SHRI VIBHUTI SINGH DEORA,JAIPUR vs. INCOME TAX OFFICER, WARD-5-2, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES ‘A’ JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 308/JP/2019 fu/kZkj.k o"kZ@Assessment Year :2014-15 cuke Vibhuti Singh Deora, ITO, Vs. Jaipur Ward-5(2), Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ADHPD7082R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Rohan Sogani (CA) jktLo dh vksj ls@ Revenue by : Miss. Chanchal Meena (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 02/01/2020 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 07/01/2020 vkns'k@ ORDER PER: VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee against the order of ld. CIT(A)-2, Jaipur dated 28.01.2019 wherein the assessee has taken the following sole ground of appeal:- “In the facts and circumstances of the case and in law, ld. CIT(A) has erred in confirming the action of ld. AO in making addition of Rs. 3,20,167 u/s 69C of the Income Tax Act, 1961. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the addition of Rs. 3,20,167 made by the ld. AO and confirmed by the ld. CIT(A).”

2. The relevant facts and findings of the ld CIT(A) which are under challenge before us reads as under: Vibhuti Singh Deora, Jaipur Vs. ITO, Ward-5(2), Jaipur “2.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. I have also considered the facts of the case, as well as applicable case laws relied upon. The facts in brief according to the Authorized Representative are that the assessee owned an agricultural land measuring 11.365 hectares (72.37 bighas) situated at Mauja Sarhadu, Balupura. The assessee let out his agriculture land to two tenants, Shri Naklang Singh and Shri Himmat Singh on Bataidari basis. Under such arrangement both the tenants jointly were entitled to 40% of the agriculture produce and in turn were also responsible for incurring expenses of the agriculture produce on such agriculture land. Assessee, under such arrangement, was entitled to 60% of the agriculture produce and had no responsibility of incurring any expenditure towards such produce. In order to confirm the above factual position, AR of the assessee produced before me the following documents, which were also produced before the AO, during assessment proceedings:-

• Copy of the Jamabandi and Girdawari Report of the agriculture land owned by the assessee. • Affidavit of the tenants, Shri Naklang Singh and Shri Himmat Singh • Certificate of Sarpanch stating that the agriculture land had been given by the assessee to the tenants on bataidari basis. • Sale vouchers of the agriculture produce, to the extent of his share, sold by the assessee. • Bank Statement in which the aforementioned sale proceeds were deposited by the assessee. 2.3.1 The Authorized Representative also stated that, during the relevant previous year, assessee was also engaged in the business of 2 Vibhuti Singh Deora, Jaipur Vs. ITO, Ward-5(2), Jaipur flying and was Director in M/s Microlight Aviation Private Limited and also run a proprietorship concern in the name of 'Palace on Wings', through which he generated income.

2.3.2 During the course of assessment proceedings, AO issued notices to the tenants, Shri Naklang Singh and Shri Himmat Singh, under section 131 and recorded their statements. However, Shri Naklang Singh and Shri Himmat Singh in their statements, before the AO, could not specify name of crops/vegetables produced and also the name of customers to whom agricultural produce was sold by them during the relevant year. Further, AO was of the view that no formal agreement was entered between the assessee and the tenants and also that the tenants did not maintain records of the expenses incurred to effectuate the agricultural produce.

Thereafter, AO was of the view that certain expenses must have been incurred by the assessee, in cash, apropos such agriculture produce and thus added Rs. 7,47,056, under Section 69C, being 35% of the agricultural income earned by the assessee.

2.3.3 The Authorized Representative of the assessee relied on the judgment of Delhi High Court in the case of Lubtec India Ltd (2009) 311 ITR 175 (Delhi) for the proposition that whenever additions are made under section 69C heavy burden is on the department to establish the real flow of money from the assessee. Further, for the proposition that the averments made in the affidavit cannot be disregarded without any cogent basis, Id. AR of the assessee also relied on the decision of the Supreme Court in the case of Mehta Parikh & Co. (1956) 30 ITR 181 (SC). Vibhuti Singh Deora, Jaipur Vs. ITO, Ward-5(2), Jaipur In the statements both the tenants accepted the fact of being involved in agriculture activities on Bataidari basis, on the agriculture land owned by the assessee. The factual position has also been confirmed by the Sarpanch in his certificate. However, the tenants were unable to specify the details with regard to their agriculture produce when asked during recording of statements.

2.3.4 In view of the above, it cannot be conclusively stated that the assessee would not have incurred any expenditure towards earning such agriculture income. The disallowance made at 35% by the Assessing Officer seems to be on higher side, thus the same is restricted to 15% of the agriculture income. As a result, addition made by the Assessing Officer under section 69C is restricted to Rs. 3,20,167/-. Assessee thus gets relief of Rs. 4,26,889/-. This ground of appeal is partly allowed.”

In the result, appeal of the assessee is disposed off in light of above directions. Vibhuti Singh Deora, Jaipur Vs. ITO, Ward-5(2), Jaipur Order pronounced in the open Court on 07/01/2020.