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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI,
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
These two appeals filed by the assessee are against orders of CIT(A), Kalaburagi dated 30.10.2018 and CIT(A) Gulbarga dated 26.2.2018 for the assessment years 2013-14 & 2014-15 respectively.
There was a delay of 246 days in filing the appeal in ITA No.47/Bang/2019 before this Tribunal. The assessee filed a condonation petition supported by a Medical Certificate stating that the assessee has been suffering from severe back pain from 25.4.2018 to 25.12.2018 and he was diagnosed
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Page 2 of 10 with Fibromyalsia and under the treatment for the same. In support of this, he furnished a certificate from Sri Vijay Laxmi Hospital, Yadgiri, Karnataka dated 25.12.2018. After medication, he consulted Advocate, who wanted further papers, which are not readily available with him and took certain time to procure them from other advocate in Hyderabad and finally appeal has been filed by the assessee on 7.1.2019. Thus, there was a delay of 246 days.
2.1 We have carefully gone through the condonation petition. We find that there is a good and sufficient reason in filing this appeal belatedly, before this Tribunal and considering the genuine problem of assessee, we hereby condone the delay in filing the appeal before this Tribunal and admit this appeal for hearing.
ITA No.47/Bang/2019 (AY 2014-15):
First, we take up ITA No.47/Bang/2019 for adjudication. The assessee has raised following grounds of appeal:-
1) The order of the learned Commissioner of Income-tax (Appeals) is erroneous both on facts and in law. 2) The learned Commissioner of Income-tax (Appeals) erred in confirming addition of Rs.1,00,00,000/- made u/s 68 of the I.T. Act disbelieving the claim of the appellant as he derived agricultural income.
3) The learned Commissioner of Income-tax (Appeals) ought to have considered the fact that the Assessing Officer's restriction of the quantum of agricultural income is arbitrary and is not justified.
4) The learned Commissioner of Income-tax (Appeals) erred in confirming addition of Rs.15,00,000/- made by the Assessing Officer u/s 69 of the I.T.
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Page 3 of 10 Act on the ground that the appellant had under stated the payments made towards purchase of Flat and Villa
5) The learned Commissioner of Income Tax (Appeals) ought to have considered the fact that the entire consideration was already recorded in the books of account and no addition could have been made u/s 69 of the I.T. Act.
6) The learned Commissioner of Income Tax (Appeals) erred in separately working out capital gain on sale of plot of land when the said receipt is accounted for as the business income and is shown under the head business of real estate.
7) Any other ground or grounds that may be urged at the time of hearing
Facts of the case that the AO inter-alia made the addition of Rs.1 crore treating the agricultural income declared by the assessee as non-agricultural income and also addition of Rs.15 lakhs u/s 69 of the Income-tax Act,1961 ['the Act' for short] as unexplained investment in flats. Against this assessee carried on the appeal before Ld. CIT(A) and the Ld. CIT(A) sustained the addition. Against this, once again the assessee is in appeal before this Tribunal.
4.1 Facts relating to addition of Rs.1 Crore are that there was survey u/s 133A of the Act on 6.11.2015 at the business premises of the assessee. During the course of survey proceedings, the assessee was asked to furnish the details of quantum of lands taken on lease or crop grown and sale proceeds of said agricultural produce. To support the claim, an amount of Rs.1 Crore agricultural income was returned by the assessee. The assessee has furnished details of agricultural land owned by him, land leased such as holder’s name, place, survey number and agricultural land details but not filed any documentary evidence of lease of land in various
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Page 4 of 10 places with regard to agricultural yield. The same position has been continued before Ld. CIT(A) also. Hence, the lower authorities have confirmed the addition of Rs.1 crore declared by him as agricultural income treating the agricultural income declared by the assessee as non- agricultural income. Against this assessee is in appeal before us.
We have heard the rival submissions and perused the materials available on record. Similar issue came up for consideration before this Tribunal in assessee’s own case in assessment year 2013-14 and the Tribunal vide order No.3416/Bang/2018 dated 15.12.2021 has held as under:
“We heard the learned DR and perused the records. The first issue relates to the addition of agricultural income of Rs.1.00 crores. The facts relating to the said issue are that the assessee is engaged in the business of execution of civil contracts. It was noticed from the return of income filed for the year under consideration that the assessee has reported agricultural income of around Rs.1.06 crore during the year under consideration, while in the earlier assessment years, the agricultural income reported by him was in the range of Rs.6 to 8 lakh only. Hence, a survey action u/s 133A of the Act was carried out. During the course of survey, the assessee submitted that he has taken many lands on lease during the year relevant to the assessment year 2013-2014 and hence, he could earn higher agricultural income. However, he could not furnish the details relating to lands taken on lease. Accordingly, he agreed to surrender a sum of Rs.1 crore out of agricultural income disclosed by him. Hence the A.O. added Rs.1.00 crore to the total income of the assessee. The learned CIT(A) also confirmed the same. 6. We notice from the statement of facts furnished before the learned CIT(A) that the assessee has furnished the details of land taken on lease. We notice that the learned CIT(A) has not considered the same. We notice that the assessee could not furnish the details of land taken on lease at the time of survey as well as at the time of assessment proceedings. However, the same was furnished before the learned CIT(A) in the statement of facts filed before him. It is settle principle that there is no estoppel against law. Accordingly, if the assessee is able to furnish the details relating to agricultural income earned by him from own lands as well as leased lands, in our view, the same should be considered before making the addition of
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Page 5 of 10 Rs.1.00 crore out of agricultural income. In fact, the assessee has agreed to offer the above said amount only on the reasoning that he could not furnish the details. Now he has furnished the details before Ld CIT(A). Under these sets of facts, in the interest of natural justice, we are of the view that this issue requires fresh examination at the end of the learned CIT(A) by duly considering the details of own land and agricultural land taken on lease by the assessee and such other details that may be furnished in support of the agricultural income earned by the assessee. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and restore the same to the file of the learned CIT(A) for examining it afresh.”
5.1 Since facts and circumstances of the present case are similar that was considered by the Tribunal in assessee’s own case in earlier year, following the same ratio, we remit the issue in dispute to the file of Ld. CIT(A) on similar lines for fresh consideration.
Next ground in this appeal is with regard to sustaining addition of Rs.15 lakhs investment in house property at Hyderabad.
6.1 Facts of the case are that the assessee was asked to produce details of investment made for purchase of flat and villa in Hyderabad. After verification of evidence produced, it was observed that there is a discrepancy of Rs.15,00,000/- in the value of investment made and assets admitted in the books of account. Further, the assessee during assessment proceedings stated that there were some omissions in ROI and also submitted that an amount Rs.15,00,000/- was incurred towards interior works done for the villa and flat during the F.Y.2013-14. It is further mentioned that as the assessee could not explain the discrepancy, he voluntarily admitted as unexplained expenditure. Further, the AO had made noting in the order sheet giving the details of additions and quantification of total income. The same was
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Page 6 of 10 acknowledged by the assessee. The copy of the order sheet noting was made part of the assessment order.
6.2. During the course of survey, it was found that the assessee sold land to the extent of 7200 sq.ft. on 25.07.13 for a total consideration of Rs.59,40,000/-. It is further mentioned in the assessment order that during assessment proceedings the assessee had submitted that the sale consideration was not admitted in the ROI filed for A.Y.2014- 15. Accordingly, capital gains were calculated and noting in the order sheet giving the details of additions and quantification of total income was made. The same was acknowledged by the assessee. The copy of the order sheet noting was made part of the assessment order.
After hearing both the parties, we are of the opinion that the assessee has admitted these additions before lower authorities and offered it for taxation. Before us, the assessee is not able to retract the above admission made by the AO as per assessee’s offer. Accordingly, we are not in a position to find any infirmity with the order of Ld. CIT(A) and is confirmed.
In the result, the appeal filed by the assessee in ITA No.47/Bang/2019 is partly allowed for statistical purposes.
ITA No.46/Bang/2019 (AY 2013-14):
In ITA No.46/Bang/2019 the assessee has following grounds of appeal:- 1. The order of the learned Commissioner of Income-tax (Appeals) is erroneous both on facts and in law.
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Page 7 of 10 2. The learned Commissioner of Income-tax (Appeals) erred in holding that there is concealment of income or furnishing of inaccurate particulars of income and further erred in confirming the penalty u/s 271(1)(c) of the Act of Rs.39,44,290/- 3. Any other ground or grounds that may be urged at the time of hearing.
This appeal is emanated from the order of Ld. CIT(A) dated 30.10.2018 for the assessment year 2013-14, where he has confirmed levy of penalty at Rs.39,44,290/- u/s 271(1)(c) of the Act.
Facts of the case are that the impugned appeal is filed by the assessee against the order of the Assessing Officer imposing penalty u/s 271(1)(c) of the Act vide his Order dated 28.7.2016. Through the above said order the Assessing Officer has imposed penalty u/s 271(1)(c) of the Act for a sum of Rs.39,44,290/ on the stated reason that the assessee has concealed the particulars of income and/or has furnished inaccurate particulars leading to escapement of tax. To be specific the penalty was levied basing on the addition made by the Assessing Officer u/s 143(3) towards (a) treatment of agricultural income of Rs.1,00,00,000/- as other source of income and (b) adding a sum of Rs.9,79,438/- as unexplained investment within the meaning of Section 69 of the Act. Ld. CIT(A) confirmed the levy of penalty. Against this assessee is in appeal before us.
We have heard the rival submissions and perused the materials available on record. It is brought to our notice that the additions made by the AO sustained by Ld. CIT(A) was subject matter of appeal before this Tribunal in ITA No.3416/Bang/2018 dated 15.12.2021 for the assessment year 2013-14. The Tribunal has remitted the issue back to the file of Ld. CIT(A) with the following observations: -
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Page 8 of 10 5. “We heard the learned DR and perused the records. The first issue relates to the addition of agricultural income of Rs.1.00 crores. The facts relating to the said issue are that the assessee is engaged in the business of execution of civil contracts. It was noticed from the return of income filed for the year under consideration that the assessee has reported agricultural income of around Rs.1.06 crore during the year under consideration, while in the earlier assessment years, the agricultural income reported by him was in the range of Rs.6 to 8 lakh only. Hence, a survey action u/s 133A of the Act was carried out. During the course of survey, the assessee submitted that he has taken many lands on lease during the year relevant to the assessment year 2013-2014 and hence, he could earn higher agricultural income. However, he could not furnish the details relating to lands taken on lease. Accordingly, he agreed to surrender a sum of Rs.1 crore out of agricultural income disclosed by him. Hence the A.O. added Rs.1.00 crore to the total income of the assessee. The learned CIT(A) also confirmed the same. 6. We notice from the statement of facts furnished before the learned CIT(A) that the assessee has furnished the details of land taken on lease. We notice that the learned CIT(A) has not considered the same. We notice that the assessee could not furnish the details of land taken on lease at the time of survey as well as at the time of assessment proceedings. However, the same was furnished before the learned CIT(A) in the statement of facts filed before him. It is settle principle that there is no estoppel against law. Accordingly, if the assessee is able to furnish the details relating to agricultural income earned by him from own lands as well as leased lands, in our view, the same should be considered before making the addition of Rs.1.00 crore out of agricultural income. In fact, the assessee has agreed to offer the above said amount only on the reasoning that he could not furnish the details. Now he has furnished the details before Ld CIT(A). Under these sets of facts, in the interest of natural justice, we are of the view that this issue requires fresh examination at the end of the learned CIT(A) by duly considering the details of own land and agricultural land taken on lease by the assessee and such other details that may be furnished in support of the agricultural income earned by the assessee. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and restore the same to the file of the learned CIT(A) for examining it afresh. 7. The next issue is relates to unexplained investments in purchase of flats. The assessee had purchased a flat and villa in Hyderabad. There was a discrepancy of Rs.9,79,438 in the value of investment made by the assessee and disclosed in the books of account of the assessee. Even though the assessee submitted that the mistake would have happened due to accounting error, yet the A.O. added the same to the total income. According to the A.O., the assessee offered the above said difference to tax.
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Page 9 of 10 8. Before the learned CIT(A), the assessee contended that there was no difference as pointed out by the A.O. Since the assessee has agreed to offer the difference, the learned CIT(A) also confirmed the addition. 9. In our view, if the assessee is able to prove that there is no difference, then no addition is required even if the assessee had offered the same as his income during the course of assessment proceedings. In the interest of natural justice, we are of the view that the assessee may be provided with an opportunity to furnish the details. Since the details that may be furnished by the assessee require verification, we restore this issue to the files of the learned CIT(A) for examining it afresh.”
12.1 Since the quantum additions involved in this penalty appeal has been set aside to the file of Ld. CIT(A) for fresh consideration, in the interest of justice, we also remit the issue of levy of penalty u/s 271(1)(c) of the Act on the above issues to the file of Ld. CIT(A) for fresh consideration to decide the same after deciding the appeal in quantum additions. The appeal of the assessee is partly allowed for statistical purposes.
In the result, both the appeals of the assessee are partly allowed for statistical purposes.
Order pronounced in the open court on 3rd Nov, 2022.
Sd/- Sd/- (Beena Pillai) (Chandra Poojari) Judicial Member Accountant Member
Bangalore, Dated 3rd Nov, 2022. VG/SPS
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Page 10 of 10
Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order
Asst. Registrar, ITAT, Bangalore.