JASHBHAI RATHOD,VADODARA vs. INCOME TAX OFFICER, WARD-7(1),, BARODA

The first issue relating to the addition of Rs. 1,02,42,050/- by the AO on account of long-term capital gain rejecting the appellant’s contention that the land is an agricultural one and is outside the purview for the provisions of the capital gain.

Upon perusal of the relevant documents including the Sarpanch certificate dated 19.02.2018 and the report submitted by the Vadodara Urban Development Authority (VUDA) which are on record before us we are of the considered opinion to remit the issue to the file of the Ld. AO to confront the contention of the Sarpanch certificate with the Vadodara Urban Development Authority (VUDA) keeping in mind that in the year 1984 the land was an agricultural one and only a proposal for converting into a residential zone has been initiated by the said authority and taking into consideration notification No.SO 9447/J dated 6.1.1994 relating to the determination of agriculture land, and to decide the issue afresh upon giving an opportunity of being heard to the assessee and upon taking into consideration the evidence, if any, which the assessee may choose to file at the time of hearing of the matter. Thus, the assessee’s appeal is allowed for statistical purpose.

During the course of assessment proceeding information regarding different banks’ statement were called for under section 133(6) of the Act. Upon verification of the same it was found that the assessee deposited certain amounts in each of the accounts and hence the assessee was asked to explain such transactions. In reply thereof the assessee by Jashbhai Rathod vs. ITO Asst.Year –2010-11 - 4 - and under a letter dated 28.03.2013 clarified that his wife Shardaben was also a farmer, earning agricultural income around Rs. 8-9 lacs per annum from her inherited agricultural share of 20 acres of land along with her aunty; the assessee being an agriculturist also having gross agricultural income of Rs. 4-5 lacs per annum. Both the sons of the assessee having agricultural income, and also looking after the business of animal husbandry. His daughter, Chhayaben, was also is in service as a nurse and having considerable amount of income. The details of the accounts whether single or joint were also clarified by the assessee. It was further clarified that the deposits made to those accounts mainly from the sale of crops of Ground Nut, Cotton, Tuver, Maize, Tobacco, Vegetables and Pulse. However, such plea of the assessee was not accepted either by the Ld. AO or by the Ld. CIT(A). Hence, the instant appeal before us.

At the time of hearing of the appeal the Ld. Advocate appearing for the assessee submitted before us, that though the justification was given by the assessee in details to the debit/credit entries in those accounts of Indian Overseas Bank, Ankodia, Bank of Baroda, IPCL Branch, Baroda, Dena Bank, Ankodia and Bank of Baroda, Rameshara Tal: Halol by way of reply dated 28.03.2013 the same was not taken into consideration by the authorities below in proper perspective. The supporting documents relating to the agricultural income being 7/12 statement showing the details of land holdings, the details of crops grown neither has been accepted in its true spirit by the Revenue. He ultimately pressed for setting aside the issue before the authorities below for fresh adjudication of the same.

However, the Ld. DR, relied upon the order passed by the authorities below.

Heard the parties, perused the relevant material available on record including the orders passed by the authorities below including the submissions made before the Revenue by the Assessee. It is the case of the assessee that the agricultural sector in the country is highly unorganized sector and mostly the activities carried out by farmers specially the transactions are done in cash only. Further that the agricultural produce are sold not as soon as got cultivated or ready but the sale depends upon the market when the farmer could fetch best prices. Neither in the rural area payments are made by the traders upon delivery of crops. Mostly those are made in installments spread over to few months period and thus money is being deposited in small installments whenever it is collected from those traders. It also appears that the assessee has submitted certain documents in support of the agricultural produce, the area of land possessed by the assessee and also his relatives which was not been considered in its proper perspective by the authorities below. No observation on this particular aspect of the matter is forthcoming from the order passed by the Revenue. Hence, we find it fit and proper in order prevent the miscarriage of justice remit the issue to the file of the AO to consider this aspect of the matter and to consider the issue afresh upon giving a reasonable opportunity of being heard to the assessee and upon taking into consideration any further evidence, which the assessee may choose to file at the time of the hearing

In the result, the assessee’s appeal is partly allowed.