JYOTIN J DOSHI, MUMBAI V. CIT-8, MUMBAI

ITA 7339/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3056 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: J
• Assessment Year: 2011-2012
• Appeal Filed On: 09-12-2014
• Court: TRIBUNAL
• Department Lawyers: K RAVIKIRAN
• Keywords: Unexplained cash credit; Onus to prove
• Section: 68

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI R.C . SHARMA, A M AND SHRI SANDEEP GOSAIN, JM ./ I.T.A. NO. 7339/MUM/2014 ( / ASSESSMENT YEAR: 2011 - 12 ) JYOTIN J. DOSHI, GEM TOURS & TRAVELS, MANI BHAVAN, G ROUND FLOOR, 54, HUGHES ROAD, M UMBAI - 400 007 . / VS. COMMISSIONER OF INCOME - TAX - 8 AAYAKAR BHAVAN, MAHARISHI KARVE ROAD, MUMBAI - 400 020. ./ ./ PAN/GIR NO. AEIPD 7823G ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI DHARMESH SHAH / RESPONDENT BY : SHRI K. RAVI KIRAN / DATE OF HEARING : 11/07 /2016 / DATE OF PRONOUNCEMENT : 21.09.16 / O R D E R PER R.C. SHARMA , A. M.: THIS IS A N A PPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 8 , MU MB AI (CIT(A) FOR SHORT) DATED 29 .10 .2014 FOR THE ASSESSMENT YEAR (A.Y.) 2011 - 12 , ON THE FOLLOWING GROUNDS: - 1. THE LEARNED ITO ERRED IN NOT CONSIDERING T HE AGREEMENT IN RESPECT OF AGRICULTURAL INCOME AS WELL AS PERSONAL STATEMENT AND CONFIRMATION FROM THE PERSON FROM WHOM AGRICULTURAL INCOME WAS RECEIVED. 2 ITA NO. 7339 / M /2014 (A.Y. 2011 - 12 ) JYOTIN J. DOSHI VS. CIT - 8 2. THE LEARNED ITO ERRED IN NOT CONSIDERING THE FACTS AND DOCUMENTS PRESENTED TO HIM. 3. THE LEARNED ITO ERR ED IN NOT TREATING AGRICULTURAL INCOME OF RS.11,400,000 AS EXEMPT U/S 10(1) OF THE ITA. 4. THE LEARNED ITO ERRED IN TREATING EXEMPT AGRICULTURAL INCOME OF RS.11,400,000 AS CASH CREDIT U/S 68 OF THE ITA AND ADDING THE SAME IN TOTAL INCOME AS WELL AS COMPUTATIO N INCOME. 5. THE LEARNED ITO ERRED IN INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ITA. 2. RIVAL CONTENTI ONS HAVE BEEN HEARD AND RECORD PERUSED . A LL THE GROUNDS RAISED BY ASSESSEE RELATE TO REJECTION OF CLAIM OF AGRICULTURAL INCOME AND ADDING THE SAM E U/S 68 OF THE ACT. THE FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED AGRICULTURAL INCOME OF RS.1,14,00,000/ - AND THE SAME WAS CREDITED TO ITS PERSONAL ACCOUNT IN THE BALANCE SHEET. ON ENQUIRY BY THE AO, THE ASSESSEE SUBMITTED THAT S HE OWNS CERTAIN AGRI CULTURAL LAND ON WHICH AGRICULTURAL ACTIVITIES HAVE BEEN CARRIED OUT, WHICH HAVE RESULTED INTO AGRICULTURAL INCOME AND FURTHER CLAIMED THAT AS PER THE KARARNAMA, THE AGRICULTURAL LAND WAS GIVEN FOR CULTIVATION TO SHRI ASHOK ROKADE, WHO HAS CARRIED OUT THE CULTIVATION OF LAND AND AMOUNT RECEIVED IS RS.1,14,00,000/ - AS PER THE AGREEMENT FROM SHRI ROKADE FOR F.Y. 2010 - 11. HOWEVER THE AO DID NOT ACCEPT ASSESSEES CLAIM OF AGRICULTURAL INCOME. 3 ITA NO. 7339 / M /2014 (A.Y. 2011 - 12 ) JYOTIN J. DOSHI VS. CIT - 8 3. BY THE IMPUGNED ORDER CIT(A) CONFIRMED THE ACTION OF AO AFTER OB SERVING AS UNDER: AS THE FACTS OF THE CASE IN THE PRESENT YEAR ARE IDENTICAL TO THAT IN A.Y. 2009 - 10, I HAVE NO REASON TO DIFFER WITH THE VIEW TAKEN BY ME WHILE DECIDING THE APPEAL IN THE CASE OF THE APPELLANT IN A.Y. 2009 - 10. THEREFORE, FOLLOWING MY OWN ORDER IN A.Y. 2009 - 10 IN APPEAL NO.CIT(A) - 8/CIR.4/199/2011 - 12, DATED 08.10.2012, ALL THE GROUNDS ARE TREATED AS DISMISSED. 4. AT THE OUTSET LD. AR PLACED ON RECORD ORDER OF THE TRIBUNAL FOR THE A.Y. 2009 - 10 DATED 21.01.2016, WHEREIN TRIBUNAL ALLOWED ASSE SSEES CLAIM OF AGRICULTURAL INCOME AFTER OBSERVING AS UNDER: 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALSO GONE THROUGH THE RECORDS. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS BROUGHT OUR ATTENTION TO THE REVENUE RECORDS/7/12 EXTRACT RELATIN G TO THE LAND IN QUESTION WHICH WERE ALSO PART OF THE RECORD BEFORE THE LOWER AUTHORITIES. THE SAID DOCUMENTS ARE PREPARED BY THE LAND REVENUE OFFICIALS BY VISITING THE FIELDS/LAND AND FURTHER NOT ONLY THE AREA OF THE LAND BUT ALSO THE QUALITY OF THE LAND WHETHER IRRIGATED OR NON IRRIGATED AND THE STANDING CROPS ARE MENTIONED IN THE REVENUE RECORDS. THESE LAND REVENUE RECORDS ARE MAINTAINED BY GOVERNMENT OFFICIALS IN REGULAR COURSE AND ARE PER SE ADMISSIBLE IN EVIDENCE. A PERUSAL OF THE LAND REVENUE RECO RDS SHOWS THAT VARIOUS TYPES OF CROPS ARE GROWN ON THE SAID LAND. IN SPECIFIC, CROPS LIKE WHEAT, JOWAR, RICE, TOOR DAAL ETC. ARE GROWN ON THESE LANDS. A PERUSAL OF THE SAID DOCUMENT SHOWS THAT NOT ONLY THE TWO REGULAR CROPS I.E. RABI CROP AND KHARIF CROP ARE BEING REAPED FROM THE LAND IN QUESTION BUT IN THE INTERVENING PERIOD, CERTAIN PULSES LIKE TOOR DAAL ETC. ARE ALSO GROWN. THE REVENUE RECORDS OF THE LAND PREPARED IN THE OFFICIAL COURSE PROVES BEYOND DOUBT THAT THE LAND IN QUESTION IS A CULTIVABLE LAN D WHERE THE MULTIPLE CROPS ARE GROWN BY THE CULTIVATOR. THE LD. A.R. OF THE ASSESSEE HAS ALSO BROUGHT OUR ATTENTION TO THE AGREEMENT DATED 12.02.08 ENTERED INTO BETWEEN THE 4 ITA NO. 7339 / M /2014 (A.Y. 2011 - 12 ) JYOTIN J. DOSHI VS. CIT - 8 ASSESSEE AND MR. ASHOK MARUTI ROKADE WHEREIN, THE SAID MR. ASHOK MARUTI ROKADE HAD TAKEN FOR CULTIVATION 46.9311 ACRES (APPROX 47 ACRES) OF AGRICULTURAL LAND FROM THE ASSESSEE FOR WHICH HE HAD AGREED TO PAY RS.55,59,000/ - AS COMPENSATION/LEASE RENT. THE AO HAD SUMMONED SAID MR. ASHOK MARUTI ROKADE AND EXAMINED HIM AT LENGTH. IN HIS CR OSS EXAMINATION BY THE AO, MR. ASHOK MARUTI ROKADE CONFIRMED THE TAKING OF THE LAND FROM THE ASSESSEE FOR CULTIVATION BY HIM AND HAS ALSO EXPLAINED THE METHOD OF CULTIVATION AND THE SOURCE OF IRRIGATION. HE HAS ALSO MENTIONED THE VARIOUS CROPS YIELDED BY THE ASSESSEE SUCH AS RICE, WHEAT, TOOR DAAL, MASOOR DAAL, HARBARA AND JOWAR IN THE AGRICULTURAL LAND. HE ALSO EXPLAINED THAT THE SEEDS WERE TAKEN FROM THE CROPS GROWN LAST YEAR. HE HAS ALSO EXPLAINED THAT THE PRODUCE WAS SOLD TO VARIOUS TRADERS BY WAY OF AUCTION AT HIS FIELD AND THAT THE PRODUCES WERE NOT CARRIED TO MANDI/GRAIN MARKET. HE HAS ALSO EXPLAINED THAT THE FERTILIZERS WERE PURCHASED BY HIM FROM SMALL TRADERS IN CASH. HE HAS ALSO EXPLAINED THAT OUT OF THE INCOME EARNED FROM THE CROPS CULTIVATED ON LAND, HE HAD PAID A SUM OF RS.55,49,000/ - TO THE ASSESSEE AND THE REMAINING AMOUNT HAD BEEN USED FOR HIS HOUSEHOLD EXPENSES AND OTHER AGRICULTURAL RELATING ACTIVITIES. MR. ASHOK MARUTI ROKADE WAS EXAMINED AT LENGTH BY THE AO BUT HE REMAINED CONSISTENT IN HIS STAND AND THE AO COULD NOT BRING OUT ANY WORD FROM HIS MOUTH TO PROVE THAT THE LAND WAS NOT TAKEN BY HIM FOR CULTIVATION OR THE AMOUNT WAS NOT PAID BY HIM TO THE ASSESSEE. THERE IS ANOTHER INTERESTING FACT ON THE FILE. THE AO HAD DEPUTED CERTAIN PERSONS/INSPECTORS TO VERIFY THE REVENUE RECORDS AND THE STANDING CROPS ON THE LAND. IN HIS REPLY TO THE QUERIES BY THE AO, THE ASSESSEE FILED A LETTER DATED DECEMBER 16 TH , 2011 WHICH WAS DULY RECEIVED IN THE OFFICE OF THE AO WHEREIN IT HAS BEEN SPECIFICA LLY MENTIONED BY THE ASSESSEE THAT MR. ASHOK MARUTI ROKADE HAS INFORMED HIM THAT TWO PEOPLE FROM THE OFFICE OF THE AO HAD PERSONALLY VISITED THE AGRICULTURAL PROPERTY OF THE ASSESSEE AS WELL AS THE LAND REVENUE OFFICE AND VERIFIED THE DOCUMENTS, MET MR. AS HOK MARUTI ROKADE AND HAD ALSO PERSONALLY SEEN THE ONGOING AGRICULTURAL ACTIVITY ON THE LAND OF THE ASSESSEE. THE AO HAS ALSO REFERRED TO THE SAID LETTER DATED 16.12.11 IN THE ASSESSMENT ORDER AND HAS ALSO REPRODUCED THE OTHER SUBMISSIONS MADE BY THE ASSE SSEE REGARDING THE AGREEMENT IN QUESTION WITH MR. ASHOK MARUTI ROKADE AND THE OTHER EXPLANATIONS GIVEN BY MR. ASHOK MARUTI ROKADE REGARDING THE CULTIVATION AND SALE OF PRODUCE OF LAND AND PAYMENT OF LUMP - SUM AMOUNT OF RS.55,49,000/ - TO THE ASSESSEE. HOWE VER, THE AO HAS 5 ITA NO. 7339 / M /2014 (A.Y. 2011 - 12 ) JYOTIN J. DOSHI VS. CIT - 8 SKIPPED THE PORTION OF THE LETTER WHEREIN THE ASSESSEE HAS SPECIFICALLY MENTIONED THAT TWO PERSONS FROM THE OFFICE OF THE AO HAD VISITED THE LANDS AS WELL AS THE LAND REVENUE OFFICIALS TO VERIFY THE RECORDS AS WELL AS TO VERIFY THE STANDING CROPS. THE AVERMENTS MADE BY THE ASSESSEE IN HIS LETTER DATED 16.12.11 HAVE NEITHER BEEN DENIED NOR REBUTTED BY THE AO. THE ASSESSEE HAS A CLEAR CUT CASE THAT HE HAS RECEIVED COMPENSATION AMOUNT IN QUESTION AS PER THE AGREEMENT FROM MR. ASHOK MARUTI ROK ADE. MR. ASHOK MARUTI ROKADE HAS NOT ONLY CONFIRMED IN WRITING BUT ALSO CONFIRMED THE SAME BY PERSONALLY APPEARING BEFORE THE AO AND HE WAS ALSO SUBJECTED TO THE LENGTHY CROSS EXAMINATION. THE EXISTENCE OF THE LAND IN QUESTION IS NOT DISPUTED. THE CARRY ING OUT OF AGRICULTURAL ACTIVITIES ON THE LAND IS ALSO PROVED FROM THE REVENUE RECORDS WHICH HAS NOT BEEN REBUTTED BY THE AO. HENCE, THE ASSESSEE HAD DISCHARGED THE PRIMARY BURDEN OF PROOF THAT HE HAD RECEIVED THE AGRICULTURAL INCOME IN QUESTION. THE ASS ESSEE HAD NEVER CLAIMED THAT HE HIMSELF HAD CULTIVATED THE LAND. UNDER SUCH CIRCUMSTANCES, IT COULD NOT BE EXPECTED FROM THE ASSESSEE TO PRODUCE THE EVIDENCE REGARDING THE PURCHASE OF SEEDS, PURCHASE OF FERTILIZERS OR REGARDING THE SALE OF PRODUCE IN THE MARKET. IT WAS MR. ASHOK MARUTI ROKADE WHO CULTIVATED THE LAND. HE WAS UNDER NO DUTY TO PRESERVE THESE TYPES OF EVIDENCES. IT WAS NOT UNDER THE CONTROL OF THE ASSESSEE TO DIRECT MR. ASHOK MARUTI ROKADE TO KEEP SUCH EVIDENCES. EVEN OTHERWISE, MR. ASHOK MARUTI ROKADE HAS THOROUGHLY EXPLAINED ABOUT THE CULTIVATION CARRIED OUT, THE YIELD OF THE CROPS AND THE MANNER OF THE SALE OF CROPS REAPED. MOREOVER, THE LAND REVENUE RECORDS WHICH ARE ADMISSIBLE EVIDENCE OTHERWISE HAVE NOT BEEN REBUTTED BY THE AO AND UN DER SUCH CIRCUMSTANCES NOTHING MORE WAS EXPECTED FROM THE ASSESSEE TO BE PRODUCED IN EVIDENCE. THE AO HAS NOT DOUBTED QUANTITY OR THE SALE PRICE OF THE EXPECTED YIELD FROM 47 ACRES OF LAND. UNDER SUCH CIRCUMSTANCES IT IS PROVED BEYOND DOUBT BY THE ASSESS EE THAT THE AGRICULTURAL ACTIVITY WAS REALLY CARRIED OUT BY MR. ASHOK MARUTI ROKADE AND THE AMOUNT IN QUESTION WAS RECEIVED BY THE ASSESSEE AS PER AGREEMENT FROM MR. ASHOK MARUTI ROKADE WHICH AS PER LAW IS TO BE TREATED AS AGRICULTURAL INCOME OF THE ASSESS EE. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LOWER AUTHORITIES IN REJECTING THE CLAIM OF THE ASSESSEE OF AGRICULTURAL INCOME. THE ADDITIONS MADE BY THE LOWER AUTHORITIES ON THIS ISSUE ARE HEREBY ORDERED TO BE DELETED. 6 ITA NO. 7339 / M /2014 (A.Y. 2011 - 12 ) JYOTIN J. DOSHI VS. CIT - 8 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT ASSESSEES CLAIM OF AGRICULTURAL INCOME DURING THE YEAR UNDER CONSIDERATION I.E. A.Y. 2011 - 12 WAS DECLINE BY THE AO AFTER OBSERVING AS UNDER: THE TREATMENT OF THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IN A. Y. 2009 - 10 HAS BEEN DISCUSSED IN DETAIL IN THE ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT FOR A.Y. 2009 - 10. IN THAT YEAR; THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE OF RS.55,49,000/ - HAS BEEN TREATED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. THE LD. CIT(A) VIDE ORDER APPEAL NO.CIT(A) - 8/CIR.4/199/2011 - 12 DATED 8/10/2012 HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE ON THIS ISSUE. 6. THE CIT(A) HAS ALSO UPHELD THE ORDER OF AO BY STATING THAT FACTS OF THE YEAR UNDER CONSIDERATION ARE SAME AS DECID ED BY HIM IN THE AY 2009 - 10. WE FOUND THAT APPEAL FILED BY THE ASSESSEE FOR A.Y.2009 - 10 WAS DECIDED BY TRIBUNAL AFTER RECORDING DETAIL ED FINDING AT PARA 4 OF ITS ORDER DATED 26.01.2016, WHICH HAS BEEN REPRODUCED ABOVE. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE SAME, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE ON THE VERY SAME FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN THE ACTION OF AO FOR DECLIN ING ASSESSEES CLAIM OF AGRICULTURAL INCOME. 7 . RESPECTFULLY FOLLOWING THE ORDERS OF TRIBUNAL IN ASSESSEES WON CASE, WE SET ASIDE THE ORDERS OF THE LO W ER AUTHORITIES AND DIR ECT THE AO TO TREAT THE AGRICULTUR AL INCOME AS EXEMPT U/S 10(1) OF THE I.T. ACT. 7 ITA NO. 7339 / M /2014 (A.Y. 2011 - 12 ) JYOTIN J. DOSHI VS. CIT - 8 8. IN THE RESULT , APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOU NCED IN THE OPEN COURT ON 21 ST SEPTEMBER , 201 6 SD/ - SD/ - ( SANDEEP GOSAIN ) ( R.C. SHARMA) / JUD I C I AL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 21 . 0 9 .201 6 PS. ASHWINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI