Shri Jayendrabhai M.Desai, Ahmedabad V. The ACIT.,Cent.Circle-2(4), Ahmedabad

ITSSA 385/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0934 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 31-08-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 06-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Search and seizure; Principle of natural justice; Source of fund
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE S/SHRI KUL BHARAT, JM, MANISH BORAD, AM. IT(SS) A NO.385/AHD/2011 ASST. YEAR 2003-04 JAYENDRABHAI M. DESAI, GAURAV TOWER, PRABHAT CHOWK, GHATLODIA, AHMEDABAD. VS ASSTT. CIT, CENTRAL CIRCLE-2(4), AHMEDABAD. (APPELLANT) (RESPONDENT) PA NO.AOFPD 0660 Q APPELLANT BY SHRI P. M. MEHTA, AR WITH SHRI G. M. THAKORE, AR RESPONDENT BY SHRI SANJAY AGRAWAL, CIT, DR DATE OF HEARING: 2/9/2015 DATE OF PRONOUNCEMENT: 09/09/2015 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER O F CIT(A)-III, AHMEDABAD VIDE HIS ORDER DATED 13/5/2011 FOR AY 200 3-04. THE ASSESSMENT WAS FRAMED BY ACIT, CENTRAL CIRCLE-2(4), AHMEDABAD VIDE HIS ORDER DATED 31 ST DECEMBER, 2010. THE CONCISE GROUNDS OF FILED BY THE APPELLANT ARE AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E OF THE APPELLANT, THE LEARNED CIT(A) HAS ERRED IN CONFIRMI NG THE ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 2 ADDITION OF RS.637,000/- MADE ON ACCOUNT OF UNEXPLA INED INCOME, WHEN NO SUCH ADDITION OUGHT TO HAVE BEEN SU STAINED. THE SAME MAY BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E OF THE APPELLANT, THE LEARNED CIT(A) HAS ERRED IN NOT FULL Y ACCEPTING AND ALLOWING THE GROUND TAKEN BEFORE HIM WHILE PASS ING THE IMPUGNED ORDER. THE ORDER CANNOT STAND AND DESERVES TO BE REVERSED. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND /OR WITHDRAW ANY GROUND OF APPEAL EITHER BEFORE OR DURI NG THE COURSE OF HEARING OF APPEAL. 2. THE ONLY ISSUE IN THE APPEAL OF THE ASSESSEE IS IN REGARD TO ADDITION OF RS.6,37,000/- MADE ON ACCOUNT OF UNEXPL AINED INCOME OUT OF THE OPENING BALANCE AS ON 01/04/2002 OF CAPITAL ACCOUNT OF RS.11,33,680/-. 3. BRIEF FACTS OF THE CASE, AS PER THE ORDER OF AO & PAPER BOOK SUBMITTED BY LD. AR, ARE THAT SEARCH AND SEIZURE AC TION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT ON 23.5.2008 AT THE RESIDENTIAL PREMISES OF THE APPELLANT. THEREAFTER THE CASE WAS ANALYSED AND NOTICES U/S 153A FOR AY 2003-04 TO 2008-09 FOR FILI NG RETURN OF INCOME WERE ISSUED. IN RESPONSE THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.90,000/- PLUS AGRICULT URAL INCOME OF RS.169,407/- ONLY. THE ASSESSEE HAD NEVER FILED RET URN OF INCOME EARLIER. DURING THE ASSESSMENT PROCEEDINGS ASSESSEE SUBMITTED THAT ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 3 HE WAS INVOLVED IN AGRICULTURAL ACTIVITIES AND