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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai
Before: Shri Shamim Yahya (AM) & Shri Ramlal Negi (JM)
This appeal by the Assessee is directed against the order of learned CIT(A) dated 29.12.2017 and pertains to A.Y. 2012-13. 2. Grounds of appeal read as under : (1) On The Facts and Circumstances of The Case, The Hon'ble Commissioner of Income Tax (Appeals) has erred in Law, in Confirming the Addition made under sec 68 of cash Income of Agricultural land of Rs.2270610/- to the assessee's Income which is most "unjustified and arbitrary.
(2) On the Facts and Circumstances of the Case. The Commissioner of Income Tax (Appeals)-17, Mumbai has erred in law in Confirming the initiation of Penalty Proceedings under Section 271(C) of the Income Tax 1961.
(3) On the Facts and Circumstances of case, The Commissioner of Income Tax (Appeals) has erred in law in Confirming the Charge Interest under Section 234A, 234B and 234C of the Income Tax Act 1961, Which is most Arbitrary.
(4) The Appellant, Craves to Add, Delete Alter, addition to the above Grounds of Appeal.
2 Mrs. Usha Umesh Mishra
Brief facts are that during the year under consideration, the assessee has shown agricultural income of Rs.22,70,610/-, which has been claimed as exempt u/s.10(1) of the Act. During the course of assessment proceedings, the Assessing Officer asked the assessee to furnish supporting documents and furnish details of agricultural land holding and the crop taken from agricultural income shown. However, no documents whatsoever were furnished by the assessee to substantiate that she had actually carried out agricultural activity. The assessee was given sufficient opportunity to substantiate agricultural produce, expenses incurred on fertilizer, labour and related expenses like purchase of seed. However, the assessee failed to furnish satisfactory explanation or supporting documents i.e. copy of sale bill, agricultural income receipts, bills etc. in support of the agricultural income.
4. Upon assessee’s appeal learned CIT(A) noted the submissions of the assessee as under :- During the appellate proceedings, the AR of the assessee submitted that the assessee have already filed 7/12 extract with the AO at the time of assessment and the agricultural land is situated at Kudal in Sindhudurg District which is jointly owned by all family members. The agricultural income is distributed among all the family members and the same is deposited in bank. The day to day activities at the farm is managed by Mr. Ashutosh Shukla alias Bablu who after deducting expenditure remits the amount to the bank. The AO has accepted the agricultural income for AY 2007-08 in the assessee's own case. The assessee's agricultural income should be deleted from income from other sources.
5. After an elaborate order learned CIT(A) confirmed the addition. He held as under :-
4.2.5 In the background of above principles, let us examine the facts of the appellant's case. The appellant has only submitted 7/12 extracts (that too not for relevant previous year with the A.O. during
3 Mrs. Usha Umesh Mishra assessment proceedings which shows that agricultural land is situated at Kudal district, Sindhudurg and jointly owned by the family members. Heavy reliance has been placed on 7/12 extract. As pointed out by the AO such not in land records are made on request. In any case the Talathi/Tahsildar who maintains 7/12 records of his jurisdiction is neither on expert nor physically inspects/verify the veracity of entry in a particular 7/12 extract. The so called 7/12 extract is the only evidence which the appellant has filed in support of agriculture income. No evidence showing that the appellant has carried out primary and secondary operations as required by the Hon'ble Supreme Court in the case of CIT Vs. Raia Benov Kumar Sahas Roy (supra) has been filed either before the Assessing Officer or before the appellate proceeding. In fact, no evidence whatsoever may be, has been filed showing any activity related to agricultural operation by the appellant except a claim that some person called Mr.Ashutosh Shukla who looks after day to day activity and after deducting expenditure remits certain amounts to the bank account of the appellant. Such claim has logically no basis and certainly cannot be accepted as a proof for carrying out agricultural operation and justifying such a receipt i.e. Rs.22,70,610/- as income from agriculture.
4.2.6 As mentioned by the A.O., the appellant has claimed landholding in Sindhudurg district by all the family members namely Umesh Arnbikaprasad Mishra, Madan Ambikaprasad Mishra, Vima Madan Mishra and Usha Umesh Mishra. The submission filed by the AR of the appellant indicates the total area of agricultural land is 68 acres jointly owned by the family members. It is interesting to observe that this agricultural land is claimed to have been purchased during the F.Y.2005-06. It is also claimed that the following plantations have been done :-
(1) Mango Trees No. 1501 (2) Cashew Nut Trees Nos.4501 (3) Coconut Trees Nos.551 (4) Dalchini Trees No.351 (5) Supari Trees Nos.76 (6) Jack Fruit Trees No.11 (7) Other crops and vegetables cultivated as per nature and season.
4.2.7 As mentioned, except 7/12 extract for certain years no proof of carrying out any operation falling under the category of agricultural operation has been filed. Even out of claimed land holding of 68 acres having claimed plantation of fruit bearing trees like mango, cashew etc, cannot generate so much of profit which the appellant and his family member have claimed.
4 Mrs. Usha Umesh Mishra
The "National Horticultural Board" is an agency which provides standard parameters for plantation and fruit cultivation. It has standardised the practices of pomology in our country such as- i) Area and production ii) Area wise adaptability of fruit trees iii) Agro climatic requirements iv) Growing and potential area v) Varieties cultivated vi) Planting season and crop management vii) Spacing and number of trees per acre viii) Issue of Biennial bearing in Mango ix) Plant protect on measures x) Harvesting and yield xi) Grading, packing, storage, transportation and marketing, xii) Sale proceed and ultimately profit per acre.
The Appellant has not produce an IOTA of evidence where the claim can be compared with standard value prescribed by this "National Horticulture Board", for each and every operation. For example Mango tree comes to bearing only after 4-5 years of planting and there after its profitable as per "National Horticulture Board", varies between Rs.25,000/- to Rs.43,000/- in this background under, no stretch of' imagination this family member can generate so much per acre of income which this have claimed as agricultural income.
In view of the above analysed facts in the background of judicial ratio on the issue of agricultural income, it is held that appellant has failed to prove that it has earned the agricultural income to the extent of Rs.22,70,610/- during the year.
4.2.8 Reliance on the assessment order of Co-owners: During the appellate proceeding, it has been contended that Shri Umesh Mishra and Mrs.Usha Mishra are the co-owners in the agricultural land with the appellant and whose agricultural income has been accepted for certain years even in the scrutiny assessment The principle of res judicata is not applicable in income tax proceeding. It has been held in various judicial ratios.
Radhasoami Sotsong V. CIT 1991 Indlaw SC 948 Broken Hill Proprietary Co. V. Municipal Council, 1926 AC 94 Amalgamated Coalfields Ltd., V. Janapada Sabha 1962 Indlaw (SC)
5 Mrs. Usha Umesh Mishra
Udayan Chinubhai V. Commissioner of Income Tax, Gujarat, 1967 (1) SCR 913 M.M. Ipah V. Commissioner of Income Tax, Madras, 1968 (1) SCR 65 Municipal Corporation of City of Thane V. Messrs Vidyut Metallics Limited and another 2O07 INDLAW SC 900.
Moreover, the Hon'ble Tribunal in the case-of Shri Umesh A. Mishra, co-owner of the appellant for A.Y.2009-10 has negated the claim of accrual of income from agricultural sources. Thus, such claims do not help the appellant's cause.
4.2.9. My predecessor had dealt this issue in the appellant's husband case i.e. Shri Umesh A. Mishra for A.Y.2009-10 in appeal No. CIT(A)-17/IT-271/11-12 dated 06.11.2013 and dismissed the appellant's ground on this issue. The relevant portion of the said order is reproduced as under :-
"2.3.1 I have carefully considered the submissions and contention of the Ld. AR of the appellant and also carefully gone through the facts and explanation given by the Ld. AR of the appellant as well as the Ld. AO. I find that the appellant has not been able to prove to nature of receipts deposited in its bank account. Though admittedly some documents were given by the appellant indicating that it owns agricultural land which is six separate pieces of agricultural lands admeasuring 19.78 acres at Nandgaon, Taluka Karjat, District Raighad. It also transpires that out of total land of 19.78 acres, 0.9 acres only had raised rice crop and rest of the entire land was termed as 'Barran'. The other details of sale of agricultural produce and the expenditure incurred to earn that income has not been produced by the appellant despite several opportunities given by the Ld.AO, Further, I find that the appellant had not given any document wherein it can be claimed that the appellant had incurred any expenditure. Further, it is seen that the appellant had purchased the agriculture lands at Kudal tor mere Rs. 31,30,000/- and the land is giving a huge revenue yield in a single year to the extent of 60% of its capital value. In the AY 2008-09, the assessee claimed agriculture income to the extent of Rs. 21,28,556/- and thus in two years the assessee recovered more than the original capital investment. Also the assessee has returned a specific figure of agriculture income of Rs. 18,75,400/-, but he did not file any documentary support to the working of such specific figure of agriculture income. Also the assessee filed its return of income after six months from the close of the financial year and without maintaining proper books returning of such specific figure is not 6 Mrs. Usha Umesh Mishra possible unless it is arbitrary and false. This is simply not possible. Further, the appellant stated that the day to day activities at the farm is managed by Mr. Ashutosh Shukla who after deducting expenditure remits the amount to the bank. Such a bold statement without any corroborative facts on record cannot be accepted. It is the onus of the appellant to prove that it had received the agriculture income and it had performed the agricultural operation. Neither of the two stands proved in the appellant's case. Under the circumstances, it is very difficult to accept the contentions of the Ld. AR of the appellant. Mere fact that that appellant is owner of the agriculture land does not prove that it had earned the agriculture income. Under the circumstances since no evidence has been adduced by the appellant, even so called the additional, evidences produced during the appellate stage can be said to be additional evidences. The Ld. AO in its remand report has clearly indicated that the documents which were required by the Ld. AO were neither produced at the assessment nor at the appellate stage and whatever documents were given by the appellant as additional evidences were already before the AO during the assessment proceedings. In view of the facts of the appellant's case, I find no infirmity in the order of the AO treating the deposits made in the bank account of the appellant as income from Other Sources u/s. 68 of the Act. In view of this, ground of appeal is accordingly dismissed".
4.2.10 The Hon'ble ITAT vide its decision in dated 26.07.2017 in the case of Shri Umesh A. Mishra, the co-owner of the appellant for A.Y.2009-10 upheld the order of my ld. Predecessor. The relevant decision of the Tribunal is reproduced as under :-
3.1 During the appellate proceedings the assessee filed certain additional evidence before the FAA who called for a remand report from AO. After considering the available material, he held that that the assessee had not been able to prove to nature of receipts deposited in its bank account, that he owned agricultural lands admeasuring 19.78 acres at Nandgaon, Taluka Karjat, District Raighad, that out of the total land, 0.9 acres only had raised rice crop and rest of the entire land was termed as 'Barren', that other details of sale of agricultural produce and the expenditure incurred to earn that income had not been produced by the assessee despite several opportunities given by the AO, that the he had not given any document wherein it could be claimed that he had incurred any expenditure, that he had purchased the agriculture lands at Kudal for mere Rs. 37,30,0007- and the land was giving a huge revenue yield in a 7 Mrs. Usha Umesh Mishra single year to the extent of 60% of its capital value, that in the A Y. 2008-09, he had claimed agriculture income to the extent of Rs.21,28,556/-, that in two years he recovered more than the original capital investment, that he had returned a specific figure of agriculture income of Rs.18,75,400/-, but he did not file any documentary support to the working of such specific figure of agriculture income, that he filed his return of income without maintaining proper books, that he had stated that the day to day activities at the farm was managed by Ashutosh Shukla who after deducting expenditure remitted the amount to the bankrthat such a statement without any corroborative facts on record could not be accepted, that the onus was on the assessee to prove that it had received the agriculture income and it had performed the agricultural operation, that there was no infirmity in the order of the AO treating the deposits made in the bank account of the assessee as income from Other Sources u/s. 68 of the Act.
3.2. Mere fact that that assessee is owner of the agriculture land does not prove that it had earned the agriculture income. Since no evidence had been adduced by the assessee about the income from agricultural land, so, in his remand report, the AO clearly indicated that the documents which were required were not produced. In absence of the documentary evidences proving genuineness of the claim, we do not want to disturb the finding of the FAA."
4.2.11 The facts in the year under consideration are identical to that of the facts in the appellant's own case as well as in the case of Shri Umesh A. Mishra for A.Y.2009-10.
In view of the discussion and analysis in earlier paras and respectfully following the decision of my Id. predecessor and also the decision of the Hon'ble ITAT (supra) in the case of Mr. Umesh A. Mishra for A.Y.2009-10, I do not find any justification to interfere with the findings of the Assessing Officer in the assessment order and hence, the ground of appeal filed by the appellant on this issue is dismissed.”
Against the above order assessee is in appeal before us.
We have heard both the counsel and perused the records. Learned Counsel of the assessee reiterated the submissions made before learned CIT(A). He submitted that evidence in the form of 7/12 extract are there.
8 Mrs. Usha Umesh Mishra However, learned Counsel of the assessee could not produce any other evidence in support of the claim of agricultural income.
Per contra learned Departmental Representative submitted that there is no cogent evidence whatsoever for the claim of agricultural income. He submitted that the authorities below have rightly rejected the claim of the assessee regarding that income.
Upon careful consideration we find that assessing this case is claiming that assessee alongwith her family members are holding huge amount of land. That they have given the task to a person named Bablu to perform agricultural activity.
That the said person does all the work and incurs expenditure and after deducting the expense deposits the net receipts in assessee’s bank account. We find that this is only a self serving statement. Not an iota of evidence is on record regarding the performance of agricultural activity or expenditure or sale of the agriculture produce. We find that learned CIT(A) has correctly placed reliance upon a catena of case laws. He also referred to ITAT decision in assessee’s own group case wherein such claim of agricultural income was rejected. ITAT decision as referred in para 4.2.10 in CIT(A)’s order above finds that after the purchase of land for Rs. 37,30,007/- the assessee has shown return of agricultural income in just two years more than the amount invested in land. The assessee here is showing a specific amount of agricultural income but is not giving the details. It is clearly an unexplained deposit in bank which has been given the garb of agricultural income. Accordingly, we are of the considered opinion that assessee’s claim of agricultural income is totally bogus and not at all sustainable in law.
In the background of aforesaid discussion and precedent we do not find any infirmity in the order of learned CIT(A).
9 Mrs. Usha Umesh Mishra
In the result, appeal filed by the assessee is dismissed. Order has been pronounced in the Court on 5.4.2019.