TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 732
X X X X Extracts X X X X
X X X X Extracts X X X X
....nces of the case. 3. The Ld. AO erred in law and on facts in taking and the Ld. CIT(A), NFAC erred in law and on facts in confirming the action of Ld. AO of taking adverse inference against the assessee without bringing on record any evidence adverse to the assessee and without considering relevant evidence furnished by the assessee in the facts and circumstances of the case. 4. The Ld. AO erred in law and on facts in doubting the authenticity of the evidences furnished by the assessee for selling of agricultural produce simply because the sale was not made through the Kisan Mandi and no Mandi tax was paid and no Mandi /sales tax registration number etc. of seller/ purchaser was available. The Ld. CIT(A), NFAC erred in law and on facts in confirming the action of Ld. AO in the facts and circumstances of the case. 5. Without prejudice to the above, The Ld. AO was not justified in law and on facts in disallowing whole of the agricultural income and the Ld. CIT(A), NF AC erred in law and on facts in confirming such action of Ld. AO while the assessee was required by the AO only to give explanation and justification for not claiming any expenses in carrying out agricultural activ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rties. The assessee reiterated his claim that he has made the expenses on the agricultural activities by selling seedlings and seeds to mobile vendors and farmers. However, AO observed that assessee did not furnish any reasonable explanation and computation of agricultural income along with books of accounts maintained for the agricultural activities. 4. In view of the unsatisfactory explanation and the deficiencies pointed out in the above paragraph, the agricultural income declared by the assessee is disallowed and added to the income of the assessee. 5. Aggrieved with the above order, assessee preferred an appeal before the NFAC and raised grounds objecting to addition of Agricultural income, non-consideration of evidence, non-appreciation of evidence and non-consideration of justification of expenses by the Assessing Officer and non-requirement of maintenance of books of account by the assessee. After considering the detailed submissions and various grounds raised by the assessee, ld. CIT (A) sustained the addition made by the Assessing Officer. 6. Aggrieved, assessee is in appeal before us. 7. At the time of hearing, ld. AR for the assessee submitted as under :- "1. Hist....
X X X X Extracts X X X X
X X X X Extracts X X X X
....agricultural income. In Para 5, the AO has observed that the assessee did not furnish any reasonable explanation along with books of account. The AO has noted the assessee's explanation that he met the expenses on the agricultural activities by selling seedlings & seeds to mobile vendors and farmers. In Para 6, the AO has claimed that the assessee was liable to maintain the books of account for agricultural activities carried on by him u/s 44AA of the Act. The AO further observed that in majority of cases the sale was effected to the related parties only. Further, the sale is not made through the Kisan Mandi & no Mandi tax was found to be paid no registration number of the seller 1 purchaser in Mandi or Sale Tax etc. is available. On these facts, the AO found that the authenticity of the evidences furnished by the assessee remained doubtful. The AO observed that the bills issued by the assessee were nothing but self- serving documents prepared to transfer the profits from the related companies & sales to them appeared to be colorable devices to reduce their profits & claim bogus exempt agricultural income. 5.1 Assessee's explanations: (i) As submitted above, the expense....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in respect of purchases made by related concerns from them (Page 90-100). You will kindly appreciate that the farmers do not have printed bills. The allegation of transfer of profits of related concerns is also factually not correct since the related concerns have earned profits on sale of seeds purchased from the assessee as per details submitted with your honor on 24.06.2024 (69 Pages). 6. Observation of NFAC in First Appeal: The assessee submitted before NFAC that throughout the assessment proceedings the Ld. AO had raised only one query i.e. how the expenses incurred for agricultural activities were accounted for. There was no show cause to the assessee that the vouchers/bills in respect of agricultural income were not authentic. No verification, whatsoever was carried out by Ld. AO. It was also submitted that the Ld. AO has not brought on record any evidence adverse to the assessee. The Ld. CIT (Appeals) NFAC did not properly appreciate the facts and circumstances & method of accounting for agricultural income consistently followed by the assessee over the years, by simply observing that the AO was not precluded from scrutinizing the claims specific to the present year. 7....