GAGJIBHAI JIVABHAI BHARWAD,SURAT vs. ITO, ADAJAN

आदेश / ORDER PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2011-12, is directed against the order passed by the National Faceless Appeal Centre, Delhi [in short, “NFAC/Ld. CIT(A)”] dated 12.05.2023, which in turn arises out of an assessment order passed by the Income Tax Officer Ward-1 Bardoli, under section 144 r.w.s 147 of the Income Tax Act, 1961 (in short ‘the Act’), dated 12.12.2018. 2. Grounds of appeal

2. That, the learned CIT(A) has grossly erred in charging interest u/s 234A and 234B of the Income Tax Act, 1961.

3. That, the findings of the learned CIT(A) are not justified and required to be deleted.”

ITA.466/SRT/2023 AY.11-12 Gagjibhai J Bharwad

ITA.466/SRT/2023 AY.11-12 Gagjibhai J Bharwad unexplained and treated as unexplained investment u/s 69 of the Act and same was added by Assessing Officer to the income of assessee for the year under consideration.

, statement of facts and the contents of assessment order filed by the appellant. No submission was filed by the appellant in spite of allowing sufficient opportunities of being herd during the appellate proceedings. 6.1 There is no dispute on the fact that the assessee had purchased an immovable property for Rs.8,90,400/- by paying stamp duty of Rs.43,700/- on 10.02.2011. The AO has asked the assessee to explain the source of aforesaid investment. The assessee claimed that he is a farmer and doing business of animal husbandry. Copy of Form 7A or 7 was also filed. The assessee explained that the payments for purchase of property was made out of past savings, agricultural income and milk business. 6.2 On the other hand, the AO held that no corroborative evidence was filed other than making the general claim as stated above. 6.3 During the appellate proceedings also, no evidence whatsoever was filed to explain the source of payment for purchase of property. The mode of payment is also not explained. In view of above, I have no material against the conclusion drawn by the AO that the above investment of Rss.9,34,100/- remained unexplained investment u/s 69. Therefore, the addition of Rs.9,34,100/- made u/s 69 for unexplained investment is hereby confirmed. The grounds of appeal are dismissed.”

6. Aggrieved by the order of NFAC/Ld. CIT(A), the assessee is in further appeal before this Tribunal.

7. At the outset, Learned Counsel for the assessee vehemently argued that assessee is an agriculturist and engaged in agricultural activities and assessee is also engaged in producing and selling milk. The assessee has earned income below threshold limit i.e., maximum amount which is not chargeable to tax therefore assessee did not file his return of income. However, Assessing Officer issued a notice on the assessee u/s 148 of the ITA.466/SRT/2023 AY.11-12 Gagjibhai J Bharwad Act stating that assessee purchased an immovable property amounting to Rs.8,90,400/- by paying stamp duty of Rs.43,700/- on 10.02.2011. In this regard, the Ld. Counsel submitted that assessee is an agriculturist and purchased an immovable property out of his agricultural income from past saving. The assessee has submitted before the Assessing Officer the details of extracted Form 7A or 7 which contain the details of land held by the assessee. The Assessing Officer stated that there is no agricultural income and assessee has purchased the property out of income from other sources, which is not acceptable. The Ld. Counsel pointed out that assessee has not engaged in any other activities other than agricultural and selling milk and therefore Assessing Officer has failed to prove that assessee has engaged in any other activities other than agricultural activities, therefore the allegation of Assessing Officer is not tenable in law. The Ld. Counsel also stated that assessee being an agriculturist is getting subsidy from the Government and also getting crop loan and cash loan under Pradhan Mantry Gramin Yojana. The assessee need not to maintain books of account because assessee’s income is below the threshold limit which is not chargeable to tax. Therefore no addition should be made in the hands of assessee.

8. On the other hand, Learned Sr.DR for the Revenue supported the order passed by the Assessing Officer and argued that assessee has failed to prove his source of income. The Ld. DR pointed out that no doubt assessee is an agriculturist and engaged in producing and selling milk and doing agricultural activities, however the assessee has to submit the summary of agricultural land such as Form-7A and 7 and details of income earned by way of doing agricultural activities. The assessee, no doubt submitted some evidences of having agricultural land but did not submit proof of earning agricultural income and income earned by producing and ITA.466/SRT/2023 AY.11-12 Gagjibhai J Bharwad selling milk. Therefore, addition made by Assessing Officer should be confirmed.

9. I have heard both the sides and gone through the relevant material on record. It is seen that it is an undisputed fact that assessee is an agriculturist and aged 47 years, who actively engaged in agricultural activities and milk selling activities since from the beginning. The assessee does not have any other source of income other than agricultural income. The assessee is also engaged in producing and selling animals such cow and buffalo etc., and in these activities cash transaction are involved. Thus, in such business, that is, to sale and purchase cow and buffalo and producing milk, the cash transaction are involved. The assessee has not filed his return of income because he has no taxable income. The assessee had only agricultural income which are entirely exempted from tax. The assessee being an agriculturist and all the activities like selling crop and milk etc., are in the cash, therefore, I note that Assessing Officer has failed to prove the other source of income other than agricultural income of assessee and income by way of selling milk. The assessee has animals on his agricultural land and used the milk for himself and unused milk is sold by him in the market, therefore assessee stated that milk selling activities are also part of agricultural activities. I note that assessee filed details of agricultural land such as Form-7A/7 etc. and other details of agricultural activities. Since assessee does not maintain books of accounts and does not file return of income, hence assessee is not liable to produce books of accounts. I find that assessee submitted documents and evidences to prove his agricultural activities, such as Form No.7A, Form No.7 and other details of agricultural activities. The assessee, as stated above, argued that he is engaged in selling milk which is also part of agricultural activities. I also find that assessee’s entire income pertains to and coming from ITA.466/SRT/2023 AY.11-12 Gagjibhai J Bharwad agricultural activities. Therefore, I find that Assessing Officer has not refuted or discredited these evidences and documents. The Assessing Officer did not mention in his assessment order that why he is not accepting these evidences. On the contrary, the Assessing Officer has just brushed aside these evidences without even a word on why they are not acceptable. It is a well settled law that when an assessee has all the possible evidences in support of his claim, they cannot be brushed aside based on surmises. Hence, I am not inclined to accept the contention of the Assessing Officer in any manner and hence the addition so made should be deleted. Accordingly, I delete the addition of Rs.9,34,100/- made by the Assessing Officer. This ground of assessee’s appeal is allowed.