Rama Yadav, C/o M/s RRA Taxindia,D-28, South Extension Part I,New Delhi. Vs. ACIT (OSD),Range-I,Dehradun.
June, 18th 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH : F : NEW DELHI
BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER
SHRI K.G. BANSAL, ACCOUNTANT MEMBER
ITA Nos. 3558 to 3563/Del/2011
Assessment Years : 1996-97 to 2001-02
Rama Yadav, Vs. ACIT (OSD),
C/o M/s RRA Taxindia, Range-I,
D-28, South Extension Part I, Dehradun.
PAN : AAXPY4644F
Assessee by : Shri Ashwani Taneja/Shri Tarun Kumar,
Revenue by : Shri Surender Pal, Sr. DR
O R D E R
PER R.P. TOLANI, JUDICIAL MEMBER:
This is a group of appeals filed by the assessee against the orders
passed by CIT(Appeals)-II, Dehradun vide orders dated 27-1-2-11 on the
reassessment orders passed u/s 143 (3)/147 by ACIT(OSD), Dehradun.
Various grounds are raised including the grounds challenging the reopening
of assessments. The assessee has not pressed grounds relating to reopening
of assessment. Though various issued are raised in memo of appeals, learned
2 ITA nos. 3558 to 3563/Del/11
counsel for the assessee contends that only the following grounds be treated
for consideration under these appeals:-
i) One common ground raised in Assessment Year 1996-97 and
1998-99 as in respect of amount received by the assessee out of the
will of the deceased father-in-law Shri Ram Bharosey Lal Yadav at
Rs 19.05 lac in Assessment Year 1996-97 and Rs 8.95 lac in
Assessment Year 1998-99.
iia) The other common ground raised in all the years pertains to
estimation of combined agricultural income of assessee and her
A.Y. Shown by Assessed by Added as
the assessee the Assessing income from
(Rs.) Officer. (Rs.) other sources
1996-97 85,000/- 79,000/- 6,000/-
1997-98 1,33,000/- 82,000/- 51,000/-
1998-99 1,75,000/- 86,500/- 88,500/-
1999-2000 1,83,000/- 89,800/- 93,500/-
2000-01 1,90,000/- 93,300/- 1,05,450/-
2001-02 2,75,000/- 1,28,500/- 1,46,000/-
iib) Amount of Rs. 8 lacs received in AY 2000-01 by assessee from her
brother Shri Yashpal Singh out of arrears of her past agricultural income.
1.1 The third common ground is the amount of advances received by the
assessee for agreement to sell following agricultural land:
3 ITA nos. 3558 to 3563/Del/11
A.Y. Amount Area in Rate per Name of
Bigha bigha vendee/relation
1997-98 3,75,000 2.0 Rs.1,85,000 Smt. Uma
1998-99 4,60,000 2.5 Rs.1,84,000 Shri Yash Pal
1999-2000 5,75,000 3.0 1,91,666 Shri Ramesh
Chand/brother in law
2000-01 4,68,000 2.5 Rs.1,87,200 Shri Zia
2. Brief facts are that the Assessing Officer received information from
Co-ordination Cell Office, Dehradun that the assessee had invested in FDRs
in her own name and in the name of other family members. On this basis
reasons were recorded and notices u/s 148 were issued on 31.07.2002. In
response thereto, the assessee filed returns of income and during the course
of reassessment proceedings filed cash flow statements to explain the
relevant investments in these years. According to the assessee these
investments were made out of following sources:-
a. Amounts received as successor to the will of her father in law late
Shri Ram Bharosey Lal Yadav claimed to be a prosperous land lord,
renowned citizen/ freedom fighter of the area and headed a prosperous
b. Agricultural income of herself and husband.
c. Advances received as consideration of agreement to sell, pieces of
her agricultural land.
3. The assessee was required by AO to substantiate the claim of receipt
of Rs.19.05 and 8.95 lacs under the will of Late Shri Ram Bharosey Lal
Yadav dated 7-7-93, which was complied. In this regard matter was referred
by AO to the Joint Director of Income Tax (Inv.), Agra to investigate the
4 ITA nos. 3558 to 3563/Del/11
genuineness of will and agriculture holdings claimed by the assessee in her
name and in the name of her husband. The report dated 21-1-2003 was
submitted by ADI (Inv.), which is placed on paper book.
3.1. The Joint Director (Inv.), Agra, after conducting discreet inquiries
and after questioning a number of persons of that area, sent an exhaustive
report. Relevant parts of that report dated 21-2-03 are being reproduced
"Kindly refer to the confidential letter F.No. ITO/Wd-
1(2)/DDN/2002-03/dated 13.12.2002 of the ITO, Ward 1 (2), 83,
Tagore Villa, Dehradun addressed to your goodself and
enclosing there with certain photo copies of Khasra-Khatauni
and a photo copy of the `Will' for verification of their
2. As per direction, the following persons were summoned u/s
131(1A) of the IT At, 1961and their statements on oath were
recorded. Original copies of their statements are also enclosed
1. Yashpal Singh S/o Shri Sukhdeo Singh, R/o Rupdhani,
Teh Aliganj, Distt. Etah.
2. Ramesh Chandra, S/o Late Chaudhary Ram Bharosey Lal,
Vill. & Post Jaimnai, The Shikohabad, Distt. Firozabad.
3. Nawab Singh Yadav, S/o Late Shri Amrit Singh Yadav,
Ex-Principal, Shri Nehru Smarak Higher Secondary School,
Khatuamai (Madanpur), Teh. Shikohabad, and R/o Yadav
Colony, Shikohabad, Distt. Firozabad.
4. Suresh Babu Yadav, S/o Shri Dilalsa Ram Yadav, R/o
15/9, Labour Colony, Shikohabad, Distt. Firozabad.
5. Vimlesh S/o Shri Vinod yadav, Servant, originally belongs
to Vill & Post Vilaspur, The. Jasrana, Distt. Firozabad.
6. Bhwan Chandra S/o Late Shri Dhani Ram, Servant,
Originally belongs to Vill. Kalona, Teh. Rani Khet, Distt.
5 ITA nos. 3558 to 3563/Del/11
7. Jeevan S/o Shri Gaya Prasad, Servant, Originally belongs
to Madhav Ganj, Shikohabad.
The summons issued u/s 131 (1A) of IT Act, 1961 to following
persons, whose names are appearing in the Khasra-Khatauni of
Vill. Chitawali land, were returned unserved with the postal
remark "is naam kaa koi vyakti....................mein nahin hai"
(1) Smt. Mohni Maheshwari, W/o Sh. Harendra Kumar, Vill. &
Post Chitawali, Tehsil Shikohabad, Distt. Firozabad.
(2) Pankaj S/o Shri Ram Prakash, Vill. & Post Chitawali, Distt.
(3) Smt. Sudesh Kumari, W/o Shri Asarfi Lal, R/o Mohammad
Mah, Shikohabad town, Distt. Firozabad.
(a) The enquiries were conducted to verify the genuineness
of `Will' of late Shri Ram Bharosey Lal. S/Shri Suresh Babu,
Advocate and Navab Singh who had witnessed the `Will' have
confirmed that Late Ram Bharosey Lal and made a `Will. They
have also confirmed the contents of the Will. But they showed
their inability to state whether the will was got registered or not.
S/shri Vimlesh, Bhuwan Chand and Jeevan, servants, in their
statement on oath, have admitted to have received Rs.17,000/-,
17,000/- and Rs.16,500/- respectively from Shri Ramesh
Chandra in cash after about one month of the death of Late Shri
Ram Bharosey Lal as "Inam" for their service to the deceased
Shri Ramesh Chandra, elder brother of Shri Rajeev Yadav, has
admitted in his statement on oath recorded on 6.1.2003 that
entire movable and immovable property left by his late father
was divided amongst the coshares as per `Will' of the deceased
S/Shri Suresh Babu, Advocate and Nawab Singh have stated that
since they have never heard about any dispute in the family
regarding the division of the assets left by the deceased, they are
of the view that the assets might have been distributed as per
`Will'. The enquiry further revealed that the said `Will" is an
unregistered `Will' and none of the persons have admitted to
have seen the moveable assets mentioned therein. The entire
cash of Rs.30,50,000/- and gold & Silver ornaments mentioned
in the will is stated to be kept at home. However, no evidence
could be furnished for the same. From the above stated facts, it
6 ITA nos. 3558 to 3563/Del/11
is hardly believable that any person may keep huge amount of
cash amounting to Rs.30,50,000/-gold ornaments weighing 5
Kgs. and silver ornaments weighing 10 Kgs. at home,
particularly when (1) there has been vide expansion of bank
branches even in small town (2) keeping of such moveable assets
at home is not safe because Shikohabad Tehsil is a criminal area
(3) the deceased had got constructed a Kothi in Shikohabad town
by making huge investment, and (4) he had performed social
liabilities in marriage of his two sons and three daughters and
other family members. It is also a major factor that late Ram
Bharosey Lal had never been assessed to wealth tax. In absence
of any documentary evidence, the availability of Cash of
Rs.30,50,000 and gold and silver ornaments weighing 5 Kgs and
10 Kgs respectively with late Ram Bharosey Lal could not be
(b) The Inspector was deputed to conduct local enquiry
about house No.570, Nai Basti, Shikohabad, Distt. Firozabad.
His report dated 13.1.2003 is enclosed. This house is stated to be
got constructed by late Shri Ram Bharosey Lal in the years 1980
and 1981 on a plot of land measuring about 500 sq. yrs. It is a
three storeyed building and looks like a Kothi. At present three
sons of Shri Ramesh Chandra namely S/Shri Vinod Kumar, Alok
Kumar and Arun Kumar are stated to be residing in this building
along with their families. Since it is an old building, no
comments are being offered with regard to investment made
(c) No evidence could be brought on record to establish
that late Ram Bharosey Lal had ever taken loan for any purpose.
"From the above stated facts, it is hardly
believable that any person may keep huge amount
of cash amounting to Rs.30,50,000/-, gold
ornaments weighing 5 Kgs. And silver ornaments
weighing 10 Kgs. At home, particularly when (1)
there has been vide expansion of bank branches
even in small town, (2) Keeping of such moveable
assets at home is not safe because Shikohabad
Tehsil is a criminal area, (3) the deceased had got
7 ITA nos. 3558 to 3563/Del/11
constructed a Kothi in Shikohabad town by
making huge investment, and (4) he had performed
social liabilities in marriage of his two sons and
three daughters and other family members. It is
also a major factor that late Ram Bharosey Lal had
never been assessed to Wealth-tax. In absence of
any documentary evidence, the availability of cash
of Rs.30,50,000/- and gold and silver ornaments
weighing 5 Kgs and 10 Kgs. respectively with late
Ram Bharosey Lal could not be ascertained.
The Inspector was deputed to conduct local enquiry about
house No.570, Nai Basti, Shikohabad, Distt. Firozabad. His
report dated 13.1.2003 is enclosed. This house is stated to be got
constructed by late Shri Ram Bharosey Lal in the years 1980 and
1981 on a plot of land measuring about 500 Kq. Yds. It is a three
storied building and looks like a Kothi. At present three sons of
Shri Ramesh Chandra namely S/Shri Vinod Kumar, Alok Kumar
and Arun Kumar are stated to be residing in this building along
with their families. Since it is an old building, no comments are
being offered with regard to investment made therein. No
evidence could be brought on record to establish that late Ram
Bharosey Lal had ever taken loan for any purpose."
"The ITI has made local enquiry from some Lekhpals who were
present at Tehsil headquarter, Shikohabad on the date of his
visit. He has reported that in Shikohabad area, mostly potato
crop is produced. He has reported average expenditure on this
crop at about Rs. 5,000/- to Rs. 6,000/- per bigha and the
income depends upon the opportunity availed for sale of
potatoes. Keeping in view the statement of Shri Yashpal Singh
and the report of the ITI, net saving of Rs. 1,500/- per bigha per
annum appears to be reasonable.
(d) To enquire into the status of S/Shri Yashpal Singh,
Ramesh Chandra and Smt. Rama yadav, their annual income
and house-hold expenses etc."
8 ITA nos. 3558 to 3563/Del/11
3.2 The assessee in response to this report filed detailed reply dated
12.12.2003, some relevant paras of the reply read as under.
"We would like to draw your kind attention to the fat that Shri
Ram Bharosey Lal Yadav belonged to a well to do family
which was ancestrally very sound in terms of wealth. Shri Ram
Bharosey Lal Yadav lived in the rural area of Firozabad (UP).
There is no bank in the near by area. The closed bank is 10 Km
away. Moreover, as this area is a criminal inflicted area, all
assets are kept under ones own possession. Banking, etc is not
common primarily on the fact that the employees of the banks
being local disclose the details of bank transactions to the
public at large. This leads to kidnapping and consequently
giving of ransoms. Wealth in the house was well guarded as
necessary arms were available.
As such Mr. Ram Bharosley Lal Yadav did not maintain any
bank account. All money that was transferred as per his will
was in cash. Madam, here we would like to point out that a
detailed examination has been done by the department in
connection with the authenticity of the will and the land
holdings of your assessee. The office of the ADI Agra
conducted spot inquiries, verified the records with the land
records department, examined under oath the witnesses to the
will who were persons of great repute of the area, recorded the
statements of the co-recipient of the will and other family
members and the servants of late Shri Ram Bharosey Lal
Yadav. The detailed report in this connection is with your
3.3. The Assessing Officer on the basis of this report held that the claim of
assessee to have invested a sum of Rs. 90,500/- in Assessment Year 1996-97
and an amount of Rs. 8.95 lac in Assessment Year 1998-99 out of the will
executed by the said Shri Ram Bharosey Lal Yadav was not believable and
the amount in question were accordingly added as assessee's undisclosed
income. This addition has been confirmed by CIT(A).
9 ITA nos. 3558 to 3563/Del/11
3.4. Apropos assessee's claim of her own agricultural income as well as
agricultural income of her husband Shri Rajiv Yadav, the Assessing Office
held that the claim of agricultural income of the assessee and husband was to
be estimated taking the yield of 2000-01 as base year and by applying the
cost inflation index as published by the CBDT, agricultural income of the
assessee and husband was to be estimated. Relevant observations for A.Y.
1996-97 are as under:
"Keeping in view above facts agriculture income of Sh. Rajeev
Yadav is been estimated by applying cost inflation index no. of
the relevant year as the assessee could not furnish any
documentary evidence except confirmation from Sh. Ramesh
Chand, the brother of Sh. Rajeev Yadav. Cost inflation index
no. of financial year 1999-00 relevant to A.Y. 2000-01 is 389
and cost inflation index no. of previous year relevant to A.Y.
1996-97 is 281.
3.5. This resulted in difference between agricultural receipts declared by
the assessee and adopted by the Assessing Officer. The additions on account
of agricultural income have been reduced by ld. CIT(Appeals) holding the
AO's estimate to be excessive. The difference is held to be income from
other sources of the assessee and accordingly the remaining additions are
challenged in these appeals.
3.6. Assessee's claim of receiving advances from sale of pieces of
agricultural land in respective years was disbelieved, like wise claim of
amount of Rs 8 lacs provided by Shri Yashpal Singh out of assessee's
accumulated past agricultural income was also rejected. These additions
have been confirmed by CIT(A).
3.7. Aggrieved, the assessee is before us.
10 ITA nos. 3558 to 3563/Del/11
4. Ld. Counsel contends that the Assessing Officer has made the
additions in respect of the amount received by the assessee out of the will of
her deceased father in law on presumptions and surmises. For explaining the
investments made by the assessee in purchase of FDRs for every year
assessee filed cash flow statements which are on the record. To verify the
will and its contents and agricultural holdings, detailed inquiries were made
by ADIT, Agra whose report is also placed on the paper book. AO has
merely relied on some doubts raised by ADIT, Agra on the genuineness of
the Will, ignoring the uncontroverted statements on oath of witnesses,
beneficiaries and other persons. The Will has been discarded on the basis of
surmises, conjectures and presumptive preponderances of probabilities. It is
signed by witnesses who are duly identified and both witnesses i.e. Nawab
Singh Yadav (Ex Principal) and Suresh Yadav (Advocate) are examined on
oath by the Assessing Officer. In their statements on oath they have
confirmed the execution of will, relevant circumstances and aspects of
implementation. The statements and the report submitted by ADIT, Agra
state the fact that these two witnesses verified the Will in question which
was signed in their presence as the last and final will of Shri Ram Bharosey
4.1. The Will contained various beneficiaries including the assessee's
husband, her brothers and house-hold servants. The other
recipients/beneficiaries of the will i.e., Shri Ramesh Chandra Yadav brother
in law of the assessee were also examined who verified the will to be true
and correct. Three other servants of the family household of Shri Ram
Bharosey Lal Yadav also were beneficiaries who also deposed about the
correctness of the will and the fact of having received the amount as
11 ITA nos. 3558 to 3563/Del/11
mentioned in the will of Shri Ram Bharosey Lal yadav. With all this
material available on record and in the absence of any contradiction in any
of the statement, the will cannot be held to be an afterthought.
4.2. It is pleaded that the Assessing Officer has held the Will to be not
genuine on presumptions without controverting the copious evidence on
record or pointing out any defect, contradiction or infirmity in the
statements on oath. It has been held as not believable, by following
i) The will was not registered with any registering authority
nor has been certified by the notary or other similar agency more so
when one of the witnesses Shri Ram Baboo Yadav was a civil
advocate and the other was a retired principal. It is not understood as
to why they did not advise the testator to get it registered. Its
authenticity is not therefore, proved beyond doubts.
ii) Late Shri Ram Bharosey Lal Yadav was a farmer and
appears to be marginally qualified and was of 79 years of age. But
signatures on the will have been made in a very fast flow. Moreover,
availability of huge cash of Rs.30,50,000/- appears to be quite
impossible particularly in view of the fact that the area is badly
affected by criminal activities.
iii) Shri Ram Bharosley Lal Yadav had two sons and three
daughters. The will of Rs.28,00,000/- in favour of the assessee and
her husband out of total available cash of Rs.30,50,000/- appears to be
quite abnormal in view of human psychology and probabilities.
12 ITA nos. 3558 to 3563/Del/11
iv) Cash of Rs.30,50,000/- gold jewellery of 5 Kg and silver
jewellery of 10 Kgs has been mentioned in the will which was clearly
chargeable to wealth tax. Shri Ram Bharosey Lal Yadav was never
assessed to income tax and wealth tax. 5 Kg gold and 10 Kg silver
ornaments have been allegedly passed onto three daughters of late
Shri Ram Bharosey Lal Yadav i.e. Smt. Prabha, Pushpalata and
Kanta. One third share of above ornaments is also chargeable to
wealth tax in respective hands of daughters. The assessee could not
set fourth any evidence to substantiate that any of the daughters of late
Sh. Ram Bharosey Lal Yadav has ever been assessed to wealth tax.
v) Late Sh. Ram Bharosey Lal Yadav had constructed a large
building in Shikohabad in 1982, which would have exhausted his
funds in construction of building. More so no loan was taken for
construction of building.
4.3. Ld counsel for the assessee assails these findings and contends that:
i. There is no law which prescribed registration of a will in India,
it only requires that the testator should be in a state to depose a will,
which should be in writing and attested by two witnesses. All these
conditions are fulfilled, both the witnesses have been examined along
with co beneficiaries, they all have confirmed the will. There is no
obligation on witnesses advise that the Will registered more so in a
village. Therefore no adverse inference can be drawn from this
observation or finding by AO.
13 ITA nos. 3558 to 3563/Del/11
ii. If there was any issue about the signature of late Shri Rambharosey,
AO could have referred to a hand writing expert. He can not assume
the role of a handwriting expert and hold the signature to be forged
merely on the assumption that he was marginally qualified. More so it
has not been disputed that he was a leading citizen of area and
freedom fighter. Therefore, no adverse inference can be drawn from
iii. As per Indian law, any testator can make a will as per terms for
distribution among heirs as agreeable to him. No adverse inference
can not be drawn of the fact that more cash was given to assessee and
her husband and land and ornaments to others. Assessee's family was
living away from the remaining family. As per Shri Rambharosey's
understanding and wishes it was appropriate to give more cash to
them in lieu of land. Thus the abnormality as pointed out by AO
neither exists nor has any legal or circumstantial consequence.
iv. The assessee cannot be held responsible or liable for non filing of
income tax and wealth tax returns of late Shri Rambharosey or his
daughters. Besides this cannot invalidate a valid and duly executed
v. Adverse inference has been drawn from the fact that Shri
Rambharosey constructed a three storied kothi in the village without
any bank loan in 1981. It corroborates the contention that in villages
prosperous families generally don't transact with banks. In villages
unlike cities, houses are constructed in simple/ country style under
self supervision. Thus adverse inference can not be drawn that his
funds were exhausted; it is a pure surmise on the part of AO.
14 ITA nos. 3558 to 3563/Del/11
4.4. Ld counsel on the basis of these arguments contends that there is no
justification or basis in AOs conclusion and additions holding that will is not
genuine. Ld CIT(A) instead of deciding the issue in an objective manner
dismissed the ground by following sweeping observations:
"The above contentions of the ld. AO are to the point and no
appellate authority can dare ignore the obligation of the testator
to he filed a return under the Wealth Tax Act if, admittedly, he
was keeping Rs. 30,50,000/- with him as cash in hand and 5 kg.
Of gold and 10 kg. Of silver jewellery over and above the cash
amount. The appellate authorities would certainly be seen as
aiding and abetting in tax evasion if they are to ignore the
evidence available to the effect that the testator in this case
ought to have filed a return under the Wealth Tax Act, paid
taxes on wealth and the appellate authorities would not like
themselves to be showing any keenness to accept the fabricated
story of receiving the unexplained money under a will. It is,
therefore, to be necessarily held that the entire statement of the
appellant is untrue, no matter what kind of over-manipulated
evidence is adduced to prove the correctn4ess of the will. The
simple question is why an identical will with identical
bequeathment was not left in favour the two sons and the other
daughters? This question veers round the preponderance of
human probability, a test on which the claim of the appellant
roundly fails. Not to talk of the hard evidence of the appellant
not being a wealth-tax assessee and that alone goes to prove
that he could not have left the claimed amount under a will. The
addition made by the ld. AO is, therefore, upheld."
4.5. It is vehemently argued that CIT(A) has relied on probabilities and
assumptions by terming the will as "an over manipulated evidence". The
evidence relied by assessee is to be controverted on the basis of cogent
counter evidence or picking contradictions in the evidence furnished. The
same cannot be discredited without pointing any contradiction and on mere
presumptions. Such observations and references to probabilities based on
15 ITA nos. 3558 to 3563/Del/11
presumption cannot discard the credible evidence filed by the assessee. It is
pleaded that these additions deserve to be deleted.
5. Apropos additions on the basis of agriculture income, it is pleaded
that authorities below have recorded contradictory findings. Assessee filed
detailed explanation supporting the claim of agricultural income included in
the cash flow statements belonging to her and husband Shri Rajiv Yadav.
Part of the same is as under:
"2. Regarding the agricultural income, we would like to
point out that both Mrs. Rama Yadav & Mr. Rajiv Yadav
belong to agriculturist background. Mrs. Yadav has sum total of
80 bighas of land in her name & Mr. Rajiv Yadav has 90
bighas of agricultural land in his name. These lands are situated
at their respective parental villages. Copies of Khasra &
khatonies to support this fact were attached with the written
submission for the asstt. Year 1996-97 as Annexure 3 thereto.
As both Rama Yadav & her husband did not stay in their
villages their land holdings were locked after their close family
members. Mr. Yadav's land was looked after by his elder
brother Mr. Ramesh Chand Yadav. Mr. Rajiv Yadav's father on
his death left behind agricultural land, house, tractors and
jewellery to be divided between his two sons (Mr. Rajiv Yadav
& Mr. Ramesh Chand Yadav). Copy of this will was appended
with the written submission for the Asstt. Year 1996-97 as
Annexure 4 thereto. Mr. Ramesh Chand Yadav cultivated the
said agricultural land of Mr. Rajiv Yadav, all expenditure on
crops i.e. fertilizers, seeds, labour were met by Mr. Ramesh
Chand Yadav, he also obtained the ale proceeds of these crops.
From time to time he would give Mr. Rajiv Yadav his share his
share of agricultural income depending on the output. However
her ewe would like to point out that as this dealing was between
brothers and especially when one brother did all the operations
and the other brother enjoyed the returns therefrom what ever
was given to Mr. Rajiv Yadav from his elder brother was taken
as final. Regarding Mandi simiti he would like to bring to your
kind attention that in Jaimai Distt Ferozabad Mandi Samiti was
16 ITA nos. 3558 to 3563/Del/11
not applicable for the year in question. As such Mandi samithi
receipts does not come in question.
Mrs. Rama Yadavs too holds ancestral agricultural land in
Rupdhani Distt. Etah. This land is looked after and cultivated
by her brother Mr. Yashpal Singh. In her case too all expenses
etc. Are borne & met by her brother and all sale proceeds are
collected by him. From time to time amounts were given to her
as net receipts from agricultural operations on her land. In Distt.
Etah for the year in question, no mandi samithi was applicable.
Thus from the above it is clear that both Mrs. Yadav & Mr.
Yadav had ancestral agricultural land. Both these lands are
canal irrigated own tractors are used for cultivation. Your
goodself can also verify this from the will of Mr. Rajiv Yadav's
father wherein he left behind two tractors for his two sons. On
both these lands, three crops are reaped in a year. Potato,
Garlic, wheat, peas, mustard & chana from the major crop
produced on these lands. Sir, keeping in view the land holding
the amount of agricultural income fully justifies itself.
3) During the year in consideration agricultural income of
Rs. 1,75,000/- was received by Mr. Rajiv Yadav. Copy of
confirmation for the same are being appended herewith as
annexure 3 showing net receipts from agricultural operations."
5.1. More importantly the issue about investigation into the agricultural
income declared by the assessee in cash flow statement was also referred by
AO to ADIT(agra). The authority has submitted a detailed report about the
agricultural land owned by assessee and her husband, estimated yield and
family details. Following facts emerge from the report on the agricultural
a. Assessee belongs to very affluent agricultural families from
paternal and in laws sides. She was gifted 62.5 Bighas of
agricultural land on 18.3.70 from her maternal grand
17 ITA nos. 3558 to 3563/Del/11
mother. Further she purchased 16 Bighas of agricultural land
b. The total holding of agricultural land is as under:
(i) Assessee Smt. Rama Yadav 80 bighas
(ii) Husband Shri Rajiv Yadav 90 bighas
c. In an statement on oath assessee's brother Yashpal Singh
confirmed that he was taking care of these fertile agricultural
land and carrying out agricultural operations. The area being
criminal infested crop was sold to local purchasers and not
taken to Mandi which was 40 kms. away.
d. Lekhapal reported that in Shikohabad area potato crop was
grown which yields Rs. 6000/- per bigha. However, on an
average net saving of Rs. 1,500/- per Bigha was reasonable.
5.2. In AY 1996-97 Though CIT(A) held that AO could have ignored the
small discrepancy of Rs. 6,000/-, still an addition of Rs. 5000/- has been
retained without any basis.
5.3. In AY 1997-98 and subsequent years - AO has estimated the
agriculture Income of assessee and her husband by a mechanical formula of
adopting yield on cost inflation index calculation. Ignoring the cultivated
land area of 170 Bighas (90 Bighas of husband and 80 Bighas owned by
assessee) and ADI's report which is based on the evidence of Tehsil
Lekhapal which confirms Rs. 1,500/- per Bigha to be a reasonable
agricultural income. CIT(A) has merely held that assesses written
submissions do not overcome AO's contentions. Thus both the authorities
have failed to appreciate proper facts on this issue. The claim of agricultural
income is supported by the report of ADI, statement of Shri Yashpal Singh
18 ITA nos. 3558 to 3563/Del/11
and report of Lekhapal. AO though relies on the ADI's report on the issue of
Will at the same time discards the reasonableness of agricultural income of
Rs. 1500/- per bigha.
5.4. It is pleaded that authorities below have failed to dislodge the material
and evidence available on record in support of agriculture receipt. AO has
adopted a mechanical method of linking the agricultural income with cost
6. Apropos the amount of Rs. 8 lacs shown in the cash flow statement as
accumulated savings of past agricultural operations ld. Counsel contends
that Shri Yashpal Singh brother of the assessee was in charge of the
management of agricultural fields, operation, sale of produce and realization
thereof. As per his statement the agricultural receipts were handed over to
his sister from time to time. This methodology. It is common in agricultural
families to safeguard the interest of agricultural operations of married
daughters of the family. Yashpal Singh's statement on oath confirms his
management of agricultural operations, thus identity and source of income
i.e. agricultural lands and Shri Yashpal Singh are identified and transactions
confirmed. AO has held it to be unbelievable on the reasons that
creditworthiness of Shri Yashpal Singh is not proved and transaction is not
through banking channels besides Shri Yashpal Singh has been handing over
the agricultural income regularly then why there were unpaid past savings.
6.1. CIT(A) held it to be unbelievable by following observations:
"As regards, the claim of receipt of Rs. 8 lacs from Shri
Yashpal Singh, the brother of the appellant, a claim in respect
of which the addition of Rs. 8 lacs is agitated at ground no. (2),
the AO has not believed the argument of Shri Yashpal Singh
that agricultural income of various years prior to 1994
19 ITA nos. 3558 to 3563/Del/11
continued to accumulate and from that accumulated source a
consolidated amount of Rs. 8 lacs was given to the appellant
during the instant assessment year. As against this view of the
AO, the written submissions do not bring out that Shri Yashpal
Singh was actually growing cash crops and accumulating the
sale proceeds over the years. Similarly, there is no evidence
showing that Shri Yashpal Singh was cultivating the lands of
the appellant as claimed. The whole explanation in the written
submissions reproduced hereinbefore is more like a story
intended to be told to someone who could buy it. There is no
corroborative evidence in the for of accounts etc. which could
substantiate the claim. Since agricultural income is no taxable
and some family members own agricultural lands, an
explanation has been prepared which is designed to substitute
for a corroborative evidence. Such an explanation is, therefore,
not acceptable. The addition made is, therefore, upheld."
6.2. Ld counsel contends that authorities below have been ignoring a vital
fact that the agricultural lands are situate in villages and the area is criminal
infested where peasants don't believe in banking system for their own
reasons. Most of the transaction are carried out in cash, people believe in self
care and cash dealings, which is indicated in the ADIT(Agra) report also.
The source of receipt i.e. agricultural lands are not disputed, the manager of
the agricultural operations Shri Yashpal Singh has testified to this effect by
giving details about the nature of crop and estimate of yield. Lekhpal's
corroborative report is mentioned by ADI(Agra) in his report. As the record
stands assessee has discharged her onus which has not been effectively
rebutted and addition has been made on general assumptions. There is no
question of creditworthiness of Shri Yashpal Singh, the amount represents
assessee's past agricultural savings lying with him. The assessee having
discharged her primary onus in explaining this credit, the addition should be
20 ITA nos. 3558 to 3563/Del/11
7. Last issue pertains to additions of credits in cash flow statement on
account of advances received from agreement to sell pieces of agricultural
lands. Ld counsel for the assessee, in respect of each advance contends that:
i. AY 97-98 - Smt. Uma Yadav- sister: She is married in a rich family
and like assessee she also inherited regularly cultivated agricultural
land from paternal side. Necessary confirmation about the advance
along with her address and detailed reply was filed during the
course of assessment proceedings. It is pertinent to mention that
the details about her relation with assessee, her family status etc.
finds mention in the ADIs report also. Ld AO without refuting her
identity, agricultural holding and income has summarily held that
her creditworthiness is not proved. Since ADIs report was being
called nothing prevented AO f investigating this aspect also.
Assessee discharged her primary onus by establishing identity,
and creditworthiness of the purchaser/sister; the addition can not
be made only on assumptions.
ii. AY 98-99 Shri Yashpal Singh Yadav- Brother-
It is pleaded that Yashpal Singh is assessees brother, since
beginning he is in charge of carrying agricultural operations on
the lands of family members including assessee. He lives in the
village only. He also inherited vast agricultural land which are
regularly cultivated. These facts are duly mentioned in the
ADI's report to the effect that Shri Yashpal Singh stays in the
village for agricultural operations and in that part of the country
transaction are generally carried on cash basis . Assessee
discharged her primary burden of proving the identity,
genuineness and creditworthiness by filing the confirmation.
His land holdings are on record and was always ready for
examination by authorities. If AO was not satisfied, this issue
also should have been referred to ADI Agra along with other
21 ITA nos. 3558 to 3563/Del/11
iii. AY 99-2000- Shri Ramesh chandra Yadav- Brother in law-
Mr. Ramesh Chand yadav is husband's brother). He also inherited a
vast land consequent to execution of WILL, which are regularly
cultivated by agricultural operations. For investigation into the will
and agricultural income he was also examined by ADI Agra and
statement on oath was recorded. These facts are duly mentioned in the
ADI's report. He stays in village Jaimai to control and supervise
agricultural operations and has stated that transactions in that part of
the country are carried in cash. His address, identity, creditworthiness
figures in the ADI's report itself. Written confirmation accepting the
advance for purchase of land is on record. Thus the assessee
discharged its primary onus of proving as contemplated by sec 68. If
at all the ld. AO was not satisfied this issued should have been
referred to ADI Agra or summoned him on his own. The assessee
having discharged the primary statutory burden cannot be made to
suffer for the non conducting of appropriate inquiries by the
(iv) Apropos AO's objection- "... It is not understood as to how the
assessee has received advance against 10 bighas of land while the land
under her ownership was only 5.32 Bigas". Ld counsel points out that
the AOs objection is not correct as collectively 170 bigas of land were
held by Sh. Rajiv Yadav & Mrs. Rama Yadav. Advances were
received for different pieces of land in different years. Their land
holding at village Chitavalli exceeded the land agreed to be sold.
Evidence of the ownership of land is submitted before the ld. AO at
the time of the assessment proceedings.
22 ITA nos. 3558 to 3563/Del/11
(v) Ld. AO has objected that all the confirmations bear the date 1-
These confirmations were issued at the specific request of assessee to
furnish the same to AO, as such the date of 1-11-2002 was put on
them. This does not mean that the transactions were executed on this
day, it merely means the date of issue of the confirmation letters.
(vi) From the statements and record it will emerge that both the
families are at cordial terms, this is the essence of relationship in rural
India where the word of honor and sensitivity of relationship is
paramount. Since the advances were received from close family
members there was no urgency of executing a written or registered
agreement. The paper formalities will be completed as and when the
transactions are fully materialized. Non execution of the written
agreement between two close relatives in these facts and
circumstances cannot be used to deny written confirmations as after
thought. More so when AO could have included this aspect in
investigation conducted through ADI Agra.
(vii) Ld. AO has observed in his order, "In regard to
immovable property there is increasing trend of price but in the
case of assessee the rate of land per bigha has varied to the
downward trend which is an abnormal phenomenon".
It is pleaded that land has been agreed to be sold to sister,
brother and broth in law at nearly same rates. The price cannot
be subject matter of hard bargain between close family
23 ITA nos. 3558 to 3563/Del/11
members. Besides that the land in question is situated at
Mainpuri Road, which is on Agra Highway with the increased
commercial activity on the Highway the land rates shot up in
1995-96 and thereafter they have been stagnant. Even AO has
not given any parallel sale instances to justify his adverse
(ix) AY 2000-2001- Shri ZIA KHAN-
This advance of Rs. 4.68 lakhs for 2.5 bigas of land situated at
Mainpuri Road Village Chitawali, Tehsil Shikohabad, distt.
Firozabad was received from Shri Nawab Zia Khan. This
confirmation disclosing his full identity & address was furnished.
He stays in village Bhadurgarh, a rural area and advance was given
in cash. He has confirmed this transactions with full address and
identity. Assessee discharged the primary burden of proving the
ingredients of sec 68, if AO was not satisfied, he could have
summoned him or entrusted the investigation to ADI Agra.
7.1. Ld counsel pleads that AO has given unjustified importance to
irrelevant facts as preponderance of probabilities and failed to appreciate
following crucial facts:
i. That the combined holding of the land owned by assessee and
her husband in village Chitawali is more than 10 Bighas agreed
to be sold by the assessee.
ii. If there was any doubt on these aspects, AO should have
referred it for investigation by ADI Agra along with other
issues. AO ignored the evidence i.e. confirmations along with
land holdings of these persons, neither assessee was asked to
24 ITA nos. 3558 to 3563/Del/11
produce them, nor summons were issued. Importantly when the
investigations were carried out through ADI Agra on the fund
flow statement of assessee; investigations on the land advances
also should have been made. Since same witnesses were called
for examination it would have saved the trouble, both for the
department and assessee.
iii. Assessee has been constantly pleading that the general mode
of transactions in this part of the country was cash; instead of
appreciating this fact in proper perspective, AO has taken a stiff
stand by making additions repeatedly on the reason that these
are cash transactions.
iv. All the purchasers i.e. Smt. Uma Yadav, S/Shri
Yashpalsingh, Ramesh Chandra and Zia Khan have confirmed
the advances given to assessee for purchase of agricultural land
along with their land holdings, their identity has not been
v. Non furnishing of income tax and wealth tax returns by
late Shri Rambharosey and his daughters cannot be used against
assessee as she had no control on their returns.
8. Ld Dr on the other hand vehemently contends that:
i. The assessee in order to substantiate her fund flow details has
created the gamut of evidence as an after thought.
ii. The alleged WILL executed by late Shri Ram Bharosey
Yadav is unbelievable. After construction of a 3 storied Kothi
in the year 1981 in the village, it does not appeal to reasons that
an amount of liquid cash of Rs. 30.5 Lakcs will be kept at home
25 ITA nos. 3558 to 3563/Del/11
along with 5 Kgs. of gold ornaments and 10 Kgs of silver
iii. These assets were not kept ever in any bank. Thus the
entire evidence is based on personal handling of the assets Thus
there was no independent evidence to support the claim. The
excuse of village being criminal area is not substantiated and it
cannot be justified as a reason for absence of independent
iv. None of the witnesses to the will or beneficiaries have
seen the assets, therefore, their existence remains
v. No wealth or income tax return was filed by late Shri Ram
Bharosey Yadav or beneficiaries of the will.
vi. AO & CIT(A) have rightly applied the preponderance of
probabilities and human conduct while examining the
genuineness of the WILL.
vii. Report of ADI Agra is relied on.
8.1. Ld DR further contends that the claim of agricultural income of the
assessee is not based on any evidence. Authorities below have rightly
estimated the agricultural income of the assessee and her husband to arrive
at the availability of funds with her.
8.2. Apropos the claim about the credit in the fund flow statement in
respect of Rs. 8 lacs provided by brother Yashpalsingh out of the assesses
past agricultural income savings, it is pleaded that the same is baseless. If the
assessee had requirement of funds in that case she would have asked the
brother to return the savings instead of selling her agricultural land. Besides
26 ITA nos. 3558 to 3563/Del/11
as per the statement of Yashpalsingh, agricultural income was regularly sent
to his sitter. No evidence has been produced to establish as to which year
these agricultural savings pertain, therefore, the addition has been rightly
8.3. Coming to the advances for land, ld DR contends that:
i. assessee has claimed to have received amounts of
advances for sale of agricultural lands; from sister- Uma Yadav
3.75 lacs; brother-Yashpalsingh 4.60 lacs; Brother in law-
Ramesh Chandra 5.75 lacs. Likewise from one Shri Zia Khan
ii. Except confirmation of same date i.e. 1-11-2002 from all
these persons, neither any agreement to sale nor any other
evidence has been filed to substantiate the proposed sale.
iii. All these transactions are in cash and these persons are
claimed to be agriculturist. Neither their bank accounts nor any
other independent credible evidence has been brought on
iv. There are no details as to which advance is for assessee
land and which for husbands.
8.4. Ld DR thus pleads that all the transactions are based on self created
evidence, without specific details and on general assumptions. The burden to
prove cash credits lies on the assessee, which is not discharged. In this
eventuality additions have been rightly made.
9. Ld counsel in rejoinder contends that:
(i) The WILL is an independent evidence which is
confirmed by as many as seven persons viz. Yashpalsingh,
Rameshchandra, Nawabsingh Yadav- ex principal, Suresh babu
27 ITA nos. 3558 to 3563/Del/11
Yadav- Advocate, Vimlesh Yadav, Bhawan Chandra. Jeevan.
None of the statement has been controverted by ADI Agra or
(ii) The will is duly executed, properly implemented.
Assessee is lady and cannot demand evidence from the family
beyond this limit. Therefore, there is no basis in holding the
WILL to be fake or bogus. Assessee has inherited the amount
by due process of law, it can not be wished away on raising
objections on assumptions.
(iii) Apropos agricultural income it is pleaded that AO has not
disputed the land holdings of assessee and her husband,
agricultural operations are regularly held by brother
Yashpalsingh whose statement on oath is on record and not
controverted by ADIT.
(iv) The estimate has been arrived at only by applying cost
inflation index which is merely a mechanical method used only
for the purposes of govt. parameters on dearness based on
certain commodities and circumstances. This mechanical
formula can not be applied to assesses agricultural operation
which depend on many factors.
(v) The estimate is arbitrary and unjust, it is trite law that
assesses claim should be accepted unless the contrary is proved
whose burden lies on the department. There being no question
about the land holding, fertility of land, cash crops and regular
agricultural operations and reasonable yield of Rs. 1500/- per
bigha, the estimate of authorities below is unjust, arbitrary and
28 ITA nos. 3558 to 3563/Del/11
(vi) Apropos advances it is pleaded that assessee discharged
her primary onus of establishing the identity, genuineness and
creditworthiness of the advances related operation.
Investigations were already entrusted to ADI Agra; if AO had
any doubts on the burden discharged by the assessee, issues
about advances also should have been got investigate. AO
cannot take a stand of neither investigating the matter nor
rebutting the burden discharged by the assessee and going
ahead with the additions.
9. We have heard the rival contentions and perused the material
available on record. Notices u/s 148 were issued to assessee for all these
years on the information received from the co-ordination cell. The issue
about validity and genuineness are not before us as they same have not been
pressed and only grounds mentioned have been pressed before us.
9.1. The issues revolve around the assesses fund flow statement to
substantiate the source of FDRs purchased in own and family members
names. It is pertinent to mention that AO chose only to get the issue about
Will and agricultural holdings to be investigated by the ADI Agra, report
was accordingly submitted dated. 21-1-2003 on these aspects.
9.2. Coming to the issue about genuineness of the Will, learned counsel
for the assessee has countered the observations of AO as mentioned above.
In our considered view the contention of learned counsel for the assessee
has substance inasmuch as Indian law does not prescribe registration of the
Will, it should be in writing, attested by two witness; there is no requirement
of any registration or notarization thereof. In this case the Will is in writing
29 ITA nos. 3558 to 3563/Del/11
and duly attested by two witnesses, therefore, no adverse inference can be
drawn on the aspect that witness did not advice for registration of the same.
9.3. Apropos the issue of flow of signature of late Shri Ram Bharosey Lal
Yadav, in our view, the AO is not an handwriting expert, therefore, the
observation amounts to a surmise. Besides, late Shri Ram Bharosey Lal
Yadav is not disputed to be a freedom fighter and an affluent landlord, he is
held to be marginally qualified. In our view, flow of writing as pointed out
by AO cannot be held to be determinative to discard the Will, in the absence
of any opinion of the handwriting expert.
9.4. ADI has examined the witnesses Shri Nawab Singh Yadav, ex-
Principal and Shri Suresh Babu Yadav Adv., they have deposed the Will to
be genuine, bearing signatures of deceased and about the distribution of
assets. This fact has further been confirmed by the sons of the deceased and
the servants who are also beneficiaries of the Will. In our view, this written
record and statements cannot be ignored without pointing out any
contradictions or inconsistencies therein.
9.5. The assessee cannot be held responsible for the non-filing of income-
tax and wealth-tax returns by the deceased and his daughters after the
distribution of the assets of the deceased, consequently, no adverse
inference can be drawn on this count. The fact that late Shri Ram Bharosey
Lal Yadav constructed a three storeyed village house in 1981 cannot be held
as assumption that he must have exhausted all the savings even after a period
of 12 years in 1993.
9.6. In our considered opinion, on the basis of material existing on record
it cannot be held that Will was fake or an after thought. AO's adverse
inference is not based on any cogent evidence but on assumptions and
30 ITA nos. 3558 to 3563/Del/11
probabilities. In our considered view when the direct evidence is available
the issue cannot be decided on assumption without contradicting the
statements on record. Consequently the additions in respect of the amount
arising out of the Will are deleted.
9.7. Coming to the second issue i.e. estimation of agricultural income,
ADIT(Inv.), Agra investigated about the land holdings of the assessee and
her husband, which revealed that the assessee owned about 80 bighas of land
out of the sources mentioned therein. Statement of Shri Yashpal Singh was
recorded, as mentioned above, who stated that the agricultural produces, like
wheat, potato, lahsun, peas, mustard, chana etc. were grown on fertile land.
9.8. Lekhpal of village stated that net savings per bigha reasonably came
to about Rs. 1500/- after meeting the agricultural expenses. The
ADIT'sreport ends with a note, "keeping in view the statement of Shri
Yashpal Singh and the report of the Lekhpal, net saving of Rs. 1500/- per
bigha per annum appears to be reasonable". The report of the Investigating
officer itself suggest that agricultural income at Rs. 1500/- per bigha was
reasonable. We see no material on record to go beyond the report of the
ADIT on this aspect. AO has adopted a yardstick of estimating the
agricultural income on the basis of cost inflation index which, in our
considered view, may be useful for capital gain purposes but cannot be a
yardstick for estimating the assessee's agricultural income.
9.9. It emerges from the record that the assessee own 80 bighas of land
and her husband 90 bighas aggregating 170 bighas. From the report of
Lekhpal and ADIT, average net agricultural income is reasonably estimated
at Rs. 1500/- per bigha which works out to Rs. 2,55,000/-. In our view, the
estimate as suggested by Lekhpal and ADIT (Agra, is reasonable. The one
adopted by AO is purely mechanical based on cost inflation index. The relief
31 ITA nos. 3558 to 3563/Del/11
given by ld. CIT(Appeals) is not on any consistent basis and cannot be
called a better estimate as compared with field investigation. In view of
these facts we are inclined to allow the agricultural income as claimed by
assessee. This ground is allowed.
9.10. Apropos third issue i.e. the advances received qua the alleged
agreement to sell the land, in our considered view, when the matter about
Will and agricultural income was referred to ADIT (Inv.), it was desirable
to refer advance from sale of land also by some investigation. As the record
stands, there are confirmations of Smt. Rama Yadav and Zia Khan along
with confirmations and statement of , Shri Yashpal Singh (brother), Shri
Rameesh Chand Yadav (brother-in-law). Adverse inference drawn by the
AO rests only on the basis that all the transactions are in cash and these
persons do not have sufficient creditworthiness. It has been vehemently
argued that neither the confirmations are controverted nor the persons were
called or asked questions during investigations in this respect. Excepting
doubting the confirmations, additions have been made without further
9.11. Similarly, the issue about amount of Rs. 8 lacs, cash given by Shri
Yashpal Singh to her sister out of arrears of past agricultural income, is also
to be examined by taking appropriate statement of Shri Yashpal Singh. The
confirmation available on record along with the agricultural land holdings of
these persons has been rejected on the basis of these adverse inferences. In
our view, when the confirmations, creditors and their land records are
available and the matter was partly referred for investigations, it would have
been desirable that they are examined to ascertain the bona fides of these
advances. In view of these facts and circumstances, we are inclined to set
32 ITA nos. 3558 to 3563/Del/11
aside these issues back to the file of AO to decide the same afresh in
accordance with law. We order accordingly.
10. In the result, assessee's appeals are partly allowed for statistical
The order pronounced in the open court on 15-06-2012.
[K.G. BANSAL] [R.P. TOLANI]
ACCOUNTANT MEMBER JUDICIAL MEMBER
Copy forwarded to: -
5. DR, ITAT
ITAT, Delhi Benches