MARUTI NINGAPPA PATIL,MUMBAI vs. ACIT CIRCLE-1 KALYAN, MUMBAI

The appellant, M/s. Maruti Ningappa Patil (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned order dated 14.07.2022 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2013-14 on the grounds inter-alia that :- “1. The Id CIT (A) erred in upholding the addition of Capital gain of Rs.3,84,967/- on sale of land without appreciating that assessee had already offered the capital gain of Rs.3,75,000/- (being is share as co- owner) in A.Y. 2012-13 on receipt of part consideration and supporting details in support of the same were filed before AO as well as CIT (A), 2 M/s. Maruti Ningappa Patil

I have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable thereto.

At the very outset, the assessee has raised specific ground that in view of the rule of natural justice adequate opportunity of being heard has not been given to the assessee during the assessment proceedings as well as during first appellate proceedings. It is also grievance of the assessee that the Ld. CIT(A) has not allowed an opportunity of being heard through video conference to explain the evidence brought on record and the AO has also not examined the evidence brought on record before the AO to explain the source of income of Rs.13,50,000/- as agricultural income explained by way of letter dated 20.09.2021 along with supporting evidence. However, on the other hand, the Ld. D.R. for the assessee contended that due opportunities have 4 M/s. Maruti Ningappa Patil already been granted to the assessee during assessment proceedings as well as during first appellate proceedings and now the assessee has nothing to say.

In the backdrop of the aforesaid contention when I examine the impugned order passed by the Ld. CIT(A) it is apparent on record that the order has been passed without examining the evidence duly brought on record before the AO and then before the first appellate authority rather impugned order has been passed in a slipshod manner as is apparent from para 8 & 9 of the impugned order which are extracted for ready perusal as under: “8. I have carefully considered the action of the Assessing Officer and the submissions of the appellant. I have noted that appellant filed his return of income only after notice u/s 148 was issued. I have also noted that after duly considering the appellant's submissions at the assessment stage the Ld. AO agreed that appellant's share of property is only 12.5%. I have also noted that countering the argument of the appellant, the Assessing Officer established and got the appellant to agree that the land is not agricultural and thereof is liable for capital gains. The appellant's submission that the capital gains of Rs.3,75,000/- was declared in Assessment Year 2012-13 is unsubstantiated as no return for that year was filed by the appellant. I find no reason to interfere with the decision of the Assessing officer in this regard.

Furthermore, the Ld. CIT(A) has also not given an opportunity to the assessee to explain the evidence brought on record and ignored by the AO to explain the source of income of Rs.13,50,000/- as agricultural income which was deposited in the 5 M/s. Maruti Ningappa Patil bank. Even before the first appellate authority the assessee has made a categoric request to consider all the relevant evidences filed before the AO and the assessee may be given an opportunity to argue through video conference.

Perusal of the assessment order also shows that though the AO has brought on record all the evidences relied upon by the assessee but failed to bring on record the reasons for not accepting the same. The AO has declined the claim of assessee qua agricultural income on the grounds inter-alia that the assessee has furnished some handwritten bills of Ram Traders with regard to soyabean which appears to be not authentic; that there is no stamp on the bill; that there is no mention of mode of payment of the sale proceeds and that identity of Ram Traders is not established as there is neither PAN/TAN nor full address on the bill and thereby not accepted the claim of the assessee.

All these facts go to prove that the evidence brought on record by the assessee has been brushed aside just on the basis of surmises without issuing notice to the Ram Traders. Any bill cannot be ignored only on the ground that the same are hand written and there is no stamp on the same because in case of traders who are purchasing agricultural produce from the farmers most of the traders working in the agricultural sector to purchase the agricultural produce from the farmers still work in a traditional manner which cannot be a ground to disregard the evidence brought on record by the assessee.

All these facts discussed in the preceding paras go to prove that this is a case in which assessee’s evidence brought on record 6 M/s. Maruti Ningappa Patil even now available before the Bench running into 1 to 7 pages of the paper book in the form of revenue record need to be examined afresh by the AO by providing adequate opportunity of being heard to the assessee.

In view of what has been discussed above, the impugned order passed by the Ld. CIT(A) is hereby set aside and case is remanded back to the AO to decide afresh by examining all the evidences brought on record by the assessee by providing adequate opportunity of being heard to the assessee.

Resultantly, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 22.12.2022.