JCIT, Meerut V. M/s. Prasandi Builders PVt. Ltd., Meerut

ITA 4647/DEL/2012

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5738 (ITAT-DELHI)
• Duration Of Justice: 9 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 30-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Non-deduction of tax; Commercial expediency; TDS
• Section: 43CA; 50C; 142(1); 40(a)(ia); 194C; 195; 143(2); 264; 13; 68

Judgement Text

1 ITA NO. 4647/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI R. K. PANDA ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 4647/DEL/2012 (A.Y 2009-10) (THROUGH VIDEO CONFER ENCING) JCIT RANGE-2, AAYAKAR BHAWAN, BHANSALI GROUND, MEERUT (APPELLANT) VS PRASANDI BUILDERS PVT. LTD. 110, KRISHNA PLAZA, GARH ROAD, MEERUT AAACP8262G (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 11/06/2012 PASSED BY CIT(A)-MEERUT FOR ASSESSMENT YEAR 2009-1 0. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- REVISED GROUNDS 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DIRECTING THE AO TO GIVE BENEFIT OF COST INDEX AND TAX THE SURPLUS AS LONG TERM CAPITAL GAIN ON SALE O F SHOP G-6 IGNORING THE FACT THAT THE AO HAD MADE THE ADDITION' ONLY ON A/C OF D IFFERENCE BETWEEN THE MARKET PRICE AND ALLEGED ACTUAL SALE PRICE SHOWN BY THE ASSESSEE AGAINST APPELLANT BY SH. K. SAMPATH, ADV & SH. V. RAJ KUMAR, ADV RESPONDENT BY SMT. SUSHMA SINGH, CIT DR DATE OF HEARING 14.07.2021 DATE OF PRONOUNCEMENT 20 .09.2021 2 ITA NO. 4647/DEL/2012 WHICH THE RELATED EXPENSE HAD ALREADY BEEN CLAIMED BY THE ASSESSEE AND ALLOWED BY THE A.O. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 2.50,0 0,000/- MADE BY THE AO. U/S 68 OF THE IT ACT, 1961 FOLLOWING THE RATION DOW N BY THE HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (P) LTD. (2008) 216-CTR-195, IGNORING THE FACT THAT THE IDENTITY OF THE ALLEGED SHARE HOLDERS REMAINED UNPROVED AND THE BOOK VALUE OF THE SHARES WAS RS.120/- ONLY AS AGAIN ST RS.5,000/- PER SHARE ? 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION BY THE A.O. O N ACCOUNT OF. SALE OF BUSINESS PROPERTY BELOW THE MARKET PRICE OUT OF TH E UNSOLD STOCK RELATING TO YEAR ENDING ON 31/03/2009 IGNORING THE FACT THAT TH E TRANSACTIONS WERE SHOWN AT PRICE MUCH BELOW THE CIRCLE RATES ? 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.2,83,28 ,690/- BEING THE LAND DEVELOPMENT EXPENSES ALLEGEDLY PAID BY THE ASSESSEE FOR THE WORK CONTRACT STATED TO HAVE BEEN RECEIVED FROM ERA LAND MARK (IN DIA) LTD. FOR RS. 2,97,53,359/- IGNORING THE FACTS THAT NO TDS WAS MA DE ON CONTRACT PAYMENT, AND THE ENTIRE EXPENSES WERE UNVERIFIABLE. 5. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN TREATING THE INCOME FROM AGRICULTU RE AGAINST THE INCOME ASSESSED UNDER THE HEAD OTHER SOURCES IGNORING TH E FACT THAT THE ASSESSEE FAILED TO ESTABLISH ANY ACTIVITY RELATING TO AGRICU LTURE. 3. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF CONSTRUCTION, BUILDERS AND PROPERTY DEVELOPERS. THE RETURN OF INC OME WAS FILED BY THE ASSESSEE COMPANY ON 28.09.2009 DECLARING INCOME OF RS. 15,18,269/- AND CLAIMING REFUND OF RS. 4,32,383/-. THE CASE WAS SEL ECTED FOR SCRUTINY AND NOTICES UNDER SECTION 143(2) DATED 23.09.2010 AND U /S 142(1) DATED 14.07.2011. THE ASSESSING OFFICER AT THE TIME OF AS SESSMENT PROCEEDINGS ASKED 3 ITA NO. 4647/DEL/2012 VARIOUS DETAILS RELATED TO SALE OF STOCK AT KRISHNA PLAZA PROJECT AND DETAILS OF ITS COMPLETION ALONG WITH OTHER DETAILS RELATED TO THE BUSINESS OF THE ASSESSEE. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FURNI SHED THE DETAILS INCLUDING THAT OF KRISHNA PLAZA PROJECT AND DWARKA PROJECT. THE ASSESSING OFFICER OBSERVED REGARDING SALE OF SHOP NO. G-6. WHICH IS F IXED ASSET THAT THE SALE WAS MADE TO SMT. UPASNA YADAV AT RS. 9,15,000/- WHERE A S THE FIXED ASSET WERE SHOWN AT RS. 3,60,000/-. STAMP DUTY VALUE OF THE P ROPERTY TRANSFERRED WAS SHOWN AT RS. 15,12,000/- ON THE DATE OF TRANSFER AS MENTIONED IN SALE DEED. THE ASSESSING OFFICER HELD THAT ASSESSEE COULD NOT PROVE THE COMMERCIAL EXPEDIENCY OR DISTRESS SALE THAT TO THE FAMILY MEMB ER AND HAS SOLD THE SHOP AT THE PRICE LOWER THAN THE STAMP VALUE AS PER PROVISI ONS OF SECTION 50C OF THE ACT. THEREFORE, U/S 50C THE ASSESSING OFFICER MADE ADDITION OF RS. 5,97,000/-. 4. THE ASSESSING OFFICER FURTHER MADE ADDITION OF R S. 2,50,00,000/- TOWARDS SHARE CAPITAL/SHARE PREMIUM RELATING TO APU RVA LEASING FINANCE & INVESTMENT COMPANY AND SHALINI HOLDINGS LTD. THEREB Y STATING THAT THE SAID TRANSACTION IS NOTHING BUT AN ARRANGEMENT AND AN AT TEMPT TO CONVERT UNACCOUNTED MONEY TO THE ASSESSEE COMPANY UNDER THE GARB OF SHARE CAPITAL AND SHARE PREMIUM AS BOTH THE COMPANIES ARE NOT AV AILABLE ON THE GIVEN ADDRESS AND ASSESSEE FAILED TO ESTABLISH THE IDENTI TY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSITIONS. THE ADDITION WAS M ADE U/S 68 OF THE ACT. 5. THE ASSESSING OFFICER FURTHER MADE ADDITION OF RS. 72,30,000/- BEING UNDISCLOSED SALE RELATING TO SALE OF PROPERTIES WHI CH ARE BELOW MARKET PRICE. THE ASSESSING OFFICER ALSO MADE ADDITION OF RS. 2, 83,28,690/- RELATING TO DISALLOWANCE ON ACCOUNT OF NON-DEDUCTION OF TAX ON PAYMENTS OF EXPENDITURE MORE SPECIFICALLY THAT OF DEVELOPMENT EXPENDITURE. FURTHER, THE ASSESSING OFFICER MADE ADDITION OF RS.4,15,250/- RELATED TO A GRICULTURAL INCOME AND RS. 1,48,75,000/- RELATING TO ADVANCE FROM CUSTOMERS FO R WHICH THERE WAS NO SPECIFIC MATERIAL PRODUCED BY THE ASSESSEE. THE AS SESSING OFFICER ALSO MADE ADDITION OF RS. 16,82,610/- RELATING TO DIFFERENCE OF SALE AMOUNT IN ABSENCE OF 4 ITA NO. 4647/DEL/2012 DETAILS WHERE THE ASSESSEE HAS TAKEN THE SALE VALU E FOR UNSOLD STOCK. THE ASSESSING OFFICER FINALLY MADE ADDITION OF RS.7,29, 144/-ON ACCOUNT OF CONTRAVENTION TO PROVISIONS OF SECTION 40A (V)(III) . 6. BEING AGGRIEVED BY THE PENALTY ORDER, THE ASSESS EE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF TH E ASSESSEE. 7. AS REGARDS TO GROUND NO. 1, THE LD. DR SUBMITT ED THAT THE ASSESSING OFFICER HAS APPLIED CIRCLE RATE. THE ASSESSING O FFICER HAS GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE COULD NOT PROVE THE COMME RCIAL EXPEDIENCY OR DISTRESS SALE MADE TO A FAMILY MEMBER. THE ASSESSE E ALSO COULD NOT PROVE THAT THE PROPERTY WAS NOT WORTH FETCHING MARKET VALUE. S MT. UPASNA DEVI TO WHOM THE SHOP WAS SOLD IS THE WIDOW OF MAJOR NAVEEN YADA V, WHO IS THE ELDER SON OF COLONEL M. S. YADAV, THE ELDER BROTHER OF THE MANAG ING DIRECTOR, VIJAY PAL YADAV. THUS, THE ASSESSING OFFICER HAS RIGHTLY MAD E ADDITION OF RS.5,97,000/-. THE LD. DR FURTHER SUBMITTED THAT THE CIT(A) HAS ER RED IN DIRECTING THE AO TO GIVE BENEFIT OF COST INFLATION INDEX AND TAX THE SU RPLUS AS LONG TERM CAPITAL GAIN ON SALE OF SHOP G-6 IGNORING THE FACT THAT TH E AO HAD MADE THE ADDITION' ONLY ON A/C OF DIFFERENCE BETWEEN THE MARKET PRICE AND ALLEGED ACTUAL SALE PRICE SHOWN BY THE ASSESSEE AGAINST WHICH THE RELATED EXP ENSE HAD ALREADY BEEN CLAIMED BY THE ASSESSEE AND ALLOWED BY THE A.O. 8. THE LD. AR SUBMITTED THAT GROUND NO. 1 IS RAISED AGAINST THE CIT(A)'S DIRECTION TO THE AO TO RE-COMPUTE THE LONG TERM CAP ITAL GAIN AFTER PROVIDING BENEFIT FOR COST INFLATION INDEXATION TO THE ASSESS EE. THE FULL FACTS LEADING TO THE ADDITION ARE NARRATED BY THE AO ON PAGE 7 OF THE AS SESSMENT ORDER. THE CIT(A) HAS GRANTED THE NOMINAL RELIEF IN TERMS OF HIS OBSE RVATIONS IN PARA 6.4 ON PAGE 5 OF THE ORDER. THE IRONY OF THE MATTER IS THAT THE AO FAILED TO REMEMBER WHILE PROPOSING THE ADDITION THAT HE HIMSELF HAD APPRECIA TED THE RUDIMENTARY FACT IN THE OPENING PORTION OF THE ASSESSMENT ORDER THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION, BUILDERS A ND PROPERTY DEVELOPMENTS. 