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Income Tax Appellate Tribunal, ‘’SMC’’ BENCH, AHMEDABAD
(Applicant) (Respondent) Assessee by : Shri Aseem L. Thakkar, A.R Revenue by : Shri Jayant Jhaveri, Sr.DR सुनवाई क� तार�ख/Date of Hearing : 15/07/2019 घोषणा क� तार�ख /Date of Pronouncement: 14/10/2019 आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-6, Ahmedabad [Ld.CIT(A) in short], dated 20/10/2015 arising in the matter of assessment order passed under s. 143 of the Income Tax Act, 1961 (here-in- after referred to as "the Act") dated 31/12/2013 relevant to Assessment Year (AY) 2011-12.
The assessee has raised the following grounds of appeal:
The Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in treating the amount of Rs.13,70,741/- as income of the Appellant considering that the same pertains to joint agricultural land.
The Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.13,70,741/- for 50% share of profit of the joint agricultural income of Rs.27,4I,481/- claimed as exempt u/s.l0(2) of the I.T.Act,1961 as taxable income of the Appellant. 3. The Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.13,70,741/- wrongly assuming his 50% share in Agricultural income of Rs.27,41,481 /- holding that the same has been claimed by the Appellant as exempt u/s.l0(2) of the I.T. Act, 1961 without considering the fact that the appellant has computed the tax on total income including the agricultural income of Rs.27,41,481/- for rate purpose. 4. The learned Commissioner of Income Tax (Appeals) has erred in not adjudicating the ground for non granting of credits for the taxes paid as per the return of income filed by the appellant. 5. The Appellant prays that the delay in filing of appeal may kindly be condoned. 6. The appellant craves leave to add, alter, amend or modify any of the grounds of appeal
on or before the date of hearing of appeal.
2. At the outset it was noticed that the appeal filed by the assessee is barred of time by 81 days. The learned AR submitted that the delay in filing the appeal has occurred due to the fault of the consultant. The learned AR in support of his claim also filed the copy of the affidavit of the assessee which is placed on record. Accordingly the learned AR for the assessee prayed for the condonation of the delay.
On the other hand, the learned DR raised no objection if the delay is condone and left the issue at the discretion of the bench.
We have heard the rival contentions of both the parties and perused the materials available on record. Considering the nature and length of delay, we are inclined to hold that there was no fault of the assessee in filing the appeal before the ITAT within the prescribed time. Therefore we condone the delay and proceed to hear the appeal on merit.
The only issue raised by the assessee is that the learned CIT (A) erred in confirming by treating 50% of agriculture income amounting to Rs. 13,70,741/- as income from other sources.
The facts in brief are that the assessee is an individual and professional Doctor. The assessee besides having the income from the profession, has also declared an income of Rs.27,41,481/- from the agricultural activities for the for rate purposes.
5.1 The AO during the assessment proceedings found that the land from which agriculture income was shown by the assessee are owned by the assessee jointly with Shri Jaysukhbhai Arjanbhai. However, the assessee has shown entire income from the agricultural operation in its income tax return. Accordingly, the AO opined that only 50% of agriculture income should be added to the total income of the assessee for the purpose of income tax rate. Thus the AO sought an explanation from the assessee for the source of balance 50% income which was claimed by him from the agricultural activities.
5.2 However the assessee failed to make the reply to the AO. Therefore the AO in the absence of an explanation from the side of the assessee treated the amount of Rs.13,70,741/- being 50% of agriculture income as income from other sources and added to the total income of the assessee.
Aggrieved assessee preferred an appeal to the learned CIT (A). Page 3 of 6
The assessee before the learned CIT (A) submitted that the other joint owner in the property Shri Jaysukhbhai Kalathiya is his son and staying at indoor. The impugned lands are the ancestral lands of the family and the name of his son was recorded in the property documents for facilitating the succession in future. Accordingly the assessee claimed that he has only carried out the agricultural operations on the agriculture lands. The assessee in support of his claim also filed the affidavit of his son.
6.1 The AO in his remand report has submitted that there was no additional evidence filed by the assessee during the remand proceedings. Accordingly the AO in the remand report left the issue at the discretion of the learned CIT (A) for deciding the same on merit.
6.2 The learned CIT (A) after considering the submission of the assessee confirmed the order of the AO by observing as under Decision ; 22. I have carefully considered the assessment order, submission of the appellant, additional evidences, remand report and rejoinder to the remand report. The undisputed fact is that the land Is jointly held by the appellant with his son Shri Jaysukhbhai Arjanbhai equally therefore, the agriculture income pertains to both of the owners equally and the informal arrangement of the family cannot overrule the legal provision of the income tax Act. The contention of the appellant that the agricultural income was received by him does not hold any merits as the agricultural income belong to the owner and the recipient or collector cannot be treated as owner as the income can be received by anybody on behalf of the joint owners. 22.1 Since the appellant has collected/received the agriculture income on behalf of joint owner therefore as per the accounting prnciples Shri Jaysukhbhai Kalathia becomes creditor in the books of the appellant. However, by any stretch of imagination, the appellant cannot be treated owner of agriculture income collected. 22.2 The appellant also relied on the decision of Hon'ble Gujarat High Court in the case of Glass Une Equipments Co. Ltd. v CIT (2002) 253 ITR 454. However, the facts of the case are entirely different and distinguishable. In the above case, the CIT(A) relied on the one part of the affidavit and ignored the other part of the affidavit. However, in the case of the appellant the affidavit is not at all considered Page 4 of 6 as the same does not hold any merit as the assessee himself has submitted that the 50% of the land belonged to his son Jaysukhbhai therefore, there question of showing the entire agricultural Income in his name does not arise at all. Since only 50% of agricultural income is belonged to the appellant therefore, the AO is justified in disallowing 50% of the claim of Rs. 13,70,741/- out of exempt income u/s. 10(2) of the I.T. Act. The disallowance made by the AO is confirmed. Ground no. 6,7 and 8 of appeal are dismissed.
Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us
The learned AR before us submitted that the AO without bringing anything on record has presumed 50% agriculture income as income from other sources.
On the other hand, the learned DR vehemently supported the order of the authorities below.
We have heard the rival contentions of both the parties and perused the materials available on record. In the present case, 50% income of the assessee from the activity of agricultural operations was treated by the AO as income from other sources. The reason of the AO was that the land with respect to which such agriculture income was declared by the assessee belongs to the two persons namely the assessee and his son. The action of the AO was subsequently confirmed by the Ld.CIT (A).
10.1 From the preceding discussion, we note that the assessee has shown agriculture income of Rs. 27,41,481/- which was declared in the income tax return for the purposes of the tax. The quantum of the income was not doubted by the authorities below. Even if we go by the order of the authorities below i.e. 50% of the agriculture income belongs to the son of the assessee, Page 5 of 6 then also in our considered view the balance income shown by the assessee for Rs. 13,70,741/- cannot be treated as income from other sources. It is because there is no iota of evidence available with the Revenue suggesting that the assessee has generated any income other than the income declared in the income tax return. Therefore, we conclude that the income from other sources in the hands of the assessee has been added by the AO on his presumption and surmise without bringing any tangible material on record.
10.2 The income which needs to be added to the total income of the assessee has to be based on some documentary evidences. Hence the ground of appeal of the assessee is allowed.
Order pronounced in the Court on 14/10/2019 at Ahmedabad.