2017 (12) TMI 352 - AT - Income Tax

Addition of agricultural income - ownership of the land - Held that - We find merit in the argument advanced by the ld. counsel for the assessee that in the light of Rule of consistently alone the agricultural income declared by the assessee should be accepted. Although the principle of res-judicata do not apply to the income-tax proceedings however since the agricultural income declared by the assessee in the preceding and succeeding year has been accepted by the Revenue although under section 143(1) proceedings and since none of the assessments have been reopened therefore following the Rule of consistency it is of the considered opinion that the agricultural income declared by the assessee should not have been rejected. Therefore set-aside the order of the CIT(A) and direct the Assessing Officer to accept the agricultural income. Addition u/s 68 as a Gift from husband as unexplained - Held that - As per the assessee that the gift deed has been duly executed by the husband of the assessee on 08.07.2010. From the various details furnished by the assessee I find the gift has been received by the assessee during the period from 01.04.2010 to 08.07.2010. I find the assessee before the Assessing Officer had given the PAN and confirmation of the donor and copy of the income-tax return during the assessment proceedings. It was given out of the cash balance with her husband. Since out of Rs. 4, 25, 000/- cash gift the Assessing Officer has already accepted Rs. 2, 75, 000/- as explained therefore find no reason to disbelieve the capacity of her husband to the balance amount of Rs. 1, 50, 000/- received as cash gift. The ground raised by the assessee is accordingly allowed. Addition of sale of future standing crops - Held that - As the assessee could not file any evidence to prove the capacity of the person who advanced the huge amount. Considering the totality of the facts of the case and in the interest of justice deem it proper to restore the issue to the file of the Assessing Officer with a direction to give one more opportunity to the assessee to substantiate with evidence to his satisfaction regarding the identity and capacity of the person to give such huge cash advance and genuineness of the transaction.

Summary

Issues:
1. Rejection of agricultural income claim by the Assessing Officer.
2. Addition of unexplained gift received from husband.
3. Addition of advance received on account of sale of future standing crops.

Issue 1: Rejection of Agricultural Income Claim:
The appeal was against the order of CIT(A) upholding the Assessing Officer's rejection of agricultural income claim of Rs. 3,32,853. The assessee provided evidence of land ownership, crop details, and sale bills. However, both the Assessing Officer and CIT(A) found the evidence unsatisfactory, leading to the rejection of the claim. The Tribunal noted that the assessee consistently declared agricultural income in previous years, which was accepted without reopening assessments. Following the principle of consistency, the Tribunal set aside CIT(A)'s order and directed the Assessing Officer to accept the agricultural income claim.

Issue 2: Addition of Unexplained Gift Received from Husband:
The Assessing Officer disallowed the claim of a gift of Rs. 1,50,000 from the husband due to lack of corresponding withdrawal from the husband's bank account. However, the Tribunal found that the gift deed was executed, and the gift was received within a specified period. The assessee provided PAN, confirmation of the donor, and income tax return copy during assessment proceedings. As a portion of the cash gift was already accepted, the Tribunal allowed the ground raised by the assessee regarding the unexplained gift.

Issue 3: Addition of Advance Received for Sale of Future Standing Crops:
An addition of Rs. 11,15,800 was made by the Assessing Officer for advance receipt against the sale of future standing crops, citing lack of evidence regarding the creditor's capacity and genuineness of cash receipts. The CIT(A) upheld this decision. The Tribunal decided to restore the issue to the Assessing Officer, providing the assessee with an opportunity to substantiate the identity and capacity of the person who advanced the cash and the genuineness of the transaction. The ground raised by the assessee was allowed for statistical purposes.

In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the Assessing Officer to accept the agricultural income claim, acknowledging the unexplained gift received from the husband, and providing an opportunity to substantiate the advance received for the sale of future standing crops.