TaxTMI 
TaxTMI 
2023 (10) TMI 253
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....eturn was processed u/s 143(1) of the Income-tax Act,1961 ['the Act' for short] accepting the returned income. Subsequently, the case was selected for scrutiny through. Assessment u/s 143(3) of the Act was completed on 29.2.2009, wherein AO made three additions/disallowances on account of closing stock, agricultural income and sundry creditors. 2.1 Against this assessee went in appeal before NFAC/CIT(A). The NFAC/CIT(A) deleted the addition in respect of unconfirmed creditors to the tune of Rs. 3,07,334/-. However, he confirmed the addition made in respect of difference in closing stock at Rs. 2.18 lakhs and addition towards unproved agricultural income at Rs. 8,29,710/-. Now the assessee is in appeal before us with regard to sus....
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....ubmitted that fluctuating of GP rate from year to year is not in assessee's hand in this line of business since the assessee is in the line of textile and cloth business where the fashion changes on day to day basis. The relevant GP and net profit rate in earlier 3 years is as follows: Asst. Year Sales Gross Profit G.P. Ratio Net Profit as per P & L A/c Net Profit ratio 31.03.2006 68,08,844 6,25,067 9.18% 2,89,890 4.26% 31.03.2005 41,27,106 3,40,489 8.25% 1,88,018 4.56% 31.03.2004 21,29,353 2,81,327 13.21% 1,11,612 5.24% 3.1 In my opinion, the mistake was crept while preparing the stock inventory manually by sales girl that was corrected by assessee and computerized ....
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....er No. LRF.CR.69/09-10 dated 10-12-2009 submitted his report. On perusal of the report, the AO noticed that the assessee violated the law of the Karnataka Land Reforms Act, 1974. The assessee has not produced any evidence in support of his claim from agricultural income. The AO stated that the assessee taken the advantage of uneducated agriculturist and who are not aware of any law and the assessee declared the agricultural income to the department on there "Geni or Leased" land. The practice of giving the agricultural land on "Cheni" is prevailing. The "Cheni" means to harvest the ready crop, on the prevailing market rate which will be changing according to the price of the areca, the person who entries into agreement with the land owner w....
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....ltivation expenses' which is found to be 5 to 10 times more than the income that may earned by an agriculturist himself if he himself cultivated the lands. (d) It is also unbelievable that the assessee has managed the cultivation of Lands which were situated in different villages in spite of managing the Cultivation of his own lands and managing his business the volume of Which is more than one crore. (e) The assessee is a prudent businessman, he should have obtained regular "A" Bill or "B" bill in support of sale of Areca, if at all he has actually cultivated the lands and to the extent of Areca Crop sold. (f) Prepared self-made vouchers to suit the needs. 4.2 In view of the above findings, the AO held tha....
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....d the lease deed from these parties for taking the lands from above parties. The assessee was asked to produce the copy of agreement entered into for acquiring lands on Tenancy, along with copy of Pahini, Bill in support of sale of agricultural products and details of expenses to verify the genuineness of the agricultural income declared by the assessee. The bills produced does not bear the name of the assessee nor the name of the original land owner. According to the AO, assessee violated the Law of Karnataka Land Reforms Act, which was confirmed by the Tahsildar, Shivamogga vide his letter dated 10.12.2009. On this basis, the lower authorities observed that no Tenancy shall be created or continued in respect of any land nor shall any land....
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....d Mr. J.L. Jayasheela has not appeared before AO for enquiry. The assessment order was passed on 29.12.2009. Before passing assessment order, the AO ought to have conducted further enquiry. No enquiry has been carried out. The assessee filed all the details before the AO like RTC record of the properties, debit entries and receipts. In my opinion, the proper enquiry has not been conducted on this issue. It is appropriate to remit this part of the issue to the file of AO for fresh consideration. (iv) Mallappa Shankarappa - Rs. 1,78,400/- who has not confirmed it by appearing before AO. Hence, I remit the issue to the file of AO for fresh consideration as discussed above. (v) Mallikamba - Rs. 61,400 who has not appeared befo....