IS E NGAGED IN AGRICULTURAL OPERATIONS AND ALLIED ACTIVITIES FOR LAST MANY YEAR S AND HAS BEEN EARNING AGRICULTURAL INCOME IN ALL THESE YEARS. DUR ING THE ASSESSMENT PROCEEDINGS ASSESSEE SUBMITTED THAT STATEMENT OF CA PITAL ACCOUNT AS ON 31.3.2003 WHEREIN OPENING CAPITAL BALANCE AS ON 1/4/2002 WAS SHOWN AT RS.11,33,682. THE AO THEREBY MADE ADDITION OF RS.11,33,682/- TO THE INCOME OF THE ASSESSEE STATIN G THAT THE REPLY OF THE ASSESSEE WAS NOT GENUINE AND BECAUSE OF THE FAC T THAT THE ASSESSEE HAS NEVER FILED ANY RETURN OF INCOME PRIOR TO ISSUANCE OF NOTICE UNDER SECTION 153A AND ALSO TOOK THE VIEW TH AT IF THE ASSESSEE WAS PRIMARILY ENGAGED IN AGRICULTURAL OPERATION WHA T WAS THE NEED FOR THE ASSESSEE TO APPOINT THE C.A. AND AS SUCH HE TRE ATED THE CAPITAL SHOWN AS OPENING BALANCE AS ON 1.4.2002 AS UNEXPLAI NED AND ADDED BACK TO THE INCOME. 4. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE TH E CIT(A) WHO DELETED PART OF THE ADDITION MADE BY THE AO AND CON FIRMED THE ADDITION OF RS.6,37,000/- IN PLACE OF RS.11,33,682/ -. THE BASIS TAKEN BY THE CIT(A) CAN BE UNDERSTOOD BY THE OBSERVATIONS MADE IN HIS APPELLATE ORDER WHICH READS AS BELOW :- ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 4 4.1 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT. I AGREE WITH THE AR THAT NORMALLY THERE CANNOT BE ANY ADDITION O N ACCOUNT OF OPENING CAPITAL BALANCE. HOWEVER, THIS CANNOT BE AC CEPTED AS UNIVERSALLY TRUE IN ALL THE CASES. IF THE APPELLANT HAS BEEN FILING THE BALANCE SHEET AND THE RETURN OF INCOME OF THE EARLI ER ASSESSMENT YEARS AND THE OPENING BALANCE IN THE YEAR UNDER CON SIDERATION REPRESENT THE CLOSING BALANCE OF IMMEDIATELY PRECED ING YEAR, THEN UNDER NO CIRCUMSTANCES THE ADDITION OF THE OPENING BALANCE CAN BE MADE IN THE YEAR UNDER CONSIDERATION, EVEN IF THE A PPELLANT IS NOT ABLE TO EXPLAIN THE SOURCE THEREOF. HOWEVER, IF THE APPE LLANT HAS NOT BEEN FILING ANY RETURN OF INCOME AND THE FIRST RETURN OF INCOME IS FILED BY HIM IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE INC OME TAX ACT AFTER THE DATE OF SEARCH AND THE SOURCE OF A PARTICULAR I NVESTMENT IS CLAIMED TO BE OUT OF THE INCOME SHOWN IN EARLIER YE ARS (BEYOND SEVEN YEARS) MAINLY ON THE GROUND THAT NO ACTION IS POSSI BLE TO INVESTIGATE THE SOURCE OF INCOME IN THAT PARTICULAR ASSESSMENT YEAR, THEN THE ONUS IS ON THE ASSESSEE TO PROVE THAT HE HAS EARNED THAT MUCH INCOME IN THAT PARTICULAR PREVIOUS YEAR. IF THE ASS ESSEE IS NOT ABLE TO PROVE THAT HE HAD EARNED THAT MUCH OF IN THAT PARTI CULAR YEAR, THEN THE AO CAN REJECT THE CLAIM OF THAT ASSESSEE I N RESPECT OF EARNING OF THAT INCOME. IN OTHER WORDS, IF THE APPE LLANT IS ABLE TO PROVE THAT HE HAD THE CAPITAL BALANCE OF RS.11,33,6 82/- AS ON 31.3.2002, THEN THE AO CANNOT MAKE ANY