Shri Mukesh Agrawal, Bhopal v. The ITO,, Bhopal

CO 73/IND/2009 | 2006-2007
Pronouncement Date: 20-07-2011 | Result: Dismissed

Appeal Details

RSA Number 7322723 RSA 2009
Assessee PAN ADBPA2015P
Bench Indore
Appeal Number CO 73/IND/2009
Duration Of Justice 1 year(s) 7 month(s) 25 day(s)
Appellant Shri Mukesh Agrawal, Bhopal
Respondent The ITO,, Bhopal
Appeal Type Cross Objection
Pronouncement Date 20-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 20-07-2011
Date Of Final Hearing 09-05-2011
Next Hearing Date 09-05-2011
Assessment Year 2006-2007
Appeal Filed On 25-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH J.M. AND SHRI R.C.SHARMA A.M. PAN NO. : ADBPA2015P I.T.A.NO. 501 / IND /200 9 A.Y. : 2006 - 07 INCOME - TAX OFFICER SHRI MUKESH AGRAWAL 3(1) VS B - 275 SHAHPURA BHOPAL. BHOPAL. APPELLANT RESPONDENT C.O.NO.73/IND/2009 (ARISING OUT OF I.T.A.NO. 501/IND/2009) A.Y. : 2006 - 07 SHRI MUKESH AGRAWAL INCOME - TAX OFFICER B - 275 SHAHPURA VS 3(1) BHOPAL. BHOPAL. APPELLANT RESPONDENT DEPARTMENT BY : SHRI ARUN DEWAN SR. DR ASSESSEE BY : SHRI B. C. JAIN CA O R D E R PER R. C. SHARMA A.M. THIS IS AN APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 16.7.2009 FOR THE ASSESSMENT YEAR 2006 - 07 IN THE - : 2 : - 2 MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME - TAX ACT 1961. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL HAVING SALARY AND INTEREST INCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND THAT THE ASSESSEE HAS SOLD HIS LAND ON 21 - 11 - 05 TO SMT. TILOTTAMA SARAN KOTHIWAL OF MORADABAD (U.P.) THE SALE CONSIDERATION FOR THE LAND MEASURING 15.74 ACRES SITUATED AT VILLAGE ADAMPUR CHHAWNI BHOPAL WAS MENTIONED AT RS. 21 00 000/ - . THE ASSESSEE IN THE COMPUTATION SHEET ENCLOS ED WITH THE RETURN HAS TAKEN THE VALUE AS ON 01 - 04 - 81 AT RS. 3 65 000/ - BEING AN ANCESTRAL PROPERTY AND AFTER TAKING DEDUCTION OF COST OF INDEX AT RS. 18 14 050/ - HAS SHOWN RS.2 85 950/ - AS CAPITAL GAIN. THE ASSESSEE HAS INVESTED RS. 3 00 000/ - IN NABARD CAPITAL GAIN BONDS AND CLAIMED EXEMPTION. HOWEVER THE ASSESSEE HAS SHOWN RECEIPT OF ANOTHER AMOUNT OF RS. 39 25 000/ - FROM THE SALE OF LAND ON ACCOUNT OF EUCALYPTUS TREES PLANTED ON THE ABOVE LAND. THIS RECEIPT HAS BEEN SHOWN AS AGRICULTURAL RECEIPTS AND AFTER CLAIMING EXPENSES OF RS. 7 25 000/ - - : 3 : - 3 AGRICULTURE INCOME OF RS. 32 OO OOO/ - HAS BEEN SHOWN BY THE ASSESSEE. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE TOTAL RECEIPT OF RS. 60 25 000/ - RECEIVED FROM THE PURCHASER HAS NOT BEEN OFFERED FOR CAPITAL GA IN AND ALSO TO SUBSTANTIATE THE AGRICULTURE INCOME CLAIMED BY HIM. 3. THE ASSESSEE VIDE REPLY DATED 4 - 11 - 08 SUBMITTED THAT DURING THE YEAR THE ASSESSEE HAS SOLD EUCALYPTUS PLANTATIONS TO SMT.TILOTAMA KOTHIWAL NANDLAL NIWAS CIVIL LINES MURADABAD UP PAN AIOPK9844L. DETAILS OF THE SAME ARE AS UNDER : - SALE PRICE OF APPROXIMATELY RS.20 OOO/ - RS.39 25 OOO/ - EUCALYPTUS TREES PLANTED ON 6.369 HECTARES (15.73 ACRES) AGRICULTURE LAND AT GRAM ADAMPUR CHAWNI FANDA TEHSIL HUZURE DISTT. HUZUR. LESS : EXPENSES RS. 7 25 000/ - (PAID TO ISHITA LILA CH.NO.158338 DATED 20.3.2006 RS. 5 00 000/ - AND CH.NO.958340 DATED 20.3.2006 RS. 2 25 000/ - ) _______________ RS. 32 00 000/ - THE NET AGRICULTURE INCOME OF RS. 32 LACS HAS BE EN DULY - : 4 : - 4 SHOWN IN THE RETURN OF INCOME BY THE ASSESSEE. AS REGARDS JUSTIFICATION OF THE NET AGRICULTURE SALE AMOUNT OF RS. 32 LACS IT WAS SUBMITTED THAT : - A) THAT THE TOTAL PLANTATION WAS ON 6.369 HECTARES (15.73 ACRES) AGRICULTURE LAND. B) ON THE SAID LAND APPROXIMATELY 20000 IN NOS EUCALYPTUS TREES WERE GROWN. IN SUPPORT COPY OF WRIN PUSTIKA AND KHASRA FOR F.YR.1998 - 99 1999 - 00 AND 2001 - 02 IS ENCLOSED AS PER ANNEXURE - 1 ON WHICH THE FACTS HAS BEEN CLEARLY MENTIONED. C) EVEN OTHERWISE WE HAVE WORKED OUT THE ESTIMATED NUMBER OF EUCALYPTUS TREES POSSIB L E TO BE GROWN ON 1 ACRE LAND AS UNDER ONE EUCALYPTUS TREE REQUIRES APPROXIMATELY 4 METERS AREA (2X2METRE) HENCE ON 1 ACRES APPROX.1000 EUCALYPTUS TREES CAN BE GROWN (1 ACRES = 4000 METRE) THUS ON 15.73 ACRES LAND 15730 NOS . OF EUCALYPTUS - : 5 : - 5 TREES CAN BE GROWN. COPY OF BOOKLET ON EUCALYPTUS FARMING IS ENCLOSED AS PER ANNEXURE - 2. THESE FIGURES ARE BASED ON THE FACTS OF THE FINANCIALLY YEAR 1983. D) THE ASSESSEE SOLD ENTIRE 20000 EUCALYPTUS PLANTATIONS FOR A CONSI DERATION OF RS. 39 25 OOO/ - . THIS INCLUDED EXPENDITURE ON CUTTING THE TREES TRANSPORTATION AND OTHER RELATED COST. THUS ON AN AVERAGE THE SALE PRICE COMES TO RS.200/ - PER TREE WHICH IS MOST REASONABLE AND CAN BE VERIFIED IN LOCAL MARKET ALSO. WE HAVE OBTA INED SOME QUOTATIONS WHICH ARE ENCLOSED AS PER ANNEXURE 3'. 4. THE AO ASKED T HE ASSESSEE TO SUBMIT EVIDENCES OF PLANTATION EXPENSES INCURRED PERIOD /TIME OF PLANTATION OF AND THE ULTIMATE PURCHASER OF TREES COPIE S OF BILLS ETC. THE ASSESSEE VIDE HIS REPL Y DATED 30 - 12 - 08 SUBMITTED AS UNDER : ASSESSEE OWNED AN AGRICULTURE LAND - : 6 : - 6 OF 15.74 ACRES AT VILLAGE ADAMPUR CHAWNI RAISEN ROAD BHOPAL WHICH WAS AN ANCESTRAL LAND . THE ASSESSEE MADE SOME DEVELOPMENT WORK ON LAND FOR DOING EFFECTIVE CULTIVATION. HENCE IN CURRED FOLLOWING EXPENDITURE: F.YR. A MOUNT 1984 - 85 RS. 4 12 800/ - 1985 - 86 RS.1 24 860/ - THIS LAND DID NOT HAVE ANY APPROACH FROM THE ROAD. THE APPROACH WAS AVAILABLE FROM THE LAND OWNED BY SHRI R.K. AGRAWAL FATHER OF THE ASSES SEE FOR THE CULTIVATION AND DEVELOPMENT OF PLANTATION THE ASSESEEE ENTERED INTO A PARTNERSHIP IN THE NAME OF M.P. PLANTATION ON 6TH DAY OF MAY 1986 WITH HIS FATHER MOTHER AND BROTHER SHRI RUPESH AGRAWAL. THE PARTNERSHIP FIRM DID CULTIVATION OF EUCALYPT US PLANTS IN THE F.YR.1986 - 87 AS DURING THOSE DAYS THERE WAS LOT OF INCENTIVE OF THE GOVERNMENT FOR PROMOTION OF EUCALYPTUS PLANTATION. FOR THIS A LOAN OF RS.11 LACS WAS OBTAINED BY THE FIRM FROM BANK OF INDIA IN THE YEAR - : 7 : - 7 1986 AND EUCALYPTUS PLANTATION WAS DONE. A FURTHER LOAN OF RS.2.35 LACS WAS OBTAINED FROM BANK OF INDIA. OUT OF THE BANK LOAN AND BY PARTNERS CONTRIBUTION OVER THE YEARS TOTAL EXPENDITURE DONE ON PLANTATION WAS RS. 20 69 971/ - (EXCLUDING INTEREST ON BANK LOAN) AS ON 31.3.1998. ON THESE LAN D ABOUT FIFTY THOUSAND EUCALYPTUS TREES WERE PLANTED. THE PROJECT OF PLANTATION WAS NOT COMMERCIALLY VIABLE HENCE SUFFERED LOSS AND THE FIRM COULD NOT CLEAR THE BANK LOAN. THEREAFTER THE BANK OF INDIA FOR RECOVERY OF LOAN AND INTEREST FILED A CIVIL SUIT. WITH LOT OF PERSUASION THE ASSESSEE COULD MANAGE TO SETTLE THE DISPUTE WITH BANK OF INDIA TO A COMPROMISE FOR RS. 22.72 LASS. THE PARTNERSHIP FIRM NAMED M.P. PLANTATION WAS THEN DISSOLVED IN MARCH 1998 AND AGRICULTURE LAND RESTORED TO THE RESPECTIVE OWNER S I.E. 15.74 ACRES TO THE ASSESSEE AND 17.46 ACRES TO SHRI R. K. AGRAWAL AND THE EXPENDITURE ON DEVELOPMENT OF PLANTATION WAS ALSO SHARED AS UNDER: R.K. AGRAWAL RS. 10 88 605/ - MUKESH AGRAWAL RS. 9 81 365/ - - : 8 : - 8 AT THAT TIME ABOUT 20 000 EUCALYPTUS TREE S WERE AVAILABLE IN GOOD CONDITION. THEREAFTER THE ASSESSEE HIMSELF MAINTAINED THE PLANTATION. IN THE FINANCIAL YEAR 2005 - 06 THE ASSESSEE MADE FURTHER DEVELOPMENT IN LAND FOR LEVELING OF LAND FENCING ROAD REPAIRING WORK ETC. AS THE FENCING DONE ABOUT 2 0 YEARS BACK WAS TOTALLY DAMAGED BY CATTLES OF NEIGHBOURING VILLAGERS AND ALSO IN DUE COURSE OF TIME. ON THIS WORK EXPENDITURE OF RS.7 25 OOO / - WAS DONE. THIS WORK WAS GOT DONE BY SHRI ISHIT LILA WHOSE BILL IS ENCLOSED HEREWITH WHICH WAS PAID BY CHEQUE NO .958338 RS. 5 LACS AND NO. 958340 RS. 2.25 LACS. AS THE ASSESSEE WAS IN NEEDS OF FUNDS HENCE ON 21ST NOVEMBER 2005 HE SOLD THE AGRICULTURE LAND AND EUCALYPTUS TREES TO SMT. TILOTMA KOTHIWAL AS UNDER: AGRICULTURE LAND RS. 21 LACS PLANTATION RS. 39 .25 LACS - : 9 : - 9 5. IT WAS FURTHER SUBMITTED THAT THIS WAS AN ANCESTRAL LAND HENCE FOR CALCULATION OF CAPITAL GAINS MARKET VALUE AS ON 1.4.1981 WAS TAKEN AT RS. 3 65 000/ - BASED ON THE THEN MARKET RATES. WE ARE ALSO ENCLOSING HEREWITH THE CORRESPONDENCE AND OTHER DOCUMENTS WITH BANK OF INDIA REGARDING AVAILING LOAN FACILITIES AND GROWING EUCALYPTUS TREES ACCOUNT SO MP PLANTATIONS AS ON 31.3.1998 AFFIDAVIT OF MR. ISHSIT LILA AND EXPENDITURE VOUCHERS AS PER ANNEXURE.I. THE ASSESSEE HAS SHOWN NET AGRICULTURE INCOME OF RS.32 LACS IN THE RETURN OF INCOME. IT IS SUBMITTED THAT IF YOUR GOOD SELF IS OF THE VIEW THAT THE SAME IS NOT AN AGRICULTURE INCOME AND PROPOSE TO ASSESSEE IT WAS CAPITAL GAINS THEN ALSO THERE WILL BE NO LIABILITY TO INCOME TAX AS UNDER : SA LE CONSIDERATION RS. 60 25 000/ - (RS. 21 00 000/ - + RS. 39 25 000/ - ) LESS : COST OF ACQUISITION INDEXED COST OF LAND RS. 18 14 050/ - - : 10 : - 10 (MARKET VALUE AS ON 1.4.81 365000/ - * 497/100 COST OF IMPROVEMENT F. Y . 85 - 86 412800/ - * 497/133 = 1 542568/ - F.Y. 86 - 87 124160/ - * 497/140 = 44076 8/ - F.Y. 97 - 98 981365/ - * 497/331 = 1473530/ - F.Y. 05 - 06 725000 725000/ - 59 95 916/ - LONG TERM CAPITAL GAINS 29 084/ - IN VIEW OF THE ABOVE AND WITHOUT PREJUDICE TO OUR CLAIM IN THE RETURN OF INCOME IT IS SUBMITTED THAT EVEN IF THE RECEIPTS IS TAXED AS CAPITAL GAINS THEN ALSO THERE WILL BE NO LIABILITY TO CAPITAL GAINS TAX. 6. WITH REGARD TO ASSESSEE S CONTENTION FOR TRANSFER OF 20 000 TREES OF EUCAL YPTUS IS THAT T HE AO OBSERVED THAT THE ASSESSEE HAS STATED THAT AT THE TIME OF TRANSFER OF LAND 20 000 TREES OF EUCALYPTUS WERE IN GROWN CONDITION. NO EVIDENCE OF THIS CLAIM IS PROVIDED BY HIM NOR ANY MENTION - : 11 : - 11 OF EUCALYPTUS TREES IS FOUND IN THE REGISTERED SALE DEED. IN S UCH CONDITION THE CLAIM REGARDING NUMBER OF EUCALYPTUS TREES IS NOT SUPPORTED BY ANY EVIDENCE TO BELIEVE THE THEORY OF ASSESSEE. NOW LET US EXAMINE THE POSSIBILITY OF NUMBER OF TREES ON THE LAND OF THE ASSESSEE. AS PER THE REPORTS AVAILABLE ON EUCALYPTUS T REES - THE AREA REQUIRED FOR GOOD AND HEALTHY GROWTH OF ONE EUCALYPTUS TREE IS 75 10 *100 SQ.FT. HOWEVER WHERE PLANTS ARE DESIRED TO BE KEPT FOR 15 - 20 YEARS THE SPACE OF 4 MTR. IS RECOMMENDED. THUS IN ONE ACRE OF LAND THE NUMBER OF TREES WHICH CAN BE GRO WN /PLANTED CAN NOT BE MORE THAN 400 TO 500 TREES. THE ASSESSEE WAS HAVING 16.75 ACRE OF LAND AND MAXIMUM NUMBER OF TREES WHICH CAN BE GROWN WOULD BE BETWEEN 6500 TO 8000. THEREFORE THE SUBMISSION OF ASSESSEE REGARDING NUMBER OF 20 000 TREES IS INCORRECT A ND EVEN IMPOSSIBLE. 7. THE AO ALSO DECLINED ASSESSEE S CLAIM FOR EXPENSES INCURRED ON SUCH TREES BY OBSERVING THAT THE EXPENSES WERE NOT COMPLETELY VERIFIABLE. THE AO ALSO OBSERVED THAT - : 12 : - 12 NUMBER OF TREES CUT AFTER PLANTATION IS ALSO NOT VERIFIABLE. THE ASSES SEE HAS CLAIMED COST OF IMPROVEMENT AS UNDER : - COST OF IMPROVEMENT FINANCIAL YEAR 85 - 86 412800/ - FINANCIAL YEAR 86 - 87 124160/ - FINANCIAL YEAR 97 - 98 981365/ - FINANCIAL YEAR 05 - 06 725000/ - HOWEVER THE AO OBSERVED THAT T HE ASSESSEE S CLAIM REGARDING E XPENSES ON PLANTATION OF TREES AND LAND FILLING FENCING IS NOT VERIFIABLE IN TERMS OF AMOUNT CLAIMED BY HIM EXCEPT RS. 7 25 000/ - . IN SUCH CIRCUMSTANCES THE CLAIM OF ASSESSEE REGARDING EXPENSES OF RS. 9 81 365/ - IN 97 - 98 WAS NOT ACCEPTED AND THE EXPENSES ON DEVELOPMENT WAS ACCEPTED AS UNDER : - FINANCIAL YEAR 85 - 86 RS. 4 12 800/ - FINANCIAL YEAR 86 - 87 RS. 1 24 160/ - FINANCIAL YEAR 05 - 06 RS. 7 25 000/ - 8. WITH REGARD TO THE VALUE OF LAND ADOPTED AS ON 31 ST MACH 1981 AT RS. 3 65 000/ - THE AO OBSERVED THAT TH E - : 13 : - 13 ASSESSEE HAS NOT FURNISHED ANY BASIS OR PRICES ADOPTED BY HIM AS ON 31.3.1981. THE AO ISSUED A LETTER U/S 133(6) TO THE SUB - REGISTRAR BHOPAL TO PROVIDE STAMP DUTY RATE AS ON 1.4.1981 OF THE LAND LOCATED AT ADAMPUR CHHAWNI BEARING PATWARI HALKA NO.16. T HE OFFICE OF DY. REGISTRAR PROVIDED A COPY OF THE GUIDELINES FOR 84 - 85 (ENCLOSED AS ANNEXURE A) WHICH SHOWS THAT THE RATE OF LAND DURING THE PERIOD 1983 - 84 FOR AGRICULTURAL LAND FALLING UNDER PATWARI HALKA NO.16 STOOD AT RS. 10 892/ - PER ACRE. THEREFORE THE VALUE OF LAND CAN NOT BE MORE THAN RS.10 982/ - PER ACRE ON 1.4.81. THE VALUE OF LAND AS ON 1.4.1981 WAS ADOPTED BY AO @ 10 500/ - PER ACRE AT RS. 1 65 270/ - AS AGAINST RS. 3 65 000/ - CLAIMED BY THE ASSESSEE. 9. IN VIEW OF THE ABOVE DISCUSSION THE LONG TE RM CAPITAL GAIN WAS COMPUTED BY THE ASSESSING OFFICER AS UNDER : - SALES CONSIDERATION RS. 60 25 000/ - LESS: COST OF ACQUISITION VALUE AS ON 04.01.1981 RS. 1 65 270/ - INDEX COST RS. 1 65 270*497/100 = RS. 8 21 392/ - - : 14 : - 14 LESS: COST OF DEVELOPMENT F.YR. 85 - 86 RS.4 12 800/ - INDEXED COST RS. 15 42 568/ - F.Y.86 - 87 RS.1 24 160/ - INDEXED COST RS.4 40 768/ - F.YR.05 - 06 RS.7 25 000/ - TOTAL COST RS. 35 29 728/ - LONG TERM CAPITAL GAIN RS. 24 95 272 SINCE THE ASSESSEE HAS MADE INVESTMENT OF RS. 3 LACS IN NABARD CAPIAL BONDS THE DEDUCTION OF THE SAME WAS ALLOWED AND REMAINING AMOUNT OF CAPITAL GAIN I.E. RS. 21 95 272/ - WAS ADDED TO THE INCOME OF THE ASSESSEE. 10. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED ADDITION OF RS. 14 73 5 30/ - OUT OF TOTAL ADDITION OF RS. 21 95 272/ - MADE BY THE ASSESSING OFFICER. 11. BOTH REVENUE AND ASSESSEE ARE IN APPEAL BEFORE US. THE REVENUE IS AGGRIEVED FOR ALLOWING DEDUCTION OF EXPENDITURE ALLEGED TO BE INCURRED IN 1997 - 98 AMOUNTING TO RS. 9 87 365/ - WH ERE AS ASSESSEE IS AGGRIEVED FOR NOT - : 15 : - 15 ACCEPTING THE VALUE OF LAND TAKEN BY THE ASSESSEE AS ON 1 ST APRIL 1981 FOR CLAIMING INDEXATION THEREON. 12. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THA T THE ASSESSEE HAS SOLD AGRICULTURAL LAND ALONGWITH EUCALYPTUS TREES THEREON. THE SALE OF LAND WAS SHOWN AT RS. 21 LAKHS WHEREAS REC EIPT FROM SALE OF EUCALYPTUS TREES WAS SHOWN AT RS. 39 25 000/ - AGAINST WHICH EXPENDITURE OF RS. 1 7 25 000/ - WAS CLAIMED AGA INST SALE OF EUCALYPTUS TREES. AS THE ASSESSEE HAS SOLD AGRICULTURAL LAND ALONGWITH THE STANDING TREES THE AO TREATED ENTIRE AMOUNT RECEIVED ON SALE AS OUT OF LONG TERM CAPITAL ASSETS RATHER THAN TREATING THE PART OF THE SALE PROCEEDS AS AGRICULTURAL INC OME. THE AO HAS ALSO DECLINED CLAIM OF EXPENDITURE OF RS. 9 81 365/ - AS HAVING BEEN CLAIMED TO BE INCURRED IN THE FINANCIAL YEAR 1997 - 98 ON THE PLEA THAT NO SUPPORTING EVIDENCE FOR INCURRING OF EXPENDITURE WAS FILED BY THE ASSESSEE . WHILE COMPUTING CAPITAL GAIN THE ASSESSEE HAS TAKEN THE VALUE OF LAND AS ON 1 ST APRIL 1981 AT RS. 3 65 000/ - . HOWEVER THE AO HAS - : 16 : - 16 CALLED FOR INFORMATION FROM THE DY. REGISTRAR WITH REGARD TO THE VALUE OF LAND AS ON 1 ST APRIL 1981 IT WAS INFORMED THAT PREVAILING RATE WAS RS. 10 500/ - PER ACRE. THEREFORE AFTER ALLOWING INDEXATION THE AO HAS TAKEN THE VALUE OF LAND AT RS. 15 42 568/ - . CONTENTION OF THE ASSESSEE WAS THAT HIS LAND WAS CULTIVATED THEREFORE THE AO WAS NOT JUSTIFIED IN TAKING THE VALUE OF LAND AT RS. 10 500/ - PE R ACRE. BY THE IMPUGNED THE CIT(A) ACCEPTED THE AO S ACTION FOR TAKING THE COST OF LAND AT RS. 10 500/ - ON THE BASIS OF COLLECTOR S RATE PARTICULAR FINDING HAS BEEN RECORDED BY THE LD. CIT(A) TO THE EFFECT THAT NO CONCLUSIVE EVIDENCE WAS FILED BY THE ASS ESSEE TO SUPPORT THE CONTENTION THAT HIS LAND WAS IRRIGATED LAND. NOTHING WAS PRODUCED BEFORE US TO DEVIATE FROM THIS FINDING OF THE CIT(A). SINCE THE ONLY EUCALYPTUS TREE WAS PLANTED ON THE LAND THERE IS NO REASON FOR TAKING THE LAND AS IRRIGATED LAND. A CCORDINGLY WE CONFIRM THE ACTION OF THE CIT(A) FOR ADOPTING THE VALUE OF LAND AS PER GUIDELINES OF DY. REGISTRAR (LAND). - : 17 : - 17 13. SO FAR AS EXPENDITURE OF RS. 9 81 365/ - CLAIMED TO BE INCURRED IN FINANCIAL YEAR 1997 - 98 IS CONCERNED THE LD. CIT(A) HAS ALLOWED THE SAME BY OBSERVING THAT THE ASSESSEE HAS PRODUCED CERTIFICATE REGARDING RAISING OF LOAN FROM BANK FOR PLANTATION OF TREES. THE LD. CIT(A) ALSO OBSERVED THAT LETTER OF THE BANK CLEARLY SUBSTANTIATE THAT THE LOAN WAS TAKEN FOR THE PURPOSE OF PLANTATION OF EUC ALYPTUS TREES ONLY. HOWEVER FROM THE RECORD WE FOUND THAT NO LOAN WAS TAKEN FROM BANK DURING THE FINANCIAL YEAR 1997 - 98. WHATEVER LOAN WAS ALLEGED TO BE TAKEN BY THE ASSESSEE WAS IN THE YEAR 1986 F ROM THE BANK OF INDIA. IF THE LOAN WAS TAKEN IN THE YEAR 1986 THERE IS NO REASON TO SAY THAT THIS LOAN WAS UTILIZED FOR EXPENDITURE INCURRED DURING THE YEAR 1997 - 98. WHEN THE BANK GRANTS ANY LOAN THE SAME IS UTILIZED EITHER DURING THE YEAR OR AT THE MOST IN THE NEXT YEAR. ACCORDINGLY THE REASONING GIVEN BY TH E LD. CIT(A) FOR ALLOWING THE CLAIM OF EXPENDITURE FOR FINANCIAL YEAR 1997 - 98 H AS NO BASIS. WHILE DISALLOWING THE CLAIM T HE AO HAS ALSO OBSERVED THAT THE EXPENDITURE ALLEGED TO BE INCURRED IS NOT FULLY VERIFIABLE. NO WHERE THE ASSESSEE HAS ESTABLISHED THA T BANK HAS CERTIFIED INCURRING OF EXPENDITURE IN THE YEAR 1997 - 98 WHICH WAS TAKEN IN THE YEAR 1986. HOWEVER AT THE VERY SAME TIME IT CANNOT ALSO BE SAID THAT THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE FOR DEVELOPMENT OF TREES. IN VIEW OF THE AO S FIN DING THAT NO SUPPORTING EVIDENCE WAS PRODUCED AND THE - : 18 : - 18 EXPENDITURE WERE NOT FULLY VERIFIABLE. WE DIRECT THE AO TO ALLOW DEDUCTION AT 75 % OF THE EXPENDITURE SO CLAIMED BY THE ASSESSEE. OUT OF THE TOTAL EXPENDITURE ALLEGED TO BE INCURRED IN 1997 - 98 WE DISAL LOW 25 % OF THE EXPENDITURE ON THE GROUND OF SAME BEING NOT SUPPORTED BY EVIDENCE AND NOT VERIFIABLE WHOLLY. 14. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS ALLOWED IN PART AND CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. THIS ORDER H AS BEEN PRONOUNCED IN THE OPEN COURT ON 2 0 TH JU LY 2011. S D/ - S D/ - (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH JU LY 2011 . CPU* 18 20 7