M/s Dilloo Ram & Sons, Mandi V. ACIT, Mandi

ITA 925/CHANDI/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1267 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-12-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 14-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: I C VERMA
• Assessee Lawyers: JAI SHREE SHARMA
• Keywords: Unexplained expenditure; Business income; Charitable institution; Rule of consistency; Additional evidence
• Section: 69C; 143(3); 69

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI N. BARATHVAJA SANKAR, VICE PRESIDENT AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.545/CHD/2010 ASSESSMENT YEAR: 2006-07 THE ACIT, VS. SHRI KARANBIR SINGH SANDHU, CRICLE PATIALA PATIALA PAN NO. ABPPS1620N (APPELLANT) (RESPONDENT) APPELLANT BY : SMT JAISHREE SHARMA RESPONDENT BY: SHRI I.C.VERMA ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE REVENUE IS AGAINST THE ORDER OF CIT(A), PATIALA DATED 26.3.2010 RELATING TO ASSESSMENT YEAR 2006-07 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 6,75,000/- MA DE ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69C, IGNORIN G THE FACT THAT THE ASSESSEE HAD FAILED TO FURNISH THE RE QUISITE DETAILS OF EXPENDITURE INCURRED ON APPLE ORCHARD, D ESPITE BEING SPECIFICALLY ASKED FOR BY THE ASSESSING OFFIC ER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THA T, THE ASSESSING OFFICER ESTIMATED THE SAME ON THE BASIS O F 2 RECOGNIZED SCIENTIFIC FORMULAE, WHICH HAVE BEEN RAT IFIED BY DR. Y.S. PARMAR UNIVERSITY OF HORTICULTURE & FOR ESTRY, NAUNI (SOLAN HP), WHICH FACT HAS NOT BEEN REBUTTED BY THE ASSESSEE AT ANY STAGE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 5,00,000/- MADE ON ACCOUNT OF TREATMENT OF MONEY, RECEIVED IN LIEU OF AGRICULTURAL LAND GIVEN ON LEAS E, AS INCOME FROM OTHER SOURCES BY THE ASSESSING OFFICER, IGNORING THE FACT THAT AS PER CLAUSE (9) OF THE AGREEMENT, THE LAND-IN-QUESTION WAS TO BE USED FOR THE PRODUCTION OF WHEAT AND PADDY SEEDS & PAYMENT WAS T O BE MADE IN ACCORDANCE WITH THE QUALITY OF EARTH ETC . AND THE MARKET RATE PREVALENT IN THE AREA IN RESPECT OF LEASE MONEY. HENCE, THE INCOME SO DERIVED AND SHOWN AS BUSINESS INCOME BY THE LESSEE DEFEATS THE VERY CHAR ACTER OF IMPUGNED AGRICULTURE INCOME, AS CLAIMED BY THE ASSESSEE. 3. THE ORDER PASSED BY THE CIT(A), ALLOWING RELIEF TO THE ASSESSEE ON THE PLEA THAT THE SAME SET OF FACTS HAD BEEN ACCEPTED BY THE ASSESSING OFFICER WHILE FRAMING ASSESSMENT FOR THE ASSESSMENT YEAR 2005-06 IN THE C ASE OF THE ASSESSEE, IS NOT ACCEPTABLE ON MERITS, BEING PERVERSE, BECAUSE THE FACTS HAD NOT BEEN EXAMINED F ROM THE ANGLE DURING THE ASSESSMENT YEAR 2005-06 AS DON E DURING THE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2006-07. 2. THE ISSUE IN GROUND NO.1 IS AGAINST THE DELETION OF ADDITION MADE U/S 69C OF THE ACT. 3. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT D URING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD DECALED INCOME OF RS . 18,82,965/- AND 3 AGRICULTURAL INCOME OF RS. 8 LACS. THE ASSESSEE H AD SHOWN NET INCOME OF RS. 3 LACS FROM APPLE ORCHARD DURING THE YEAR AFTER CLAIMING EXPENDITURE OF RS. 2,99,583/-. THE ASSESSING OFFICER REQUISITI ONED THE ASSESSEE TO JUSTIFY THE EXPENDITURE INCURRED DURING THE YEAR IN COMPARISON TO THE INCOME AND EXPENDITURE IN THE PRECEDING YEAR. THE ASSESSING OFFICER ALSO ASKED THE ASSESSEE TO EXPLAIN WHY THE SAID INC OME SHOULD NOT BE TREATED AS INCOME FROM UNEXPLAINED SOURCES. THE EX PLANATION OF THE ASSESSEE WAS THAT DURING THE YEAR THE SALE PROCEEDS FROM APPLE ORCHARD WERE ON THE LOWER SIDE AS COMPARED TO THE PRECEDING YEAR THOUGH THE EXPENDITURE INCURRED WERE SIMILAR. THE ASSESSEE H AD SHOWN NET SALES OF APPLES IN THE ASSESSMENT YEAR 2005-06 AT RS. 6,99,1 42/- AGAINST WHICH EXPENDITURE OF RS. 3 LACS WAS CLAIMED, REFLECTING I NCOME OF RS. 3,99,141/- DURING THE YEAR UNDER APPEAL, THE ASSESSEE HAD SHOW N THE INCOME FROM SALE OF APPLES AT RS. 5,99,583/- AGAINST WHICH EXPE NDITURE OF RS. 2,99,583/- WAS INCURRED AND BALANCE INCOME OF RS. 3 LAC WAS SHOWN BY THE ASSESSEE. THE ASSESSEE FURTHER EXPLAINED THAT THE ENTIRE CROP OF APPLES WAS SOLD TO M/S JAGGI ROHIT FRUIT TRADERS, AZADPUR MANDI, DELHI AND FREIGHT AND OTHER RELATED EXPENSES WERE PAID BY THE PURCHASERS ON BEHALF OF THE ASSESSEE AND WERE DEDUCTED FORM THE SALE OF AMOUNTS IN THE BILLS. THE COPY OF ACCOUNT OF M/S JAGGI ROHIT FRUIT TRADER S WAS ALSO FILED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICE R FOUND THE CONTENTION OF THE ASSESSEE NOT TENABLE IN VIEW OF THE FOLLOWIN G REASONS: A) THE INCOME SHOWN BY THE ASSESSEE WAS NET OF EXPENDI TURE INCURRED ON FREIGHT AND COMMISSION B) NO DETAILS OF THE EXPENDITURE CLAIMED AT RS. 2,99,5 83/- WERE FURNISHED BY THE ASSESSEE. 4 C) THE CASH FLOW STATEMENT FILED BY THE ASSESSEE DOES NOT EXPLAIN ANYTHING ABOUT THE SOURCES OF EXPENDITURE I NCURRED ON APPLE ORCHARD IN EXCESS OF RS. 2,99,583/-. D) THE ASSESSEE FAILED TO FURNISH THE DETAILS OF EXPEN DITURE INCURRED ON LABOUR, FERTILIZERS, PESTICIDES AND INS ECTICIDES. E) THE ASSESSEE WAS NOT MAINTAINING ANY DETAILS OF EXP ENDITURE INCURRED WHEN HE WAS GROWING APPLES ON COMMERCIAL S CALE. 4. THE ASSESSING OFFICER AT PAGE 8 OF THE ASSESSMEN T ORDER IN VIEW OF THE ABOVE SAID REASONS ESTIMATED THE EXPENSES INCUR RED ON APPLE ORCHARD ON PER PLANT PER YEAR BASIS AND WAS OF THE VIEW THA T THE EXPENDITURE WAS RS. 500/- PER PLANT PER YEAR. THE ASSESSEE WAS HAVI NG 2500 PLANTS SPREAD OVER 170 BIGHAS AND AS SUCH THE COST ON TENDING TO APPLE ORCHARD WAS ESTIMATED AT RS. 12,50,000/-. FURTHER ASSESSING O FFICER ALLOWED BENEFIT OF 10% ON ACCOUNT OF AVERAGE COST OF INPUTS AND ADD ITIONALLY 10% WAS PROVIDED AS THE EXPENSES WERE BASED ON ESTIMATION. FURTHER, IN RESPECT OF 500 PLANT BEING NON FRUIT BEARING, DEDUCTION OF RS. 25,000/- WAS ALLOWED. ON THE AFORESAID PARAMETERS, THE ASSESSING OFFICER WORKED OUT UNEXPLAINED EXPENDITURE OF RS. 6,75,400/- AS PER TH E CALCULATION TABULATED AT PAGE 9 OF THE ASSESSMENT ORDER AND THE SAME WAS ADDED UNDER THE PROVISIONS OF SECTION 69C OF THE ACT. 5. BEFORE THE CIT(A), THE CONTENTION OF THE LD. AR FOR THE ASSESSEE WAS THAT THE CALCULATION ON EXPENSES AT RS. 500/- P ER TREE WAS WITHOUT ANY AUTHENTICITY AND WAS NOT SUPPORTED BY ANY EVIDENCE OR POSITIVE MATERIAL HAVING BEEN BROUGHT ON RECORD BUT WAS BASED ON MERE SURMISES AND WITHOUT ANY EVIDENCE. FURTHER, IT WAS POINTED OUT BY THE LD. AR THAT THE SAID CALCULATIONS WERE NOT CONFRONTED TO THE ASSESS EE DURING THE 5 ASSESSMENT PROCEEDINGS AND AS SUCH, THE ADDITION WA S UNWARRANTED. FURTHER, IT WAS POINTED OUT THAT IN THE EARLIER YEA RS ALSO, THE INCOME FROM THE SAID SOURCES WAS COMPUTED IN THE SAME MANNER AN D THE RESULTS DECLARED BY THE ASSESSEE HAVE BEEN ACCEPTED IN THE ASSESSMEN T YEAR 2005-06 VIDE ORDER FRAMED U/S 143(3) OF THE ACT. THE EXPENSES I N THE SAID YEARS WERE ABOUT 43% OF THE NET RECEIPTS AND DURING THE YEAR T HE SAID EXPENDITURE WERE 50% MAINLY DUE TO PRICE RISE FURTHER, THE LD . AR OBJECTED TO THE APPLICATION OF SECTION 69C ON THE PLEA THAT IT CONT EMPLATES INCURRING OF ACTUAL EXPENDITURE, WHICH IS HELD TO BE UN-EXPLAINE D AND NOT PRESUMPTIVE ONE AS ESTIMATED BY THE ASSESSING OFFICER. THE CIT( A) HAD REQUISITIONED FOR A REMAND REPORT FROM THE ASSESSING OFFICER AND IT WAS POINTED OUT BY THE LD. AR THAT THE STAGE WISE EXPENSES IN APPLE OR CHARD IS PRESUMED AND ESTIMATED BY THE ASSESSING OFFICER IN THE ASSESSMEN T PROCEEDINGS AND IN REMAND REPORT WERE SELF CONTRADICTORY AND LACKED C REDIBILITY. A COMPARATIVE TABLE WAS FURNISHED BY THE ASSESSEE BEF ORE THE CIT(A) TO EXPLAIN THE SAME. AN ALTERNATIVE PLEA WAS RAISED T HAT THE ASSESSING OFFICER DURING THE REMAND PROCEEDINGS HAD ESTIMATED THE EXPENDITURE ON THE BASIS OF REPORT OF DR. Y.S. PARMAR, UNIVERSITY OF HORTICULTURE AND FORESTRY, NAUNI, SOLAN (H.P.), WHICH WAS NOT AVAILA BLE WITH THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS AND THE S AME AMOUNTED TO FURNISHING OF ADDITIONAL EVIDENCE DURING THE APPELL ATE PROCEEDINGS. THE ASSESSING OFFICER ON THE OTHER HAND REITERATED HIS EARLIER SUBMISSIONS AND EMPHASIZED THAT SECTION 69C WAS CORRECTLY INVOKED A S THE ASSESSEE HAVING NOT MAINTAINED COMPLETE RECORD OF EXPENDITURE AND T HERE WAS NO OPTION BUT TO ESTIMATE THE SAID EXPENSES. THE CIT(A) NOTED TH AT THE EXPENDITURE ESTIMATED BY THE ASSESSING OFFICER WAS AS HIGH AS 1 62% OF THE NET SALES WHEREAS IN ASSESSMENT YEAR 2005-06, THE DIRECT EXPE NDITURE WERE ABOUT 43% OF THE NET RECEIPTS WHICH WERE ACCEPTED BY THE ASSESSING OFFICER VIDE 6 ORDER PASSED U/S 143(3) OF THE ACT. DURING THE YEA R THE ASSESSEE HAD CLAIMED EXPENSES OF ABOUT 50% OF NET RECEIPTS. THE CIT(A) FURTHER HELD THAT THOUGH THE PRINCIPLE OF RES JUDICATA WAS NOT A PPLICABLE IN THE INCOME TAX MATTERS, BUT THE RULE OF CONSISTENCY IS RECOGNI ZED BY THE COURTS SPECIALLY WHEN THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. RELIANCE WAS PLACED ON THE RATIO LAID DOWN B Y THE HON'BLE SUPREME COURT IN CIT V J.K. CHARITABLE TRUST [308 ITR 161 ( SC)] FOR THE PROPOSITION THAT WHERE THE FACT SITUATION IN ALL TH E ASSESSMENT YEARS WAS THE SAME, AND IF THE REVENUE HAD NOT APPEALED FROM THE DECISION FOR AN EARLIER YEARS, ITS APPEALS AGAINST THE DECISION FO R A SUCCEEDING YEAR, WOULD BE DISMISSED. ACCORDINGLY, THE ADDITION OF RS. 6,7 5,000/- WAS DELETED BY THE CIT(A). THE REVENUE IS IN APPEAL AGAINST THE S AID DELETION. 6. THE LD. DR FOR THE REVENUE POINTED OUT THAT THE ASSESSING OFFICER HAD ESTIMATED THE EXPENDITURE RELATABLE TO THE EAR NING OF INCOME FROM APPLE ORCHARD AND THE ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE WHEREAS THE CIT(A) DELETED THE ADDITION WITHOUT EXAMINING THE FACTS OF THE CASE. THE LD. AR FOR THE ASSESSEE ON THE OTHER HAND POINTED OUT THAT THERE WAS INCONSISTENCY IN THE ORD ER OF THE ASSESSING OFFICER AS SIMILAR INCOME WAS ACCEPTED IN THE EARLI ER YEARS BY AN ORDER PASSED U/S 143(3) OF THE ACT AND DURING THE YEAR WH EN THE SAME METHOD WAS BEING FOLLOWED AND THE FACTS AND CIRCUMSTANCES BEING SAME, THERE IS NO MERIT IN ESTIMATING THE EXPENDITURE IN THE HANDS OF THE ASSESSEE. FURTHER, IT WAS POINTED OUT THAT IN THE ASSESSMENT ORDER THERE WAS NO MENTION OF ANY FORMULA ACCEPTED FOR ESTIMATION OF E XPENSES AND EVEN IN THE FIRST REMAND REPORT THERE WAS NO MENTION OF ANY FORMULA, WHEREAS IN THE SECOND REMAND REPORT, THE ASSESSING OFFICER HAS FURNISHED THE FIGURES WHICH WERE REBUTTED BY THE ASSESSEE BEFORE THE CIT( A) AND IN THE ABSENCE 7 OF RATIFICATION TO THE SAME, THE ORDER OF CIT(A) ME RITS TO BE UPHELD. IT WAS FURTHER POINTED OUT THAT THE ASSESSING OFFICER HAD PLACED HIS ASSUMPTION IN THE REMAND PROCEEDING ON A FORMULA ISSUED BY THE