Ramesh Sidramappa Patil,, Solapur v. Income-tax Officer,,

ITA 946/PUN/2014 | 2008-2009
Pronouncement Date: 27-09-2016 | Result: Allowed

Appeal Details

RSA Number 94624514 RSA 2014
Assessee PAN AJXPP8134A
Bench Pune
Appeal Number ITA 946/PUN/2014
Duration Of Justice 2 year(s) 4 month(s) 19 day(s)
Appellant Ramesh Sidramappa Patil,, Solapur
Respondent Income-tax Officer,,
Appeal Type Income Tax Appeal
Pronouncement Date 27-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 27-09-2016
Date Of Final Hearing 19-09-2016
Next Hearing Date 19-09-2016
Assessment Year 2008-2009
Appeal Filed On 08-05-2014
Judgment Text
] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE ! # $ BEFORE MS. SUSHMA CHOWLA JM AND SHRI ANIL CHATURV EDI AM ITA NO.946/PN/2014 ASSESSMENT YEAR : 2008-09 MR. RAMESH SIDRAMAPPA PATIL 39/7 RAILWAY LINES BEHIND SAINT JOSEPH HIGH SCHOOL SOLAPUR 413 001. PAN : AJXPP8134A . APPELLANT VS. THE INCOME TAX OFFICER WARD 1(1) SOLAPUR. . RESPONDENT / APPELLANT BY : SHRI V. C. SHAH & SHRI M. S. PATIL / RESPONDENT BY : SHRI ANIL CHAWARE / DATE OF HEARING : 19.09.2016 / DATE OF PRONOUNCEMENT: 27.09.2016 % / ORDER PER ANIL CHATURVEDI AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-III PUNE DATED 03.02.2014 FOR THE ASSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER :- 2.1 ASSESSEE IS AN INDIVIDUAL WHO IS STATED TO BE D ERIVING INCOME FROM CIVIL CONSTRUCTION BUSINESS. ASSESSEE ELECTRONICALLY FIL ED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 ON 30 TH SEPTEMBER 2008 DECLARING TOTAL INCOME OF 2 ITA NO.946/PN/2014 RS.4 43 480/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE INCOME TAX A CT 1961 (IN SHORT THE ACT) VIDE ORDER DATED 30.12.2010 AND THE TOTAL INCOME WA S DETERMINED AT RS.29 58 930/-. AGGRIEVED BY THE ORDER OF ASSESSIN G OFFICER ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED 03.02.2014 IN APPEAL NO.PN/CIT(A)-III/WD-1(1) SOL/516/2010-11/698 GRANTE D PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED FURTHER BY THE ORDER OF LD. CI T(A) ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTA INING THE ADDITION OF RS.23 31 000/- AS UNEXPLAINED INCOME U/S 69A OF THE ACT THOUGH IT WAS EXPLAINED THAT THE SOURCE OF FUNDS WAS FROM AGRICULTURE INCLU DING FUNDS AVAILABLE FROM THE AGRICULTURAL LANDS OWNED BY THE ASSESSEE IN HIS CAP ACITY AS KARTA OF HINDU UNDIVIDED FAMILY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN DISBELIEVING THE SOURCE OF FUNDS FR OM WHICH THE DEPOSITS WERE MADE IN THE BANK ACCOUNT AND IN SUSTAINING THE ADDITION MADE BY THE ASSESSING OFFICER ON CONJECTURES AND SURMISES WHICH WAS DONE WITHOUT GIV ING ADEQUATE OPPORTUNITY TO EXPLAIN THE FACTS PARTICULARLY WHEN YOUR APPELLANT WAS NOT AWARE OF THE CONSEQUENCES OF CONCLUSIONS THAT MAY BE DRAWN BY TH E AUTHORITIES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN SUSTAINING THE DISBELIEF OF THE ASS ESSING OFFICER REGARDING THE CONTENTS OF BANK ACCOUNT MERELY BECAUSE THE SAME WA S HELD IN INDIVIDUAL NAME JOINTLY WITH WIFE THOUGH THE SAME CONTAINS TRANSACT IONS RELATING TO AGRICULTURE IN RESPECT OF LAND OWNED BY THE ASSESSEE IN HIS CAPACI TY AS KARTA OF HUF. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THAT THE SOURCE OF CASH DEPOSITED WAS NOT EXPLAINED THOUGH YOUR APPELLANT HAD CLARIFIED THAT THE SAME W AS OUT OF FUNDS BELONGING TO THE HINDU UNDIVIDED FAMILY OF WHICH HE WAS THE KARTA AN D YOUR APPELLANT WAS UNDER THE IMPRESSION THAT THE SOURCE OF FUNDS WAS TO BE E XPLAINED SEPARATELY IN HIS CAPACITY AS KARTA OF THE FAMILY AND THE SAME NEED N OT BE EXPLAINED WHEN HE WAS EXPLAINING THE SOURCE OF FUNDS IN INDIVIDUAL CAPACI TY. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN GRANTING ONLY PARTIAL RELIEF ON ACC OUNT OF FALL IN GROSS PROFIT THOUGH SUCH FALL WAS ONLY MARGINAL AND WAS ON ACCOUNT OF V ARIOUS COMMERCIAL FACTORS. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF SALA RIES AT 10% AMOUNTING TO RS.84450/- WHICH IS DONE BY THE ASSESSING OFFICER O N MERE CONJECTURES AND SURMISES AND BY IGNORING THE FACT THAT YOUR APPELLA NT AS A PROPRIETOR ALONE COULD NOT LOOK AFTER EXECUTION OF CONTRACTS AND HE HAD TO EMP LOY PERSONS HAVING ADEQUATE KNOWLEDGE OF DIFFERENT TYPES IN EXECUTION OF CONTRA CTS. 7. YOUR APPELLANT CRAVES LEAVE TO ADD TO AMEND AL TER OR DELETE ANY OF THE ABOVE GROUNDS AS MAY BE ADVISED. 3 ITA NO.946/PN/2014 3. AT THE OUTSET THE LD. AR SUBMITTED THAT THOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS BUT THE SOLE CONTROVERSY WHICH IS T O BE DECIDED IS WITH RESPECT TO ADDITION OF RS.23 31 000/- MADE UNDER SECTION 69A O F THE ACT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE BASIS OF INFORMATION GENERATED THROUGH ITD APPLICATION IN THE ANNUAL INF ORMATION REPORT THAT WAS FILED BY THE CORPORATION BANK SOLAPUR IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD DEPOSITED CASH OF RS.23 31 000/- IN SA VING BANK A/C NO.01/009099 WITH CORPORATION BANK SOLAPUR DURING THE YEAR AND HAD ALSO MADE WITHDRAWAL/TRANSFER THROUGH CHEQUES. ASSESSING OFF ICER THEREAFTER CALLED FOR INFORMATION FROM THE BANK AND ON THE BASIS OF INFOR MATION SUBMITTED BY THE BANK ASSESSING OFFICER NOTICED THAT THOUGH THE ASSESSEE HAD DEPOSITED SUM EXCEEDING RS.10 LAKHS DURING THE RELEVANT PERIOD BUT IN THE BALANCE SHEET FILED BY THE ASSESSEE THE SAVING BANK ACCOUNT DID NOT APPEAR EI THER IN THE BALANCE SHEET OR IN THE BOOKS OF ACCOUNT. THE ASSESSEE WAS THEREFOR E ASKED TO EXPLAIN THE TRANSACTIONS AND ALSO FURNISH THE RELEVANT PROOFS O F SOURCE OF CASH DEPOSITS. THE ASSESSING OFFICER NOTED THAT DESPITE VARIOUS OPPORT UNITIES GRANTED TO THE ASSESSEE THE ASSESSEE DID NOT FURNISH THE RELEVANT DOCUMENTA RY EVIDENCES IN RESPECT OF CASH DEPOSITS AND THE SOURCES THEREOF. THE SUBMISSIONS OF THE ASSESSEE OF HAVING EARNED AGRICULTURAL INCOME OUT OF AGRICULTURAL LAND BELONGING TO THE HUF WAS ALSO NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER. THE ASSESSING OFFICER THEREFORE TREATED THE AGGREGATE AMOUNT OF RS.23 31 000/- DEPO SITED BY THE ASSESSEE IN THE BANK ACCOUNT AS UNEXPLAINED INCOME UNDER SECTION 69 A OF THE ACT. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER THE ASSESSEE CARRIE D THE MATTER BEFORE THE LD. CIT(A) WHO UPHELD THE ORDER OF ASSESSING OFFICER B Y HOLDING AS UNDER :- 5. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A PPELLANT WITH REFERENCE TO THE FACTS AVAILABLE ON RECORD. THE APPELLANT IS A C ONTRACTOR BY PROFESSION CARRYING OUT CONSTRUCTION ACTIVITY UNDER THE NAME AND STYLE OF LAXMI CONSTRUCTIONS A PROPRIETORY CONCERN. THE MAIN ISSUE RELATES TO THE CASH DEPOSITED IN THE BANK 4 ITA NO.946/PN/2014 ACCOUNT STANDING IN THE APPELLANT'S INDIVIDUAL NAME IN SAVINGS BANK ACCOUNT NO 01/009099 MAINTAINED WITH CORPORATION BANK OLD EMP LOYMENT CHOWK SOLAPUR WHICH STANDS ADDED BY THE AO TO THE APPELLANT'S INC OME BY INVOKING THE PROVISIONS OF SECTION 69A. DESPITE NUMEROUS OPPORTU NITIES THE APPELLANT DID NOT EXPLAIN THE QUERY RAISED BY THE AO REGARDING SOURCE OF THESE CASH DEPOSITS VIDE NOTICE U/S 142(1) DATED 28/05/2010 AND 08/12/2010 A ND SEVERAL ORDER SHEET ENTRIES DURING ASSESSMENT PROCEEDINGS. FINALLY AS P ER LETTER DATED 30/12/2010 (ADDRESSED TO THE AO JUST ONE DAY PRIOR TO THE TIME -BARRING DATE) THE EXPLANATION SUBMITTED BY THE APPELLANT WAS THAT THE SUBSTANTIAL CASH DEPOSITED INTO THE SAID BANK ACCOUNT WAS GENERATED FROM AGRIC ULTURAL ACTIVITIES OF THE HUF. HOWEVER NO BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED BY THE HUF. THE ONLY PROOF OF THE SO-CALLED AGRICULTURAL INCOME THAT ARE FILED DURING THE PRESENT PROCEEDINGS (AS THE SAME HAVE NOT BEEN MENTIONED IN THE ASSESSMENT ORDER AND THEREFORE ASSUMED NOT TO HAVE BEEN FILED DURING ASSESSMENT) A RE THE 7/12 EXTRACTS AND SOME SELF-MADE VOUCHERS TO EVIDENCE SALE OF AGRICULTURAL PRODUCE. 5.1 TO UNDERSTAND AND DECIDE THE ISSUE AS TO WHETHE R THE APPELLANTS CONTENTION THAT THE SOURCE FOR THE CASH DEPOSITS ARISES FROM T HE AGRICULTURAL INCOME OF THE HUF IS CORRECT AND CAN BE ACCEPTED THE EVIDENCES FILED AS PROOF OF THE HUF AGRICULTURAL INCOME ARE DISCUSSED AND ANALY SED HEREINAFTER. IT IS NECESSARY IN THE FIRST PLACE TO REPRODUCE THE DET AILS OF THE LANDS HELD BY THE APPELLANT AND HIS WIFE WHICH APPARENTLY REPRESENTS THE SO-CALLED HUF OF THE APPELLANT IN VARIOUS PLACES IN SOLAPUR DISTRICT W HICH ARE STATED TO BE AS UNDER: PLACE GAT NO./SURVEY NO. HOLDERS NAME AREA KUMTHE 101 ASSESSEE 4H 55R KUMTHE 74/1 ASSESSEE 1H 51R KUMTHE 66/2 ASSESSEE 3H 61R KUMTHE 74/2 ASSESSEE 1H 19R CHINCHOLI 195/1 ASSESSEE 3H 12R BHOGAO 78/1/B/1/B WIFE 2H 63R BANDALGI 107 WIFE/ASSESSEE 9H 33R DHOTRI 118/4 ASSESSEE 2H 32R DHOTRI 188/3 ASSESSEE 3H 07R CHINCHOLI 195/2A WIFE 1H 52R CHINCHOLI 195/2B WIFE 1H 60R CHINCHOLI 213/1 WIFE 0H 63R KUMTHE 59/2 WIFE 1H 49R KUMTHE 59/1 WIFE 0H 81R TOTAL 37H 38R 5 ITA NO.946/PN/2014 5.2 AT THE OUTSET THOUGH AS PER THE WORKING IN THE AFORE-MENTIONED TABLE IT HAS BEEN CLAIMED THAT THE APPELLANT'S TOTAL LAND HO LDING IN HUF CAPACITY IS AROUND 90 ACRES (CORRESPONDING TO 37 HECTARES 38 ARES) TH E LANDS ARE SEEN TO BE HELD EITHER BY THE APPELLANT IN HIS INDIVIDUAL CAPACITY OR BY HIS WIFE MRS. RUPALI RAMESH PATIL IN HER INDIVIDUAL CAPACITY. THE ONLY LAND THA T IS IN THE JOINT NAMES OF THE APPELLANT AND HIS WIFE IS LAND AT GAT NO.107 BANDA LAGI SOLAPUR DISTRICT ADMEASURING 9H 33R. NONE OF THE 7/12 EXTRACTS MAKE ANY MENTION OF THE HUF. THE APPELLANT HAS NOT SUPPLIED THE DATES OF PURCHAS E OF THESE LANDS. APPARENTLY HOWEVER AS THE 7/12 EXTRACTS SHOW SOME OF THE LAN DS WERE MORTGAGED TO EITHER THE KUMTHE SOCIETY CHINCHOLI COOPERATIVE SOCIETY STATE BANK OF INDIA OR CORPORATION BANK FOR HUGE AMOUNTS OF LOANS RANGING FROM 1 LAKH TO RS 25 LAKHS WHICH INDICATE THAT THE LOANS WERE TAKEN FOR BUSINE SS PURPOSES WHICH HAVE ALSO NOT BEEN CLARIFIED BY THE APPELLANT. THE APPELLANT' S STATEMENT THAT THE LANDS WERE OWNED BY THE HUF CANNOT THEREFORE ALSO BE ACCEPTED FOR THE REASON THAT THERE IS NO EVIDENCE FURNISHED TO SHOW THAT THE LOANS HAVE B EEN BORROWED BY THE HUF FOR THE ONLY ACTIVITY THAT HAS ALLEGEDLY BEEN CARRIED O UT THROUGHOUT THE YEAR AND THAT IS AGRICULTURAL ACTIVITY. THE ONUS OF CONCLUSIVELY PRO VING THAT THE LANDS IN QUESTION WERE OWNED BY THE HUF HAS THUS NOT BEEN DI SCHARGED BY THE APPELLANT. RATHER THE PRESUMPTION THAT NATURALLY ARISES ON TH E BORROWINGS MADE IS THAT THE SAME HAVE BEEN MORTGAGED BY THE APPELLANT IN HIS IN DIVIDUAL CAPACITY FOR HIS NORMAL BUSINESS PURPOSES. 5.3 SECONDLY THE LANDS ARE LOCATED AT VERY GREAT D ISTANCES FROM THE APPELLANT'S PLACE OF RESIDENCE. FOR EXAMPLE AROUND 30 ACRES (1 3H 16R) OF LAND AT KUMTHE IN SOLAPUR DISTRICT IS SEEN TO BE LOCATED AT A DISTANC E OF 189 KILOMETERS FROM SOLAPUR WHERE THE APPELLANT'S MAIN BUSINESS ACTIVI TIES ARE CARRIED OUT. THE LANDS AT CHINCHOLI ARE LOCATED APPROXIMATELY 274 KMS FROM SOLAPUR. BHOGAO WHERE THE APPELLANT OWNS AROUND 5 ACRES OF LAND IS SITUATED 292 KMS AWAY FROM SOLAPUR. THE APPELLANT HAS NOT MENTIONED WHO TAKES CARE OF T HESE LANDS WHICH ARE LOCATED AT GREAT DISTANCES FROM HIS NORMAL PLACE OF RESIDENCE AND BUSINESS AND THE AGRICULTURAL ACTIVITIES THAT HAVE BEEN UNDERTAK EN TO GROW THE CROPS AND THEREAFTER TO RENDER THEM FIT TO BE MARKETED/SOLD. THIRDLY THE STATEMENT SHOWING DETAILS OF SALE OF AGRICULTURAL PRODUCE BY THE APPE LLANT REVEALS THAT THE TOTAL SALES WERE TO THE EXTENT OF RS. 33 94 234/-. HOWEVER NO DETAILS OF EXPENSES INCURRED ON THE SAID LANDS HAVE BEEN FILED NOR IT HAS BEEN M ENTIONED HOW THESE LANDS WERE CULTIVATED. FOR CULTIVATION OF AGRICULTURAL LA NDS A VARIETY OF EXPENDITURES ARE REQUIRED TO BE INCURRED SUCH AS LAND DEVELOPMENT ( SUCH AS LEVELING BUNDLING ETC.) WATER RESOURCES TILLING OF LAND EXPENSES O N MANURE/FERTILIZERS/PESTICIDES AND OTHER CHEMICALS ETC. EXPENSES INCURRED ON SEE DS EXPENSES ON SOWING OF CROPS EXPENSES FOR PROCURING SAPLINGS AND PLANTING THE SAME LABOUR HARVESTING/PLUCKING/THRESHING EXPENSES STORAGE AND SALE EXPENSES. THE SUPREME COURT IN CIT VS R. VENKATASWARNY NAIDU (29 ITR 529) HELD THAT 'THE ASSESSEE HAS TO PLACE BEFORE THE INCOME-TAX AUTHORI TIES PROPER MATERIAL WHICH WILL ENABLE THEM TO COME TO A CONCLUSION THAT THE INCOME WHICH IS SOUGHT TO BE ASSESSED IS AGRICULTURAL INCOME. IT IS NOT FOR THE INCOME-TAX AUTHORITIES TO PROVE THAT IT IS NOT AGRICULTURAL INCOME ' WHICH WAS REIT ERATED BY THE APEX COURT IN THE CASE OF CIT VS RAMAKRISHNA DEO (35 ITR 312). IN CIT V. RAJA BENOY KURNAR SAHAS ROY [1957] 32 ITR 466 WHICH IS REGARDED AS THE LOC US CLASSICUS ON THE SUBJECT OF AGRICULTURAL INCOME IT WAS HELD THAT 'A GRICULTURE IN ITS ROOT SENSE MEANS 'AGAR' A FIELD AND 'CULTURE' I.E. CULTIVAT ION OF A FIELD. 'AGRICULTURE' IMPLIES EXPENDITURE OF HUMAN SKILL AND LABOUR UPON LAND. AF TER EXHAUSTIVELY DISCUSSING THE VARIOUS CASES DEALING WITH THE SUBJECT THE APE X COURT HELD THAT AGRICULTURE INVOLVED 'BASIC OPERATIONS' SUCH AS TILLING OF LAN D SOWING OF SEEDS PLANTING ETC. AND 'SUBSEQUENT OPERATIONS' SUCH AS WEEDING TENDI NG PRUNING CUTTING HARVESTING AND RENDERING THE PRODUCE FIT FOR MARKET . IN THE PRESENT CASE NOT A SHRED OF EVIDENCE HAS BEEN PRESENTED BY THE APPELLA NT EITHER BEFORE THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS OR BEFORE ME DURING APPELLATE PROCEEDINGS TO ESTABLISH THAT THE LAND IN QUESTION WAS ACTUALLY BEING USED FOR 6 ITA NO.946/PN/2014 CULTIVATION AT ANY TIME OR ANY 'BASIC OPERATIONS' O R 'SUBSEQUENT OPERATIONS' AS EXPLAINED BY THE HON. SUPREME COURT IN RAJA BENOY K UMAR SAHAS ROY (SUPRA}. 5.4 THE PLEA OF THE APPELLANT IS THAT THE HUF HAS N OT MAINTAINED ANY BOOKS OF ACCOUNTS. EVEN SO NO EXPENSES ARE ALSO FOUND TO BE INCURRED AND NO SUPPORTING EVIDENCES ARE FILED IN THIS BEHALF IN CASE SUCH EX PENSES HAVE ACTUALLY BEEN INCURRED. THE ADDRESSES OF THE PARTIES TO WHOM THE ALLEGED CROPS PREDOMINANTLY JOWAR AND KADABA ARE SOLD ARE NOT MENTIONED. THE V OUCHERS EVIDENCING THE SALE OF SUCH PRODUCE ARE ADMITTEDLY SELF-MADE. IT SEEMS TH AT THE APPELLANT OTHER THAN RELYING UPON THE 7/12 EXTRACTS AND SELF-MADE VOUCHE RS DOES NOT HAVE ANY AUTHORITATIVE PROOF OF AGRICULTURAL OPERATIONS THAT ARE BEING CLAIMED TO HAVE BEEN CARRIED OUT BY THE HUF. ON THE OTHER HAND BY FURNI SHING THE INFORMATION THAT THE SOURCES OF CASH DEPOSIT IN THE APPELLANT'S BANK ACC OUNT WERE FROM THE HUF'S AGRICULTURAL INCOME AT THE LAST MINUTE THE APPELLA NT HAS TRIED TO PRE-EMPT ANY MEANINGFUL INQUIRIES BY THE ASSESSING OFFICER INTO THE GENUINENESS AND CORRECTNESS OF THE CLAIM AS HELD BY THE HONORABLE SUPREME COURT IN R. VEKATASWAMY NAIDU CASE (SUPRA) THE ONUS WAS PRI MARILY ON THE APPELLANT TO DEMONSTRATE THAT THE AGRICULTURAL INCOME AND THEREF ORE THE SOURCE OF CASH DEPOSITS WAS EXPLAINABLE BUT THE APPELLANT HAS NOT DISCHARGED THAT ONUS. IT IS NOT FOR THE AO TO PROVE THAT THE INCOME IN QUESTION WAS NOT EXEMPT AGRICULTURAL INCOME BUT THE POSITIVE BURDEN OF PROOF WAS ON THE APPELLANT TO SHOW THAT IT WAS OTHERWISE AND THEREFORE THE SOURCES IN QUESTION FO R THE CASH DEPOSITS ARE EXPLAINED. FINALLY IT IS ALSO SEEN THAT THE APPELL ANT HAD OPENED THE IMPUGNED BANK ACCOUNT WITH CORPORATION BANK OLD EMPLOYMENT CHOWK SOLAPUR ON 29.09.2006 WHEREAS CASH OF RS. 15 00 000/- HAS BEE N DEPOSITED ON 25.07.2007. ANOTHER INSTALMENT OF CASH AMOUNTING OF RS. 8 31 00 0/- HAS BEEN DEPOSITED ON 27.03.2008. IT IS NOT KNOWN AS TO WHY THE CASH THAT WAS APPARENTLY GENERATED FROM AGRICULTURAL INCOME WAS NOT IMMEDIATELY DEPOSI TED IN THE BANK ACCOUNT PARTICULARLY WHEN THE ACCOUNT STOOD OPENED WITH EFF ECT FROM 29.09.2006. THE ACCOUNTS STANDS IN THE INDIVIDUAL NAME OF APPELLANT AND NOT IN THE HUF STATUS OR EVEN JOINTLY WITH HIS WIFE SMT. RUPALI R. PATIL. TH E ASSESSING OFFICER HAS THEREFORE RIGHTLY CONCLUDED THAT THE SOURCES OF THE CASH DEPO SITED ARE NOT SUITABLY EXPLAINED. 5.5 THE LEARNED AR HAS-QUOTED THE DECISION OF THE H ON'BLE SUPREME COURT IN THE CASE OF P.K. NOORJEHAN IN HIS CLIENT'S FAVOUR. HOWEVER IN THAT CASE THE ASSESSEE WAS A MUSLIM LADY AROUND 20 YEARS OF AGE. HER EXPLANATION REGARDING INVESTMENT IN CERTAIN LAND AT ERNAKUTAM WAS THAT TH E SAME WAS SOURCED THROUGH THE SAVINGS FROM THE PROPERTIES LEFT BEHIND BY HER MOTHER'S FIRST HUSBAND. THE AO DID NOT ACCEPT THIS EXPLANATION AND INVOKED SECTION 69 AND ASSESSED THE INVESTMENT AS INCOME FROM OTHER SOURCES. THE HONB LE SUPREME COURT AFFIRMED THE ITAT AND HIGH COURT'S VIEWS THAT TAKING INTO ACCOUN T THE COMPLETE ABSENCE OF RESOURCES AND HER AGE AND THE POSITION IN WHICH SHE WAS PLACED EVEN WHEN THE EXPLANATION RENDERED MAY NOT BE SATISFACTORY THE A O WAS NOT JUSTIFIED IN TREATING THE INVESTMENT AS HER OWN. IT WAS HELD THAT IN VIEW OF THE WORDS 'MAY' USED IN SECTION 69 AS AGAINST 'SHALL' SECTION 69 OF THE IN COME-TAX ACT 1961 ('THE ACT') CONFERRED ONLY A DISCRETION ON THE ITO TO DEAL WITH THE INVESTMENT AS INCOME OF THE ASSESSEE AND THAT IT DID NOT MAKE IT MANDATORY ON HIS PART TO DEAL WITH THE INCOME AS INCOME OF THE ASSESSEE AS SOON AS THE LAT TER'S EXPLANATION HAPPENED TO BE REJECTED. IT WAS HELD BY THE SUPREME COURT TH AT THE QUESTION WHETHER THE SOURCE OF THE INVESTMENT SHOULD BE TREATED AS INCOM E OR NOT UNDER SECTION 69 HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF EACH CASE. IN OTHER WORDS A DISCRETION HAS BEEN CONFERRED ON THE ITO UNDER SECTION 69 TO T REAT THE SOURCE OF INVESTMENT AS THE INCOME OF THE ASSESSEE IF THE EXPLANATION OF FERED BY THE ASSESSEE IS NOT FOUND SATISFACTORY AND THE SAID DISCRETION HAS TO B E EXERCISED KEEPING ILL VIEW THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE. TH ERE IS NO QUARREL WITH THE PROPOSITION EXPOUNDED BY THE HON'BLE SUPREME COURT IN THE AFOREMENTIONED CASE. HOWEVER IN THE FACTS OF THE APPELLANT'S CASE HE I S A CIVIL CONTRACTOR WHO IS EARNING SUBSTANTIAL INCOMES FROM CARRYING OUT CONTRACTS. HE HAS BEEN FILING RETURNS OF 7 ITA NO.946/PN/2014 INCOME FOR SEVERAL YEARS AND IS AWARE OF THE IMPLIC ATIONS OF HAVING TAXABLE INCOME. IF THE SO-CALLED HUF HAD SUBSTANTIAL INCOME FROM AG RICULTURE TO THE TUNE OF MORE THAN RS. 30 LAKHS THE APPROPRIATE WAY WAS TO FILE RETURNS OF THE HUF. NO AGRICULTURAL INCOME HAS BEEN SHOWN BY THE APPELLANT OR HIS HUF IN THE PAST OR EVEN SUBSEQUENT YEARS. THE LANDS IN QUESTION HAVE BEEN P RESUMABLY MORTGAGED AGAINST LOANS TAKEN FOR HIS INDIVIDUAL NEEDS AND REQUIREMEN TS. THE CASH DEPOSITS COULD THEREFORE BE PRESUMED TO BE HIS UNDISCLOSED BUSINES S INCOME OR INCOME FROM UNDISCLOSED OTHER SOURCES. THEREFORE IN MY VIEW T HE EXPLANATION OF THE APPELLANT HAS BEEN RIGHTLY REJECTED IN VIEW OF THE ABOVE FACT S AND CIRCUMSTANCES AND THE RATIO OF THE HONBLE SUPREME COURT DECISION IN THE CASE O F P.K. NOORJEHAN DOES NOT APPLY TO THE FACTS OF THE PRESENT CASE. 5.6 IN VIEW OF THE FACTS AND CIRCUMSTANCES AND THE ENTIRE CONSPECTUS OF THE CASE AS DISCUSSED IN THE PRECEDING PARAGRAPHS IT IS HEL D THAT THE ASSESSING OFFICER WAS PERFECTLY JUSTIFIED IN REJECTING THE EXPLANATION RE NDERED BY THE APPELLANT AND IN TREATING THE CASH DEPOSIT OF RS.23 31 000/- AS UNEX PLAINED INCOME U/S 69A. GROUNDS OF APPEAL NO.1 AND 2 STAND DISMISSED. 5. AGGRIEVED BY THE ORDER OF LD. CIT(A) THE ASSESS EE IS NOW IN APPEAL BEFORE US. 6. BEFORE US AT THE OUTSET LD. AR REITERATED SUBM ISSIONS MADE BEFORE ASSESSING OFFICER AND CIT(A) AND FURTHER INTER-ALIA SUBMITTED THAT ASSESSEE OWNED AGRICULTURAL LAND OF MORE THAN 90 ACRES IN HUF CAPA CITY. HE SUBMITTED THAT ASSESSEE ALONG WITH HIS BROTHER HAD PURCHASED AGRIC ULTURAL LAND AT HATTUR ON 16 TH SEPTEMBER 1999 AND IT WAS SOLD ON 29 TH AUGUST 2006 FOR RS.70 00 000/-. ON THE SALE OF THE AFORESAID LAND ASSESSEE HAD RECEIVED H IS SHARE OF CONSIDERATION OF RS.35 00 000/- WHICH WAS DEPOSITED IN SOLAPUR DIST RICT CENTRAL CO-OPERATIVE BANK. OUT OF THE AFORESAID DEPOSITS ASSESSEE HAD MADE WI THDRAWALS FOR PURCHASE OF AGRICULTURAL LAND JOINTLY WITH HIS WIFE. BEFORE US THE LD. AR HAS ALSO FILED A SWORN AFFIDAVIT OF THE ASSESSEE WHEREIN INTER-ALIA IT HAS BEEN CONTENDED THAT THE DEPOSITS OF CASH APART FROM BEING OUT OF SALE PROCEEDS OF A GRICULTURAL PRODUCE IS ALSO OUT OF SALE OF LAND. IT IS FURTHER SUBMITTED BY THE LD. A R THAT THE DOCUMENTS PERTAINING TO THE PURCHASE AND SALE OF LAND WAS NOT FILED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES AND ALSO COULD NOT FURNISH THE COPY OF SALE AND PURCHASE DEED OF THE LAND. HE THEREFORE SUBMITTED THAT THE ADDITIONAL E VIDENCES SUBMITTED BY THE ASSESSEE IN THE FORM OF EXPLANATION THE COPY OF BA NK STATEMENTS COPY OF SALE AND 8 ITA NO.946/PN/2014 PURCHASE DEED BE ADMITTED AND SINCE THE SOURCE OF C ASH DEPOSITS ARE FULLY EXPLAINED THE ADDITION BE DELETED. IN THE ALTERNA TE HE SUBMITTED THAT THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE BEFORE HONBLE TRIBUNAL MAY BE SENT TO THE LOWER AUTHORITIES FOR ITS VERIFICATION AND THAT THE Y BE DIRECTED TO EXAMINE THE SAME AND THEREAFTER DECIDE THE ISSUE. THE LD. DR ON TH E OTHER HAND SUPPORTED THE ORDER OF ASSESSING OFFICER AND CIT(A) AND SUBMITTED THAT EXPLANATION OF CASH DEPOSITS BEING OUT OF SALE OF LAND WAS NEVER MADE BEFORE THE LOWER AUTHORITIES AND IT IS NEW EXPLANATION THAT IS SUBMITTED BY THE LD. AR BEFORE THE HONBLE TRIBUNAL AND THAT THE SAME BE IGNORED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO AD DITION OF UNEXPLAINED INVESTMENT OF RS.23 31 000/-. BEFORE US IT IS INTER-ALIA ASSESSEES SUBMISSION THAT THE SOURCE OF CASH DEPOSITS ARE OUT OF SALE PROCEEDS OF AGRICU LTURAL PRODUCE AND OUT OF SALE PROCEEDS OF LAND. THE LD. AR HAS ALSO SUBMITTED AN AFFIDAVIT OF THE ASSESSEE WHEREIN HE HAS EXPLAINED THE SOURCES OF DEPOSITS OF CASH. THE AFFIDAVIT WHICH IS SUBMITTED BY THE LD. AR IS REPRODUCED HEREUNDER AND READS AS UNDER :- AFFIDAVIT I RAMESH SIDRAMAPAA PATIL RESIDENT OF 39/7 RAILWAY LINES BEHIND SAINT JOSEPH HIGH SCHOOL SOLAPUR STATE ON SOLEMN AFFIRMATION AS FOLLOWS:- I AM PROPRIETOR OF BUSINESS CARRIED ON UNDER THE NA ME AND STYLE OF M/S. LAXMI CORPORATION OF WHICH TAX AUDIT IS DONE AND RETURN O F INCOME IS FILED. I ALSO OWN AGRICULTURAL LAND ADMEASURING ABOUT 90 A CRES DETAILS OF WHICH WERE FILED IN ASSESSMENT PROCEEDINGS. MY ASSESSING OFFICER CAME TO KNOW THAT THERE WAS A CASH DEPOSIT AGGREGATING TO RS.23 31 000/- IN BANK ACCOUNT BEARING NO.