SHANKER N. KASHID,MUMBAI vs. DCIT 13(2)(2), MUMBAI

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.

“(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.”

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.

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.