Validity of Addition towards sale proceeds of the agricultural produce if Assessee produced all the documentary evidences towards ownership of land and towards carrying on agricultural activities
short Overview Where assessee filed his return of income under head Profits and gains from business or profession along with agricultural income and AO made addition on allegation that assessee failed to produce details of total sale proceeds of the agricultural produce sold and also failed to produce details of expenditure incurred on the agricultural activities, considering evidences filed by the assessee and the statement of the Sarpanch of the village along with Certificate given by him, i.e., Sarpanch and in view of the huge ownership of land by the assessee for which the assessee produced all the documentary evidences, revenue was not justified in making addition on estimate basis.
Assessee filed his return of income under head profits and gain from business or profession along with agricultural income. Case of the assessee was selected for limited scrutiny and assessee failed to produce details of total sale proceeds of the agricultural produce sold and also failed to produce details of expenditure incurred on the agricultural activities. Case of assessee was that agricultural income was disclosed at higher figure due to typographical mistake. AO made addition while assessing the total income under section 143(3).
It is held that Keeping in view of the evidences filed by the assessee and the statement of the Sarpanch of the village along with Certificate given by him, i.e., Sarpanch and in view of the huge ownership of land by the assessee for which the assessee produced all the documentary evidences, AO as well as CIT(A) made and confirmed the addition in dispute only on estimate basis and disallowed the same on the basis of the documentary evidences rejecting the claim of the assessee which was on the basis of the evidences of the revenue authorities. Thus, addition in dispute was wrongly made by the revenue authorities without any basis and the same was not sustainable in the eyes of law and was deleted in the interest of justice.
Decision: In assessee s favour.
IN THE ITAT, DELHI BENCH
H.S. SIDHU, J.M.
Ramavtar v. ITO
ITA No. 2305/Del/2019
7 January, 2021
Assessee by: Naveen Kr. Goyal, CA
Department by: Prakash Dubey, Sr. DR.
ORDER
H.S. Sidhu, JM
This appeal filed by the Assessee is directed against the impugned Order, dated 28-2-2019 passed by the learned Commissioner (Appeals), Rohtak in relation to assessment year 2014-15.
2. The brief facts relating to the case are that the assessee has filed his return of income of Rs. 2,03,620 on 22-7-2014 under the head profits and gain from business or profession alongwith agricultural income of Rs. 52,36,200. The case of the assessee was selected for limited scrutiny under CASS and notice under section 143(2) of the Income Tax Income Tax Act, 1961 (hereinafter referred to as “the Act”), 1961 was issued on 21-9-2015 and served upon the assessee and subsequent on the transfer of case of the assessee, the assessing officer also issued requisite notices to the assessee. In response to the same, assessee appeared and filed necessary documentary evidences, but failed to produce details of total sale proceeds of the agricultural produce sold and also failed to produce details of expenditure incurred on the agricultural activities. According to the assessee, the assessee has earned about Rs. 32,36,200 from agricultural income instead of Rs. 52,36,200 which was wrongly mentioned, due to typographical mistake. Assessee has also filed Form-J in support of having produced and sold the agricultural produce only for Rs. 15,36,747 in order to work out the net agricultural income of the assessee, expenditure incurred to earn such income is to be reduced and assessing officer on the basis of documentary evidences was of the view that the assessee has not submitted any details in respect of expenses of 40% of production and he worked out at Rs. 6,14,698 @ 40% of Rs. 15,36,747 and the net agricultural income of the assessee was worked out at Rs. 9,22,048 and difference of Rs. 43,14,152 (5236200-922048) and assessing officer made the addition of Rs. 43,14,152 by assessing the total income at Rs. 45,17,772 under section 143(3) of the Income Tax Act, 1961 vide Order, dated 15/28-12-2016. Aggrieved with the assessment order, assessee appealed before the learned Commissioner (Appeals), who vide his impugned Order, dated 28-2-2019 has partly allowed the appeal of the assessee. Against the impugned Order, dated 28-2-2019, assessee is in appeal before the Tribunal.
3. At the time of hearing, learned Counsel for the assessee stated that assessee has agricultural land of about 45 acres situated at Village Bheni Surjan and assessee has also taken land on lease for agricultural purposes from Sh. Balraj, Bijender and Balwan, but no agreement of land of lease has been made or registered between the assessee and the concerned parties. Learned Counsel for the assessee further stated that assessee has submitted the girdwari as evidence of cultivation of land showing the ownership land. Assessee has also submitted Form J in support of his produce and sold agricultural income. assessing officer has not believed the same and made the addition of Rs. 43,14,152 only giving the relief of Rs. 9,22,048. Similarly, the learned Commissioner (Appeals) has also given a very minor relief to the assessee by holding that the gross agricultural receipts in this year was only Rs. 29,25,000 and not Rs. 52,36,200 as claimed by the assessee and he has given no explanation for the difference of Rs. 23,11,200 thus, would be his undisclosed income which is taxable. Learned Counsel for the assessee stated that learned Commissioner (Appeals) s finding is not based on the documentary evidences and as per the previous record of the assessee and he requested that the return filed by the assessee be accepted by allowing the appeal of the assessee and addition in dispute may be deleted.
4. On the contrary, learned DR relied upon the orders of the authorities below and stated that on the basis of the documentary evidences filed by the assessee, the assessing officer has rightly assessed the income of the assessee and similarly, learned Commissioner (Appeals) has given sufficient relief by correcting the amount of Rs. 52,36,200 as Rs. 29,25,000, because the assessee could not produce the evidence before the authorities below.
5. I have heard both the parties and perused the records especially the orders passed by the revenue authorities alongwith the documentary evidences filed by the assessee in support of his claim before the lower authorities. I am of the view that as per the order of the learned Commissioner (Appeals) the gross receipt in the year in dispute is Rs. 29,25,000 and not Rs. 54,36,200 as claimed by the assessee. Learned Commissioner (Appeals) has rightly corrected the mistake, but I am of the view that keeping in view of the evidences filed by the assessee and the statement of the Sarpanch of the village alongwith Certificate given by him i.e. Sarpanch and in view of the huge ownership of land by the assessee for which the assessee has produced all the documentary evidences as mentioned in the impugned order, I am of the considered view that assessing officer as well as learned Commissioner (Appeals) made and confirmed the addition in dispute only on estimate basis and disallowed the same on the basis of the documentary evidences rejecting the claim of the assessee which is on the basis of the evidences of the revenue authorities. Hence, I am of the view that the addition in dispute has wrongly been made for this year by the revenue authorities without any basis and the same is not sustainable in the eyes of law and is hereby deleted in the interest of justice, by accepting the appeal of the assessee.
6. In the result, the Assessee s Appeal is allowed.
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