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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI BHAVNESH SAINI
ORDER This appeal by assessee has been directed against the order of Ld. CIT(Appeals)-18, New Delhi dated 17.11.2017 for AY 2013- 14.
Briefly the facts of the case are that return of income was filed at income of Rs. 1,85,770/- and agricultural income of Rs. 26 lakhs. The assessee was asked to furnish documentary evidences along with confirmation in respect of receipt of agricultural income in assessment year under appeal. However, the assessee did not furnish any confirmation of the same, despite specifically asked for. The assessee made submissions before AO. Summary of the same is reproduced in the assessment order in which the assessee
Rakesh Chaudhary explained that assessee has approximately 35 bigha agricultural land at Kabulpur banger, Ballabgarh, Faridabad, Haryana. He has given his agricultural land to his Uncle Mr. Chand for cultivating seasonal crops on sharing basis. All the agricultural activities are maintained by his Uncle against which assessee has taken 50% of produced seasonal crops only as his share. In the year 2007 and 2008 approximately 2000 poplar trees, eucalyptus, etc. were irrigated on the periphery of this land, except this seasonal corps also have been irrigated in this land. The documents of the agricultural activity have been filed. Out of 2000 trees above, 1460 trees were alive and assessee has sold approximately 950 trees for Rs. 26 lakhs in assessment year under appeal and balance 510 trees have been sold for Rs. 15 lakhs in the next year. The assessee also submitted an undertaking of two pages written in Hindi informing receipt of cash amounting to Rs. 26 lakhs on various dates in lieu of sale of trees of poplar, safeda, etc. to Shri Shafi Khan, Shri Tahir Khan, Sh. Azad Khan, Sh. Nizam Khan and Shri Bablu. Some details/information were submitted by assessee but without any confirmation or documentary evidences showing receipt of agricultural income of Rs. 26 lakhs received during the year under consideration. The AO further, afforded opportunity to the assessee to explain this issue and to file complete particulars of the above five persons who have paid the amount of cash of Rs. 26 lakhs to the assessee. Assessee was also directed to prove their identity, creditworthiness and genuineness of the transaction in the matter. Assessee was also intimated that since no evidences
Rakesh Chaudhary have been submitted by assessee, therefore, same be submitted to prove the above facts. Assessee was also asked to explain whether any permission from the competent authority was taken before cutting of these 950 trees. The assessee submitted before AO that after such a long time the assessee cannot find these persons. The assessee has sold these trees to wood cutters for which no permission was taken from competent authority for cutting these trees. Assessee has no control over the purchaser. The AO noted that assessee has again failed to furnish any documentary evidence in support of his claim as neither he produced these five persons for cross examination/verification to whom sale of 950 trees have been claimed, nor any documentary evidences of the standing crop on the agricultural land have been filed. The assessee further stated that he is willing to pay tax over on 40% of the agricultural income. The assessee in response to the final notice also submitted that during the year under consideration assessee had deposited cash of Rs. 22,54,260/- out of Rs. 1,81,260/- from rental income and balance of Rs. 20,73,000/- is out of agricultural income. The assessee submitted some mandi receipts against sale of some seasonal crops for past years. The assessee voluntarily intimated to the Department to allow him to pay tax over 40% of Rs. 26 lakhs for buying peace of mind.
2.1 The AO, however, noted that despite giving sufficient opportunities, assessee failed to produce any documentary evidences to support receipt of cash of Rs. 26 lakhs from sale of Rakesh Chaudhary trees. The AO rejected the explanation of assessee on the following reasons:
“Assessee failed to produce any documentary evidence of 1460 trees grown on agricultural land in a number of years starting from the year 2007 till the sale of these trees as claimed by the assessee.
2. The age, length, circumference and weight of the stem of the trees has been no where mentioned. 3. Assessee grossly failed to prove the identity and creditworthiness of the five persons who made the payment of Rs. 26 lakhs which is claimed as agricultural income. 4. Since the assessee failed to prove the identity and the creditworthiness of the five persons, therefore, the genuineness of the transaction also could not be proved. 5. As per the copy of the will executed by the mother of the assessee Mrs. Ramvati, it has been declared that the entire agricultural land will stand in her name till she is alive and this agricultural land belonging to her will pass on to her two sons namely Sh. Vinod Kumar and Sh. Rakesh Kumar in equal part only after her death. This fact of ownership of agricultural land is also verifiable from the land record which clearly indicate the ownership of agricultural land in the name of Smt. Ramvati, the mother of the assessee. Therefore, whatever agricultural income is earned, it is earned only by Smt. Ramvati and not the assessee. 6. Assessee grossly failed to discharge his onus with regard to receipt of agricultural income.” 2.2 The AO further noted that since cash was found deposited in the bank account of the assessee, therefore, entire cash of Rs. 26 lakhs is treated as “income from other sources” and same was added to the income of the assessee.
Rakesh Chaudhary 3. The assessee challenged the addition before Ld.CIT(A). The written submission of the assessee is reproduced in the appellate order in which the assessee reiterated the same submissions as were submitted before AO and also submitted that part of the land is in the name of the assessee and partly in the name of his mother. He has submitted that section 68 of the Act will not apply and that assessee proved the source of cash deposits as above.
The Ld.CIT(A) noted that assessee failed to produce any documentary evidence of earning agricultural income and also failed to prove the identity and creditworthiness of the persons to whom sale of trees was made and also failed to prove genuineness of the transaction in the matter. Addition on merit was confirmed. The Ld. CIT(A) also rectified the order of the AO by directing that addition u/s 69 of the Act be made. Appeal of assessee was accordingly dismissed.
Ld. Counsel for assessee reiterated the submissions made before authorities below. He has argued that assessee has produced sufficient documentary evidences to prove that assessee holds agricultural land and earned agricultural income. The assessee also filed copy of the electricity bill for running the water pump for agricultural purpose and some receipts of mandi samiti for selling of the crops.
5.1 On the other hand, Ld. DR relied upon the orders of the authorities below.
Rakesh Chaudhary 6. I have considered the rival submission and perused the findings of the authorities below.
The assesse has raised three effective grounds of appeal, however, Ld. Counsel for assessee only argued on merit of the addition. No other grounds have been argued by him and no infirmities have been pointed out as to what is illegality in selection of the case under CASS scrutiny. Therefore, no interference is called for on those grounds of appeals. As regards, the addition on merit of Rs. 26 lakhs, assessee submitted documents of ownership of the land which according to him was in his name and the name of his mother. He has filed copy of electricity bill for running the water pump and some receipts of mandi samiti to prove sale of crop. The assessee, however, failed to produce any documentary evidence of growing any poplar trees, etc. in the agricultural land in the year 2007 and 2008. The assessee also failed to prove the age, length, circumference and weight of the stem of the trees. The assessee also failed to prove the identity and creditworthiness of the five persons who have made payment in cash of Rs. 26 lakhs to the assessee on account of sale of poplar trees. The assessee failed to prove genuineness of the transaction in the matter. The AO specifically noted that agricultural land was in the name of mother of the assessee who has executed a will that after her death the property shall be inherited by her two sons i.e. assessee and Sh. Vinod Kumar in equal part. Therefore, property was not in the name of the Rakesh Chaudhary assessee. Thus, assessee failed to prove as to how he has earned agricultural income despite he was not owner of the property in question. The assessee also did not obtain permission of the competent authority before cutting the trees. In the absence of any evidence on record of growing of the trees in agricultural land, and cutting of the trees, it is difficult to believe the explanation of assessee that assessee earned agricultural income of Rs. 26 lakhs on account of sale of trees to five persons. These facts clearly establish that assessee made a wrong claim of earning of agricultural income on account of selling of the poplar trees. No interference is required in the matter. I, accordingly, confirm the findings of facts recorded by the authorities below and dismiss the appeal of assessee.
In the result, the appeal of assessee is dismissed.
Order pronounced in the open court.