TaxTMI 
TaxTMI 
2017 (10) TMI 1628
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.... Under the facts and circumstances of the case, the ld. CIT(A) is not justified in not justified in estimating the agriculture income of the assessee at Rs. 3,00,000/- from 16 bigha of agriculture land held by the assessee and thereby deleting the relevant addition to that extent only. ITA No. 219/JP/2016 -A.Y.2007-08 1. Under the facts and circumstances of the case, the ld. CIT(A) is not justified in not justified in confirming the addition of Rs. 25,56,440/- as unexplained investment u/s 69 of the I.T. Act, 1961 towards cash deposited into the bank and payment made for purchase of agriculture land. 2.1 First of all, the appeal of the assessee in ITA No.436/JP/2015 for the Assessment Year 2006-07 is taken up for adjudication. 3.1 During the course of hearing, the ld.AR of the assessee has not pressed the Ground No. 3. Hence, the same is dismissed being not pressed. 4.1 Apropos Ground No. 1 and 2 of the assessee, the facts as emerges from the order of the ld. CIT(A) is as under:- ''3.6 I have perused the facts of the case, the assessment order and the submissions of the appellant. The appellant has made cash deposits in his bank account of Rs. 21....
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....sary evidences to discharge his onus u/s. 69 of the I.T. Act. However, the assessee did not submit even the basic and bare minimum details in the form of names and addresses of the persons to whom the advances had been given. In view of the above discussion, it is held that the appellant was not prevented by sufficient cause from producing before the Assessing Officer, evidences relevant to the above grounds of appeal. Therefore, the application for admission of additional evidences under Rule 46A is not accepted and the additional evidences are not admitted. 4.3 Even otherwise, the additional evidences submitted by the appellant do not have evidentiary value since the persons, to whom advances are said to have been given, were witnesses of the appellant, but he was unable to produce them in spite of being specifically asked by the Assessing Officer to do so, during remand proceedings. During inquiries made by the Assessing Officer, it was seen that one of the persons (Phoola Devi) to whom advance of Rs. 5,00,000/- was given, was not existing at the address given by the appellant. Thus, during appeal proceedings satisfactory explanation with respect to bank withdrawals of ....
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....d show the crops grown by the assessee. c. No details have been furnished regarding the crops grown, and expenditure incurred on seeds, fertilizers etc. No evidence of carrying out basic agricultural operations, have been submitted. d. No agricultural income has been disclosed by the assessee in the returns of income filed. e. The sale bills of agricultural produce submitted by the assessee pertain to subsequent years and no sale bills pertain to the year under consideration or the preceding years. 5.2 The appellant has not been able to controvert the above grounds, raised by the Assessing Officer for rejecting the agricultural income. The only contention of the appellant is that he owns agricultural land purchased through a sale deed (submitted before the Assessing Officer) and therefore, it cannot be disputed that he is engaged in agriculture. The appellant has also cited the case of his father - Shri Kalu Ram Meena, where on similar facts of agricultural land holding of 8 bighas, the Assessing Officer has accepted the explanation of the assessee with regard to agricultural income, to the tune of Rs. 1,90,000/'-. Looking to the facts that t....
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.... of withdrawals have been issued in favour of certain land owners as advance and latter on relevant agreements have been cancelled, in such cases the cash received towards refund of advance has been deposited in to the bank. 5. The AO rejected the plea of the assessee in respect of the earlier Bank withdrawal on the ground: (Para (f) on page No.7 of the assessment order) (i) that the same have been made through cheques and the assessee might have utilized the same for other purposes. (ii) No details or evidences in respect of such claim of the assessee have been tendered during the course of assessment proceedings. 6. The assessee during the course of appellate proceedings submitted the details of withdrawals to the extent of Rs.1250000/- and copy of relevant agreements /cancellation agreements along with application for admission of additional evidence under rule 46 of IT Rules 1962 (PB No.16-18): (i) Agreement dated 20.04.2005 with Phoola Devi along with it's cancellation endorsement on 20.12.2005.(PB No.19-26) (ii) Cancellation agreement dated 05.01.2006 with Ram Phool and others (PB No.27). Date Ch. No. Payee/Purpos....
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....ed in cash as claimed by the assessee. 14. It has been held by Hon. Supreme Court in CIT v. Orissa Corporation Pvt Ltd., that " In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were the income-tax assessees. Their index number was in the file of the revenue. The revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises." 15.This is apparent from the relevant details that ....
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....the additional evidences and rejected explanation of the assessee on the ground that sufficient opportunities were given in assessment proceedings to adduce the evidences and the assessee during the remand proceedings could not produce the persons before the AO to whom advances were given. However the ld. CIT(A) after allowing claim of agriculture income of Rs.3,00,000/- sustained addition to the extent of Rs.33,14, 000/-. The ld.AR reiterated on the application filed before ld. CIT(A) u/r 46A of IT Rules 1962 placed at P.B. page no.16-18 and submitted that the additional evidences filed before the ld. CIT(A) are relevant for disposal of the claim of the assessee. Therefore ld. CIT(A) is not justified in not admitting the additional evidences as to claim of the assessee. The ld.AR further submitted that the receipt of cash of Rs.12,50,000/-is evident from the cancellation agreements placed at PB page No.19-27 and details mentioned in application u/r 46A . It is evident from the agreement dated 20.04.2005 placed at PB page No.19-26, that the assessee paid advance of Rs.5,00,000/- to Phooli Devi vide Ch No.126751 and as per endorsement dated 20.12.2005 (PB Page No.26) the said agreem....
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....se, the assessment order and the submission of the appellant. The appellant had made cash deposit of Rs.9,20,000/- in the saving banks accounts in SBI, Tonk Road, Jaipur and also made cash payment of Rs 19,29,960/- for purchase of land at Gunewata. In response to notice u/s 148, the assessee has requested that the original return filed may be taken as return filed in response to notice under section 148. The appellant has stated that the source of above cash deposits and cash payment of agricultural land is from agricultural income and advances received for sale of agricultural land. Explanation regarding source of Rs.30 lacs for investment and purchase of land, the assessee claimed that an amount of Rs.30 lacs has been received for an agreement to sale dated 25.07.2006 from Smt. Diwan Solanki, Shri Suresh Solanki and Shri Rakesh Solanki resident of Palam Village, Delhi. In support of the transactions, Shri Suresh Solanki and Diwan Solanki were produced as wittiness for this transaction. It was noticed by the Assessing Officer that the value of land as per this agreement was taken at Rs.30 lacs per bighas whereas in another agreement dated 30.11.2006, relating to land situated clos....
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....uced some purchase bills of the produce and girdawari of the agricultural land. The Assessing Officer did not accept the claim of agricultural income because no such claim had been made by the assessee either in the original return of income filed nor in the return filed in response to notice u/s 148. Secondly, the Assessing Officer found that this land had not been registered in the name of the assessee even after eleven years of the transaction. Further, the assessee would have been 20 years of age at that time and hence would not had the requisite sources to purchase the land. The appellant has not been able to controvert the above findings of the Assessing Officer for rejecting the agricultural income. The only contention of the assessee is that he owns agricultural land which is evidenced by the purchase deed. The appellant has also cited the case of his farther Shri Kalu Ram Meena where on similar facts of agricultural land holding of eight bighas, the Assessing Officer has accepted explanation of the assessee with regard to agricultural income to the tune of Rs. 1,19,000/- . Further, in the previous year, the A.Y. 2006-07, my predecessor, the CIT(A)-2 vide order dat....
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....0/- 320000/- 31.07.2006 310000/- 310000/- 07.10.2006 400000/- 400000/- 30.11.2006 1930960/- 1930960/- 02.12.2006 210000/- 210000/- Total 1240000/- 1930960/- 3170960/- (Para 2 (ii) on Page No.2 of the assessment order.) 2.The assessee vide his letter dated 24.12.2014 (PB No.20-21) explained before the AO that the relevant deposits in to the bank accounts and cash payment towards purchase of land have been made out of the advance received against sale of land of Rs. 3000000/- and other Income of Rs.391000/-. 3.The assessee in support of his claim submitted copy of agreement dated 25.07.2006 ( PB No.22-24) executed between the assessee and (i) Smt. Deewan Solanki w/o Shri Ramesh Solanki (ii) Shri Suresh Solanki s/o Shri Nand Ram Solanki and (iii) Rakesh Solanki s/o Shri Dalel Singh Solanki, for sale of his agriculture land at Village Gunawata evidencing receipt of Rs.3000000/- as advance towards the same and certain sales slips of agriculture produce. 4. The assessee has produced before the AO Shri Suresh Solanki and Rakesh Solanki the purchasers of ....
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.... 25.07.2006. Allegation of the AO: (iii) the relevant transaction has not been completed even after lapse of seven years from the date of relevant agreement. Submission: The relevant land has not been converted in to residential land as undertaken by the assessee therefore the agreement dated 25.07.2006 has not been matured till date. Allegation of the AO: (iv) the assessee has deposited different amounts in his bank on different dates, had the assessee would have received the advance of Rs.300000/- it would have been deposited on single day. Submission: The assessee has deposited different amounts in his bank account on different dates as considered convenient and necessary and simply for the reason that the entire amount of Rs.3000000/- has not been deposited on single day the receipt of the same against agreement dated 25.07.2006 cannot be doubted. 12.Without prejudice to the submission cited above it is humbly submitted that even if it is assumed that the appellant could not explained the source of funds of the purchasers for paying advance for purchase of land pursuant to agreement dated 25.07.200....
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....the purchasers could not prove their capacity to give such advance and genuineness of the transaction. The AO also rejected the claim of the assessee of agriculture income and held the same as taxable income from other sources (page 2 to 5 of assessment order). Thus the AO made addition of agriculture income of Rs.2,93,520/-as income from other sources and of Rs.30,00,000/-as unexplained deposit u/s 68 of the IT Act 1961. The ld. CIT(A) after allowing claim of agriculture income of Rs.2,93,520/- sustained addition of Rs.28,49,960/-as unexplained investment u/s 69 of the Act. The ld.AR relied on the agreement dated 25.07.2006 placed at P.B. page no. 22-24, bank statements, IT returns, Pan Cards etc. of the purchasers of the land placed at PB page No.25-33.The ld.AR also relied on statements of Shri Suresh Solanki and Rakesh Solanki referred by the AO at page No.4 of the assessment order. It is evident from the agreement dated 25.07.2006 that the purchasers of the land paid advance of Rs.30,00,000/- to the assessee for purchase of agriculture land of the assessee at village Gunawata, Patwar- Labana, Tehsil-Amer, Distt-Jaipur. It is also evident from the assessment order itself that t....