TaxTMI 
TaxTMI 
2025 (4) TMI 2163
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....tlets and such business was claimed to be carried on till the year under consideration. The assessee in the return of income for the year under consideration declared business loss of Rs. 14,51,426/- and agricultural income of Rs. 60,42,070/- which was selected for scrutiny. 4. The AO during the assessment proceedings found that the assessee's claim of earning Rs. 60.42 lakhs as agricultural income was unsubstantiated. As per the AO, the assessee failed to explain how such huge income was generated within a month after commencing agricultural activities in February 2012. As such, the AO doubted the genuineness and authenticity of lease deed dated 02-02-2012, submitted as evidence in support of agricultural income by holding that impugned deed was unregistered and involved a related party transaction. The AO rejected the assessee's explanation that the leased property was containing standing crop by holding that the deed vaguely mentioned "standing crops" without specifying their nature or valuation. The AO questioned why a prudent person will lease out land with crops allegedly worth Rs. 60.42 lakhs for a nominal monthly rent of Rs. 41,650.00 only. The AO further noted discrepan....
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....e deed with Ms. G.C. Ramya, a director in the company, to establish that the land was leased and had standing crops. However, the ld. CIT(A) noted that the lease deed did not provide any specific details regarding the type of crops, their stage of growth, the estimated yield, or the details of their sale. In the absence of such critical information, the significant doubts were raised by the ld. CIT-A about the authenticity of the claim. 8.1 The ld. CIT(A) further observed that, despite claiming that the leased land had standing crops of capsicum, the assessee failed to produce any documentary evidence or third-party confirmations regarding the existence, harvesting, or sale of these crops. No invoice, transportation records, buyer details, or payment receipts were furnished to support the claim of agricultural produce being sold. Additionally, the assessee's claim that the leased land had a greenhouse covering 14 acres was found to be inconsistent, as the lease deed made no reference to such a structure. 8.2 Another key issue noted by the ld. CIT(A) was the disproportionate financial feasibility of the transaction. The lease rent for the land was only Rs. 5 lakhs per annum, t....
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.... is in appeal before us. 10. The learned AR for the assessee before us filed 2 sets of paper book running from pages 1 to 175 and pages 1 to 128 and submitted that there were certain documents filed during the appellate proceedings which have not been considered by the learned CIT-A. As per the assessee there were filed purchase bills on sample basis along with other details about the lands taken on lease for agricultural activities. Accordingly, the ld. AR prayed before us to restore the issue to the file of the AO for fresh adjudication as per the provisions of law. 11. On the other hand, the learned DR before us submitted that there were numerous inconsistencies in the claim made by the assessee with respect to the agricultural income which have been duly highlighted by the authorities below. As such these inconsistencies were not answered by the assessee during the proceedings before the lower authorities based on the documentary evidence. Accordingly, the ld. DR vehemently supported the order of the authorities below. 12. We have heard the rival contentions of both the parties and perused the materials placed on record, and evaluated the additional evidence submitted ....
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....ter to the file of the AO for de novo adjudication in accordance with law. Hence, the ground of appeal is hereby allowed for statistical purposes. 13. The last issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of Rs. 73,14,000/-by treating the unsecured loan from director as unexplained credit under section 68 of the Act. 14. The necessary facts are that the assessee during the year under consideration has shown receipt of unsecured from its director namely Smt. Ramya Ramesh Gowda for Rs. 73,14,0000/- only. However, the AO found that the assessee has neither provided confirmation nor any detail establishing the amount was received form the director. Thus, the AO held that the genuineness of unsecured loan not proved, and assessee failed to discharge the onus cast under section 68 of the Act and thereby the AO made addition of Rs. 73,14,0000/- by treating such loan as unexplained cash credit under section 68 of the Act. 15. The aggrieved assessee preferred an appeal before the learned CIT(A). 16. The assessee before the learned CIT(A) submitted that the provision of section 68 of the Act requires assessee to explain the nature and s....
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....of the party. The identity of the party refers to the existence of such party which can be proven based on the evidences. As such the identity of a party can be established by furnishing the name, address and PAN detail, bank details, passport and other details of the Government agencies. 24. The next stage comes to verify the genuineness of the transaction. Genuineness of transaction refers what has been asserted is true and authentic. A genuine transaction must be proved to be genuine from all prospective and not merely on paper. The documentary evidences should not provide a mask to cover the actual transaction or designed in way to present the transaction as true but the same is not. Genuineness of transaction can be proved by submitting confirmation of the party along details of mode of transaction but merely showing transaction carried out through banking channel is not sufficient enough. As such, the same (genuineness) should also be proved by circumstantial/ surrounding evidences as held by the Hon'ble Supreme court in case of Durga Prasad More reported in 82 ITR 540 and in case of Smt. Sumati Dayal reported in 214 ITR 801. 25. The last stage comes to verify the credi....