TaxTMI 
TaxTMI 
2016 (2) TMI 739
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....perty documents, certain pro-notes were noticed and seized. The Assessing Officer (AO) made various additions based on the documents and returns filed by the assessee. Agricultural Income: 4. Assessee had offered agricultural income of Rs. 1,89,919/- in AY. 2005-06; Rs. 1,01,880/- in AY. 2006-07; and Rs. 1,04,270/- in AY. 2007-08. AO, on the reason that assessee has not substantiated the incomes, has treated the agricultural income as 'income from other sources' and brought to tax. Before the Ld.CIT(A), assessee furnished Pattadar Pass Book as 'additional evidence' which was sent to AO for verification and report. However, Ld.CIT(A) did not accept assessee's contentions on the reason that possession of agricultural land is one thing and deriving agricultural income thereon is another thing. If the claim was correct, assessee should have been in a position to file necessary documentary evidences relating to expenditure and cultivation and sale of produce. Since no evidence was furnished and since no incomes were offered in later assessment years of 2008-09 to 2011-12, Ld.CIT(A) confirmed the treatment of agricultural income as 'income from other sources'. 5. Ld. Counsel submitte....
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....rs. Before us, Ld. Counsel fairly admitted that assessee did not have any evidence of payment of these amounts. Since assessee is not forthcoming with any evidence, we do not find any reason to interfere with the order of the CIT(A). Accordingly, the grounds on disallowance u/s.80C are dismissed. Additions based on agreement of sale: 8. Assessee, as stated earlier, is involved in un-registered chit business in his own name and also in his family members' names. In the course of search, apart from a chit notes, certain promissory notes and agreements of sale were also seized. Based on the value as mentioned in the agreement of sale, AO has made additions in the impugned assessment years towards un-accounted investment in purchase of property. It was submitted that these properties were not intended to be purchased by assessee, but were obtained as a security for the amount disbursed in the chit business. Assessee explained that whenever a successful bidder takes the money, in order to secure the repayment, assessee generally takes either a promissory note for higher value or an agreement of sale along with title deeds of the property so as to secure the amounts. Considering the e....
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....at Troop Bazar, Hyderabad, which was also confirmed by the Ld. CIT(A). In AY. 2010-11, Ld. CIT(A) deleted the addition of Rs. 4,49,000/- and confirmed the addition of Rs. 1,01,500/- in that year. Assessee is aggrieved of the confirmation of the above amounts in respective assessment years. 10. Ld. Counsel referring to the submissions made before the authorities including additional evidence filed, submitted that Ld. CIT(A) accepted the modus oparandi in various years and deleted substantial amounts, but confirmed partly on the reason that assessee failed to furnish necessary evidence. It was submitted that assessee has furnished the addresses and Encumbrance Certificate to prove that these properties were never intended for purchase and it was the failure of the AO in not enquiring properly which resulted in getting the confirmation. He referred to the orders of the CIT(A) to submit that assessee has discharged his primary onus and since this so called agreement of sale are securities obtained in the course of chit fund business, the income of which were already offered, no further addition can be made on the failure of the AO to examine the above transactions. Ld. DR supported th....
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....ng of property as security is a norm in this kind of business. Further, no finding has been given by the Assessing Officer in contradiction to the claim made by the appellant that the transaction entered into and affidavits submitted were not genuine. It is, therefore, held that the agreements are documents constituting security collected by the assessee/ his father in normal course of the chit business; they do not represent any investment. Hence, there is no occasion to treat is as unexplained investment and deem the same to be the assessee's income. But as already mentioned the appellant has not given any confirmation with regard to property at H.No. 16-11/677 at Vasrabnagar, for a consideration of Rs. 16 lakhs. In this connection he has failed to discharge his initial onus of furnishing necessary documentary evidence in support of his claim. To prove a claim made by him, the assessee has to substantiate it. This is more so when he is made a party to transactions in the unorganised chit business run by his father. Claims and reliefs cannot be given as a largesse and as blanket approvals. Each transaction has to pass the litmus test of verification. The appellant has not file....
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....embers, sometimes security was taken in the form of agreement of sale if the bidders are having properties and some times, by way of promissory notes for a higher amount than what was lent. It was submitted that these two transactions also pertain to chit business. It was further submitted that the relevant pro-notes were seized by the department and are available with them. Ld. DR supported the orders of the Ld. CIT(A). 15. On this issue also, we are of the opinion that AO has not made out any enquiries. It is accepted that assessee is conducting un-organised chit business and as discussed earlier for the 'agreements of sale' found during the course of search, the modus oparandi has been accepted. In view of that, assessee's contentions cannot be brushed aside without proper enquiry. Since the promissory notes are available with the department (by this time, they would have been time barred), it is necessary that AO makes necessary enquiries with the persons who executed the promissory notes to ascertain whether assessee has advanced cash or obtained them towards security for the chit availed by them. Unless proper enquiry is made, it would not be proper to refuse assessee's cont....