TaxTMI 
TaxTMI 
2022 (11) TMI 1579
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....he assessee is condoned and the above appeals are admitted for adjudication. ITA No.455/Hyd/2021 - A.Y.2016-17 3. Facts of the case, in brief, are that the assessee is an individual and derives income from real estate business. A search and seizure operation u/s 132 of the I.T. Act was conducted in the case of Shanawaz Group of cases on 25.10.2017 during which certain information pertaining to the assessee was found. After recording due satisfaction, notice u/s 153C was issued to the assessee. In response to the same, the assessee filed his return of income for the impugned A.Y declaring total income of Rs.20,66,692/-(similarly assessee filed return of income declaring total income of Rs.8,96,25,810/- for A.Y 2017-18 and Rs.7,81,34,950/- for A.Y 2018-19). 3.1 During the course of assessment proceedings, the Assessing Officer noted that during the course of search proceedings in the case of Shri Shanawaz, additional income of Rs.40.00 crores was disclosed u/s 132(4) in the hands of Shri Shanawaz S/o Mohammed Zuberuddin and the assessee. The amount admitted by the assessee for the three A.Ys are as under: (Amount in Rupees) Income from Real Estate Business A.Y 2016-....
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....pellant has claimed that he produces cotton crop in ten acres of land held by him R.R. Distt and has produced proof of ownership of the land. The Assessing Officer rejected the submissions stating that no details of agricultural income earned by the assessee were furnished during the assessment proceedings. During appellate proceedings, the appellant submitted that he owned agricultural land of ten acres at Chingomulu, Pudoor (Mandal) Vikarabad on which agricultural income was earned due to the sale of cotton to various cotton mills. The appellant has provided pattadar passbook as evidence to show that agricultural income is earned during the year. In the subsequent years namely AYs 2017-18 and 2018-19 in the appellant's own case, on this issue, the AO has estimated 40% of gross agricultural income towards unexplained agricultural expenses and taxed it as income from other sources. In the current year, the AO took a different view and has taxed the entire agricultural income as income from other sources. Though res-judicata is not applicable to tax proceedings, it is incumbent on the AO to maintain consistency on an issue in all the years when facts are identical. It is not correct....
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....f income was filed in response to notice u/s.153C of the Act. 8. The Ld.CIT(A) ought to have appreciated the fact that the Ld.AO erred in treating agricultural income as income from other sources as they were RE never part of the seized documents and the income was already declared in the original return of income. 9. The Ld.CIT(A) ought to have appreciated the fact that the Ld.AO erred in making an addition towards income from other sources as no incriminating material and document has been found for the AY under consideration for this particular addition during the course of search| operations. 10. The Ld.CIT(A) ought to have appreciated the fact that the appellant has furnished the supporting evidences regarding the agriculture income during the scrutiny proceedings. 11. The Ld.CIT(A), for the current assessment year, erred in considering CIT(A) orders for the assessment years 2017-18 and 2018-19 basing on which he disallowed the 20 percent of agriculture income as unexplained As state agricultural expenses without appreciating the fact that entire addition Above made by AO is to be deleted. 12. The Ld.CIT(A) ought to have appreciated....
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....ted that the addition made by the Assessing Officer and sustained by the learned Cit (A) should be deleted. 10. So far as the disallowance of agricultural income is concerned, he submitted that as against the agricultural income declared at Rs.23,92,632/-, the learned CIT (A) allowed 80% agricultural income and the balance 20% was treated by him as "income from other sources". He submitted that the disallowance of 20% of such agricultural income is on the higher side and therefore, full relief should be granted especially when all receipts are from reputed company through proper banking channel. 11. The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the CIT(A). He submitted that once the assessee has declared the income during the course of search as his additional income, he cannot reduce the same while filing the return of income. He accordingly submitted that the order of the learned CIT (A) being in accordance with law should be upheld. So far as the agricultural income is concerned, he submitted that the assessee has not maintained any books of account nor filed any details to substantiate his claim. Further, the learned CIT (A) h....
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....he assessee, the Assessing Officer treated the entire amount as "income from other sources" and on appeal by the assessee, the learned CIT (A) restricted the disallowance to 20% of such agricultural income the reasons of which are already reproduced in the preceding paragraphs. It is the submission of the learned Counsel for the assessee that treating 20% of such agricultural income as "income from other sources" is on the higher side. It is an admitted fact that the assessee has not maintained any books of account. It is also an admitted fact that the entire produce is sold to ITC Bhadrachalam and the amount has been received through banking channels. Considering the totality of the facts of the case, we are of the considered opinion that disallowance of 10% of such agricultural income as "income from other sources" as against 20% held by the CIT (A) will meet the ends of justice. We, therefore, hold that out of the agricultural income of Rs.23,92,632/-, 90% of such income is to be treated as agricultural income and the balance 10% amounting to Rs.2,39,263/- is to be treated as "income from other sources". The second issue raised by the assessee in the grounds of appeal is accordi....
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....rations consistently for the past several years in the returns. 6.3.1 have considered the submissions of the appellant and the contentions of the AO. It is not in dispute that the appellant possess agricultural land of ten acres at Chingomulu, Pudoor (Mandal), Vikarabad, Rangareddy District. Other than producing the Pattadar passbook, the appellant has not produced any evidences to prove the crop sales such as bills, vouchers etc. The bank account copy produced by the appellant has credits for crop sales of Rs.29,38,462/-. This proves that the appellant is carrying agricultural operations and has earned income on the same. It is not necessary that entire agricultural income has to be reflected in the bank account. It is a market practice that agricultural sales are normally through cash and the expenses are also usually incurred in cash. Therefore, it is reasonable to estimate that the appellant has incurred 20% of the gross receipts towards agricultural expenses. Therefore, restricting the disallowance on account of unexplained agricultural expenses to 20% would meet the ends of justice. Accordingly, the disallowance to the extent of Rs.7,36,046/- (20% of Rs.36,80,229/-) ....