SHRI BABOO SINGH,SHEOPUR V. ITO-2, MORENA

ITA 60/AGR/2023

AI Insights

This case involves an appeal by Shri Baboo Singh against the order of the Commissioner of Income-tax (Appeals), NFAC, Delhi, which sustained an addition of Rs. 21,94,000 to the assessee's income, treating it as income from other sources rather than exempt agricultural income. The original assessment was made by the Income Tax Officer under section 143(3) of the Income-tax Act, 1961, which was contested in the first appeal and subsequently in the ITAT. The ITAT found that the assessee had not been given a proper opportunity to present additional evidences that could substantiate his claims, leading to the decision to remand the case back to the CIT(A) for a thorough re-examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474816 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-12-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 19-04-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SRIVASTAVA
• Assessee Lawyers: RAJENDRA SHARMA
• Keywords: Additional evidence; Earning of tax free income
• Section: 143(3); 142(1); 143(2); 250; 143(1); 131

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH, AGRA BEFORE: SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No. 60/Agr/2023 Assessment Year: 2012-13 Shri Baboo Singh, Pali Road, Jaatkheda, Sheopur (M.P.) PAN: EEKPS6894J v. Income Tax Officer-2, Morena. (Appellant) (Respondent) Assesseeby : Sh. Rajendra Sharma, Advocate Sh. Manuj Sharma, Advocate Ms. Ayushi Pareek Revenue by : Sh. Shailendra Srivastava, Sr. DR Date of hearing : 05.12.2024 Date of Pronouncement : 05.12.2024 ORDER This appeal in ITA No.60 /Agr/2023 for the assessment year 2012-13 has arisen from the appellate order dated 20.02.2023(DIN& Order No. ITBA/NFAC/S/250/2022-23/1049932950(1)) passed by learned Commissioner of Income-tax(Appeals), NFAC, Delhi u/s 250 of the Income-tax Act, 1961, which appeal in turn has arisen from the ITA No. 60/Agr/2023 2 assessment order dated 26.03.2015 passed by Assessing Officer u/s. 143(3) of the Income-tax Act, 1961. 2. Grounds of Appeal raised by the assessee in the Memo of appeal filed with Income Tax Appellate Tribunal, Agra Bench, Agra, reads as under : “1. That the Commissioner of Income tax Appeal has erred on facts and law while sustaining the addition for Rs.21,94,000/- made by the A.O. treating the agricultural income, as the income of the assessee from other sources, no addition is liable to be sustained, the addition made by the A.O., sustained by the CIT Appeal is liable to be deleted. 2. That while sustaining the addition, the learned CIT Appeals has not considered the facts and the case after taking into consideration, the facts of the case, no addition is liable to be sustained, addition sustained by the CIT Appeal is liable to be deleted. 3. That appellant order dt. 20.02.2023 is bad in law.” 3. Brief facts of the case are that the assessee has filed return of income on 18.03.2014 declaring income of Rs.49,520/-. Return of income was processed by the Revenue u/s. 143(1) of the Act. Thereafter, through CASS, return of income was selected for framing scrutiny assessment. Statutory notices u/s. 143(2) and 142(1) were issued to the assessee by the Assessing Officer ,during the course of ITA No. 60/Agr/2023 3 assessment proceedings. The assessee participated in the assessment proceedings. Assessee has also claimed exempt income of Rs.21,94,000/- from agriculture in the return of income filed with the Revenue. Assessing Officer observed from the documents filed by the assessee during the course of assessment proceedings, that there are certain discrepancies in the documents filed with respect to agricultural produce of wheat and the claim of exempt agricultural income by the assessee, which findings of the AO has been duly incorporated by the Assessing Officer in detail in the assessment order at page No. 2. The Assessing Officer treated the agriculture income as chargeable to tax under the head “income from other sources”, as the assessee is not able to prove and substantiate that the said income of Rs. 21,94,000/- has arisen from agriculture, and the same was accordingly brought to tax by the AO. 4. Being aggrieved, the assessee filed first appeal with ld. CIT(Appeals) . The ld. CIT(Appeals) issued as many as three notices dated 01.01.2021, 16.03.2022 and 02.02.2023 to the assessee, seeking documents from the assesseein support of appeal memo, but there was no response/reply from the assessee. Ld. CIT(Appeals) ITA No. 60/Agr/2023 4 dismissed the appeal of the assessee both for non-prosecution as well as ld. CIT(Appeals) decided the appeal of the assessee on merits by holding that the assessee has failed to prove the receipt of Rs.21,94,000/- as sale proceeds of agriculture produce, as no documentary evidence has been produced by the assessee to prove that the assessee is holding agriculture land, nature, type and quality of crop produced, the details of the purchasers etc. Thus, as per learned CIT(A), the assessee has not submitted authenticated sale slips bearing signature and stamp of Mandi in which sales have been effected. The evidence of ownership of actual land on which agriculture was done with all the details were not produced. As per ld. CIT(A), \\the details of expenditure borne to make the agricultural produce saleable were not submitted. The assessee has also not submitted the details of expenditure incurred during the course of agriculture, such as fertilizer, irrigation, carriage and other associated items and hence, the order of the Assessing Officer was confirmed by ld. CIT(Appeals). 5. Still aggrieved, the assessee has filed an appeal with ITAT and the ld. Counsel for the assessee Shri Rajendra Sharma, Advocate ITA No. 60/Agr/2023 5 appeared on behalf of the assessee,and at the outset submitted that the assessee wants to file additional evidence under Rule 29 of the ITAT Rules, as the assessee was not allowed proper time for submitting these evidences by the authorities below. These additional evidences are in the form of affidavits of the persons of whose agricultural land was cultivated by the assesseeas the assessee is claiming that he did not only undertook cultivation of self and family members agricultural land but also of others on Batai basis, and enjoyed the agricultural income from such land. The assessee has also filed copies of the assessment orders for the subsequent assessment years, i.e. 2013-14 and 2014-15, which were completed by the Assessing Officer u/s. 143(3) of the Act, wherein, the Assessing Officer has accepted the income of the assessee from agriculture. Thus, prayers were made that these additional evidences should be admitted as proper opportunity was not granted by the authorities below to submit these documents. The assessee has filed paper book containing 51 pages, which is placed on record in file. These additional evidences are placed on record in file. Written submission has also been filed by the ld. AR in the paper book, which ITA No. 60/Agr/2023 6 is placed on record in file. It was submitted that during the course of assessment proceedings, the assessee has duly submitted before the Assessing Officer that the assessee and his family own 60 Bighas of agriculture land and the assessee is also doing agriculture on the land of other agriculturists on BATAI. Some documents to substantiate the sale of agriculture produce were also filed with the Assessing Officer, but they were rejected by the Assessing Officer. It was submitted that in assessment year 2013-14, i.e., immediately succeeding year, the assessee has shown agriculture income of Rs.54,79,200/- , and the Assessing Officer has accepted the same. It was submitted that even the assessee was summoned u/s. 131 of the Act by the AO, and statement of the assesseewas duly recorded by the AO during the course of assessment proceedings. Affidavits, Khata, Khatoni and bank statements were also filed by the assessee,and after going through all the documents, the Assessing Officer has accepted the agriculture income of Rs.54,79,200/- in the assessment framed u/s. 143(3) of the Act. Similarly, it was submitted that in the subsequent assessment year 2014-15, the Assessing Officer has accepted the agriculture income of Rs.30,00,000/- in the ITA No. 60/Agr/2023 7 scrutiny assessment u/s. 143(3) of the Act. It was submitted that assessee filed affidavit ,khasra, khatoni and statements of other persons before the AO, and after considering the same, the AO accepted agricultural income during assessment year 2014- 15.Presently, we are concerned with ay:2012-13.It is prayed that the additional evidences now produced before ITAT, goes to the root of the matter and they should be admitted and the matter can be restored back to the file of the ld. CIT(Appeals) for denovo adjudication of appeal of the assessee as the order of ld. CIT(Appeals) was passed ex-parte. The application filed by the assessee requesting for admission of additional evidences as well written submissions, are filed in the paper book containing 51 pages, which is placed on record in file. 5.2Learned Sr. DR on the other hand, fairly submitted that the matter can go back to the file of ld. CIT(Appeals) for denovo adjudication, as the appeal was decided exparte by the ld. CIT(Appeals) , and now the assessee has filed additional evidences before ITAT for the first time, which require verification. ITA No. 60/Agr/2023 8 6. I have heard both the parties and gone through the material on record. I have observed that the assessee filed return of income for the impugned assessment year 2012-13, declaring income of Rs.49,520/-. Case of the assessee was selected by Revenue for framing scrutiny assessment under CASS. The assessee has also declared agricultural income to the tune of Rs. 21,94,000/- , which was claimed as an exempt income. During the course of assessment proceedings, the Assessing Officer did not accept the agriculture income of Rs.21,94,000/- declared by the assessee, as the assessee could not justify and substantiate said agriculture income and the same was brought to tax by the AO as ‘income from other sources’. Assessee filed first appeal with ld. CIT(Appeals). Ld. CIT(Appeals) issued three notices requiring assessee to submit documents in support of the appeal memo, but the same were not complied with by the assessee. Ld. CIT(Appeals) dismissed the appeal of the assessee both for non-prosecution as well as ld. CIT(Appeals) decided the appeal of the assessee on merits by holding that the assessee has failed to prove the receipt of Rs.21,94,000/- as sale proceeds of agriculture produce, as no documentary evidence has ITA No. 60/Agr/2023 9 been produced by the assessee to prove that the assessee is holding agriculture land, nature, type and quality of crop produced, the details of the purchasers etc. Thus, as per learned CIT(A), the assessee has not submitted authenticated sale slips bearing signature and stamp of Mandi in which sales have been effected. The evidence of ownership of actual land on which agriculture was done with all the details were not produced. As per ld. CIT(A),the details of expenditure borne to make the agricultural produce saleable were not submitted. The assessee has also not submitted the details of expenditure incurred during the course of agriculture, such as fertilizer, irrigation, carriage and other associated items and hence, the order of the Assessing Officer was confirmed by ld. CIT(Appeals).The assessee has now filed before ITAT for the first time, additional evidence under Rule 29 of the Income-tax Appellate Tribunal Rules, which are by way of Khasra, Khatoni containing the land owned by the assessee. Assessee has also filed affidavits of the persons whom the assessee is claiming that the assessee is cultivating their land on Batai basis. I have also observed that the Assessing Officer has duly accepted agriculture income declared by the assessee in the immediately ITA No. 60/Agr/2023 10 succeeding assessment years, i.e, 2013-14 and 2014-15, in the scrutiny assessment completed u/s 143(3) read with Section 143(2). The assessee has filed copies of assessment year 2013-14 and 2014-15 passed by the AO u/s 143(3), which are placed on record in file. I have observed that the AO has recorded statement of the assessee u/s 131 during course of assessment proceedings for the assessment year 2013-14, before accepting agricultural income . The assessee has also filed khasrakhatoni of the land owned by the assessee during assessment proceedings before the AO for ay: 2013-14 and 2014-15. Presently, this appeal relates to ay:2012-13. The assessee has now filed additional evidences for the first time before the ITAT under Rule 29 of ITAT, Rules, 1963. These additional evidences are by way of khasra, khatoni of the land owned by the assessee and his family members , agricultural loan book showing taking loan and holding of the agricultural land , and copies of affidavits of various agriculture land holders from whom the assessee is claiming that he was cultivating their land on Batai basis. The assessee has claimed that the assessee was not granted proper opportunity by lower authorities. These additional evidences which ITA No. 60/Agr/2023 11 are now filed for the first time before ITAT are placed on record in file and in my considered view, these additional evidencesgoes to the root of the matter and require verification by the authorities below. Ld. CIT(Appeals) has dismissed the appeal of the assessee ex parte, although ld. CIT(A) decided on merits also, but the assessee did not submitted any reply/response to notices issued by ld. CIT(A). The mandate of 1961 Act is to assess correct income for the correct assessment year in the hands of the correct assessee, as per the provisions and mandate of the 1961 Act.The agricultural income of the assessee declared in ITR to the tune of Rs. 21,94,000/- which is claimed by the assessee to be exempt u/s 10(1) and is to be included for rate purposes, is brought to tax by authorities below by denying exemption on the grounds that the assessee is not able to prove and substantiate agricultural income, and was charged to tax as ‘income from other sources’ and accordingly taxes were imposed. For subsequentassessment years i.e. ay: 2013-14 and 2014-15, the AO has accepted the agricultural income declared by the assessee in the assessment framed u/s 143(3) read with Section 143(2). In the interest of justice and fair play, it will be fair and proper that these ITA No. 60/Agr/2023 12 additional evidences submitted by the assessee be admitted as necessary verifications are required , and the matter is restored back to the file of ld. CIT(A) for denovo adjudication of the appeal of the assessee , after giving opportunity of hearing to both the parties. The appeal of the assessee is allowed for statistical purposes. I clarify that I have not commented on the merits of the issues arising in the appeal. I order accordingly. 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 05.12.2024 on the conclusion of the hearing in the presence of both the parties and reduced to writing and signed on 10/12/24. Sd/- (RAMIT KOCHAR) ACCOUNTANT MEMBER Dated:10/12/2024 *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT Assistant Registrar ITAT Agra "