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2015 (7) TMI 247 - ITAT DELHIAddition of agricultural income as undisclosed income of the assessee - comparing the total actual crop yield of the assessee with the average crop yield from the information available on the website of the Haryana Government submitted by the AO along with remand report - Held that:- The authorities below have not denied and fact that there was agriculture land of 8.32 hectare in the hands of the assessee and agricultural activities were carried on and crops were grown/produced on the agriculture land which were sold in the grain market through commission agents. As per the assessee, the wheat and paddy were sold between ₹ 850 to ₹ 870 and ₹ 1400 to ₹ 1950 respectively and the CIT(A) adopted the rates shown on the website of Haryana Government and determined the average sale rate as ₹ 800 for wheat and ₹ 1500 per qtl. for paddy. From careful reading of the assessment order and appellate order, we note that authorities below have not brought out any fact or allegation on record to dispute or raise any doubt regarding papers available at page no. 1 to 51 which contain land ownership proof of the assessee, Master Akhil Garg and Master Aman Garg, confirmation copy of accounts and purchase vouchers/bills for the sale of timber by Master Akhil Garg, proof of ownership of agricultural land of both minor sons of the assessee, copy of the auction (Boli) Registers of the commission agent, clarification/confirmation from commission agent about continuity/usage of ‘J’ Form bill book, bill/confirmation pertaining to agricultural expenses.On the basis of critical analysis of documentary proof submitted by the assessee supporting to proof of ownership of agriculture land, proof of sale of agriculture credit and timber and receipt of consideration through banking channel, we observe that the assessee submitted all possible documentary proof supporting his claim of agriculture income from sale of agriculture crop and timber. The assessee has also submitted proof of trees which were recorded in the revenue records on the agricultural land in the name of assessee and his minor sons. CIT(A) wrongly adopted average yield and sale price of wheat and paddy as shown in the website of Government of Haryana. The CIT(A) was not correct in dismissing the claim of the asessee regarding income from sale of timber without further verification and examination. We may point out that the issue of sale of timber was also not properly examined by the AO at his level and the AO dismissed entire documentary evidence of the assessee without any deliberation and adjudication. As we have already observed that the authorities below did not properly consider claim of the assessee about agriculture income and AO dismissed the claim of the assessee at the threshold on the basis of incorrect and wrong observations. During the first appellate proceedings, the CIT(A) allowed a part of the claim and restricted the disallowance to ₹ 8,16,153/- without any logical basis and sustainable reasoning and by taking a hyper technical and incorrect approach and data. In this situation, we dismiss the observations of the AO that the assessee did not furnish any iota of document to support her claim about agriculture income because as we have already noted above that the assessee submitted all possible documents including revenue records, purchase bills/vouchers, bank statement and other relevant documents showing agriculture activities which brought agriculture income to the assessee. - Decided in favour of assessee for statistical purposes. Disallowance of interest - Claim of payment of interest remained unsubstantiated - The stand of department for rejection of the claim of the assessee is that the assessee had been allowed interest on loan account of HDFC Bank and EMI paid includes interest component therefore, the interest on current account of Bank of Baroda cannot be allowed - Held that:- If we analyse the facts, then we clearly observe that the first instalment of HDFC loan was paid by the assessee on 29.11.2007. Prior to that, there are number of transactions which are related to the agriculture and other economic activities of the assessee including amount of loan advanced to M/s Des Raj Ram Kumar and other firms. In the peculiar facts and circumstances when the interest received from M/s Des Raj Ram Kumar has been offered to tax by the assesse under the head of income from other sources, then the amount of entire interest paid on current account out of which loans were advanced cannot be disallowed at the threshold merely because instalment of property loan to HDFC bank approximately ₹ 3.5 lakh has been paid by the assessee and the entire interest paid on current account cannot be disallowed. However, we make it clear that the AO may disallow the interest amount which is related to the payment of EMIs on HDFC loans by the assessee between the period 29.11.2007 to 28.3.2008 and remaining amount of interest paid by the assessee on Bank of Baroda current account deserves to be allowed and we direct the AO to allow the same accordingly. With these directions, ground no. 3 of the assessee is deemed to be allowed for statistical purposes with the limited direction to the AO as mentioned hereinabove. - Decided in favour of assessee for statistical purposes. Addition on low household withdrawals - CIT(A) upheld the addition on the basis of facts mentioned in the remand report of the AO that the address mentioned in the assessee’s ration card and assessee’s father-in-law’s ration card were different, therefore, it cannot be said that the assessee’s father-in-law and mother-in-law were sharing their withdrawals for meeting the household expenses - Held that:- from the copies of the ration card placed before us, we note that the address of the assessee and her in laws is the same and any withdrawals made by her in laws cannot be ignored for the purpose of calculating the total withdrawals by the joint family and its sufficiency to meet household expenses during the period under consideration. The lower authorities also ignored this very fact that the assessee is living in a joint family with her in laws without any air-conditioning, generator set facility or any domestic help/servant facility. The AO has not disputed this fact that the assessee holds agriculture land and cattle out of which maximum needs of household, grocery, vegetables, fruits, milk etc. are fulfilled and in this situation, total withdrawals of ₹ 3,80,200 cannot be held as insufficient for meeting the household expenses, specially when the assessee is living a normal life without any expensive luxury and supported by agriculture produce. In this situation, addition made by the AO and partly upheld by the CIT(A) on account of low household withdrawals cannot be held as justifiable and we direct the AO to delete the same - Decided in favour of assessee.
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