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Income Tax Appellate Tribunal, ‘’ B” BENCH, AHMEDABAD
Before: MS SUCHITRA KAMBLE & SHRI WASEEM AHMED
आदेश/O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals), Ahmedabad-5, dated 17/08/2018 arising in the matter of assessment order passed under s. 263 of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2014-2015.
The only issue raised by the assessee is that learned CIT erred in confirming the order of the AO by sustaining the addition of agricultural income of ₹ 50,34,653.00 treating the same as unexplained cash credit under section 68 of the Act.
The facts in brief are that the assessee in the present case is an individual and a partner in the firm under the name and style of M/s Arihant Jewellers. The assessee, besides the remuneration and share of profit from the partnership firm, has also shown agriculture income amounting to ₹ 50,34,653.00 in the year under consideration which was included in the total income for rate purposes and thereafter the same was claimed as exempted. It was submitted that she has earned agriculture income from the sale of wheat and paddy which were produced by her.
However, the AO during the assessment proceedings observed certain facts as detailed under: i. There was no income shown by the assessee from the agricultural operation in the immediate preceding 2 assessment years i.e. 2012-13 and 2013-14. Although, the assessee claimed to have earned an agricultural income in the assessment year 2013-14 amounting to ₹ 1,18,631 but the same was not included in the total income for the rate purposes in the income tax purposes. ii. There was no expense shown by the assessee against the agricultural income. As such, the gross sale proceeds shown by the assessee has been declared as the income from the agricultural operations. iii. The major sales of the agricultural produce was shown by the assessee to M/s Jalaram Agro industries amounting to ₹ 17,63,684.00 dated 2 March 2014 and 12,35,040.00 dated 6th of March 2014 but the assessee failed to produce the authorized person from such party. iv. The agriculture lands were purchased by the assessee in the year under consideration as evident from the details furnished by her. The crops
namely wheat and paddy, produced by the assessee, normally takes 6 months to grow and therefore it was not possible to produce such agricultural produce in the year under consideration. Furthermore, all the lands were barren land and therefore for this reason as well, the agricultural operations were not carried out by the assessee. Though the land was acquired the in the period beginning from June 2013 to September 2013 but the assessee has shown agriculture income even prior to the acquisition of the agricultural land which was not possible. 4.1 In view of the above, the AO was of the opinion that the agricultural income shown by the assessee is not actually representing from the agricultural operations and therefore the same was treated as unexplained cash credit under section 68 of the Act. Thus, the AO made the addition of ₹ 50,34,653.00 to the total income of the assessee.
Aggrieved assessee preferred an appeal to the learned CIT-A.
The assessee before the learned CIT-A submitted that she has furnished the details of the ownerships of the land which were purchased in the year under consideration. According to the assessee, the sales of the agricultural produce is not possible until and unless the crop is grown and cultivated. The assessee has furnished the details of the sales containing the names of the parties along with the Bill Numbers. The assessee also submitted that non-response of the party being M/s Jalaram Agro Industries cannot be a ground for doubting the genuineness of the sales. The assessee also submitted that the land was tilled, seeds and fertilizers were used for cultivating the crops after the purchase of the lands.
However, the learned CIT-A was not satisfied with the contention of the assessee and thus confirmed the order of the AO by observing as under: 3.6. Facts of the case and the submissions are considered. From the facts, narrated in the assessment order, it is very much clear that the assessee has not earned any genuine agricultural income during the year. The AO has made inquiries from M/sJalaram Agro
Industries to which the assessee has shown substantial sale of agricultural produce. However, no reply was received from the said parry. The lands were purchased during the year under consideration in the month of June and September. However, Use assessee had credited most of the agricultural income before June, 2013. It is very natural and common to incur certain expenditure for agricultural activities. However, it is very unusual that the assessee has not incurred any expenditure for the agricultural produce. From the pictures which are part of the assessment order, it is very much clear that these lands are barren land. The AO has also asked the assessee to furnish the details of nature of crop cultivate and their output. However, no such details were furnished by the assessee. During the appellate proceedings, the appellant has only contended that the agricultural income is genuine and it has been proved through the sale bills. However, the sales made to one party Jalarm Agro Industries was no proved during the assessment proceedings. All other facts clearly show that the agriculture income shown by the appellant is non-genuine one. Considering all these, the action of the AO is justified and addition is confirmed.
Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us.
The Ld. AR, before us has filed additional evidences with the application dated 17/05/2022 for the admission of such evidences under Rule 29 of ITAT Rules. The Ld. A.R, also submitted that the additional evidences pertains to the third party and the assessee has taken lots of time to collect the same. Therefore, the additional evidences were not filed before the authorities below. It was also pleaded that consideration of these additional evidences for adjudication of the dispute is necessary. Therefore, the Ld. A.R prayed before us for the admission of such additional evidences and to restore the matter to the file of the AO for fresh adjudication as per the provision of law.
On the contrary the Ld. DR, opposed for the admission of such additional evidences on the reasoning that there was no sufficient cause furnished by the Ld. AR which prevented the assessee to furnish such additional evidences before the authorities below. The Ld. DR vehemently supported the order of the authorities below.
We heard the rival contentions of both the parties and perused the materials available on record. In the present case, there was the cash deposit in the bank account which was treated as unexplained cash credit by the AO under the provisions of section 68 of the Act. On the contrary, the assessee claimed that such cash was deposited out of the agricultural income. The assessee in support of his contention has filed the additional documents in the form of affidavit is of the parties from womb the land was purchased. The 1st controversy that arises before us to adjudicate the admission of the additional evidences filed by the assessee vide letter dated 17 May 2022 which is placed on record. Pursuant to provisions of sub-section (5) of section 255 of the Act, the ITAT Rules, 1963 ("the Appellate Tribunal Rules") have been formulated. Rule 8(4) and Rules 29, 30 & 31 of the Appellate Tribunal Rules are relevant for the discussion which deal with production of additional evidence before the Tribunal. a. RULE 8 – PREPARATION OF PAPER BOOKS, ETC.
Sub-rule (4) of Rule 8 provides that the additional evidence, if any, shall not form part of the same paper book. If any party desires to file additional evidence, then same shall be filed by way of a separate paper book containing such particulars as are referred to in sub-rule (3) accompanied by an application stating the reasons for filing such additional evidence. b. RULE 29 - PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal. If the Tribunal requires any document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. c. RULE 30 - MODE OF TAKING ADDITIONAL EVIDENCE Such document may be produced or such witness examined or such evidence adduced either before the Tribunal or before such income-tax authority as the Tribunal may direct. d. RULE 31 - ADDITIONAL EVIDENCE TO BE SUBMITTED TO THE TRIBUNAL If the document is directed to be produced or witness examined or evidence adduced before any income-tax authority, he shall comply with the direction of the Tribunal and after compliance send the document, the record of the deposition of the witness or the record of the evidence adduced to the Tribunal.
In the case of CIT v. Smt. Kamal C. Mahboobbani [1995] 214 ITR 15/81 Taxman 311 (Bom.), the Bombay High Court held as under:-
"We are of the opinion that rule 29 does not confer any right on the parties, as such, to produce any additional evidence either oral or documentary before the Tribunal. On the other hand, such a right has specifically been taken away by prohibiting the production of the additional evidence by the parties. The power has been vested only in the Tribunal to require production of any document or evidence if it is of the opinion that it is necessary to do so to enable it to pass order or for any other substantial cause." 11.1 In view of the aforesaid discussion, the additional evidence cannot be placed by the assessee for the admission before the Tribunal as a matter of right. The Tribunal has the sole discretion whether to admit or not to admit additional evidence. However such discretion cannot be used in arbitrary manner.
11.2 Now coming to the facts of the case on hand, we find that these additional evidences were collected from the 3rd parties and the assessee has put lot of efforts in obtaining the same from the concern parties. Furthermore, we note that these additional documents filed by the assessee go to the root of the matter and therefore in the interest of justice and fair play, the consideration of these documents at the end of the AO is necessary. Accordingly, we exercise our power granted under rule 29 of ITAT rules and admit these additional evidences and set aside the issue to the file of the AO for fresh adjudication as per the provisions of law and in the light of the additional evidences as discussed above. Hence the ground of appeal of the assessee is allowed for the statistical purposes.
In the result, the appeal filed by the assessee is allowed for the statistical purposes.
Order pronounced in the Court on 12/08/2022 at Ahmedabad.