VALLBHBHAI NEBHABHAI GOJIYA,AT.BANKODI, TAL.JAMKALYANPUR vs. COMMISSIONER OF INCOME-TAX (APPEALS), DELHI

The assessing officer had gone through the above reply of the assessee and noticed that the assessee has merely submitted that during the year under consideration his agricultural income is Rs. 6,39,780/- only, however, the same was inadvertently declared at Rs. 34,08,958/- due to clerical error. The assessee, to substantiate his claim, has not submitted any documentary evidences. In absence of any relevant documents the assessee, vide notice dated 14.03.2022 was requested to show cause as to why an addition of Rs. 34,08,958/- should not be made to his total income.

In response to the above notice of the assessing officer, the assessee submitted again, its reply along with documentary evidences, which is reproduced below: "I, VALLBHBHAI NEBHABHAI GOJIYA has received SCN dated 14.03.2022 against my earlier response. In response to SCN issued dated 14th March, 2022 with above mentioned reference, I would like to clarify further as follow- As per your remark in Para no. 4 (i) and (ii) of SCN in response to our earlier reply I would like to clarify as follow-In original reply I had mentioned that agriculture income is 6,39,780.00 and not 34,08,958.00 and it is purely data entry error. Here I would like to clarify that this agriculture income of 6,39,780.00 which I had mention in earlier response is not of AY 2019-20 but only of current ITR i.e., AY 2020-21. You might have wrongly considered this as of AY 2019-20 while rejecting our response. Yes, we had no agriculture income in AY 2019-20 Page 3 of Vallabhbhai N. Gojiya

and I have no where mentioned in my earlier response that we have agriculture income in AY 2019-20. To remove any doubt, here I am providing capital account for further clarification which I have also provided in earlier submission. CAPITAL ACCOUNT OF VALLBHBHAI NEBHABHAI GOJIYA AS ON 31.03.2020 Particular Amount Particular Amount To Withdrawals 7,95,000.00 By Opening Balance 27,69,178.00 01.04.2019 Closing To Balance 29, 15,386.00 By Agriculture Income of FY 2019-20 6,39,780.00 31.03.2020 (AY 2020-21) By Profit For the year 3,01,228.00 TOTAL...... 37,10,386.00 TOTAL...... 37,10,386.00 Now, as mentioned above in capital account total of Opening capital balance and actual Agriculture income (For AY 2020-21) i.e 27,69,178.00 (Opening Capital) + 6,39,780.00 (Agriculture income) is 34,08,958.00 which is wrongly entered while filing ITR and Agriculture Expense of 7,95,000.00 mentioned while filling ITR is nothing but Total Withdrawal as mention above in capital account. So, On the basis of above I can clarify that it was purely a mistake and no such income was recognized in books and only actual income i.e 6,39,780.00 was recognized in books of account which already I have produced in earlier response. With this response I am providing proof of agriculture income as we have considered in books. Further, we were also not aware about this error otherwise we would have revised the return earlier only. We further request you to allow us to rectify this return to correct the error.

In response to your query in para 4(iii) we have attached supporting to justify agriculture income.

In response to para 4(iv) I would like to clarify that we have not revised return as we were not even aware about this error till date we have received notice u/s 143(2). And as per income tax provision we can not revise return after issuance of notice u/s 143(2). I here request you to allow to rectify return to correct errоr. Further clarification: After considering all income, Withdrawals and agriculture income of FY 2019-20 (AY 2020-21). My Total Capital account closing balance as on 31.03.2020 is 29,15,386.00 than how we can have agriculture income of 34,08,958.00 in that Financial Year! So, it was purely data entry error and nothing else and actual agriculture income which we actually have considered in our books of account is 6,39,780.00 only.

The assessing officer, having gone through the above reply of the assessee, held that addition to the tune of Rs. 27,69,178/- ( Rs.34,08,958- Rs.6,39,780), should not be made in the hands of the assessee, as the assessee has furnished the sufficient evidences. However, assessing officer made the addition in the hands of the assessee to the tune of Rs.6,39,780/-.

Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the CIT(A), who has confirmed the action of the Assessing Officer, therefore, assessee is in appeal before this Tribunal.

Learned Counsel for the assessee, vehemently argued that assessee has submitted before assessing officer, every kind of document and evidence to prove the claim of agricultural income, such as ownership, documents of the agricultural land, sale of agricultural produce, expenses of agricultural activities, however, despite of this, the assessing officer made addition to the tune of Rs.6,39,780/-. The Learned Counsel without prejudice to the above, further argued that the Bench may make an ad-hoc estimated addition, to meet the end of Justice, in the hands of the assessee, considering the smallness of the amount.

On the other hand, the ld. D.R. for the Revenue submitted that addition made by the assessing officer is only to the tune of Rs. 6,39,780/-, and Page 5 of Vallabhbhai N. Gojiya assessee submitted some documents and evidences before the assessing officer. Therefore, to protect the interest of the revenue and considering the smallness of the amount, an adhoc estimated addition may be made in the hands of the assessee.

We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that during the assessment proceedings, assessing officer proposed to make the addition in the hands of the assessee to the tune of Rs. 34,08,958/-. However, out of total addition to be made Rs. 34,08,958/-, the assessing officer did not make the addition to the tune of Rs. 27,69,178/-. The assessing officer only made addition of Rs. 6,39,780/-. Considering the fact that assessing officer himself did not make the addition to the tune of Rs. 27,69,178/-, as the assessing officer, observed that in assessee`s case, there was merit, in the documents and evidences submitted by the assessee during the assessment proceedings.However, assessing officer made the addition in the hands of the assessee to the tune of Rs.6,39,780/-, only. For such small addition of Rs.6,39,780/-, the assessee submitted necessary documentary evidences before the assessing officer, relating to agricultural income. However, the assessing officer did not consider these documents and evidences in right perspective.

We note that the agricultural income of the assessee is to the tune of Rs. 6,39,780/-, and assessee submitted, sufficient documentary evidences to Page 6 of Vallabhbhai N. Gojiya prove his claim. However, we find that some of the documents and evidences are self-servicing, documents and evidences on which reliance cannot be placed, therefore, to protect the interest of the revenue, and considering the smallness of the amount an adhoc, estimated addition should be made in the hands of the assessee. Therefore, we find some merit in the contention of the ld. Counsel for the assessee. Hence, we find that while the case of the assessee merits some relief, at the same time entire relief cannot be permitted to the assessee. In our view the ends of justice would be met, if a net profit rate of @ 5% of Rs. 6,39,780/- which comes to Rs. 31,989/-, is adopted, since the same would take care of the inconsistencies, in the various documents and evidences submitted before the lower authorities. Therefore, in order to plug the leakage of revenue, we direct the assessing officer to make addition of Rs. 31,989/-, by applying the normal rate of income tax ( not under section 115BBE of the Act). It is also made clear that instant adjudication shall not be treated as a precedent in any preceding or succeeding assessment year.

In the result, the appeal of the assessee is partly allowed in above terms.