SHANTINATH S. VATHARE,SANGLI vs. INCOME-TAX OFFICER, WARD - 1(1), SANGLI

The only issue raised in this appeal is against the confirmation of addition of Rs.18,58,731/- as ‘income from undisclosed sources’.

Briefly stated, the facts of the case are that assessee filed original of income on 10-10-2012 declaring total income of Rs.1,80,000/-. This return was processed u/s. 143(1) of the Income-tax Act, 1961 (hereinafter called ‘the Act’). Thereafter, the assessee filed e-return of income as his revised return on 26- 03-2013. In the revised return, the assessee declared total income of Rs.1,46,439/- and also agricultural income of Rs.25,30,000/-. The e-return filed on 26-03-2013 was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS) to verify on `Large agricultural income’. Assessment u/s. 143(3) was completed on 16-12-2013 determining total income at Rs.2,80,010/- plus agricultural income of Rs.25,30,000/-. The Pr. CIT, invoking his jurisdiction u/s.263 of the Act, set-aside the assessment order so passed by terming it as erroneous and prejudicial to the interest of Revenue. In the said order, the AO was directed to find out the extent of land actually utilized for cultivation; actual expenditure incurred on cultivation of Turmeric and other crops; genuineness of sale bills issued by traders; record of Market Yard Committee; receipts of Market Yard Tax; and weightment slips etc. The instant assessment was completed u/s. 143(3) r.w.263 of the Act. In this assessment, the AO required the assessee to furnish the evidence as directed by the ld. CIT in his revision order.

The assessee could submit only part details. In order to verify the genuineness of sale pattis filed by the assessee from three parties listed in para 5 of the assessment order, the AO issued summons. None of the parties attended but certain written submissions were filed stating that the details called for were not available with them. In order to verify the claim of the assessee that he was cultivating lands belonging to all the family members and utilizing the entire proceeds for self, the AO issued summons dated 03-08-2016 to such family members, namely, Smt. Vaishali Satish Vathara, Shri Satish Annaso Vathare, Shri Santinath Jinnappa Vathare and Smt.

I have heard the rival sides and gone through the relevant material on record. The instant proceedings have emanated from the revisionary order passed u/s 263 of the Act directing the AO to examine the veracity of the claim of the assessee qua the agricultural income shown at Rs.25.30 lakh. The ld. AR admitted that the assessee accepted such an order and did not challenge the same before the Tribunal. Now the only question is to examine the genuineness of the claim of agricultural income shown by the assessee in the return. The assessee made out a claim of having earned agricultural income of Rs.25.30 lakh from certain land belonging to him and 4 other family members. The AO issued summons to all such family members, which remained unresponded. This fact was brought to the notice of assessee. The assessee failed to produce any evidence to demonstrate that his four family members had foregone their respective shares in the agricultural income and permitted him to cultivate the land and retain the entire earnings therefrom for self. Thus, the claim of the assessee that he earned agricultural income of Rs.25.30 lakh from the entire land, which also included the share of other four family members, has not been established. The AO took up the assessee’s actual share in the land at 0.89 R. By examining 7/12 extract, he estimated the agricultural income as under :

It is evident from the above calculation that the AO calculated the assessee’s agricultural income by taking his actual share in land and the crop thereon as per 7/12 extract as multiplied by sale price of turmeric as per Agricultural Officer, Miraj’s report. After allowing deduction @ 30% of expenses, he estimated net agricultural income at Rs.6,71,269/-. No infirmity in such calculation has been pointed out on behalf of the assessee. In my considered opinion, the AO was fully justified in determining the agricultural income to this extent and in making and treating the remaining amount of Rs.18,58,731/- as ‘Income from other sources’. I, therefore, uphold the impugned order.

In the result, the appeal is dismissed.