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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI RAJENDRA & SHRI AMIT SHUKLA
आदेश ORDER अिमत शु�ला : �या. स.: PER AMIT SHUKLA, JM: The aforesaid appeal has been filed by the revenue against impugned order dated 30.06.2011, passed by Commissioner of Income Tax (Appeals)-3, Mumbai [CIT(A)] for the quantum of assessment passed u/s 143(3) for the assessment year 2008-09 on the following grounds of appeal: “1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A)-3, Mumbai has erred in accepting assessee’s claim of agricultural income of Rs.60,30,000/-.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A)-3, Mumbai has erred in allowing the claim of assessee of agricultural income to the �ी केशव जी मेनॉन 2 Shri Keshav G Menon ITA 6288/M/2011 extent of Rs.60,30,000/- even though the assessee did not bring necessary evidence on record to controvert the findings of the AO/JCIT.
3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A)-3, Mumbai has erred in shifting the onus of proof of agricultural income from the assessee to the Assessing Officer.
4. The appellant prays that order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer restored”.
2. Before us, the Ld. Counsel, Shri Rajiv Khandelwal submitted that in AY 2010-11, the Tribunal has deleted the similar addition of Rs.12,50,000/- made on account of agricultural income.
3. On the other hand, Ld. DR strongly relied upon the order of the AO and submitted that, the assessee had shown at agricultural income of Rs. 60,30,000/- from land holding of less than six acres which is improbable under the facts and circumstances as discussed in the assessment order. Moreover, in AY 2010-11, out of agricultural income of Rs. 25 lakhs AO had disallowed 50% and Tribunal has deleted the balance addition of 50%. If same ratio is to be followed then the agricultural income should be confined to Rs.25 lakhs.
Brief facts are that, the assessee is an Advocate by profession, showing income from profession and income from other sources. He has shown huge agricultural income of Rs.60,30,000/- from land holding of approximately 6 acres. The nature of products and receipts shown by the assessee were as under: Rice Rs.18,71,365/- Banana Rs. 8,62,890/- Coconut Rs.12,84,116/- Mango Rs.13,67,958/- Jack Fruit Rs. 4,84,390/- Chickoo Rs. 3,89,811/- Other cultivation Rs. 3,96,514/- Total Rs.66,57,044/- �ी केशव जी मेनॉन 3 Shri Keshav G Menon ITA 6288/M/2011 As against this, the assessee has debited expenses on account of fertilizer at Rs. 2,42,330/-; labour charges at Rs.3,02,550/-; tools & equipments at Rs.46,750/- and Other expenses of Rs.31,414/-. The assessee had moved a petition under section 144A before the Joint Commissioner of Income-tax for issuing of necessary guidelines and instruction to the AO. The Ld. JCIT after detailed discussion and analysis, found that the assessee’s claim of agricultural income is not genuine at all. The detailed reasoning of the JCIT have been reproduced from pages 4 to 14 of the assessment order wherein each and every contention and evidences of the assessee has been dealt with. Accordingly, the entire agricultural income was treated by him to be false and non-genuine. The AO thus following the directions of the JCIT treated the agricultural income of Rs.60,30,000/- as unexplained income.
4. Before the CIT(A), the assessee submitted the details of income and expenditure account, gross receipts from sale of Rice, Banana, Coconut, Mango, Jackfruit, Chikoo as well as expenses on fertilizers and seeds, labour charges etc. Sample copies of bills were also filed. From these details, it was submitted that, agricultural activities were actually carried out by the assessee and therefore, the agricultural income is genuine. A certificate from Village Administrative Officer was also filed to show that, assessee was in possession of 5.8 acres of agricultural land. The Ld. CIT(A) held that AO has not disputed the land holding of 5.83 acres of agricultural land and also the copies of sale bills of agricultural produce. If AO was not satisfied with the genuineness of the documents, he could have made further enquiries from land revenue office. Thus, he treated the entire agricultural income as genuine.
After considering the submissions of the parties and on perusal of the relevant finding given in the impugned order, we find �ी केशव जी मेनॉन 4 Shri Keshav G Menon ITA 6288/M/2011 that from land holding of approximately 6 acres (5.8 acres) the assessee had shown receipts from various kind of agricultural produce like, fruits, paddy and other cultivation for sums aggregating Rs. 66,44,044/-. After deducting expenses of Rs.6.14 lakhs approximately, the balance amount of Rs.60,30,000/- has been shown as an net income from agriculture. However, to substantiate such a huge receipts from a small holding of 6 acres, we find that, assessee has not produced yield-wise and crop-wise details of agricultural product and in how much area paddy was grown and for fruits, how much area was specified for trees and plants. Such a huge quantity of production of fruits will require a larger area. Here, no such details have been furnished. The bills which were furnished were mostly in the form of cash bills. The AO at page 11, has reproduced the copies of certain bills, wherein, he has analysed the rate of paddy sold and also the quantity of paddy grown. After detailed discussion for each and every item, definite finding of fact has been given by the AO that such a huge amount is not fully substantiated. The ld. CIT(A) without any proper rebuttal of the AO’s finding has simply shifted the onus to the Department that further enquiries should have been made. Such an approach of the CIT(A) cannot be accepted. However, in this case, it cannot be denied that assessee did not carried out any agricultural activity or has not earned any income. Looking to the fact that in the subsequent years, agricultural income has been accepted to the extent of 25 lakh rupees, therefore, consistent with the view taken, some reasonable estimate of agricultural is being made. Accordingly, to be fair to the assessee, we hold that, out of Rs.60,30,000/-, 50% of the income declared can be treated as agricultural income and balance 50% has to be treated as unexplained income. Such an estimate is made purely on the principles of judicial precedence, because in the subsequent year, agricultural income to the extent of Rs.25 lakhs has been accepted. Thus, grounds raised by the revenue are partly allowed.