-01/00909 9 WHICH CORPORATION BANK OLD EMPLOYMENT CHOWK SOLAPUR WHICH WAS IN MY NAME. THI S BANK ACCOUNT WAS IN RESPECT OF MY AGRICULTURAL ACTIVITY WHICH IS MY FAM ILY ACTIVITY I.E. OF HINDU UNDIVIDED FAMILY OF WHICH I AM KARTA. I AM ATTACHING HEREWITH A COPY PURCHASE DEED OF AGR ICULTURAL LAND ADMEASURING ABOUT 22 ACRES DATED 16 TH SEPTEMBER 1999 PURCHASED BY ME JOINTLY WITH MY BR OTHER AT HATTUR SOUTH SOLAPUR DISTRICT (ANNEXURE A). 9 ITA NO.946/PN/2014 I AM ALSO ATTACHING HEREWITH A COPY OF SALE DEED OF AGRICULTURAL LAND AT HATTUR VILLAGE TAL-SOUTH SOLAPUR DIST SOLAPUR SALE DEE D DATED 29 TH AUGUST 2006 JOINTLY HELD BY ME WITH MY BROTHER SOLD FOR RS.70 00 000/-. (ANNEXURE B). 50% OF THE SALE PRICE WAS RECEIVED BY ME. THE SALE PRICE OF RS.35 00 000/- WAS PAID TO ME AS FOLLOWS:- CHEQUE NO-096393 DATED 29/08/2006 RS.25 00 000/- CHEQUE NO-105840 DATED 29/08/2006 RS. 5 00 000/- CHEQUE NO-96395 DATED 31/08/2006 RS. 5 00 000/- TOTAL RS.35 00 000/- ALL THE THESE CHEQUES WERE DEPOSITED BY ME IN MY SA VINGS BANK ACCOUNT BEARING NO.19337 WITH THE SOLAPUR DISTRICT CENTRAL CO-OP. B ANK LTD. ATTACHED HEREWITH IS A COPY OF BANK ACCOUNT STATEMENT OF SAID ACCOUNT FOR THE FINANCIAL YEAR 2006-07 (ANNEXURE C') THIS STATEMENT SHOWS DEPOSIT OF CHE QUES OF SALE PROCEEDS RECEIVED AS PER ABOVE REFERRED SALE DEED DATED 29 TH AUGUST 2006. THIS VERY STATEMENT AT ANNEXURE C' SHOWS THAT I HA D WITHDRAWN CASH ON 1 ST DECEMBER 2006 OF RS.25 00 000/- BY DRAWING A CHEQU E BEARING NO.1102425. THIS AMOUNT WAS WITHDRAWN WITH A VIEW OF BUY SOME AGRICU LTURAL LAND. I HAD PURCHASED IN MY NAME ALONG WITH MY WIFE A FARM WHICH HAD COST RS.8 77 010/-. THE REMAINING AMOUNT BEING ROUNDED OFF TO RS.15 00 000/- WAS DEPOSITED BY ME IN CASH IN SAVINGS BANK ACCOUNT BEARING NO-01/009099 R EFERRED TO IN THE ASSESSMENT ORDER ANNEXURE D ON 25 TH JULY 2007. I HAD FURTHER WITHDRAWN FROM THE SOLAPUR DISTRICT C ENTRAL CO-OP. BANK LTD. A SUM OF RS.8 31 000/- ON 7 TH MARCH 2008 (ANNEXURE E) PAGE 53 AND SAME WAS DE POSITED IN MY ACCOUNT WITH CORPORATION BANK ANNEXURE D (P AGE 52). BOTH THESE BANK ACCOUNTS BEING ONE WITH THE SOLAPUR DISTRICT CENTRAL CO-OP. BANK LTD. AND ANOTHER WITH CORPORATION BANK ARE IN RESPE CT OF MY AGRICULTURAL ACTIVITY CARRIED ON BY ME AFTER GETTING LAND FROM MY FATHER WHO HAD INHERITED THE SAME. AS EXPLAINED IN ASSESSMENT PROCEEDINGS AND ALSO TO CIT(A) I HAVE AGRICULTURAL LAND IN EXCESS OF 90 ACRES AND I GET SALE PROCEEDS OF AG RICULTURAL PRODUCE. I DO NOT MAINTAIN ANY BOOKS OF ACCOUNTS AND HENCE SAME WERE NEVER PRODUCED. I WAS REQUIRED BY MY TAX CONSULTANT TO SHOW PROOF OF AGRI CULTURAL SALE PRODUCE RECEIPTS AND HENCE SAME WERE GIVEN. I WAS NEVER TOLD BY HIM THAT PROCEEDS OF SALE PRICE OF AGRICULTURAL LAND AND ANY CO-RELATION WITH DEPOSITS ARE REQUIRED TO BE GIVEN. THE ABOVE STATED ACCOUNTS BEING FOR MY AGRICULTURAL ACTIVITY OF ANCESTRAL LAND WERE NEVER GIVEN TO THE ACCOUNTANT WHO PREPARED THE BOOK S OR C.A. WHO CONDUCTED AUDIT. THESE BANK ACCOUNTS NEVER APPEARED IN MY BO OKS OF ACCOUNTS AND / OR RETURN OF INCOME AS THESE DID NOT RELATE TO MY ACTI VITY AS INDIVIDUAL. I NEVER KNEW THAT DEPOSITS OUT OF AGRICULTURAL ACTI VITY WAS ALSO TO BE PROVED. IN LETTER DATED 30 TH DECEMBER 2010 IT WAS EXPLAINED IN ASSESSMENT PROC EEDINGS THAT THE BANK ACCOUNT REFERRED RELATED TO MY AGRICU LTURAL ACTIVITY AS KARTA OF HUF AND I HOLD AROUND 90 ACRES OF AGRICULTURAL LAND. I T WAS EXPLAINED THAT AMOUNT DEPOSITED WAS OUT OF SALE PROCEEDS OF AGRICULTURAL LAND PRODUCE. I WAS NEVER GUIDED THAT AS LARGE AMOUNT OF DEPOSITS WERE FROM S ALE OF AGRICULTURAL LAND THEY ARE TO BE CO-RELATED IF POSSIBLE. I HAVE NOW FOUND OUT THE LINK WITH SUPPORTING DOCUMENTS OF SALE REGISTERED IN GOVT. OFFICE RECEI PT OF CHEQUES DEPOSITS IN BANK 10 ITA NO.946/PN/2014 ACCOUNT AND WITHDRAWAL FROM ONE BANK ACCOUNT WHEN R EQUIRED AND REDEPOSIT OF THE SAME IN OTHER BANK ACCOUNT. I HAD ALSO PRODUCED IN ASSESSMENT PROCEEDINGS SALE PATTIS 7/12 EXTRACT ETC BUT BANK ACCOUNT STATEMENT FOR THE SOLAPUR DISTRICT CEN TRAL CO-OP. BANK AND SALE DEED OF AGRICULTURAL LAND WAS NOT PRODUCED AS I WAS NOT GUIDED APPROPRIATELY TO GIVE FACTS WHICH EXISTED. I FURTHER STATE THAT I REALIZED THE CONSEQUENCES OF NOT GIVING EXISTING EVIDENCES AND THE LEARNED C.I.T. DISBELIEVING MY AGRICULTURAL ACT IVITY AS FAMILY ACTIVITY AND THE FACT THAT I ATTEND TO THE AGRICULTURAL ACTIVITY AND LOOK AFTER BUSINESS PARTIALLY. SOLEMNLY AFFIRMED AT PUNE. BY THE WITHING NAMED RAMESH SIDRAMAPPA PATIL --ON THIS ---18 TH JAN------ DAY OF JANUARY 2016 DEPONENT SD/- BEFORE ME 8. ON PERUSING THE AFFIDAVIT THAT HAS BEEN FILED BY THE ASSESSEE BEFORE US WE FIND THAT IF THE ASSESSEE HAS INTER-ALIA CONTENDED THAT THE SOURCE OF CASH DEPOSITS TO BE OUT OF AGRICULTURAL ACTIVITIES AND SALE OF AGRIC ULTURAL LAND AND THAT HE WAS NEVER TOLD BY HIS TAX CONSULTANT THAT PROCEEDS OF AGRICUL TURAL LAND HAD TO BE CO-RELATED WITH THE CASH DEPOSITS IN BANK AND THAT ASSESSEE HAS NOW FOUND LINK OF CASH DEPOSITS WITH SUPPORTING DOCUMENTS OF SALE OF LAND RECEIPT OF CHEQUES DEPOSITS IN BANK AND WITHDRAWAL FROM ONE BANK AND DEPOSIT IT ANOTHER BAN K ACCOUNT. WE FIND THAT THE AFORESAID AFFIDAVIT HAS BEEN FURNISHED BEFORE US FO R THE FIRST TIME AND THEREFORE THE LOWER AUTHORITIES DID NOT HAVE AN OPPORTUNITY TO EX AMINE THE CONTENTS OF THE AFFIDAVIT. BEFORE US ON BEHALF OF THE ASSESSEE A PRAYER FOR ADMISSION OF ADDITIONAL EVIDENCE HAS BEEN MADE AND IT IS SUBMITTED THAT THE EVIDENCES ARE MATERIAL AND WOULD HELP IN DECIDING THE ISSUE. CONSIDERING THE SUBMISSIONS OF LD. AR THE ADDITIONAL EVIDENCES SUBMITTED ARE ADMITTED. HOWEV ER SINCE THESE EVIDENCES WERE NOT AVAILABLE BEFORE THE LOWER AUTHORITIES WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE AND FAIR PLAY THE ISSUE RAISED IN APPEAL NEEDS TO BE CONSIDERED AFRESH IN THE LIGHT OF ADDITIONAL EVIDENCES SUBMITT ED BY THE ASSESSEE. WE 11 ITA NO.946/PN/2014 THEREFORE REMIT THE ISSUE TO THE FILE OF THE LD. A SSESSING OFFICER TO DECIDE THE ISSUE AFRESH AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE AND IN ACCORDANCE WITH LAW. NEEDLESS TO STATE THAT THE ASSESSING OFFICER SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ALSO DIRECT THE ASS ESSEE TO CO-OPERATE BY FURNISHING PROMPTLY ANY OTHER DETAILS CALLED FOR B Y THE ASSESSING OFFICER. SINCE WE ARE RESTORING THE MATTER TO THE ASSESSING OFFICER WE REFRAIN TO COMMENT ON THE MERITS OF THE ISSUE ON HAND. THUS THE GROUND OF A SSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 27 TH DAY OF SEPTEMBER 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 27 TH SEPTEMBER 2016. % & ' () *) / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III PUNE; 4) THE CIT-IV PUNE; 5) THE DR A BENCH I.T.A.T. PUNE; 6) GUARD FILE. % / BY ORDER ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* / ITAT PUNE