Bhupinder Singh Chauhan, Yamunanagar V. ITO, Yamunanagar

ITA 772/CHANDI/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81036 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 10-11-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 01-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: RAKESH JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 772/CHD/2011 ASSESSMENT YEAR : 2006-07 SHRI BHUPINDER SINGH CHAUHAN, VS. THE INCOME TAX OFFICER, C/O NATRAJ TYRES, JORIAN CHOWK, WARD 3, YAMUNA NAGAR, HARYANA. YAMUNA NAGAR, HARYANA. PAN: ADOPC2423Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH JAIN RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 10.11.2014 DATE OF PRONOUNCEMENT : 18.11.2014 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), KARNAL DATED 20.4.2011 FOR ASSESSMENT YE AR 2006-07 CHALLENGING THE ADDITION OF RS.9 LACS TREAT ING THE SAME AS INCOME FROM OTHER SOURCES INSTEAD OF AGRICU LTURAL INCOME. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME DECLARING INCOME OF RS.97,23 0/- PLUS AGRICULTURAL INCOME OF RS.12 LACS ON 12.9.2006 . THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THA T HE OWNED 40 ACRES OF LAND UNDER SELF CULTIVATION, OUT OF 2 WHICH 25 ACRES WERE TAKEN ON LEASE AND 15 ACRES JOI NTLY OWNED BY HIM WITH HIS FATHER AND BROTHER. THE DET AILS OF THE AGRICULTURAL INCOME WERE SUBMITTED, WHICH INCLU DES SALE OF POPLAR TREES AT RS.9,37,241/-, SALE OF WHEA T AT RS.2,52,485/- AND SALE OF ROOT, FUEL WOOD, ETC. AT RS.2 LACS AND AFTER CLAIMING EXPENSES, THE AGRICULTURAL INCOM E WAS DECLARED AT RS.12 LACS. LATER ON, ANOTHER CHART O F COMPUTATION OF AGRICULTURAL INCOME WAS FILED IN WHI CH THE SALE OF POPLAR TREES AND SALE OF WHEAT REMAINED SAM E, HOWEVER, THE SALE OF FUEL WOOD AND SALE OF HALDI, P OTATO, ETC. WERE ALSO TAKEN JOINTLY AND AFTER REDUCING THE LEASE MONEY AND OTHER EXPENSES, THE AGRICULTURAL INCOME W AS DECLARED AT THE SAME AMOUNT OF RS.12 LACS. THE CH ART SUBMITTED BY THE ASSESSEE SHOWS THAT THE AGRICULTUR AL INCOME DECLARED BY THE ASSESSEE REMAINED SAME IN BO TH THE CHARTS BUT IN THE FIRST CHART SALE OF ROOTS, FU EL WOOD, ETC. WAS SHOWN AT RS.2 LACS AND EXPENSES AT RS.1,89,726/- BUT IN SECOND CHART RS.2 LACS WERE DI VIDED IN TWO PARTS AND EXPENSES WERE ALSO BIFURCATED IN TWO PARTS. THE TOTAL RECEIPTS FROM AGRICULTURAL PRODU CTS WAS ENHANCED IN THE SECOND CHART AND EXPENSES WERE ALSO ENHANCED IN THE SECOND CHART INCLUDING THE LEASE MO NEY. THE ASSESSING OFFICER NOTED THAT THE RECEIPTS IN BO TH THE CHARTS WERE DOUBTFUL AND NO BOOKS OF ACCOUNT AND VOUCHERS, ETC. OF EXPENSES AND AGRICULTURAL INCOME HAVE BEEN PRODUCED. THE ASSESSING OFFICER FURTHER DISC USSED THE DETAILS OF LAND TAKEN ON LEASE AND NOTED THAT M OST OF THE AGRICULTURAL LAND WAS TAKEN ON LEASE FROM 1 ST 3 FEBRUARY, 2003, WHEREAS THE ASSESSMENT YEAR IS 2006 -07. THE ASSESSING OFFICER NOTED THAT THE POPLAR TREES T AKE TIME OF ATLEAST 6-7 YEARS TO BE USED FOR THE PURPOS E OF SALE. THE ASSESSEE ALSO EXPLAINED THAT THE AGRICU LTURAL LAND MEASURING 14 ACRES WERE TAKEN ON LEASE FROM 1.11.1997 TO 30.4.2004. THE ASSESSING OFFICER FUR THER NOTED THAT THE ASSESSEE IS DOING BUSINESS AT YAMUNA NAGAR, WHEREAS THE LAND TAKEN ON LEASE IS SITUATED IN SAHARANPUR AND RADAUR, THEREFORE, IT IS NOT FEASIBL E TO ATTEND THE AGRICULTURAL OPERATIONS IN DIFFERENT DIS TRICTS UNDER SELF-CULTIVATION. THE ONUS UPON THE ASSESSE E HAS NOT BEEN PROVED OF CORRECTNESS OF AGRICULTURAL INCO ME SO DECLARED IN THE RETURN OF INCOME. THE ASSESSING O FFICER, THEREFORE, ESTIMATED THE AGRICULTURAL INCOME AT RS. 3 LACS AND BALANCE INCOME OF RS.9 LACS AS INCOME FROM OTHE R SOURCES. 3. THE ASSESSEE CHALLENGED THE ABOVE ADDITION BEFOR E THE LEARNED CIT (APPEALS) AND IT WAS SUBMITTED THAT THE ASSESSEE HAD 46 ACRES OF AGRICULTURAL LAND, OUT OF WHICH 31 ACRES WERE TAKEN ON LEASE AND 15 ACRES WERE HELD BY SELF AND OTHER FAMILY MEMBERS. THE COPIES OF THE LEASE AGREEMENT, KHASRA GIRDWARI, COPIES OF SOME J FORM S AND VOUCHERS OF SALE OF FUEL WOOD, ETC. WERE FILED. TH E ASSESSEE ALSO FILED JAMABANDI, WHICH ALSO SUPPORTS THE EARNING OF AGRICULTURAL INCOME. THEREFORE, THE AGRI CULTURAL INCOME DECLARED BY THE ASSESSEE IS CORRECT. THE L EARNED CIT (APPEALS) AFTER CALLING THE COMMENTS OF THE ASS ESSING 4 OFFICER AND MATERIAL ON RECORD, CONFIRMED THE ADDIT ION AND DISMISSED THE APPEAL OF THE ASSESSEE. THE FINDING S OF THE LEARNED CIT (APPEALS) IN PARAS 1.08 TO 1.21 ARE REP RODUCED AS UNDER :- 1.08. THE FACTS IN BRIEF ARE THAT THE APPELLANT DEC LARED INCOME OF RS.97,230/- + A.I. OF RS.12 LAKH. DURING THE ASSESS MENT PROCEEDINGS, THE APPELLANT CLAIMED OF CARRYING OUT AGRICULTURE ON 40 A CRES OF LAND, OUT OF WHICH 25 ACRES CLAIMED TO BE TAKEN ON LEASE AND REM AINING 15 ACRES WAS CLAIMED TO BE OWNED BY HIM JOINTLY WITH HIS FATHER AND BROTHER. DETAILS OF LAND TAKEN ON LEASE HAS BEEN FURNISHED ON PAGE 71 OF THE PAPER BOOK, WHICH IS REPRODUCED BELOW ; NAME OF LESSOR RAM SWAROOP KARAM SINGH & BRAHAM SINGH, VILL. MAUJA NAKUM, RADAUR LAND 3 ACRES PERIOD 1/11/97- 30/4/04 REMARKS COPY OF AGREEMENT ENCLOSED. 1/2/03- 31/1/08 COPY OF AGREEMENT ALREADY SUBMITTED. KADAM SINGH PADAM SINGH DHARAM SINGH & KARAM SINGH, VILL. NAKUM , RADAUR 7 ACRES 1/11/97- 30/4/04 COPY OF AGREEMENT ENCLOSED. 1/2/03 - 31/1/08 COPY OF AGREEMENT ALREADY SUBMITTED. ........ . DO .. 8 ACRES 1/2/03 - 31/1/08 ................... DO ................. SHER SINGH SHRI PAL VILL NAKKUM, RADAUR 9 ACRES 2/5/04 - 1/5/08 ................... DO ................. SADHU SINGH, VILL. NAKUM, RADAUR 4 ACRES 1/11/97- 30/4/04 COPY OF AGREEMENT ENCLOSED. 1/5/04- 30/4/06 COPY OF AGREEMENT ALREADY SUBMITTED. 5 1.09. AS DISCUSSED ABOVE THAT DURING THE ASSESSMENT PROCEEDINGS, INITIALLY DETAILS OF RECEIPT FROM THE SALE OF THE AGRICULTURE PRODUCE AND THE EXPENDITURE INCURRED WAS SUBMITTED AS UNDER: SALE OF POPULAR TREES RS.937241 SALES OF WHEAT RS.252485 SALES OF ROOT, FUEL WOOD AND OTHER CROPS ETC IN OPEN MKT. RS.2,00,000/- TOTAL RS.13,89,726 LESS: EXPENSES RS. 1.89.726 AGRICULTURE INCOME RS.12, 00.000 1.10 FROM THE ABOVE CHART, THE AO NOTED THAT NO EXPENSES ON ACCOUNT OF LEASE MONEY PAID WAS SHOWN. TH IS FACT WAS CONFRONTED TO THE ASSESSEE AND THEREAFTER THE AS SESSEE FILED A REVISED CHART OF RECEIPTS FROM SALE OF AGRICULTURE P RODUCE AND EXPENDITURE AS UNDER:- SALE OF POPULAR TREES RS.937241 SALES OF WHEAT RS.252485 SALES OF, FUEL WOOD TO NATRAJ TYRE YAMUNA NAGAR RS.1,36115 SALE OF WHEAT, HALDI, POTATO FUEL WOODS IN OPEN MARKET RS.120000 TOTAL RECEIPTS RS.1445841 EXPENSES LESS MONEY : RS. 142500 SEED, DIESEL OTHER EXPENSES RS.103341 RS.245841 AGRICULTURE INCOME RS.12,00, 000 (I) FROM THE ABOVE CHART IT IS NOTED THAT WHEREAS RECEI PT FROM SALE OF POPULAR TREES AND OF WHEAT WERE REMAINED TH E SAME IN THE 1 ST AND 2 ND CHART, THE RECEIPT FROM SALE OF ROOTS , FUEL WOOD AND OTHER CROPS WHICH WAS SHOWN IN THE 1 ST CHART AT RS.2 LAKH, WAS, HOWEVER, DIVIDED IN THE TWO AND THE TOTAL RECEIPTS W AS INCREASED TO RS.2,56,115/-. SIMILARLY EXPENSES IN THE 1 ST CHART ON CARRYING 6 OUT THE AGRICULTURE OPERATIONS WERE SHOWN TO BE RS.1 ,89,726/- WHEREAS THE SAME WAS INCREASED TO RS.2,45,841/- IN THE 2 ND CHART. APPARENTLY, THE RECEIPTS FROM SALE OF AGRICULTUR E PRODUCE WAS INCREASED TO EXPLAIN THE PAYMENT OF LEASE MONEY, WHICH WAS EARLIER NOT CONSIDERED. THESE FACTS HAS BEEN DISC USSED BY THE AO IN THE ASSESSMENT ORDER AS WELL AS IN THE COMM ENTS ON THE WRITTEN SUBMISSION OF THE APPELLANT BUT NO EXPLANATION / JUSTIFICATION IN THIS REGARD HAS BEEN FURNISHED, BY T HE APPELLANT; (II) THE APPELLANT CLAIMED TO HAVE TAKEN 25 ACRES LAND O N LEASE DURING THE ASSESSMENT PROCEEDINGS BUT LATER ON THE S AME WAS CLAIMED TO BE 31 ACRES AS PER THE WRITTEN SUBMISSIONS FILED DURING THE ASSESSMENT PROCEEDINGS. ON EXAMINATION OF THE C OPY OF LEASE DEED FILED BY THE APPELLANT, IT IS NOTED THAT THE APPEL LANT SHOWN TO HAVE TAKEN 7 ACRES AGRICULTURAL LAND @ RS.4,000/- PER A CRES FROM 1.11.97 TO 30.4.04 FROM KADAM SINGH, PADAM SINGH, DHARAM SINGH AND KARAM SINGH. HE THEREAFTER SHOWN TO HAVE TAKEN 15 ACRES AGRICULTURE LAND FROM 1.2.03 TO 31.1.08 AT THE SAME RATE. I.E. RS.4.000/- PER ACRE WHICH INCLUDES 7 ACRES LAND TOOK EARLIER FROM 1.11.97 TO 30.4.2004 ALSO, FROM THESE PERSONS. THE 2 ND AGREEMENT WAS ON A PLAIN PAPER AND NOT ON A STAMP PA PER AND WAS ALSO NOT REGISTERED. NO PLAUSIBLE EXPLANATION IN T HIS REGARD COULD BE FURNISHED. APPARENTLY THIS EXERCISE WAS CA RRIED OUT TO JUSTIFY THE AGRICULTURE INCOME DECLARED; (III) THE MAIN INCOME HAS BEEN SHOWN FROM THE SALE OF POP ULAR TREES WHICH IS IN THE YEAR UNDER CONSIDERATION IS RS.9,37,241/- . NORMALLY IT TAKES 6-7 YEARS FOR A POPULAR TREE TO BE READY FOR USE IN 7 THE PLYWOOD/BOARD INDUSTRY. THIS FACT IS ENDORSED BY THE NOTE GIVEN BY THE APPELLANT ON PAGE 71 OF PAPER BOOKS WHEREIN D ETAILS OF LAND TAKEN ON LEASE IS GIVEN. AS PER THE CHART OF LAND TAKEN ON LEASE SUBMITTED BY THE APPELLANT AND HAS BEEN REPRO DUCED ABOVE ALSO, THE APPELLANT TOOK ON LEASE, LAND MEASURING 1 4 ACRES FROM 1.11.1997. IF IT IS TAKEN THAT THE POPULAR TREES W ERE PLANTED ON THIS LAND IN 1997, THE SAME WOULD HAVE BEEN GROWN UP FOR SALE IN THE YEAR 2003 AND AS SUCH CLAIM OF THE APPELLANT OF SALE OF POP ULAR TREES FOR RS.9,37,241/- IN THE YEAR UNDER CONSIDERATION IS NOT TE NABLE; (IV) THE APPELLANT TOOK ON LEASE LAND MEASURING 14 ACRES FROM 1.11.1997 TO 30.4.2004 BUT THE SAME WS GOT RENEWED A YEAR IN ADVANCE, I.E., FROM 1.2.2003 WHICH DOES NOT STAND T O LOGIC. THE APPELLANT FURTHER CMD TO HAVE TAKEN ADDITIONAL LAND MEASURING 8 ACRES ON LEASE FROM KAAM SINGH AND OTHERS FROM 1.2.03 TO 31 .1.08, I.E., FOR 5 YEARS, 9 ACRES ON LEASE FROM SHER SINGH SHRI PAL FROM 2.5.2004 TO 1.5.2008, I.E., FOR 4 YEARS. THE POPUL AR TREES CAN NOT BE GROWN UP FOR SALE, FROM THESE LANDS I THE PREVIO US YEAR 2005-06 RELEVANT TO THE A.Y. 2006-07 I.E. THE YEAR UNDER CONSI DERATION; (V) THE APPELLANT IS PROPRIETOR OF M/S SUCCESS GROUP AN D WORKING PARTNER IN M/S GLOBA SOSTECH SOLUTION YAMUNA NAAR, WHEREAS THE LAND TAKEN ON LEASE WERE EXISTED IN DISTRICTED SAHA RANPUR AND IN TEHSIL, RADAUR FAR AWAY FROM YAMUNA NAGAR AND IT IS DIF FICULT FOR A PERSON STATIONED AT YAMUNA NAGAR AND IS FULLY OCCUP IED IN CARRYING BUSINESS OF TWO FIRMS, TO LOOK AFTER THE A GRICULTURE OPERATIONS ON THE LAND SITUATED FAR AWAY; 8 (VI) THE APPELLANT IN THE DETAILS OF LAND TAKEN ON LEASE ON PAGE 71 OF PAPER BOOK GIVEN A NOTE AS UNDER: AVERAGE PRODUCTION OF POPULAR PER ACRE IN 6 YEARS AB OE IS RS.4- 5 LAKH APP. (VII)(A) THE AVERAGE INCOME PER ACRE ANNUM AS SUCH S HOULD BE RS.66,667 TO RS.83,333/-. THE APPELLANT, HOWEVER, CLAIMED TO HAVE TAKEN LAND ON LEASE @ RS.4,000 PER ACRE FROM 1.11.19 97 TO 3.4.2004 WHICH CLAIMED TO BE GOT RENEWED @ RS.3,500/- PER ACR E IN THE CASE OF RAM SWROOP. KARAM SINGH AND BRAHAM SINGH @ S.4,000/ - PER ACRE FROM KADAM SINGH, PADAM SINGH, DHAAM SINGH AND KARAM SIN GH. THE APPELLANT AS SUCH TAKEN LAND ON LEASE MEASURING 14 ACRES FROM 1.11.97 TO 30.4.04 @ 4000 PER ACRE AND GOT RENEWED THE SAME MORE OR LESS AT THE SAME RATE, WHEREAS IT IS CLAIMED THAT AVERAGE INCOME PER ACRE FROM POPULAR TREES ITSELF IS MORE THAN RS.66,000/- PER A CRE P.A. BESIDES THE INCOME FROM GROWING WHEAT/PADDY, HALDI, POTATO, FUEL WOOD ETC. FROM THIS LAND, AS IS CLAIMED BY THE APPELLANT. IT IS DIF FICULT TO APPRECIATE THAT WHY A PERSON WOULD GIVE HIS LAND ON LEASE AT SUCH A MEAGER RATE OF RS.4000 PER ACRE WHEN THE INCOME COULD BE EARNED MO RE THAN RS.70,000/- PER ACRE. IT IS ALSO DIFFICULT TO APPR ECIATE THAT THERE WAS NO INCREASE IN THE LEASE RENT FROM 1997 TO 2008, RATHE R IT WAS DECREASED TO RS.3500/- PER ACRE IN THE CASE OF AGRICULTURE LAND TAKEN ON LEASE FROM RAM SWAROOP, KAAM SINGH AND BRAHAM SINGH. 1.11. THE APPELLANT ENCLOSED COPY OF REVENUE RECORD I N SOME OF THE CASES OF LAND WHICH CLAIMED TO BE TAKEN ON LEASE. ON EXAMINATI ON THEREOF IT IS NOTED THAT UNDER THE COLUMN OF CULTIVATOR, THE NAME OF THE OWNER OF 9 THE LAND, I.E., LESSOR HAS BEEN GIVEN AND NOWHERE I T CONTAINED THE NAME OF THE APPELLANT AS CULTIVATOR. 1.12 AS DISCUSSED ABOVE THAT THE APPELLANT CLAIMED TO HA VE TAKEN 14 ACRES LAND ON LEASE FROM 1.11.97 TO 30.4.04. 10 ACRES OUT OF THIS LAND CLAIMED TO BE GOT RENEWED A YEAR IN ADVANCE BEFORE COMPLETION OF THE LEASE PERIOD, I.E., FROM 1.2.03 INSTEAD OF 1.5.04 AND THAT' S TOO ON A PLAIN PAPER INSTEAD OF ON A STAMP PAPER WHICH WAS ALSO NOT GOT REGISTERED. NO JUSTIFICATION OF GETTING THE LEASE RENEWED A YEAR I N ADVANCE AND NOT GETTING THE SAME REGISTERED HAS BEEN BROUGHT ON RECORD. 1.13 THE APPELLANT IN THE REVISED CHART OF RECEIPT OF SALE PROCEEDS OF THE AGRICULTURE PRODUCE, AS DISCUSSED ABOVE, CLAIME D TO HAVE SOLD FUEL WOOD TO NATRAJ TYRES YAMUNA NAGAR FOR RS.1,36,1157/-. HE ENCLOSED DETAILS OF SALE OF FUEL WOOD AT PAGE 91 OF THE PAPER BOOK ALONGWITH THE COPY OF INTERNAL VOUCHERS OF NATRAJ TYRES. AT THE OUTSET, IT IS NOTED THAT IT IS A FIRM OF THE SAME GROUP. FURTHER IT IS NOTED FRO M THE DETAILS OF SALE OF FUEL WOOD THAT THE SALE WAS SHOWN TO BE MADE EXACTLY FORTNIGHTLY THROUGHOUT THE YEAR WHICH CAN NOT BE IN NORMAL CIRCUM STANCES. A COPY OF THE DETAIL ENCLOSED BY THE APPELLANT IS MADE PART OF THIS ORDER AS ANNEXURE A. 1.14 FURTHER, IN THE 1ST CHART THE APPELLANT CLAIMED EXPENSES ON CARRYING OUT AGRICULTURE OPERATION AT RS.1,89,726/- AND IN THE REVISED CHART AT RS.1,103,341/- BESIDES PAYMENT OF LEASE MONEY OF RS.1,42,500/. IN VIEW OF THE FACT THAT THE APPELLANT CLAIMED THE E XACT AMOUNT OF EXPENSES INCURRED IN CARRYING OUT AGRICULTURE OPERATIONS, THE INFERENCE IS TO BE DRAWN THAT DETAILS THEREOF ALONG WITH DOCUMENTARY EVIDENC E WOULD HAVE BEEN MAINTAINED BUT NO SUCH DETAILS AND EVIDENCE/BOOKS OF ACCOUNTS/BILLS ETC. 10 HAS BEEN PRODUCED NEITHER BEFORE THE AO DURING THE A SSESSMENT PROCEEDINGS NOR BEFORE THIS OFFICE DURING APPEAL PR OCEEDINGS. 1.15 IT IS WELL KNOWN FACT THAT SUBSTANTIAL EXPENDI TURE HAS TO BE INCURRED ON PURCHASE OF VARIOUS INPUTS AND ON CARRYING OUT V ARIOUS AGRICULTURAL OPERATIONS SUCH AS SEEDS, FERTILIZERS, PESTICIDES, E XPENSES ON LABOUR, ELECTRICITY AND POWER, DIESEL AND ON MACHINERY AND EQUIP MENT I.E. TRACTOR ETC. NORMALLY THE EXPENDITURE WORKS OUT TO 40% OF THE GR OSS RECEIPTS FROM SALE OF AGRICULTURE PRODUCE. THE APPELLANT, HOWEVER, CLAIMED TO HAVE INCURRED RS.1,89,726/- FOR HAVING TOTAL RECEIPTS FROM SALE O F AGRICULTURE PRODUCE AT RS.13,89,726/- IN THE 1 ST CHART, WHICH WORKS OUT TO 13.66% AND RS.2,45,841/- FOR HAVING AGRICULTURE RECEIPTS OF RS. 14,45,841/- IN THE 2 ND CHART, WHICH WORKS OUT TO 17%. THE EXPENSES DECLAR ED IS APPARENTLY VERY MUCH ON LOWER SIDE, IN SPITE OF THE FACT THAT THE LA ND ON WHICH AGRICULTURE OPERATIONS WERE CARRIED OUT WAS TAKEN ON LEASE. 1.16 THE APPELLANT FILED PHOTOGRAPHS OF SOME FIELDS . AT THE OUTSET FROM THESE PHOTOGRAPHS, IT CAN NOT BE MADE OUT THAT THE SAME WERE OF LAND, WHICH WERE CLAIMED TO BE TAKEN ON LEASE. FURTHER IN ONE O F THE PHOTOGRAPHS, THERE ARE 6 PERSONS WHICH CLAIMED TO BE FOR CARRYING OUT A GRICULTURE. THE SALARY OF THESE PERSONS WOULD ABOUT BE RS.2 LAKH P.A. NOW A D AYS, WHICH HAS NOT BEEN SHOWN IN THE CHART OF RECEIPT AND EXPENDITURE OF AGRI CULTURE. IN ANOTHER PHOTOGRAPH, THERE ARE TWO TRACTORS. DETAILS OF PUR CHASE, SOURCE ALONG WITH DOCUMENTARY EVIDENCE OF THESE TRACTORS HAS NOT BEEN BROUGHT ON RECORD. FURTHER DETAILS OF THEIR RUNNING AND MAINTENANCE EX PENSES AND EXPENSES ON DIESEL AND THE FACT THAT THE SAME COVERED WITHIN TH E AGRICULTURE EXPENSES SHOWN, HAS NOT BEEN BROUGHT ON RECORD. 11 1.18 DETAILS OF AGRICULTURE LAND OWNED JOINTLY WITH H IS FATHER AND BORTHER; CULTIVATION DONE THEREON ALONG WITH REVENUE RECORD, DETAILS OF EXPENSES INCURRED AND INCOME EARNED ALONG WITH DOCUMENTARY EVID ENCE AND THE SHARE OF THE APPELLANT THEREIN, HAS ALSO NOT BEEN BROUGHT ON RECORD. 1.19 THE APPELLANT FILED COPY OF RETURN OF INCOME F ROM THE A.Y.2003-04 TO 2008-09 ALONG WITH HIS LETTER FILED ON 28.10.2010 IN THE D AK OF THIS OFFIE AND SUBMITTED THAT ALL THE ASSESSMENT OF THE PREVIOUS A ND SUCCEEDING YEAR HAS BEEN ACCEPTED U/S 143(1) OF THE ACT. ON EXAMINATIO N OF THE PHOTOCOPY OF THE RETURN OF INCOME FILED BY THE ASSESSEE, IT IS NOTED THAT THE APPELLANT DECLARED INCOME AS FOLLOWS: A.Y. AGRICULTURE INCOME OTHER INCOME TAX PAYA BLE 2003-04 797270 UNDER THE HEAD SALARY RS.50000 NIL 2004-05 700000 INCOME FROM BUSINESS RS.46240 NIL 2005-06 750000 ..DO..., RS.104180 RS.982 2006-07 1200,000 ..DO... RS.97230 NIL 2007-08 900000 ..DO... RS.205365 1643 2008-09 700000 ..DO... RS.200620 NIL 1.20 FROM THE ABOVE DETAIL, IT IS NOTED THAT THE AP PELLANT FILED RETURN OF INCOME IN SPITE OF THE FACT OF HAVING NO TAX LIABILI TY OR MEAGER TAX LIABILITY. 1.21 FROM THE FACTS DISCUSSED ABOVE, IT IS HELD THA T THE APPELLANT FAILED TO ESTABLISH THE GENUINENESS OF AGRICULTURE IN COME DECLARED BY HIM. THE ONLY INFERENCE WHICH CAN BE DRAWN IS THAT THE E NTIRE EXERCISE HAS BEEN CARRIED OUT TO BRING THE UNEXPLAINED INCOME IN BOOK S IN THE GUISE OF AGRICULTURE INCOME WITHOUT PAYING ANY TAX. NO INTER FERENCE IS, THEREFORE, CALLED FOR IN THE ORDER OF THE ASSESSING OFFICER IN THIS RE GARD AND HIS ACTION OF HOLDING AGRICULTURE INCOME OF RS.9 LAKH OUT OF THE T OTAL AGRICULTURE INCOME OF RS.12 LAKHS DECLARED AS INCOME FROM OTHER SOURCES, IS, THEREFORE, CONFIRMED. 12 GROUNDS OF APPEAL NOS.1 AND 2 ARE AS SUCH REJECTED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD. THE LEARNED COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND REFERRED TO THE LEASE DEED AND DIFFERENT AGRICULTURAL LANDS TAKEN ON LEASE AND SUBMITTED THA T MOST OF THE DEEDS ARE REGISTERED AND GENUINENESS OF THE LEASE DEED HAVE NOT BEEN DOUBTED. THE DETAILS OF EARNI NG OF THE AGRICULTURAL INCOME WERE FILED BEFORE THE ASSES SING OFFICER AND THERE WAS NO DIFFERENCE IN THE SALE OF POPLAR TREES AND SALE OF WHEAT AND ULTIMATELY THERE WAS NO DIFFERENCE IN THE TOTAL AGRICULTURAL INCOME DECLARE D. THE EVIDENCES OF EARNING OF AGRICULTURAL INCOME WERE AL SO FILED BEFORE THE AUTHORITIES BELOW. THE DETAILS OF LAND HOLDINGS WERE FILED AND THE SECOND AGREEMENT WAS DULY NOTARI ZED, WHICH IS AN ACCEPTED FACT. HE HAS SUBMITTED THAT THE OBJECTION REGARDING FOUR YEARS OF PLANTATION HAS NO MERIT SINCE THE CYCLE OF POPLAR PLANTATION IS SIX YEARS W HEREIN THE HARVESTING COMMENCES ON OR AFTER 3-4 YEARS, CAL LED UNDER-SIZE POPLAR AND 5-6 YEARS CALLED OVER-SIZE/FU LL GROWTH. THE ASSESSEE FILED PHOTOGRAPHS OF THE SAM E. THE LANDS WITH THE ASSESSEE ARE SINCE EVER LONG AND FARMING IS IN ROTATION. THE STUDY OF VARIOUS RESE ARCHERS HAS BEEN FILED AT PAGE 6 TO 14 TO EXPLAIN THE CUTTI NG CYCLE OF POPLAR TREES FROM 1-3 YEARS TO 15-20 YEARS. IT DEPENDS UPON THE AGE AND SIZE, ETC. THE CULTIVATION AT D ISTANT PLACE IS NOT RELEVANT. THE OBJECTION OF THE AUTHOR ITIES 13 BELOW THAT THE LEASE MONEY FIXED FOR SEVERAL YEARS AT LESSER AMOUNT, IS QUIETLY INCORRECT BECAUSE THE LEA SE MONEY WAS PAID PER ANNUM, WHICH WAS CLARIFIED FROM THE LEASE AGREEMENT. HE HAS SUBMITTED THAT THE DETAIL S OF SALE OF POPLAR TREES AND CONFIRMATION OF PARTIES WE RE FILED BEFORE THE AUTHORITIES BELOW. THE COPIES OF THE CONFIRMATION OF M/S AGGARWAL BROTHERS, YAMUNA NAGAR , AGGARWAL WOOD CRAFTS, YAMUNA NAGAR, AGGARWAL TRADIN G COMPANY, YAMUNA NAGAR HAVE BEEN FILED AT PAGES 82 T O 84 OF THE PAPER BOOK, WHICH ALSO SHOWS THAT THE PAYMEN TS OF SALE OF POPLAR TREES HAVE BEEN RECEIVED FROM BANKIN G CHANNEL. THE SALE OF POPLAR TREES HAS NOT BEEN DO UBTED BY THE AUTHORITIES BELOW. HE HAS ALSO SUBMITTED TH AT IN EARLIER AND SUBSEQUENT ASSESSMENT YEARS, THE AGRICU LTURAL INCOME DECLARED BY THE ASSESSEE HAD BEEN ACCEPTED, AS IS NOTED BY THE LEARNED CIT (APPEALS) IN HIS FINDINGS. 5. ON THE OTHER HAND, THE LEARNED D.R. FOR THE REVE NUE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ASSESSING OFFICER DOUBTED THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE BECAUSE TWO DIFFERENT COMPUTATION OF AGRICULTURAL INCOME WERE FILED BUT I N FACT, THERE WAS NO DIFFERENCE IN THE FIGURES OF SALE OF P OPLAR TREES AND SALE OF WHEAT. VIRTUALLY, THERE WAS MIN OR DIFFERENCE IN SALE OF FUEL WOOD, WHICH WAS BIFURCAT ED IN TWO PARTS IN THE SECOND CHART. IN FIRST CHART, TH E ASSESSEE HAS NOT MENTIONED THE CLAIM OF LEASE RENT WHICH 14 WAS ADDED IN THE SECOND CHART. THE MATERIAL ON REC ORD CLEARLY SUGGESTS THAT THE ASSESSEE WAS CARRYING ON THE AGRICULTURAL OPERATION IN EARLIER AS WELL AS SUBSEQ UENT ASSESSMENT YEARS. THE SUBSTANTIAL LAND HAS BEEN T AKEN ON LEASE, WHICH IS APPARENT FROM THE COPIES OF THE LEASE DEED FILED ON RECORD. THE ASSESSING OFFICER DID N OT ACCEPT THE RELIABILITY OF HOLDING THE AGRICULTURAL LAND ON LEASE AND HELD THE AGRICULTURAL INCOME TO BE ON EXC ESSIVE SIDE. HOWEVER, THE ASSESSING OFFICER HAS FAILED T O GIVE ANY REASONABLE AND COGENT REASON AS TO HOW HE DIS- BELIEVED THE LEASE DEED DULY REGISTERED BETWEEN THE ASSESSEE AND OTHERS AND PRODUCED ON RECORD. IT IS , THEREFORE, CLEAR THAT THE ASSESSING OFFICER VIRTUAL LY DID NOT GIVE ANY BENEFIT TO THE ASSESSEE OF THE AGRICULTURA L LAND TAKEN ON LEASE. THE ASSESSEE IN THE EARLIER ASSESS MENT YEARS HAS SHOWN AGRICULTURAL INCOME RANGING FROM RS .7 LACS TO RS.7,97,000/- AS IS REPRODUCED IN THE FININ GS OF THE LEARNED CIT (APPEALS) QUOTED ABOVE AND IN THE SUBSEQUENT ASSESSMENT YEARS THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME FROM THE SAME AGRICULTURAL LAND RANGING FROM RS.9 LACS TO RS.7 LACS. THEREFORE, I T IS ABUNDANTLY CLEAR FROM THE RECORD THAT THE ASSESSEE HAS DECLARED THE AGRICULTURAL INCOME IN THE PAST ALSO. THE FACTUM OF THE ASSESSEE BEING ENGAGED IN THE ACTIVIT Y OF EARNING OF AGRICULTURAL INCOME IN THE PAST AS WELL AS DURING THE YEAR UNDER CONSIDERATION AND SUBSEQUENT YEAR, IS NOT IN DISPUTE. THE ONLY DISPUTE ARISES OF THE QUANTUM OF AGRICULTURAL INCOME EARNED BY THE ASSESSEE. AC CORDING 15 TO THE ASSESSING OFFICER, SINCE NO BOOKS OF ACCOUNT , BILLS AND VOUCHERS HAVE BEEN PRODUCED, THEREFORE, HE HAS ESTIMATED THE AGRICULTURAL INCOME AT RS.3 LACS ON ESTIMATED BASIS. THE LEARNED COUNSEL FOR THE ASSE SSEE HAS REFERRED TO PAGES 82,83 AND 84 OF THE PAPER BOO K , WHICH ARE CONFIRMATIONS GIVEN BY THREE PARTIES, NAM ELY M/S AGGARWAL BROTHERS, YAMUNA NAGAR, AGGARWAL WOOD CRAFTS, YAMUNA NAGAR, AGGARWAL TRADING COMPANY, YAMUNA NAGAR, WHO HAVE PURCHASED POPLAR TREES FROM THE ASSESSEE IN THE YEAR UNDER CONSIDERATION AND HAVE P AID THE AMOUNT IN QUESTION THROUGH BANKING CHANNEL. T HESE DOCUMENTS HAVE NOT BEEN EITHER VERIFIED OR REJECTED BY THE AUTHORITIES BELOW. THEREFORE, THE ASSESSEE IS ABL E TO PROVE ON RECORD THAT HE HAS PLANTED POPLAR TREES AN D SOLD THE SAME TO VARIOUS PARTIES AND EARNED THE AGRICULT URAL INCOME THE SALE OF POPLAR TREES IS THE MAJOR SOUR CE OF EARNING OF AGRICULTURAL INCOME, AS DECLARED BY THE ASSESSEE. THE KHASRA GIRDAWARI AND JAMABANDI OF DIFFERENT LEASED LAND ALSO SUPPORT THE VERSION OF T HE ASSESSEE THAT THE ASSESSEE HAD CULTIVATED AGRICULTU RAL LAND BY SOWING POPLAR TREES AND WHEAT, ETC. THESE FACTS ARE ALSO MENTIONED IN THE REVENUE RECORD PRODUCED B Y THE ASSESSEE OF HAVING POPLAR TREES AND PLANTS OF WHEAT , ETC. 7. CONSIDERING THE HISTORY OF THE ASSESSEE IN EARLI ER AS WELL AS SUBSEQUENT ASSESSMENT YEARS AND THE EVIDENC ES PRODUCED ON RECORD, WE ARE OF THE VIEW THAT EVEN IF NO BOOKS OF ACCOUNT HAVE BEEN PRODUCED BEFORE THE ASSE SSING 16 OFFICER OF EARNING OF AGRICULTURAL INCOME BUT THE M ATERIAL ON RECORD CLEARLY SUGGESTED THAT THE ASSESSEE HAD E ARNED SUBSTANTIAL AGRICULTURAL INCOME, WHICH IS ESTIMATED ON VERY LOWER SIDE BY THE ASSESSING OFFICER. THE ASS ESSING OFFICER HAS ALSO GIVEN REASON THAT AT DIFFERENT DIS TRICTS, THE ASSESSEE WAS NOT ABLE TO DO AGRICULTURAL ACTIVI TY ON LEASED PROPERTIES. THIS REASON IS NOT SUPPORTED B Y ANY VERIFICATION MADE BY THE ASSESSING OFFICER. THE A SSESSEE HAS PRODUCED SUFFICIENT EVIDENCE ON RECORD OF EARNI NG OF AGRICULTURAL INCOME, HOWEVER IN THE ABSENCE OF SPEC IFIC EVIDENCE PRODUCED BEFORE THE AUTHORITIES BELOW TO P ROVE THE QUANTUM OF EARNING OF AGRICULTURAL INCOME, IT W OULD BE REASONABLE AND PROPER TO ESTIMATE THE AGRICULTURAL INCOME CONSIDERING THE SIZE OF THE AGRICULTURAL LAND HELD BY THE ASSESSEE IN HIS OWNERSHIP, LEASE OF AGRICULTURAL LA ND AND EVIDENCES OF SALE OF POPLAR TREES TO DIFFERENT PART IES AND RECEIPT OF PAYMENT THROUGH BANKING CHANNEL. IT WOU LD SUPPORT THE CASE OF THE ASSESSEE THAT THE ESTIMATE OF AGRICULTURAL INCOME WAS ON VERY LOWER SIDE MADE BY THE AUTHORITIES BELOW. WE, THEREFORE, ESTIMATE THE EA RNING OF AGRICULTURAL INCOME BY THE ASSESSEE AT RS.9 LACS AS AGAINST RS.12 LACS AND AGAINST THE ESTIMATE MADE BY THE AUTHORITIES BELOW AT RS.3 LACS. THE ORDERS OF THE AUTHORITIES BELOW ARE, THEREFORE MODIFIED TO THE EX TENT THAT THE AGRICULTURAL INCOME OF THE ASSESSEE SHALL BE COMPUTED AT RS.9 LACS, WHICH WOULD RESULT IN ADDITI ON OF RS.3 LACS AGAINST THE ASSESSEE AS INCOME FROM OTHER 17 SOURCES. THE ORDERS OF THE AUTHORITIES BELOW TO T HAT EXTENT ARE MODIFIED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF NOVEMBER, 2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 TH NOVEMBER, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH