SHRI PRADHYUMANSINGHJI J. PADHIYAR (HUF),,ANAND vs. THE INCOME TAX OFFICER, WARD-1(3)(2),, PETLAD

This is an appeal filed by the assessee against the order dated 20.03.2017 passed by the CIT(A)-4, Vadodara pertaining to A.Y. 2012-13.

The grounds of appeal are as under:

The Assessing Officer as well as first appellate authority has erred in law and on facts in making the addition and confirming respectively of Rs.37,50,000/- on account of treating agriculture income as non agriculture income. The same deserves to be deleted.”

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The Ld. AR submitted that addition on account of unexplained capital introduction which is ground no.1 & 2 of the present appeal should be remitted back to the file of the Assessing Officer as the opening balance as on 31.03.2011 was not rightly taken into account by the Assessing Officer.

The Ld. DR relied upon the assessment order and the order of the CIT(A).

We have heard both the parties and perused all the material available on record. It is pertinent to note that the Balance Sheet as on 31.03.2011 and 31.03.2012 were reproduced by the CIT(A) in the order as under :-

But the same does not tally from the actual opening balance as on 01.04.2011 i.e. Rs.44,14,030.05. In fact the figure of closing balance as on 31.03.2011 was shown as Rs.25,64,030/- which is not in consonance with the actual details filed by the assessee before the Assessing Officer as well as before the CIT(A). Therefore, this needs verification and we direct the Assessing Officer to verify the same. The matter is remitted back to the file of the Assessing Officer for proper adjudication of this issue after verifying the details filed by the assessee. Needful to say the assessee be given opportunity of being heard by following the principles of natural justice. Thus, ground no.1 & 2 are partly allowed for statistical purpose.

As regards the addition on account of income from agriculture, the Ld. AR submitted that the Assessing Officer has not properly adjudicated this ground and given an incorrect observation that the said land is useless land for cultivation.

The Ld. AR submitted the report of the Talati/Statement of Talati that it is non- cultivation land was not at all cross-examined. In fact, the assessee is having more than 1000 acres of agricultural land and portion of land at the bank of Mahi is cultivable land from which assessee was drawing agricultural income though the revenue record shows that the same is sandy and stony land. Ld AR submitted that the portion of land i.e. Vanta land wherein survey no 410 and 555 are not cultivable land but the land appearing in survey no 415/Paiki which is the major portion and is total agricultural. Ld. AR relied upon the decision of Hon’ble Gujarat High Court in case of CIT vs. Sarifabibi Mohamed Ibrahim, 136 ITR 621 wherein it is held that the land is entered as agricultural land in revenue records and is assessed as such under the land revenue side, would a circumstance in favour of conclusion that it is an agricultural land. Ld. AR also relied upon the decision of Apex Court in CWT vs.

The Ld. DR relied upon the assessment order and the order of the CIT(A).

We have heard both the patties and perused all the relevant material available record. It is pertinent to note that the statement of Talati saying that the land is non- agricultural is contrary to the land revenue records wherein it is submitted that the portion of the land is cultivable land as well. The statement of Talati was never cross- examined. In fact, the record before us which was produced at the time of assessment order and before the CIT(A) reveals that there is a portion of agricultural land and there are agricultural activity going on which means that the assessee is deriving income from agriculture. These facts also need to be verified. The Assessing Officer has simply relied upon the quantum has made addition. Therefore, we remit back this issue to the file of Assessing Officer for proper adjudication and verification of the land and its use in the assessment before us. The issue is remitted back to the Assessing Officer for proper adjudication as per law. Needless to say that the assessee be given opportunity of hearing by following the principles of natural justice. Ground no.3 is partly allowed for statistical purpose.

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