ADDITION IN ASSESSMENT YEAR 2003-04. IF HOWEVER, IT IS PROVED THAT THE APP ELLANT HAD NO SOURCE OF INCOME TILL 31/3/2002, IN THAT CASE, THE AO CAN MAKE ADDITION OF THE UNEXPLAINED AMOUNT IN ASSESSMENT YE AR 2003-04. IN VIEW OF THIS, THE APPELLANT WAS ASKED TO STATE THE SOURCE OF CAPITAL AS ON 31/3/2002. THE APPELLANT HAD FILED A COPY OF BAL ANCE SHEET PREPARED AFTER THE DATE OF SEARCH BEFORE THE AO AS WELL AS BEFORE ME, AS PER WHICH AS ON 31/3/2002, THE APPELLANT HAD FIX ED ASSETS IN THE FORM OF AGRICULTURAL LAND OF RS.337,888/- AND ANIMA LS OF RS.30,000/-. INVESTMENT IN LIC TO THE EXTENT OF RS.104,152 IS SH OWN AS ON 31.3.2002. BESIDES THIS THE APPELLANT HAS ALSO SHOW N CASH IN HAND TO THE TUNE OF RS.660,916 AND BANK BALANCE RS.726. DUR ING THE YEAR THE APPELLANT HAS SHOWN THE PROFIT TO THE EXTENT OF RS. 207,469 MOST PROBABLY IN THE FORM OF THE AGRICULTURAL INCOME. ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 5 IN THE ORDER OF CIT(A) REFERENCE WAS MADE, THE DETA ILS OF INVESTMENT IN LAND MADE BY ASSESSEE IN WHICH ASSESSEE PURCHASE D AGRICULTURAL LAND (AS PER 7/12) SINCE 21.6.1989 TILL 9 TH DECEMBER 1994 DURING WHICH ASSESSEE PURCHASED 69913 SQ.METRES OF LAND AS PER 7/12 FOR A TOTAL VALUE OF RS.337,888 (PURCHASE PRICE RS.297214 AND STAMP DUTY AND REGISTRATION CHARGES AT RS.40674). ON THIS BASI S CIT(A) ACCEPTED THE CONTENTION OF THE APPELLANT THAT HE HAD THE INV ESTMENT OF RS.337888 AS ON 31.3.2002 IN THE FORM OF AGRICULTUR AL LAND FORMING PART OF THE OPENING CAPITAL BALANCE. SIMILARLY, CIT (A) ALSO ACCEPTED THE INVESTMENT AT RS.30,000 IN ANIMALS AS ON 31.3.2 012 AND INVESTMENT IN LIC PREMIUM AT RS.104152 AND BANK BAL ANCE OF RS.726 WAS ALSO ALLOWED BY CIT(A) SUBJECT TO VERIFICATION BY AO. HOWEVER, CIT(A) DID NOT ACCEPT THE CLAIM OF APPELL ANT THAT HE HAD CASH IN HAND OF RS.660916 AS ON 31.3.2002 WITH THE BASIS OF DETAILED WORKING OF AGRICULTURAL PRODUCTION YIELD F OR LAST FOUR YEARS WITH THE VALUATION OF AGRICULTURAL PRODUCE AT MINIMUM SU PPORT PRICE, POSSIBLE PRODUCTION OF BAJRA AND JAWAR AS PER THE S TATISTICS OF THE GOVERNMENT AND ESTIMATED SAVINGS, WHICH POSSIBLY CO ULD HAVE BEEN MADE BY THE ASSESSEE AFTER INCURRING HOUSEHOLD EXPE NSES AND HELD ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 6 THAT IN MY OPINION, PRIOR TO ASSESSMENT YEAR 2003-04 TH E NET AGRICULTURAL INCOME OF THE APPELLANT CANNOT BE MORE THAN RS.76,212. FURTHER IT WAS STATED BY THE AR THAT THE APPELLANT HAS THREE DEPENDENT FAMILY MEMBERS. IT WOULD BE REASONABLE TO ESTIMATE RS.5000/- PER MONTH TOWARDS THE HOUSEHOLD EXPENSES OF THE APPELLANT. IN OTHER WORDS, THE APPELLANT COULD HAVE SAVED ONLY RS.16,000 (76000-60000) DURING A YEAR UPTO ASSESSME NT YEAR 2003- 04. FROM 1994 TO MARCH 2002 IN EIGHT YEARS, THE APP ELLANT COULD HAVE SAVED RS.16,000 X 8 = RS.128,000. AS STATED EARLIER , THE APPELLANT HIMSELF HAS SHOWN INVESTMENT IN THE POLICY OF LIC T O THE EXTENT OF RS.104,152 OUT OF THE SAVING TILL 31/3/2002. THIS M EANS, THE APPELLANT WAS LEFT WITH ONLY RS.24,000 APPROXIMATELY FOR FURT HER INVESTMENT AS ON 31/3/2002. AS AGAINST THIS, THE APPELLANT HAS SH OWN CASH IN HAND TO THE EXTENT OF RS.660916. IN MY OPINION, THE APPE LLANT HAS INFLATED THE FIGURE OF OPENING CASH IN HAND BY AT LEAST RS.6 37,000 BEING THE DIFFERENCE OF RS.660,916 AND RS.24,000. IN OTHER WO RDS, I AGREE WITH THE AO THAT THE APPELLANT HAS INFLATED THE FIGURE O F OPENING CASH IN HAND BY RS.637,000. SINCE THE APPELLANT WAS HAVING A BANK ACCOUNT, THERE WAS NO NEED TO KEEP SO MUCH OF CASH IN HAND. THE SAME CASH COULD HAVE BEEN DEPOSITED BY THE APPELLANT IN HIS B ANK ACCOUNT. NO ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 7 EVIDENCE HAS BEEN FURNISHED BEFORE ME IN SUPPORT OF THE FACT THAT THE APPELLANT HAS DEPOSITED THE AGRICULTURAL INCOME IN HIS BANK ACCOUNT. THEREFORE, THE APPELLANT HAS TRIED TO EXPLAIN THE S OURCE OF CASH OF RUPEES 637,000 OF THE YEAR RELEVANT TO ASSESSMENT Y EAR 2003-04 AS PERTAINING TO EARLIER YEARS. IN OTHER WORDS, AS AGA INST THE TOTAL ADDITIONS OF RS.11,33,682/- ON ACCOUNT OF OPENING C APITAL BALANCE, THE ADDITION OF RS.637,000 ONLY IS SUSTAINED. 5. BEING FURTHER AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. AR OF THE ASSESSEE SUBMITTED AS UNDER :- (I) DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE APPELLANT WAS CALLED UPON TO EXPLAIN THE AVAILABILITY OF THE AFORESAID OPENING CASH BALANCE AS ON 1 ST APRIL, 2002. IN THE REPLY OF THE APPELLANT, IT WAS SUBMITTED THAT IN THE STATEMENT RECORDED UNDER SECT ION 132(4) OF THE ACT THE APPELLANT HAD CATEGORICALLY DEPOSED THAT HE HAS BEEN MAINTAINING BOOKS OF ACCOUNTS AND WERE AVAILABLE WI TH HIS CA AT THE TIME OF SEARCH. FURTHER SUCH BOOKS OF ACCOUNTS WERE ALSO SUBMITTED DURING THE PROCEEDINGS BEFORE HIM AND DEMONSTRATED HOW THE OPENING BALANCE IN CAPITAL ACCOUNT WAS DRAWN. HOWEV ER, THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE APPELLANT ON THE GROUND THAT THE APPELLANT HAD NEVER FILED ANY R ETURN OF INCOME ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 8 PRIOR TO THE ISSUANCE OF THE NOTICE UNDER SECTION 1 53A OF THE ACT. ACCORDING TO THE AO THERE WAS NO NEED FOR THE APPEL LANT TO ENGAGE A CA, WHEN THE APPELLANT IS ENGAGED IN AGRICULTURAL O PERATIONS. THE LEARNED AO THEREUPON PROCEEDED TO DISBELIEVED THE E XPLANATIONS OFFERED BY THE ASSESSEE AND HE TREATED THE OPENING CAPITAL BALANCE AS ON 1/4/2002 AS UNEXPLAINED AND ACCORDINGLY MADE THE ADDITION OF RS.11,33,682/-. (II) AGGRIEVED BY THE ADDITIONS MADE BY THE LEARNED AO INCLUDING THE AFORESAID ADDITION OF RS.11,33,682/- MADE ON AC COUNT OF UNEXPLAINED OPENING CAPITAL BALANCE, THE APPELLANT PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A). THE APPELLANT SUB MITTED A FAIRLY DETAILED SUBMISSION AND MADE ORAL ARGUMENTS TOO FRO M TIME TO TIME IN THE COURSE OF HEARING BEFORE THE CIT(A). HOWEVER , THE LD. CIT(A) HAS SUSTAINED THE ADDITION OF RS.637,000 AND GRANTE D RELIEF FOR THE BALANCE ON THIS SCORE. (III) IT IS RESPECTFULLY SUBMITTED THAT THE APPELLA NT HAS SUBMITTED A FAIRLY DETAILED WRITTEN SUBMISSION DATED 22 ND MARCH, 2011 BEFORE THE LD. CIT(A). FURTHER, IT WAS EMPHASIZED THAT IN CONF ORMITY WITH THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT, IN THE COURSE OF SEARCH PROCEEDINGS AT ANSWER NO.9 THE APPELLANT HAD CATEGORICALLY STATED THAT HE HAS MAINTAINED REGULAR BOOKS OF ACCO UNTS AND FURTHER SUCH BOOKS OF ACCOUNTS WERE ALSO SUBMITTED BEFORE T HE LEARNED AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HEN CE THE AOS CONTENTION TO THE EFFECT THAT APPELLANT HAS NEVER M AINTAINED ANY SUCH ACCOUNTS IS DEVOID OF ANY MERITS. ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 9 (IV) IN THIS CONTEXT, THE APPELLANT BEGS TO SUBMIT THAT THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE LE TTER DATED 21.12.2010 DID FURNISH THE EXPLANATION ALONG WITH T HE BREAKUP OF THE SAID BALANCE AND THE AO HAD NOT DENIED SUCH DETAILS . THE APPELLANT FURTHER SUBMITS THAT SAID BALANCE OF RS.11,33,682/- CONSISTED OF THE VALUE OF VARIOUS LAND PURCHASED BEFORE 31.03.2002 A ND INCOME GENERATED OVER THE YEARS. IT IS THEREFORE SUBMITTED THAT THE ENTIRE OPENING CAPITAL BALANCE IS DULY EXPLAINED AND HENCE NO ADVERSE INFERENCE IN THAT REGARD WAS WARRANTED IN THE PRESE NT CASE OF APPELLANT. (V) WITHOUT PREJUDICE TO ABOVE, THE APPELLANT SUBMI TS THAT SINCE THE IMPUGNED ADDITION HAS BEEN MADE BY THE AO IN RELATI ON TO OPENING BALANCE OF CAPITAL ACCOUNT CARRIED FORWARD FROM THE PREVIOUS YEARS, THE SAME CANNOT BE CONSIDERED AS INCOME FOR THE REL EVANT YEAR UNDER CONSIDERATION. IT MAY ALSO BE KINDLY NOTED THAT THE LD. AO APART FROM ARBITRARILY REJECTING THE EXPLANATION OF APPELLANT HAS FAILED TO BRING ON RECORD ANY MATERIAL OR EVIDENCE TO SHOW EXISTENCE O F ANY UNACCOUNTED SOURCES OF INCOME OF APPELLANT. IN THE ABSENCE OF ANY SUCH FINDING BY THE AO, IT WOULD BE COMPLETELY UNJU STIFIED TO PRESUME THAT PART OF THE OPENING CAPITAL BALANCE SHOWN BY T HE APPELLANT IS UNDISCLOSED INCOME OF THE YEAR UNDER CONSIDERATION. THE LD. CIT(A) HAS HOWEVER NOT ACCEPTED THE EXPLANATION OF THE APP ELLANT IN TRUE AND PROPER PERSPECTIVE AND HAS GRANTED PARTIAL RELIEF. ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 10 (VI) VIDE PARA 4.1 OF THE IMPUGNED APPELLATE ORDER, ON ONE HAND, THE CIT(A) HAS FULLY AGREED THAT NORMALLY THERE CAN NOT BE ANY ADDITION ON ACCOUNT OF OPENING CAPITAL BALANCE AND ON THE OT HER HAND, HE HAS OPINED THAT THIS CANNOT BE ACCEPTED AS UNIVERSALLY TRUE IN ALL THE CASES. THE LD. CIT(A) HAS FURTHER MISDIRECTED HIMSE LF IN COMING TO THE CONCLUSION THAT APPELLANTS ARGUMENT IS NOT ACCEPTA BLE SINCE THE APPELLANT HAD NOT FILED RETURN OF INCOME FOR EARLIE R YEARS TO PROVE THE INCOME SHOWN IN THE EARLIER YEARS, MAINLY ON THE GR OUND THAT NO ACTION IS POSSIBLE TO INVESTIGATE THE SOURCES OF IN COME IN EARLIER YEARS, THEN THE ONUS IS ON THE APPELLANT TO PROVE S OURCE OF IT. THE LD. CIT(A) HAS PERUSED THE COPY OF BALANCE SHEET WHICH WERE ALREADY ON THE RECORD OF THE ASSESSING OFFICER AS WELL AS PROD UCED BEFORE HIM AND HE HAS NOTED THE FIXED ASSETS IN THE FORM OF AG RICULTURAL LAND, ANIMALS, INVESTMENT AND ALSO NOTED CASH IN HAND TO THE EXTENT OF RS.660,916/- AND BANK BALANCE OF RS.726/- AND HAS N OT DOUBTED AGRICULTURAL EARNINGS OF THE APPELLANT. (VII) IN PARA 4.2 THE LD. CIT(A) HAS OBSERVED THAT THE APPELLANT HAD MADE INVESTMENT IN THE LAND FROM THE YEAR 1987 TILL DECEMBER, 1994 AND THE TOTAL INVESTMENT IN LAND SO MADE FOR RS.337 ,888. ON SUCH VERIFICATION AND ON THE BASIS OF DOCUMENTS, THE LD. CIT(A) HAS ACCEPTED THE CONTENTION OF THE APPELLANT THAT HE HA D CAPITAL OF RS.337,888/- AS ON 31 ST MARCH, 2002. SIMILARLY, HE HAS ACCEPTED THE INVESTMENT OF RS.30,000 IN ANIMALS AS ON 31 ST MARCH, 2002. VIDE PARA 4.3 HE HAS ACCEPTED THE FIGURE OF LIC PREMIUMS FOR RS.1,04,152/- TILL 31 ST MARCH, 2002 AND THE FIGURE OF BANK BALANCE. HOWEVE R, ONLY WITH REFERENCE TO BALANCE CASH ON HAND I.E. 637,916/- AS ON 31 ST MARCH, ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 11 2002, THE LEARNED CIT(A) HAS VIEWED THE EXPLANATION OF APPELLANT DIFFERENTLY. WHILE DOING SO THE LD. CIT(A) HAS ESTI MATED THE AGRICULTURAL PRODUCTION ON ESTIMATED BASIS ADOPTING THE ESTIMATED SALE-PRICE OF THE CROPS SOLD AND HAS ALLOWED SET OF F OF 35% OF EXPENSES HAVING INCURRED BY THE APPELLANT TOWARDS C OST OF SEED CULTIVATION ETC. AND HAS PROCEEDED TO WORK OUT THE AGRICULTURAL INCOME AT RS.76,212/- ONLY. BESIDES, THE LD. CIT(A) HAS ES TIMATED HOUSEHOLD EXPENSES OF RS.5,000 P.M. IGNORING THE VITAL FACTS THAT THE ASSESSEE IS AN AGRICULTURIST HAVING THREE DEPENDANT FAMILY M EMBERS AND LIVING IN LOWER MIDDLE CLASS STANDARD. THE LD. CIT(A) HAS ON SUCH ESTIMATED BASIS WORKED OUT THE EXPLAINED SOURCE OF CASH AND H AD AGREED WITH THE VIEW OF THE O THAT THE APPELLANT HAD INFLATED T HE FIGURE OF OPENING CASH IN HAND BY RS.637,000/- AND HAS SUSTAINED THE IMPUGNED ADDITION OF RS.637,000 WHOLLY CONTRARY TO THE FACTS AND FIGURES FURNISHED BY THE APPELLANT AND THE POINT IS THAT TH E HARD FACTS AND FIGURES, FURNISHED ON THE BASIS OF RECORD CANNOT BE BRUSHED ASIDE BY THE AUTHORITY BELOW. IT IS SUBMITTED THAT THE LD. C IT(A) HAS UN- JUSTIFIABLY PROCEEDED TO WORK OUT THE AVAILABILITY OF CASH ON HAND ON ESTIMATED FORMULA. THIS CANNOT FORM BASIS FOR SUSTA INING THE ADDITION IN PART, WHICH HAS RESULTED IN VIOLATION OF PRINCIP LES OF NATURAL JUSTICE. (VIII) IT IS RESPECTFULLY SUBMITTED THAT THE ORDERS OF THE LEARNED CITA) IN RESTRICTING THE ADDITION OF RS.637,000/- ON ACCO UNT OF OPENING CASH BALANCE IN THE CAPITAL ACCOUNT IS UNFAIR AND IT MAY BE HELD AS WHOLLY UNJUSTIFIED AND THE ORDERS OF THE LOWER AUTHORITY T O THAT EXTENT MAY KINDLY BE REVERSED. ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 12 7. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE RS OF LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. IT IS CLEARLY ACCEPT ED AT THE LEVEL OF AO AS WELL AS CIT(A) THAT THE ASSESSEE WAS ENGAGED IN THE AGRICULTURAL ACTIVITIES AND WAS HOLDING AGRICULTURA L LAND MEASURING 69913 SQ. METRES (AS PER 7/12) WHICH WAS PURCHASED BY HIM IN PARTS FROM 21.6.1989 TO DECEMBER, 1994. THE APPELLANT HAS SHOWN THAT HE WAS CULTIVATING CROPS LIKE BAJRA, MAKA, ETC. AND HI S MAIN SOURCE OF INCOME, THEREFORE, HE WAS NOT FILING RETURN OF INCO ME AND IT IS APPARENT THAT THESE FACTS HAVE NOT BEEN DISPUTED BY THE AO NOR HAS HE DISPUTED CROPS PRODUCED AS PER 7/12 SUBMITTED TO HIM. FURTHER THE LD. CIT(A) HAS MADE AN ESTIMATED BASIS OF CALCULATI NG ESTIMATED INCOME, ESTIMATED EXPENSES AND ESTIMATED HOUSEHOLD EXPENSES ON AN OVERALL ESTIMATE BASIS. LOOKING TO THE FACTS THA T THE ASSESSEE IS AGED ABOUT 43 YEARS AT THE CLOSE OF THE AY AND HE H AS BEEN CARRYING ON AGRICULTURAL OPERATIONS SINCE 1989 WHICH CERTAIN LY GAVE HIM REGULAR EARNING AND AFTER MEETING HOUSEHOLD EXPENSE S SOME SAVINGS CANNOT BE IGNORED. HOWEVER, THIS IS ALSO A FACT THA T THE ASSESSEE HAS ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 13 NOT BEEN ABLE TO FURNISH PROPER DETAILS OF HIS SAVI NGS AND EARNINGS IN PREVIOUS YEARS WHICH IN NORMAL CASES ARE BEING RARE LY MAINTAINED BY THE AGRICULTURISTS AS THEIR INCOME IS EXEMPT FROM T AX. THEREFORE, IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES AS WELL AS NAT URE OF SOURCE OF INCOME OF THE ASSESSEE AND ESTIMATES MADE BY CIT(A) IT WILL BE JUSTIFIABLE TO REDUCE THE ADDITION FROM RS.6,37,000 /- TO RS.1,00,000/- ONLY AND THE SAME IS CONFIRMED. THE ASSESSEE GETS P ART RELIEF. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9/9/15 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 09/09/15 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD ITSS)A NO.385/AHD/2011 ASST. YEAR 2003-04 14 1. DATE OF DICTATION:2-3/9/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: ________OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 9/9/15 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: