SHRI MAHENDRA SINGH CHARAN,JODHPUR vs. ITO,WAD-2(2), JODHPUR

Following ground has been raised in this appeal: "1) Whether on the facts and interest he circumstances of the case, the Ld. CIT(Appeals) was justified in restricting the addition of Rs. 6,00,000/- on account of undisclosed income from unexplained sources for the purchase of land in the F.Y. 2010-11 and in making the addition of Rs. 1,50,000/- vide the Order dated 28/02/2018 on hypothecation basis, treating it as the regular income of the Appellant Assessee for the A.Y. 2011-12. That the Appellant reserves the right to add, amend, alter, delete or modify or withdraw any or all of the above grounds of appeal before or at the time of hearing." 3. Facts of the case in brief are that the Assessing Officer noticed that the assessee had purchased a piece of land in consideration of Rs. 6,00,000/- on 15/12/2010 and the entire amount was paid in cash. He further observed that the assessee did not file the return of income so the source of investment made by him amounting to Rs. 6,00,000/- was not ascertainable. He requested the

Being aggrieved the assessee carried the matter to the Ld. CIT(A) and filed various details viz. copies of Income Tax Returns filed in subsequent years, copies of account containing details of fixed assets, capital account, trading account and P&L account, balance sheet for the year ended on 31/03/2007 to 31/03/2011. The assessee also furnished bank statement for the period from 01/04/2008 to 30/04/2011 alongwith affidavit asserting that the agricultural land was purchased for Rs. 6,00,000/- in F.Y. 2010-11 out of the disclosed sources. The Ld. CIT(A) forwarded the submissions and evidences filed by the assessee under Rule 46A of the Income Tax Rules, 1962 to the Assessing Officer for his comments.

Now the assessee is in appeal.

The Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that all the details were furnished before the Assessing Officer and the Ld. CIT(A) and that in the copy of the cash book furnished by the assessee the income of Rs. 6,00,000/- for purchase of agricultural land at Mathania had been shown on 15/12/2010, a reference was made to page No. 58 of the assessee's paper book. It was further submitted that the assesssee was an agriculturist and earned income from the sale of agriculture produce as well as sale of seeds and that the income of the assessee was below taxable limit, therefore no income tax return was furnished for the year under consideration. It was further submitted that the assessee purchased the land from his earning of the small business and past savings which were duly reflected in his cash book, copy of which was furnished before the Assessing Officer and the Ld. CIT(A). Therefore the addition made by the Assessing Officer and sustained by the Ld. CIT(A) was not justified. It was further submitted that the income estimated by the Ld. CIT(A) at Rs. 1,50,000/- was also highly excessive.

In his rival submissions the Ld. DR strongly supported the orders of the authorities below.

I have considered the submissions of both the parties and perused the material available on the record. In the present case it is noticed that the assessee furnished the balance sheet, trading account, P&L Account for the various years, copy of which are placed at page Nos. 37 to 46 of the assessee's

As regards to the other addition relating to estimations of the business income, it is noticed that neither the Assessing Officer nor the Ld. CIT(A) has given any basis for their presumption for estimating the income. I therefore by keeping in view the principles of natural justice deem it fair and reasonable to estimate the income of the assessee from the business at Rs. 1,20,000/- instead of Rs. 1,50,000/- estimated by the Ld. CIT(A).

In the result, appeal of the assessee is allowed for statistical purposes.