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Income Tax Appellate Tribunal, “E” Bench, Mumbai
O R D E R Per Shamim Yahya (AM) :
These are appeals by the assessee is directed against the orders of learned CIT(A) for concerned assessment years.
The issues are common and connected and appeals were heard together, hence these are being disposed off by this common order for the sake of convenience.
3. For the sake of reference we are referring to assessment year 2011-12.
The grounds of appeal in all the years are common except for change in respective figures. We are referring grounds of appeal for A.Y. 2011-12 as under :-
2 Tara Kabra “I. Notice u/s. 153C of the Act bad in law : The Id. CIT(A) has erred in issuing notice u/s. 153C of the Act dt 12/10/2018 without appreciating that there was no incriminating material found in the case of appellant nor there is a reference in the satisfaction note. As, no material is brought on record which justifies issuance of the notice u/s 153C of the Act nor the satisfaction recorded refers to the same, therefore, impugned notice as well as the assessment order passed u/s I53C should be considered as bad in law and liable to be quashed.
II. Approval U7s 153D of the Act: 2. The Id. CIT(A) has erred in upholding the order of the assessing officer without appreciating the fact that approval u/s. 153D of the Act had not being referred in the body of the assessment order and same is not a curable defect, therefore the order passed should be treated as null and void liable to be quashed. V
Non-mention of approval u/s 153D in the body of assessment order is violation of Clause 9 of Manual of Office Procedure Volume II Technical February 2003 issued by Directorate of Income Tax on behalf of Central Board of Direct Taxes, Department of Revenue, Government of India.
III. Agricultural income Rs. 1.36.580/-: 4. The Id CIT (A) erred in confirming the addition of agriculture income declared in return of income filed u/s 139 as well as u/s 153C of the Act, to the extent of Rs.1,36,580/- (AO added Rs.2,36,580/- and CIT(A) has given relief of Rs. 1,00,000/-) by considering the same as unexplained cash credit u/s. 68 of the Act, without any reference to any incriminating material and therefore such addition cannot be made in relevant year in a proceeding u/s. 153C of the Act.
The Id CIT (A) erred in confirming addition of agriculture income to the extent of Rs.1,36,580/- as unexplained cash credit for the year under consideration without considering the evidences like sample agriculture bills/agreements for agriculture lands owned and used for agriculture purposes by appellant. The appellant craves leave to add, alter or delete any grounds of appeal.’
5. For A.Y 2017-18 one more ground is there which read as under :-
4. Without prejudice to the aforesaid Grounds, The Hon'ble CIT (A) has erred in confirming addition of agriculture income to the extent of Rs.4,49,490/- as unexplained cash credit for the year under consideration without considering the facts and submissions and evidences like sample agriculture bills/agreements for agriculture lands owned and used for agriculture purposes by appellant. Hon'ble CIT (A) has failed to consider submission made by appellant with regard to such sample bills/agreements brought on record Accordingly, addition confirmed to the extent of Rs.4,49,490/- should be deleted.
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At the outset learned Counsel of the assessee submitted that he shall not be pressing ground No. 1 pertaining to notice under section 153C of the Act being bad in law and the issue of incriminating material and assessment year attaining finality. Hence this ground is dismissed as not pressed.
As regards ground No. 2 regarding approval under section 153D of the Act is concerned learned Counsel of the assessee fairly admitted that there is due approval in the records which was duly shown to learned CIT(A). However he submitted that there is no mention of the same in the assessment order. We find that this is frivolous ground not sustainable in law. Approval is duly on record hence this ground raised by the assessee is dismissed in as much as learned counsel himself has agreed that due approval is already on record which was shown to learned CIT(A) in the first appellate proceedings.
Apropos addition on account of agricultural income :
For the sake of convenience in this regard with regard to agricultural income we are referring to A.Y. 2011-12 where order of the Assessing Officer is recorded as under :-
Vide notice u/s 142(1) dated 07.12.2018, the following query was raised to assesses, and the date of compliance was fixed as on 11.12.2018 at 11.45 am: "It is observed that you have shown following Agriculture Income in various assessment years: AY 2011-12 2,42,860 AY 2013- 14 6,58,690 AY 2014- I5 6,79,680 AY 2015-16 6,82,450 AY 2016-17 6,98,251 AY 2017-18 6,99,490 In regard to above, please submit as under: a) Please explain as to where your Agricultural Land at which such activity is earned out is situated, with copy of registered agreement.
4 Tara Kabra b) Please explain measurement area of said land. c) Please submit relevant evidences to prove that agricultural activity has been carried out at said land. Please explain the type of agriculture crop in each year and quantity of agriculture produce. d) Please submit copies of bills for seeds/fertilizers/water bill/electricity bill/labour bills etc. e) Please explain the party-wise details of persons to whom sold agriculture produce is sold, rate of sale, and mode of payment received. Also please submit transportation receipts for carriage of agricultural produce. g) Please submit break-up of costs & sale realization in each year. Please explain reasons of generating almost similar net profit in last 5 years, i.e. ranging between Rs. 6.50 to 7 lakhs.
In case you fail to submit complete details to prove the genuineness of said activity, please show cause as to why aforesaid receipts should not be assessed as unexplained cash credit u/s 68 of the Act."
5.2 The assessee has failed to comply with aforesaid notice. Subsequently in notice u/s 274 r.w.s. 27 l(l)(b) dated 12.12.2018, the assessee was provided last & final opportunity and date of compliance was fixed on 14. 12.2018 at 11.30 am. In the said notice, the assesses was show caused as to why assessment of total income should not be made to the best judgment u/s 144 of the Income Tax Act, 1961. The assessee however tailed to comply with said notice as well. In these circumstances, it is presumed that the assessee has no explanation to officer and the assessment is being completed ns per best judgment u/s 144 of the Act. Further, penalty order was passed dated 12.12.2018 u/s 271(1) (b).”
5.3 The onus lied upon assessee to prove the genuineness of aforesaid income having earned from agricultural activity, in which the assessee has grossly failed. It appears that the assessee has offered ad-hoc amount of agriculture income in each year without any basis' or supporting evidences just to convert her unaccounted income into accounted, knowing that the agriculture income would not be taxable and includible just for rate purposes.
5.4 In view of above, the amount of Rs. 2,36,580/- relevant for the assessment year under consideration, is added to total income of assessee as unexplained cash credit u/s 68 under Income from Other Sources.”
Upon assessee’s appeal learned CIT(A) noted that additional evidence 9. has been submitted by the assessee. Additional evidence was forwarded to the Assessing Officer by learned CIT(A). The Assessing Officer in the remand report submitted that the assessee’s claim for agricultural income is not 5 Tara Kabra sustainable. Concluding portion of Assessing Officer’s remand report was as under :- 4.2 The assessee has submitted some sample copies of purchase agreement in respect of land purchased. It is pertinent to mention here that mere holding of agricultural land in itself does not prove that agricultural income has accrued to the assessee. Hence, the accrual of agricultural income cannot be proved till the evidence of agricultural income are not submitted.
4.2 The assessee’s representative has further mentioned that the agricultural activity is done on contractual basis and the assessee gets 2/3 of net revenue proceeds after reducing all costs incurred from gross agricultural produce. However, the assessee has failed to submit any evidence in respect of the expenses incurred under the pretext that the agricultural are done through various contractors". The assessee has failed to submit any detail in respect of the gross agricultural produce, expenses incurred or details of the contractors through whom the agricultural activity is carried out. The assessee has also failed to submit expenses incurred in respect of water as well as electricity. In absence of the details of expenditure, the assessee has also failed to submit as to how the agricultural income as declared in the return is worked out. Thus, apart from some sample copies of gross agricultural produce as tabulated hereunder the assessee has failed to submit any documentary evidence in respect of agricultural income and expenses incurred to earn such income. The details of gross income in respect of agricultural produce as submitted by The assessee are as under :-
Sr. No. FY Amount
3 2012-13 52,849/- 1 2015-16 1,80,460/- 4 2015-16 58,826/- 5 2015-16 58,787/- 6 2015-16 68,283/- 2 2016-17 57,826/- It is observed from the aforementioned details filed that the assessee has shown to have received gross amount of Rs 3,66,056/- during FY 2015-16 relevant to AY 2016-17, Rs. 52,849/- during I Y 2012-13 relevant AY 2013- 14 and Rs. 57,820/- during FY 2016-17 relevant to AY 2017-18. Apart from the aforementioned gross receipts, the assessee has failed to submit any other documentary evidence in support of her claim of agricultural income. It is pertinent to note here that even the aforementioned receipts are gross receipts and the details in respect of expenses incurred to earn such receipts are not submitted. It is further observed that the query in respect of agricultural income was first raised on 07/12/2018 and thereafter order has been passed on 25/12/2018. Even after a period of more than two years, the assessee has failed to submit evidences in respect of the agricultural income earned. Thus, even on merits, the assessee's contention does not appear to be acceptable.
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In view of the above, the additional evidences submitted by the assessee do not appear to be admissible and the order passed by my predecessor is hereby endorsed.”
Learned CIT(A) granted part relief and hold as under : 9.4 As stated above, the assessee owns 37 bighas of agricultural land at her native place in Rajasthan. Further, the assessee has produced some evidence of sale of agricultural produce in nature of sale vouchers of cotton, jawar and other crops at Krishi Mandi. It is claimed that the agricultural operations are done on batai basis in which the person actually doing agricultural operations gets l/3r"share of crops and remaining 2/3rdshare conies to the assessee. However, I feel that the sample vouchers for the sale of agricultural produce submitted by the assessee are very few and do not explain the kind of income shown by the assessee, which are shown as under:
Sr No. Assessment Amount of sample Agriculture income year vouchers shown 1 2011-12 nil 236580/- 2 2012-13 nil 242860/- 3 2013-14 52,849/- 658690/- 4 2014-15 nil 679680/- 5 2015-16 nil 682450/- 6 2016-17 4,24,182/- 698251/-
7 2017-18 Nil 6,99,490/- Further sales have been claimed to be made in cash and therefore it becomes difficult for verification. I am also unable to agree with the assessee that she will get 2/3"1 share of agricultural produce. Normally, it may not be more than 50% of the produce. Considering these facts, I broadly agree with the AO that the assessee has not explained the sources of this agriculture income properly. However at the same time it cannot be said that the assessee just did not earn any income from agriculture or could not have earned any income. Even if the assessee gives it somebody else to cultivate it, she will end up getting some income from 37 bighas of land.
9.5 Therefore, considering the overall facts of the case, I am of the view that it will be reasonable that the assessee may be allowed benefit of agricultural income to the extent of as shown in the table below.
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Sr. No. Assessm Amount Agriculture Agriculture Agriculture ent year sample income be income income to vouchers allowed shown disallowed
1 2011-12 nil 1,00,000 236580/- 1,36,580/- 2 2012-13 nil 1,00,000/- 242860/- 1,42,860/- 3 2013-14 52,849/- 2,00,000/- 658690/- 4,58,690/- 4 2014-15 nil 2,00,000/- 679680/- 4,79,680/- 5 2015-16 nil 2, 50,000/- 682450/- 4,32,450/- 6 2016-17 4,24,182/- 2,50,000/- 698251/- 4,48,251/-
7 2017-18 nil 2,50,000/- 6,99,490 4,49,490/- 9.6 Thus, the assessee gets relief of Rs.1,00,000/- and remaining amount of Rs. l,36,580/- is upheld as income from other sources. Consequently, ground no.2 is partly allowed.”
Against the above order the assessee is in appeal before us.
We have heard both the parties and perused the records. Learned counsel reiterated the submission that claim for agricultural income is cogent and learned CIT(A) erred in not deleting the same. On a query from the Bench whether land revenue record in the form of 7/12 extracts were furnished before the authorities below learned counsel admitted that only a miniscule portion of the same was submitted. A perusal of them shows that it also mention status of the land is ‘BANJAR’ i.e. non-cultivable. As already emanating from the orders of the authority below there is no cogent evidence of agricultural income and agricultural expenses incurred by the assessee. Entire submissions of the assessee are an afterthought and make believe submission. We note that the revenue is not in appeal against the relief granted by learned CIT(A). In our considered opinion learned CIT(A) has granted more than fair relief to the assessee. The theory of agricultural income by the assessee is devoid of cogent evidence. In this view of the matter we do not find any infirmity in the order of learned CIT(A) in this regard. Hence, we confirm the same.
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As regards the last ground of addition for cash and jewellery for A.Y. 2017-18, we note that in the assessment order the Assessing Officer noted that during the course of search these were found. The Assessing Officer has made addition by following observation :
“Vide Notice u/s 142(1) elated 16.11.2018 the following query was raised to assesses, and the date of compliance was fixed as on 19.11.2018 at 12.00 pm:
"A Search & Seizure action under section 132 (along with Survey actions under section 133A) of the Income-tax Act, 1961 was undertaken on 25. 10.2016 in the case of Pandhe group comprising Pandhe Infracons Private limited (PIPL) and its associated concerns- controlled by Shri Ankur Anil Pandhe and his family. During the course of Search action, your residence was also covered.
In the course of search action, the Inventory of Jewellery and Cash found/seized was recorded as under:
Premise Assets found but not seized Assets seized particulars Cash Jewellery Total Cash Jewellery Total (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) Residence at 2202, Mahindra 21,200 8,15,796 8,36,996 Nil Nil Nil Eminent, Near Patkar College, S.V. Road Goregaon, West Mumbai Please explain the source of above Cash/ Jewellery with supporting evidences. In case the same is not proved, please show cause as to why the respective amount should not be added to your total income u/s 69A/ 69 B of the Act in the year of search i.e. A.Y. 2017-18. "
5.2 The assesses has failed to comply with aforesaid notice, and hence penalty order u/s 271(l)(b) dated 12.12.2018 levying a penalty of Rs. 10,000/- was passed. Subsequently in notice u/s 274 r.w.s. 271(1)(b) dated 12.12.2018, the assesses was provided last & final opportunity and date of compliance was fixed on 14.12.2018 at 1130 am, In the said notice, the assessee was show caused as to why assessment of total income should not be made to the best judgment u/s 144 of the Income Tax Act, 1961, The assessee however failed to comply with said notice as well. In these circumstances, it is presumed that the assessee has no explanation to offer, and the assessment is being completed as per best judgment u/s 144 of the Act.
9 Tara Kabra 5.3 The onus lied upon assessee to prove the source of above jewellery/cash found during search, in which the assessee has grossly failed.
5.4 In view of above, the amount of Rs. 8,36,996/- is added to total income of assessee u/s 69A under Income from Other Sources- Penalty proceedings are initiated separately for concealment of income.”
Upon assessee’s appeal in this regard learned CIT(A) has confirmed the addition holding as under :
10. During the course of search, cash of Rs.21,200/- and jewellery of Rs.8,15,796/- totaling to Rs.8,36,996/- was found and seized. During the course of assessment proceedings, the assessee failed to furnish any reply in this regard even though, she was given sufficient opportunities of being heard. This resulted into completion of assessment, as per host judgment in the manner laid down u/s.144 arid Assessing Officer also had to levy penalty u/s.271(l)(b) of the I.T. Act. Consequently, addition of Rs.8,36,996/- was made by the Assessing Officer in the hands of the assessee on this account. During the appellate proceedings also, the assessee failed to furnish any credible explanation or evidence in support of cash and jewellery found and seized and treated as unexplained by the Assessing Officer. Assessee only said that cash and jewellery found from its premised at the Time of search was not unusual. In absence of any evidence to the contrary, I am not in a position to deviate from the view taken by the Assessing Officer. Therefore, addition of Rs.8,36,996/-, made by the Assessing Officer is upheld.’’
Against the above order assessee is in appeal before us.
We have heard both the parties and perused the records. Learned counsel of the assessee submitted that the assessee should be granted due relief on the basis of CBDT Circular which provides for permission of holding the jewllery for individual which may not be seized. In this regard he referred to some ITAT decisions, wherein reliefs on the basis of the said CBDT circular have been granted. Upon hearing learned counsel and perusing records we find that, what the learned counsel submits is the guidelines for seizure of the jewellery and ornaments by the CBDT Circular which read as under :
“Instances of seizure of jewellery of small quantity in course of operations under section 132 have come to the notice of the Board. The question of a common approach to situations where search parties come across items of jewellery, has been examined by the Board and following guidelines are issued for strict compliance.
10 Tara Kabra (i) In the case of a wealth-tax assessee, gold jewellery and ornaments found in excess of the gross weight declared in the wealth-tax return only need be seized. (ii) In the case of a person not assessed to wealth-tax gold jewellery and ornaments to the extent of 500 gms. per married lady, 250 gms. per unmarried lady and 100 gms per male member of the family need not be seized.
(iii) The authorised officer may, having regard to the status of the family, and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure. This should be reported to the Director of Income-tax/Commissioner authorising the search at the time of furnishing the search report. (iv) In all cases, a detailed inventory of the jewellery and be used for assessment purposes. These guidelines may please be brought to the notice of the officers in your region. Instruction : No. 1916, dated 11-5-1994.”
We find that the above guideline is with regard to seizure of jewellery. In the present case it is not at all the case that there is any seizure. The issue here is that cash and jewellery was found during search and the onus was upon the assessee to explain the same. However, before the Assessing Officer, as recorded in the assessment order the assessee has not made any submission in this regard after due notice. Before learned CIT(A) also nothing was submitted as it has been duly noted by learned CIT(A) that the assessee has all along being harping upon the validity of notice and jurisdiction of assessment. As noted by us hereinabove this has been not been pressed by learned counsel. Even this plea of relief of jewellery found on the basis of CBDT guideline was also not made before learned CIT(A). Hence, this new plank raised by learned counsel is not emanating from the orders of authorities below. As noted by learned CIT(A) except for submitting that the items found in search were not unusual, no explanation was made by the assessee before learned CIT(A). In the absence of any material on record in this regard we are not inclined to grant any relief whatsoever by simply mentioning of that CBDT
11 Tara Kabra guideline. In this view of the matter this ground raised by the assessee stands dismissed.
Our above order applies mutatis mutandis to all assessment years. In this regard we also note that in the subsequent years learned CIT(A) has granted substantial relief to the tune of Rs. 2,50,000/- per year for agricultural income. As noted by us the revenue is not in appeal before the ITAT in this regard. Hence, we are upholding the orders of authority below.
In the result, these appeals by the assessee stand dismissed. Order pronounced in the open court on 18.04.2022.