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Shri Sandeep Gupta, 1476, Sector-14, Faridabad, Haryana. PIN – 121 001. Vs. The Income Tax Officer, Ward – 1(1), Faridabad, Haryana.
September, 12th 2019

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
                             2
                                            ITA.No.3076/Del./2018
                                    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
                               3
                                               ITA.No.3076/Del./2018
                                       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
                              4
                                              ITA.No.3076/Del./2018
                                      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.
                              5
                                              ITA.No.3076/Del./2018
                                      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
                               6
                                            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.
                                 7
                                                   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-
                                  8
                                                    ITA.No.3076/Del./2018
                                            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
                               9
                                                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
                              10
                                              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
                             11
                                              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.
                                  12
                                                    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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