CHINTAN UMEDSINH SODHA,JAMNAGAR vs. INCOME TAX OFFICER, WARD 1(3), JAMNAGAR

From the above, the A.O. noticed that the agriculture income is nothing but the assessee's own undisclosed income which is diverted under the guise of agricultural income. Merely furnishing the copy of 7/12, 8-A and income and expenditure account, it is not proved that the assessee has made agricultural activities and earned the agricultural income. The assessee has no evidences of earning of agriculture Page 3 of 7 income. The onus lies on the assessee to prove the genuineness of the transaction, assessee has not submitted any supporting evidence regarding sale of agriculture product, the bills or vouchers of dava expenses, khatar expenses, labour expenses, biyaran expenses etc. In addition to that the assessee has not furnished /offered any explanation in response to the show -cause notice. In view of the above, the amount of Rs.8,15,200/- was treated as income received by the assessee from undisclosed sources and added to the total income of the assessee during the year under consideration.

Regarding tuition income, the assessing officer noticed that the assessee is having tuition income and just furnished the ledger showing student's name and amount for about two months but assessee has not submitted any documents regarding details of students class-wise, fees taken from the student class-wise, qualification of the tutor, mode of payment etc. The onus lies on the assessee to prove the genuineness of transaction and to submit the details and supporting evidences to cross verify the source of income. Therefore, the amount of Rs.5,75,800/- was treated as received by the assessee from undisclosed sources and added to the total income of the assessee during the year under consideration.

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. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before this Tribunal.

Learned Counsel for the assessee, submitted that during the assessment proceedings, the assessee has submitted the proof of agricultural income and also Page 4 of 7 submitted the evidences relating to holding of agricultural land, such as copy of 7/12 and copy of 8A and income and expenditure account. The assessee also submitted the entire possible evidences, for income from tuition, therefore, no addition should be made in the hands of the assessee.Learned Counsel, without prejudice to the above, also submitted that the assessee, being a farmer, has submitted all the possible evidences, however if the Bench wants 10% adhoc addition may be made in the hands of the assessee.

I 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. I note that in order to explain the genuineness of the agriculture income, the assessee submitted before the lower authorities, the copy of 7/12, and copy of 8-A and income and expenditure account. About tuition income, the assessee submitted all the possible explanations. However, assessing officer, ignoring all these evidences made the addition in the hands of the assessee. I note that the assessee is a small farmer and during the assessment proceedings the assessee submitted all the possible evidences such as copy of 7/12 and 8A to prove the holding of the agricultural land and also submitted income and expenditure account in respect of agricultural income. I note that the total of both the additions of Rs. 8,15,200/- and Rs. 5,75,800/-, come to Rs. 13,91,000/-. I also find that the Page 5 of 7 assessing officer, had not specifically identified any specific defects in the purported evidences and also taking note of the fact that the assessing officer, has not held that these evidence filed by the assessee, are bogus. Therefore, I find some merit in the contention of the ld. Counsel for the assessee. Therefore, I find that while the case of the assessee merits some relief, at the same time entire relief cannot be permitted to the assessee. In my view the ends of justice would be met, if a net profit rate of 10% is adopted on both the additions, 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, I direct the assessing officer to make addition at the rate of 10% of Rs.13,91,000/-, in the hands of assessee, which comes to Rs. 1,39,100 /-.

Before parting, it is made clear that instant adjudication is made due to smallness of the amount and the fact that both the parties have agreed for such adhoc disallowance, therefore, the instant adjudication shall not be treated as a precedent in any preceding or succeeding assessment year.

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