5 ITA NO. 4647/DEL/2012 THE CIT(A) PASSED THE ORDER ON 11.06.2012. THE INCO ME-TAX ACT PROVIDED FOR TAXATION OF THE DIFFERENCE BETWEEN THE CIRCLE RATE AND THE ACTUAL SALE CONSIDERATION OF PROPERTY BY A TRADER THROUGH THE I NSERTION OF SECTION 43CA W.E.F. 01.04.2004. MUCH BEFORE THIS, THE RESPONDENT ASSESSEE HAD POINTED OUT TO THE AO THAT THE MUMBAI TRIBUNAL IN INDERLOK HOTE LS PRIVATE LTD. VS. ITO 318 ITR 234 (AT) HAD EXPLICITLY HELD THAT SECTION 50C O F THE ACT HAD NO APPLICATION TO THE SALE OF STOCK IN TRADE. THE CIT(A) OUGHT TO HAVE ABIDED BY THE RATIO OF THE DECISION OF THE MUMBAI TRIBUNAL AS CITED AND RELIED UPON BEFORE HIM BY THE ASSESSEE. ACCORDINGLY, THEREFORE, IT IS PLEADED THA T THE DIRECTIONS OF THE CIT(A) BE AMENDED TO PROVIDE RELIEF TO THE ASSESSEE ON THI S POINT AS PER THE APPLICABLE LAW. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT T HE ASSESSEE SUBMITTED BEFORE THE REVENUE AUTHORITIES THAT THE ASSESSEE SOLD THE SHOP AT MARKET PRICE TO A CLOSE RELATIVE WITH A GUARANTEE THAT IT WOULD FETCH GOOD RENT, HOWEVER, IT WAS LYING VACANT AND THE ASSESSING OFFICER APPLIED SECT ION 50C OF THE ACT. THE ASSESSEE TRANSFERRED THE SAID SHOP IN THE ASSETS AN D NOT CLAIMED IT AS STOCK YEAR AFTER YEAR. THE GENUINENESS OF THE TRANSACTION WAS NEVER DOUBTED BY THE ASSESSING OFFICER, AND THE BUYER SMT. UPASNA DEVI I S THE DAUGHTER-IN-LAW OF ELDER BROTHER OF THE ASSESSEE. THE ASSESSING OFFICE R HAS APPLIED SECTION 50C OF THE ACT, BUT THE CIT(A) HAS NOT GIVEN ANY FINDING A S TO WHY THE COST INFLATION INDEX BENEFIT HAS TO BE GIVEN TO THE ASSESSEE. THER EFORE, IT NEEDS VERIFICATION OF THE ENTIRE ISSUE. THUS, WE ARE REMANDING BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR PROPER ADJUDICATION AND DECID E THE SAME AFRESH AS PER LAW. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTU NITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. GROUND NO. 1 OF THE REVENUES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 10. AS REGARDS GROUND NO. 2, THE LD. DR SUBMITTED T HAT THE INVESTIGATION WING HAS GIVEN A CLEAR REPORT THAT THESE PARTIES AR E NON-EXISTENT AND ARE 6 ITA NO. 4647/DEL/2012 ACCOMMODATION ENTRY PROVIDING COMPANIES. THE LD. A R FURTHER SUBMITTED THAT THE ASSESSEE AT NO POINT OF TIME HAS GIVEN THE BASI S AS TO HOW THE BOOK VALUE OF SHARES WAS INCREASED FROM RS. 124 TO RS. 5000 PER S HARE. THE ASSESSING OFFICER HAS RIGHTLY MADE ADDITION OF RS. 2,50,00,00 0/-. THE LD. DR FURTHER SUBMITTED THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,50,00,000/- MADE BY THE AO. U/S 68 OF THE IT ACT, 1961 FOLLOWING THE RATIO DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF LO VELY EXPORTS (P) LTD. (2008) 216-CTR-195, IGNORING THE FACT THAT THE IDEN TITY OF THE ALLEGED SHARE HOLDERS REMAINED UNPROVED AND THE BOOK VALUE OF THE SHARES WAS RS.120/- ONLY AS AGAINST RS.5,000/- PER SHARE. 11. THE LD. AR SUBMITTED THAT GROUND NO. 2 IS WITH REFERENCE TO THE DELETION OF ADDITION OF RS. 2.50 CRORES MADE ON ACCOUNT OF S HARE CAPITAL BY THE AO IN ASSESSMENT. THE LD. AR SUBMITTED THAT THE ASSESSEE COMPANY, WHICH WAS INCORPORATED IN 1995, HAD PURCHASED LAND FROM AWAS VIKAS PARISHAD, U.P. AT MEERUT IN 1999 WHICH, FROM TIME TO TIME, WAS BEING CARRIED OVER AS STOCK IN TRADE IN ITS ACCOUNTS. DUE TO THE DEPRESSION IN THE REAL ESTATE BUSINESS, THE ASSESSEE WAS UNABLE TO LIQUIDATE THE PROPERTIES CON STRUCTED ON THOSE LANDS, SWIFTLY OR CONVENIENTLY. HOWEVER, THE VALUE OF LAND S, AS SUCH, HAD CONSIDERABLY APPRECIATED BY THE TIME OF THE ADVENT OF THE SUBJEC T ASSESSMENT YEAR. 11.1. THE LD. AR SUBMITTED THAT IN ORDER TO BE ABLE TO MEET THE FINANCIAL OBLIGATIONS OF THE BUSINESS, THE ASSESSEE COMPANY I SSUED SHARES TO TWO COMPANIES VIZ., SHALINI HOLDINGS LTD. AND APOORVA L EASING FINANCE AND INVESTMENT COMPANY LTD. WHICH BELONGED TO THE RELAT IVES OF THE DIRECTORS OF THE ASSESSEE COMPANY. THE FORMER HAD FREE RESERVES OF RS. 112.12 CRORES AND THE LATTER OF RS. 14.86 CRORES. THE ABOVE NAMED INV ESTMENT COMPANIES HAD ALSO MADE SIMILAR INVESTMENTS IN ANOTHER GROUP COMPANY O F THE ASSESSEE KNOWN AS EMM VEE INFRASTRUCTURES INDIA PRIVATE LTD. IN THE A SSESSMENT OF THE EMM VEE INFRASTRUCTURES, SIMILAR OBJECTIONS HAD BEEN TAKEN BY THE CONCERNED AO TO THE INDUCTION OF SHARE CAPITAL THEREIN. THE OBJECTIONS AS TAKEN IN ASSESSMENT WERE 7 ITA NO. 4647/DEL/2012 ALL OVERRULED IN APPEAL BY THE CIT(A) IN THAT CASE. WHEN THAT ISSUE CAME UP BEFORE THE TRIBUNAL, B BENCH BY WAY OF A DEPARTMENT AL APPEAL BEARING NO. 4178/D/2012, THE TRIBUNAL VIDE ORDER DATED 19.06.20 17, FINDING NO MERIT IN THE DEPARTMENTAL APPEAL, DISMISSED THE SAME. 11.2. THE LD. AR SUBMITTED THAT IN THE SUBJECT CA SE, THE ADDITION HAS BEEN MADE ON THE BASIS OF GRATUITOUS AND ANOMALOUS ALLEG ATIONS BASED ENTIRELY ON SUSPICION AND CONJECTURES AND ON THE PRECEDENT OF E MM VEE INFRASTRUCTURES. TO DISCREDIT THE VALUATION OF SHARES AS PRESENTED B Y THE ASSESSEE, THE AO WORKED OUT THE VALUE OF SHARES AS PER BOOK INSTEAD OF TAKING THE VALUE, AS PER THE MARKET VALUE OF THE ASSETS HELD BY THE ASSESSEE COMPANY. NOTWITHSTANDING THE FACT THAT COGENT AND COPIOUS EVIDENCE WAS FILED DURING ASSESSMENT TO PROVE THE IDENTITY, CREDIT-WORTHINESS AND GENUINENESS OF THE TRANSACTIONS, THE AO IGNORED THE SAME ON SUSPICIOUS AND FALLACIOUS GROUN DS. HE FAILED TO REPUDIATE THE EVIDENCE AS FILED ON BEHALF OF THE ASSESSEE. HA D ONLY THE AO TAKEN THE VALUE OF ASSETS HELD BY THE ASSESSEE ON THE VALUATI ON DATE AT THEIR CONTEMPORANEOUS VALUE, THE JUSTIFICATION FOR THE SH ARE PREMIUM WOULD HAVE BEEN SELF- EVIDENT TO HIM. THE FACTUM OF THE INVEST ING COMPANIES NOT HAVING HANDSOME INCOME WAS NOT OF MUCH RELEVANCE IN FACE O F THE FACT THAT BOTH THE INVESTING COMPANIES HAD MASSIVE RESERVES AND THUS H AD AT THEIR COMMAND ADEQUATE FINANCIAL RESOURCES TO SUPPORT ANY INVESTM ENTS PROPOSED TO BE MADE BY THEM. 11.3. THE LD. AR SUBMITTED THAT THE VARIOUS DECIS IONS RELIED UPON BY THE LD. DR ARE DISTINGUISHABLE AND ARE NOT APPLICABLE TO TH E FACTS OF THE CASE SPECIALLY WHEN THE TRIBUNAL HAD ALREADY ACCEPTED THE GENUINEN ESS OF THE TRANSACTIONS. THE LD. AR SUBMITTED THAT THE CITATION IN NRA IRON AND STEELS PRIVATE LTD. (2019) 412 ITR 161 (SC) AS RELIED UPON BY THE DEPAR TMENT WOULD BE OF NO HELP TO IT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. T HE REASON BEING THAT IN THE SAID DECISION, THE HIGH COURT DECISIONS IN FAVOUR O F THE ASSESSEE ON SHARE CAPITAL HAVE ALL BEEN UNRESERVEDLY ENDORSED. OF SPE CIAL IMPORTANCE IS THE FACT 8 ITA NO. 4647/DEL/2012 THAT THE ORDER OF THE APEX COURT CLEARLY SPELLS ITS DECISION THAT IT IS IN THE CONTEXT OF THE FACTS OF THE CASE BEFORE. THAT IS ST ATED EXPLICITLY IN PARA 12 OF ITS APEX COURT ORDER. THE APEX COURT THUS TESTED THE CO RRECTNESS OF THE DECISION OF THE HIGH COURT AND THE TRIBUNAL ON THE BASIS OF THE ACCEPTED AUTHORITIES AND THE NORMAL PROTOCOL FOR SHARE CAPITAL VERIFICATION AS PROVIDED IN THE JUDGMENTS OF THE DELHI HIGH COURT IN CIT VS. LOVELY EXPORTS P RIVATE LTD. (2008) 299 ITR 268, CIT VS. OASIS HOSPITALITIES PRIVATE LTD. (2011 ) 333 ITR 119(DEL), CIT VS. KAMADHENU STEEL & ALLOYS LTD. (2014) 361 ITR 220(DE L) AND CIT VS. N.R. PORTFOLIO LTD. (2014) 222 TAXMAN 157(MAG.)(DEL). IN ORDER TO CULL THE REQUIREMENT ENVISAGED U/S 68 OF THE ACT FOR THE ACC EPTANCE OF THE CREDIT, THE APEX COURT WENT BY THE TIME HONOURED AUTHORITIES IN KALE KHAN MOHAMMED HANIF VS. CIT (1963) 50 ITR 1 (SC) AND, ROSHAN DI H ATTI VS. CIT (1977)107 ITR 938 (SC). THE APEX COURT ALSO APPROVINGLY CITED FRO M THE OBSERVATIONS OF THE GUWAHATI HIGH COURT IN NEMI CHAND KOTHARI VS. CIT ( 2003) 264 ITR 254(GAU). IN ORDER TO BE ABLE TO UNRAVEL THE SINISTER DESIGNS OF EVASIVE AND MANIPULATIVE ASSESSEES, THE APEX COURT WENT BY THE RATIO AND STA NDARDS ENUNCIATED IN THE CASES OF SUMATI DAYAL VS. CIT (1995) 214 ITR 801 (S C) AND CIT VS. MOHANKALA (2007) 291 ITR 278(SC). IT WOULD THUS BE AMPLY CLEA R, ON A CAREFUL READING OF THE JUDGMENT AS A WHOLE, THAT THE APEX COURT DID NO T SPELL OUT ANY FRESH TEST OR ANY NEW MODE OR MANNER OF VERIFICATION OF SHARE CAP ITAL U/S 68 OF THE ACT. IT IS MOST NOTEWORTHY THAT IN A WAY, THE APEX COURT IN TH E SAID JUDGMENT STOOD BY THE MANDATE IN THE CASE OF LOVELY EXPORTS (P) LTD. (SUPRA) AND OTHERS WHICH INCLUDED DIVINE LEASING & FINANCE COMPANY LTD. IN T HIS WAY, THE ORDER OF THE CIT(A) IN PARA 7.5 IS IN TOTAL AND COMPLETE SYNC WI TH THE APEX COURT OBSERVATIONS IN THE CITED CASE. FURTHER, THE DECISI ON OF EMM VEE INFRASTRUCTURES INDIA PRIVATE LTD. AS REFERRED TO T HE ORDER OF THE LOWER AUTHORITIES HAS SUBSEQUENTLY BEEN CONFIRMED BY THE TRIBUNAL FOR RELIEF IN THAT CASE AS POINTED OUT HEREINBEFORE. IN THE CIRCUMSTAN CES, THE ADDITION AS DELETED BY THE CIT(A) BEING CORRECT BOTH ON FACTS AND ON LA W. 9 ITA NO. 4647/DEL/2012 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE CIT(A) WHILE DELETING THE ADDITION HAS HELD AS UNDER:- 7.5 DECISION AND REASONS THEREFOR: I HAVE GONE THROUGH THE ASSESSMENT ORDER OF THE AO AND CONSIDERED THE WRITTEN SUBMISSIONS AND ARGUMENTS OF THE AR. I HAVE ALSO GONE THROUGH THE REMAND REPORT AS WELL THE REJOINDER MADE BY THE AR. I HAVE ALSO GONE THROUGH THE CASE LAWS REFERRED TO BY THE AR. THE AO HAS MAD E REFERENCE FOR ENQUIRY TO THE INVESTIGATION WING, DELHI. HE ALSO OBTAINED A SIMILAR ENQUIRY REPORT MADE BY ACIT, CIRCLE, 1, MEERUT IN THE CASE OF EMM VEE INFRASTRUCTURES INDIA PVT. LTD. THE AO FORMED HIS OPINION ON THE BASIS OF THE REPORT OF THE INVESTIGATION WING, DELHI AND OF ACIT CIRCLE 1, MEE RUT WITHOUT GOING HIMSELF FOR THE VERIFICATION FROM THE SHARE APPLICANTS ABOU T THE CONFIRMATION AND THE DOCUMENTS SUBMITTED BY THE ASSESSEE COMPANY. THE AO HAD WITH HIM THE ADDRESSES OF THE SHARE APPLICANTS, THEIR BANK STATE MENTS AND EVEN THEIR INCOME TAX RETURN ACKNOWLEDGMENTS. HE HAD WITH HIM THE ADDRESSES OF THE DIRECTORS BUT NEVER VERIFIED ANY DETAIL FROM HIS CO UNTERPART IN DELHI WHERE THE SHARE APPLICANTS WERE ASSESSED. THE INVESTIGATION W ING AND ACIT CIRCLE 1, MEERUT THROUGH ACIT (TDS), DELHI HAD PROVIDED THE N AMES AND THE ADDRESSES OF THE DIRECTORS BUT THE AO FAILED TO ENQUIRE FROM THEM REGARDING THE INVESTMENTS. NEITHER THE AO NOR THE INVESTIGATION W ING, DELHI FOUND ANY CASH DEPOSITED IN THE BANK FOR THE ENCASHMENT OF THE SHA RE APPLICATION CHEQUES. I FIND THAT THERE IS NO DOUBT ABOUT THE IDENTITY OF THE SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSACTION REGARDING THE SH ARE APPLICATION WHICH ARE PROVED BY THE CONFIRMATIONS AND THE BANK ACCOUNTS W HICH THE ASSESSEE COMPANY HAS SUBMITTED DURING THE ASSESSMENT PROCEED INGS. THE CONFIRMATIONS OF BOTH THE SHARE APPLICANTS WERE SUB MITTED AND THE TRANSACTIONS HAVE BEEN DONE THROUGH THE AXIS BANK, KAROL BAGH, DELHI. THE ASSESSEE EVEN FURNISHED BEFORE THE A.O. THE SET OF BALANCE SHEETS , THE COPIES 10 ITA NO. 4647/DEL/2012 OF INCOME TAX RETURN ACKNOWLEDGMENTS, THE COPIES OF SHARE APPLICATIONS AND THE COPIES OF BOARD RESOLUTION FOR THE SHARE APPLIC ATION. FURTHER FROM THE SET OF BALANCE SHEETS IT IS SEEN THAT THE COMPANY SHALI NI HOLDINGS LTD HAS CAPITAL AND FREE RESERVES AT RS. 112,12,50,000/- AN D INVESTMENTS AT RS. 116,95,01,200/- IN 253 COMPANIES WHEREAS THE SECOND APPLICANT HAS CAPITAL AND FREE RESERVES AT RS. 14,86,25,000/- AND INVESTM ENTS OF RS. 13,20,35,000/- IN 21 COMPANIES. THE CAPITAL AND FRE E RESERVES AND THE INVESTMENTS OF THE SHARE APPLICANTS PROVE THEIR CRE DITWORTHINESS. THE A.O FAILED TO SEE THE LARGE AMOUNTS OF INVESTMENTS AND CAPITAL STRUCTURES OF THE SHARE APPLICANTS AND WITHOUT APPLYING HIS MIND ADDE D THE AMOUNTS RECEIVED AS SHARE APPLICATION U/S 68 OF IT ACT. IN VIEW OF THE ABOVE FACTS AND VARIOUS JUDGMENTS CI TED BY AR AND KEEPING IN MIND OF JUDGMENT OF APEX COURT IN THE CASE OF LO VELY EXPORTS PVT. LTD (2008) 216 CTR 195 THE ADDITION OF RS.2,50,00,000/- IS DEL ETED. 12.1 IT IS PERTINENT TO NOTE THAT THE ASSESSEE FOR WANT OF WORKING CAPITAL HAD ISSUED 10,000 EQUITY SHARES OF RS. 100 EACH AT A PR EMIUM OF RS. 4,900/- TO TWO DIFFERENT COMPANIES. THE BREAKUP OF ISSUE STAN DS OF 2,000 EQUITY SHARES OF RS. 100 EACH AT A PREMIUM OF RS. 4,900/- TO APPOORV A LEASING FINANCE AND INVESTMENT PVT. LTD. AMOUNTING TO RS. 50,00,000 AND 8000 EQUITY SHARES OF RS. 100 EACH AT A PREMIUM OF RS. 4,900/- TO SHALINI HOL DINGS LTD. THE TOTAL OF ISSUE CAPITAL AMOUNTED TO RS. 250,00,000 INCLUDING THE SHARE PREMIUM OF RS.245,00,000/-. THE ASSESSEE COMPANY HAS FURNISHE D DETAILS OF SHARES ISSUED TO THE TWO COMPANIES. WE FIND MERIT IN THE C ONTENTION OF LD. AR/ ASSESSEE COMPANY THAT THE PREMIUM IS WORTH BY LOOKI NG THE ORDERS IN HAND, THE ASSETS IN POSSESSION AND THE WORKINGS OF THE TE AR RESULTS. THE DETAILS OF THE ISSUED CAPITAL AND THE CONFIRMATIONS WERE PROVIDED BY THE ASSESSEE TO THE ASSESSING OFFICER. THE COPY OF BANK STATEMENT OF T HE SHARE APPLICANTS ALONG WITH ITR ACKNOWLEDGMENTS, THE SET OF BALANCE SHEETS WERE ALSO FORWARDED TO THE ASSESSING OFFICER. THE CHANGE IN THE ADDRESS O F INVESTOR COMPANIES WERE 11 ITA NO. 4647/DEL/2012 ALSO INFORMED TO THE ASSESSING OFFICER. THUS, THE ASSESSEE COMPANY HAD DISCHARGED THE BURDEN BY PROVING THE GENUINENESS OF THE TRANSACTIONS BY SUBMITTING THE BANK STATEMENTS, THE CREDITWORTHINES S OF THE INVESTORS BY SUBMITTING THE SET OF BALANCE SHEETS OF THE INVESTO R COMPANIES AND ALSO PROVED IDENTITY WHILE SUBMITTING THE DETAILS OF THEIR INCO ME TAX ACKNOWLEDGES, THE CERTIFICATE OF INCORPORATIONS AND THE COPY OF ADDRE SSES FROM THE SITE OF MINISTRY OF COMPANY AFFAIRS. MERELY STATING THAT HOW THE BOO K VALUE OF SHARES WAS INCREASED WITHOUT ANY COGENT EVIDENCE BROUGHT ON RE CORD BY THE ASSESSING OFFICER THE ASSESSING OFFICER CANNOT SUSPECT THE GE NUINENESS CREDITWORTHINESS OF THE TRANSACTIONS. THE DECISION OF THE TRIBUNAL IN CASE OF EMM VEE INFRASTRUCTURES (SUPRA) RELIED BY THE LD. AR IS APT IN THE PRESENT CASE THUS, THERE IS NO NEED TO INTERFERE WITH THE FINDING OF T HE CIT(A). HENCE, GROUND NO. 2 IS DISMISSED. 13. AS REGARDS GROUND NO. 3, THE LD. DR MADE SIMIL AR SUBMISSIONS TO THAT OF GROUND NO. 1. THE LD. DR FURTHER SUBMITTED THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITION BY THE A.O. ON ACCOUNT OF SAL E OF BUSINESS PROPERTY BELOW THE MARKET PRICE OUT OF THE UNSOLD STOCK RELATING TO YEAR ENDING ON 31/03/2009 IGNORING THE FACT THAT THE TRANSACTIONS WERE SHOWN AT PRICE MUCH BELOW THE CIRCLE RATES. 14. THE LD. AR SUBMITTED THAT GROUND NO. 3 IS IN RE SPECT OF THE SALE OF SHOPS HELD BY THE ASSESSEE AS STOCK IN HAND. THE AO HAS N ARRATED THE FACTS ON PAGES 16 AND 17 OF HIS ORDER. THE CIT(A) HAS RECORDED HIS FINDINGS ON PAGES 27 TO 33 OF THE ORDER. IN DELETING THE ADDITION, AS PROPOSED BY THE AO, THE CIT(A) HAS RELIED UPON THE DECISION OF THE MUMBAI TRIBUNAL IN INDERLOK HOTELS PRIVATE LTD. VS. CIT (2009) 318 ITR 234. AS OF PRESENT, THE LAW ON THIS POINT IS VERY CLEAR, IN AS MUCH AS, THE POWER SO TO DO HAS BEEN GRANTED BY THE ACT TO THE AO IN TERMS OF SECTION 44CA ONLY W.E.F. 01.04.2014. HE SUBMITTE D THAT IN THE SUBJECT YEAR, THERE WAS NO SUCH POWER WITH THE AO TO TAX THE DIFF ERENCE BETWEEN THE CIRCLE 12 ITA NO. 4647/DEL/2012 RATE AND THE SALE VALUE. THE DIFFERENCE BETWEEN CIR CLE RATE AND THE SALE VALUE IN THE CASE OF SALE OR STOCK IN TRADE, CIRCLE RATE AS BROUGHT TO TAX BY THE AO HAS BEEN RIGHTLY DELETED BY THE CIT (A) WHICH MERITS TO BE CONFIRMED. 15. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT T HE LD. DR MADE SIMILAR SUBMISSIONS TO THAT OF GROUND NO. 1 AND THE SAME IS IDENTICAL. IT IS FURTHER NOTED BY US WHILE DECIDING GROUND NO. 1 THAT THE AS SESSING OFFICER HAS APPLIED SECTION 50C OF THE ACT, BUT THE CIT(A) HAS NOT GIVE N ANY FINDING AS TO WHY THE COST INFLATION INDEX BENEFIT HAS TO BE GIVEN TO THE ASSESSEE. THEREFORE, IT NEEDS VERIFICATION OF THE ENTIRE ISSUE. THUS, WE ARE REMA NDING BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR PROPER ADJUDICATI ON AND DECIDE THE SAME AFRESH AS PER LAW. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. GROUND NO. 3 OF THE REVENUES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE 16. AS REGARDS TO GROUND NO. 4, THE LD. DR RELIED U PON THE ASSESSMENT ORDER. THE LD. DR FURTHER SUBMITTED THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,83,28,690/- BEING THE LAND DEVELOP MENT EXPENSES ALLEGEDLY PAID BY THE ASSESSEE FOR THE WORKS CONTRACT STATED TO HAVE BEEN RECEIVED FROM ERA LAND MARK (INDIA) LTD. FOR RS. 2,97,53,359/- IG NORING THE FACTS THAT NO TDS WAS MADE ON CONTRACT PAYMENT, AND THE ENTIRE EXPENS ES WERE UNVERIFIABLE. 17. THE LD. AR SUBMITTED THAT GROUND NO. 4 IS IN RE SPECT OF ADDITION OF RS. 2,83,23,690/- MADE ON ACCOUNT OF LAND DEVELOPMENT E XPENSES. THE ASSESSEE COMPANY HAD A BUSINESS CONTRACT WITH THE ERA LAND M ARKET INDIA LTD. FOR THE DEVELOPMENT OF THEIR LANDS. FULL FACTS WITH REGARD TO THIS ISSUE IS STATED BY THE AO IN THE ASSESSMENT ORDER ON PAGES 17 TO 19. THE A DDITION HAS BEEN MADE BY THE AO IN TERMS OF THE ALLEGED NON-COMPLIANCE WITH THE TDS PROVISIONS AND ALSO ON THE CONSEQUENT DISABILITY FOR CLAIMING DEDU CTION FOR RELATABLE EXPENSES AS PROVIDED U/S 40(A) (IA) OF THE ACT. THE CIT(A) H AS NARRATED THE FACTS AND 13 ITA NO. 4647/DEL/2012 STATED HIS CONCLUSION ON PAGES 33 TO 38 OF THE ORDE R. THE SIMPLE FACT OF THE CASE IS THAT ALL THESE PAYMENTS RELATED TO LABOUR C HARGES PAID TO LABOURERS ON A DAILY BASIS WERE ALL NOTED ON THE ACQUAINTANCE SHEE TS FOR EACH DAY. LATER, THE ACQUAINTANCE SHEETS WERE BUNCHED TOGETHER AND THE A GGREGATE PAYMENTS WERE DEBITED TO THE ACCOUNTS AS ONE SINGLE SUM OF THE DA Y. FOR THE FACT THAT THE INDIVIDUAL PAYMENTS WERE NOT IN EXCESS OF THE PRESC RIBED LIMITS FOR TDS AND THAT THE PAYMENTS TO THE SEVERAL LABOURERS WERE IND IVIDUALLY MUCH BELOW THE TDS LIMITS, THE RELIEF HAS RIGHTLY BEEN ALLOWED BY THE CIT(A). THE DEPARTMENT HAS NOT POINTED OUT ANY FACTUAL ERROR OR DEFICIENCY IN THE ORDER OF THE CIT(A). IN THE CIRCUMSTANCES, THE DELETION AS ORDERED BY THE C IT(A) BE CONFIRMED. 18. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE CIT(A) IN PARA 9.4 HELD A S UNDER: 9.4 DECISION AND REASONS THEREFORE: I HAVE GONE THROUGH THE FACTS OF THE CASE, SUBMI SSIONS OF THE AR, THE REMAND REPORT OF THE AO AND THE REJOINDER OF THE AR . I HAVE ALSO CONSIDERED THE LETTER OF THE COMPANY REGARDING THE VOUCHERS BE ING WITH THE PARENT COMPANY FOR THEIR AUDIT FOR OBTAINING THE FINANCE F ACILITIES AND VICE VERSA LETTER OF ERA LAND MARKS LTD. ABOUT THE RETURNING O F THE VOUCHERS. I HAVE ALSO CONSIDERED THE CASE LAW AS GIVEN BY THE AR. T HE AO COULD NOT VERIFY THE ENTIRE BUNCH OF VOUCHERS BUT RETAINED SOME AND IN THE THIRD PARA OF PAGE 19 EXPRESSED. A LIST OF FEW LABOURS HAVE BEEN SUB MITTED ALONG WITH SOME SIGNATURES WITHOUT ANY DETAILS, DATE OR SUPPORTING RECORD. HOWEVER, EVERY WHERE HE HAS STATED THAT NO DETAILS HAVE BEEN SUBMI TTED REGARDING THE PAYMENTS OR DEDUCTION OF TDS. THE AO FURTHER HAS S TATED IN THE LAST LINES OF THE SAME PARA THAT IT IS FURTHER STATED THAT AT LATER STAGE IF ASSESSEE ESTABLISHED THE DEDUCTION OF TDS AND DEPOSIT TO TH E CENTRAL GOVERNMENT AS PER PROVISION OF I.T. ACT THEN INCOME OF RS. 1,65, CR. AS STATED ABOVE SHALL BE TREATED AS INCOME OF THE ASSESSEE. THE AO CANNOT PRESUME THE INCOME AT ONE STAGE OF RS. 14,24,669/- BEING 4.79% AS SHOWN BY THE ASSESSEE AND AT ANOTHER STAGE AN INCOME OF 14 ITA NO. 4647/DEL/2012 RS. 1,65 CRORE. THE AO HAS FAILED TO ESTABLISH THE CORRECT AMOUNT OF INCOME WHICH HE WANTED TO BE TAXED AS THE REAL SURPLUS OF THE ASSESSEE FROM THE WORK CONTRACT. HE HAS DISALLOWED HE ENTIRE EXPENDI TURE TAKING THE SAME AS PAYMENTS MADE ABOVE THE STATUTORY LIMIT OF SECTION 194C OF THE INCOME-TAX ACT, 1961. THE AO HAS FAILED TO ESTABLISH FROM THE LIST OF VOUCHERS/DETAILS AS SUBMITTED BY THE ASSESSEE FOR HIS VERIFICATION T O SHOW THAT THERE WAS ANY PAYMENT MADE IN EXCESS OF RS. 20,000/-, THE STA TUTORY LIMIT FOR TDS. THE AO WAS CONFUSED BY THE BOOK ENTRY ADJUSTMENT OF THE PURCHASE OF COMMERCIAL SPACE MADE BY THE ASSESSEE COMPANY FROM THE ERA LAND MARK LIMITED. THE APPLICATION OF SECTION 40(A)(IA) HAS TO DO NOTHING ON THE ADJUSTMENTS FOR HE COMMERCIAL SPACE. IF ANY PAYMEN T IS MADE EXCEEDING RS. 20,000/-, THE SAME COULD BE DISALLOWED. THE AO TOOK THE ADVANTAGE OF THE FORM 3CD WITHOUT GOING TO THE BASIC REQUIREMENT S OF VERIFYING THE BOOKS. NO DETAILS, AS STATED BY THE AO, WAS PRODUCED, BUT HE COULD VERIFY FROM THE BOOKS OF ACCOUNTS THE AMOUNT TO BE DISALLOWED. THE AO HAS EXPRESSED THAT IF AT A LATER STAGE ANY PAYMENT OF TDS IS MADE, TH E INCOME SHALL BE TREATED AS RS. 1.65 CRORE. THE AO HAS HIMSELF NOTED REGARD ING THE SUBMISSION OF FEW LABOUR SHEETS, BUT HAS NOT COMMENTED IF ANY VIO LATION OF THE PROVISIONS OF SECTION 194C OF IT ACT, 1961 WAS DONE BY ASSESSE E ON THOSE PAYMENTS. I HAVE GONE THROUGH THE SET OF PAYMENT VOUCHERS SUBMI TTED BY THE ASSESSEE WITH HIS WRITTEN SUBMISSIONS OF VARIOUS HEAD OF ACC OUNTS AND FIND THAT THESE IS NO PAYMENT WHICH VIOLATES THE PROVISIONS O F SECTION 194C OF IT ACT, 1961, HENCE THE DISALLOWANCE OF RS.2,83,28,000/- IS DELETED FROM THE INCOME OF THE ASSESSEE. THUS, IT IS PERTINENT TO NOTE THAT ALL THE PAYMENTS RELATED TO LABOUR CHARGES WERE PAID TO LABOURERS ON A DAILY BASIS WERE NOTED ON THE ACQUAINTANCE SHEETS FOR EACH DAY AS PER THE DOCUMENTS PRODUCED BY THE A SSESSEE BEFORE THE REVENUE AUTHORITIES. THE ACQUAINTANCE SHEETS WERE B UNCHED TOGETHER AND THE AGGREGATE PAYMENTS WERE DEBITED TO THE ACCOUNTS AS ONE SINGLE SUM OF THE DAY, BECAUSE THE INDIVIDUAL PAYMENTS WERE NOT IN EXCESS OF THE PRESCRIBED LIMITS FOR 15 ITA NO. 4647/DEL/2012 TDS AND THAT THE PAYMENTS TO THE SEVERAL LABOURERS WERE INDIVIDUALLY MUCH BELOW THE TDS LIMITS. THEREFORE, THE CIT(A) WAS RIG HTLY DELETED THE SAID ADDITION AS DEPARTMENT COULD NOT POINT OUT ANY FACTUAL ERROR OR DEFICIENCY IN THE ORDER OF THE CIT(A). THUS, THERE IS NO NEED TO INTERFERE WITH THE FINDINGS OF THE CIT(A). GROUND NO. 4 IS DISMISSED. 19. AS REGARDS TO GROUND NO. 5, THE LD. DR RELIED U PON THE ASSESSMENT ORDER. THE LD. DR FURTHER SUBMITTED THAT THE CIT(A) HAS ER RED IN TREATING THE INCOME FROM AGRICULTURE AGAINST THE INCOME ASSESSE D UNDER THE HEAD OTHER SOURCES IGNORING THE FACT THAT THE ASSESSEE FAILED TO ESTABLISH ANY ACTIVITY RELATING TO AGRICULTURE. 20. THE LD. AR SUBMITTED THAT GROUND NO. 5 IS WITH REGARD TO AGRICULTURAL INCOME AS DERIVED BY THE ASSESSEE DURING THE YEAR. THE AOS OBSERVATIONS IN THIS REGARD ARE CONTAINED ON PAGE 19 OF THE ASSESSM ENT ORDER. THE CIT (A) HAS DEALT WITH THIS ISSUE ON PAGES 38 TO 40 OF HIS ORDE R. THE LD. AR SUBMITS THAT THE AO WRONGLY IGNORED THE EVIDENCES FURNISHED BY T HE ASSESSEE FOR THE PURCHASE OF SEEDS, THE PAYMENT OF ELECTRICITY AND D IESEL EXPENSES FOR OPERATING THE TUBE WELL AND TRACTOR, THE KHASRA AND KHATAUNI ISSUED BY THE PATWARI FOR THE CROPS AND ALSO THE SALE VOUCHERS OF THE AGRICUL TURAL PRODUCE. NO ERROR OR SHORTCOMING HAS BEEN PINPOINTED BY THE DEPARTMENT I N THE ORDER OF THE CIT (A). HENCE THE ORDER OF THE CIT (A) ON THIS POINT B E CONFIRMED. 21. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS GIVEN THE DETAILS UPON WHICH THE ASSESSING OFFICER HAS GIVEN A REMAND REPO RT BEFORE THE CIT(A). THE CIT(A) HELD AS UNDER: 10.4 DECISION AND REASONS THEREFORE: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE AR. I HAVE ALSO CONSIDERED THE R EMAND REPORT OF AO AND ITS REJOINDER MADE BY THE AR. ON THE BASIS OF THE COPIE S OF LETTERS AND OTHER 16 ITA NO. 4647/DEL/2012 RELEVANT DOCUMENTS PRODUCED BY THE AR, AND FROM THE LETTERS AND DOCUMENTS SUBMITTED, INCLUDING COPIES OF KHASRA KHATAUNI, THE BILLS OF DIESEL, THE COPY OF BILLS OF SEEDS, USE OF TRACTOR AND ELECTRICITY BILL S, I REACH THE CONCLUSION THAT INCOME RELATED TO THE ACTIVITY OF LAND COULD ONLY B E HELD AS AGRICULTURAL INCOME. LOOKING AT ALL RELEVANT FACTS, I HOLD THE I NCOME OF RS. 4,15,250/- TO BE AGRICULTURAL INCOME AND NOT INCOME FROM OTHER SOUR CES IT IS DIRECTED ACCORDINGLY. THE ASSESSEE HAS GIVEN/PRODUCED LETTERS AND DOCUMEN TS INCLUDING COPIES OF KHASARA AND KHATAUNI, BILLS OF DIESEL, COPY OF BILL S OF SEEDS, USE OF TRACTOR AND ELECTRICITY BILLS. THE ASSESSEE HAS PROVED BEFORE THE AUTHORITIES THAT ACTIVITY ON LAND WAS PURELY AGRICULTURAL IN NATURE. THEREFORE, THE CIT(A) HAS RIGHTLY HELD THE SAID INCOME TO BE AGRICULTURAL INCOME. THERE I S NO NEED TO INTERFERE WITH THE FINDINGS OF THE CIT(A). HENCE, GROUND NO. 5 IS DISMISSED. 22. IN RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20TH DAY OF SEPTEMBER, 2021. SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED : 20/09/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 17 ITA NO. 4647/DEL/2012