TaxTMI 
TaxTMI 
2018 (11) TMI 1888
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....grieved by the order of LD.CIT(A), assessee is now in appeal and has raised the following grounds : "1. The Learned Taxing Authorities bellow had erred in making additions of Rs. 5,22,020/- on account of sundry creditors and making an addition to total income of the appellant. Considering the facts of the case and provisions of law, the addition may be deleted. Just and proper relief may be granted to the appellant. 2. The Learned Taxing authorities bellow had erred in disallowing the agricultural income to the extent of Rs. 70,110/- and making an addition as income from other sources. Considering the facts of the case and provisions of law, the agricultural income be allowed in full and the addition to other income be deleted. Just and proper relief may be granted to the appellant. 3. The opinion expressed in the order may severely affect the reputation of the Assessee. Therefore appellant request to delete the opinion expressed in para 7 (page 5 & 6) of the order' by Hon'ble C.I.T." 3. Subsequently, assessee vide letter dt.13.09.2016 has raised additional ground which reads as under : "On facts and circumstances prevailing in the cas....
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....e genuineness of the alleged creditors, the AO then issued notices U/s 133(6) of the Income Tax Act to them. There was non-compliance from the nine creditors and one of the creditor namely Shri Dnyanoba Dhondiram Bobade stated that he was an agriculturist. Though he alleged to have sold Bhusar goods to the assessee and took the money as and when needed by him yet there was no evidence available with him for the alleged sale. Since the claim of the assessee remained unsubstantiated, the AO made the impugned addition to the income of the assessee. During the course of present appellate proceedings, the counsel of the appellant has argued that the assessee was assessed to tax U/s 44AF of the Income Tax Act. It was stated that no books of account were maintained however the balance sheet relating to retail business was prepared. Similarly it is not understood as to why these creditors appeared in the balance sheet as on 31.03.2010 furnished by the appellant. There are grave doubts about the genuineness of the alleged creditors and nature of transactions carried out with them. In the absence of copy of account, it is not known whether the amounts shown as outstanding against these credi....
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....c.69A of the Act are applicable only when an assessee is found to be the owner of any money, bullion, jewellery or other valuable article and it is not recorded in his books of account and when he has no satisfactory explanation regarding it, then the value of the bullion, jewellery or valuable article may be deemed to be his income. In the present case as noted by AO that assessee was not maintaining books of accounts and therefore the provisions of Sec.69A of the Act are not attracted and that LD.CIT(A) had erred in confirming the addition u/s 69A of the Act. For the proposition that when profits declared by the assessee was made under presumptive taxation u/s 44AD of the Act, AO could not make separate addition by invoking the provisions of Sec.69C of the Act he relied on the decision of Chandigarh Bench of Tribunal in the case of Nand Lal Popli reported in (2016) 71 taxmann.com 246 (Chd). Ld DR on the other hand supported the order of lower authorities. 7. I have heard the rival submissions and perused the material on record. The issue on the present ground is with respect to addition u/s 69A of the Act. The addition of Rs. 5,22,020/- is respect of unexplained creditors has ....
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....I have duly considered the submissions of the appellant. The appellant had filed return of income for the year under reference declaring total business income of Rs. 2,43,l10/- and agricultural income of Rs. 1,78,110/-. The AO had information in his possession that the appellant had been allotted a flat in Adarsh Housing Society at Mumbai and invested the amount out of bank loan and agricultural income for the purchase of flat in the current year. The Adarsh Housing Society was a cooperative society at CTS No.652, Block VI, Colaba Division, Captain Prakash Pethe Marg, Adjacent to Backbay Bus Depot, Colaba, Mumbai-400 005 (Registration No. MUM/WA/HSG/TC/ 8481/2004/YEAR-04). The origins of the scam in allotment of flats in the said society went back to February 2002 when a request was made to the Chief Minister of Maharashtra to allot land in the heart of Mumbai for the construction of a housing complex for "the welfare of serving and retired personnel of the Defence Services". Over a period of ten years, top politicians, bureaucrats and military officers proceeded to bend several rules and perpetrate various acts of omission and commission in order to have the building constructed a....
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....n no.6. Further when asked about purchases of fertilizers, seeds, pesticides and details of expenses incurred, the appellant could not recollect these details in reply to question no.7. He also expressed his inability to furnish any kind of documentary evidence in support of agricultural income. The assessee thus failed to submit even an iota of evidence regarding carrying out agricultural operations. There is no change in this factual position even during the present appellate proceedings. The pertinent question is whether the appellant has actually carried out primary/secondary operations on land or not. The answer to the above question is in negative and there is no material on record to suggest otherwise. This being the case, the agricultural income though accompanied by sale bills can't be accepted as genuine. Thus there are grave doubts about the genuineness of agricultural income. 7.1. The AO had also asked the assessee to furnish evidences for carrying out primary and secondary agricultural operations on land, yield of agricultural produce and copy of 7/12 extracts. Since the appellant did not furnish these vital details except copy of 7/12 extracts, the AO cho....
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....T (Appeals) held in his favour. However, the Tribunal by impugned order allowed the appeal filed by the revenue and restored the views of Assessing Officer. The Tribunal dealt with this issue in their order while repelling the contention of assessee :- "Para-7 We have considered the rival submissions carefully as well as relevant material on record and find force in the contention of Ld. DR. The Privy Council in Raja Musthafa Alikhan Vs. CIT 16 ITR 330 had observed that burden of proving that a particular income was exempt lies on the person who claims the same and this rule has been followed by various courts later on also. From the particulars submitted by the assessee before Assessing Officer it becomes clear that no expenditure was shown to have been incurred on labour for ploughing of land, tilling of same and harvesting of the crop etc. which cast serious doubt whether any agricultural operations were carried out. In case of Prithviraj Chouhan Vs. ACIT in ITA Nos.650, 651 and 652/Ind./96, this Bench had taken a view that Form B-2 and B-1 Khasra which provides for a column for cultivator and his particulars as well as owner separately and thus name of the cultivator i....
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.... On reference, the Hon'ble Madhya Pradesh High Court upheld the finding of the Tribunal and dismissed the appeal of the assessee. In the present case, the surrounding circumstances do indicate that all is not well with the alleged claim of agricultural income due to the absence of vouchers for expenses and lack of any evidence for carrying out agricultural activities. The assessee did not maintain any records/ documents in respect of agricultural income. The vouchers for expenses such as purchase of seeds, fertilizers and labour charges were not furnished. The copy of 7/12 extract submitted by the appellant was also perused. It shows that the assessee owned 10.8 hectares of land. Since there is scanty rainfall in central Maharashtra, the average yield per hectares can't be expected to fetch more than Rs. 9,500/- to Rs. 10,000/-per hectare. On the contrary, the appellant has made claim of agricultural income of more than Rs.l. 78 lacs in the current year which is neither commensurate with the land holding nor the average yield in Asola, Distt. Parbhani. In the current year, the appellant would not have earned agricultural income exceeding Rs. 1,08,000/- and same would ha....
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....instant case, no account was maintained by the assessee. The claim was ad hoc, which was examined by the lower authorities. The addition was restricted on the basis of estimation. The estimation was a question of fact as per the ratio laid down in the case of Sudarshan Silks Vs. CIT (2008) 12 SCC 458 and needed no interference. In light of above findings, the action of the AO to treat agricultural income as income from other sources is upheld. There is no res judicata in the Income Tax proceedings and each assessment year is a separate unit. The findings of the AO for AY 2009- 10 to allow agricultural income was based on appreciation of the facts for that year but same can't be imported here. Out of alleged agricultural income, the appellant had made cash deposits in the saving bank account maintained with Vaidyanath Bank, Parli Vaijnath. However the addition of Rs. 1,78,l10/- made by the AO is restricted to Rs. 70,110/- and to that extent, it is held that the appellant has introduced his undisclosed income in the garb of agricultural income. The appellant gets relief of Rs. 1,08,000/-. This ground of appeal is partly allowed. Aggrieved by the order of CIT(A), assessee is no....