VIVEK VINAYAK SANE, MUMBAI V. ITO 22(2)(2), NAVI MUMBAI

ITA 5036/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79466 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 18-12-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 27-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MALLIKAR UTTURE
• Keywords: Reopening of assessment; Unexplained investment; Opportunity of being heard; Principle of natural justice; Corroborative evidences
• Section: 68; 69; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI . . , , $ $ $ $ BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER /. ITA NOS. 5036, 5037 & 5038/MUM/2011 / ASSESSMENT YEARS: 2002-03,2003-04 &2004-05. VIVEK VINAYAK SANE, 302, MARYLAND APARTMENT, D.K. SANDU, CHEMBUR, MUMBAI, MAHARASHTRA 400 071 / / / / VS. ITO 22(2)(2) 33 VASHI RAILWAY STATION COMPLEX, TOWER NO.6 VASHI, NAVI MUMBAI . .. ./ // / PAN : AALPS818R (APPLICANT) .. RESPONDENT) ASSESSEE BY: SHRI MANDAR VAIDYA DEPARTMENT BY : SHRI MALLIKAR UTTURE (DR) * , * , * , * , / // / DATE OF HEARING : 02-06-2014 * , * , * , * , / DATE OF PRONOUNCEMENT : 18-07-2014 / / / / O R D E R PER SANJAY GARG, JUDICIAL MEMBER : THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDERS OF THE CIT(A) DATED 11.04.2011 PERTAINING TO ASSESS MENT YEARS 2002-03, 2003-04 &2004-05 RESPECTIVELY. SINCE THE FACTS AS WELL AS T HE ISSUES INVOLVED ARE IDENTICAL IN ALL THE APPEALS, SO THESE ARE TAKEN TOGETHER FOR DI SPOSAL BY THIS COMMON ORDER. FOR THE ITA NOS.50 36 5037&5038 /MUM/2011 . 2 SAKE OF CONVENIENCE, THE FACTS HAVE BEEN TAKEN FROM ITA NO.5036/M/2011 FOR THE ASSESSMENT YEAR 2002-03. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: I. ON THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE S CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN PASSING AN ERROR ONUS ORDER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED TO HOLD THAT THE AGRICULTURAL INCOME IS NOT SUBSTANTIATED WITH THE E VIDENCES & PROOFS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN MAKING THE ADDITION OF RS.40,5 I ,275/- AS UNEXPLAINED INCOME U/S 69 OF THE ACT WHEN IT WAS RETURNED AS AGRICULTURAL INCOME. 4. 1 HE ASSESSEE CRAVES, LEAVES TO ALTER, AMEND, WI THDRAW OR SUBSTITUTE ANY GROUND OR GROUNDS OR TO ADD ANY NEW GROUND OR GROUN DS OF APPEAL OR ALL OF THE ABOVE GROUNDS OF APPEAL, ON OR BEFORE HEARING, EACH OF WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2. THIS IS THE SECOND ROUND OF APPEAL BEFORE US. EARLIER THE CIT (A) ) VIDE A COMMON EX-PARTE ORDER DATED 05.12.2007 FOR ASSESSME NT YEARS 1999-2000, 2000-01, 2001-01 & 2002-03 CONFIRMED THE ADDITIONS MADE BY T HE ASSESSING OFFICER, VIDE ORDER DATED 22.12.2006 PASSED U/S 144 R.W.S. 148, O N ACCOUNT OF UNEXPLAINED INCOME U/S 69 OF THE ACT AGAINST THE CLAIM OF THE ASSESSEE AS INCOME FROM AGRICULTURE. THE ASSESSEE PREFERRED THE APPEALS AGAINST THE SAID ORD ER OF THE CIT(A) BEFORE THIS TRIBUNAL VIDE ITA NO.1895 TO 1898/MUM/2008 PERTAINI NG TO ASSESSMENT YEARS 1999- 2000, 2000-01, 2001-01 & 2002-03. THE APPEALS OF TH E ASSESSEE FOR THE ABOVE SAID ASSESSMENT YEARS AS WELL AS FOR A.YRS. 2003-04, 200 4-05 AND FOR A.Y. 2005-06 WERE TAKEN TOGETHER FOR HEARING. IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE THE TRIBUNAL THAT THERE WAS A SERIOUS DIFFERENCE BE TWEEN THE ASSESSEE AND SHRI NAMDEV GAWARE, WHO WAS LOOKING AFTER THE AGRICULTUR AL ACTIVITIES OF THE ASSESSEE DURING THE RELEVANT PERIOD OF ASSESSMENT PROCEEDING S BEFORE THE A.O. AND APPELLATE PROCEEDINGS BEFORE THE ID.CIT(A). SHE ALSO SUBMITTE D THAT THE SAID DIFFERENCE BY THEN HAD BEEN SETTLED AND THE ASSESSEE WAS IN A POSITION TO PRODUCE THE SAID PERSON IN ITA NOS.50 36 5037&5038 /MUM/2011 . 3 ORDER TO SUPPORT AND SUBSTANTIATE HIS CLAIM FOR AGR ICULTURAL INCOME, IF ONE MORE OPPORTUNITY WOULD BE GIVEN TO HIM. KEEPING IN VIEW THE SAID SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AND KEEPING IN MIND THE PRIN CIPLES OF NATURAL JUSTICE, THE TRIBUNAL SET ASIDE THE IMPUGNED ORDERS OF THE LD.CI T(A) PASSED EX-PARTE FOR A.YRS. 1999-2000 TO 2002-03 AND 2005-06 AND REMANDED THE M ATTER TO THE CIT(A) FOR DECISION SAID YEARS AFRESH AFTER GIVING THE ASSESSE E SUFFICIENT AND PROPER OPPORTUNITY OF BEING HEARD. IT WAS ALSO DIRECTED THAT THE ASSES SEE WOULD BE FREE TO PRODUCE FRESH EVIDENCE IF ANY, IN SUPPORT OF HIS CASE. AFTER FRESH HEARING OF THE MATTER, THE APPEALS OF T HE ASSESSEE WERE DISMISSED BY THE CIT(A) VIDE IMPUGNED ORDER. THE ASSESSEE IS THU S WITH PRESENT APPEALS BEFORE US. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E VIDE HIS RETURN OF INCOME FILED ON 18.07.2003 DECLARED INCOME AT RS.97,650/-. THE A SSESSEE HAD CLAIMED RECEIPT OF INCOME FROM CONSULTANCY AND AGRICULTURE. THE ASSESS EE, A PILOT BY PROFESSION, HAD MADE INVESTMENTS IN VISAA AIRWAYS PVT. LTD., WHICH WAS IN PROCESS OF LAUNCHING LOW BUDGET AIRLINE SERVICES. 4. THE AO NOTICED FROM THE RETURN OF INCOME THAT TH E ASSESSEE HAD SHOWN AGRICULTURAL INCOME OF RS.40,51,275/-. TO VERIFY TH E GENUINENESS OF THE AGRICULTURAL INCOME, HE ASKED THE ASSESSEE TO GIVE THE DETAILS O F THE AGRICULTURAL INCOME, THE INCOME & EXPENDITURE A/C., THE MONTH-WISE RECEIPTS CROP WISE, THE BANK A/C., MAINTAINED FOR AGRICULTURAL ACTIVITY, CASH BOOK MAI NTAINED FOR AGRICULTURAL ACTIVITY AND THE COPY OF BANK STATEMENT. THE ASSESSEE DESPIT E AVAILING SEVERAL OPPORTUNITIES, FAILED TO SUBSTANTIATE HIS CLAIM OF EARNING OF AGRI CULTURAL INCOME WITH COGENT AND CONVINCING EVIDENCE. THE AO HELD THAT THE ASSESSEE HAD FAILED TO PROVE THAT HE HAD CARRIED OUT ANY AGRICULTURAL ACTIVITY AND THEREFORE , TREATED THE SAID INCOME WHICH WAS ITA NOS.50 36 5037&5038 /MUM/2011 . 4 SHOWN AS AGRICULTURAL INCOME AND CLAIMED AS EXEMPT BY THE ASSESSEE, AS UNEXPLAINED INCOME FROM OTHER SOURCES U/S.68 OF THE I.T. ACT, 1 961. 5. EVEN DURING THE SECOND ROUND OF APPEAL BEFORE TH E CIT(A) THE ASSESSEE FAILED TO PRODUCE SAID MR. NAMDEV GAWARE. HOWEVER, THE ASS ESSEE FILED AFFIDAVIT DATED 24.8.2006 OF SAID MR. GAWARE. LD.CIT(A) AFTER GOING THROUGH THE EVIDENCES PRODUCED AND ALSO AFTER HEARING THE LD. REPRESENTA TIVE OF THE ASSESSEE OBSERVED THAT THE ONUS WAS ON THE ASSESSEE TO PROVE THAT HE HAD AGRICULTURAL INCOME TO THE TUNE OF RS.1,78,73,519/- FROM A.Y. 1998-99 TILL A.Y. 2002-0 3 AND RS.44,00,594/- FOR A.Y. 2002-03 WHICH ALL PUT TOGETHER AT RS.2,25,48,919/- IN A.Y. 2002-03 WAS REFLECTED IN HIS CAPITAL ACCOUNT. THE CIT(A) SPECIALLY ASKED TH E ASSESSEE FOR THE REASON FOR NOT PRODUCING SHRI NAMDEV GAWARE UPON WHOM THE ASSESSEE HAD RELIED TO EXPLAIN THAT HE HAD AGRICULTURAL INCOME. HOWEVER, THE ASSESSEE D ID NOT GIVE ANY REASON AND SIMPLY RELIED ON HIS AFFIDAVIT FILED ALONG WITH THE WRITTEN SUBMISSIONS FILED. THE SAID AFFIDAVIT AND WRITTEN SUBMISSIONS FILED BY THE ASSE SSEE, AS REPRODUCED IN THE IMPUGNED ORDER OF THE CIT(A), ARE EXTRACTED AS UNDE R: AFFIDAVIT OF MR. GAWRE ' I, SHRI GAWARE NAMDEV SON OF MR. GAWARE DATTATRAY A PRESENTLY HAVING OFFICE AT 482/C, MARATHE PALACE, SHANIWAR PETH PUNE -411 030, INDIAN INHABITANT, AGED ABOUT 37 YEARS, DO HERBY SOLEMNLY SAY, AFFIRM AND DECLARE AS FOLLOWS: 1. I, SAY THAT I HAVE PURCHASED GOODS WORTH RS.46,5 1375.00 FROM SHRI VIVEK VINAYAK SANE HAVING ADDRESS AT 302, MARYLAND, D.K. SANGHAVI ROAD, CHEMBUR, MUMBAI - 400 071 DURING THE ASSESSMENT YEA R 2003-04. 2. I, FURTHER SAY THAT I HAVE PURCHASED ALOEVERAL/G LADOLILUS AS ABOVE SAID FROM SHRI VIVEK V. SANE DIRECTLY. 3. I, FURTHER STATE THAT ALL THESE TRANSACTIONS STA TED ABOVE ARE COMPLETELY GENUINE AND BACKED BY DELIVERY OF THE SAME AND SETT LED BY PAYMENTS OF THE NET AMOUNT AT THE FOOT OF THE ACCOUNT. 4. I, ALSO DECLARE THAT MY PAN IS AA WPG 1909N 5. I, FURTHER DECLARE THAT MY ABOVE PURCHASES RE RE FLECTED IN THE BOOKS OF ACCOUNTS MAINTAINED BY ME. ITA NOS.50 36 5037&5038 /MUM/2011 . 5 6. I, ALSO DECLARE THAT MY ACCOUNT WITH SHRI VIVEK SANE IS FULLY SETTLED. 7. I, REITERATE THAT ALL THESE TRANSACTIONS REFERRE D TO ABOVE ARE EFFECTED BY ME AND ARE GENUINE IN ALL RESPECT. 8. I FURTHER SAY THAT I HAVE EXECUTED THE SAID DECL ARATION OUT MY FREE WILL AND VOLITION, VOLUNTARILY, WITHOUT ANY SORT FOR UND UE INFLUENCE OR COERCION OR MISREPRESENTATION. 9. I, FURTHER SAY AND DECLARE THAT THAT SAID DECLAR ATION IN TOTO IS BINDING UPON ME, MY HEIRS, EXECUTORS, ADMINISTRATORS AND AS SIGNS AND LAWYERS AND CONSULTANT AND THEY WILL NOT DISPUTE THE SAME AT AN Y TIME HEREINAFTER. 10. I, FURTHER SAY AND DECLARE THAT WHATEVER IS STA TED ABOVE IS UTMOST TRUE TO THE BEST OF MY KNOWLEDGE AND BELIEF. SOLEMNLY AFFIRMED AND DECLARED AT PUNE THIS 24TH DA Y OF AUGUST 2006.' WRITTEN SUBMISSIONS OF THE ASSESSEE: 'AS PER THE ORAL SUBMISSIONS MADE BY MY AUTHORISED REPRESENTATIVES ON THE DATE OF PREVIOUS HEARING IE.15/2/2011, I WISH TO RE DUCE THE SAME TO WRITING AS FOLLOWS:- THAT I AM AGRICULTURIST SINCE THE AY 1998-99 DURING WHICH PERIOD I STARTED FARMING MY FATHERS AGRICULTURAL LAND WHICH WAS GRO WING MANGOES AND CASHEW NUTS. DURING THE PERIOD 1999-00 TO 2005-06, I ALSO ACQUIRED AGRICULTURAL LAND ON LEASE WHICH WAS USED FOR GROWI NG PLANTS LIKE ALOEVERA AND GLADIOLI. THEREAFTER, FROM AY 2006-07 ONWARDS I HAVE NOT RENEWED MY LEASE ON THE AGRICULTURAL LAND AND AM ONLY FARMING MY FATHER'S LAND. DURING THE YEARS IN APPEAL, IE. AY 1999-00 TO 2005-06, I H AVE BEEN EARNING AGRICULTURAL INCOME ON THE AFOREMENTIONED TWO TYPES OF LAND, TO THE TUNE OF RS.40-50 LACS. MOST OF THE PRODUCE GROWN ON THE LEA SE HOLD LAND HAS BEEN SOLD BY ME THROUGH MR. NAMDEV GAWARE, WHOSE ORIGINA L AFFIDAVIT IN THIS REGARD HAS ALREADY BEEN SUBMITTED BEFORE YOUR GOODS ELF ON THE DATE OF LAST HEARING ON 15/2/2011. I AM ALSO ATTACHING HEREWITH A COPY OF TALATI'S CERTIFICATE REGARDING THE CULTIVATION CARRIED OUT O N THE AGRICULTURAL LAND PASSED TO ME BY MY FATHER, SITUATED AT POST KAPARE, TALUKACHIPLUN, DISTRICT RATNAGIRI. ATTACHED ALSO PLEASE FIND MY RETURN OF I NCOME FOR THE AY 2006-07 AND 2007-08 WHEREIN THE AGRICULTURAL INCOME FROM TH E PARCEL OF LAND HAS BEEN SHOWN AT RS.4,29,690/-&RS.4,14,875/- RESPECTIV ELY. 2. THE AGRICULTURAL INCOME AS AFORESAID HAS BEEN PR IMARILY INVESTED IN MY COMPANY, M/S VISA AIRWAYS PRIVATE LIMITED. AS BORNE OUT FROM THE BALANCE SHEET OF M/S VISA AIRWAYS PVT.LTD. (APPEARING ON PA GE 50-52 OF THE PB) THE SHARE APPLICATION MONEY DEPOSITED BY ME AS ON 31/3/ 1998 WAS TO THE TUNE OF RS.44,00,594/- THIS BALANCE SHEET HAS BEEN AUDITED AND FILED BEFORE THE REGISTRAR OF COMPANIES. 3. WHILE PASSING THE ASSESSMENT ORDER FOR AY 1999-0 0 (FIRST AMONG THE YEARS IN APPEAL), LD. AO HAS NOTED THAT MY INVESTMENT IN M/S VISA AIRWAYS PVT. LTD. AS ON 31/3/2002 WAS RS.2,69,49,513/- AND THE INCOME EARNED DURING THIS YEAR ITA NOS.50 36 5037&5038 /MUM/2011 . 6 WAS RS46,75,400/-. THEREFORE, THE INVESTMENT IN M/S VISA AIRWAYS PVT. LTD. TO THE TUNE OF RS.2,22,74,113/- (RS.2,69,49,51 3/- RS4 6,75,400/-) REMAINED TO BE EXPLAINED. FURTHER, HE ERRONEOUSLY PRESUMED THAT TH IS INVESTMENT HAD BEEN MADE DURING THE 3-YEAR PERIOD FROM AY 1999-00 TO AY 2001-02. THIS CONCLUSION OF THE AO IS PATENTLY ERRONEOUS BECAUSE OUT THIS FIGURE OF RS.22,274,113/-, RS.44,05,593/- WAS INVESTED BY ME IN M/S VISA AIRWAYS PVT. LTD. ON 31/3/1998 ITSELF. THEREFORE, THE BALANCE, I F ANY, WHICH REMAINS TO BE EXPLAINED WAS ONLY RS.1,78,73,520/- THIS IS MET OUT OF THE AGRICULTURAL INCOME EARNED IN THESE 3 YEARS. THEREFORE, NO ADDITION ON THIS COUNT IS TO BE MADE. 4. COMING TO THE REOPENING OF ASSESSMENTS FOR THE A YS 1999-00 TO 2002-03, IT IS SUBMITTED THAT THE REASONS FOR INITIATING THE PR OCEEDINGS U/S 148 ARE ERRONEOUS AND FACTUALLY INCORRECT AND THEREFORE THE ENTIRE RE-ASSESSMENT IS VITIATED. A COPY OF REASONS RECORDED FOR ALL THE 4 YEARS IS ATTACHED AT PAGES 13-16 OF THE PAPER-BOOK WHEREIN IT IS STATED THAT A SIMILAR ADDITION TO CAPITAL HAS BEEN MADE DURING AY 1999-00 TO AY 2002-03 WHICH HAS RESULTED IN BUILT- UP OF CAPITAL OF RS.3.06 CRORES FOR AY 2002-03..' AS ALREADY DEMONSTRATED ABOVE, THIS ENTIRE CAPITAL OF RS.3.06 CRORES WAS NO T BUILT-UP IN THESE 4 YEARS PERIOD ALONE. IN FACT, A SUBSTANTIAL PART OF IT AMO UNTING TO RS.44,00,593/- (REFLECTED IN THE BALANCE SHEET OF M/S VISA AIRWAYS PVT. LTD. AS ON 31/3/1998) WAS MADE PRIOR TO THIS PERIOD. FOR THIS REASON ALON E, THE RE-ASSESSMENT ORDERS FOR 4 YEARS FROM AY 1991-00 TO 2002-03 DESER VED TO BE QUASHED. 5. WITHOUT PREJUDICE TO THE SUBMISSIONS ABOVE, YOUR KIND ATTENTION IS DRAWN TO PARA 7 OF THE ASSESSMENT ORDER FOR AY.1999-2000 WHI CH IS REPLICATED IN THE ASSESSMENT ORDERS FOR AY 2000-01 & 2001-02. IT READ S AS: '7. THE CIRCUMSTANCES AND FACTS OF THE CASE, THE AS SESSEE HAVING CASH AND OFFERING NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF, THAT SUMS SO CREDITED IS CHARGED TO INCOME-TAX AS THE INCOME-TAX OF THE ASSESSEE U/S 68 OF THE ACT, 1961 6. AS PER THE FACTS OF THE PRESENT CASE, YOUR GOODS ELF WOULD OBSERVE THAT THERE IS NO CREDITING OF ANY CASH IN ANY OF THESE 3 YEARS AS MISTAKENLY CONSTRUED BY THE LD. AO. IN FACT, ALL HE HAS DONE IS TO APPORTION THE UNEXPLAINED INVESTMENT IN M/S. VISA AIRWAYS PVT. LT D. (AS WORKED OUT BY HIM) AMONG THESE 3 YEARS RESULTING IN AN ADDITION OF RS. 74,27,704/- IN EACH YEAR. YOUR KIND ATTENTION IS DRAWN TO THE PROVISION OF SE CTION 68 WHEREIN IT IS STATED THAT- 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLA NATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HI M IS NOT, IN THE OPINION OF THE [ASSESSING] OFFICER, SATISFACTORY, THE SUM SO C REDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR'. SINCE I HAVE MERELY CARRIED OUT AGRICULTURAL ACTIVI TY DURING THESE 3 YEARS, I HAVE NOT MAINTAINED ANY BOOKS OF ACCOUNTS. THERE IS NO MATERIAL EXISTING ON THE BASIS OF WHICH THE LD. AO COULD HAVE CONCLUDED THAT ANY CASH AMOUNT HAS BEEN CREDITED TO MY BOOKS OF ACCOUNTS IN THESE YEAR S. ITA NOS.50 36 5037&5038 /MUM/2011 . 7 7. AT THE SAME, IT CANNOT BE DENIED THAT AN AMOUNT INVESTED IN M/S VISA AIRWAYS PVT.LTD. TO THE TUNE OF RS.2,69,49,513/- (R EFER TO PAGE 28 OF THE PAPER-BOOK) HAS BEEN FOUND REFLECTED IN MY STATEMEN T OF BALANCE AS ON 31/3/2002, OUT OF WHICH RS.46,75,400/- HAS BEEN MAD E OUT OF THE AGRICULTURAL INCOME FOR THAT YEAR. THUS AN AMOUNT OF RS.2,22,74, 113/- WHICH FURTHER STANDS REDUCED OF RS.1,78,73,520/- AS AFOREMENTIONE D REMAINED TO BE EXPLAINED. IN CASE YOUR GOODSELF IS OF THE OPINION THAT MY AGRICULTURAL INCOME FOR THE 3 YEARS SPANNING 1999-00 TO 2001-02, IS NOT SUFFICIENT TO COVER THIS INVESTMENT OF RS.1.78 CRORES, THE BALANCE MAY BE BO UGHT TO TAX. HOWEVER, SUCH BALANCE AMOUNT CANNOT BE APPORTIONED AMONG THE SE 3 YEARS U/S 68 FOR THE REASONS AFOREMENTIONED. AT BEST, IT CAN BE ADDE D U/S 69 OF THE ACT AS THE INCOME OF THE ASSESSMENT YEAR AY 2002-03 SINCE THIS WAS YEAR IN WHICH SUCH AN INVESTMENT HAS COME TO LIGHT BY VIRTUE OF THE ST ATEMENT OF AFFAIRS ATTACHED ALONG WITH MY RETURN OF INCOME FOR AY 2002-03. IN T HIS REGARD, YOUR KIND ATTENTION IS DIRECTED TO THE PROVISIONS OF SECTION 69 WHICH ARE REPRODUCED HERE UNDER:- 'WHEREIN IN THE FINANCIAL YEAR IMMEDIATELY PRECEDIN G THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT RECORDE D IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLAN ATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANATION OFFERE D BY HIM IS NOT, IN THE OPINION OF THE [ASSESSING] OFFICER, SATISFACTORY, T HE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF S UCH FINANCIAL YEAR.' LASTLY, IT IS MENTIONED THAT I AM IN THE PROCESS OF ARRANGING THE LEASE HOLD AGREEMENTS WITH THE FARMERS, THE ORIGINAL COPIES OF WHICH WERE UNFORTUNATELY DESTROYED IN THE FLOOD IN MUMBAI ON 26/7/2005. ALSO , THE ASSESSEE IS SEARCHING FOR THE LEASE DEED OF THE LEASE HOLD LAND AT MANGAON MUGAVALI VILLAGE ALONG WITH THE VOUCHERS AND STATEMENTS OF I NCOME. THEREFORE, IT IS HUMBLY REQUESTED THAT WE MAY BE GRANTED AN ADJOURNM ENT OF 3 MONTHS TO FILE FURTHER DOCUMENTARY EVIDENCES IN THE MATTER. KINDLY CONSIDER AND OBLIGE.' 6. THE LD. CIT (A) AFTER DUE CONSIDERATION OF FACT S AND EVIDENCES SUMMED UP HIS FINDINGS ON THE ISSUE AS UNDER: (I) IT IS SEEN THAT APPELLANT HAS NOT BEEN ABLE TO PRODUCE SHRI RAMDEV GAWARE WHO AS PER APPELLANT IS THE ONLY PERSON IN K NOWLEDGE OF ALL HIS AGRICULTURAL ACTIVITY INCLUDING FARMING, HARVESTING , SELLING THE CROPS IN MARKET AND COLLECTING MONEY FROM VENDORS. IT WAS APPELLANT 'S STAND BEFORE THE ITAT, MUMBAI THAT HE WILL PRODUCE MR. RAMDEV GAWARE IF ON E MORE OPPORTUNITY IS GIVEN TO HIM ON WHOM HE IS DEPENDENT FOR FURNISHING ALL THE DETAILS AND EVIDENCES REGARDING HIS AGRICULTURAL ACTIVITIES AND CONSEQUENT AGRICULTURAL ITA NOS.50 36 5037&5038 /MUM/2011 . 8 INCOME. THE APPELLANT HAS NOT PRODUCED HIM AND RATH ER AN AFFIDAVIT IN THE NAME HAS BEEN FILED. IT IS NOTEWORTHY THAT APPELLAN T HAS NOT GIVEN ANY REASON FOR NOT PRODUCING HIM DURING APPELLATE PROCEEDINGS. THE AFFIDAVIT IS FOR ASSESSMENT YEAR 2003-04 AND 2004-05 AND NOT FOR ASS ESSMENT YEAR 1999- 2000,2000-01,2001-02 AND 2002-03. (II) NOW COMING TO AFFIDAVIT IT IS OBSERVED THAT; (A) THE AFFIDAVIT OF MR. RAMDEVGAWARE ONLY SHOWS TH AT HE IS A PURCHASER OF APPELLANT PRODUCTS AT THE MOST WHICH ARE GLADIOL A AND ALOEVERA. IT IS OF SPECIAL SIGNIFICANCE TO NOTE THAT HE HAS NOT STATED ANY WHERE HE HAS EARNED 5% OF THE SALE AS CONSIDERATION IN LIEU OF ANY SERV ICES GIVEN TO THE APPELLANT LIKE CONSULTANCY AND MARKETING ETC. THE AFFIDAVIT A LSO DOES NOT SAY THAT HE HAS EVER BEEN ENGAGED IN THIS KIND OF ACTIVITY FOR THE APPELLANT. IT IS NOTEWORTHY THAT APPELLANT IN HIS STATEMENT RECORDED ON OATH ON 7.11.2006 IN RESPONSE TO QUESTION NO. 14 STATED THAT MR. NAMDEV GAWARE IS HI S CONSULTANT AND HE CHARGES 5% OF SALE CONSIDERATION OF THE PRODUCT. TH EN IN QUESTION NO. 16 APPELLANT HAS STATED THAT THE PRODUCTS ARE SOLD TO RETAIL MARKET TO FLOWER VENDOR AND SOAP INDUSTRY AND PHARMACEUTICAL INDUSTR Y THROUGH CONSULTANT MR. GAWARE. THIS AFFIDAVIT DOES NOT SAY THAT HE IS SELLING PRODUCTS OR CONSULTANT. IT IS NOT ACCOMPANIED BY ANY BILL ALSO TO SHOW THE ITEM PURCHASED QUANTITY AND RATE THEREOF, THE AMOUNT PAID AND DATE OF PAYMENT. (B) IT ALSO CREATES A DOUBT IF HE IS THE SAME MR. R AMDEVGAWARE OR A PERSON BY THE SAME NAME WHO IS HAVING HIS BUSINESS AS APMC AGENT AS THE AFFIDAVIT SAYS. THUS THE WHOLE PREMISE TAKEN BY APP ELLANT THAT HE IS IN A POSITION TO PRODUCE MR. RAMDEV GAWARE WHO ONLY KNOW S EVERYTHING ABOUT HIS AGRICULTURAL INCOME HAS REMAINED HOLLOW AND UNS UPPORTED BY THIS AFFIDAVIT. IT IS OF SPECIAL SIGNIFICANCE AS IT WAS ON INSISTENCE OF THE APPELLANT ONLY BEFORE THE HON'BLE ITAT THAT THIS OPPORTUNITY WAS GIVEN TO HIM WHICH HE DID NOT AVAIL FOR REASONS BEST KNOWN TO HIM. (C) IT IS ALSO IMPORTANT TO NOTE THAT FOR ASSESSMEN T YEAR 1999-2000 THE ASSESSING OFFICER HAS RECORDED STATEMENT OF APPELLA NT ON 07.11.2006 WHERE AS THE AFFIDAVIT FILED BY SHRI RAMDEVGAWARE IS DATE D 24.08.2006 AND HENCE IT IS ONLY NATURAL AND LOGICAL TO ASSUME THAT THIS WAS IN APPELLANTS POSSESSION. IT IS SURPRISING THAT THIS AFFIDAVIT WAS NOT FILED THE N AND RATHER IN THE STATEMENT GIVEN ON OATH ON 07.11.2006 APPELLANT SAID THAT HE WILL PROVIDE THE EXACT ADDRESS AND CONTACT NUMBER OF SHRI RAMDEV GAWARE. (D) AFFIDAVIT OF SHRI RAMDEV GAWARE IS ONLY FOR AS SESSMENT YEARS 2003-04 AND 2004-05 AND HENCE BY NO STRETCH OF IMAGINATION IT CAN BE TAKEN TO SUPPORT THE AGRICULTURAL INCOME REFLECTED BY APPELLANT FOR ASSESSMENT YEAR 1999-2000, 2000-01, 2001-02 AND 2002-03. OBVIOUSLY THE APPELLA NT'S PLEA THAT HE HAD AGRICULTURAL INCOME OF RS.44,00,594/- FOR ASSESSMEN T YEAR 2002-03 AND CONSEQUENT INCREASE SHOWN IN THE CAPITAL ACCOUNT AT RS.2,25,48,919/-,(RS. 2,69,49,513/- - RS. 44,00,594/-) HAS NOT BEEN SUBST ANTIATED. (III) THE APPELLANT HAS ALSO STATED THAT DUE TO LOS S OF DETAILS IN THE FLOOD OF JULY 2007 HE IS NOT ABLE TO PRODUCE ANY DOCUMENTS. IT IS INTERESTING TO NOTE ITA NOS.50 36 5037&5038 /MUM/2011 . 9 THAT THE SAID ACCOUNT OF INCOME AND EXPENDITURE WER E STATED TO BE MAINTAINED BY ONE C.A. SHRI K.R. MANIK FOR WHICH APPELLANT HAS FURNISHED N OW IN HIS PAPER BOOK FILED; AN INTERNET SEARCH PAPER TO AUGMENT HIS PLEA THAT SUCH A C.A. IS IN EXISTENCE. IT IS STRANGE THAT APPELLANT HAD TO SEAR CH HIM ON INTERNET IN ORDER TO FIND HIS C.A. WHO IS APPARENTLY CLAIMED BY APPELLAN T AS THE ONE MAINTAINING DETAILS OF HIS INCOME AND EXPENSES OF AGRICULTURAL ACTIVITY AS PER STATEMENT GIVEN ON OATH ON 07.11.2006 BEFORE ASSESSING OFFICE R. IT IS SURPRISING THAT EVEN AFTER SEARCHING AND FINDING THAT HIS C.A. MR. KR. MANIK IS IN EXISTENCE, HE HAS NOT TRIED TO CONTACT TO GET HIS INCOME AND E XPENDITURE ACCOUNT IF ANY WITH HIM. THE INTERNET SEARCH DONE FOR C.A; SHRI KR . MANIK THE PAPER ONLY MAKES IT CLEAR THAT ONE SHRI KR. MANIK IS AN ACTIVE MEMBER ON THE DATE OF SEARCH IE. 08.06.2009. (IV) IN FACT THE 7/12 EXTRACTS BEAR NAME OF APPELLA NT'S FATHER WHO OWNS THE PROPERTY. IT IS SURPRISING TO NOTE THAT HIS FATHER WITH THE SAME 5 ACRES OF LAND IN HIS HANDS HAVE NOT BEEN ABLE TO HAVE ANY SURPLUS BY WAY OF AGRICULTURAL INCOME WHEREAS AS APPELLANT WITH THE SAME THINGS IN PLACE AND WITHOUT ADDING ANY TECHNOLOGY OR INFRASTRUCTURE ON THAT IS CLAIMING TO HAVE EXORBITANT SURPLUS AS AGRICULTURE INCOME. THE 7/12 EXTRACT FUR NISHED BY THE APPELLANT ONLY SHOWS THAT HIS FATHER OWNS THE LAND. THE AREA OF LAND IS AROUND 5 ACRS. THE APPELLANT HAS FILED A DECLARATION DATED 4.12.20 09 FROM HIS FATHER, OWNER OF THE LAND STATING THAT HE HAS SURRENDERED ALL RIG HTS AND OBLIGATION IN THIS LAND TO HIS SON, APPELLANT. (V) ONE MORE PLEA TAKEN BY THE APPELLANT IS THAT TH E APPELLANT IS HAVING TALATI'S CERTIFICATE REGARDING THE CULTIVATION CARR IED OUT ON THE AGRICULTURAL LAND PASSED ON TO HIM BY HIS FATHER. IT IS SEEN THA T THE CERTIFICATE DOES NOT SPEAK THAT HE IS CULTIVATING ANY LAND BELONGING TO OTHERS THOUGH APPELLANT HAS CLAIMED THAT HE HAS CULTIVATED 20 ACRES OF OTHERS L AND TAKEN ON LEASE BY THE APPELLANT. IT IS ALSO IMPORTANT TO NOTE THAT THE AG RICULTURAL INCOME CERTIFIED IS IN THE RANGE OF RS.4,30,000/- WHEREAS APPELLANT IS CLAIMING IT TO THE TUNE OF RS.40 TO RS.50 LAKHS EVERY YEAR. 7.7 IN VIEW OF THE DISCUSSION MADE IN THE LIGHT OF FACT FOUND AND REPRODUCED ABOVE, THIS AMOUNT OFRS.1,78,73,519/- HAS TO HE BRO UGHT TO TAX AS APPELLANT FAILED TO SUBSTANTIATE HIS CLAIM THAT THIS AMOUNT I S EARNED AS AGRICULTURAL INCOME FOR WANT OF ANY SUPPORTING EVIDENCES, VOUCHE RS, BILLS, DETAILS OF CROPS FOR THESE ASSESSMENT YEARS STARTING FROM 1999-2000 TO 2003-04. THE ASSESSING OFFICER HAS MADE ADDITION OF RS.74,27,704 /- EACH IN THESE THREE ASSESSMENT YEARS BY TAKING 1/3RD OF THE DIFFERENTIA L AMOUNT OF THE FIGURE REF1ECTED AS ON 31.03.1998 AND 31.03.2002. I AGREE WITH APPELLANT THAT FOR ASSESSMENT YEARS 1999-2000, 2000-01 & 2001-02 NO AD DITION CAN BE MADE U/S 68 AND HAS TO BE MADE IN ASSESSMENT YEAR 2002-0 3 U/S 69 OF THE ACT. 8. NOW COMING TO ASSESSMENT YEAR 2002-03 THE APPEL LANT HAS CLAIMED THAT THE AMOUNT OF RS.46,75,400/- INTRODUCED IN CAP ITAL ACCOUNT OF APPELLANT IN ASSESSMENT YEAR 2002-03 IS CLAIMED OUT OF AGRICU LTURAL INCOME OF ITA NOS.50 36 5037&5038 /MUM/2011 . 10 ASSESSMENT YEAR. IN VIEW OF DISCUSSION MADE ABOVE T HIS AMOUNT IS ALSO FOUND TO BE UNEXPLAINED INCOME OF THE APPELLANT BROUGHT I N THE NAME OF AGRICULTURE INCOME LIKE THAT FOR ASSESSMENT YEAR 1999-2000 TO 2 001-02. IN VIEW OF THIS ADDITION FOR THIS AMOUNT ALSO HAS TO BE MADE IN ASS ESSMENT YEAR 2002-03 ONLY. THUS THE TOTAL ADDITION OF RS.1,78,73,519/- + RS.46,75,400/- IE. RS.2,25,48,919/- IS SUSTAINED AS INCOME OF THE APPE LLANT FOR ASSESSMENT YEAR 2002-03 U/S. 69 BEING HIS UNEXPLAINED INCOME. 9. IN THE RESULT THE APPEAL IS DISMISSED ACCORDING LY. 7. WE HAVE HEARD LEARNED REPRESENTATIVE OF THE PART IES AND HAVE ALSO GONE THROUGH THE RECORDS. THE LD. AR COULD NOT BRING BEF ORE US ANY NEW FACT AND ALSO COULD NOT POINT OUT ANY EVIDENCE TO SHOW THAT THE A SSESSEE HAD GOT ANY LAND ON LEASE AS HAS BEEN CLAIMED BY THE ASSESSEE. EVEN, THERE AR E LOT OF CONTRADICTIONS BETWEEN THE AVERMENTS MADE BY SHRI GAWARE IN HIS AFFIDAVIT, AND THE SUBMISSIONS OF THE ASSESSEE IN THIS RESPECT. THOUGH THE CASE OF THE ASSESSEE HA S BEEN THAT MR. GAWARE USED TO LOOK INTO THE AGRICULTURAL ACTIVITIES OF THE ASSESS EE, WHEREAS THE SAID MR. GAWARE IN HIS AFFIDAVIT HAS CLAIMED THAT HE HAD PURCHASED THE AGRICULTURE PRODUCE FROM THE ASSESSEE. THE ASSESSEE COULD NOT POINT OUT AS TO WH OM THE ASSESSEE HAD SOLD HIS PRODUCE. THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE TO SHOW THAT ASSESSEE HAD EVER DONE THE AGRICULTURAL ACTIVITIES OR HAD ANY AGRICUL TURE INCOME AS CLAIMED. THOUGH THE ASSESSEE HAD PRODUCED SOME REVENUE RECORD RELATING TO THE OWNERSHIP OF THE LAND OF THE FATHER OF THE ASSESSEE, HOWEVER, A PERUSAL OF T HE SAID REVENUE RECORD REVEALS THAT THERE IS NO MENTION OF ANY AGRICULTURAL ACTIVITIES OR AGRICULTURAL PRODUCE ETC. ON THE SAID LAND. THE ASSESSEE HAS CLAIMED THAT THE LAND W AS USED FOR GROWING MANGOES AND CASHEW NUTS WHICH ARE FRUITS FROM PERMANENT TREES. THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENT TO SHOW THAT SUCH TREES EVER EXISTED I N THE LAND OF THE FATHER OF THE ASSESSEE. EVEN THE ASSESSEE HAD SOUGHT TO PRODUCE M R. GAWARE BEFORE THE AO, BUT DESPITE TAKING AMPLE OPPORTUNITY NOT ONLY BEFORE TH E AO BUT ALSO IN TWO ROUNDS OF APPEALS BEFORE THE CIT(A), THE ASSESSEE HAS FAILED TO DO SO. THE ASSESSEE HAS FAILED TO PRODUCE ANY COGENT AND CONVINCING EVIDENCE TO SHOW THAT HE HAD ANY AGRICULTURAL ITA NOS.50 36 5037&5038 /MUM/2011 . 11 INCOME AS WAS CLAIMED BY HIM IN HIS RETURNS OF INCO ME. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE WELL REASONED ORDERS OF THE CI T(A) AND SAME IS HEREBY UPHELD. . IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.07.2014 . * / 18.07.2014 * SD/- SD/- ( R.C.SHARMA) (SANJAY GARG) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; / DATED 18.07.2014 .../ A.K.PATEL , PS * 12 32/ COPY OF THE ORDER FORWARDED TO : 1. 4 / THE APPELLANT 2. 154 / THE RESPONDENT. 3. 6() / THE CIT(A)- MUMBAI CONCERNED 4. 6 / CIT MUMBAI CONCERNED 5. 2 1, , / DR, ITAT, MUMBAI D BENCH 6. / GUARD FILE. / BY ORDER, 52 1 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI