Rakesh Chaudhary, Delhi V. ITO, Ward- 53(4), New Delhi

ITA 7832/DEL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0012 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 28-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Wrong claim; Competent authority
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBE R ITA NO. 7832/DEL/2017 ASSESSMENT YEAR: 2013-14 RAKESH CHAUDHARY H.NO. 54, SUBHASH MARKET, SEWA NAGAR, KOTLA MUBARKPUR, NEW DELHI. PAN NO. AKQPC5661F VS ITO WARD 53(4) NEW DELHI. APPELLANT RESPONDENT ASSESSEE BY SH. DINESH MOHAN SINHA, ADV. REVENUE BY SH. S.L. ANURAGI, SR. DR ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS)-18, NEW DELHI DATED 17.11.2017 FOR AY 2013- 14. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT RETURN OF INCOME WAS FILED AT INCOME OF RS. 1,85,770/- AND AGRICULTURAL INCOME OF RS. 26 LAKHS. THE ASSESSEE WAS ASKED TO FURNISH DOCUMENTA RY EVIDENCES ALONG WITH CONFIRMATION IN RESPECT OF RECEIPT OF AG RICULTURAL INCOME IN ASSESSMENT YEAR UNDER APPEAL. HOWEVER, THE ASSE SSEE DID NOT FURNISH ANY CONFIRMATION OF THE SAME, DESPITE SPECI FICALLY ASKED FOR. THE ASSESSEE MADE SUBMISSIONS BEFORE AO. SUM MARY OF THE SAME IS REPRODUCED IN THE ASSESSMENT ORDER IN WHICH THE ASSESSEE DATE OF HEARING 03.12.2018 DATE OF PRONOUNCEMENT 07.12.2018 2 ITA NO. 7832/DEL /2017 AY 2013-14 RAKESH CHAUDHARY EXPLAINED THAT ASSESSEE HAS APPROXIMATELY 35 BIGHA AGRICULTURAL LAND AT KABULPUR BANGER, BALLABGARH, FARIDABAD, HAR YANA. HE HAS GIVEN HIS AGRICULTURAL LAND TO HIS UNCLE MR. CHAND FOR CULTIVATING SEASONAL CROPS ON SHARING BASIS. ALL THE AGRICULTU RAL ACTIVITIES ARE MAINTAINED BY HIS UNCLE AGAINST WHICH ASSESSEE HAS TAKEN 50% OF PRODUCED SEASONAL CROPS ONLY AS HIS SHARE. IN THE YEAR 2007 AND 2008 APPROXIMATELY 2000 POPLAR TREES, EUCALYPTUS, E TC. WERE IRRIGATED ON THE PERIPHERY OF THIS LAND, EXCEPT THI S SEASONAL CORPS ALSO HAVE BEEN IRRIGATED IN THIS LAND. THE DOCUMEN TS OF THE AGRICULTURAL ACTIVITY HAVE BEEN FILED. OUT OF 2000 TREES ABOVE, 1460 TREES WERE ALIVE AND ASSESSEE HAS SOLD APPROXI MATELY 950 TREES FOR RS. 26 LAKHS IN ASSESSMENT YEAR UNDER APP EAL AND BALANCE 510 TREES HAVE BEEN SOLD FOR RS. 15 LAKHS I N THE NEXT YEAR. THE ASSESSEE ALSO SUBMITTED AN UNDERTAKING OF TWO P AGES WRITTEN IN HINDI INFORMING RECEIPT OF CASH AMOUNTING TO RS. 26 LAKHS ON VARIOUS DATES IN LIEU OF SALE OF TREES OF POPLAR, S AFEDA, ETC. TO SHRI SHAFI KHAN, SHRI TAHIR KHAN, SH. AZAD KHAN, SH. NIZ AM KHAN AND SHRI BABLU. SOME DETAILS/INFORMATION WERE SUBMITTE D BY ASSESSEE BUT WITHOUT ANY CONFIRMATION OR DOCUMENTARY EVIDENC ES SHOWING RECEIPT OF AGRICULTURAL INCOME OF RS. 26 LAKHS RECE IVED DURING THE YEAR UNDER CONSIDERATION. THE AO FURTHER, AFFORDED OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THIS ISSUE AND TO FILE COMP LETE PARTICULARS OF THE ABOVE FIVE PERSONS WHO HAVE PAID THE AMOUNT OF CASH OF RS. 26 LAKHS TO THE ASSESSEE. ASSESSEE WAS ALSO DIRECT ED TO PROVE THEIR IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION IN THE MATTER. ASSESSEE WAS ALSO INTIMATED THAT SINCE NO EVIDENCES 3 ITA NO. 7832/DEL /2017 AY 2013-14 RAKESH CHAUDHARY HAVE BEEN SUBMITTED BY ASSESSEE, THEREFORE, SAME BE SUBMITTED TO PROVE THE ABOVE FACTS. ASSESSEE WAS ALSO ASKED TO EXPLAIN WHETHER ANY PERMISSION FROM THE COMPETENT AUTHORITY WAS TAK EN BEFORE CUTTING OF THESE 950 TREES. THE ASSESSEE SUBMITTED BEFORE AO THAT AFTER SUCH A LONG TIME THE ASSESSEE CANNOT FIND THE SE PERSONS. THE ASSESSEE HAS SOLD THESE TREES TO WOOD CUTTERS FOR W HICH NO PERMISSION WAS TAKEN FROM COMPETENT AUTHORITY FOR C UTTING THESE TREES. ASSESSEE HAS NO CONTROL OVER THE PURCHASER. THE AO NOTED THAT ASSESSEE HAS AGAIN FAILED TO FURNISH ANY DOCUM ENTARY EVIDENCE IN SUPPORT OF HIS CLAIM AS NEITHER HE PROD UCED THESE FIVE PERSONS FOR CROSS EXAMINATION/VERIFICATION TO WHOM SALE OF 950 TREES HAVE BEEN CLAIMED, NOR ANY DOCUMENTARY EVIDEN CES OF THE STANDING CROP ON THE AGRICULTURAL LAND HAVE BEEN FI LED. THE ASSESSEE FURTHER STATED THAT HE IS WILLING TO PAY T AX OVER ON 40% OF THE AGRICULTURAL INCOME. THE ASSESSEE IN RESPONSE T O THE FINAL NOTICE ALSO SUBMITTED THAT DURING THE YEAR UNDER CO NSIDERATION ASSESSEE HAD DEPOSITED CASH OF RS. 22,54,260/- OUT OF RS. 1,81,260/- FROM RENTAL INCOME AND BALANCE OF RS. 20 ,73,000/- IS OUT OF AGRICULTURAL INCOME. THE ASSESSEE SUBMITTED SOME MANDI RECEIPTS AGAINST SALE OF SOME SEASONAL CROPS FOR PA ST YEARS. THE ASSESSEE VOLUNTARILY INTIMATED TO THE DEPARTMENT TO ALLOW HIM TO PAY TAX OVER 40% OF RS. 26 LAKHS FOR BUYING PEACE O F MIND. 2.1 THE AO, HOWEVER, NOTED THAT DESPITE GIVING SUFF ICIENT OPPORTUNITIES, ASSESSEE FAILED TO PRODUCE ANY DOCUM ENTARY EVIDENCES TO SUPPORT RECEIPT OF CASH OF RS. 26 LAKH S FROM SALE OF 4 ITA NO. 7832/DEL /2017 AY 2013-14 RAKESH CHAUDHARY TREES. THE AO REJECTED THE EXPLANATION OF ASSESSEE ON THE FOLLOWING REASONS: 1. ASSESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDEN CE OF 1460 TREES GROWN ON AGRICULTURAL LAND IN A NUMBER O F YEARS STARTING FROM THE YEAR 2007 TILL THE SALE OF THESE TREES AS CLAIMED BY THE ASSESSEE. 2. THE AGE, LENGTH, CIRCUMFERENCE AND WEIGHT OF THE ST EM OF THE TREES HAS BEEN NO WHERE MENTIONED. 3. ASSESSEE GROSSLY FAILED TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE FIVE PERSONS WHO MADE THE PAYMENT OF RS. 26 LAKHS WHICH IS CLAIMED AS AGRICUL TURAL INCOME. 4. SINCE THE ASSESSEE FAILED TO PROVE THE IDENTITY AND THE CREDITWORTHINESS OF THE FIVE PERSONS, THEREFORE, TH E GENUINENESS OF THE TRANSACTION ALSO COULD NOT BE PR OVED. 5. AS PER THE COPY OF THE WILL EXECUTED BY THE MOTHER OF THE ASSESSEE MRS. RAMVATI, IT HAS BEEN DECLARED THAT TH E ENTIRE AGRICULTURAL LAND WILL STAND IN HER NAME TIL L SHE IS ALIVE AND THIS AGRICULTURAL LAND BELONGING TO HER W ILL PASS ON TO HER TWO SONS NAMELY SH. VINOD KUMAR AND SH. RAKESH KUMAR IN EQUAL PART ONLY AFTER HER DEATH. T HIS FACT OF OWNERSHIP OF AGRICULTURAL LAND IS ALSO VERI FIABLE FROM THE LAND RECORD WHICH CLEARLY INDICATE THE OWN ERSHIP OF AGRICULTURAL LAND IN THE NAME OF SMT. RAMVATI, T HE MOTHER OF THE ASSESSEE. THEREFORE, WHATEVER AGRICU LTURAL INCOME IS EARNED, IT IS EARNED ONLY BY SMT. RAMVATI AND NOT THE ASSESSEE. 6. ASSESSEE GROSSLY FAILED TO DISCHARGE HIS ONUS WITH REGARD TO RECEIPT OF AGRICULTURAL INCOME. 2.2 THE AO FURTHER NOTED THAT SINCE CASH WAS FOUND DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE, THEREFORE, ENTIRE CASH OF RS. 26 LAKHS IS TREATED AS INCOME FROM OTHER SOURCES AND SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. 5 ITA NO. 7832/DEL /2017 AY 2013-14 RAKESH CHAUDHARY 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD.C IT(A). THE WRITTEN SUBMISSION OF THE ASSESSEE IS REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSESSEE REITERATED THE SAME SUB MISSIONS AS WERE SUBMITTED BEFORE AO AND ALSO SUBMITTED THAT PA RT OF THE LAND IS IN THE NAME OF THE ASSESSEE AND PARTLY IN THE NA ME OF HIS MOTHER. HE HAS SUBMITTED THAT SECTION 68 OF THE AC T WILL NOT APPLY AND THAT ASSESSEE PROVED THE SOURCE OF CASH DEPOSIT S AS ABOVE. 4. THE LD.CIT(A) NOTED THAT ASSESSEE FAILED TO PROD UCE ANY DOCUMENTARY EVIDENCE OF EARNING AGRICULTURAL INCOME AND ALSO FAILED TO PROVE THE IDENTITY AND CREDITWORTHINESS O F THE PERSONS TO WHOM SALE OF TREES WAS MADE AND ALSO FAILED TO PROV E GENUINENESS OF THE TRANSACTION IN THE MATTER. ADDITION ON MERI T WAS CONFIRMED. THE LD. CIT(A) ALSO RECTIFIED THE ORDER OF THE AO B Y DIRECTING THAT ADDITION U/S 69 OF THE ACT BE MADE. APPEAL OF ASSE SSEE WAS ACCORDINGLY DISMISSED. 5. LD. COUNSEL FOR ASSESSEE REITERATED THE SUBMISSI ONS MADE BEFORE AUTHORITIES BELOW. HE HAS ARGUED THAT ASSES SEE HAS PRODUCED SUFFICIENT DOCUMENTARY EVIDENCES TO PROVE THAT ASSESSEE HOLDS AGRICULTURAL LAND AND EARNED AGRICULTURAL INC OME. THE ASSESSEE ALSO FILED COPY OF THE ELECTRICITY BILL FO R RUNNING THE WATER PUMP FOR AGRICULTURAL PURPOSE AND SOME RECEIPTS OF MANDI SAMITI FOR SELLING OF THE CROPS. 5.1 ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 6 ITA NO. 7832/DEL /2017 AY 2013-14 RAKESH CHAUDHARY 6. I HAVE CONSIDERED THE RIVAL SUBMISSION AND PERUS ED THE FINDINGS OF THE AUTHORITIES BELOW. 7. THE ASSESSE HAS RAISED THREE EFFECTIVE GROUNDS O F APPEAL, HOWEVER, LD. COUNSEL FOR ASSESSEE ONLY ARGUED ON ME RIT OF THE ADDITION. NO OTHER GROUNDS HAVE BEEN ARGUED BY HIM AND NO INFIRMITIES HAVE BEEN POINTED OUT AS TO WHAT IS ILL EGALITY IN SELECTION OF THE CASE UNDER CASS SCRUTINY. THEREFO RE, NO INTERFERENCE IS CALLED FOR ON THOSE GROUNDS OF APPE ALS. AS REGARDS, THE ADDITION ON MERIT OF RS. 26 LAKHS, ASSESSEE SUB MITTED DOCUMENTS OF OWNERSHIP OF THE LAND WHICH ACCORDING TO HIM WAS IN HIS NAME AND THE NAME OF HIS MOTHER. HE HAS FILED COPY OF ELECTRICITY BILL FOR RUNNING THE WATER PUMP AND SOM E RECEIPTS OF MANDI SAMITI TO PROVE SALE OF CROP. THE ASSESSEE, HOWEVER, FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE OF GROWING ANY POPLAR TREES, ETC. IN THE AGRICULTURAL LAND IN THE YEAR 2007 AND 2008. THE ASSESSEE ALSO FAILED TO PROVE THE AGE, LENGTH, CIRC UMFERENCE AND WEIGHT OF THE STEM OF THE TREES. THE ASSESSEE ALSO FAILED TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE FIVE PERSO NS WHO HAVE MADE PAYMENT IN CASH OF RS. 26 LAKHS TO THE ASSESSE E ON ACCOUNT OF SALE OF POPLAR TREES. THE ASSESSEE FAILED TO PR OVE GENUINENESS OF THE TRANSACTION IN THE MATTER. THE AO SPECIFICALLY NOTED THAT AGRICULTURAL LAND WAS IN THE NAME OF MOTHER OF THE ASSESSEE WHO HAS EXECUTED A WILL THAT AFTER HER DEATH THE PROPER TY SHALL BE INHERITED BY HER TWO SONS I.E. ASSESSEE AND SH. VIN OD KUMAR IN EQUAL PART. THEREFORE, PROPERTY WAS NOT IN THE NAM E OF THE 7 ITA NO. 7832/DEL /2017 AY 2013-14 RAKESH CHAUDHARY ASSESSEE. THUS, ASSESSEE FAILED TO PROVE AS TO HOW HE HAS EARNED AGRICULTURAL INCOME DESPITE HE WAS NOT OWNER OF THE PROPERTY IN QUESTION. THE ASSESSEE ALSO DID NOT OBTAIN PERMISSI ON OF THE COMPETENT AUTHORITY BEFORE CUTTING THE TREES. IN T HE ABSENCE OF ANY EVIDENCE ON RECORD OF GROWING OF THE TREES IN A GRICULTURAL LAND, AND CUTTING OF THE TREES, IT IS DIFFICULT TO BELIEV E THE EXPLANATION OF ASSESSEE THAT ASSESSEE EARNED AGRICULTURAL INCOME O F RS. 26 LAKHS ON ACCOUNT OF SALE OF TREES TO FIVE PERSONS. THESE FACTS CLEARLY ESTABLISH THAT ASSESSEE MADE A WRONG CLAIM OF EARNI NG OF AGRICULTURAL INCOME ON ACCOUNT OF SELLING OF THE PO PLAR TREES. NO INTERFERENCE IS REQUIRED IN THE MATTER. I, ACCORDI NGLY, CONFIRM THE FINDINGS OF FACTS RECORDED BY THE AUTHORITIES BELOW AND DISMISS THE APPEAL OF ASSESSEE. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 07.12.2018 *KAVITA ARORA 8 ITA NO. 7832/DEL /2017 AY 2013-14 RAKESH CHAUDHARY COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 9 ITA NO. 7832/DEL /2017 AY 2013-14 RAKESH CHAUDHARY DATE OF DICTATION 06.12.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER