ITO, New Delhi V. Smt. Shimla Devi, New Delhi

ITA 6524/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3118 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 08-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NAINA SAIN KAPIL
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Capital asset; Fair market value; Corroborative evidences
• Section: 50C; 68; 37

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SMT BEENA A PILLAI , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6524/DEL/2015 (ASSESSMENT YEAR: 2011 - 12 ) ITO, WARD - 41(3), NEW DELHI VS. SHIMLA DEVI, C - 29, NEW MULTAN NAGAR, NEW DELHI PAN: AFYPD6835R (APPELLANT) (RESPONDENT) REVENUE BY : SMT NAINA SAIN KAPIL, SR. DR ASSESSEE BY: NONE DATE OF HEARING 22/01 / 201 9 DATE OF PRONOUNCEMENT 28 / 02 / 2019 O R D E R PER PRASHANT MAHARISHI, A. M. 1 . THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - 14, NEW DELHI DATED 2011 - 12. 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,90,03,658/ - MADE BY THE AO ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON SALE OF LAND, TREATING THE LAND AS AGRICULTURAL LAND WHEREAS IN FACT THE AREA HAS BEEN DECLARED AS INDUSTRIAL CLUSTER BY THE DELHI GOVT. VIDE NOTIFICATION ALSO IGNORING THAT THE ASSESSEE HAS NEVER DONE ANY AGRICULTURAL ACTIVITY ON THIS LAND. 2. THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 22,00,000/ - MADE BY THE AO ON ACCOUNT OF INCOME FROM OTHER SOURCES INSTEAD OF AGRICU LTURAL INCOME IGNORING THE FACTS THAT THE CREDIT WORTHINESS AND GENUINENESS FOR PAYING ADVANCE OF PERSONS PURPORTED TO HAVE PAID LEASE RENT TO ASSESSEE WERE NOT ESTABLISHED. 3 . FACTS STATED IN BRIEF SHOWS THAT ASSESSEE IS AN INDIVIDUAL WHO FILED HER RETURN O F INCOME ON 3/8/2011 DECLARING TOTAL INCOME OF INR 8 05980/ . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS. DURING THE YEAR, THE ASSESSEE HAS EARNED INCOME FROM SALE OF PROPERTY, OTHER SOURCES AND AGRICULTURAL INCOME. AS PER THE A I R INFORMATION, THE ASSESSEE HAS DEPOSITED CASH IN A SAVINGS BANK ACCOUNT AND SHOWN SALE/PURCHASE OF IMMOVABLE PROPERTIES , THAT REQUIRES TO BE VERIFIED. ASSESSEE HAS ALSO SHOWN PAGE | 2 AN AGRICULTURAL INCOME OF INR 2,200,000 AS RENT RECEIVED OF HER AGRICULTURAL LA ND. ON THE SALE OF THE PROPERTY , THE LEARNED ASSESSING OFFICER NOTED THAT NET CONSIDERATION OF TWO PLOTS OF AGRICULTURAL LAND SOLD BY THE ASSESSEE, HAS NOT BEEN SHOWN AT THE CIRCLE RATE . THE LEARNED ASSESSING OFFICER ADOPTED THE CIRCLE RATE HOLDING THAT THESE AGRICULTURAL LAND ARE F ALLING INTO THE INDUSTRIAL AREA AND ADOPTING THAT RATE , APPLIED THE PROVISIONS OF SECTION 50C OF THE ACT . THEREFORE FOR PLOT NUMBER 76 THE LEARNED AO ADOPTING THE SALE CONSIDERATION OF INR 10398843 COMPUTED THE SHORT - TER M CAPITAL GAIN OF INR 9 740081 AGAINST SHORT - TERM CAPITAL LOSS DISCLOSED BY THE ASSESSEE OF INR 1 58762. WITH RESPECT TO PLOT NUMBER 76C THE AO ADOPTED THE NET SALE CONSIDERATION UNDER SECTION 50 C OF INR 1 0090624 AND COMPUTED SHORT - TERM CAPITAL GAIN OF INR 9 563617 AGAINST SHORT - TERM CAPITAL LOSS SHOWN BY THE ASSESSEE OF INR 2 7009/ . THE LEARNED ASSESSING OFFICER ALSO NOTED THAT THE ASSESSEE HAS SHOWN THE AGRICULTURAL INCOME AS RENT RECEIVED FROM AGRICULTURAL LAND FROM TWO DIFFERENT PARTIES. ON EXAMIN ATION OF BOTH THE PARTIES , THE LEARNED AO NOTED THAT THE Y A RE NOT CAPABLE OF PROVING THAT THEY HAVE PAID THE RENT POINTING OUT MANY INFIRMITIES. THEREFORE, THE AGRICULTURAL LAND RENT SHOWN BY THE ASSESSEE OF INR 2,200,000 WAS ASSESSED BY THE LEARNED ASSE SSING OFFICER AS INCOME FROM OTHER SOURCES. CONSEQUENTLY THE ASSESSMENT UNDER SECTION 143 (3) OF THE INCOME TAX ACT WAS PASSED ON 31/3/2014. ON APPEAL BEFORE THE LEARNED ASSESSING OFFICER BOTH THESE ADDITIONS ARE DELETED AND THEREFORE THE REVENUE IS IN A PPEAL BEFORE US AGAINST BOTH THE ADDITIONS DELETED BY THE LEARNED CIT APPEAL. 4 . DESPITE NOTICE TO THE ASSESSEE, NONE APPEARED ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. ON EARLIER 3 OCCASIONS, THE APPEALS WERE LISTED FOR HEARING AND ON ALL THE OCCAS IONS ASSESSEE HAS SOUGHT ADJOURNMENTS. ON ALL THE EARLIER DATES OF HEARING , ASSESSEE SUBMITTED APPLICATION FOR ADJOURNMENT STATING NAMES OF DIFFERENT ADVOCATES, BUT NEITHER FILING THEIR POWER OF ATTORNEY, NOR THOSE ADVOCATES SEEKING ADJOURNMENT. ON ONE OF THE OCCASION, ASSESSEE DEPUTED ONE ADVOCATE WITH LIMITED INSTRUCTION OF SEEKING ADJOURNMENT. UNTIL TO DATE WE DONO T HAVE ANY POWER OF ATTORNEY IN FAVOR OF ANY ADVOCATE. THIS APPEAL IS FILED IN 2015 AND SUBSTANTIAL TIME HAS PASSED BUT ASSESSEE HAS NO T MADE DUE ARRANGEMENT DESPITE MANY NOTICES. THE NOTICE FOR THE HEARING TODAY WA S ISSUED TO THE ASSESSEE BY REGISTERED POST, PAGE | 3 DESPITE THIS ASSESSEE DID NOT CHOOSE TO REPRESENT HER CASE. AS THIS APPEAL IS PENDING FOR A LONG TIME, ASSESSEE IS CONSTANTL Y SEEKING ADJOURNMENTS WITHOUT FILING ANY POWER OF ATTORNEY OR EVEN ENGAGING ANY ADVOCATE, NOT RESPONDING TO THE NOTICES DESPITE BEING SERVED AND PROVIDING ENOUGH TIME, WE DONOT HAVE ANY ALTERNATIVE BUT TO DISPOSE OF THE MATTER. IN VIEW OF THIS, W E DO NOT HAVE ANY ALTERNATIVE BUT TO DECIDE THE ISSUE ON MERIT AS PER INFORMATION AVAILABLE ON RECORD. 5 . COMING TO THE FACTS OF THE 1 ST GROUND OF APPEAL WHERE ADDITION OF INR 19003658 ON ACCOUNT OF SHORT - TERM CAPITAL GAIN ON SALE OF LAND IS DELETED BY THE LE ARNED CIT APPEAL, THE FACT SHOWS THAT, THE LEARNED AO FOUND THAT ASSESSEE HAS SOLD FOUR PROPERTIES AND OUT OF WHICH IN TWO PROPERTIES , THE ASSESSEE HAS SHOWN SHORT - TERM CAPITAL LOSS. THEREFORE WITH RESPECT TO THESE 2 PROPERTIES IN WHICH ASSESSEE HAS SHO WN SHORT - TERM CAPITAL LOSS THE LEARNED AO ISSUED SHOW CAUSE NOTICE ON 28/3/2014. THE ASSESSEE REPLIED IT . BASED ON THIS THE LEARNED ASSESSING OFFICER NOTED THAT DURING THE YEAR ASSESSEE HAS SOLD 2 PROPERTIES PLOT AREA ADMEASURING 455.50 Y D BEARING PLOT NUMBER 76C AT MUNDKA , NEW DELHI AND PLOT AREA 4 42 YD AT VILLAGE M UNDKA , NEW DELHI. THE ASSESSEE HAS NOT TAKEN THE SALE PRICE OF THESE PROPERTIES AT CIRCLE RATE. A O ALSO NOTED THAT THE ABOVE PLOTS ARE IN INDUSTRIAL AREA AND ARE AS PER MASTER DEVELOPMENT PLAN OF DELHI/2010 FALLING INTO CATEGORY C. THE CIRCLE RATE OF THIS PROPERTY IS ADOPTED AT RS 27300 PER SQUARE METER . ACCORDINGLY HE INVOKED THE PROVISIONS OF SECTION 50C AND CALCULATED THE SHORT - TERM CAPITAL GAIN IN RESPECT OF THE ABOVE PROPERTIES AND MADE AN ADDITION OF INR 19303658/ . 6 . ASSESSEE APPROACHED THE COMMISSIONER OF INCOME TAX APPEALS 14, NEW DELHI AGAINST THE ORDER OF THE AO. THE LEARNED CIT A PASSED AN ORDE R ON 24/9/2015. THE LEARNED CIT A HELD THAT PROVISIONS OF SECTION 50C ARE NOT APPLICABLE IN CASE OF THE ASSESSEE BECAUSE ( I ) THE LEARNED UNDER CONSIDERATION IS NOT CATEGORIZED AS INDUSTRIAL LAND AS PER THE LAND RECORDS OF THE GOVERNMENT OF DELHI ON THE DAT E OF THE SALE THEREFORE THE RATE APPLIED BY THE AO OF THE INDUSTRIAL AREA ARE NOT APPLICABLE TO AGRICULTURAL AREA PAGE | 4 ( II ) THE AREA IN WHICH THE APPELLANT HAD SOLD LAND IN APRIL/MAY 2010 IS STILL NOT NOTIFIED AS INDUSTRIAL AREA AND VARIOUS CONDITIONS TO BE FULFIL LED BY THE OCCUPANTS ARE STILL NOT COMPLIED WITH THEREFORE IT CANNOT BE CALLED AS AN INDUSTRIAL AREA ( III ) THE LEARNED AO HAS REFERRED TO THE NOTIFICATION DATED 23/3/2015 WHICH COULD NOT BE APPLIED FOR THE SALE OF LAND IN APRIL AND MAY 2010 . ( IV ) ASSESSEE TRANSFER RED THE PROPERTY IN QUESTION BY EXECUTI NG AN AGREEMENT WHICH WAS NOT REGISTERED WITH THE REGISTERING AUTHORITY AND THEREFORE SECTION 50C COULD NOT HAVE COME INTO OPERATION AND THE RESULTANT APPLICATION OF SECTION 55A BY WHICH THE AO GOT THE PROPERTY VALUE D AND ADOPTED THE REPORT OF THE VALUATION OFFICER IS THE SOLE BASIS FOR MAKING THE IMPUGNED ADDITION WAS WHOLLY INVALID. ( V ) THE ASSESSING OFFICER HAS NOT EMBARKED UPON MAKING INQUIRIES FROM THE PURCHASER ABOUT THE ACTUAL SALE CONSIDERATION AND HAS NOT BROUG HT ON RECORD ANY OTHER MATERIAL WORTH THE NAME TO SHOW THAT THE SALE CONSIDERATION DECLARED BY THE ASSESSEE WAS UNDERSTATED ( VI ) N CASE OF ADJOINING PLOTS THE SUB DIVISIONAL MAGISTRATE HAS HELD THAT THESE PLOTS SITUATED IN THE REVENUE ESTATE OF VILLAGE MUNDKA , DELHI ARE AGRICULTURAL LAND ( VII ) ASSESSEE HAS CALCULATED THE CAPITAL GAIN ON THE TRANSACTIONS OF PURCHASE AND SALE OF LAND AND SHOWN IN THE RETURN OF INCOME AS PER THE PROVISIONS OF THE ACT. ACCORDINGLY HE DELETED THE ADDITION OF INR 1 9003658 TO THE INCOME OF THE ASSESSEE. 7 . THE LEARNED SENIOR DR VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICER AND SUBMITTED THAT THE REASONS GIVEN BY THE LEARNED CIT FOR DELETING THE ADDITION UNDER SECTION 50 C OF THE INCOME TAX ACT ARE NOT SUSTAINABLE IN LAW. SHE SUBMITTED THAT A . THE ASSESSMENT YEAR INVOLVED IS ASSESSMENT YEAR 2011 12 AND THE PROVISIONS OF SECTION 50 C OF THE INCOME TAX ACT APPLIES TO THE SALE OF PAGE | 5 LAND EVEN IF IT IS THORUGH AGREEMENT WHICH IS NOT REGISTERED . SHE STATED THAT THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT PROVIDES THAT NET SALES CONSIDERATION IF IT IS LESS THAN THE FAIR MARKET VALUE AS PER THE STAMP DUTY THEN SAME SHOULD BE ADOPTED AS NET SALES CONSIDERATION. B . THE ASSESSEE HAS ALSO NOT CLAIM ED BEFORE THE ASSESSING OFFICER THAT CIRCLE RATE IS NOT THE FAIR MARKET VALUE OF THE PROPERTY. THERFORE ONLY OPTION WITH THE REVENUE IS TO ADOPT THE FMV FOR STAMP DUTY AS PER REGISTERING AUTHORITIES. C . WHETHER THE LAND IS CATEGORIZED AS THE INDUSTRIAL LAND OR AS AGRICULTURAL LAND BUT THE PROVISIONS OF SECTION 50C APPLIES . SHE STATED THAT THE ASSESSEE HAS NEVER CONTESTED BEFORE THE ASSESSING OFFICER THAT THE AGRICULTURAL LAND SOLD BY THE ASSESSEE IS NOT INDUSTRIAL LAND AND THEREFORE THE LEARNED CIT HAS INCORRECTLY FOUND FAULT WITH THE ASSESSING OFFICER. D . E VEN WHEN NO SALE DEED EXECUTED IS NO GROUND ABOUT NON APPLICABILITY OF THE PROVISIONS OF SECTION 50C OF THE ACT. SHE REFERRED TO THE AMENDMENT IN SECTION 50 C AND STATED THAT DEC ISION RELIED BY CIT (A) ARE PRIOR TO AMENDMENT AND DOES NOT APPLY TO THE AY IN THIS APPEAL. E . LEARNED ASSESSING OFFICER IS NOT REQUIRED TO BRING ANYTHING MORE ON RECORD OTHER THAN THE DIFFERENCE BETWEEN THE FAIR MARKET VALUE AS PER THE CIRCLE RATE AND THE NET SALE CONSIDERATION SHOWN BY THE ASSESSEE. F . S UB DIVISIONAL MAGISTRATE DOES NOT HAVE ANY AUTHORITY TO STATE THAT LAND AS AGRICULTURAL LAND AND WHICH LAND AS INDUSTRIAL LAND. SHE OTHERWISE STATED THAT IT IS NOT THE DISPUTE THAT WHETHER THE LAND IS AGRI CULTURAL OR NOT BUT THE REAL DISPUTE IS WHAT IS THE FAIR MARKET VALUE OF THAT PARTICULAR PROPERTY FOR THE PURPOSE OF THE CIRCLE RATE. THEREFORE SHE STATED THAT THE DELETION OF THE ADDITION OF INR 1 9003658 MADE BY THE LEARNED CIT A IGNORING THE PROVISI ONS OF SECTION 50C OF THE ACT IS NOT SUSTAINABLE IN LAW. 8 . WE HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE AS WELL AS PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ADMITTEDLY, THE ASSESSEE HAS SOLD TWO PLOTS OF LAND WHERE THE PAGE | 6 SALE CONSIDERATION HAS NOT BEEN SUBSTITUTED WITH THE CIRCLE RATE. THE LEARNED AO ADOPTED THE CIRCLE RATE OF THE PROPERTIES HOLDING THEM TO BE AN INDUSTRIAL LAND WHERE THE CLAIM OF THE ASSESSEE IS THAT THEY ARE AGRICULTURAL LAND. THE LEARNE D CIT APPEAL SURPRISINGLY DELETED THE WHOLE ADDITION RELYING UPON THE DECISION OF THE TRIBUNAL IN 110 ITD 525, WHICH WAS PERTAINING TO ASSESSMENT YEAR 2003 04. THE RELEVANT ASSESSMENT YEAR BEFORE THE LEARNED CIT APPEAL IN THE IMPUGNED APPEAL IS ASSESSME NT YEAR 2011 12. THE PROVISIONS OF SECTION 50C HAVE UNDERGONE AMENDMENT WITH EFFECT FROM 01/10/2009. THIS AMENDMENT HAS BEEN IGNORED BY THE LEARNED CIT A. THE PROVISIONS OF SECTION 50C AS IT STOOD THEN PROVIDES AS UNDER: - [ SPECIAL PROVISION FOR FU LL VALUE OF CONSIDERATION IN CERTAIN CASES. 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED 91 [OR ASSESSABLE ] BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE STAMP VALUATION AUTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED 91 [OR ASSESSABLE] SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB - SECTION (1), WHERE ( A ) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED 91 [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB - SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRA NSFER; ( B ) THE VALUE SO ADOPTED OR ASSESSED 91 [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB - SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB - SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE ( I ) OF SUB - SECTION (1) AND SUB - SECTIONS (6) AND (7) OF SECTION 23A, SUB - SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODI - FICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPL Y IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB - SECTION (1) OF SECTION 16A OF THAT ACT. 92 [ EXPLANATION 1 ]. FOR THE PURPOSES OF THIS SECTION, VALUATION OFFICER SHALL HAVE THE SAME MEANING AS IN CLAU SE ( R ) OF SECTION 2 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957). 93 [ EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION ASSESSABLE MEANS THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDIN G ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY.] (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB - SECTION (2), WHERE THE VALUE ASCERTAINED UNDER SUB - SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED 93 [OR PAGE | 7 ASSESSABLE] BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB - SECTION (1), THE VALUE SO ADOPTED OR ASSESSED 93 [OR ASSESSABLE] BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER.] THEREFORE, EVEN IF THE DOCUMENT IS NOT REGISTERED WITH THE REGISTERING AUTHORITY, THE SALE PRICE IS REQUIRED TO BE SUBSTITUTED WITH THE FAIR MARKET VALUE , IF IT IS MORE THAN THE SALE CONSIDERATION DECLARED BY THE ASSESSEE FOR PURPOSE OF C O M P U T A T I O N OF CAPITAL GAIN . THE AMENDMENT TO SECTION 50C OF THE INCOME TAX ACT HAS BEEN IGNORED BY THE LEARNED CIT A. EVEN OTHERWISE THE LEARNED CIT A HAS DELETED THE ADDITION BY GIVING THE REASONS WHICH ARE NOT RELEVANT FOR COMPUTATION OF SHORT - TERM CAPITAL GAIN IN THE HANDS O F THE ASSESSEE BY ADOPTING THE FAIR MARKET VALUE. IT IS NOT THE DUTY OF THE ASSESSING OFFICER TO SHOW THAT ASSESSEE HAS RECEIVED HIGHER CONSIDERATION THEN THE CONSIDERATION SHOWN IN THE DEED TO INVOKE THE PROVISIONS OF SECTION 50C OF THE ACT. THEREFORE, THIS REASON GIVEN BY THE LEARNED CIT APPEAL IS ALSO NOT SUSTAINABLE. THE LEARNED CIT APPEAL HAS ALSO STATED THAT THE SUB DIVISIONAL MAGISTRATE HAS HELD THAT THE PLOT SOLD BY THE ASSESSEE ARE AGRICULTURAL LAND BECAUSE OF THE REASON THAT ADDITION PLOTS HAVE BEEN HELD BY THE SUB DIVISIONAL MAGISTRATE TO BE AN AGRICULTURAL LAND. ACCORDING TO US, THIS FACT HAS NOT RELEVAN CE . WHAT IS RELEVANT IS WHAT IS THE FAIR MARKET VALUE OF THE PROPERTY THAT HAS BEEN SOLD BY THE ASSESSEE AS PER THE CIRCLE RATE. THE LEARN ED CIT APPEAL HAS NOT AT ALL CONSIDERED IT AND PROCEEDED TO DELETE THE ADDITION ON ALTOGETHER IRRELEVANT CONSIDERATIONS. IN VIEW OF THIS, WE SET ASIDE THE WHOLE ISSUE BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER WITH A DIRECTION TO THE ASSESSEE TO SH OW WHAT IS THE FAIR MARKET VALUE OF THE PROPERTY SOLD BY THE ASSESSEE AS PER THE CIRCLE RATE. SUCH CIRCLE RATE IS REQUIRED TO BE ADOPTED AS THE NET SALE CONSIDERATION AND RESULTANT COMPUTATION OF CAPITAL GAIN IS REQUIRED TO BE MADE. THE LEARNED AO MAY AL SO ENQUIRE THE SAME TO THE REGISTERING AUTHORITY. ACCORDINGLY, GROUND NUMBER 1 OF THE APPEAL OF THE REVENUE IS ALLOWED WITH ABOVE DIRECTION. 9 . COMING TO GROUND NUMBER 2 OF TREATMENT OF AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AS INCOME FROM OTHER SOURCES BY THE LEARNED ASSESSING OFFICER , THE FACT SHOWS THAT, ON VERIFICATION OF THE RETURN OF INCOME THE LEARNED AO NOTED THAT THE ASSESSEE HAS DECLARED AN AMOUNT OF INR 2,200,000 AS PAGE | 8 AGRICULTURAL INCOME BEING RENT RECEIVED FROM TWO D IFFERENT PERSONS . ASSESSEE WAS ASKED TO JUSTIFY HIS CLAIM ALONG WITH THE NECESSARY SUPPORTING EVIDENCE. THE ASSESSEE SUBMITTED THAT SHE OWNS 46 BIGHA OF AGRICULTURAL LAND, WHICH WAS GIVEN TO TWO PARTIES ON ANNUAL RENT OF RS 10 LAKHS AND RS 12 LAKHS AGGREGATING TO INR 2,200,000 RESPECTIVELY. THE LEARNED ASSESSING OFFICER WAS ALSO SUBMITTED THE DETAILS OF LEASE MONEY RECEIVED FROM THE PARTIES AS WELL AS THE AGRICULTURAL PRODUCE DETAILS. THE LEARNED ASSESSING OFFICER EXAMINED THE PARTIES FROM WHOM T HE ASSESSEE HAS RECEIVED LEASE RENT. BASED ON THE STATEMENT THE LEARNED ASSESSING OFFICER CAME TO CONCLUSION THAT SUCH PERSONS WERE VERY POOR AND CANNOT PAY SUCH A HUGE SUM IN ADVANCE TO THE ASSESSEE. THEY ALSO DENIED IN THEIR STATEMENT THAT THEY HAVE GI VEN ANY ADVANCE TO THE ASSESSEE. THERE WAS DIFFERENCE IN THE PRODUCE WHICH ASSESSEE IS CLAIMING AND THOSE PERSONS ARE STATING. THE LEARNED ASSESSING OFFICER HAS CONCLUDED THAT SUCH PERSON DID NOT HAVE ANY CAPACITY TO PAY SUCH A HUGE AMOUNT OF MONEY TO TH E ASSESSEE AS ADVANCE MONEY. THEY DO NOT HAV E ANY KNOWLEDGE OF AGRICULTURAL. THE STATEMENT OF ANOTHER PERSON WAS ALSO RECORDED WHO DID NOT REPLY TO MANY THINGS SUCH AS HIS REGULAR MONTHLY INCOME , TYPE OF CROPS AND TIME OF CROP CULTIVATED. SUCH PERSON A LSO STATED THAT HE HAS PAID A SUM OF INR 1,000,000 TO THE ASSESSEE IN INSTALMENT FROM BORROWED MONEY BUT DID NOT DISCLOSE THE SOURCE OF SUCH BORROWINGS . HE DID NOT HAVE ANY BANK ACCOUNT AND DID NOT REPLY TO ANY QUESTIONS RELATED TO AGRICULTURAL ACTIVITI ES CARRIED ON. HE A LSO LEFT THE OFFICE OF THE AO WHEN THE STATEMENT WAS STILL IN PROGRESS. THEREFORE THE LEARNED ASSESSING OFFICER DISBELIEVED THE CLAIM OF THE ASSESSEE THAT SUM OF INR 2,200,000 IS RECEIVED BY THE ASSESSEE IS AN AGRICULTURAL RECEIPT AND TREATED IT AS INCOME FROM OTHER SOURCES. THERFORE T HE LEARNED ASSESSING OFFICER MADE AN ADDITION OF INR 2,200,000 ON ACCOUNT OF FUNDS RECEIVED FROM MR LA V KUSH AND MR ANAND HOLDING THEM THAT THEY ARE NOT AGRICULTURAL RECEIPTS BUT INCOME FROM OTHER SOURCE S. ACCORDINGLY, HE COMPUTED THE TOTAL INCOME OF THE ASSESSEE AT RS. 22195411/ AND PASSED AN ASSESSMENT ORDER UNDER SECTION 143 (3) ON 31/3/2014. 10 . ASSESSEE APPROACHED THE COMMISSIONER OF INCOME TAX APPEALS 14, NEW DELHI AGAINST THE ORDER OF THE AO. THE LEARNED CIT A PASSED AN ORDER ON 24/9/2015. THE LEARNED CIT A DELETED THE ADDITION OF INR 2,200,000 ON PAGE | 9 ACCOUNT OF AGRICULTURAL INCOME DISBELIEVED BY THE LEARNED AO. THE LEARNED CIT APPEAL GAVE THE REA SON THAT WITH RESPECT TO THE AGRICULTURAL INCOME ASSESSEE HAS FILED THE COPY OF AGRICULTURAL PRODUCE CERTIFICATES FROM GOVERNMENT OFFICERS IN FORM NUMBER P 4 WHICH EVIDENCES THAT AN AGRICULTURAL ACTIVITIES CARRIED ON THE LAND. HE ALSO STATED THAT AGRICU LTURAL INCOME MEANS ANY RENTER REVENUE DERIVED FROM LAND, WHICH IS SITUATED IN INDIA AND IS USED FOR AGRICULTURAL PURPOSES . HE THEREFORE HELD THAT AS THE ASSESSEE HAS PROVIDED AS AGRICULTURAL LAND TO THE DIFFERENT CULTIVATORS FOR CARRYING OUT THE AGRICU LTURAL ACTIVITIES AND IN LIEU OF THAT , FARMERS HAVE PAID TO THE APPELLANT THE RENT, WHICH HAS BEEN CLAIMED BY THE APPELLANT AS AGRICULTURAL INCOME. FURTHER THE PERSONS FROM WHOM THE RENT WAS RECEI VED HAVE GIVEN COPIES OF THEIR AADHAR CARD AND VOTER ID I N ORDER TO PROVE THEIR IDENTITY , AS THEY ALL WERE NOT ASSESSABLE TO INCOME TAX NEITHER OF THEM FILED THEIR INCOME TAX RETURNS AND NOR HAD THEIR PERMANENT ACCOUNT NUMBER. HE FURTHER HELD THAT NO ADVERSE EVIDENCE HAS BEEN BROUGHT AGAINST THE CLAIM OF THE A SSESSEE DURING THE COURSE OF ASSESSMENT. HENCE, HE HELD THAT THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITION OF INR 2,200,000 TO THE INCOME OF THE APPELLANT BY TREATING AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. ACCORDINGLY, HE D ELETED THE ADDITION. THE REVENUE AS PER GROUND NUMBER 2 OF THE APPEAL CHALLENGES THIS DELETION . 11 . THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICER AND STATED THAT BOTH THE PERSONS FROM WHOM THE RENT HAS BEEN RECEIVED HAVE BEEN EXAMINED BY AO, BOTH OF THEM HAVE BEEN FOUND NOT THE PERSONS OF ADEQUATE MEANS. SHE FURTHER STATED THAT THERE IS A DIFFERENCE BETWEEN THE AGRICULTURAL PRODUCE CLAIMED BY THE ASSESSEE AND STATED BY THOSE PERSONS. IT WAS FURTHER CLAIMED THAT THEY HAVE DENIED THE AGRICULTURAL INCOME EARNED BY THEM OF SUCH A NATURE AND HAS ALSO DENIED AS ADVANCE TO THE ASSESSEE . SHE ALSO STATED THAT THE LEARNED CIT A HAS DELETED THE WHOLE ADDITION ONLY BASED ON THE PROOF OF THOSE PE RSONS ABOUT THEIR IDENTITY. SHE STATED THAT THE ASSESSEE HAS RECEIVED THE MONEY OF INR 2,200,000 AS AGRICULTURAL LAND, WHICH DOES NOT SHOW ANY GENUINENESS OF THE RECEIPT OF SUCH A HUGE RENT WHEN THOSE PERSONS HAVE NOT EARNED ANY MONEY OUT OF THIS AGRICULT URAL LAND. SHE FURTHER STATED THAT WHEN THE AGRICULTURAL ACTIVITIES ARE NOT DONE ON THAT PARTICULAR LAND OR IT IS PAGE | 10 SO SMALL THAT IT CANNOT GENERATE SUCH A KIND OF REVENUES , THE WHOLE CLAIM OF THE ASSESSEE OF RECEIVING SUCH A HUGE RENT IS DEVOID OF ANY MER IT. SHE FURTHER STATED THAT THOUGH THE ASSESSING OFFICER HAS MADE THE ADDITION AS INCOME FROM OTHER SOURCES BUT THE REAL ADDITION SHOULD HAVE BEEN MADE UNDER SECTION 68 OF THE ACT AS UNEXPLAINED CASH DEPOSITED IN THE BANK ACCOUNT. 12 . WE HAVE CAREFULLY CONSI DERED THE RIVAL CONTENTION AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IN THE PRESENT CASE, THE ASSESSEE HAS SHOWN RECEIPT OF INR 2,200,000 AS RENTAL INCOME FROM AGRICULTURAL LAND. THE SOURCE OF SUCH LAND RENT STATED BY THE ASSESSEE ARE TWO DIFFER ENT PARTIES WHO WERE EXAMINED BY THE LEARNED ASSESSING OFFICER AND FOUND TO BE THE PERSON OF SMALL MEANS WHO COULD NOT HAVE AFFORDED PAYMENT OF SUCH A HUGE RENT TO THE ASSESSEE . EVEN OTHERWISE, THERE AGRICULTURAL ACTIVITIES ALSO DID NOT SUBSTANTIATE THE AMOUNT OF RENT THAT THOSE PERSONS W OULD HAVE PAID . ON EXAMINATION OF THE PARTIES, THEY HAVE DENIED PAYING ANY ADVANCE RENT TO THE ASSESSEE. ONE OF THE PERSON COULD NOT COMPLETE HIS STATEMENT B EFORE THE ASSESSING OFFICER AND LEFT THE OFFICE OF THE LEARNED AO. THE ASSESSEE HAS ALSO NOT MADE ANY EFFORT TO PROVE THE SOURCE OF AGRICULTURAL RENT RECEIVED FROM THESE PARTIES BY SUBSTANTIATING THE SAME , PROVING THE GENUINESNESS THEREOF. THE LEARNED CI T A HAS DELETED THE WHOLE ADDITION AS AADHAR CARD OR VOTER IDENTIFICATION HAS BEEN GIVEN BY THOSE PERSONS. THE LEARNED CIT A HAS FURTHER STATED THAT NO ADVERSE EVIDENCE HAS BEEN BROUGHT AGAINST THE CLAIM OF THE ASSESSEE DURING THE COURSE OF ASSESSME NT WHEN THE LEARNED ASSESSING OFFICER HAS MADE A DETAILED EXAMINATION OF THOSE PERSONS IN BOTH THE PERSONS WERE FOUND TO BE OF NO MEANS. THE LEARNED CIT A HAS IGNORED THE STATEMENT OF THESE TWO PERSONS RECORDED BY THE LEARNED ASSESSING OFFICER. THE LD C IT A ALSO DID NOT EXAMINE ANYTHING BUT MERELY BELIEVED THE CLAIM OF THE ASSESSEE. THERE IS NO CONCRETE FINDING ABOUT THE DIFFERENCE BETWEEN THE AGRICULTURAL PRODUCE. HE ALSO DID NOT EXAMINE THE FACTS THAT HOW THE PERSONS OF SUCH A SMALL MEAN COULD HAVE GIV EN THE RENT IN ADVANCE TO THE ASSESSEE. HE ALSO DID NOT GAVE ANY FINIDNG THAT THE AMOUNT OF RENT PAID BY THE OTHER PERSON IS OUT OF BORROWINGS AND WHAT COULD HAVE BEEN THE SOURCES OF BORROWING BY THAT PERSON TO PAY SUCH A HUGE RENT TO THE ASSESSEE. HE ME RELY BELIEVED THE WRITTEN SUBMISSION OF THE ASSESSEE FOR PAGE | 11 DELETING THE ADDITION. THEREFORE, WE DO NOT FIND THAT ON THE FACTS STATED BY THE LEARNED ASSESSING OFFICER THE ADDITION DESERVES TO BE DELETED. WE FURTHER FULLY AGREE WITH THE ARGUMENT OF THE LEAR NED SENIOR DEPARTMENTAL REPRESENTATIVE THAT THE LEARNED ASSESSING OFFICER SHOULD HAVE MADE THE ADDITION AS UNEXPLAINED CREDIT UNDER SECTION 68 BUT THE LEARNED ASSESSING OFFICER UNDER THE MISTAKE HAS MADE THE ADDITION AS INCOME FROM OTHER SOURCES. WE ARE N OT CONCERNED WITH IT AND NOW WE CANNOT CORRECT IT ALSO. THERFORE , WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED ASSESSING OFFICER IN TREATING THE ABOVE INCOME AS INCOME FROM OTHER SOURCES AND CERTAINLY NOT AS AN AGRICULTURAL INCOME. IN VIEW OF THIS, WE CONFIRM THE ACTION OF THE LEARNED ASSESSING OFFICER IN HOLDING THAT AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IS INCOME FROM OTHER SOURCES. IN THE RESULT, WE REVERSE THE ORDER OF THE LEARNED CIT APPEAL AND RESTORE THE ORDER OF THE LEARNED ASSESSING OFF ICER; CONSEQUENTLY, GROUND NUMBER 2 OF THE APPEAL OF THE REVENUE IS ALLOWED. 13 . IN THE RESULT, APPEAL OF THE LEARNED ASSESSING OFFICER IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 8 / 02 / 2019 . - SD/ - - SD/ - ( BEENA A PILLAI ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 8 / 02 / 2019 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI