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Income Tax Appellate Tribunal, AGRA BENCH: AGRA
Before: SHRI LALIET KUMAR,AND DR. MITHA LAL MEENA
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA
BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER,AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER
I.T.A No.288/Agra/2018 (ASSESSMENT YEAR-2011-12)
Rakesh Kumar Gupta, Vs.. ITO-Ward 2(5), Gupta Rice & Flour Mill Station Mainpuri. Road, Mainpuri. PAN:ABEPG9644H (Appellant) (Respondent)
Appellant by ShriR.C. Tomar, ITP. Assessee by Shri Waseem Arshad, Sr. DR.
Date of Hearing 02.07.2019 Date of Pronouncement 08.07.2019
ORDER Per Dr. M. L. Meena, A.M.: The present appealemanates from the order of the ld. Commissioner of Income Tax Appeals, Gwalior [(in short ‘the ld. CIT(A)], dated 10.11.2015 for A.Y. 2011-12. where the has raised the following ground: “1. That C.I.T. (Appeal) has erred on facts and in-law to sustain the addition of Rs. 1431582/- which was invested by the assessee after withdrawing from the bank account jointly held with his father. 2. That the C.I.T. (Appeal) has erred on facts and in law to disbelieve the evidence for sale of agriculture produce to the tune of Rs. 1631582/- which included Rs. 384282/-from savings of father and the sale of crops supported by the Krishi Utpadan Mandi Samiti receipts issued and produced before the A.O. and the C.I.T. (A).
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That the C.I.T. (Appeal) has erred on facts and in law that the amount of investment made at Rs. 1631582/- for share margin money was unexplained ignoring the possession of 50 Bigha of agriculture land and the receipts derived from sale of agriculture crop in March 2010 Rs. 350600/-, July 2010 Rs. 345800/-, Oct. 2010 550900/- totaling to Rs. 1247300/- supported by 6R and Rs. 384282/- out of past agricultural income available as a result of savings when the C.I.T. himself has accepted agriculture income at Rs. 2.00 lac during the year. 4. That C.I.T. has erred on facts and in law to disbelieve the affidavit filed by Shri Narendra Singh father of the assessee who had testified the availability of money as a result of agriculture produce sold, past savings duly deposited in bank account. 5. That the addition of Rs. 43804/- for the accumulated interest on RD in one assessment year is illegal and arbitrary. 6. The appellant craves to add or alter any other ground of appeal as may be warranted.” 2. from the above, we find one effective issue being split into as many as five grounds of appeal pertaining to confirmation of addition of Rs.14,31,582/- as unexplained income on account of investment in margin money of share trading besides RD Interest. Therefore, all the grounds are adjudicated together by this composite order
In brief, the facts of the case are that assessee was engaged in the business of running a restaurant besides earning commission and interest income; that the AO observed during the scrutiny assessment that the assessee has done share trading during the year under consideration with a margin money of Rs. 23, 40,676/- however, he has not shown the income from such share trading in the return of income; that the assessee failed to explain the source of investment of margin money of Rs.Rs.14,31,582/- out of Rs. 23, 40,676/- with the supporting the documentary evidences; that the assessee even could not produce the bill/vouchers in support of agricultural income and that the statement of copy of joint bank account in the name of assessee and his father submitted for the financial year 2010-11 and 2011-12 (financial year relevant to assessment year underconsideration) showed a deposited of Rs.2,90,000/- during financial year 2009-10 and nil during financial year 2011-12
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whereas Rs15,02,220/- during financial year 2010-11 relevant to assessment year under consideration. Considering the Rs.2,00,000/- as assessee father’s agricultural income contribution towards the margin money on the basis of the bank statement for the three finance year as above, and Rs.7,09,096/- as assessee’s other explained income, thereafter, the AO has treated balance Rs.14,31,582/-out of the margin money of Rs. 23, 40,676/- as unexplained income of the assessee and added to the return income.
Being aggrieved, the assessee went in appeal before the ld. CIT(A) who has confirmed the finding of the Assessing Officer by observing that the assessee had failed to explain the source of investment of Rs.14,31,582/-shown to be invested from his father’s agricultural incomein the margin money of share trading business. He further observed that the assessee has not brought on record any material evidence regarding production of wheat, potato and rice crop and storage of these crops for a period of two and a half year thereof ; that the assessee has not produce any evidence regarding sale of stored potato crop in March 2010 and thus merely a submission of an affidavit by the assessee would not be sufficient to discharge the burden of proving the source of agricultural income of his father. Therefore, the ld. CIT(A) has held that the assessee has failed to discharge the primary onus to explain the source of agricultural income of his father and his bank deposit and reconciliation of the bank deposit before one year and agricultural income earned thereof and accordingly upheld the finding of the AO as reasonable and logical in the absence corroborative evidence.
The ld. AR argued that the C.I.T. (Appeal) has erred on facts and in-law to sustain the addition of Rs. 14,31,582/- which was invested by the assessee after withdrawing from the bank account jointly held with his father; that he has erred on facts to disbelieve the evidence for sale of agriculture produce to the tune of Rs.
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1631582/- which included Rs. 384282/- from savings of father and the sale of crops supported by the Krishi Utpadan Mandi Samiti receipts issued and produced before the A.O. and holding the amount of investment made at Rs. 1631582/- for share margin money was unexplained ignoring the possession of 50 Bigha of agriculture land and the receipts derived from sale of agriculture crop in March 2010 Rs. 350600/-, July 2010 Rs. 345800/-, Oct. 2010 550900/- totaling to Rs. 1247300/- supported by Rs. 384282/- out of past agricultural income available as a result of savings when the C.I.T. himself has accepted agriculture income at Rs. 2.00 lac during the year.The CIT(A) has erred in law to disbelieve the affidavit filed by Shri Narendra Singh father of the assessee who had testified the availability of money as a result of agriculture produce sold, past savings duly deposited in bank account and that the addition of Rs. 43804/- for the accumulated interest on RD in one assessment year is illegal.
Per contra, the ld. DR placed reliance on the impugned order.He submitted that the AO has observed at page 2 of the assessment order that the agricultural land owned by the assessee’s father but assessee had declared agricultural income from the sale of accumulated produce of two and a half years in between March 2010 to October 2010 towards cash deposit in the bank account (APB, Pg. 9). However, he has not shown any withdrawals in anticipation to the agricultural operations carried out for earning the agricultural income of Rs.15,02,220/- so as to demonstrate availability of cash for margin money. He further submitted that the assessee has failed to produce documentary evidence to proof cultivation of agricultural produce by way of KhasraKhatauni, source of irrigation (tube well/canal), evidence on cold storage etc. He contended that the deposits in the bank account do not correlate with the proceeds emanating from Mandi Parishad. In support, he placed reliance on the case of Smt. Prem Sundari vs. CIT Appeal No.95 of 2008 All.
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“For claiming the benefit of the agriculture income. It is necessary to produce the certificate for the assessment year under consideration. Further, the assessee should maintain the accounts pertaining to entire agriculture activity. In the instant case, no account was maintained by the assessee.” 7. We have heard both the parties, and perused the material on record and the case laws referred on the issue under dispute.
7.1 It is not disputed that the assessee has shown agricultural income of Rs.1,50,520/- for rate purpose in the return of income for the year under consideration (APB, Pg. 2). It is also not disputed that the assessee’s father has never filed any return of income, and the assessee and his father had a joint bank account in Allahabad Bank, Mainpuri in which the AO noticed cash deposit of Rs.2,90,000/- and 15,02,220/- during the financial year 2009-10 and 2010-11 respectively. The ld. Counsel contended thatthe assessee has investedRs.14,31,582/- from his father’s agricultural income in the margin money of share trading business. In the absence of relevant material evidence on record, such as return of income, withdrawals for agricultural expenses on cultivation of crops, details of agricultural activities, suitability of soil in terms of fertility for the types of the crops, and other facilities of tubewell/canal for irrigation etc. in support of the aforesaid agricultural income, the ld. CIT(A) has disbelieved the affidavit of the deceased father of the assessee in respect of his agricultural income from the sale of stored crops of wheat, potato, rice etc. for two and a half years. Merely, submission of an affidavit of the assessee’sdeceased father would be not sufficient to discharge the burden of proving the source of agricultural income of his father having been invested as cash deposit in the aforesaid joint bank account for the purpose of use of margin money in the share capital business. Without prejudice to the above, the assessee’s father was died on14/09/2016 (APB, Pg. 10) and
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the affidavit is given on Rs. 10/- stamp paper where neither dateis givennor the content of affidavit are verifiable in case of the deceased person. Therefore, the ld. CIT(A) has been justified in holdingthat the assessee has failed to discharge the primary onus to explain the source of investment in the margin money of share trading business owing to unexplained agricultural income of his father andnon-reconciliation of the bank deposit and agricultural income earned thereof. From the record, we find that the agricultural land was owned by the assessee’s 7.2. father.However, the assessee has not claimed such an agricultural income from his father either in the earlier assessment years or in the succeeding years. Over and above the assessee’s father is neither filing return of incomenor any statement of account including income and expenditure statement of working of his agricultural income has been furnished by the assessee either before Authorities below or before us so as to ascertain the correct amount of agricultural income. It is noticed that the assessee has failed to produce material documentary evidence to proof cultivation of agricultural produce by way of KhasraKhatauni, source of irrigation (tube well/canal), evidence on cold storage etc. to justify the cash deposits in the aforesaid joint bank account in which even the cash deposits do not correlate with the proceeds emanating from Mandi Parishad.Therefore, the agricultural income claimed from the sale of accumulated produce of two and a half years in between March 2010 to October 2010 towards cash deposit in the bank account in anticipation to corresponding withdrawalsto the agricultural operations to be carried out for earning such volume of agricultural income of Rs. 15,02,220/- is rightly disbelieved by the ld. CIT(A),to demonstrate availability of cash Rs.14,31,582/- for investment in margin money of share trading business(APB, page 9).
It is evident from the above that for the purpose of claiming the benefit of the agriculture income, it is necessary to produce the material evidence to substantiate
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claim of agricultural income for the assessment year under consideration. Further, the assessee should maintain the accounts pertaining to entire agriculture activity. In the instant case, no account was maintained by the assessee. Following the Hon’ble Jurisdictional High Court in the case of “Smt. Prem 9. Sundari vs. CIT”, (supra)we uphold the order of the ld. CIT(A) in sustaining the addition of Rs. 14,31,582/-.Accordingly, all the five grounds of the assessee on this issue are dismissed.
As regards to the addition of Rs. 43804/- in respect of the accumulated interest on RD A/c, it is noticed that the aforesaid interest amount was found credited in the RD bank amount in the year under consideration by the AO. Since, the assessee failed to demonstrate on the basis of documentary evidence that the said Interest income was related to earlier years either before the authorities below or before us and therefore, we are inclined to appreciate the finding of the CIT(A) on this issue as legal and justified and confirm the addition accordingly. This ground of appeal is also rejected.
In the result, all the grounds of appeal are dismissed.
Order pronounced in the open court on 08/07/2019.
Sd/- Sd/- (Laliet Kumar) (Dr. M.L. Meena) JUDICIAL MEMBER ACCOUNTANT MEMBER *AKV* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR