 09 2009 - 10 9,92,500 9,46,418 13,52,100 9,92,500 9,46,418 13,52,100 0 0 0 SMT. M.G. PARIPOORNAM (LESSEE FOR THE LANDS OF M/S. CANAAN GARDENS P. LTD. TO, SALARY WARD1(3), COIM BATORE 2007 - 08 2008 - 09 2009 - 10 9,74,926 13,69,065 13,69,065 5,77,005 NOT ASSESSED 3,48,465 3,97,921 10,20,600 SHRI RAJA RABIDEV FOR THE LANDS OF M/S. AMUDHAM GARDENS P. LTD. ITO, SALARAY WARD - 1( 5 ), C OIMBATORE 2007 - 08 2008 - 09 2009 - 10 0 45,000 6,63,550 NOT ASSESSED NOT ASSESSED 0 6,63,550 A PERUSAL OF THE ABOVE TABLE SHOWS THAT, THE ASSESSING OFFICER OF SHRI J.WILLIAMS, WHO IS THE LESSEE OF M/S.DEAR LAND (INDIA) P.LTD., IN RE - ASSESSMENT PROCEEDINGS AFTER VERIF ICATION OF THE DETAILS, ACCEPTED THE AGRICULTURE INCOME DISCLOSED BY SHRI WILLIAMS IN HIS RETURN OF INCOME FOR THE AYS.2007 - 08, 2008 - 09 AND 2009 - 10. THE REVENUE HAS PLACED ON RECORD DISTRICT COLLECTORS REPORT WHICH IS BASED ON A DETAILED SURVEY OF AGRICUL TURAL LAND CONDUCTED BY THE OFFICIALS OF HORTICULTURE DEPARTMENT, AGRICULTURE DEPARTMENT AND REVENUE DEPARTMENT. A PERUSAL OF REPORT SHOWS THAT THE LAND OWNED BY THE ASSESSEE COMPANIES AND OTHER PERSONS ARE WET LANDS, WITH IRRIGATION FACILITIES. THE LANDS ARE UNDER CULTIVATION WITH INTER - CROP AND HIGHYIELDING FRUIT TREES VIZ., MANGO, GUAVA, SAPOTA ETC., WITH AGE 5 YEARS TO 20 YEARS. THE AGRICULTURE LAND OF ALL THE COMPANIES ARE LOCATED IN THE SAME AREA AND ARE CONTIGUOUS. HAVE SAME TYPE OF SOIL AND IRRIGATI ON FACILITIES, THE CROPS GROWN ARE ALSO THE SAME, THE QUALITY AND YIELD OF CROPS IS MORE OR LESS THE SAME. THEREFORE, THE AGRICULTURE INCOME DERIVED BY ONE ASSESSEE IS INDICATIVE OF THE AGRICULTURE INCOME DERIVED BY THE OTHERS. THE ASSESSING OFFICER OF SHR I JACOB WILLIAMS BEFORE ACCEPTING THE RETURNED INCOME, CONDUCTED FIELD ENQUIRIES, RECORDED THE STATEMENT OF NEIGHBORING FARMERS AND ULTIMATELY CAME TO THE CONCLUSION THAT, APART FROM MANGOES, INTER CROPS AND VEGETABLES ARE GROWN ON THE AGRICULTURE LAND OWN ED BY THE LESSOR COMPANY. BASED ON THE ENQUIRIES AND REPORTS, THE ASSESSING OFFICER OF SHRI JACOB WILLIAMS CAME TO THE CONCLUSION THAT THE INCOME DISCLOSED BY THE ASSESSEE IS REASONABLE AND GENUINE. THE I.T.A. NO.454 / BANG/ 2020 19 ASSESSING OFFICER ALSO ACCEPTED THE YIELD AND RATES O F MANGOES BASED ON THE REPORT OF DISTRICT HORTICULTURE AND REVENUE DEPARTMENTS. ONCE THE AGRICULTURE INCOME FROM THE ADJACENT LAND IS ACCEPTED, THERE IS NO QUESTION AS TO WHY THE AGRICULTURE INCOME FROM THE CONTIGUOUS PARCEL OF LAND SHOULD NOT BE ACCEPTED. WE ARE IN FULL AGREEMENT WITH THE DETAILED FINDINGS OF THE CIT(APPEALS) IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER IN RESPECT OF ALL THE FOUR COMPANIES. 40. IN VIEW OF THE ABOVE OF THE TRIBUNAL, WE ARE INCLINED TO CONFIRM THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. THIS GROUND OF THE REVENUE IS DISMISSED. THE APPEALS OF THE REVENUE IN ITA NOS.154 TO 157/MDS/2015 ARE DISMISSED. 8. 2 THE DECISION RELIED ON BY THE LD. DR IN THE CASE OF MADHUSUDHANA REDDY VS. DCIT IN ITA NO.1601/CHNY/2016 DT.17.03.2017 (TRIB) IS DISTINGUISHABLE AS IN THAT CASE, THERE IS NO IOTA OF EVIDENCE FURNISHED BY THE ASSESSEE IN SUPPORT OF AGRICULTURAL INCOME. HENCE, THE TRIBUNAL REJECTED THE CLAIM OF AGRICULTURAL INCOME OF THE ASSESSEE IN THAT CASE . HOWEVER, IN THE PRESENT CASE, THE ASSESSING OFFICER HIMSELF ACCEPTED THE PORTION OF AGRICULTURAL INCOME AND DENIED ANOTHER PORTION OF AGRICULTURAL INCOME IN SPITE OF EVIDENCE PRODUCED BY THE ASSESSEE FROM THE REVENUE AUTHORITIES AND ALSO SUP PORTED BY THE AFFIDAVITS PRODUCED FROM VARIOUS PARTIES. THE ASSESSING OFFICER REJECTED PART AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE WITHOUT EXAMINING THE AFFIDAVITS AND REVENUE RECORDS WHICH IS NOT PROPER. 8. 3 IN THE CASE OF JUSTICE P.D. DINAKARAN & OTHERS IN ITA NO. 1492/CHNY/2013 AND C.O. NO. 19/2013 DATED 18/11/2014, THE TRIBUNAL HELD AS FOLLOWS: 10. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AT LENGTH AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE I.T.A. NO.454 / BANG/ 2020 20 HAV E ALSO CONSIDERED THE EXTRACTS OF THE PAPER BOOK REFERRED TO, AS WELL AS, THE JUDGMENTS RELIED ON BY BOTH THE SIDES. FOR THE SAKE OF BREVITY, THE FACTS NARRATED HEREIN ABOVE ARE NOT REPEATED AGAIN. BEFORE PROCEEDING WITH THE MERITS OF THE APPEALS, WE TAKE UP THE OBJECTIONS RAISED BY THE ASSESSEES WITH REGARD TO RE - OPENING OF ASSESSMENT. THE ONLY OBJECTION RAISED BY THE ASSESSEE IN RESPECT OF RE - OPENING IS THAT PROCEEDINGS U/S.147 HAVE BEEN INITIATED ON THE BASIS OF INFORMATION NOT PROCURED FROM AUTHORIZED S OURCE. RE - ASSESSMENT PROCEEDINGS ARE BAD IN LAW AS THERE ARE NO REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. 11. WE DO NOT FIND FORCE IN THE ARGUMENT OF THE LD.AR. IT IS A WELL SETTLED LAW THAT FOR INITIATING RE - ASSESSMENT PROCEEDINGS, THE SOU RCE OF INFORMATION IS NOT RELEVANT. IT IS THE INFORMATION AND ITS AUTHENTICITY THAT MATTERS. IF THE ASSESSING OFFICER HAS RELIABLE INFORMATION AND ON THE BASIS OF SAID INFORMATION HE HAS REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT, THE ASSES SING OFFICER IS WELL WITHIN HIS JURISDICTION TO INITIATE RE - ASSESSMENT PROCEEDINGS. IN THE PRESENT CASE, ORIGINAL ASSESSMENT IN RESPECT OF ALL THE ASSESSEES WERE COMPLETED U/S.143(1). THE ASSESSING OFFICER HAD NO OCCASION TO ANALYSE THE TRANSACTIONS AND FO RM ANY OPINION. IT WAS ONLY AFTER THE RECEIPT OF INFORMATION IN THE FORM OF DATA COLLECTED BY JIC THAT THE ASSESSING OFFICER INITIATED RE - ASSESSMENT PROCEEDINGS. AFTER EXAMINING THE INFORMATION RECEIVED, THE ASSESSING OFFICER MIGHT HAVE REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF RAYALA CORPORATION PVT. LTD., (SUPRA) HAS HELD: 47. IN TERMS OF SUB SECTION (1D) INSERTED IN SECTION 143 BY FINANCE ACT 2012, W.E.F., 01.07.2012, NOTWITHSTANDING ANYTHING IN SUB SECTION (1) OF SECTION 143 OF THE I.T. ACT, PROCESSING OF RETURN SHALL NOT BE NECESSARY, WHERE A NOTICE IS ISSUED UNDER SECTION 143(2) OF THE I.T. ACT. IT IS ONLY UNDER SECTION 143(2) OF THE I.T. ACT, THE ROLE OF THE ASSESSING OFFICER COMES IN. THE IN TIMATION GIVEN UNDER SECTION 143(1)(A) OF THE I.T. ACT IS WITHOUT PREJUDICE TO THE PROVISIONS OF SECTION 143(2) OF THE I.T. ACT AND THOUGH THE INTIMATION IS DEEMED TO BE A DEMAND, IT DOES NOT FORECLOSE THE RIGHT OF THE ASSESSING OFFICER TO PROCEED UNDER SE CTION 143(2) OF THE I.T. ACT. IT IS TO BE NOTED THAT THE WORD ASSESSING OFFICER IS CONSPICUOUSLY ABSENT IN SECTION 143(1) OF THE I.T.ACT. THE RESULTANT POSITION IS MADE CLEAR, WHEN WE READ SECTION 143(3) OF THE I.T. ACT. THUS THE PROCESS OF ASSESSMENT IN T HE REAL SENSE OF THE TERM COMMENCES ONLY WHEN NOTICE IS ISSUED UNDER SECTION 143(2) OF THE I.T. ACT. HERE TOO NOTICE HAS TO BE SERVED ON THE ASSESSEE WITHIN THE PERIOD OF ONE YEAR FROM THE END OF THE MONTH, IN WHICH THE RETURN IS FURNISHED. THUS, IF NO NOT ICE IS SERVED WITHIN THE STIPULATED PERIOD OF TWELVE MONTHS, THE ASSESSMENT PROCEEDINGS UNDER SECTION 143 OF THE I.T. ACT COME TO AN END. THUS, THOUGH TECHNICALLY THERE IS NO ASSESSMENT FRAMED IN SUCH A CASE, YET THE PROCEEDINGS AS FAR AS SECTION 143 OF TH E I.T.ACT IS I.T.A. NO.454 / BANG/ 2020 21 CONCERNED, THE SAME STAND TERMINATED. THOUGH THE PROCEDURE OF CENTRALISED PROCESSING UNDER SUB SECTION 1A OF SECTION 143(1) OF THE I.T. ACT FINDS PLACE UNDER THE HEADING 'ASSESSMENT' UNDER SECTION 143 OF THE I.T. ACT, THERE APPEARS TO BE A CLE AR DISTINCTION AND DICHOTOMY IN PROCEDURE. BETWEEN APRIL 1, 1998, AND MAY 31, 1999, SENDING OF AN INTIMATION UNDER SECTION 143(1)(A) OF THE I.T. ACT, WAS MANDATORY. 48. WHILE MAKING AN ASSESSMENT, THE ASSESSING OFFICER IS FREE TO MAKE ANY ADDITION AFTER G RANT OF OPPORTUNITY TO THE ASSESSEE BY MAKING ADJUSTMENTS UNDER THE FIRST PROVISO TO SECTION 143(1)(A) OF THE I.T. ACT, NO ADDITION WHICH IS IMPERMISSIBLE BY THE INFORMATION GIVEN IN THE RETURN COULD BE MADE BY THE ASSESSING OFFICER. THIS IS SO BECAUSE NO OPPORTUNITY IS AFFORDED TO THE ASSESSEE UNDER SECTION 143(1)(A) OF THE I.T. ACT, AND THE ASSESSING OFFICER MERELY PROCEEDS TO ACCEPT THE RETURN AND MAKING PERMISSIBLE ADJUSTMENTS ONLY. THUS AN ASSESSMENT UNDER SECTION 143(3) OF THE I.T. ACT, IS BASED ON A DIFFERENT METHODOLOGY WHICH HAS TO BE BORNE IN MIND WHILE CONSIDERING THE SCOPE, PURPOSE, AMBIT AND IMPORT OF SECTION 147 OF THE I.T. ACT. 49. AS HELD BY THE HON'BLE SUPREME COURT, THE ACKNOWLEDGMENT IS NOT DONE BY ANY ASSESSING OFFICER, BUT MOSTLY BY MINI STERIAL STAFF AND IT CAN HARDLY BE SAID THAT ANY ASSESSMENT IS DONE THEREIN BY THEM. THEREFORE, AS PER THE SCHEME UNDER SECTION 143(1)(A) OF THE I.T. ACT, THE SAME CANNOT BE TREATED AS AN ORDER OF ASSESSMENT IN THE TRUE SENSE OF ITS TERM IT BEING A SUMMARY PROCEDURE. THE INTIMATION UNDER SECTION 143(1)(A) OF THE I.T. ACT, IS DEEMED TO BE A NOTICE OF DEMAND UNDER SECTION 156 OF THE I.T. ACT, FOR THE PURPOSE OF FACILITATING THE MACHINERY PROVISIONS RELATING TO RECOVERY OF TAX. THUS, THE PURPOSE OF SUCH INTIMA TION IS ONLY FOR RECOVERY OF THE TAX AND NO OTHER EXPANSIVE MEANING CAN BE GIVEN TO SUCH DEEMING PROVISION. THEREFORE, THE HON'BLE SUPREME COURT HELD THAT THERE BEING NO ASSESSMENT UNDER SECTION 143(1)(A) OF THE I.T. ACT, THE QUESTION OF CHANGE OF OPINION, AS CONTENDED, DOES NOT ARISE. 50. THE DIVISION BENCH OF THIS COURT IN THE CASES OF WCI (MADRAS) (P) LTD. V. ASSISTANT COMMISSIONER OF INCOME - TAX REPORTED IN [2010] 324 ITR 181(MAD), AND COMMISSIONER OF INCOME - TAX V. RAVINDRAN PRABHAKAR REPORTED IN [2010] 326 ITR 363, HELD THAT THERE WAS ONLY PROCESSING UNDER SECTION 143(1) OF THE I.T. ACT, SUCH INTIMATION CANNOT BE TREATED AS ASSESSMENT ORDER AND REASSESSMENT WAS HELD TO BE VALID IN SUCH CASES AND HENCE THE ARGUMENT OF CHANGE OF OPINION WOULD NOT APPLY. A S HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF ASST. CIT V. RAJESH JHAVERI STOCK BROKERS P. LTD. [2007] 291 ITR 500(SC), THE LEGISLATIVE INTENT IS VERY CLEAR FROM THE USE OF THE WORD INTIMATION AS SUBSTITUTED FOR ASSESSMENT THAT TWO DIFFERENT CONCEPTS EMERGED. I.T.A. NO.454 / BANG/ 2020 22 12. THE LD.AR ON THE OTHER HAND HAS PLACED RELIANCE ON THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ORIENT CRAFT (SUPRA). THE HON'BLE HIGH COURT IN THE PECULIAR FACTS OF THAT CASE OBSERVED THAT REASONS TO BELIEVE, CANNOT HAVE TWO MEANINGS ONE APPLICABLE IN ASSESSMENT MADE U/S.143(3) AND ANOTHER APPLICABLE U/S.143(1). IN ORIENT CRAFT NOTICE U/S.148 OF THE ACT WAS ISSUED FOR REOPENING ASSESSMENT ON THE GROUND THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. WHILE RECOR DING THE REASONS FOR REOPENING, THE ASSESSING OFFICER STATED THAT ON GOING THROUGH THE RETURN OF INCOME, IT REVEALED THAT WHILE DEDUCTING 90% OF OTHER INCOME FROM THE PROFITS OF THE BUSINESS, PREMIUM ON SALE OF QUOTA INCLUDED IN THE SALE, WAS NOT CONSIDERE D. THE HONBLE COURT AFTER DISCUSSION VARIOUS JUDGMENTS RENDERED BY THE HON'BLE SUPREME COURT OF INDIA HELD, THAT THE REASON DISCLOSED BY THE ASSESSING OFFICER STATING ON GOING THROUGH THE RETURN OF INCOME DOES NOT SATISFY THE EXPRESSION REASON TO BELIE VE. THUS, IN THE SAID CASE, RE - ASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION GIVEN IN THE RETURN, NO TANGIBLE MATERIAL CAME TO THE POSSESSION OF THE ASSESSING OFFICER AFTER THE ISSUE OF INTIMATION U/S.143(1). WHEREAS, IN THE PRESENT CA SE, ORIGINAL ASSESSMENT WAS MADE U/S.143(1). THE PROVISIONS OF SECTION 147 FOR RE - OPENING WERE INVOKED AFTER THE INFORMATION COLLECTED BY JIC WAS PASSED ON TO THE ASSESSING OFFICER OF THE ASSESSEE. THE ASSESSING OFFICER HAD SUBSTANTIAL MATERIAL TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. IN THIS BACKGROUND, WE ARE OF CONSIDERED VIEW THAT THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT CANNOT BE APPLIED IN THE CASE OF ASSESSEE. IN VIEW OF THE WELL SETTLED LAW AND THE FACTS OF THE CASE, THE CROSS - OBJECTIONS F ILED BY THE ASSESSEE ARE DISMISSED AND THE RE - OPENING OF ASSESSMENT IS HELD TO BE JUSTIFIED. 13. ITA NO.1492/MDS/2013: THE ASSESSING OFFICER IN RE - ASSESSMENT PROCEEDINGS MADE ADDITION OF RS. 43.26 LAKHS IN THE INCOME RETURNED BY THE ASSESSEE. THE ORIGINAL LIST OF ADDITIONS MADE BY THE ASSESSING OFFICER IS AS UNDER: I. ASSESSEES CLAIM OF AGRICULTURE INCOME WAS DISALLOWED AND AGRICULTURAL RECEIPTS OF RS. 2,77,310/ - WERE TREATED AS INCOME FROM OTHER SOURCES; II. GIFTS FROM SHRI JACOB WILLIAMS RS. 1,05,000/ - DIS - ALLOWED AND TREATED AS INCOME FROM OTHER SOURCES; III. AGRICULTURAL INCOME OF WIFE OF THE ASSESSEE RS. 2,82,750/ - ADDED IN THE TOTAL INCOME OF THE ASSESSEE; IV. GIFTS RECEIVED BY ASSESSEES WIFE FROM HER BROTHER RS. 15,00,000/ - ADDED IN THE INCOME OF THE ASSESSEE; V. CASH DEPOSITS IN THE ACCOUNT OF ASSESSEES WIFE RS. 8,42,000/ - ADDED IN THE INCOME OF THE ASSESSEE; VI. CASH DEPOSITS IN THE ACCOUNTS OF ASSESSEES DAUGHTERS I.T.A. NO.454 / BANG/ 2020 23 ( RS. 2,25,000 AND RS. 3,50,600/ - ) ADDED IN THE INCOME OF THE ASSESSEE; VII. AGRICU LTURE INCOME OF ASSESSEES BROTHER - IN - LAW RS. 3,60,820/ - , MOTHER - IN - LAW RS. 3,18,750/ - AND ASSESSEES SISTERS HUSBAND RS. 49,330/ - WERE ADDED IN THE INCOME OF THE ASSESSEE; IN FIRST APPEAL BY ASSESSEE, THE CIT(APPEALS) DELETED ALL THE ADDITIONS. NOW, THE RE VENUE HAS ASSAILED THE FINDINGS OF CIT(APPEALS) IN ITS APPEAL BEFORE THE TRIBUNAL. 13.1 THE FIRST ISSUE RAISED IN THE APPEAL IS WITH REGARD TO AGRICULTURE INCOME. THE REVENUE HAS TREATED THE AGRICULTURE INCOME OF THE ASSESSEE AS INCOME FROM OTHER SOURCES . THE LD.STANDING COUNSEL FOR THE REVENUE HAS CONTENDED THAT THE LAND OWNED BY THE ASSESSEE IS NOT CULTIVABLE AND THUS, COULD NOT PRODUCE HUGE YIELD AS CLAIMED BY THE ASSESSEE. IT IS NOT DISPUTED THAT THE ASSESSEE OWNS LAND MEASURING 48.38 ACRES. AS PER R EVENUE RECORDS, MAJORITY OF LANDS ARE WET LANDS. THE REVENUE HAS PLACED ON RECORD DISTRICT COLLECTORS REPORT AT PAGE 52 TO 128 OF THE PAPER BOOK. AS PER THE REPORT, THE LAND OF THE ASSESSEE IS CULTIVABLE, IRRIGATED, HAVE HIGH YIELDING FRUIT BEARING TREES AND THUS HAVE POTENTIAL OF GENERATING INCOME `9,000/ - TO `10,000/ - PER ACRE. A FURTHER PERUSAL OF COLLECTORS REPORT SHOWS THAT MANGO, AMLA, SAPOTA AND GUAVA TREES ARE STANDING ON THE LAND OWNED BY THE ASSESSEE. THE COLLECTOR IN HIS REPORT HAS FURTHER CON FIRMED INTERCROP CULTIVATION. THUS, THE STAND OF THE ASSESSEE THAT HE IS GETTING AGRICULTURE YIELD OF RS. 4,000 TO RS. 5,000/ - PER ACRE IS JUSTIFIED. THE LD.STANDING COUNSEL FOR THE REVENUE HAS NOT BEEN ABLE TO CONTROVERT THE OBSERVATIONS GIVEN IN THE SURVEY REPORT WHICH HAS BEEN PLACED ON RECORD IN THE FORM OF PAPER BOOK BY REVENUE ITSELF. THE CIT(APPEALS) WHILE GIVING WELL REASONED FINDINGS ON THE ISSUE HAS HELD THAT THE ASSESSING OFFICERS CONCLUSIONS ARE ONLY PRESUMPTIONS AND ARE NOT BASED ON ANY MATERIAL FACTS. WE SEE NO REASON TO DIFFER WITH THE FINDINGS OF CIT(APPEALS). THIS GROUND OF APPEAL OF THE REVENUE IS ACCORDINGLY DISMISSED. 13.2 THE NEXT ISSUE IN APPEAL IS WITH REGARD TO GIFT OF RS. 1,05,000/ - FROM MR.JACOB WILLIAMS. MR. WILLIAMS HAS CONFIRMED T HE FACT OF MAKING GIFT. IT IS UNDISPUTED THAT THE DONAR AND THE ASSESSEE ARE CLOSELY RELATED. THE GIFT HAS BEEN MADE BY WAY OF DEMAND DRAFT. THE DONOR HAS BEEN ABLE TO SHOW THE SOURCE OF INCOME FOR MAKING THE GIFTS. SINCE, THE ASSESSEE HAS BEEN ABLE TO SHO W THE SOURCE OF GIFT AND THE CREDITWORTHINESS OF THE DONOR HAS ALSO BEEN ESTABLISHED, THE ASSESSING OFFICER HAS ACTED IN AN ARBITRARY MANNER & WITHOUT ANY JUSTIFICATION IN MAKING THE ADDITION OF GIFT AMOUNT AS INCOME FROM OTHER SOURCES. WE DO NOT FIND AN Y ERROR IN THE FINDINGS OF THE CIT(APPEALS) ON THIS ISSUE. ACCORDINGLY, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. I.T.A. NO.454 / BANG/ 2020 24 13.3 THE NEXT ISSUE IN APPEAL IS WITH REGARD TO ADDITION OF AGRICULTURE INCOME OF DR.VINODINI DINAKARAN, WIFE OF ASSESSEE, IN THE IN COME OF ASSESSEE. THE ASSESSING OFFICER HAS INCLUDED THE INCOME OF DR.VINODINI DINAKARAN, IN THE HANDS OF ASSESSEE ON THE GROUND THAT DR.VINODINI DINAKARAN DOES NOT HAVE INDEPENDENT SOURCE OF INCOME AS SHE HAILS FROM MODEST FAMILY. THE REVENUE HAS FAILED T O TAKE INTO CONSIDERATION THE FACT THAT DR.VINODINI DINAKARAN IS A QUALIFIED MEDICAL PRACTITIONER AND IS WORKING WITH CSI KALYANI HOSPITAL. THUS, SHE IS HAVING INDEPENDENT SOURCE OF INCOME. IT IS ALSO AN ADMITTED FACT THAT DR.VINODINI DINAKARAN IS HAVING M ORE THAN 29 ACRES OF AGRICULTURE LAND IN HER NAME. THE SAID LAND IS CULTIVABLE AND SHE IS CARRYING ON AGRICULTURE OPERATION THEREON. SHE IS HAVING MANGO ORCHED WITH 296 MANGO TREES OF HIGH YIELDING VARIETIES. THE CIT(APPEALS) IN HIS ORDER HAS CATEGORICALLY HELD THAT DR.VINODINI DINAKARAN IS HAVING INDEPENDENT SOURCE OF INCOME FROM HER PROFESSION AS WELL AS AGRICULTURE INCOME. THE LD.COUNSEL FOR THE REVENUE HAS NOT BEEN ABLE TO CONTROVERT THE FINDINGS OF CIT(APPEALS). THUS, IN VIEW OF THE UNREBUTTED FINDINGS , THE ARGUMENTS RAISED BY THE LD. STANDING COUNSEL THAT THE WIFE OF ASSESSEE IS NOT HAVING INDEPENDENT SOURCE OF INCOME DOES NOT HOLD GROUND. THE CIT(APPEALS) HAS RIGHTLY HELD THAT THE ASSESSING OFFICERS ACTION OF ASSESSING DR.VINODINI DINAKARANS AGRICUL TURE INCOME IN THE HANDS OF THE ASSESSEE IS ONLY ON PRESUMPTIONS AND NOT BASED ON ANY MATERIAL FACTS AND EVIDENCES. WE CONFIRM THE FINDINGS OF CIT(APPEALS) ON THE ISSUE. ACCORDINGLY, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 13.4 THE NEXT GROUND ON WHICH THE REVENUE HAS ASSAILED THE FINDINGS OF CIT(APPEALS) IS WITH REGARD TO GIFTS RECEIVED BY WIFE OF THE ASSESSEE FROM HER BROTHER SHRI RAJA RABIDEV. THE ASSESSING OFFICER MADE ADDITION OF RS. 15,00,000/ - IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF GIF TS RECEIVED BY HIS WIFE FROM HER BROTHER. THE WIFE OF THE ASSESSEE IS AN INDEPENDENT ASSESSEE HAVING SEPARATE PERMANENT ACCOUNT NUMBER (PAN) AND HAS BEEN FILING HER SEPARATE RETURN OF INCOME. SHE IS INDEPENDENTLY ASSESSED TO TAX. THE TOTAL SUM OF RS. 15,00, 000/ - HAS BEEN GIFTED BY HER BROTHER RAJA RABIDEV ON DIFFERENT DATES I.E., RS.7 ,00,000/ - ON 07 - 01 - 2004, RS. 3,00,000/ - ON 16 - 03 - 2004 AND RS. 5,00,000/ - ON 08 - 01 - 2004. HE IS A CLOSE BLOOD RELATIVE OF DR.VINODINI DINAKARAN. THE DONOR HAS BEEN ABLE TO EXPLAIN T HE SOURCE OF GIFTS. ONCE THE IDENTITY AND THE CREDITWORTHINESS OF THE DONOR IS ESTABLISHED, THERE IS NO REASON TO DOUBT THE VERACITY OF THE GIFT. IN VIEW OF THE FACT THAT THE WIFE OF THE ASSESSEE IS FILING HER SEPARATE RETURN OF INCOME AND THE FACT THAT IT HAS BEEN CLEARLY ESTABLISHED THAT THE GIFTS WERE GIVEN BY SHRI RAJA RABIDEV TO HER SISTER - DR.VINODINI DINAKARAN, THERE IS NO QUESTION OF MAKING I.T.A. NO.454 / BANG/ 2020 25 ADDITION OF THE SAID GIFTS IN THE HANDS OF THE ASSESSEE. THE CIT(APPEALS) HAS RIGHTLY DELETED THE ADDITION MADE BY ASSESSING OFFICER . THEREFORE, THIS GROUND OF APPEAL OF REVENUE IS DISMISSED BEING DEVOID OF MERIT. 8.5 IN THE PRESENT CASE ALSO THE ASSESSEE HAS FILED AMPLE EVIDENCE SUPPORTING THE AGRICULTURAL INCOME EARNED BY HUF WHERE THE ASSESSEE IS A MEMB ER WHICH ARE SUPPORTED BY THE AFFIDAVIT AND REVENUE RECORDS. THE LOWER AUTHORITIES ARE NOT CONTROVERTED THE GENUINENESS OF THE STATEMENTS IN AFFIDAVIT AND WITHOUT ANY BASIS THE ASSESSING OFFICER AS WELL AS THE CIT (APPEALS) OVERLOOKED THESE EVIDENCES WHIC H IS NOT JUSTIFIED AS HELD BY HON'BLE SUPREME COURT IN THECASE OF M/S. MEHTA PRAKASH VS. CIT (1956) AIR 554 . T HE ASSESSING OFFICER AS WELL AS THE FIRST APPELLATE AUTHORITY WHO HEARD THE CASE WITHOUT CROSS EXAMINING THE DEPONENT IN THE AFFIDAVIT WITH REFER ENCE TO THEIR STATEMENTS IN THE AFFIDAVIT, THEY REJECTED THESE EVIDENCES, WHICH IS NOT PROPER. FURTHER, THE ASSESSEE HAS GIVEN A BONA FIDE EXPLANATION THAT HE HAS RECEIVED THE FUNDS FROM HUF IN RETURN THE HUF HAS EARNED THE AGRICULTURAL INCOME. THESE FAC TS CANNOT BE OVERLOOKED BY THE LOWER AUTHORITIES WITHOUT BRINGING ANY EVIDENCE AGAINST THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE COULD NOT BE ASSAILED BY A PURELY IMAGINERY CALCULATION OF THE NATURE MADE BY THE ASSESSING OFFICER OR THE CIT (APPEALS). IN OUR OPINION, THERE IS NO REASON TO REDUCE THE AGRICULTURAL INCOME AS IT IS NOT SUPPORT ED BY ANY EVIDENCE TO SHOW THAT PART OF THE INCOME IS EARNED BY THE ASSESSEE FROM ANY OTHER SOURCES. THE ASSESSEE HAVING GIVEN REASONABLE EXPLANATION, THE LOWER AUTH ORITIES COULD NOT, BY APPLYING THE RULE OF THUMB I.T.A. NO.454 / BANG/ 2020 26 DISCARD IT SO FAR AS AGRICULTURAL INCOME IS CONCERNED AND CANNOT ACT ON MERE SURMISE. HENCE, W E ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11TH SEPTEMBER, 20 20. SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER PLACE: BENG A LURU DATED: 11TH SEPTEMBER, 20 20 . REDDY GP / GJ COPY TO: 1 . SHRI SHANKAR NAIK, 873 - 7 - 23, JAYANAG AR, C BLOCK, NITUVALLI, DAVANAGARE. 2. THE ITO, WARD - 3, DAVANAGARE . 3. THE COMMISSIONER OF INCOME - TAX (AP P EALS) , DAVANAGARE . 4. THE PR. COMMISSIONER OF INCOME - TAX, BENG A LURU. 5. D. R., I.T.A.T., BANGALORE BENCH, BENG A LURU. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., BENGULURU