SRI. K. SHANKAR NAIK,DAVANGERE vs. INCOME TAX OFFICER, WARD- 3, DAVANGERE

Per CHANDRA POOJARI, AM This appeal filed by the assessee is directed against the order of the CIT(A), Bengaluru dated. The relevant assessment year is 2009-10. 1.1 There is a delay of 51 days in filing this appeal before the Tribunal. The delay occurred on account of lock down declared by the Central Government due to COVID-19 pandemic. 1.2 I have heard the rival parties. I find that there is sufficient cause for the delay in filing the appeal and hence, condone the delay of 51 days and admit the appeal for adjudication.

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The Assessing Officer verified the claim of the assessee as regards source of Rs.16.85 lakhs being agricultural income and did not accept estimation of agricultural income for the period 1990-91. The Assessing Officer observed that as per report of agricultural consultant, agricultural income for the period 2003- 04 to 2008-09 was estimated at Rs.40,02,145/- whereas the same is substantially less at Rs.36,96,162/- for the period 1990-91 to 2002-03. Thus, the 2

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Assessing Officer estimated the net income of the HUF at Rs.8,55,755/-for the period 2003-04 to 2008-09. 5. On appeal, the CIT(A) found that the major land holding of 9.06 acres are in the name of Mrs. Shilpa Shankar, wife of the assessee. Considering that the assessee was 48 years old as on the date of affidavit i.e., 01/02/2018 and joined service in 1997, the lands in the name of his wife Mrs. Shilpa Shankar must have obviously been acquired much later. Therefore, the claim of the assessee that HUF was getting substantial agricultural income even from the days of his father does not appear to be correct. According to the CIT(A), the assessee estimated net agricultural income of the HUF at Rs.76,98,307/- from 1990-91 to 2009-10. However, the CIT(A) found that as the assessee does not maintain any details as regards sale proceeds from the crops, expenditure incurred, expenditure for maintenance of the family met out of agricultural income, the accuracy and correctness of estimate prepared by the assessee remains unverifiable. The CIT(A) summarized the reasons for rejection of assessee’s contentions as follows: i) The assessee estimated income from the lands for the years for which no crop information is available in RTC. ii) The assessee considered peak rate for valuation of crop which is far from reality. iii) The factors such as variation in yield, quality of the crop and fluctuation in price are not factored in the report.

5.1 In view of the above, the CIT(A) justified the decision of the Assessing Officer to reject the estimation of net agricultural income made by the assessee. 3

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Accordingly, the CIT(A) held the decision of the Assessing Officer to adopt the net agricultural income of HUF at Rs.8,55,755/- which was estimated over a period of 2003-04 to 2008-09 as reasonable. 5.2 Regarding charging of interest u/s. 234A/234B, the CIT(A) observed that the charging of interest is mandatory and consequential. There is no discretion in the matter as held by the Supreme Court in the case of Anjum M.H. Ghaswala (252 ITR 1). Therefore, the CIT(A) held that no appeal can lie against the order charging interest unless it concerns a perceived or apparent non-application of mind. 6. Against this, the assessee is in appeal before me. The Ld. AR submitted that assessee HUF is having 35 acres of land and income from such land was accumulated from year to year and out of this, the assessee received Rs.16.85 lakhs. The Assessing Officer accepted only Rs.8,55,755/- as income from HUF from 2003-04 to 2008-09 and he has not accepted Rs.8,29,245/- , though he has no evidence to show that it is from other sources. According to the Ld. AR, the lower authorities had accepted that the assessee is owning agricultural land and derived income. The Assessing Officer accepted only partial agricultural income without any basis. The Ld. AR drew our attention to the recording of rights issued by revenue authorities in respect of agricultural properties owned by the HUF. The Ld. AR drew our attention to the affidavits made by Smt. Devibai, Smt. Venkibai, Smt. Parvathibai, Smt. Roopalibai, Smt. Sithabai, Smt. Sarojabai, Shri Thippeswamy and Shri Ramaswamy as follows:

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6.1 Further, he drew our attention to the affidavit by Shankar Naik. Thus, the Ld. AR submitted that the lower authorities are not justified in rejecting the affidavits filed by the assessee which is in contrary to these documents which read as under :

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6.1 The learned Authorised Representative has also relied on the order of the Tribunal in ITA No.1492/Mad/2013 & Others dt.18.11.2014 in the case of Shri Justice P.D. Dinakaran for the proposition that when there is no evidence in the Department contrary to the submissions made by the assessee with regard to exempted income, it has to be accepted. 6.2 The ld. AR also relied on the decision of Tribunal in the case of Shri Justice P.D. Dinakaran in ITA Nos.110 & 111/Mad/2015 Dt.20.08.2015. 7. On the other hand, the Ld. DR submitted that the assessee declared Rs.16.85 lakhs received from HUF as agricultural income out of cultivation of 28.05 acres of land. However, the assessee has not produced direct evidence for cultivation of agricultural products or any evidence for sale of agricultural products. In view of this, the Assessing Officer accepted the sum of Rs.8,55,755/- as agricultural income and balance Rs.8,29,245/- was considered 13

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as income from other sources. According to the Ld. DR, the Assessing Officer has given very reasonable amount as agricultural income inspite of no evidence produced by the assessee. He requested the Bench to sustain the addition made by the Assessing Officer which is very reasonable. 7.1 The learned Departmental Representative relied on the decision of Tribunal in the case of Madhusudhana Reddy vs. DCIT in ITA No. 1601/Chny/2016 dated 17/03/2017 wherein it was held as follows:

“7. We have heard both the parties and perused the material on record. In this case the assessee stated that he owns vast area of agricultural land. There was no iota of evidence regarding cultivation carried on by the assessee with reference to nature of crop grown, labourers employed or any details of expenditure incurred or products sold. In the absence of these particulars it is not possible for department to give benefit of agricultural income to the assessee. Since the assessee placed no evidence regarding agricultural income the burden cast upon the assessee not shifted to the revenue authority as to prove that there is no agricultural income. Accordingly we upheld the order of lower authorities. Therefore this ground raised by the assessee is dismissed. Thus the appeal in ITA No. 1726/MDS/16 is dismissed.”

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accepted Rs.8,55,755/- as agricultural income out of Rs.16.85 lakhs, there is no reason to disbelieve Rs.8,29,245/-. The HUF is having vast area of agricultural land which is subject to cultivation and it is evidenced by the revenue records. 8.1 Further, the ld AR submitted that the assessee is a member in the HUF agricultural land which was used year to year for agricultural operation and derived agricultural income. The Assessing Officer having not brought on record any contrary evidence, the assessee’s claim of agricultural income is to be accepted. Accordingly, the Ld. AR submitted that the Assessing Officer has no right to reduce it without bringing on record any material against the assessee. For this purpose, the Ld. AR relied on the order of the Chennai Bench of the Tribunal in the case of Justice P.D. Dinakaran & Others in ITA Nos. 110 & 111/Mad/2015 dated 28/08/2015 wherein it was held as follows: 39. We have heard both the parties and perused the material on record. A similar issue was considered by the Tribunal in ITA No.1857 to 1868/Mds/2013 for the assessment years 2007-08 to 2009-2010, dated 18.11.2014, wherein it was held as under:- ‘’14.1 In all the appeals, the Revenue has raised common issue. The Assessing Officer had dis-allowed part of ‘Agriculture Income’ returned by the assessee companies and treated the same as income from other sources/un-explained income. The Assessing Officer during the course of assessment proceedings observed that the assessee companies have shown substantial amount of agriculture income in their respective returns of income for the AYs.2007-08, 2008-09 & 2009-10. The Assessing Officer held that the agriculture income shown by the assessee companies are excessive and un-reasonable and hence, treated the part of agriculture income as ‘Income from Other Sources’. The details of agriculture income returned by the companies and the dis-allowance made by the Assessing Officers in case of respective companies are as under:

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Name of the Assessing Asst. Agri. Agri. Treated as Company Officer Year Income Income income shown by Accepted by from the the Sources company Assessing Officer M/s. Dearlands ITO, 2007-08 5,11,710 2,80,542 2,31,168 (I) P. Ltd. Company 2008-09 8,00,110 2,99,600 5,00,510 Ward-1(1), 2009-10 11,48,800 3,75,780 7,73,020 Chennai M/s. Canaan ITO, 2007-08 7,86,000 1,53,330 6,32,670 Gardens P. Company 2008-09 11,06,300 3,59,153 7,47,147 Ltd. Ward-1(1), 2009-10 11,71,300 3,58,810 8,12,490 Chennai M/s. ITO, 2007-08 7,86,000 (-)4,68,032 12,54,032 Amudham Company 2008-09 5,27,350 (-)8,85,040 14,12,390 Gardens P. Ward-1(1), 2009-10 13,14,160 (-)3,36,135 16,50,295 Ltd. Chennai M/s. Amirtham ITO, 2007-08 75,800 (-)11,54,886 12,30,686 Gardens P. Company 2008-09 4,03,973 (-) 9,13,471 13,17,444 Ltd. Ward-1(1), 2009-10 11,36,106 (-) 2,80,484 14,16,590 Chennai The companies were floated in the year 2005 and the lands were transferred to the above companies by the relatives of Shri P.D.Dinakaran. The extent of land transferred by various persons to these companies and crops grown thereon are as under:

Name of the Land Extent of Crops grown Company Transferred by land transferred to Co. (in acres) M/s. Canaan K. Raja 20.42 Mango inter crop and Gardens P. Ltd. Rabidev vegetables Shanti 27.85 Sanghamithra 48.27 M/s. Amudham Jacob Williams 16.49 7,86,000 Gardens P. Ltd. Dr. PKA 04.75 Mango, Groundnut, Chandrasekar Vegetables and 16

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M.G. 20.83 Paddy Paripoornam K. Raja 15.91 Rabidev 57.98 M/s. Amirtham Dr. PKA 13.72 Mango, Inter crop, Gardens P. Ltd. Chandrasekar Paddy , Ground nut Jacob Williams 16.59 and Vegetables M.G. 18.21 Paripoornam K. Raja 03.34 Rabidev 51.86 M/s. Dear Lands Jacob Williams 13.42 Vegetables, Mango India P. Ltd. K. Raja 08.49 and Ground Nut Rabidev Shanti 18.37 Sangamithra 40.28

The shares in companies were allotted to the persons who transferred their land to the companies. The shares were allotted in the proportion of landholdings transferred. Subsequently, the companies leased out agricultural lands to some of its shareholders. M/s.Canaan Gardens P. Ltd. leased out its land to Smt.M.G.Paripoornam, M/s.Amudham Gardens P.Ltd. leased out its land to Shri K.Raja Rabidev and M/s.Dear Lands (India) P.Ltd. leased out its land to Shri Jacob Williams. As per the lease agreements, the proceeds of agriculture produce from the lands was to be shared between the company and the lessees in the ratio of 1:2. Since, the Assessing Officer in case of the companies and the lessees were different, the Assessing Officers followed different criteria for assessing agriculture income of the companies and the assessees. The same is evident from the table given as under:

Name of the Assessing Asst. Agri. Agri. Income Treated as Individual Officer Year Income Accepted by income (Lessees of shown by the Assessing from the lands hold the Lessee Officer Sources 17

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by the companies) J.Williams ITO, 2007-08 9,92,500 9,92,500 0 (Lessee for the Company 2008-09 9,46,418 9,46,418 0 lands of M/s. Ward-1(6), 2009-10 13,52,100 13,52,100 0 Dearlands (I) Vellore P. Ltd. Smt. M.G. TO, Salary 2007-08 9,74,926 5,77,005 3,97,921 Paripoornam Ward1(3), 2008-09 13,69,065 Not assessed (Lessee for the Coimbatore 2009-10 13,69,065 3,48,465 10,20,600 lands of M/s. Canaan Gardens P. Ltd. Shri Raja ITO, Salaray 2007-08 0 Not assessed Rabidev for Ward-1(5), 2008-09 45,000 Not assessed the lands of Coimbatore 2009-10 6,63,550 0 6,63,550 M/s. Amudham Gardens P. Ltd.

A perusal of the above table shows that, the Assessing Officer of Shri J.Williams, who is the lessee of M/s.Dear Land (India) P.Ltd., in re- assessment proceedings after verification of the details, accepted the agriculture income disclosed by Shri Williams in his return of income for the AYs.2007-08, 2008-09 and 2009-10. The Revenue has placed on record District Collector’s Report which is based on a detailed survey of agricultural land conducted by the officials of Horticulture Department, Agriculture Department and Revenue Department. A perusal of report shows that the land owned by the assessee companies and other persons are wet lands, with irrigation facilities. The lands are under cultivation with inter-crop and highyielding fruit trees viz., Mango, Guava, Sapota etc., with age 5 years to 20 years. The agriculture land of all the companies are located in the same area and are contiguous. Have same type of soil and irrigation facilities, the crops grown are also the same, the quality and yield of crops is more or less the same. Therefore, the agriculture income derived by one assessee is indicative of the agriculture income derived by the others. The Assessing Officer of Shri Jacob Williams before accepting the returned income, conducted field enquiries, recorded the statement of neighboring farmers and ultimately came to the conclusion that, apart from Mangoes, inter crops and Vegetables are grown on the agriculture land owned by the Lessor company. Based on the enquiries and reports, the Assessing Officer of Shri Jacob Williams came to the conclusion that the income disclosed by the assessee is reasonable and genuine. The 18

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Assessing Officer also accepted the yield and rates of Mangoes based on the report of District Horticulture and Revenue Departments. Once the agriculture income from the adjacent land is accepted, there is no question as to why the agriculture income from the contiguous parcel of land should not be accepted. We are in full agreement with the detailed findings of the CIT(Appeals) in deleting the additions made by the Assessing Officer in respect of all the four companies’’. 40. In view of the above of the Tribunal, we are inclined to confirm the order of the Commissioner of Income Tax (Appeals) on this issue. This ground of the Revenue is dismissed. The appeals of the Revenue in ITA Nos.154 to 157/Mds/2015 are dismissed.”

8.2 The decision relied on by the ld. DR in the case of Madhusudhana Reddy Vs. DCIT in ITA No.1601/Chny/2016 dt.17.03.2017 (Trib) is distinguishable as in that case, there is no iota of evidence furnished by the assessee in support of agricultural income. Hence, the Tribunal rejected the claim of agricultural income of the assessee in that case. However, in the present case, the Assessing Officer himself accepted the portion of agricultural income and denied another portion of agricultural income in spite of evidence produced by the assessee from the revenue authorities and also supported by the affidavits produced from various parties. The Assessing Officer rejected part agricultural income claimed by the assessee without examining the affidavits and revenue records which is not proper.

8.3 In the case of Justice P.D. Dinakaran & Others in ITA No. 1492/Chny/2013 and C.O. No. 19/2013 dated 18/11/2014, the Tribunal held as follows: “10. We have heard the submissions made by the representatives of both the sides at length and have perused the orders of the authorities below. We 19

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have also considered the extracts of the paper book referred to, as well as, the judgments relied on by both the sides. For the sake of brevity, the facts narrated herein above are not repeated again. Before proceeding with the merits of the appeals, we take up the objections raised by the assessees with regard to re-opening of assessment. The only objection raised by the assessee in respect of re-opening is that proceedings u/s.147 have been initiated on the basis of information not procured from authorized source. Re-assessment proceedings are bad in law as there are no ‘reasons to believe’ that income has escaped assessment. 11. We do not find force in the argument of the ld.AR. It is a well settled law that for initiating re-assessment proceedings, the source of information is not relevant. It is the information and its authenticity that matters. If the Assessing Officer has reliable information and on the basis of said information he has ‘reason to believe’ that the income has escaped assessment, the Assessing Officer is well within his jurisdiction to initiate re- assessment proceedings. In the present case, original assessment in respect of all the assessees were completed u/s.143(1). The Assessing Officer had no occasion to analyse the transactions and form any opinion. It was only after the receipt of information in the form of data collected by JIC that the Assessing Officer initiated re-assessment proceedings. After examining the information received, the Assessing Officer might have reasons to believe that income has escaped assessment. The Hon'ble Madras High Court in the case of Rayala Corporation Pvt. Ltd., (supra) has held: “47. In terms of sub section (1D) inserted in Section 143 by Finance Act 2012, w.e.f., 01.07.2012, notwithstanding anything in sub section (1) of Section 143 of the I.T. Act, processing of return shall not be necessary, where a notice is issued under Section 143(2) of the I.T. Act. It is only under Section 143(2) of the I.T. Act, the role of the Assessing Officer comes in. The intimation given under section 143(1)(a) of the I.T. Act is without prejudice to the provisions of section 143(2) of the I.T. Act and though the intimation is deemed to be a demand, it does not foreclose the right of the Assessing Officer to proceed under Section 143(2) of the I.T. Act. It is to be noted that the word Assessing Officer is conspicuously absent in Section 143(1) of the I.T.Act. The resultant position is made clear, when we read Section 143(3) of the I.T. Act. Thus the process of assessment in the real sense of the term commences only when notice is issued under Section 143(2) of the I.T. Act. Here too notice has to be served on the Assessee within the period of one year from the end of the month, in which the return is furnished. Thus, if no notice is served within the stipulated period of twelve months, the assessment proceedings under section 143 of the I.T. Act come to an end. Thus, though technically there is no assessment framed in such a case, yet the proceedings as far as section 143 of the I.T.Act is 20

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concerned, the same stand terminated. Though the procedure of centralised processing under sub section 1A of Section 143(1) of the I.T. Act finds place under the heading "Assessment" under section 143 of the I.T. Act, there appears to be a clear distinction and dichotomy in procedure. Between April 1, 1998, and May 31, 1999, sending of an intimation under section 143(1)(a) of the I.T. Act, was mandatory. 48. While making an assessment, the Assessing Officer is free to make any addition after grant of opportunity to the assessee by making adjustments under the first proviso to section 143(1)(a) of the I.T. Act, no addition which is impermissible by the information given in the return could be made by the Assessing Officer. This is so because no opportunity is afforded to the assessee under Section 143(1)(a) of the I.T. Act, and the Assessing Officer merely proceeds to accept the return and making permissible adjustments only. Thus an assessment under Section 143(3) of the I.T. Act, is based on a different methodology which has to be borne in mind while considering the scope, purpose, ambit and import of Section 147 of the I.T. Act. 49. As held by the Hon'ble Supreme Court, the acknowledgment is not done by any Assessing Officer, but mostly by ministerial staff and it can hardly be said that any assessment is done therein by them. Therefore, as per the scheme under Section 143(1)(a) of the I.T. Act, the same cannot be treated as an order of assessment in the true sense of its term it being a summary procedure. The intimation under section 143(1)(a) of the I.T. Act, is deemed to be a notice of demand under section 156 of the I.T. Act, for the purpose of facilitating the machinery provisions relating to recovery of tax. Thus, the purpose of such intimation is only for recovery of the tax and no other expansive meaning can be given to such deeming provision. Therefore, the Hon'ble Supreme Court held that there being no assessment under section 143(1)(a) of the I.T. Act, the question of change of opinion, as contended, does not arise. 50. The Division Bench of this Court in the cases of WCI (Madras) (P) Ltd. v. Assistant Commissioner of Income-tax reported in [2010] 324 ITR 181(Mad), and Commissioner of Income-tax v. Ravindran Prabhakar reported in [2010] 326 ITR 363, held that there was only processing under section 143(1) of the I.T. Act, such intimation cannot be treated as assessment order and reassessment was held to be valid in such cases and hence the argument of change of opinion would not apply. As held by the Hon'ble Supreme Court in the case of Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500(SC), the legislative intent is very clear from the use of the word intimation as substituted for assessment that two different concepts emerged”.

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(Rs.2,25,000 and Rs.3,50,600/-) added in the income of the assessee; vii. Agriculture income of assessee’s brother-in-law Rs.3,60,820/-, mother-in- law Rs.3,18,750/- and assessee’s sister’s husband Rs.49,330/- were added in the income of the assessee; In first appeal by assessee, the CIT(Appeals) deleted all the additions. Now, the Revenue has assailed the findings of CIT(Appeals) in its appeal before the Tribunal. 13.1 The first issue raised in the appeal is with regard to agriculture income. The Revenue has treated the agriculture income of the assessee as ‘Income from other Sources’. The ld.Standing Counsel for the Revenue has contended that the land owned by the assessee is not cultivable and thus, could not produce huge yield as claimed by the assessee. It is not disputed that the assessee owns land measuring 48.38 acres. As per revenue records, majority of lands are wet lands. The Revenue has placed on record District Collector’s report at page 52 to 128 of the Paper Book. As per the report, the land of the assessee is cultivable, irrigated, have high yielding fruit bearing trees and thus have potential of generating income `9,000/- to `10,000/- per acre. A further perusal of Collector’s Report shows that Mango, Amla, Sapota and Guava trees are standing on the land owned by the assessee. The Collector in his report has further confirmed intercrop cultivation. Thus, the stand of the assessee that he is getting agriculture yield of Rs.4,000 to Rs.5,000/- per acre is justified. The ld.Standing Counsel for the Revenue has not been able to controvert the observations given in the Survey Report which has been placed on record in the form of Paper Book by Revenue itself. The CIT(Appeals) while giving well reasoned findings on the issue has held that the Assessing Officer’s conclusions are only presumptions and are not based on any material facts. We see no reason to differ with the findings of CIT(Appeals). This ground of appeal of the Revenue is accordingly dismissed. 13.2 The next issue in appeal is with regard to gift of Rs.1,05,000/- from Mr.Jacob Williams. Mr. Williams has confirmed the fact of making gift. It is undisputed that the donar and the assessee are closely related. The gift has been made by way of Demand Draft. The donor has been able to show the source of income for making the gifts. Since, the assessee has been able to show the source of gift and the creditworthiness of the donor has also been established, the Assessing Officer has acted in an arbitrary manner & without any justification in making the addition of gift amount as ‘Income from other sources.’ We do not find any error in the findings of the CIT(Appeals) on this issue. Accordingly, this ground of appeal of the Revenue is dismissed.

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13.3 The next issue in appeal is with regard to addition of agriculture income of Dr.Vinodini Dinakaran, wife of assessee, in the income of assessee. The Assessing Officer has included the income of Dr.Vinodini Dinakaran, in the hands of assessee on the ground that Dr.Vinodini Dinakaran does not have independent source of income as she hails from modest family. The Revenue has failed to take into consideration the fact that Dr.Vinodini Dinakaran is a qualified medical practitioner and is working with CSI Kalyani Hospital. Thus, she is having independent source of income. It is also an admitted fact that Dr.Vinodini Dinakaran is having more than 29 acres of agriculture land in her name. The said land is cultivable and she is carrying on agriculture operation thereon. She is having mango orched with 296 mango trees of high yielding varieties. The CIT(Appeals) in his order has categorically held that Dr.Vinodini Dinakaran is having independent source of income from her profession as well as agriculture income. The ld.Counsel for the Revenue has not been able to controvert the findings of CIT(Appeals). Thus, in view of the unrebutted findings, the arguments raised by the ld. Standing Counsel that the wife of assessee is not having independent source of income does not hold ground. The CIT(Appeals) has rightly held that the Assessing Officer’s action of assessing Dr.Vinodini Dinakaran’s agriculture income in the hands of the assessee is only on presumptions and not based on any material facts and evidences. We confirm the findings of CIT(Appeals) on the issue. Accordingly, this ground of appeal of the Revenue is dismissed. 13.4 The next ground on which the Revenue has assailed the findings of CIT(Appeals) is with regard to gifts received by wife of the assessee from her brother Shri Raja Rabidev. The Assessing Officer made addition of Rs.15,00,000/- in the hands of the assessee on account of gifts received by his wife from her brother. The wife of the assessee is an independent assessee having separate Permanent Account Number (PAN) and has been filing her separate return of income. She is independently assessed to tax. The total sum of Rs.15,00,000/- has been gifted by her brother Raja Rabidev on different dates i.e., Rs.7,00,000/- on 07-01-2004, Rs.3,00,000/- on 16-03- 2004 and Rs.5,00,000/- on 08-01-2004. He is a close blood relative of Dr.Vinodini Dinakaran. The donor has been able to explain the source of gifts. Once the identity and the creditworthiness of the donor is established, there is no reason to doubt the veracity of the gift. In view of the fact that the wife of the assessee is filing her separate return of income and the fact that it has been clearly established that the gifts were given by Shri Raja Rabidev to her sister-Dr.Vinodini Dinakaran, there is no question of making 24

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addition of the said gifts in the hands of the assessee. The CIT(Appeals) has rightly deleted the addition made by Assessing Officer . Therefore, this ground of appeal of Revenue is dismissed being devoid of merit.”

8.5 In the present case also the assessee has filed ample evidence supporting the agricultural income earned by HUF where the assessee is a Member which are supported by the Affidavit and revenue records. The lower authorities are not controverted the genuineness of the statements in Affidavit and without any basis the Assessing Officer as well as the CIT (Appeals) overlooked these evidences which is not justified as held by Hon'ble Supreme Court in thecase of M/s. Mehta Prakash Vs. CIT (1956) AIR 554. The Assessing Officer as well as the first appellate authority who heard the case without cross examining the Deponent in the Affidavit with reference to their statements in the Affidavit, they rejected these evidences, which is not proper. Further, the assessee has given a bona fide explanation that he has received the funds from HUF in return the HUF has earned the agricultural income. These facts cannot be overlooked by the lower authorities without bringing any evidence against the assessee. The Explanation of the assessee could not be assailed by a purely imaginery calculation of the nature made by the Assessing Officer or the CIT (Appeals). In our opinion, there is no reason to reduce the agricultural income as it is not supported by any evidence to show that part of the income is earned by the assessee from any other sources. The assessee having given reasonable explanation, the lower authorities could not, by applying the rule of thumb

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discard it so far as agricultural income is concerned and cannot act on mere surmise. Hence, we allow the ground of appeal of the assessee. 9. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open Court on this 11th September, 2020.

Sd/- (CHANDRA POOJARI) ACCOUNTANT MEMBER

Place: Bengaluru Dated: 11th September, 2020. Reddy GP / GJ Copy to: 1. Shri Shankar Naik, 873-7-23, Jayanagar, C Block, Nituvalli, Davanagare. 2. The ITO, Ward-3, Davanagare. 3. The Commissioner of Income-tax(Appeals), Davanagare. 4. The Pr. Commissioner of Income-tax, Bengaluru. 5. D.R., I.T.A.T., Bangalore Bench, Bengaluru. 6. Guard File. By Order

(ASSISTANT REGISTRAR) I.T.A.T., Benguluru