LAXMIBEN RAMESHKUMAR MODI,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-1(2)(3),, AHMEDABAD

The assessee has raised following grounds of appeal:- “1. The Id. CIT(A) has erred in confirming the action of the AO of treating the agriculture income of the appellant to the extent of Rs.9,15,980/- out of income of Rs.9,65,980/- as income from undisclosed sources on the basis of observations given in the appellate order without proper consideration and appreciation of the facts of the case. In view of facts and submissions filed coupled with legal position, the Id. CTT (A) ought to have allowed the agriculture income shown by the appellant in her return-of income.. 1.1. The Id. CIT(A) has erred in observing that the additional evidences filed by the appellant in support of the agriculture income are an afterthought and thereby confirming

Ground nos. 1 to 1.3 are inter-connected to the common issue treating the income disclosed by the assessee from agriculture as income from undisclosed sources, therefore, for the sake of convenience these grounds of appeal adjudicated together.

Further the ground no. 2 to 2.1 pertained to addition of Rs. 2,11,500/- on account of unexplained stamp duty paid for Santej land also adjudicated along with above grounds of appeal being connected matter.

The brief fact of the case is that the assessee has filed return of income declaring income of Rs. 10,22,350/- on 28th Jan, 2014. The assessee has shown agricultural income of Rs. 9,13,024/-. Thereafter, the case was selected under security by issuing of notice u/s. 143(2) of the act on 4th Sep, 2014. During the course of assessment proceedings, the assessing officer noticed that assessee has shown net agricultural income of Rs. 9,13,024/-. On verification, the assessing officer found that assessee was holding only 0.62 hectares land ,therefore, he observed that assessee had highly inflated her income from agriculture as she was having very inadequate agricultural land. During assessment, the assesse had also claimed that she had taken agricultural land on rent from Rabri Isharbhai Lilabhai. However, the assessee has failed to substantiate her claim of taking agricultural land on rent with any relevant evidences. Therefore, the assessing officer has treated agricultural income of Rs. 9,13,024/- as income from undisclosed sources and added the same to the total income of the assessee.

Second ground of appeal pertained to the payment of stamp duty of Rs. 2,11,500/- which was treated as unexplained for want of evidences. During the course of assessment proceedings, the assessing officer has observed that assessee has paid stamp duty for Saltej land at Rs. 2,11,500/- and assessee has not debited stamp duty expenses in his ledger account, therefore, the same was added to his income u/s. 69 of the act.

Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee stating that assessee could not produce any evidences whatsoever either before the assessing officer or in the appellate proceedings before him to prove the genuineness of agricultural income. Further he has also dismissed assessee’s ground of appeal against undisclosed stamp duty stating that assessee has not debited the same in the ledger account.

We have heard the rival contentions and perused the material on record. It is noticed that the assessee has shown net agricultural income to the amount of Rs.9,13,024/– for the year under concentration. It is undisputed fact that land holding of the assessing was only 0.61 hactare at village Ramol, Taluka. Subsequently the assessee has claimed that he had taken land on rent from Rabari Ishwarbhai Nilabhai ,however, the assessee has not substantiated his claim of taking land on rent with relevant supporting evidences. The assessee has also failed to demonstrate the earning of huge income of Rs.9, 13024/– from tiny land holding of only 0.61 ha. Even the assessee has failed to furnish the supporting bills/vouchers for utilization of seeds and other cultivation . The above facts demonstrate that the assessee has claimed abnormally high amount of agricultural income from small landholding and failed to substantiate his such claim with relevant supporting material. The assessee has also failed to prove with relevant evidences that additional land was taken on rent on which the agricultural activities were carried out. In spite of providing a number of opportunities the assessee has failed to furnish even the basic proof as rent agreement to prove the genuineness of her claim of taking 7 ha of agricultural land on rent. Even the assessing officer has issued summon to the person from whom the assessee had claimed that land was taken on rent ,however, no compliance was made. In the light of the above facts and circumstances it is very clear that assessee has failed to substantiate that such a high income can be earned from the landholding of 1/2 acre . However we observe that the decision of learned Commissioner of income tax appeal to disallow the entire agricultural income is not justified. Therefore we consider that it would be reasonable to estimate agricultural income to the amount of Rs.2,13,024 during the year under consideration from the landholding of only 0.61 ha. Accordingly the appeal of the assessee is partly allowed. In respect of other ground of appeal of the assessee relating to addition of rupees 2,11,500 relating to unexplained stamp duty paid for Santej land it was

In the result, appeal of the assessee is partly allowed.