MR. ABDUL HANNAN,HIRIYUR vs. INCOME-TAX OFFICER, WARD-1, CHITRADURGA

ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal is filed by the assessee against the order dated 13.06.2023 passed by the NFAC for A.Y. 2017-18 on following grounds of appeal:

Tax effect relating to each Ground of Grounds of Appeal appeal (see note below) The Learned CIT(A) erred in holding the order of assessment made for the assessment year 2017-18 is not in violation of principles of Natural

1. Justice, when an order is passed without considering the request of the appellant, for cross examination of the purchaser of Pomegranates, who denied the transaction. The order of the Learned CIT(A) is opposed to the decisions of Hon'ble High Court of Allahabad rendered in the case of Nathu Ram Premchand vs. Commissioner of Income Tax, U.P (39

2. ITR 561 (All), and to the decision of the Hon'ble High court of Karnataka rendered in the case of Sai Ramakrishna Karuturi vs. Union of India and others (2018) 402 ITR 7 (Kar). The Learned CIT(A) while not disputing the agricultural income, confirmation of the transaction by one 3. of the purchaser, merely on the Rs.27,61,265/- ground that the another purchaser did not confirm purchase, ought not to have confirmed the addition. The Learned CIT(A) while not disputing the agricultural income, confirmation of the transaction by one 4. of the purchaser, merely on the ground that the another purchaser did not confirm purchase, ought not to have confirmed the addition. The Learned CIT(A),since there being no investment of agricultural income 5. in any asset, ought to have held no addition is warranted.

The Learned CIT(A) ought to have considered the reduction of confirmed 6. transaction of Rs.5,20,365/- from out of the agricultural income declared. The confirmation of addition by the Learned CIT(A) is opposed to law and 7. without consideration of the facts and the law. On the facts and in the circumstances 8. levy of interests was not warranted. The appellant prays that this Hon'ble be pleased to permit the appellant to 9. add, delete or modify any ground or grounds at the time of hearing. Total tax effect (see note below) Rs.27,61,265/- 2. Brief facts of the case are as under: 2.1 Assessee is an individual and is an electrical contractor. Assessee is also renting a lodge and earns agricultural income. For the year under consideration, assessee filed his return of income on 30.08.2017 declaring total income of Rs.8,92,760/- and agricultural income of Rs.55,42,965/-. 2.2 The case was selected for limited scrutiny to verify large agricultural income. Accordingly notices were served to the assessee calling for various details. In response to the notices issued, assessee filed the financial statements along with agricultural land holdings, bank statements and other details. The Ld.AO upon verification of assessee’s agricultural income for the preceding years found to be very low as compared to the year under consideration where there is a steep hike. 133(6) notices were issued to the persons to whom assessee had submitted to have sold the agricultural produce during the year under Page 4 of consideration. In response to 133(6) notices, one of the agent submitted that they have not done any transaction with the assessee. The assessee had sought for cross examination of the purchaser who had denied the transaction with the assessee. However the Ld.AO denied the same by observing as under: “10. In the present case, the revenue has discharged its burden, when based on the very material provided by the assessee, enquiries were made and letter got from the concerned party, that no transactions were undertaken with the assessee. The assessee was also made aware of this evidence when show cause notice was sent asking the assessee to explain the same. Without any explanation, the assessee has simply asked for cross-examination on 24/12/2019. To provide for cross examination will mean time has to be given for the other party to receive the summons and attend from out of station. However, the case is time-barring and that could not be done.” 2.3 The Ld.AO thus made an addition of the entire sale proceeds alleged to be received from the purchaser who had denied the transaction with the assessee under Income from Other Sources. Aggrieved by the order of the Ld.AO, assessee preferred appeal before the Ld.CIT(A). Before the Ld.CIT(A), assessee filed all the details and also raised the ground of non-granting cross examination by the Ld.AO. The Ld.CIT(A) dismissed the appeal of assessee without considering any submissions in a cryptic way. 2.4 Aggrieved by the order of the Ld.CIT(A), assessee is in appeal before this Tribunal.