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Income Tax Appellate Tribunal, A/“SMC” BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI
आदेश / O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal is filed by the assessee, aggrieved by the order of the Learned Commissioner of Income Tax(A)-13, Chennai dated 05.06.2017 pertaining to assessment year 2013-14.
The first issue raised in this appeal for adjudication is with regard to treatment of agricultural income as undisclosed cash credit.
The brief facts of the case are that during the Assessment Year 2013-14, the Assessee had admitted agricultural income earned of `6,50,000/- from a land situated at Sriperambadur B-Village. In the course of scrutiny, the Assessee was asked to furnish relevant documents pertaining to the agricultural income earned and the assessee accordingly furnished the documents including the Adangal for the Fasli Year 1425(01/07/2015 to 30/0/2016), issued by the VAO on 20/08/2015 as proof of agricultural income. The assessee further explained that the agricultural is from Paddy and was sold locally.
3.1 Subsequently the learned officer issued summons u/.s 131 of the Act, to the VAO, and obtained a sworn statement stating that the lands are barren lands and no agricultural activities were carried out in the Financial Year 2012-13. Further, the VAO subsequently has cancelled the Adangal issued on 20/08/2015 stating that the Adangal does not belong to F.Y 2012-13.
3.2 The assessee submitted that during the course of assessment proceedings, the assessee was not given an opportunity to be heard or to cross examine the VAO and statement was obtained from the VAO on the back of the Assessee. Given the substantial nature of change in opinion of the VAO, it is crucial to the principles of Natural Justice that the assessee be given an opportunity to be heard and to cross examine the submissions made by the VAO. The Assessee submitted that the Learned Officer has also stated in the impugned order that the Talsidar has denoted that the lands are denoted as puncture lands for the period in question and hence were uncultivable. However, the Officer has erred in considering this opinion after significant time has lapsed since the financial years in question when the Adángal has clearly shown that the assessee has earned the income from the sale of agricultural produce, cultivated from the land held by the Appellant.
3.3 Subsequently, the AO completed the assessment u/s.143(3) of the Act on 10.03.2016 by adding the following: i) treating the agricultural income admitted as unexplained cash credit `6,50,000/-. ii) the interest received from a Housing not offered as income `2,20,706/-.
Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A). Regarding the issue of agricultural income, Ld.CIT(A) endorsed the view of the ld. Assessing Officer and decided the issue against the assessee. Against the decision of Ld.CIT(A), now the assessee is in appeal before Tribunal.
Before the Bench, the ld.A.R submitted that the assessee produced all requisite documents relevant to agricultural income earned including the Adangal issued on 20/08/2015 for the Fasli Year 1425(01/07/2015 to 30/0/2016). Subsequently, the ld. Assessing Officer summoned the VAO u/s.131 of the Act and recorded a sworn statement stating that the lands are barren lands and no agricultural activities were carried out in the financial year 2012-13. Later, the VAO cancelled the Adangal issued on 20/08/2015 stating that the Adangal does not belong to the Financial year 2012-13. It was submitted by the ld.A.R that the assessee was not given an opportunity to cross examine the submissions of the VAO and the ld. Assessing Officer decided the case against the assessee at the back of the assessee. Further, the ld.A.R submitted that in the earlier year, the agriculture income was accepted by the Department and only from the present assessment year, it was not accepted. According to him, thee should a consistency in income tax proceedings for each assessment year, the ld. Assessing Officer cannot take a different view on the same set of facts.
On the other hand, ld.D.R relied on the order of lower authorities and submitted that the assessee had not produced any relevant evidence to prove that the assessee carried on agricultural operations in the said land owned by the assessee and assessee has to furnish relevant documents pertaining to the agricultural income earned.
I have heard both the parties and perused the material on record. Admittedly, in this case, the owning of agricultural land is not disputed by the lower authorities. Further, it is also undisputed fact that in earlier years, the declared the agricultural income, which was accepted by the ld. Assessing Officer. But, only in this assessment year under consideration, the same income was not accepted as agricultural income. There was a statement recorded from VAO u/s.131 of the Act and principles of natural justice requires to provide proper opportunity to be given to the party to cross examine the submissions of the VAO, if such third party statements relied upon by A.O to complete the assessment. Hence, in the interest of justice, I am inclined to remit the entire issue to the file of ld. Assessing Officer to give copy of sworn statement recorded from VAO u/s.131 of the Act to assessee and also to consider the agricultural income declared by the assessee in earlier assessment years to come to conclusion for present assessment year on this issue. With this observation, I remit the issue to the file of ld. Assessing Officer for fresh consideration.
The next issue is with regard to taxing of interest income.
7.1 It was submitted by the ld.A.R that the assessee received `2,20,706/- as interest income, which was offered to tax in earlier assessment year 2012-13 on accrual basis. As such, taxing the same income in this assessment year under consideration amounts to double taxation. In my opinion, it is to verify whether the same income was offered to tax in earlier assessment year 2012-13, if so, there cannot be any addition on this count in this assessment year under consideration. Further, I direct the AO to verify whether any interest income accrued to the assessee in the present assessment year under consideration, if so, the same is to bring to tax in this assessment year also. With this observation, this issue is remitted to the file of ld. Assessing Officer for fresh consideration.
In the result, the appeal of assessee is partly allowed for statistical purposes.
Order pronounced on 20.12.2017.