Brahm Pal Saini, Noida vs Assessee

This is an appeal by the assessee against the order dated 21.06.2013 of

ld. CIT (Appeals), Noida. The only effective ground raised in this appeal reads

as under:

"1. On the facts and circumstances of the case the finding of Ld. CIT(A) is contrary to evidence in confirming addition of Rs.2,55,000/-."

2. Facts of the case in brief are that the assessee filed the return of income

on 1.5.2006, declaring an income of Rs.1,50,530/- and an agricultural income of

Rs.5,10,000/-. The AO asked the assessee to furnish the copy of Khasra

Khatauni of the agricultural land along with details and evidence of expenses

made for agricultural produce and bills and vouchers regarding its sales. I.T.A .No.-4408/Del/2013 2

3. In response, the assessee furnished copy of khasra khatauni and receipts

of sale of mango crops and popular trees. It was further stated that all the crops

had been sold in cash and expenses had also been made in cash, for which no

bills were available. The AO however, in the absence of any receipts, bills and

vouchers estimated the agricultural income at Rs.2,55,000/- and balance amount

of Rs.2,55,000/- was treated as income from other sources and added in the

hands of the assessee.

4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and

submitted that the assessee furnished sale agreement/a letter of sale of mango

and popular trees etc., before the AO. It was further submitted that the assessee

also sold sugarcane for Rs.65,179/- to Iqbalpur Sugar Mill, and the amount was

credited in saving account with SBI, Roorkee. The assessee also furnished the

copy of Bank passbook before the ld. CIT(A). However, the ld. CIT(A) was not

satisfied with the submissions of the assessee and confirmed the addition by

observing as under:

"I have carefully considered rival contentions and find that it is a fact that assessee is engaged in agricultural activities and derives income from the same. The only dispute arises regarding the quantum of income from agricultural activities from the piece of land of 4.726 hectares owned by the assessee. I have also noticed that while the assessee has furnished details of receipt from sale of popular tree and mango crop, he has failed to furnish the details along with evidence in support of expenditure incurred on the above. So far as agricultural crops are concerned the assessee has admitted that all the crops are sold in cash and I.T.A .No.-4408/Del/2013 3

expenses are also being incurred in cash for which the assessee does not have the bills/vouchers and that no accounts books or any records whatsoever are being maintained by the assessee in this regard. In the light of above facts I am convinced that the AO had no option but to assess the agricultural income on estimate basis by treating the 50% of declared agricultural income of Rs.5,10,000/- as income from agricultural activities while remaining amount of Rs.2,55,000/- was treated as income from other sources. Moreover, even during the appellate proceedings the appellant has completely failed to adduce any evidence whatsoever before me in support of earning of Rs.5,10,000/- as declared agricultural income and to that extent I find that the assessee has failed to discharge his onus of proving the genuineness of the claim made by him in his income tax return. In the light of above facts, I confirm the action of AO in estimating agricultural income at Rs.2,55,000/- while treating the remaining Rs.2,55,000/- as income from other sources in the case of the assessee."

5. Now the assessee is in appeal before this Tribunal. The ld. counsel for the

assessee submitted that the assessee was owner of the land on which mango

trees and popular trees were grown. It was further stated that the assessee

furnished evidence of land holding and for cultivating of crops in the form of

khasra khatauni which was not doubted by the AO. Therefore, the addition

made by the AO and sustained by the ld. CIT(A) was not justified. It was

further submitted that in the preceding year similar income was shown which

was accepted by the Department but only a disallowance of Rs.50,000/- was

made. In her rival submissions, the ld. DR strongly supported the orders of the

authorities below and further submitted that the assessee could not produce the

receipts for the sale of agricultural crops, and that the "income from other I.T.A .No.-4408/Del/2013 4

sources" was shown as agricultural income. Therefore, the ld. CIT(A) was

justified in confirming the addition made by the AO.

6. We have considered the submissions of both the parties and carefully

gone through the material available on the record. In the instant case it is an

admitted fact that the assessee was holding the agriculture land on which mango

trees and popular trees were grown, the assessee also cultivated sugarcane and

furnished the copy of khasra khatauni before the ld. CIT(A) as well as the AO.

However, the AO treated 50% of the declared agricultural income as income

from other sources but without any basis. At the same time it is an admitted fact

that the assessee failed to produce sales, bills for sale of mango crops.

Therefore, we are of the view that some disallowance is called for to cover the

leakage, if any. The contention of the ld. counsel for the assessee was that in

similar circumstances, a disallowance of Rs.50,000/- was made in the earlier

year by this Department, the said contention was not rebutted. We therefore,

deem it appropriate to sustain the disallowance of Rs.50,000/-only.

Accordingly, the assessee will get relief of Rs.2,05,000/-.

7. In the result, appeal of the assessee is partly allowed.

Order pronounced in the open Court on 04/03/2015.

Sd/- Sd/- (C. M. GARG) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER I.T.A .No.-4408/Del/2013 5

Dated: 04/03/2015 *AK VERMA*

Copy forwarded to:

1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR