RAJENDRA NAMDEORAO KACHI, Pune V. Income Tax Office, Ward-5(3), Pune, Pune

ITA 534/PUN/2023

AI Insights

The case involves Rajendra Namdeorao Kachi, who appealed against the order of the CIT(A) confirming the addition of Rs.34,82,251 to his income for the assessment year 2014-15. The addition was initially made by the Assessing Officer (AO) under section 68 of the Income-tax Act, 1961, due to discrepancies in the agricultural receipts claimed by the assessee from the sale of onions and potatoes. The AO found inconsistencies in the bills and lack of evidence of the agricultural produce being routed through the Agriculture Produce Market Committee (APMC), Pune. The CIT(A) reduced the addition by Rs.5.50 lakh, treating it as normal agricultural expenses. The ITAT further allowed the deduction of Rs.18.00 lakh as agricultural expenses, resulting in a net addition of Rs.19.32 lakh as income under section 68.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124149 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 02-07-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 02-05-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. /ITA No.534/PUN/2023 नधा रण वष / Assessment Year : 2014-15 Rajendra Namdeorao Kachi, 622 (1+2), 665, Chaitraban, Bibwewadi, Pune 411 037 Maharashtra PAN : AKQPK6537N Vs. ITO, Ward-5(3), Pune Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP: This appeal by the assessee arises out of the order dated 10-03-2023 passed by the CIT(A) in National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2014-15. 2. The only issue raised in this appeal is against the confirmation of addition of Rs.34,82,251/-. 3. Briefly stated, the facts of the case are that the assessee claimed to have received gross agricultural receipts at Rs.40,32,251/- (Onion of Rs.34,79,778 + Potato of Rs.5,52,475) from M/s Shree Data Assessee by Shri Nikhil Pathak Revenue by Shri Arvind Desai Date of hearing 05-07-2023 Date of pronouncement 06-07-2023 ITA No.534/PUN/2023 Rajendra Namdeorao Kachi 2 Digambar Company from sale of agricultural produce during the year under consideration. The assessee submitted that he was not directly involved in agricultural activities, but doing it through two cultivating farmers, namely, Shri Shantaram Ghule and Shri Sunil Ghule. Out of such total sale proceeds of Rs.40,32,251/-, the assessee claimed to have spent Rs.18.00 lakh to these two farmers as agricultural expenses. The AO required the assessee to produce the two farmers. One of them, namely, Shri Shantaram Ghule appeared who stated that the seeds and fertilisers were purchased by the assessee and handed over to him. In response to question No.8, he submitted that the assessee paid him a sum of Rs.1.50 lakh to 2.50 lakh during the year. The AO carried out investigation in respect of the sales of agricultural produce to M/s. Datta Digambar Company. Information u/s.133(6) was called for, which was furnished. On its perusal, the AO observed discrepancies in the bill nos. and the relevant dates on which such bills were claimed to have been issued. As against Bill No.6597 having date of 2-2-2013, the next number was 6595 was having date of 4-12-2013 and No. 6594 of 6-12-2013 and so on. The AO further observed that the sales to M/s. Datta Digambar Company were not routed through Agriculture Produce Market Committee (APMC), Pune. In this backdrop of the facts, the ITA No.534/PUN/2023 Rajendra Namdeorao Kachi 3 AO treated the receipts of Rs.40,32,251/- as income u/s.68 of the Act. The ld. CIT(A) reduced the addition by Rs.5.50 lakh. Aggrieved thereby, the assessee is in appeal before the Tribunal. 4. Having heard the rival submissions and gone through the relevant material on record, it is seen that the assessee made out a case that the entire agricultural produce was sold to M/s. Datta Digambar Company. However, M/s. Datta Digambar Company could not place any convincing evidence of transportation of the produce to them. Further, there were no weighing slips available with them. Still further, the sales were not routed through APMC. The books of M/s. Datta Digambar Company disclosed bill nos. and dates in an unevenly order inasmuch as the first bill dt. 2-12-2013 bore No.6595, however, the later bill dt. 6-12-2013 bore the earlier No.6594. Similar is the position regarding all other bills. Likewise bill dt. 30-12-2013 bore No.6579, whereas bill dt. 2-01-2014 bore No.6577. In view of these facts, it is clear that the assessee could not substantiate that the sales were genuinely made to M/s. Datta Digambar Company. 5. Shri Shantaram Ghule, the farmer who cultivated the assessee’s land, admitted in his statement before the AO that he was paid a sum of Rs.1.50 lakh to Rs.2.50 lakh for the year under consideration. ITA No.534/PUN/2023 Rajendra Namdeorao Kachi 4 This part of the statement has not been controverted by the AO. This shows that some agricultural activity was carried out on the land of the assessee by this person. The ld. CIT(A) has treated normal agricultural expenses at 45% of the gross receipts. By considering Rs.2.50 lakh as equivalent expense at 45%, he extrapolated gross agricultural receipts at Rs.5.50 lakh and confirmed the remaining addition of Rs.34,82,251/- (Rs.40,32,251 – Rs.5.50 lakh). The Revenue has not challenged the order passed by the ld. CIT(A). This shows that the genuine agricultural receipts of Rs.5.50 lakh, as estimated by the ld. CIT(A), is not in dispute. If agricultural expenses of Rs.2.50 lakh are deducted from it, the net agricultural income comes to Rs.3.00 lakh. 6. It is pertinent to note that as against gross agricultural receipts of Rs.40,32,251/-, the assessee reduced Rs.18.00 lakh towards expenses and declared net agricultural income at Rs.22,32,251/-. It is only this income which could have been considered by the AO for the purposes of addition and not the gross receipts at Rs.40.32 lakh. By considering the genuine net agricultural income at Rs.3.00 lakh, the remaining amount of Rs.19.32 lakh is held to be income u/s.68 of the Act. ITA No.534/PUN/2023 Rajendra Namdeorao Kachi 5 7. In the result, the appeal is partly allowed. Order pronounced in the Open Court on 06 th July, 2023. Sd/- (R.S.SYAL) VICE PRESIDENT पुणे Pune; िदनांक Dated : 06 th July, 2023 सतीश आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to : 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. 4. 5. The Pr.CIT concerned DR, ITAT, ‘SMC’ Bench, Pune गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune ITA No.534/PUN/2023 Rajendra Namdeorao Kachi 6 Date 1. Draft dictated on 05-07-2023 Sr.PS 2. Draft placed before author 05-07-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *