Shri Ashwani Nath Sharma, Bhopal V. The ACIT 1(2), Bhopal

ITSSA 231/IND/2013

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1359 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-09-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 12-08-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: N D PATWA
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 153A; 68

Judgement Text

ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER IT(SS) A NOS. 231 TO 233/IND/2013 & 124/IND/2013 A.YS. 2000-01, 2002-03, 2004-05 & 2005- 06 SHRI ASHWANI NATH SHARMA BHOPAL PAN AVSPS 9947D ::: APPELLANT VS ASSTT.COMM ISSIONER OF INCOME TAX 1(2) BHOPAL ::: RESPONDENT ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 2 ASSESSEE BY SHRI ASHISH GOYAL AND SHRI N.D. PATWA REVENUE BY SHRI R.A. VERMA DATE OF HEARING 8.12 .2015 DATE OF PRONOUNCEMENT 9 .12 .2015 O R D E R PER SHRI B.C. MEENA, AM ALL THESE APPEALS FILED BY THE ASSESSEE AND THE REVENU E EMANATE FROM DIFFERENT ORDERS OF THE LEARNED CIT(A)-I, BHOPAL, DATED 31.5.2013 AND 26.3.2013. SINCE COMMON ISSUES ARE INVOLVED, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. IT(SS) A. NO. 231/IND/2013 2. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(A)-I, BHOPAL, DATED 31.5.201 3. 3. THE ONLY GROUND TAKEN BY THE ASSESSEE IN THIS APPEAL IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN ACCEPT ING THE ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 3 OPENING CASH BALANCE AT RS. 17,163/- OUT OF RS. 42,163/ - CLAIMED BY THE ASSESSEE AND IN CONFIRMING THE ADDITION OF RS.25,000/- AS MADE BY THE ASSESSING OFFICER. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL WHO DID NOT FILE ORIGINAL RETURN OF INCOME FOR A.Y. 2000-01. SEARCH AND SEIZURE OPERATIONS U/S 132(1) OF T HE ACT WERE CARRIED OUT AT THE PREMISES OF THE ASSESSEE AN D DURING THE SEARCH CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WERE FOUND AND SEIZED. THEREAFTER, THE ASSES SING OFFICER ISSUED NOTICE U/S 153A OF THE ACT ON 22.3.2 006 REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME U/S 153A FOR THE ASSESSMENT YEAR 2000-01, IN RESPONSE TO WHICH TH E ASSESSEE FURNISHED RETURN OF INCOME ON 19.2.2007 DECLARING INCOME AT RS.1,33,652/-. AFTER ISSUE OF NO TICE U/S 143(2) AND 142(1), THE ASSESSING OFFICER ASSESSED THE TAXABLE INCOME OF THE ASSESSEE AT RS. 1,58,652/-. ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 4 5. SO FAR AS THE ADDITION OF RS.25,000/- AS MADE BY TH E ASSESSING OFFICER IS CONCERNED, WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAS SHOWN CASH IN HAND AT RS . 58,000/- AS ON 01 . 04 . 1999 WHEREAS THE BANK BALANCE HAS BEEN SHOWN AT RS. 23/- ONLY IN RESPECT OF ALL THE THREE BANK ACCOUNTS OPERATED BY THE ASSESSEE . HE OBSERVED THAT THE INCOME PROFILE OF THE ASSESSEE ALSO DOES NOT JUST IFY AVAILABILITY OF HOLDING OF THE CASH TO THE EXTENT OF RS.42 , 163/- PARTICULARLY WHEN THE INCOME DURING THE YEAR WAS ONLY RS. 1 , 33 , 652/- OUT OF WHICH ASSESSEE HAS TO BEAR DAY TO DAY HOUSEHOLD EXPENSES. HE OBSERVED THAT TAKING A WHOLESOME VIEW, CASH TO THE EXTENT OF RS . 17 , 163/- WAS JUSTIFIED HOLD ING ON THE PART OF ASSESSEE AS ON 01 . 04 . 1999. THE ASSESSING OFFICER, THEREFORE, TREATED REST OF TH E CASH AMOUNTING TO RS.25 , 000/- AS UNEXPLAINED AND UNDISCLOSED INCOME OF THE ASSESSEE WHICH HE TAXED U/S 68 OF THE I.T . ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 5 ACT . FELT AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) AND THE LEARNED CIT(A) ON HIS PART OBSERVED AS UNDER 6.6 HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT, REMAND REPORT OF THE AO AND REJOINDER OF THE APPELLANT . IT IS NOTICED THAT THE APPELLANT WAS NOT MA IN TAINING REGULAR BOOKS OF ACCOUNT AND THE CASH FLOW CHART WAS PREPARED AFTER THE SEARCH JUST TO TRY TO EXPLAIN THE SOURCE OF INVESTMENT MADE AND EXPENDITURE INCURRED. THE APPELLANT HAD CLAIMED OPENING CASH IN H AND OF RS . 42,163/- WHICH REMAINED WITH HIM AFTER MEETING HOUSEHOLD EXPENSES OUT OF THE CASH RECEIVED OF RS . 90 , 000/- ON SALE OF LAND AS PER SALE DEED DATED 01 . 10.1997 AND RS . 20,000/- AS HIS SHARE ON THE SALE OF LAND REGISTERED ON 11 . 03.1998 IN THE CAPACITY OF ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 6 GENERAL POWER OF ATTORNEY HOLDER . BUT FROM THE SALE DEED REGISTERED ON 11 . 03 . 1998 FOR THE SALE OF LAND FOR RS . 40,000/-, OUT OF WHICH THE APPELLANT CLAIMED TO HAVE RECEIVED RS . 20 , 000/- AS HIS HALF SHARE, IT IS NOTICED THAT THE PURCHASER HAD MADE PAYMENT BY BANK DRAFT DATED 02 . 01 . 1998 OF STATE BANK OF INDIA, BHOPAL TO THE SELLERS SHRI ASHISH KUMAR AND SMT . KUSUM SHARMA AND NO AMOUNT IN CASH WAS PAID TO THE APPELLANT . IT IS ALSO NOTICED THAT THE APPELLANT HAD SHOWN HOUSEHOLD EXPENSES ONLY OF RS . 26 , 000/- AND RS . 28,000/- FOR F . YS . 1997-98 AND 1998-99 WHICH WERE NOT SUFFICIENT TO MEET HIS HOUSEHOLD EXPENSES CONSIDERING THAT HE HAS TWO CHILDREN. FURTHER, IT IS NOTICED THAT THE APPELLANT WAS MAINTAINING BANK ACCOUNTS AND IN THAT SITUATION HE WOULD ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 7 NOT HAVE KEPT CASH IN HAND FOR SUCH A LONG TIME. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT . THE AO WAS JUSTIFIED IN ESTIMATING OPENING CASH IN HAND AT RS . 17,163/- AND MAKING ADDITION OF THE BALANCE AMOUNT OF RS . 25,000/- . HENCE, THE ADDITION OF RS . 25,000/- IS CONFIRMED. 6. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASH FLOW STATEMENT WAS GIVEN FROM THE FINANCIAL YEAR 1997-98 TO 1998-99 I.E. BEFORE THE BLOCK PERIOD WHI CH IS PLACED AT PB-18. FURTHER THE BALANCE SHEET WAS ALSO FILE D AT PB-6. HE SUBMITTED THAT A PERUSAL OF THE CASH FLOW STATEMENT AT PB-18 WOULD SHOW THAT AS ON IST APRIL, 199 7 THE OPENING CASH BALANCE WAS RS.1,263. FURTHER, THE RECEIPTS AND PAYMENTS THEREAFTER WERE VERY SPECIFIC SOURCES ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 8 WHICH WERE VERIFIABLE. THEY RELATED TO SALE PROCEEDS O F LAND AND DEPOSITS AND WITHDRAWALS FROM THE BANK. SALE PROCEEDS OF LAND ARE EVIDENCED BY SALE DEED PB 19-24. DEPOSITS AND WITHDRAWALS IN BANK ARE EVIDENCED BY PB 42 - 44. HE SUBMITTED THAT LIABILITY OF THE BALANCE SHEET AS ON 1.4.1999 IS ACCEPTED BY THE LEARNED ASSESSING OFFICER PB-6. IT COMPRISES OF CAPITAL BALANCE OF RS.11,87,429/-. THE OTHER ASSETS ARE ACCEPTED. THERE IS NO EVIDENCE THAT T HE ASSESSEE HAD ANY OTHER ASSET AS ON 1.4.1999. THUS, THE ONLY FIGURE WHICH IS LEFT IS CASH IN HAND I.E. RS.42, 163/-. THIS FIGURE CANNOT BE DENIED BY THE LEARNED ASSESSI NG OFFICER. HE CANNOT PICK AND CHOOSE ONE FIGURE AND DENY IT. HE ALSO SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ESTIMATION OF RS.17,163/- OF THE CASH BALANCE AS ON 1.4.1999 WHEN THE RE IS NO BASIS FOR TAKING THE FIGURE OF RS.17,163/-. NO FINDING HAS BEEN GIVEN BY LEARNED CIT(A) FOR TAKING THIS FIGUR E OF ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 9 RS.17,163/-. HE HAS ALSO NOT GIVEN ANY FINDING AS TO H OW THIS FIGURE OF RS.17,163/- WAS ARRIVED AT. 8. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES , WE FIND THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONF IRMING THE ADDITION OF RS. 25,000/- OUT OF OPENING CASH BALANC E OF RS. 42,163/-. ASSESSEE HAS SUBMITTED RECEIPT AND PAYM ENT ACCOUNT FOR PERIOD 1.4.1997 TO 313.1999 WHERE RECEIP TS HAVE BEEN SHOWN FROM SPECIFIC SOURCE LIKE SALE OF LAND AND WITHDRAWALS FROM BANK. THE REVENUE HAS NOT REJECTED OR DEMOLISHED THESE SOURCES OF CASH AVAILABILITY WITH THE ASSESSEE. THE REVENUE HAS ALSO FAILED TO ESTABLISH THAT THIS CASH WAS SPENT SOMEWHERE ELSE. IN VIEW OF THESE FACTS, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS AL SO NOT JUSTIFIED IN CONFIRMING THE ESTIMATION OF RS.17, 163/- OF THE CASH BALANCE AS ON 1.4.1999 WITHOUT ANY BASIS. WE, ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 10 THEREFORE, DELETE THE ADDITION OF RS.25,000/- OUT OF OPENING CASH BALANCE OF RS.42,163/-. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. IT(SS) A NO. 232/IND/2013 11. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED CIT(A)-I, BHOPAL, DATED 31.5.201 3. THE ONLY GROUND TAKEN BY THE ASSESSEE IN THIS APPEAL IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN ACCEPTING THE AGRICULTURAL INCOME AT RS.30,450/- OUT OF RS.95,000/- AS CLAIMED BY THE ASSESSEE OUT OF 5.7 ACRES (CORRECTLY 11 ACRES) AND IN CONFIRMING THE ADDITION OF RS.64,550/- TOWARDS THE SOCALLED UNEXPLAINED AGRICULTURAL INCOME SHOWN BY THE ASSESSEE. 12. TH E A SS E SS E E H AS S HOWN AGRICULTURE INCOME OF R S. 95 , 000/- IN RESPECT OF AGRICULTURE LAND O WNED BY THE ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 11 A SSES SEE FOR TWO YEARS. THE ASSESSEE OWNS AGRICULTURAL LAND OF 3.86 ACRES AT VILLAGE TUMRA KHEDA AND 1/3 SHARE IN 6. 7 ACRES OF LAND LOCATED AT VILLAGE DEHRI KALAN. THUS, THE ASSESSEE WAS OWNER OF 6.09 ACRES OF AGRICULTURAL LAND. THE ASSESSING OFFICER OBSERVED THAT T HOU G H TH E AG RICULTURE LAND O N WHICH A GRI C ULTUR E A CTIVITY IS S H O WN I S B E IN G O WN BY THE AS S E SS EE FOR L AS T MANY YE A R S BUT NO AGRICULTURE INC O ME H AS BE E N DI SC LO S ED THI S S HO WS THAT THE S ET L E ND I S NEVER B E EN U S ED FOR AG RICULTUR E PR O P OSE . AN Y S PONT A NE O U S D E V E LOPMENT OF PL A NT/CROP WITH MIGHT HA V E HAPPENED ON ITS OW N E D WO ULD N O T B E E NOUGH TO B E SO LD IN THE M A RKET . HE FOUND THAT NO E V IDENCE O F S ALE OF A GRICULTURE PRODU C ED WERE FILED WHICH PROV E D TH A T TH E RE IS NO A GRICULTURE A CTIVITY CARRIED O UT BY THE ASSE S SEE AND THE AGRICULTURE INCOME REPRESENT THE UNDIS C LOSED FUND OF THE ASSESSEE WHICH HAVE BEEN CHANALIZED IN THE FORM OF EXEMPTED INCOME. THE ASSESSING OFFICER, THEREFORE , TREATED THE AGRICULTURE INCOME ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 12 OF RS . 95,000/- S HOWN BY THE ASSE S SEE AS UNEXPLAINED INCOME OF THE ASSESEE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 13. AGGRIEVED WITH THE ABOVE ACTION OF THE ASSESSING OFFICER, THE ASSESSEE WENT IN APPEAL BEFORE THE LEARNED CIT(A) WHO OBSERVED AS UNDER :- 6 . 6 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT, REMAND REPORT OF THE AO AND REJOINDER OF THE APPELLANT . IT IS AN ADMITTED FACT THAT THE APPELLANT WAS OWNER OF AGRICULTURE LAND ADMEASURING 6 . 09 ACRES SITUATED AT GRAM TUBRAKHEDA AND DEHRI KALAN. THE APPELLANT ALSO FURNISHED COPY OF KHASRA OF DEHRI KA LAN, WHICH MENTIONED THAT THE CROPS OF SOYABEEN AND WHEAT WERE GROWN ON THE LAND OWNED BY THE APPELLANT DURING F.Y.200L-02 . THUS, THE FACT THAT AGRICULTURE ACTIVITIES WERE UNDERTAKEN ON LAND OWNED BY THE APPELLANT COULD NOT BE DENIED. THE APPELLANT HAD NO T ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 13 FURNISHED ANY LEASE AGREEMENT BEFORE THE DURING ASSESSMENT PROCEEDINGS AND NO SUCH AGREEMENT WAS ALSO FOUND AT THE PREMISES OF THE APPELLANT DURING SEARCH AND SEIZURE OPERATIONS AND, THEREFORE, THE AGREEMENT IS NOT RELIABLE . HOWEVER, SINCE AGRICULTURAL ACTIVITIES WERE UNDERTAKEN ON THE LAND, THERE WAS A N AGRICULTURAL INCOME FROM THE LAND . IN THE ABSENCE OF AN Y EV I DENCE , REGARDING SALE OF AGRICULTURAL PRODUCE ETC . , THE AGRICULTURAL INCOME HAS TO BE ESTIMATE WAS ADMITTED BY THE APPELLANT THAT HE HAD NOT HIMSELF UNDERTAKEN THE AGRICULTURAL ACTIVITIE S. IT I S A COMMON PRACTICE IN THE AGRICULTURE THAT IF THE LAND IS GIV EN ON BATAI, THE LAND OWNER GETS HALF OF THE INCOME EARNE D FROM AGRICULTURAL INCOME AND NORMALLY THE LEASE REN T IS ALSO EQUIVALENT TO HALF OF TOTAL AGRICULTURAL INCOM E FROM THE LAND. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , IT WOULD BE REASONABLE IF AN ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 14 AGRICULTURAL INCOME OF RS . 5,000/- PER ACRE PER ANNUM IS ESTIMATED AS AGRICULTURAL INCOME IN F.Y. 2002-03. ACCORDINGLY, THE TOTA L AGRICULTURAL INCOME WORKED OUT AT RS . 30,450/- (6 . 09 ACRES X RS . 5,OOO) . THUS, IT IS HELD THAT THE APPELLANT WAS H A V I NG AGRICULTURAL INCOME TO THE TUNE OF RS . 30,450/- ONLY FOR A . Y . 2002-03 . HENCE, THE APPELLANT GETS A RELIEF OF RS.30 , 450/- AND , ACCORDINGLY, THE ADDITION TO THE EXTENT OF RS . 30 , 450/- IS DELETED AND THE BALANCE ADDITION OF RS.64,550/- ('RS.95,000 - RS . 30 , 450) IS CONFIRMED. THIS GROUND IS PARTLY ALLOWED . 14. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 15. WE HAVE HEARD BOTH THE SIDES. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ACCEPTED THE FACT OF AGRICULTURAL INCOME AT RS.5,000/- PER ACRE AND ACCEPTED RS. 29,450/- FOR AROUND 6 ACRES OF LAND. THE DEPARTMENT HAS NOT CHALLENGED THIS FINDING OF AGRICULT URAL ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 15 INCOME, THEREFORE, THE ONLY ISSUE WHICH REMAINS IS T HE ESTIMATION OF AGRICULTURAL INCOME. THE LAND WAS GIVEN O N BATAI TO RAJMAL MEENA FOR A RENT OF RS.95,000/- FOR TWO YEARS, THEREFORE, THE ANNUAL RENT WAS RS. 47,500/-. THU S THE RENT PER ACRE COMES TO RS. 7,800/-. THE AGREEMENT WITH SHRI RAJMAL IS PLACED AT PB-69. THE ASSESSEE HAS SHOWN RECEIPT OF ENTIRE AGRICULTURAL INCOME IN THE CURRENT YEAR. THIS HAS BEEN SHOWN IN THE RECEIPTS AND PAYMENT ACCOU NT. IT IS ALSO A FACT THAT THE AGRICULTURAL INCOME OF RS.15,0 00/- TO RS. 20,000/- PER ACRE HAS ALREADY BEEN ACCEPTED BY TH E HONBLE ITAT, INDORE BENCH, IN THE CASE OF SMT. SUNI TA VINOD; 18 ITJ 630. SINCE THE ASSESSEE HAS GIVEN LAND O N BATAI, THEREFORE, THE RENT OF RS. 7,800/- PER ACRE PER YEAR APPEARS TO BE REASONABLE, THEREFORE, WE ACCEPT THE SAME. IN THE LIGHT OF THESE FACTS, WE ARE OF THE VIEW THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION O F RS.64,550/- TOWARDS UNEXPLAINED AGRICULTURAL INCOME ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 16 SHOWN BY THE ASSESSEE. IN THE CASE OF BATAI A MAJOR PORTION OF THE AGRICULTURAL INCOME GOES TO THE LANDLOR D WITHOUT ANY CORRESPONDING EXPENDITURE THEREFORE IT C ANNOT BE DENIED THAT AS SUCH THE AGRICULTURAL INCOME SHOWN B Y THE ASSESSEE AT RS. 7,800/- PER ACRE PER YEAR IS NOT REASONABLE. WE, THEREFORE, DELETE THE ADDITION OF RS.64,550/- TOWARDS THE SOCALLED UNEXPLAINED AGRICULTUR AL INCOME SHOWN BY THE ASSESSEE. IT(SS) A NO. 233/IND/2013 16. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED CIT(A)-I, BHOPAL, DATED 31.5.201 3. 17. THE ONLY GROUND TAKEN BY THE ASSESSEE IN THIS APPE AL IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN ACCEPT ING THE AGRICULTURAL INCOME AT RS.36,540/- AS CLAIMED BY THE ASSESSEE OUT OF 6.7 ACRES (CORRECTLY 11 ACRES) AND IN CONFIRMING THE ADDITION OF RS.1,12,460/- TOWARDS THE ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 17 SOCALLED UNEXPLAINED AGRICULTURAL INCOME SHOWN BY THE ASSESSEE. 18. THE ASSESSEE HAD SHOWN AGRICULTURAL INCOME OF RS.1,49,000/- IN RESPECT OF AGRICULTURAL LAND OWNED BY THE ASSESSEE AT DEHRI KALAN, NEAR KOLAR ROAD, BHOPAL. THE ASSESSING OFFICER OBSERVING THAT NO AGRICULTURAL ACTIVI TY WAS CARRIED OUT BY THE ASSESSEE ON THE SAID LAND, DISALLOWED THE CLAIM OF THE ASSESSEE AND MADE ADDITION O F RS.1,49,000/-. ON APPEAL, THE LEARNED CIT(A) GRANTED R ELIEF OF RS.36,540/- AND BALANCE ADDITION OF RS.1,12,460/- WA S CONFIRMED. 19. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LAND IS THE SAME LAND WHICH WAS IN TH E A.Y. 2002-03. IT HAS BEEN GIVEN ON RENT TO RAJMAL ME ENA FOR RENT OF RS.1,49,000/- FOR TWO YEARS. THE ANNUAL RE NT IS RS. 74,500/-. PER ACRE PER YEAR INCOME IS RS. 12,250 /-. HE SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TA X ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 18 (APPEALS) HAS ACCEPTED RS.6,000/- PER ACRE I.E. RS.36,5 40/- AND BALANCE RS.1,12,460/- HAS BEEN ADDED WITHOUT ANY BASIS. 20. ON THE OTHER HAND, THE LD. DR SUPPORTED THE OR DER OF THE LEARNED CIT(A). 21. AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES , WE ARE OF THE VIEW THAT THE LEARNED CIT(A) WAS NOT JUSTIFI ED IN MAINTAINING THE ADDITION OF RS. 1,12,460/- WITHOUT ANY BASIS. THE FACT THAT IN CASE OF BATAI A MAJOR PORTION OF THE AGRICULTURAL INCOME GOES TO THE LANDLORD WITHOUT ANY CORRESPONDING EXPENDITURE. AS SUCH THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AT RS. 12,280/- PER ACRE PER YEAR SEEMS TO BE REASONABLE FOR THAT PERIOD. WE, THEREF ORE, DELETE THE ADDITION OF RS.64,550/- TOWARDS THE SOCALLE D UNEXPLAINED AGRICULTURAL INCOME SHOWN BY THE ASSESSEE. ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 19 IT(SS) A NO. 124/IND/2013 22. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED CIT(A)-I, BHOPAL, DATED 26.3.201 3. 23. THE FIRST GROUND TAKEN BY THE ASSESSEE IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN ACCEPTING THE AGRICULTURAL INCOME AT RS.36,540/- IN PLACE OF RS.97,10 8/- CLAIMED BY THE ASSESSEE AND IN CONFIRMING THE ADDITION OF RS.60,568/-. 24. WE HAVE HEARD BOTH THE SIDES. AN IDENTICAL ISSUE H AS BEEN DECIDED BY US IN THE ABOVE APPEALS AND FOR THE REASONS MENTIONED THEREIN, WE DECIDE THIS GROUND IN FAVOUR OF THE ASSESSEE BY DELETING THE ADDITION IN QUESTION. 25. THE NEXT GROUND PERTAINS TO THE ORDER OF THE LEAR NED CIT(A) WHEREIN THE LEARNED CIT(A) DID NOT ACCEPT THE CREDIT OBTAINED FROM SHRI D.K. CHOURASIA THROUGH CHEQUE AT ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 20 RS.2,50,000/- AND IN CONFIRMING THE ADDITION OF RS.2,50,000/- AS MADE BY THE ASSESSING OFFICER. 26. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE CLAIMED T O HAVE RECEIVED ADVANCE FROM D.K. CHOURASIYA AMOUNTING TO RS.2, 50,000/-. THE ASSESSING OFFICER ASKED THE ASSES SEE TO PROVE THE IDENTITY AND CREDIT WORTHINESS OF THE CRED ITOR AS WELL AS GENUINENESS OF THE TRANSACTION BUT THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE. THE ASSESSING OFFICE R, THEREFORE, DISALLOWED THE CLAIM AND ADDED THE AMOUNT OF RS.2,50,000/- TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE SAME AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 27. BEFORE US, IT WAS SUBMITTED BY THE LEARNED COUNSE L FOR THE ASSESSEE THAT THE LEARNED AO NEVER ASKED THE ASSESSE E ABOUT THE ADVANCE DURING THE ASSESSMENT PROCEEDINGS. T HE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED DETAILED SUMMARY OF CHEQUES RECEIVED AND CASH RECEIVED IS ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 21 AVAILABLE AT PAGE 10 OF THE ORDER OF THE LEARNED CIT(A) . ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDERS O F THE AUTHORITIES BELOW. 28. WE HAVE HEARD BOTH THE SIDES. THE ASSESSEE HAS RECEIVED RS. 2,50,000/- FROM SHRI D.K. CHOURASIA BY CHEQUES OF RS. 1,00,000/- ON 16.3.2005, RS. 1,00,000 /- ON 17.3.2005 AND RS. 50,000/- ON 17.3.2005. THIS AMOUNT WAS ADVANCED AGAINST THE LAND OF SAKEEL RAJA FOR WHICH THE ASSESSEE WAS HAVING POWER OF ATTORNEY. THE LAND COULD NO T BE TRANSFERRED TO D.K. CHAURASIA DUE TO DISPUTE WITH SAKEEL RAJA. THE PAYMENTS TO SAKEEL RAJA WERE MADE FRO M THE ACCOUNT OF SMT. KUSUM SHARMA WIFE OF THE ASSESSEE. ALTIMATELY, THE LAND WAS SOLD FOR RS. 11,00,000/- OUT OF WHICH RS. 9,50,000/- WAS RECEIVED IN CHEQUES AND THE S ALE DEED WAS REGISTERED ON 18.5.2005 IN THE NAME OF 4 PER SONS. THE CIT(A) ACCEPTED THE GENUINENESS OF ADVANCE OF RS. 7,00,000/- BUT DOUTED THE BALANCE OF ADVANCE OF RS. ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 22 2,50,000/- RECEIVED FROM SHRI D.K. CHOURASIA. THE ASSESSING OFFICER NEVER ASKED FOR DETAILS OF ADVANCE FR OM SHRI CHAURASIA. THIS AMOUNT WAS ADVANCE RECEIVED IN CHEQUES TOWARDS THE LAND OF SHRI SAKEEL RAJA FOR WHICH T HE ASSESSEE WAS POWER OF ATTORNEY HOLDER AND THE PAYMENTS FOR THE SAME WAS MADE BY CHEQUE FROM HIS WIFES ACCOUNT S, THEREFORE, AFTER CONSIDERING THE ARGUMENTS OF THE PAR TIES AT LENGTH, WE FIND THAT THE ASSESSEE HAS BEEN ABLE TO EX PLAIN THE AMOUNT IN QUESTION RECEIVED FROM SHRI D.K. CHOURA SIA. WE, THEREFORE, DELETE THE ADDITION. 29. IN THE GROUND NO. 3 THE ASSESSEE ASSAILS THE ORDER OF THE LEARNED CIT(A) IN MAKING THE SEPARATE ADDITIONS OF RS.6,50,000/- AT THE APPELLATE STAGE FOR THE INVESTMENT REFLECTED IN P. NOS. 18, 26, 29, 39 AND 48 OF LPS-2 WITHOUT CONSIDERING THE FACT THAT THESE INVESTMENTS WERE REFL ECTED IN THE TENTATIVE RECEIPTS/PAYMENTS ACCOUNT AND BALANCE SHEET ACCOMPANYING THE RETURN. ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 23 30. DURING THE COURSE OF APPELLATE PROCEEDINGS FOR TH E ASSESSMENT YEAR 2006-07 THE LEARNED CIT(A) NOTICED THAT THE ASSESSING OFFICER MADE THE ADDITION OF RS.39,41,1 30/- IN THE ASSESSEES CASE FOR THE ASSESSMENT YEAR 2006-07 AS BEING 1/4 TH SHARE OF TOTAL ADDITION OF RS.1,57,64,521/- MADE IN THE HANDS OF ALL THE FOUR FAMILY MEMBERS TOWARD S THE DECLARATION MADE BY SHRI RAM NATH SHARMA DURING THE SEARCH PROCEEDINGS WHICH INCLUDED AMOUNT OF RS.58,08,000/- TOWARDS TRANSACTIONS RECORDED ON DIFFER ENT PAGES OF LPS-2 SEIZED DURING THE SEARCH AND SEIZURE OPERATIONS. THE ASSESSEE POINTED OUT THAT CERTAIN PAYME NTS RELATED TO ASSESSMENT YEAR 2005-06. THE LEARNED CIT(A ) AFTER PERUSAL OF SEIZED DOCUMENTS FOUND THAT THE ASSESS EE HAD MADE PAYMENTS OF RS.6,50,000/- DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2005-06 DETAILS OF WHICH ARE GIVEN BY THE LEARNED CIT(A) AT PAGE 12 OF HIS APPELLATE ORDER. THE LEARNED CIT(A) REQUIRED THE ASSESSE E TO ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 24 EXPLAIN THAT SINCE THE ASSESSEE HAD MADE PAYMENTS OF RS.6,50,000/- DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2005-06, WHY ADDITION OF THIS AMOUNT SHOULD NOT BE MADE IN THE ASSESSMENT YEAR 2005-06. I N REPLY THE ASSESSEE SUBMITTED DETAILED SUBMISSIONS, WH ICH COULD NOT SATISFY THE LEARNED CIT(A). THE LEARNED CIT( A), THEREFORE, DIRECTED THE ASSESSING OFFICER TO MAKE T HE ADDITION OF RS.6,50,000/- IN THE ASSESSMENT YEAR 2005- 06 UNDER CONSIDERATION. AGAINST THIS FINDING, THE ASSESS EE IS IN APPEAL BEFORE US. 31. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED TH E CONTENTIONS MADE BEFORE THE LEARNED CIT(A) AND PLEADED THAT ALL THESE AMOUNTS ARE REFLECTED IN RECEIPT AND PAY MENT ACCOUNTS. HE ALSO SUBMITTED THAT THE ORDER OF THE LEAR NED CIT(A) BE REVERSED. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDER OF THE LEARNED CIT(A). ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 25 32. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S, WE ARE OF THE VIEW THAT THE LEARNED CIT(A) WAS NOT JUSTIFI ED IN MAKING THE ADDITION OF RS.6,50,000/-. THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCOUNTS AND HAS NOT FILED RETU RN OF INCOME FOR ANY OF THE ASSESSMENT YEARS PRIOR TO TH E DATE OF SEARCH. A RECEIPT AND PAYMENT ACCOUNT WAS PREPARED AND ALL THE PAYMENTS/INVESTMENTS ARE REFLECTED IN THE RECEIPT AND PAYMENT ACCOUNTS. ALL THE ENTRIES FOUND I N PAPERS HAVE BEEN TAKEN CARE OF IN THESE ACCOUNTS. THE RECEIPT AND PAYMENT ACCOUNTS PREPARED ON THE BASIS OF DOCUMENTS FOUND AND SEIZED DURING THE SEARCH HAVE NOT BEEN DOUBTED BY THE REVENUE. ALL THESE PAYMENTS HAVE BEEN REFLECTED IN THESE ACCOUNTS. EVEN PAYMENTS OF R S. 4 LACS (RS.3,00,000/- ON 23.9.2004 + RS.1,00,000/- ON 13.7.2004) ARE THROUGH CHEQUES ONLY AND REFLECTED IN T HE ACCOUNTS. SINCE THE ASSESSEE HAS PLEADED THAT ADDITION CAN BE RESTRICTED TO THE CASH PAYMENT OF RS. 2,50,000/- ONLY, ASHWANI NATH SHARMA IT(SS)ANOS. 231 TO 233/IND/2013 & 124/IND/2013 26 WE DIRECT ACCORDINGLY. WE, THEREFORE, DELETE THE ADDI TION OF RS.4 LACS OUT OF RS. 6,50,000/- MADE BY THE LEARNED CI T(A). 33. IN THE RESULT, THE APPEAL STANDS PARTLY ALLOWED. PRONOUNCED IN OPEN COURT ON 9 TH DECEMBER, 2015 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 9 TH DECEMBER, 2015 DN/-