SHRI LAXMI NARAYAN SONI,KHANDWA vs. THE ITO, KHANDWA

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ITA 925/IND/2016Status: DisposedITAT Indore15 February 2018AY 2011-1210 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) had mixed facts and figures and failed to provide specific findings on crucial issues like agricultural income and cash availability. Therefore, the case was remanded for de novo adjudication.

What were the facts?

The assessee, an individual with agricultural and interest income, surrendered Rs. 10 lacs during a survey. The Assessing Officer (AO) assessed income based on a revised computation and additional cash deposits. The Commissioner (Appeals) partly deleted the addition but did not specifically address all grounds.

What were the issues?

Whether the CIT(A) erred in assessing income based on a revised computation without a revised return and in not properly adjudicating the grounds related to agricultural income and interest.

Which sections of the Income-tax Act were involved?

Section 133A,Section 143(3),Section 147,Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI KUL BHARAT & SHRI MANISH BORAD

For Appellant: Shri S.N, Shri Pankaj Mogra
For Respondent: Shri B.K. Boricha
Hearing: 08.02.2018Pronounced: 15.02.2018

PER MANISH BORAD, AM

This appeal filed by the assessee pertaining to Assessment

Year 2011-12 is directed against the order of ld. Commissioner of

Income-tax (Appeals)-22 (holding concurrent jurisdiction of CIT(A),

Indore-2) dated 17.6.2016 which is arising out of the order u/s

143(3)/147 of the Income Tax Act dated 10.12.2013 framed by the

ITO, Khandwa. 1

2.

The assessee has raised the following grounds of appeal :-

“(i) That on the facts and in the circumstances of the case, the

ld. CIT(A) erred in assessing the total income of the appellant of

Rs. 11,43,440/- on the basis of revised computation even when

no revised return was filed and the appellant ahs disputed then

same during the course of assessment itself and also in the first

appeal without properly appreciating the facts of the case and

submission made before him.

(ii) That on the facts and in the circumstances of case, the ld.

CIT(A) erred in restricting the agricultural income of

Rs.1,10,000/- in place of agricultural income originally declared

of Rs.6,48,241/- on the basis of revised computation of income

even when no revised return was filed by the appellant.

(iii) That on the facts and in the circumstances of the case, the

ld. CIT(A) erred in not deciding the ground of appeal

challenging the charging of interest u/s 234A of Rs. 23,032/-

and Rs.97,886/- u/s 234B of the Act.”

3.

Briefly stated, the facts, as culled out from record, are

that the assessee is an Individual deriving income from agricultural

operations and also earned interest on loans provided on short term

basis. The survey was conducted at the business premises on

7.1.2011 u/s 133A of the Act. During the course of survey, the

assessee surrendered Rs. 10 lacs under various heads to be offered

to tax for the A.Y. 2011-12 and the brother of the assessee Mr.

Manoj Soni surrendered Rs. 10,18,000/-. The surrender made by

the assessee consisted of cash of Rs.5,85,000/- and advance of

Girvi at rs.4,15,000/-. Subsequently, the assessee filed return of

income on 31.3.2012 disclosing income at Rs. 3,93,440/- and

agricultural income at Rs. 6,48,247/-. Thereafter, notices u/s

143(2) and 143(2) of the act were duly served upon the assessee.

During the course of assessment proceedings the assessee filed

revised computation of income declaring income at Rs.11,43,440/-

in place of Rs. 3,93,400/- shown in the return of income and

similarly agricultural income was also revised in the revised

computation at Rs. 1,10,000/- which was originally declared at

Rs.6,48,241/-. However, the assessee did not file any revised return

of income. The learned AO during the course of assessment 3

proceedings further came across various details of sale of

agriculture produce, cash income received from sale of buffalos,

cash deposits in various bank accounts totaling to Rs. 7 lacs. He

accordingly completed the assessment in the light of the revised

computation of income filed by the assessee as well as other

information gathered and assessed the income at Rs.18,43,440/-

and agricultural income at Rs. 1,10,000/-. While assessing the

income, the learned Assessing Officer took the basis of the revised

income shown in the computation at Rs. 11,43,440/- and further

added unaccounted income of Rs. 7 lacs towards unexplained cash

deposited in the bank.

4.

Aggrieved, the assessee preferred appeal before the ld.

CIT(A) and partly succeeded wherein the CIT(A) deleted Rs. 7 lacs by

applying the findings made in the case of brother of the assessee,

Shri Manoj Soni and also the fact that the cash of Rs. 5.85 lacs and

advance on Girvi at Rs. 4.15 lac was treated as explained. The

learned CIT(A), however, made no specific finding on the grounds

relating to assessing the agricultural income as well as the ground

challenging the action of the Assessing Officer adopting the

returned income at Rs.11,43,440/- even when no revised return of

income was filed.

5.

Aggrieved, the assessee has come up in appeal before the

Tribunal.

6.

Before us, the learned counsel for the assessee commonly

submitted for ground nos. 1 and 2 that the assessee’s main source

of income is from agriculture and income is earned through cheque

as well as cash so much that during the year under appeal the

gross receipts from sale of agricultural produce was Rs.28.78 lacs

which, inter alia, included receipt of Rs.8.11 lacs from the sale of

Soyabean, Arbi, Bhusi, etc. He contended that the assessee did not

file any revised return of income and the revised computation of

income was filed in the wrong belief as the assessee was not well

verse with the taxation laws.

7.

The learned counsel for the assessee further contended by

referring to paper book pages 94 to 97 wherein a chart has been

prepared for the availability of cash jointly in the hands of the

assessee and his brother as per which, on the date of survey, there

was cash balance of Rs.20,03,400/- and this statement did not 5

include any agricultural income earned in cash. The details

mentioned in this chart are only for the withdrawals made from

bank accounts. The cash balance of Rs. 20,03,400/- on the date of

survey i.e. 7.1.2011 itself takes care of the surrendered income of

Rs. 20,18,000/-. He, therefore, submitted that no addition should

have been sustained by the learned CIT(A).

8.

On the other hand, the learned DR submitted supporting

the order of the CIT(A) and further added that the assessee has

himself given the revised computation of income and paid due taxes

thereon and the plea taken by the assessee before the CIT(A) as well

as before the Tribunal is just an after-thought.

8.

We have heard the rival contentions and perused the

record placed before us. The assessee’s grievance in ground nos. 1

and 2 relates to the order of the CIT(a) confirming the action of the

Assessing Officer assessing the income at Rs. 11,43,440/- as

against the income declared by the assessee at Rs.3,93,440/-

thereby making addition of Rs.7,50,000/- and further assessing the

income from agriculture at Rs.1,10,000/- against the originally

declared agricultural income of Rs. 6,48,241/-. From perusal of the

submissions of the learned counsel for the assessee during the

course of hearing, findings of the CIT(A) as well as the paper book

running from page 1 to 97 the following facts emerge out :-

(i) The assessee owns agricultural land admeasuring 36 acres at

Gram Kundia and is regularly earning agricultural income.

(ii) During the year total revenue from sale of agricultural produce

disclosed by the asssessee during the assessment proceedings

is Rs.28.78 lacs.

(iii) The assessee is also engaged in the business of earning interest

on short term loans and advances

(iv) As per the statement filed from page 94 to 96 which depicts

availability of cash withdrawn by the assessee and his brother

from 16.4.2009 till the date of survey and also deposits of cash

in bank, leaves the net figure of Rs.20,03,400/- which, as

pleaded by the learned counsel for the assessee, was cash in

hand with the assessee and his brother and, therefore, the

alleged surrender is duly explained.

9.

On the other hand, the learned CIT(A) while adjudicating

the grounds raised by the assessee mixed the facts and figures of

the assessee and his brother. No specific finding on the issue of

agricultural income has been given. There is no discussion about

the availability of cash jointly in the hands of the assessee, the

source of which is from withdrawal and bank account and the cash

income earned from agriculture is over and above the cash balance.

Looking this factual matrix, a question was posed to both the

parties as to why not to send the issues raised in this appeal to the

file of the CIT(A) for de novo adjudication to which no party

objected.

10.

We, therefore, in the given facts and circumstances of the

case and looking to the factual matrix and the facts mentioned by

the learned counsel for the assessee in the course of hearing with

reference to paper book, are of the considered opinion that the issue

raised in this appeal needs to be readjudicated by the learned

CIT(A) and if necessary remand report can be called for from the

Assessing Officer. We also direct the assessee to appear before the

CIT(A) with all the documentary evidence including details

submitted in the paper book without taking unnecessary

adjournment unless otherwise required. Needless to mention that

the assessee will be provided adequate opportunity of being heard.

11.

In the result, the appeal of the assessee is allowed for

statistical purposes.

Order pronounced in open Court on 15th February, 2018.

Sd/- sd/-

(KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER February 15th , 2018

Copy to : Appellant/Respondent/CIT/CIT(A)/DR

Dn/-

By order

Private Secretary/DDO, Indore

1.

Date of dictation : 8.2.2018 2. Date on which the typed draft is placed before the Dictating Member : 9.2.2018 3. Date on which approved draft comes to the Sr.P.S./P.S: 10.1.2018 4. Date on which the fair order is placed before the dictating Member for pronouncement: 5. Date on which the fair order comes back to the Sr.P.S./P.S.: 6. Date on which the file goes to the Bench Clerk: 7. Date on which the file goes to the Head Clerk: 8. The date on which the file goes to the Assisstant Registrar for signature of the order. 9. Date of Despatch of the Order:

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