UN IVERSITY OF HORTICULTURE AND FORESTRY, WHICH CAN ONLY BE A GUID ELINE BUT NO ADDITION COULD BE MADE ON THAT BASIS. FURTHER PLEA WAS THAT THE PROVISIONS OF SECTION 69C OF THE ACT WOULD APPLY ONLY WHEN THERE IS ACTUAL EXPENDITURE AND NOT WHEN THERE IS PRESUMPTIVE EXPENDITURE ESTIM ATED IN THE HANDS OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT IT WA S THE DUTY OF THE ASSESSING OFFICER TO FIND ACTUAL EXPENSES INCURRED BY THE ASSESSEE AND THERE WAS NO BURDEN ON THE ASSESSEE IN THE ABSENCE OF ANY ADMISSION OF HAVING INCURRED SUCH EXPENDITURE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ASSESSEE IS THE OWNER OF AN APPLE ORCHARD MEASURING 170 BIGAS ON WHICH 2500 APPLE TREES ARE GROWN BY THE ASSESSEE OUT OF W HICH 500 TREES ARE NON FRUIT BEARING TREES. THE ASSESSEE DURING THE YEAR U NDER CONSIDERATION HAD SHOWN TOTAL AGRICULTURAL INCOME OF RS. 8 LACS, OUT OF WHICH RS. 3 LACS WAS SHOWN FROM SALE OF APPLES. THE TOTAL SALE PROCEEDS OF THE APPLE CROP WERE RS. 5,99,583/- AGAINST WHICH EXPENDITURE ON ACCOUNT OF FERTILIZERS, PESTICIDES AND LABOUR ETC WAS CLAIMED AT RS. 2,99,5 83/- AND ACCORDINGLY INCOME FROM SALE OF APPLES WAS DECLARED AT RS. 3 LA CS. THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS HAD ADMITTED NOT TO HAVE MAINTAINED THE ITEM WISE DETAILS OF THE SUCH EXPENDITURE. THE ASSESSEE HAD SHOWN SIMILAR AGRICULTURE INCOME FROM SALE OF APPLES DURI NG THE PRECEDING YEAR I.E. ASSESSMENT YEAR 2005-06 IN WHICH THE NET SALE OF APPLES WAS RS. 6,99,142/- AGAINST WHICH EXPENDITURE OF RS. 3 LACS WAS CLAIMED AND NET INCOME OF RS. 3,99,141/- WAS DECLARED AS AGRICULTUR E INCOME. THE SAID INCOME WAS ACCEPTED VIDE ASSESSMENT ORDER PASSED U/ S 143(3) OF THE ACT. 8 HOWEVER, DURING THE YEAR UNDER CONSIDERATION, THE A SSESSING OFFICER ESTIMATED THE EXPENDITURE TO BE INCURRED FOR CARRYI NG OUT THE AGRICULTURE OPERATIONS AND ON THE CALCULATIONS AS TABULATED AT PAGE 9 OF THE ASSESSMENT ORDER. THE ASSESSEE WAS FOUND TO HAVE INCURRED EXP ENDITURE AT WITH LESSER FIGURE AND AN ADDITION OF RS. 6,75,000/- WAS MADE B Y THE ASSESSING OFFICER AFTER INVOKING THE PROVISIONS OF SECTION 69 C OF THE ACT. THE SAID ADDITION WAS DELETED BY THE CIT(A) FOLLOWING THE RU LE OF CONSISTENCY AS THE FACTS AND CIRCUMSTANCES OF THE CASE UNDER CONSI DERATION WERE FOUND TO BE IDENTICAL TO THE FACTS IN THE PRECEDING YEAR AND THE AGRICULTURE INCOME DECLARED BY THE ASSESSEE HAVING BEEN ACCEPTED IN TH E PRECEDING YEAR. 8. WE ARE IN CONFORMITY WITH THE OBSERVATION OF THE CIT(A) THAT WHERE THE FACTS AND CIRCUMSTANCES ARE IDENTICAL THE RULE OF CONSISTENCY DEMAND THAT WHERE THE INCOME IF DECLARED ON THE SIMILAR BA SIS, AND WERE ACCEPTED ON THE SAME GROUNDS IN THE EARLIER YEARS MERITS TO BE ACCEPTED IN THE COMPARABLE CIRCUMSTANCES. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN CIT VS. J.K. CHARITAB LE TRUST (SUPRA). THE ASSESSING OFFICER VIDE ORDER PASSED U/S 143(3) OF T HE ACT RELATING TO ASSESSMENT YEAR 2005-06 HAD ACCEPTED THE AGRICULTUR AL INCOME FROM SALE OF APPLES, IN THE HANDS OF THE ASSESSEE IN THE PRECEDI NG YEAR, SIMILAR INCOME WAS SHOWN BY THE ASSESSEE THOUGH THERE WAS A FALL I N THE INCOME DURING THE YEAR UNDER APPEAL. THE EXPLANATION OF THE ASS ESSEE IN THIS REGARD WAS THAT (A) THE CROP OF APPLES WAS LESS DURING THE YEA R AND (B) THE COST OF EXPENDITURE HAD GONE UP AND HENCE THE SAID FALL IN INCOME. WE FIND NO MERIT IN THE ORDER OF THE ASSESSING OFFICER IN REJE CTING THE EXPLANATION OF THE ASSESSEE WITH REGARD TO ITS AGRICULTURAL INCOME , WITHOUT BRINING ON RECORD ANY EVIDENCE TO THE CONTRARY. THE ASSESSING OFFICER HAD COMPUTED THE EXPENDITURE ON GROWING OF THE APPLE TREES AND O THER RELATED 9 EXPENDITURE ON ESTIMATE BASIS. FOLLOWING THE RULE OF CONSISTENCY, WE UPHOLD THE ORDER OF CIT(A) IN THIS REGARD. 9. NOW COMING TO THE MERITS OF INVOKING THE PROVISI ONS OF SECTION 69C OF THE ACT BY THE ASSESSING OFFICER, WE FIND THAT I N THE PRESENT CASE THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE AFTE R ESTIMATING THE EXPENDITURE AND THEREAFTER HOLDING THAT ADDITION IS WARRANTED ON THE BASIS OF PARAMETERS ELABORATED UPON IN THE ASSESSMENT ORD ER, ACCORDING TO WHICH THE COST OF TENDING AND GROWING APPLES WORKS OUT TO RS. 9,75,000/- AND AFTER ALLOWING DEDUCTION ON ACCOUNT OF EXPENSES SHO WN BY THE ASSESSEE AT RS. 299583/-, THE BALANCE OF RS. 6,75,400/- IS TREA TED AS UNEXPLAINED EXPENDITURE BY INVOKING THE PROVISIONS OF SECTION 6 9C OF THE ACT. SECTION 69C OF THE ACT READS AS UNDER:- UNEXPLAINED EXPENDITURE, ETC. 69C. WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATI ON ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREO F, OR THE EXPLANATION, IF ANY, OFFERED BY HIM IS NOT, IN THE OPINION OF THE [ASSESSING] OFFICER, SATISFACTORY, T HE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MAY BE, MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR :] [ PROVIDED THAT, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, SUCH UNEXPLAINED EXPENDITURE WHICH IS DEEMED TO BE THE INCOME OF THE ASSESSEE SHALL NOT BE ALLOWED AS A DEDUCTION UNDER ANY HEAD OF INCOME.] 10. THE PROVISIONS OF SECTION 69C OF THE ACT ARE AT TRACTED IN ALL SUCH CASES WHERE THE ASSESSEE IS FOUND TO HAVE INCURRED AN EXPENDITURE FOR WHICH IT OFFERS NO EXPLANATION OR THE EXPLANATION O FFERED BY THE ASSESSEE DOES NOT COVER OF AMOUNT OF SUCH EXPENDITURE OR PAR T THEREOF, THEN SUCH EXPENDITURE IS DEEMED TO BE THE INCOME OF THE ASSES SEE OF THE YEAR IN 10 WHICH THE SAME HAD BEEN INCURRED. THE REQUIREMENT OF THE SECTION IS FIRSTLY AN EXPENDITURE SHOULD BE FOUND TO HAVE BEEN INCURRED BY THE ASSESSEE AND SECONDLY THE ASSESSEE FAILS TO EXPLAIN THE SOURCE OF SUCH EXPENSES. WHEN THE TWO CONDITIONS ARE SATISFIED, T HE DEEMING PROVISIONS OF SECTION 69C OF THE ACT ARE ATTRACTED AND ADDITIO N IS TO BE MADE IN THE YEAR TO WHICH SUCH EXPENDITURE RELATES. IN THE CA SE FALLING U/S 69C OF THE ACT, THE CONDITION PRECEDENT IS THAT IT SHOULD BE E STABLISHED THAT THE ASSESSEE HAD INCURRED ANY EXPENDITURE AND SUCH ESTA BLISHMENT OF THE EXPENDITURE SHOULD BE BACKED BY SUFFICIENT EVIDENCE AND / OR MATERIAL ON RECORD. THE PRIMARY ONUS IS UPON THE REVENUE TO E STABLISH THE SAME AND IN CASE OF THE FAILURE ON THE PART OF THE REVENUE T O PROVE, THE SAME CANNOT BE TAXED AS INCOME IN THE HANDS OF THE ASSESSEE. I N THE FACTS OF THE PRESENT CASE, WE FIND THAT THE ASSESSING OFFICER HAS FAILED TO BRING ON RECORD ANY EVIDENCE TO ESTABLISH THE ASSESSEE TO HAVE INCURRED ANY EXPENDITURE OVER AND ABOVE THE EXPENDITURE CLAIMED BY HIM TO HAVE BE EN SPENT. THE ASSESSING OFFICER HAD ESTIMATED THE COST OF TENDERI NG AND PLANTING OF THE CROP OF APPLES IN THE HANDS OF THE ASSESSEE AND AFT ER SUCH ESTIMATION HAD CONCLUDED THE ASSESSEE TO HAVE INCURRED AN EXPENDI TURE OF RS. 9,75,000/-, AS AGAINST THE EXPENSES OF RS. 2,99,583/- SHOWN BY THE ASSESSEE. THE ASSESSEE HAS NOT PRODUCED ANY BREAK UP OF THE EXP ENSES BUT IT IS TO BE KEPT IN MIND THAT THE INCOME BEING DETERMINED IN TH E HANDS OF THE ASSESSEE IS THE AGRICULTURAL INCOME, WHICH IS TO BE INCLUDED FOR RATE PURPOSES IN THE HANDS OF THE ASSESSEE. THE PARAMETERS LAID DOWN FO R COMPUTING THE INCOME FROM BUSINESS CANNOT BE APPLIED FOR COMPUTIN G THE AGRICULTURAL INCOME AND IN ANY CASE THE EXPENDITURE CLAIMED BY T HE ASSESSEE IS AT PARITY WITH SIMILAR EXPENDITURE BEING ALLOWED IN THE HANDS OF THE ASSESSEE IN THE PRECEDING YEAR AND THE SAME IS BEING ACCEPTED BY TH E REVENUE AUTHORITIES. IN THE ABSENCE OF ANY EVIDENCE BEING BROUGHT ON REC ORD BY THE ASSESSING 11 OFFICER TO PROVE THE INCURRING OF EXPENDITURE EQUIV ALENT TO RS. 6,75,400/- WE FIND NO MERIT IN THE AFORESAID ADDITION BEING MA DE UNDER THE PROVISIONS OF SECTION 69C OF THE ACT. CONFIRMING THE ORDER OF CIT(A), WE DISMISS THE GROUND OF APPEAL RAISED BY THE REVENUE. 11. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF MARCH, 2010. SD/- SD/- (N.BARATHVAJA SANKAR) (SUSHMA CHOWLA) VICE PRESIDENT JUDICIAL MEMBER DATED : 30 TH MARCH, 2010 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR