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Income Tax Appellate Tribunal, J Bench, Mumbai
Before: Shri G.S. Pannu & Shri Ramlal NegiShri Shankar N. Kashid
This appeal has been filed by the Revenue against the order of the CIT(A)-21, Mumbai dated 15.09.2016 for A.Y. 2012-13.
The assessee has raised the following grounds of appeal: -
“(1) On the facts & circumstances and in law the learned CIT(A) - 21, Mumbai [referred as "CIT(A)"] erred in confirming addition of net agricultural income of Rs. 2,04,47,847/- as unexplained cash credit u/s. 68 of the Act without giving sufficient opportunity. (2) On the facts and circumstances the learned CIT(A) failed to appreciate that there was bonafide and genuine reason for not attending & furnishing the required details and explanation in relation to the alleged agricultural income before the learned DCIT. (3) On the facts and circumstances it is prayed that the alleged addition may be deleted and the same may be treated as agricultural income and exemption u/s. 10(1) of the Act may be granted.
Shri Shankar N. Kashid (4) Alternatively, in the interest of natural justice, Your Appellant prays that one more opportunity may be granted to substantiate the claim.”
At the time of hearing the learned A.R. has not assailed the efficacy of the addition of net agricultural income of `2,04,47,847/- made under Section 68 of Income Tax Act (hereinafter “the Act”) as raised in the Memo of appeal but instead sought to raise a preliminary point to explain the incapacity of the assessee to adequately explain the return of income before the lower authorities and therefore canvassed that the matter be restored back to the file of the AO for assessment afresh.
In this regard it is noticed that the assessee is an individual, who filed his return of income declaring total income of `2,22,660/- and agricultural income of `2,06,70,507/-. The return of income so filed was taken up for scrutiny assessment and it is noted by the AO that in response to the notice of hearing issued assessee did not submit any information in support of his return of income. The AO has noted the explanation furnished by the assessee to the effect that he was a Director in a company, M/s. Stationery Point (India) Ltd. and that the CBI, EOW Wing, Mumbai has seized laptop/electronic data from his residence on 25.09.2014 and therefore the assessee was not in a position to submit any information. With regard to the agricultural income shown at `2,04,47,847/- it is noted by the AO that though the assessee filed a copy of his land holdings in the shape of 7/12 extract but no information was furnished about the sale and purchase of agricultural products and the accounts for the same were not furnished. The AO concluded that it was difficult to believe that the assessee had such a high agricultural income and accordingly he treated the agricultural income declared at `2,04,47,847/- as income under the head ‘income from other sources’. Accordingly the income was finally assessed at `2,06,70,510/- as against the returned income of `2,22,660/-. When the matter was carried in appeal before the CIT(A), the CIT(A) records that none appeared before him. Though the CIT(A) notes that the assessee filed certain details in the Paper
Shri Shankar N. Kashid Book claiming that it was cultivating grapes, onion, chillies and other agricultural products but the details of quantitative sales, purchases, expenses, etc. were not filed on the ground that necessary data/laptop was seized by the CBI EWO Wing. The Commissioner noticed that even the papers filed by the assessee constituted additional evidences as the same was not filed before the AO in the course of assessment proceedings and that no application under Rule 46A of the I.T. Rules for admission of additional evidence was made. The Commissioner also noted that on one hand the assessee had claimed agricultural income of `2,04,47,847/- whereas in the Income & Expenditure Account filed in the Paper Book, though sale of `2,04,47,849/- was shown, but the net profit from agricultural operations was shown at `34,06,902/-. The CIT(A) viewed the same as “highly improbable” and therefore dismissed the appeal of the assessee.
Before us, the learned counsel for the assessee pointed out that due to the impediment of seizure by the CBI the assessee could not furnish the required details or effectively support his return of income. The learned counsel for the assessee has filed a Paper Book containing 159 pages which, inter alia, contains copy of communications addressed to the AO, Income & Expenditure Account of agricultural operations, details of agricultural land holdings and items cultivated and details of invoices, etc. as also details of expenditure incurred on agricultural operations, viz. salary, wages, purchase of fertilizer/seeds and packing materials, etc. The learned counsel for the assessee pointed that now the assessee is in a position to furnish the requisite details as he has obtained the requisite copies and in this manner it was pleaded that the matter be restored back to the file of the AO for fresh assessment.
On the other hand, the learned D.R. for Revenue has not seriously opposed the plea of the assessee for restoration of the matter back to the file of the AO.
Shri Shankar N. Kashid 7. We have carefully considered the rival submissions. Ostensibly the instant is a case where the assessee was not able to furnish any worthwhile material or information to support his return of income as the laptop and electronic data available with him was seized by the CBI EOW Wing on 25.09.2014. The factum of the seizure has not been disputed by the income tax authorities. At the time of hearing, a statement has been made by the learned counsel for the assessee at Bar that the requisite material is now available with the assessee and the same is germane to arrive at the correct tax liability. Apart there from, we find an incongruous situation in as much as on one hand assessee declared agricultural income of `2,04,47,849/- in the return of income whereas in the Income & Expenditure Account of the agricultural operations the net income has been computed at `34,06,902/- and the figure of `20,04,47,487/- reflects the gross sale of agricultural products. Pertinently there is an inadequacy on the part of the assessee, and the correct position is required to be established by examining the requisite material and the assessee cannot be penalised merely because at the relevant point of time the requisite material was not within his domain and control. It is also evident from the material on record that the assessee owns agricultural land to the extent of 18 to 19 acres, evidenced by 7/12 extracts, copies of which have been placed in the Paper Book; therefore the claim of existence of agricultural income cannot be outrightly rejected, as done by the Income Tax Authorities. Considering the entirety of circumstances, in our view, it would be in the fitness of things that the order of the CIT(A) is set aside and the matter is restored back to the file of the AO for de novo assessment. We hold so. Of course, in the ensuing assessment, the AO shall allow a reasonable opportunity of hearing to the assessee in support of his return of income and only thereafter pass an order afresh in accordance with law.
In the result, without going into the merits of the impugned addition, the appeal of the assessee is disposed off as above. Appeal of the assessee is allowed for statistical purposes.