TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 123
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....been heard together and are being disposed of by this consolidated order. 3.When these appeals were called out for hearing, Learned Counsel for the assessee invited our attention to the order dated 22.11.2021, passed by the Division Bench of this Tribunal in assessee's group case in IT(SS)A Nos. 11 to 14/SRT/2017 and IT(SS)A Nos. 20 to 24/SRT/2017 for AY.2008-09, 2010-11 to 2013-14, wherein the issue relating to agricultural income, enhancement made on account of agricultural income and other income of farmers have been discussed and adjudicated in favour of assessees (Farmers). Learned Counsel for the assessee submitted that these twenty two appeals are squarely covered by the above said order of the Tribunal. A copy of the said order was also placed before the bench. 4. Learned Departmental Representative (ld. DR) for the Revenue relied upon the orders of the authorities below. 5.We see no reason to take any other view of the matter than the view so taken by the Division Bench of this Tribunal in assessee's own group cases (the facts are identical and similar), vide order dated 22.11.2021. In this order, the Tribunal has inter alia observed as follows: "12. We have given our....
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...., agricultural income account, vide PB-49, ledger account of Chalthan Khand Ydhyog Mandali, vide PB-54 and cash book, vide PB -55. (d) For assessment year 2013-14: The assessee submitted before us balance-sheet which is placed at paper book page no.56, agricultural income account, vide PB 56, ledger account of Chalthan Khand Ydhyog Mandali, vide PB 57, and submitted cash book, vide PB page 58. 13. Learned Counsel submits that it is not feasible to maintain books of account for labour charges and these are paid from time to time by cash. The assessee family comprised of various family members of different families of brothers and cousins' brothers and since all of them are engaged in agricultural activities, the day-to-day details of various agricultural expenses are not systematically maintained for the reason that the assessee family is wholly and exclusively engaged in agricultural activities and agricultural income is exempted from tax, that is why, they do not maintain records. It is not practically possible to maintain details of various different natures of expenses. The assessee and his family members are showing net agricultural income which was earned by them individua....
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....ver, for A.Y. 2011-12 and A.Y. 2012-13, where returns of income were filed before the date of search, the AO disallowed 40% of the agricultural income received through cash. Further, AO disallowed the whole enhanced claim of agricultural income in the revised return for A.Y. 2011-12 and A.Y. 2012-13. We note that in course of the assessment proceedings, assessee filed financial statements, agriculture income and Expenditure account and other details in support of his claim of agricultural. Further, assessee filed detailed submissions from time to time which have been placed at Page No 244 to 256 of the 2nd Paper Book of the assessee. The AO did not accept the explanations of the assessee and made addition. The assessee filed an exhaustive submission before Ld.CIT(A) which is placed at Page No 3 to 18 of the paper book. In the course of appellate proceedings before Ld.CIT(A), the ld CIT(A), issued a show cause notice as per order sheet which was properly replied by the assessee by way of additional submission filed before him which is placed at Page No 1 and 2 of the paper book. 15. We note that Ld. CIT(A) was not satisfied with the submission of the assessee and he adopted differ....
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....n A.Y. 2008-09 and A.Y. 2009-10 and other family members, Viz. Kamleshbhai, Ajaybhai and Ishwerbhai, they were having taxable non-agriculture income. In this connection, it is submitted that they had earned income from other sources and capital gain which were declared in the return of income. In no case, the income from any non- agricultural business was declared. The CIT(A), in Para 7(v) of his order, observed that in the course of search conducted, evidence of substantial cash deposits in bank account and transaction including huge purchase immovable properties and expenses were found. In this connection, it is submitted that, no investment in immovable properties were made in the year under assessment as observed by the CIT(A). There is no such finding by the assessing officer in the assessment order. The deposits in bank accounts and expenses incurred by the assessee and family member were out of agriculture income only. The assessing officer in the assessment order has not given any such finding except huge cash deposit in the bank account. Regarding the expense for earning agricultural income, as observed by the Ld.CIT(A) at Para 7(vii) of his order, the ld Counsel submits....
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....egarding the agriculture income being used for repayment of loan, it is submitted that loans reflected in the balance sheet were mostly from family members. Even the CIT(A) accepted the loan when the addition was made by the assessing officer for A.Y. 2013-14. The assessee was having agricultural equipment for long. The assessee and family members and their forefathers were engaged in the agricultural activities for last so many years. The agricultural tools and machinery of Rs. 25,650/- in case of Rajesh G. Patel is reflected in his balance sheet. Similarly, agricultural tools of Rs. 87,500/- is reflected in balance sheet of Pankajbhai. In other cases also, the agricultural tools are reflected in their respective balance sheets. In support of above arguments, the ld Counsel relied on the decision of Hon`ble Gujarat High Court in the case of ITO Vs. Ashwin D. Mehta (HUF) [Tax Appeal No 386 of 2000 with 391 of 2000] where it was observed that: "We have heard learned advocates for the parties and perused the records. The CIT(A) has observed that the assessee has given complete details about the income and also shown agricultural income in the books of accounts though the returns we....
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....such AYs will have to be computed by the LD AOs as a fresh exercise. (iii) The LD AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The Ld. AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". (iv) Although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Ld. AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." (v) In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Se....
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.... of expenses to the tune of 40% as estimated by the learned assessing officer. The AO admitted that independent inquiries related to income earned from Chalthan Society were made and nothing adverse was found there from. It is a known fact that in agricultural operations in co-operative sector, the major care and monitoring of the sugarcane agricultural operations are being conducted by the sugar factory itself for the benefit of the members and for getting advantage of distribution of overheads on large scale operations and hence the expenses required to be borne by the assessee was quite minimal in as much as the major part of the expenses is related to transportation cost day-today monitoring and supervision and the same was incurred by the assessee by employing casual labourers. 21. We note that all these agricultural farms were located in the village area of Vesu, Bharthana, Khajod, Sarsana, Dumas, Bhimpore etc and all these lands were located in an area having very small distance from each other and therefore, the assessee had carried out agricultural operations with the help of common labour group which used to work in all the farms and that is why, the assessee had substa....
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....must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false. It is not necessarily the agriculture income of current year only, as the past savings of the earlier years out of agriculture income were deposited in bank accounts or applied in the current year. We note that net holding of the agriculture land of this assessee and his family members is at 3,84,250.77 square meters, and nature of the crops cultivated by the family are sugar cane, jowar, tuwer, fruits, paddy, vegetables etc. To prove land holding, assessee submitted copies of Forms 7 x 12, which shows joint ownership of his and his family members as well as the types of crops grown in the land belonging to the assessee and his family members. The assessee also submitted before ld CIT(A), balance sheet, cash flow statement. The assessee submitted the agricultural income account. The assessee submitted ledger account of Chalthan Khand Ydhyog Mandali. The assessee also submitted cash book for AY 2008-09. The ld CIT(A) has failed to bring any cogent evidence on record to show that these evidences are false. The Id CIT(....
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....sing Officer and we also delete the agricultural income enhanced by the ld. CIT(A). 7.We note that in a few group of assessees' Assessing Officer made addition as the assessee has travelled/made investment. The Ld. counsel contended that small expenditure incurred for travel and investment etc. were out of the agricultural income. The small cash deposit was made in to bank account out of agriculture income and the said issue has been dealt with by us in assessee's own group cases (supra). For A.Y. 2010-11, the assessee raised small ground regarding confirmation of addition of Rs. 4,57,486/- on account of unexplained jewellery. In this connection, it is submitted by the ld Counsel that assessee had filed a detailed submission before the CIT(A) (vide Page No 13 and 14 of Paper Book). The ld Counsel contended that papers found in the course of search were sort of rough Estimate and the assessee did not purchase the jewellery actually. No evidence in the form of invoice and the payment made by the assessee were found during the course of search. Further it is submitted that there was no seizure of the jewellery in the course of the search as the jewellery held by the assessee and othe....