Dy.Commissioner of Income Tax, Lucknow V. Mohd. Zubair Siddiqui, Lucknow

ITA 719/LKW/2014

• Counselvise Citation: 71923714 RSA 2014
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 12-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: YOGESH AGRAWAL
• Keywords: Unexplained cash credit; Business income; Income from undisclosed sources; Earning of tax free income; Source of fund; Permanent establishment
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.719/LKW/2014 ASSESSMENT YEAR:2010-11 DCIT RANGE VI LUCKNOW V. MOHD. ZUBAIR SIDDIQUI LUCKNOW TAN/PAN:ALGPS8949B (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. MANJU THAKUR, D.R. RESPONDENT BY: SHRI. YOGESH AGRAWAL, ADVOCATE DATE OF HEARING: 14 07 2015 DATE OF PRONOUNCEMENT: 14 08 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS:- 1. THE COMMISSIONER OF INCOME TAX (APPEALS), LUCKNOW HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.39,31,550/- MADE ON ACCOUNT OF CASH DEPOSITS IN SAVING BANK ACCOUNT IN THE NAME OF ASSESSEE AND HIS BROTHER WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COULD NOT PRODUCE' ANY CONCRETE EVIDENCE REGARDING ARISING OF AGRICULTURAL INCOME AND DEPOSITING THE SAME INTO SAVING BANK ACCOUNT. THE CIT(A) ALSO FAILED TO APPRECIATE THAT THE ASSESSEE COULD NOT DIFFERENTIATE THE AMOUNT DEPOSITED IN SAVING BANK ACCOUNT BY HIM AND HIS BROTHER. 2. THE COMMISSIONER OF INCOME TAX (APPEALS), LUCKNOW HAS ERRED IN LAW AND ON FACT OF THE CASE IN DELETING THE ADDITION OF :- 2 -: RS.9,15,044/- MADE ON ACCOUNT OF DIFFERENCE OF AMOUNT OF DIFFERENCE OF AMOUNT BETWEEN THE SHARE PROFIT FROM VARIOUS FIRMS SHOWN IN THE RETURN OF INCOME AND COPY OF ACCOUNTS. THE CONTENTION OF THE ASSESSEE THAT THE DIFFERENCE OF AMOUNT AS SHOWN IN RETURN OF INCOME AS SHARE PROFIT FROM VARIOUS FIRMS AND CLAIMED AS EXEMPT INCOME AND AS SHOWN IN THE COPY OF ACCOUNTS OF THE VARIOUS FIRM, WAS ACTUALLY THE SHARE IN FIRMS PRIOR THE ACCOUNTING FOR THE FIRM'S TAX, IS NOT ACCEPTABLE. 3. THE COMMISSIONER OF INCOME TAX (APPEALS), LUCKNOW HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS.1,51,200/- MADE ON ACCOUNT OF INCOME FROM HOUSE PROPERTY U/S 23 OF THE INCOME TAX ACT, 1961 IGNORING THE FACT THAT THE ASSESSEE IS THE OWNER OF TWO PROPERTY AND HAD CLAIMED BOTH THE HOUSE PROPERTIES AS SELF OCCUPIED PROPERTIES. 2. APROPOS GROUND NO.1, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME DECLARING TOTAL INCOME AT RS.8,03,480/- AND AGRICULTURAL INCOME WAS SHOWN AT RS.20,00,750/-. THE ASSESSING OFFICER HAS NOTICED THAT IN THE JOINT SB ACCOUNT IN THE NAME OF THE ASSESSEE AND HIS BROTHER, SHRI. SHEIK MOHD. TARIQUE WITH BANK OF BARODA, CHOWK, LUCKNOW THERE IS CASH CREDIT ENTRIES OF RS.39,31,550/-. THE ASSESSEE WAS REQUIRED TO FURNISH SOURCE OF THESE CASH CREDIT ENTRIES AND IN RESPONSE THERETO IT WAS STATED ON BEHALF OF THE ASSESSEE THAT THE CASH DEPOSIT IN THE JOINT SB ACCOUNT IS OUT OF SALE PROCEEDS OF MANGO ORCHARD AND DIFFERENT CROPS. IT WAS ALSO EXPLAINED THAT FROM THESE SOURCE THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME AT RS.20,00,750/- IN HIS RETURN OF INCOME. IN ORDER TO SUBSTANTIATE THE AGRICULTURAL INCOME, THE ASSESSEE HAS ALSO PRODUCED KHASRA AND KHATAUNI AND AUCTION PAPERS OF MANGO ORCHARD BEFORE THE ASSESSING OFFICER. THE DETAILS OF AUCTION PAPERS ARE AS UNDER:- :- 3 -: SL. NO. NAME OF THE PERSON WHO MADE AUCTION ADDRESS AUCTION AMOUNT 1 SHRI WASHEEM AHMAD S/O SHRI WAHIDALI SANDILA, HARDOI 1958000/- 2 SHRI SHAHID AH S/O SHRI SHAMATARIALI SANDILA , HARDOI 2126000/- 3 SHRI NANHAY LAL S/O SHRI GURDIN SANDILA, HARODOI 684000/- 4 SHRI ANIL KUMAR S/O SHRI RAM SARAN MALIHABAD, LUCKNOW 179000/- 5 SHRI SALEEM AHMAD S/O SHRI MAZIDALI SANDILA , HARODI 53000/- 3. THE ASSESSING OFFICER HAS ANALYZED THESE AUCTION PAPERS AND HAS NOTICED THAT THE AUCTION PAPERS WERE NOT ON STAMP PAPERS AND THERE ARE CERTAIN DISCREPANCIES IN THE SIGNATURES OF BIDDERS AND WITNESSES ON THE AUCTION PAPERS. HE ACCORDINGLY DOUBTED THE EXPLANATION OF THE ASSESSEE AND TREATED THE ENTIRE DEPOSIT IN THE JOINT BANK ACCOUNT AS UNEXPLAINED CASH CREDIT AND MADE ADDITION OF THE SAME. 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT THE AMOUNT OF RS.39,31,550/- WAS DEPOSITED IN THE JOINT BANK ACCOUNT WITH HIS BROTHER AND THIS AMOUNT WAS RECEIVED FROM VARIOUS AUCTIONEERS OF THE ORCHARD FROM TIME TO TIME IN CASH. IT WAS FURTHER EXPLAINED THAT BECAUSE MOST OF THE AUCTIONEERS ARE ILLITERATE AND HAVE NO BANK ACCOUNT OF THEIR OWN, THE AUCTION MONEY WAS RECEIVED IN CASH. BEFORE THE LD. CIT(A) HE HAS ALSO FILED PHOTOCOPIES OF KHASRA AND KHATAUNI, AUCTION PAPERS WITH NAMES AND ADDRESSES OF THE PERSONS WHO TOOK PART IN THE AUCTION OF ORCHARDS, REPORT OF UDHYAN ADHIKARI, LUCKNOW AND REPORT OF TEHSILDAR, MALIHABAD, LUCKNOW SHOWING ANNUAL INCOME OF ALL FIVE MANGO :- 4 -: ORCHARDS ALONG WITH COPY OF BANK ACCOUNT IN WHICH THE AFORESAID CASH HAS BEEN DEPOSITED BY VARIOUS AUCTIONEERS OF ORCHARDS FROM TIME TO TIME. IT WAS FURTHER CONTENDED THAT THE ASSESSING OFFICER HAS IGNORED OR RATHER FAILED TO APPRECIATE THE FACT THAT FIRSTLY ALL THE PEOPLE WHO PARTICIPATE IN AUCTION ARE ILLITERATE AND NOT HAVING ANY PERMANENT ESTABLISHMENT. FURTHER THE ASSESSEE AND HIS FAMILY HAVE BEEN EARNING AGRICULTURAL INCOME FOR MORE THAN 30 YEARS AND THE AMOUNT OF RS.39,31,550/- WAS PART OF THE TOTAL AGRICULTURAL INCOME EARNED BY TWO BROTHERS I.E. THE ASSESSEE AND HIS BROTHER, SHRI. SHEIK MOHD. TARIQ. MOREOVER, IN THIS YEAR, THE INCOME OF THE MOTHER, SMT. SAGIRA KHATOON IS INCLUDED, AS SHE HAD EXPIRED AND HER 20% SHARE HAS ALSO BEEN INCLUDED IN THE INCOME OF THE ASSESSEE AND HIS BROTHER. IT WAS FURTHER EXPLAINED THAT THE ASSESSING OFFICER HAS MADE ADDITION OF THE ENTIRE DEPOSIT IN THE HANDS OF THE ASSESSEE WHEREAS 50% OF THE DEPOSITS BELONG TO THE BROTHER OF THE ASSESSEE. 5. THE LD. CIT(A) RE-EXAMINED THE ISSUE IN THE LIGHT OF ASSESSEES CONTENTIONS AND THE INCOME TAX INSPECTORS REPORT AND BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, HE DELETED THE ADDITION. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE:- 10. I HAVE GONE THROUGH THE ORDER PASSED OF THE A.O. U/S 143(3), WRITTEN SUBMISSIONS FILED BY THE APPELLANT DURING APPELLATE PROCEEDINGS AS WELL AS THE FACTS OF THE CASE. I NOW PROCEED TO DECIDE THE APPEAL ON THE BASIS OF THE GROUNDS OF APPEAL RAISED BEFORE ME. GROUND NO. I TO IV IN RESPECT OF ADDITION MADE ON ACCOUNT OF INCOME FROM OTHER SOURCES TREATING THE AGRICULTURAL INCOME AS UNDISCLOSED SOURCES OF INCOME OF RS.39,31,550/-. THE AO HAS DISCUSSED THIS ISSUE IN PARA 3 OF ASSESSMENT ORDER FOR MAKING THE ADDITION IS THAT THE APPELLANT HAS FAILED TO FURNISH THE COMPLETE ADDRESSES OF BIDDER AS MENTIONED SUPRA. THE MAIN, CONTENTION OF THE ASSESSING OFFICER IS THAT THE AUTHENTICITY AND GENUINENESS OF THE TRANSACTION OF SALE OF :- 5 -: MANGO TO DIFFERENT BIDDERS IS NOT VERIFIABLE FROM THE PAPERS SUBMITTED DURING ASSESSMENT PROCEEDINGS. FURTHER THE AO HAS ALSO MENTIONED THAT THE APPELLANT DID NOT PRODUCE THESE BIDDERS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE AO HAS MADE THE ADDITION BY TREATING THE AMOUNT DEPOSITED IN THE JOINT BANK ACCOUNT OF THE ASSESSEE AND HIS BROTHER SHEIK MOHD. TARIQ AS INCOME FROM UNDISCLOSED SOURCES DEPOSITED IN THE SAID BANK ACCOUNT. 11. DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS FURNISHED WRITTEN SUBMISSION ON THE REMAND REPORT WAS OBTAINED FROM AO AND COUNTER COMMENT OF THE APPELLANT ON REMAND REPORT HAS ALSO BEEN OBTAINED AND IS PLACED ON RECORD. THE CONTENTION OF THE APPELLANT IN WRITTEN SUBMISSION AS WELL AS ON THE COUNTER COMMENT OF THE REMAND REPORT MENTIONED SUPRA. THE FINDING GIVEN BY THE AO IN ASSESSMENT ORDER AND REMAND REPORT HAS ALSO BEEN TAKEN ON RECORD AS MENTIONED SUPRA. I NOW PROCEED TO DECIDE THE ISSUE BEFORE ME. IT IS OBSERVED THAT THE APPELLANT HAS FILED BEFORE THE AO THE LAND HOLDING PAPERS SHOWING THE EXISTENCE OF ADULT AND FRUIT BEARING MANGO TREES APART FROM 'OTHER IRRIGATED AGRICULTURAL LAND ON WHICH CROPS OF WHEAT, RABI, RICE, VEGETABLES ETC. WERE BEING GROWN. THESE DOCUMENTS HAVE ALSO BEEN FILED BEFORE ME AND ARE PLACED ON RECORD. THE AO HAS ALONG WITH HIS REMAND REPORT SUBMITTED A COPY OF THE INSPECTOR REPORT WHO HAD ACTUALLY VISITED THE SITE OF AGRICULTURAL LANDS AND ORCHARDS. THE ITI HAS GIVEN THE NUMBER OF TREES EXISTING, THE PRODUCE PER TREE AND THE SALE RATE. HE HAS ALSO MENTIONED THE SALE CONSIDERATION RECEIVED FOR THE YEAR AS PER LOCAL ENQUIRIES. THE ITI HAS EVEN MENTIONED IN HIS REPORT THE EXISTENCE OF 30 BIGHAS OF IRRIGATED AGRICULTURAL LAND. AS PER THE WORKING OF THE ITI WHICH THE APPELLANT HAS SUBMITTED IN RESPONSE O THE REMAND REPORT VIDE REPLY DATED 15TH MAY, 2014 THE INCOME FROM MANGO TREES ITSELF WORKS OUT TO RS.65,31,250/-. THE ITI HAS ALSO MENTIONED THE EXISTENCE OF THE ADULT TREES ON THE APPELLANT'S LAND. AS PER ORDER SHEET ENTRY DATED 22ND APRIL 2014 THE APPELLANT WAS REQUIRED TO FILE THE REPORT OF THE DISSTT. HORTICULTURE DEPARTMENT REGARDING PRODUCE OF MANGO AND ITS SALE RATE. THE SAME IS ALSO FILED ALONG WITH WRITTEN SUBMISSION ON 15- :- 6 -: 5-2014. AS PER THE SAID REPORT THE INCOME WHICH CAN BE GENERATED FROM SALE OF MANGOES ITSELF IS RS.50,16,600/-. OVER AND ABOVE THE SALE OF MANGOES THE APPELLANTS CLAIMED THAT THE REVENUE GENERATED FROM OTHER AGRICULTURAL OPERATIONS IS RS.2 TO 3 LAKHS PER ANNUM AFTER DEDUCTING THE EXPENSES. 12. THE APPELLANT IN HIS PAPER BOOK HAS ALSO FILED THE COPIES OF THE JUDGMENTS OF THE ITAT, LUCKNOW BENCH IN HIS OWN CASE AS WELL AS HIS BROTHER WHO IS THE CO-OWNER OF THE LANDS FOR A.Y.'S 2006-07 AND ALSO THE COPY OF THE ORDER THE CIT (A)'S FOR A.Y. 2008-09 IN THE CASE OF THE APPELLANT. ON PERUSAL OF THE DECISION OF THE HON'BLE ITAT REVEALS THAT THE APPELLANT AND HIS BROTHER WERE DERIVING AGRICULTURAL INCOME OF RS.11,33,200/ EACH FOR A.Y. 2006-07. THE APPELLANT SUBMITS THAT DURING THE SAID A.Y. 2006-07. THE MOTHER OF THE APPELLANT SMT. SAGIRA KHATOON WAS ALSO DISCLOSING AGRICULTURAL INCOME OF RS.5,66,600/-. SINCE HER DEATH IN A.Y. 2009-10 THE INCOME OF THE MOTHER IS NOW DISTRIBUTED BETWEEN THE TWO BROTHERS EQUALLY. THE LAND HAS ALSO DEVOLVED UPON THE TWO BROTHERS IN EQUAL PROPORTION. IT IS SEEN THAT IN A.Y. 2006-07 THE INCOME FROM THESE MANGO ORCHARDS ITSELF IS AROUND RS.28.5 LAKHS. IN A.Y. 2008-09 THE APPELLANT HAS DISCLOSED .AN INCOME OF RS. 13,42,000/- IN HIS OWN CASE. TAKING THE INCOME OF THE BROTHER AND HIS MOTHER OF RS.6.71,000/- THE INCOME SO DISCLOSED FOR THAT YEAR WORKS OUT TO RS.33.5 LAKHS APPROX. LOOKING TO THE INCREASING TREND OF THE AGRICULTURAL PRODUCE AND INCOME THE INCOME DISCLOSED BY THE APPELLANT AND HIS BROTHER DURING THE ASSESSMENT YEAR UNDER CONSIDERATION THE INCOME SO DISCLOSED AND AS DEPOSITED IN THE JOINT BANK ACCOUNT OF RS.39,31,550/- CANNOT BE SAID TO BE EXCESSIVE AND UNREASONABLE, SPECIFICALLY WHEN THE APPELLANT AND HIS BROTHER ALSO OWN OTHER IRRIGATED AGRICULTURAL LAND. I FIND FORCE IN THE ARGUMENT OF THE APPELLANT THAT IF THE SAID BANK ACCOUNT WAS IN THE JOINT NAMES OF THE APPELLANT AND HIS BROTHER SRI. SHEIK MOHD. TARIQ ALSO AN EXISTING ASSESSEE REGULARLY ASSESSEE TO TAX AND SHOWING AGRICULTURAL INCOME THE SAME CANNOT BE TREATED THE DEPOSITS IN THE SAID JOINT BANK ACCOUNT SOLELY OF THE APPELLANT. THE RETURN OF INCOME OF THE BROTHER SRI. SHEIK MOHD. TARIQ WAS ALSO FILED WITH THE SAME AO :- 7 -: WHEREIN HE HAS NOT MADE ANY ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSITS, TREATING THE AGRICULTURAL INCOME AS UNDISCLOSED INCOME. I FIND THAT THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD WHICH WOULD JUSTIFY THE ENTIRE DEPOSITS IN SAID BANK ACCOUNT AS BELONGING THE APPELLANT. 13. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE I HOLD THAT THE AO WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.39,31,550/- IN THE PRESENT CASE AND TREATING THE GENUINE AGRICULTURAL INCOME OF RS.20,00,750/- AS BEING FROM UNDISCLOSED SOURCES AND THE ADDITION MADE BY THE AO DESERVES TO BE DELETED. THUS THE ADDITION OF RS.39,31,550/- MADE AS INCOME FROM OTHER SOURCES WHICH WAS DEPOSITED IN THE JOINT BANK ACCOUNT IS HEREBY DELETED. THUS THE APPELLANT GETS RELIEF OF RS.39,31,550/-. 6. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND HAS PLACED HEAVY RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER WHEREAS THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THIS IS NOT THE FIRST YEAR IN WHICH THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME. THE ASSESSEE OWNED ORCHARDS WHICH WERE AUCTIONED TO VARIOUS AUCTIONEERS AND THE AUCTION MONEY WAS DEPOSITED FROM TIME TO TIME IN THE JOINT BANK ACCOUNT OF THE ASSESSEE WITH HIS BROTHER, SHRI. SHEIK MOHD. TARIQ AND HIS BROTHER HAS ALSO CLAIMED AGRICULTURAL INCOME FOR THE IMPUGNED ASSESSMENT YEAR AT RS.20,00,750/- EQUAL TO THE AGRICULTURAL INCOME EARNED BY THE ASSESSEE WHICH SHOWS THAT BOTH THE BROTHERS HAVE EARNED EQUAL AGRICULTURAL INCOME AND AGRICULTURAL INCOME SHOWN BY THE BROTHER OF THE ASSESSEE HAS NOT BEEN DOUBTED BY THE REVENUE. IT WAS FURTHER CONTENDED THAT THE ASSESSEE HAS ALSO PLACED COPY OF THE REVENUE RECORD IN ORDER TO ESTABLISH THE OWNERSHIP OF ORCHARDS AND ONCE THE ASSESSEE OWNED ORCHARDS, THERE HAS TO BE SOME AGRICULTURAL INCOME; WHEREAS THE ASSESSING OFFICER HAS OUTRIGHTLY REJECTED THE EXPLANATIONS OF THE ASSESSEE AND MADE ADDITION OF THE ENTIRE DEPOSIT IN THE JOINT BANK ACCOUNT, IN THE HANDS OF THE ASSESSEE. :- 8 -: COPIES OF THE RETURN FILED BY HIS BROTHER, SHRI. SHEIK MOHD. TARIQ AND JOINT BANK ACCOUNT ARE PLACED ON RECORD. COPIES OF THE ORDERS OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 AND ALSO IN THE CASE OF HIS BROTHER ARE FILED BEFORE US, IN WHICH THE ASSESSING OFFICER HIMSELF HAS ADMITTED AGRICULTURAL INCOME AT RS.11.20 LAKHS IN THE HANDS OF THE ASSESSEE. NOW THE ASSESSMENT YEAR INVOLVED IS 2010-11 AND THERE IS EVERY POSSIBILITY OF INCREASE IN THE AGRICULTURAL INCOME. IT WAS ALSO CONTENDED BY THE ASSESSEE THAT DURING THE IMPUGNED ASSESSMENT YEAR MOTHER OF THE ASSESSEE WAS EXPIRED AND THE ORCHARD BELONG TO HIS MOTHER WAS INHERITED BY THE ASSESSEE AND HIS BROTHER. THEREFORE, THE INCOME OF THE MOTHER HAS ALSO BEEN SHOWN IN THE HANDS OF THE ASSESSEE. COPIES OF THE RETURNS OF THE MOTHER OF THE ASSESSEE FOR 2004-05, 2006-07, 2008-09 AND 2009-10 ARE ALSO PLACED ON RECORD. 7. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE ASSESSEE OWNED AGRICULTURAL LAND IN THE FORM OF FIVE MANGO ORCHARDS. IN ORDER TO ESTABLISH THE OWNERSHIP OF THE MANGO ORCHARDS, COPIES OF THE REVENUE RECORD I.E. KHASRA AND KHATAUNI WERE ALSO PLACED BEFORE THE LOWER AUTHORITIES AND THERE IS NO SPECIFIC FINDING BY THE ASSESSING OFFICER DENYING THE OWNERSHIP OF THE ORCHARDS BY THE ASSESSEE. ONCE THE ASSESSEE IS HELD TO BE THE OWNER OF THE ORCHARDS, THERE HAS TO BE SOME AGRICULTURAL INCOME EARNED THEREFROM. IT IS ALSO EVIDENT FROM THE RECORD THAT BEFORE THE ASSESSING OFFICER ASSESSEE HAS FILED DETAILS OF THE PERSONS WHO GOT CONTRACT OF THESE ORCHARDS IN AUCTION. IT IS ALSO EVIDENT FROM THE RECORD THAT THIS CASH WAS DEPOSITED IN THE JOINT BANK ACCOUNT OF THE ASSESSEE AND HIS BROTHER, BUT THE ASSESSING OFFICER HAS TREATED THE ENTIRE CASH DEPOSIT AS UNEXPLAINED IN THE HANDS OF THE ASSESSEE; WHEREAS THE ASSESSEE HAS CONTENDED THAT WHATEVER AUCTION MONEY WAS RECEIVED, IT WAS DEPOSITED IN THE JOINT BANK ACCOUNT OF THE ASSESSEE AND HIS BROTHER, SHRI. SHEIK MOHD. TARIQ. THE TOTAL CASH DEPOSIT :- 9 -: WAS OF RS.39,31,550/- WHEREAS THE ASSESSEE AND HIS BROTHER CLAIMED AGRICULTURAL INCOME TO BE AT RS.20,00,750/- EACH AND IN THE HANDS OF THE BROTHER, NO ADDITION WAS MADE BY THE ASSESSING OFFICER. THE ASSESSEE HAS ALSO PLACED COPY OF THE RETURN OF HIS MOTHER IN ORDER TO ESTABLISH THAT THE MOTHER WAS EXPIRED DURING THE YEAR AND AGRICULTURAL INCOME EARNED BY HER WAS ALSO DEPOSITED IN THE SAME ACCOUNTS OF THE ASSESSEE, AS THEY ARE THE INHERITORS OF THEIR MOTHER. IT IS ALSO NOTICED THAT THE ASSESSEE HAS FILED WRITTEN SUBMISSION BEFORE THE LD. CIT(A) ON WHICH REMAND REPORT WAS CALLED BY THE LD. CIT(A) AND THEREAFTER ON THE REMAND REPORT COMMENTS WERE ALSO SOUGHT FROM THE ASSESSEE. THE LD. CIT(A), WHILE ADJUDICATING THE ISSUE, HAS TAKEN INTO ACCOUNT THE REPORT OF THE TEHSILDAR, MALIHABAD, LUCKNOW AND REPORT OF THE UDHYAN ADHIKARI, LUCKNOW WITH RESPECT TO THE PRODUCTION OF MANGOES FROM THESE ORCHARDS AND ALSO REPORT OF THE INCOME TAX INSPECTOR. KEEPING IN VIEW THE REPORTS, THE LD. CIT(A) HAS HELD THAT NO ADDITION IS CALLED FOR, AS THE AMOUNT DEPOSITED IN THE JOINT BANK ACCOUNT IS AGRICULTURAL INCOME EARNED BY THE ASSESSEE. THE LD. CIT(A) HAS ALSO OBSERVED IN HIS ORDER THAT EVEN AFTER COMPLETION OF THE ASSESSMENT, INDEPENDENT ENQUIRY WAS ALSO CONDUCTED IN RESPECT OF RECEIPT FROM THE AGRICULTURE PRODUCES BY THE THEN ASSESSING OFFICER THROUGH AN INSPECTOR. HAVING TAKEN NOTE OF ALL THESE FACTS, THE LD. CIT(A) HAS DELETED THE ADDITION. DURING THE COURSE OF HEARING, THE LD. D.R. HAS SIMPLY PLACED RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER AND NO DEFECT WAS POINTED OUT IN THE ORDER OF THE LD. CIT(A). WE, HOWEVER, HAVE CAREFULLY EXAMINED THE ORDER OF THE LD. CIT(A) AND WE FIND THAT THE LD. CIT(A) HAS ADJUDICATED THE ISSUE IN THE RIGHT PERSPECTIVE IN THE LIGHT OF DETAILED EVIDENCE FILED BY THE ASSESSEE. WE ACCORDINGLY CONFIRM THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 8. APROPOS GROUND NO.2, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED FROM THE DETAILS OF CAPITAL INVESTMENT THAT :- 10 -: THE ASSESSEE HAS SHOWN PROFIT ON BUSINESS AT RS.20,65,710.14 FROM DIFFERENT FIRMS WHICH IS AS UNDER:- SL.NO. PARTYS NAME PROFIT 1 REPUBLIC SERVICE CENTRE 20,191.94 2 METRO CARGO CARRIERS 6,59,382.20 3 REPUBLIC AUTO SALES 13,86,136.00 TOTAL 20,65,710.14 9. HOWEVER, IN THE RETURN OF INCOME THE ASSESSEE HAS SHOWN SHARE IN THE PROFIT OF FIRM AT RS.29,80,754/- AND CLAIMED IT AS EXEMPTED INCOME. THE FIRM-WISE PROFIT SHARE SHOWN BY THE ASSESSEE IS ALSO REPRODUCED HEREUNDER:- 1 REPUBLIC SERVICE CENTRE 29,221/- 2 METRO CARGO CARRIERS 9,45,547/- 3 REPUBLIC AUTO SALES 20,05,986/- TOTAL 29,80,754/- 10. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS CLAIMED RS.9,15,044/- AS EXCESS EXEMPTED INCOME. A SHOW CAUSE NOTICE WAS ALSO ISSUED TO THE ASSESSEE AND IN RESPONSE THERETO IT WAS STATED THAT IN THE FIRST CHART THE FIGURE OF PROFIT MENTIONED AT RS.20,65,710.14 IN CAPITAL ACCOUNT IS THE PROFIT AFTER DEDUCTING THE FIRMS TAXES, FROM THE FIRMS IN WHICH THE ASSESSEE IS A PARTNER AND NOTHING ELSE. SIMILARLY, AS PER SECOND CHART THE FIGURE OF PROFIT MENTIONED AT RS.29,80,754/- IN CAPITAL ACCOUNT IS THE PROFIT :- 11 -: BEFORE DEDUCTING THE FIRMS TAXES, FROM THE FIRMS IN WHICH THE ASSESSEE IS A PARTNER. THE ASSESSING OFFICER HAS NOT ACCEPTED THE CONTENTIONS OF THE ASSESSEE IN THE LIGHT OF PROVISIONS OF SECTION 10(2A) OF THE ACT AND TREATED THE DIFFERENCE OF RS.9,15,044/- AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 11. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND REITERATED HIS CONTENTIONS. IT WAS ALSO CONTENDED THAT IN CASE ANY ADDITION IS TO BE MADE IT CAN ONLY BE MADE IN THE HANDS OF THE FIRM AND NOT IN THE HANDS OF THE PARTNERS. HE HAS FURNISHED THE COMPLETE DETAILS IN THIS REGARD. IT WAS FURTHER CONTENDED BEFORE THE LD. CIT(A) THAT ON MAKING ADDITION, THE ASSESSING OFFICER HAS IGNORED, RATHER FAILED TO APPRECIATE THE FACT THAT THE AMOUNT OF RS.29,80,754/- CLAIMED AS EXEMPTED INCOME IN THE RETURN OF INCOME IS ACTUALLY SHARE IN THE FIRM PRIOR TO ACCOUNTING FOR THE FIRMS TAX AND IN EFFECT IT DOES NOT MAKE ANY DIFFERENCE, AS ACTUALLY THE SHARE INCOME FROM FIRM IS TAX FREE AS PER THE PROVISIONS OF SECTION 10(2A) OF THE ACT AND MOREOVER THAT AMOUNT OF RS.29,80,754/- HAS NOT BEEN CREDITED IN THE BOOKS TO INVOKE THE MISCHIEF OF SECTION 68 OF THE ACT. 12. THE LD. CIT(A) RE-EXAMINED THE CLAIM OF THE ASSESSEE IN THE LIGHT OF ASSESSEES CONTENTIONS AND BEING CONVINCED WITH IT HE DELETED THE ADDITION. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE:- CONSIDERING THE FINDING GIVEN BY THE AO IN ASSESSMENT ORDER AS WELL AS THE REMAND REPORT AND WRITTEN SUBMISSION OF THE APPELLANT FILED DURING APPELLATE PROCEEDINGS. I FIND THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.9,15,044/- UNDER THE HEAD OF UNEXPLAINED CASH CREDIT U/S 68. THE APPELLANT DID NOT HAVE BUSINESS INCOME AND WAS THUS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS AND BALANCE SHEET. HENCE THE PROVISIONS OF SEC 68 DO NOT APPLY ON THE PRESENT SET OF FACTS AND CIRCUMSTANCES. THE APPELLANT HAS ALSO FILED THE COPIES OF :- 12 -: THE AUDIT REPORT AND COMPUTATION SHEET OF THE DIFFERENT FIRMS FROM WHERE THE APPELLANT IS DERIVING SHARE PROFIT. THE FIGURE OF PROFIT AS CLAIMED EXEMPT IS DULY VERIFIABLE FROM THE COPIES OF THE FINAL ACCOUNT OF THE VARIOUS FIRMS. THERE IS NO DIFFERENCE IN THE AMOUNT SO SHOWN AS EXEMPT INCOME BY THE APPELLANT AND THAT AS SHOWN BY THE FIRM. NO CAPITAL INVESTMENT HAS BEEN MADE BY THE APPELLANT FOR THE YEAR UNDER CONSIDERATION. THEREFORE THE ADDITION MADE BY THE AO UNDER THIS HEAD AS ALLEGED EXCESS EXEMPT INCOME SHOWN BY APPELLANT IS NOT SUSTAINABLE. THE ADDITION SO MADE DESERVES TO BE DELETED. THE APPELLANT GETS A RELIEF OF RS.9,15,044/-. 13. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND HAS PLACED HEAVY RELIANCE UPON THE ASSESSMENT ORDER WHEREAS THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A), WITH THE SUBMISSION THAT THE DIFFERENCE WAS DULY EXPLAINED BEFORE THE LOWER AUTHORITIES, BUT THE ASSESSING OFFICER HAS NOT APPRECIATED THE EXPLANATIONS THAT THE AMOUNT OF RS.29,80,754/- CLAIMED AS EXEMPTED INCOME IN THE RETURN OF INCOME IS ACTUALLY SHARE IN THE FIRM PRIOR TO THE ACCOUNTING OF THE FIRMS TAX AND IN FACT IT DOES NOT MAKE ANY DIFFERENCE AS ACTUALLY SHARE INCOME FROM FIRM IS TAX FREE AS PER PROVISIONS OF SECTION 10(2A) OF THE ACT. 14. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE DIFFERENCE OF RS.9,15,044/- WAS DULY EXPLAINED BY THE ASSESSEE EVEN BEFORE THE ASSESSING OFFICER, BUT IT WAS NOT ACCEPTED BY HIM WHEREAS THE LD. CIT(A) HAS EXAMINED THE DIFFERENCE IN THE LIGHT OF EXPLANATIONS OF THE ASSESSEE AND BEING CONVINCED WITH IT THE ADDITION WAS DELETED. THE LD. D.R. HAS NOT POINTED OUT ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). MOREOVER, THE LD. CIT(A) HAS TAKEN COGNIZANCE OF THE CORRECT FACTS WHILE DELETING THE ADDITION. SINCE WE FIND NO INFIRMITY THEREIN, WE CONFIRM HIS ORDER ON THIS ISSUE. :- 13 -: 15. APROPOS GROUND NO.3, IT IS NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 24 OF THE ACT. THE ASSESSEE IS HAVING TWO PROPERTIES NAMELY FLAT NO.1, TOWER-11, METRO CITY, PAPER MILL COMPOUND, LUCKNOW AND PLUMERIA HOMES, FLAT NO.701-K TOWER, VIBHUTI KHAND, GOMTI NAGAR, LUCKNOW. BOTH THE PROSPERITIES HAS CLAIMED AS SELF OCCUPIED. IN REPLY DATED 5.9.2012, THE ASSESSEE HAS CLAIMED PROPERTY SITUATED AT FLAT NO.1, TOWER-11, METRO CITY, PAPER MILL COMPOUND, LUCKNOW AS HIS RESIDENTIAL PROPERTY AND TREATED AS HIS SOP AND THE OTHER PROPERTY SITUATED AT PLUMERIA HOMES, FLAT NO.701-K TOWER, VIBHUTI KHAND, GOMTI NAGAR, LUCKNOW IS CONSIDERED FOR THE COMPUTATION OF ALV UNDER SECTION 23 OF THE ACT. THE ASSESSING OFFICER HAS CONSIDERED MONTHLY RENT OF THIS PROPERTY AT RS.18,000/- CONSIDERING THE AREA AND LOCALITY OF THE PROPERTY AND ACCORDINGLY CALCULATED THE ALV AT RS.2.16 LAKHS AND AFTER ALLOWING 30% STANDARD DEDUCTION OF RS.64,800/- AND INTEREST ON BORROWED CAPITAL AS CLAIMED BY THE ASSESSEE AT RS1.50 LAKHS, MADE AN ADDITION OF RS.1,200/- AS INCOME FROM HOUSE PROPERTY. 16. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT BOTH THE PROPERTIES ARE SELF-OCCUPIED PROPERTIES AND THE LD. CIT(A) HAS GIVEN A FINDING ON DIFFERENT FACTS AND GRANTED RELIEF OF RS.1,51,200/-. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE EXTRACTED HEREUNDER:- GROUND NO. VLL IS IN RESPECT OF ADDITION TOWARDS ALV OF HOUSE PROPERTY LOCATED AT PLUMERIA HOMES, FLAT NO.701-K TOWER, VIBHUTI KHAND, GOMTI NAGAR, LUCKNOW OF RS.1,51,200/-. THE AO HAS DEALT WITH THIS ISSUE VIDE PARA 6 OF HIS ORDER AS SUPRA. THE APPELLANT HAS MADE HIS SUBMISSION ON THIS ASPECT IN HIS REPLY DATED 29LH APRIL 2014 MENTIONED SUPRA. CONSIDERING THE SUBMISSION GIVEN BY THE APPELLANT GIVEN IN THE ASSESSMENT PROCEEDING AS WELL AS IN THE APPELLATE PROCEEDINGS I FIND THAT THE PROPERTY IN QUESTION HAS STILL NOT BE :- 14 -: DELIVERED TO THE APPELLANT TILL DATE. THE APPELLANT WAS ALSO REQUIRED TO FILE PROOF OF THE SAME IN RESPONSE TO WHICH HE HAS FILED A COPY OF THE LETTER DATED 17LH DECEMBER 2013 ADDRESSED TO GENERAL MANAGER FINANCE, ROHTAS PROJECTS LIMITED, LUCKNOW REGARDING THE DELAY IN POSSESSION OF THE FLAT. IT IS THUS CLEAR HAT IN THE YEAR UNDER CONSIDERATION THE APPELLANT WAS NOT IN POSSESSION OF THE SAID HOUSE PROPERTY. THEREFORE THE ADDITION TOWARDS ALV OF THE SAID HOUSE PROPERTY IS NOT SUSTAINABLE IN LAW. THE APPELLANT GETS A RELIEF OF RS.1,51,200/-. 17. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT THE ISSUE BEFORE THE LD. CIT(A) WAS ONLY WITH REGARD TO THE ADDITION OF RS.1,200/- AS INCOME FROM HOUSE PROPERTY, BUT THE LD. CIT(A) HAS GIVEN A DIFFERENT FINDING RELYING UPON DIFFERENT FACTS WHILE GIVING RELIEF OF RS.1,51,200/-. THE LD. D.R. HAS ALSO INVITED OUR ATTENTION TO THE ASSESSMENT ORDER THAT ADDITION WAS MADE OF RS.1,200/- ONLY UNDER THE HEAD INCOME FROM HOUSE PROPERTY WHEREAS THE LD. CIT(A) HAS GRANTED RELIEF OF RS.1,51,200/-. 18. THE LD. COUNSEL FOR THE ASSESSEE HAS SIMPLY PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 19. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT BEFORE THE ASSESSING OFFICER THE ISSUE WAS WITH REGARD TO THE INCOME FROM HOUSE PROPERTY, AS THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 24 OF THE ACT. THE ASSESSEE WAS HAVING TWO PROPERTIES AND ONE PROPERTY WAS SELF-OCCUPIED AND ALV WAS TO BE COMPUTED FOR ANOTHER PROPERTY ON WHICH ACCORDING TO THE ASSESSING OFFICER RENT WAS OF RS.18,000/- PER MONTH AND BY APPLYING THE SAME, ALV WAS WORKED OUT AT RS.2.16 LAKHS AND AFTER ALLOWING STANDARD DEDUCTION, INTEREST AND BORROWED CAPITAL AS CLAIMED BY THE ASSESSEE, THE INCOME FROM HOUSE PROPERTY WAS COMPUTED TO BE AT RS.1,200/-. THE ASSESSING OFFICER :- 15 -: HAS MADE ADDITION OF THE SAME, BUT WHILE DELETING THE SAME THE LD. CIT(A) HAS GIVEN A RELIEF OF RS.1,51,200/- IN WHICH WE DO NOT FIND ANY MERIT. WE ACCORDINGLY SET ASIDE THE FINDINGS OF THE LD. CIT(A) IN THIS REGARD. HOWEVER, THE DIFFERENCE WAS OF ONLY OF RS.1,200/- ON THE BASIS OF THE ESTIMATION OF ALV BY THE ASSESSING OFFICER, THEREFORE, THIS ADDITION IS ALSO DESERVES TO BE DELETED BEING NOMINAL ADDITION. ACCORDINGLY WE DELETE THE SAME. THIS ISSUE IS ACCORDINGLY DISPOSED OF. 20. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:14 TH AUGUST, 2015 JJ:2407 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR