TaxTMI 
TaxTMI 
2010 (8) TMI 1192
X X X X Extracts X X X X
X X X X Extracts X X X X
....arned CIT (Appeals) erred in confirming the treatment of agricultural income of Rs.50,000/- as non agricultural income". 2. We have heard learned representatives of both the parties, perused the findings of the authorities below and considered the material on record pointed out by the parties. 3. Briefly, the facts of the case on the above grounds are that the AO observed that the assessee had not filed return of income while it was gathered that the assessee declared Rs.8,23,314/- under VDIS scheme including Rs.49,366/- being cost of plot of land at village Akota and deposits with private parties as well as Baroda District Industries Co-operative Bank. In response to notice u/s 148 of the IT Act, the assessee filed return of income d....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... any notional income. It was further submitted that no interest had actually been received during the year or had become due during the period. It was submitted that the AO has not brought an iota of proof that the assessee had earned interest income. It was further submitted that no further enquiry was made in the matter. Therefore, the addition is unjustified. The learned CIT(A) considering the submissions of the assessee observed that the accounts were closed in 1994 and 1995 and money was available to the assessee. The learned CIT(A) noted that there is a doubt in the explanation of the assessee for utilization of whole of the amounts in two years particularly when the assessee is primarily an agriculturist and have agriculture income. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as non-agricultural income. 6. On the other hand, the learned DR relied upon the orders of the authorities below. 7. We have considered the rival submissions and material available on record. It is not in dispute that the assessee declared Rs.8,23,314/- under VDIS scheme. The AO on verification of the copies of the accounts of the private parties found that the assessee earlier invested the amounts with private parties and the said accounts were closed in 1994 and 1995. The AO wanted the assessee to file explanation as to whether these amounts were deposited after closure of the above accounts. The assessee filed affidavit to the effect that the amounts withdrawn from private parties have been utilized for personal and family purposes....
X X X X Extracts X X X X
X X X X Extracts X X X X
....TAT Jodhpur Bench in the case of Laxmi Narayan Mehta (supra) considered the identical issue and held that "when there is no material or evidence to support charging of interest by the assessee, charging of estimated interest on notional basis is unjustified". The departmental appeal on this question was accordingly dismissed. Considering the above discussions, we are of the view that authorities below were not justified in charging notional interest on the matter in issue. We accordingly, set aside the orders of the authorities below and delete the addition of Rs.1,39,311/-. As a result, ground No.1 of the appeal of the assessee is allowed. 8. As regards ground No.2, it is admitted fact that the assessee in response to notice u/s 148 of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... until the AO proves that the assessee has any other source of income which is taxable under the Income Tax Act. The AO has not brought on record any material or evidence to show that the assessee was having any other source of income except agricultural income which is not taxable. CIT(A) was, therefore, justified in deleting the addition of Rs.3,45,356/- to the total income made by the AO because the assessee has no income taxable and agricultural income is not taxable." 7. In the case of Narendra Badjatiya Vs. ITO, ITAT, Indore, SMC-I, in ITA no.537/Ind/2006 in A.Y. 2003-2004, held in para.6 as under:- "6. I have considered the rival submissions and the material on record. I find that the Assessing Officer without bring....