TMI Blog2009 (9) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is accordingly rejected - - - - - Dated:- 8-9-2009 - Member(s) : P. M. JAGTAP., N. V. VASUDEVAN. JUDGMENT: These are appeals by the Revenue against the common order dt. 8th June, 2001, of the CIT(A)-I, Raipur, relating to the asst. yrs. 1998-99 and 1997-98, respectively. The common grounds of appeals of the Revenue for both the assessment years read as under: "On the facts and in the circumstance of the case, the learned CIT(A) was not justified in: "1. deleting the disallowance of Rs. 3,02,475 (Rs. 2,68,224 in asst. yr. 1998-99) made out of claim of agricultural income of Rs. 6,04,950 (Rs. 5,36,448 in asst. yr. 1998-99). 2. allowing the assessee's appeal in part by overlooking all the material brought on record by the AO for treating 50 per cent of the claim as income from undisclosed sources." 2. The facts giving rise to the aforesaid appeals are as follows: The assessee is an individual who derives income from agriculture and also share income from the firm. In the return of income for the asst. yr. 1997-98, the assessee declared agricultural income of Rs. 6,04,950. Similarly, for the asst. yr. 1998-99, the assessee declared agricultural income of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee did not sell any produce through the Mandi. He further informed that there was no licensee firm in the name of Binni Enterprises. The AO, therefore, came to the conclusion that the sale bills produced by the assessee were prima facie fictitious. When confronted, the assessee explained that he had effected the sale of agricultural produce through Kochayas i.e., intermediary or middlemen. It was explained by the assessee that one Mohd. Farooqh who was his friend had introduced one Shri Nandkishore Sahu who was a Kochayas and through whom the agricultural produces were sold. It was further explained by the assessee that Shri Nandkishore Sahu was a middleman and he earned only commission on sale of agricultural produce of the assessee. It was also submitted that if the receipt obtained by Shri Nandkishore Sahu to the effect that if the sales have been effected to Binni Enterprises through Mandi turned out to be untrue, the assessee cannot be held responsible for the same as admittedly, the assessee had dealt with only through the intermediary Shri Nandkishore Sahu and did not know the purchaser. The AO, however, was not convinced with this reply given by the assessee. Conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of paddy can be produced @ 20 bags per acre. BUT (a) The assessee has no evidence that 2,000 bags of paddy was produced. (b) All the land in areas of Sigma are not so fertile which can produce average 20 bags of paddy. Almost land Bharri and Bhata. (c) On lease out land farmers themselves cultivate and with experience of cultivation, they earn Rs. 1,25,000 to 1,40,000 by cultivating crops of paddy, chana, masoor, moong, lakahdi, etc. and on the same land taken on lease, the assessee has earned 5-6 lakhs of annual income. (d) The assessee could not produce accounts relating to agricultural income. The proportion of income and expenditure shown in not reliable. (e) It is evident from the statement of land owners 1. Shri Ghayshyam Sunder Agrawal. 2. Shri Makhan Gopal Agrawal, Shri Baidu Hari Agrawal and other three farmers that from their land 30 per cent to 40 per cent of the total production is earned as net income. Even if, it is assumed that the assessee has done agricultural production, there is no possibility of earning more than 30 per cent after deducting lease rent. Considering the above facts, 50 per cent of agriculture income i.e., Rs. 3,02,475 (which is dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, therefore, it has no evidentiary value. The CIT(A), accordingly directed the AO to delete the additions made in both the assessment years and directed the AO to accept the agricultural incomes as returned by the assessee. Aggrieved by the order of the CIT(A), the Revenue is in appeal before us. 6. The learned Departmental Representative took us through the order of assessment and submitted that the AO has very categorically come to the conclusion that the assessee failed to discharge his onus of proving the quantum of agricultural income. In the absence of evidence, on the part of the assessee, to substantiate the agricultural income, it was submitted by the learned Departmental Representative that the addition made by the AO was justified. According to him, the CIT(A) has not taken due note of the various findings in the order of assessment while deleting the additions made by the AO. He, therefore, submitted that the orders of the AO for both the years under consideration be restored. 7. The learned counsel for the assessee, on the other hand, relied on the order of the CIT(A) and submitted that there was nothing on record before the AO to come to a conclusion that 50 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mandi receipt which was disputed by the AO and the AO addressed a letter to Krishi Upaj Mandi Samiti, Tilda through whom the paddy was alleged to have been sold to Binni Enterprises and the Mandi secretary appears to have informed the AO that Shri Rajendra Tiwari i.e., the assessee, did not sell any produce to Binni Enterprises through Mandi. It was the evidence of the intermediary Shri Nandkishore Sahu that he sold the produce to the purchaser who passed on the Mandi receipt and he in turn, gave this Mandi receipt to the assessee. The fact that the Mandi receipt evidences the sale of produce to Binni Enterprises is not in dispute. When the transaction is done through intermediary, the assessee, as a seller cannot be held responsible for the defect in the receipt obtained from the purchaser through intermediary. Admittedly, the assessee did not have knowledge about the purchaser and it was Shri Nandkishore Sahu who knew the purchaser. The fact that the agricultural produce were sold and the price as stated in the receipt has been paid to the assessee has been categorically affirmed by the intermediary Mr. Nandkishore Sahu. The quantum of sale proceeds stated to have been received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lal (2003) 78 TTJ (Jd) 573 in this regard. 10. We have perused the judgment relied upon by the learned counsel for the assessee. We are of the view that the question decided by the Jodhpur Bench of the Tribunal was as to the validity of the levy of penalty in appeal by the Department against the order of the CIT(A) cancelling the levy of penalty. In such circumstances, the assessee was given a right of challenging the levy of penalty on technical ground and without filing a cross-objection and without such a technical ground having been considered and decided by the CIT(A). In the said decision, the issue involved being the levy of penalty, the Tribunal thought it fit to allow the assessee to raise all objections with regard to the levy of penalty. The facts in the present case are totally different. The levy of interest having not been challenged by way of an appeal or a cross-objection by the assessee cannot be sought to be raised by a mere argument at the time of hearing of the appeal of the Revenue wherein there is no ground of appeal regarding charging of interest under ss. 234A, 234B and 234C. We are, therefore, of the view that the assessee should not be permitted to rais ..... X X X X Extracts X X X X X X X X Extracts X X X X
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