Referred Sections: Section 133(6) Section 131 of the Income Tax Act, 1961 Section 68 of the I.T. Act, 1961.
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES "SMC": DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
ITA.No.3076/Del./2018
Assessment Year 2012-2013
Shri Sandeep Gupta,
1476, Sector-14, The Income Tax Officer,
Faridabad, Haryana. vs., Ward 1(1),
PIN 121 001. Faridabad,
PAN AEMPG2457H Haryana.
(Appellant) (Respondent)
Shri I.P. Bansal, And
For Assessee : Shri Sanjay Kumar,
Advocates.
For Revenue : Shri S.L. Anuragi, Sr. D.R.
Date of Hearing : 28.08.2019
Date of Pronouncement : 11.09.2019
ORDER
This appeal by Assessee has been directed
against the Order of the Ld. CIT(A), Faridabad, Dated
08.03.2018, for the A.Y. 2012-2013.
2. Briefly the facts of the case are that assessee filed
return of income declaring income of Rs.9,69,700 (+
Rs.20,61,541/- Exempted Agricultural Income) on
31.07.2012 for the A.Y. 2012-2013. The assessee derives
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Shri Sandeep Gupta, Faridabad.
income mainly from salary and agriculture. The assessee
has shown agriculture income of Rs. 32,82,000/- for which
he has produced bills from Adathia, M/s Jagdamba Traders
for selling of agriculture produces. He has also shown
Rs.12,20,959/- as expenses on agriculture for which no
supporting documents were furnished except a daily
expenses book written by one of his employee. The assessee
has also filed Thekanama of land (lease deed) for having
taken land on lease from two persons namely Sh. Bhhekay
Khan and Sh. Munger Kghan Tehsil & Distt. Jaisalmer,
Rajasthan. In support the genuineness of agriculture
income, he has also filed photocopy of Khasara Girdawari
issued by the Patwari and countersigned by the Tehsildar
Ramgarh No.2 along with sale bills of agriculture produce
from Adathia M/s Jagdamba Traders. The A.O. in order to
verify the genuineness of the photocopy of lease deed,
issued a notice under section 133(6) to the lessor Sh.
Bhhekey Khan and the Notary Public who had attested the
lease deed. In response to the same, reply from Sh. Bhhekey
Khan lessor was received, in which, he has admitted that he
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Shri Sandeep Gupta, Faridabad.
had leased out the land to assessee and also furnished the
photocopy of the lease deed which is placed on record.
However, no reply was from Notary Public. In the lease
furnished by lessee, the A.O. noted that the land was given
to assessee from 01 April 2012 to 31-3-2013. Therefore, the
land in question was not given for the assessment year
under appeal. The A.O. in order to verify the genuineness of
the photocopy of Khasara Girdawari, issued notice under
section 133(6) to Tehsildar Ramgarh No.2. In response to
the same, Khasara Girdawari of Chak number 6 BTM
Murabba number 112/35 along with quantum of area where
Sh Subhash Gupta has cultivated crop was furnished by the
Tehsildar. The A.O, therefore, noted that copy of Khasara
Girdawari filed by the assessee is different from the copy
furnished by Tehsildar. The assessee also filed five sale bills
issued by M/s Jagdamba Traders of Ramgarh under the
aegis of Krishi Upaj Mandi Samiti Jaisalmer. The A.O.
doubted the same. The A.O. issued notice under section
133(6) to M/s Jagdamba Traders for verification of the bills
which were returned undelivered with postal remarks
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Shri Sandeep Gupta, Faridabad.
"Incomplete address." The assessee was, therefore, asked to
furnish complete address of M/s Jagdamba Traders to verify
the genuineness of bills. The assessee submitted before the
A.O. that the address mentioned in the bills are correct. The
shop might have closed due to any reason. The A.O. was,
therefore, requested to issue summons under section 133(6)
of the Income Tax Act 1961. On request of the assessee,
summons under section 131 of the Income Tax Act, 1961
was issued to M/s Jagdamba Traders and requested to
furnish Original seller slip book, Copy of bank account,
evidence of payment of "Mandi Charges" and evidence of
payment made to assessee for the selling commodities. The
said summons were again returned un-served with postal
remarks "Incomplete address." The A.O. has given
numerous opportunities to assessee to substantiate his
claim of having agriculture income by taking the land on
lease. The assessee filed reply before A.O. filing copy of the
Khasaar Girdawari, signed by Patwari. The assessee filed
further reply before A.O. in which it is stated that copy of
the confirmation along with copy of bank statement of M/s.
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Shri Sandeep Gupta, Faridabad.
Jagadamba Traders, payment of Mandi charges, copy of PAN
card are attached. The confirmation and other papers were
directly sent to the A.O. by speed post. The assessee also
furnished correct address of the Adathia along with email.
The assessee also provided Phone No. for quick confirmation
and also requested that letter/confirmation may be sent at
the address best available with the assessee. The A.O.
however did not accept the contention of assessee because
there is a difference in the period for which lease was
granted of agricultural land and that there is discrepancy in
the Khasra with respect to same furnished by the assessee
by the Patwari. It is noted that genuineness of the bills
could not be verified because Adathia has done business
only for assessee and in his account cash was found to have
been deposited on various dates. The assessee could not
produce the Adathia during the proceedings, therefore, bills
could not be verified. The A.O. also noted that evidence of
incurring expenditure have also not been produced. The
A.O, therefore, treated the entire amount as income from
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ITA.No.3076/Del./2018
Shri Sandeep Gupta, Faridabad.
other sources and made addition of Rs.32,82,000/- under
section 68 of the I.T. Act, 1961.
2.1. The A.O. on perusal of the capital account also
found that assessee has debited Rs.2,41,000/- on account
of house hold expenses. The assessee was asked to justify
house hold expenses with reference to size of the family,
number of school going children, standard of living and
telephone/electricity bills etc. The assessee filed copy of
balance-sheet with evidences. The A.O, however, made
further addition of Rs.2,40,000/- on account of low house
hold withdrawal.
3. The assessee challenged both these additions
before the Ld. CIT(A). On the submissions of the assessee,
the Ld. CIT(A) called for the remand report from the A.O.
The A.O. in the remand report also collected information
from Directorate of Agriculture, Jaipur, Rajasthan. As per
information, yield of Gowar in assessment year under
appeal was 323 kg per Hector, therefore, there is a
difference in the production claimed by assessee. The Ld.
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ITA.No.3076/Del./2018
Shri Sandeep Gupta, Faridabad.
CIT(A) called for explanation of assessee and in the absence
of reply from the side of the assessee, dismissed the appeal
of assessee on both the additions.
4. The assessee in the present appeal has
challenged the addition of Rs.32,82,000/- on account of
agricultural income and Rs.2,40,000/- on account of low
house hold expenses.
5. I have heard the Learned Representative of both
the parties and perused the material available on record.
6. Learned Counsel for the Assessee reiterated the
submissions made before the authorities below and has
referred to PB-9 which is reply filed before A.O. in which it
is contended that assessee had taken agricultural land
measuring 50 Bigas on lease for one year at Rs.50,000/-.
The assessee earned agricultural income of Rs.32,82,000/-
and after incurring expenses of Rs.12,20,459/- earned net
agricultural income of Rs.20,61,541/- which is supported
by the documents and confirmations etc., PB-13 is lease
deed executed by Sh Bhhekay Khan, Dated 08.08.2011. PB-
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Shri Sandeep Gupta, Faridabad.
14 lease deed executed by Sh. Munger Khan, Dated
05.07.2011. He has, therefore, submitted that the difference
of lease deed noted by the A.O. are incorrect. PB-15 is sale
on agricultural produce for the above sum supported by
Krishi Upaj Mandi Samiti receipts through the Adathia,
copies of which are filed at pages 16-20 of the PB. Pb-21 is
details of agricultural expenses. PB-22 is ledger account of
Adathia showing the sale of agricultural produce and the
amounts received by assessee through banking channel.
PB-27 is another reply filed before A.O. in which assessee
has produced original invoices of agricultural income for
verification before A.O. and photo copies of the same were
also filed. PB-29 onwards are the details of doing
agricultural operation. PB-99 is another reply filed by
assessee before A.O. submitting Khasra etc., and to clarify
the discrepancy. PB-102 and 103 are Khasra to show name
of the lessor and the assessee as a lessee for doing
agricultural operation. PB-105 is another reply filed before
A.O. producing the entire original documents before A.O. in
respect of the above contention. PB-108 is reply filed by
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ITA.No.3076/Del./2018
Shri Sandeep Gupta, Faridabad.
M/s. Jagadamba Traders confirming sale of agricultural
produce by assessee to them and payments made through
banking channel which is supported by receipts of Krishi
Upaj Mandi Samiti. PB-107 are the copies of the bank
account of M/s. Jagadamba Traders to support payments
through banking channel. Learned Counsel for the
Assessee, therefore, submitted that those documentary
evidences clearly support that assessee cultivated the
agricultural land taken on lease and earned agricultural
income, therefore, no addition could be made against the
assessee. PB-152 is reply of the assessee on low household
expenses in which assessee explained that he has shown
house hold expenses in a sum of Rs.6,29,643/- by self and
other expenses made by family members totaling to
Rs.15,30,415/-. He has, therefore, submitted that there was
no justification to make the addition on account of low
house hold expenses.
7. On the other hand, Ld. D.R. relied upon the
Orders of the authorities below and submitted that assessee
failed to produce sufficient documentary evidences before
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ITA.No.3076/Del./2018
Shri Sandeep Gupta, Faridabad.
A.O. to prove earning of agricultural income, therefore, both
additions may be confirmed.
8. I have considered the rival submissions and
perused the material on record. The assessee has filed copy
of the lease deed as noted above which are Dated
08.08.2011 and 05.07.2011. Therefore, these would prove
agricultural land taken by assessee on lease in respect of
assessment year under appeal, therefore, the very basis of
the A.O. to disallow claim of assessee have been negated by
the Learned Counsel for the Assessee. Both these lease
deeds have been produced before the authorities below
supported by copies of the bills of Krishi Upaj Mandi Samiti
which clarify that assessee sold agricultural produce
through M/s. Jagadamba Traders. M/s. Jagadamba Traders
confirmed the selling of the agricultural produce by assessee
through them and all the payments are made by
cheque/RTGS to assessee through banking channel. The
name of assessee is appearing in the Khasra along with
owner/lesser of the agricultural land. The adtiya is assessed
to tax and have PAN and have also confirmed purchasing
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ITA.No.3076/Del./2018
Shri Sandeep Gupta, Faridabad.
the agricultural produce from assessee through Mandi and
payments have been made through banking channel, which
is also supported copy of the bank statement of the Adathia.
On the face of all these evidences on record, it clearly
establishes that assessee was doing agricultural activities
and earned agricultural income, therefore, there was no
justification to treat the agricultural income as income from
other sources. Further, assessee has explained that he has
shown sufficient house hold expenses by self which contain
electricity, water charges, medical, vehicle expenses etc.
Other family members have also joined him in incurring the
house hold expenses totaling to Rs.15,30,241/- which was
noted above was more than the amount for which addition
is made by the A.O. Therefore, there was no justification to
make any addition on account of house hold expenses. In
view of the above discussion and material on record, I am of
the view that both the additions are wholly unjustified. I,
accordingly, set aside the Orders of the authorities below
and delete both the additions.
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ITA.No.3076/Del./2018
Shri Sandeep Gupta, Faridabad.
9. In the result, appeal of Assessee allowed.
Order pronounced in the open Court.
Sd/-
(BHAVNESH SAINI)
JUDICIAL MEMBER
Delhi, Dated 11th September, 2019
VBP/-
Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT "SMC" Bench
6. Guard File
//By Order//
Asst. Registrar : ITAT : Delhi Benches :
Delhi.
Date of dictation 28.08.2019
Date on which the typed draft order is placed before 09.09.2019
the dictation Member
Date on which the approval draft comes to the Sr. PS 11.09.2019
Date on which the fair order is placed before the 11.09.2019
Dictation member for pronouncement
Date on which the fair order comes back to the Sr. P.S. 11.09.2019
Date on which the final order is uploaded on the 11.09.2019
website of ITAT
Date on which the file goes to the Bench Clerk 11.09.2019
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the Order.
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