TMI Blog2012 (6) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... ts on record. Consequently the additions in respect of the amount arising out of the Will are deleted. Estimation of Agricultural Income - addition on ground of difference - AO estimated agricultural income taking the yield of 2000-01 as base year and applying the cost inflation index to it - Held that:- Report of the Investigating officer itself suggest that agricultural income at Rs. 1500/- per bigha was reasonable. AO has adopted a yardstick of estimating the agricultural income on the basis of cost inflation index which, in our considered view, may be useful for capital gain purposes but cannot be a yardstick for estimating the assessee's agricultural income. Hence, agricultural income as claimed by assessee is allowed. Advances received qua the alleged agreement to sell the land - addition made on ground of it being cash transactions and doubt about credit-worthiness of purchasers - Held that:- Excepting doubting the confirmations, additions have been made without further inquiries. therefore, we set aside these issues back to the file of AO to decide the same afresh in accordance with law. - IT Appeal NOS. 3558 TO 3563 (DELHI) OF 2011 - - - Dated:- 15-6-2012 - R.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khan/unrelated 2. Brief facts are that the Assessing Officer received information from Co-ordination Cell Office, Dehradun that the assessee had invested in FDRs in her own name and in the name of other family members. On this basis reasons were recorded and notices u/s 148 were issued on 31.07.2002. In response thereto, the assessee filed returns of income and during the course of reassessment proceedings filed cash flow statements to explain the relevant investments in these years. According to the assessee these investments were made out of following sources:- a. Amounts received as successor to the will of her father in law late Shri Ram Bharosey Lal Yadav claimed to be a prosperous land lord, renowned citizen/ freedom fighter of the area and headed a prosperous family. b. Agricultural income of herself and husband. c. Advances received as consideration of agreement to sell, pieces of her agricultural land. 3. The assessee was required by AO to substantiate the claim of receipt of Rs. 19.05 and 8.95 lacs under the will of Late Shri Ram Bharosey Lal Yadav dated 7-7-93, which was complied. In this regard matter was referred by AO to the Joint Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ** ** ** ( a ) The enquiries were conducted to verify the genuineness of 'Will' of late Shri Ram Bharosey Lal. S/Shri Suresh Babu, Advocate and Navab Singh who had witnessed the 'Will' have confirmed that Late Ram Bharosey Lal and made a 'Will. They have also confirmed the contents of the Will. But they showed their inability to state whether the will was got registered or not. S/shri Vimlesh, Bhuwan Chand and Jeevan, servants, in their statement on oath, have admitted to have received Rs. 17,000/-, 17,000/- and Rs. 16,500/- respectively from Shri Ramesh Chandra in cash after about one month of the death of Late Shri Ram Bharosey Lal as "Inam" for their service to the deceased Shri Ramesh Chandra, elder brother of Shri Rajeev Yadav, has admitted in his statement on oath recorded on 6.1.2003 that entire movable and immovable property left by his late father was divided amongst the coshares as per 'Will' of the deceased S/Shri Suresh Babu, Advocate and Nawab Singh have stated that since they have never heard about any dispute in the family regarding the division of the assets left by the deceased, they are of the view that the assets might have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a criminal area, (3) the deceased had got constructed a Kothi in Shikohabad town by making huge investment, and (4) he had performed social liabilities in marriage of his two sons and three daughters and other family members. It is also a major factor that late Ram Bharosey Lal had never been assessed to Wealth-tax. In absence of any documentary evidence, the availability of cash of Rs. 30,50,000/- and gold and silver ornaments weighing 5 Kgs and 10 Kgs. respectively with late Ram Bharosey Lal could not be ascertained. The Inspector was deputed to conduct local enquiry about house No.570, Nai Basti, Shikohabad, Distt. Firozabad. His report dated 13.1.2003 is enclosed. This house is stated to be got constructed by late Shri Ram Bharosey Lal in the years 1980 and 1981 on a plot of land measuring about 500 Kq. Yds. It is a three storied building and looks like a Kothi. At present three sons of Shri Ramesh Chandra namely S/Shri Vinod Kumar, Alok Kumar and Arun Kumar are stated to be residing in this building along with their families. Since it is an old building, no comments are being offered with regard to investment made therein. No evidence could be brought on record to establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the claim of assessee to have invested a sum of Rs. 90,500/- in Assessment Year 1996-97 and an amount of Rs. 8.95 lac in Assessment Year 1998-99 out of the will executed by the said Shri Ram Bharosey Lal Yadav was not believable and the amount in question were accordingly added as assessee's undisclosed income. This addition has been confirmed by CIT(A). 3.4. Apropos assessee's claim of her own agricultural income as well as agricultural income of her husband Shri Rajiv Yadav, the Assessing Office held that the claim of agricultural income of the assessee and husband was to be estimated taking the yield of 2000-01 as base year and by applying the cost inflation index as published by the CBDT, agricultural income of the assessee and husband was to be estimated. Relevant observations for A.Y. 1996-97 are as under: "Keeping in view above facts agriculture income of Sh. Rajeev Yadav is been estimated by applying cost inflation index no. of the relevant year as the assessee could not furnish any documentary evidence except confirmation from Sh. Ramesh Chand, the brother of Sh. Rajeev Yadav. Cost inflation index no. of financial year 1999-00 relevant to A.Y. 2000-01 is 389 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee were also examined who verified the will to be true and correct. Three other servants of the family household of Shri Ram Bharosey Lal Yadav also were beneficiaries who also deposed about the correctness of the will and the fact of having received the amount as mentioned in the will of Shri Ram Bharosey Lal yadav. With all this material available on record and in the absence of any contradiction in any of the statement, the will cannot be held to be an afterthought. 4.2 . It is pleaded that the Assessing Officer has held the Will to be not genuine on presumptions without controverting the copious evidence on record or pointing out any defect, contradiction or infirmity in the statements on oath. It has been held as not believable, by following objections:- ( i ) The will was not registered with any registering authority nor has been certified by the notary or other similar agency more so when one of the witnesses Shri Ram Baboo Yadav was a civil advocate and the other was a retired principal. It is not understood as to why they did not advise the testator to get it registered. Its authenticity is not therefore, proved beyond doubts. ( ii ) Late Shri Ram Bharosey La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng citizen of area and freedom fighter. Therefore, no adverse inference can be drawn from this observation. iii . As per Indian law, any testator can make a will as per terms for distribution among heirs as agreeable to him. No adverse inference can not be drawn of the fact that more cash was given to assessee and her husband and land and ornaments to others. Assessee's family was living away from the remaining family. As per Shri Rambharosey's understanding and wishes it was appropriate to give more cash to them in lieu of land. Thus the abnormality as pointed out by AO neither exists nor has any legal or circumstantial consequence. iv . The assessee cannot be held responsible or liable for non filing of income tax and wealth tax returns of late Shri Rambharosey or his daughters. Besides this cannot invalidate a valid and duly executed will. v . Adverse inference has been drawn from the fact that Shri Rambharosey constructed a three storied kothi in the village without any bank loan in 1981. It corroborates the contention that in villages prosperous families generally don't transact with banks. In villages unlike cities, houses are constructed in simple/country style u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rve to be deleted. 5. Apropos additions on the basis of agriculture income, it is pleaded that authorities below have recorded contradictory findings. Assessee filed detailed explanation supporting the claim of agricultural income included in the cash flow statements belonging to her and husband Shri Rajiv Yadav. Part of the same is as under: "2. Regarding the agricultural income, we would like to point out that both Mrs. Rama Yadav Mr. Rajiv Yadav belong to agriculturist background. Mrs. Yadav has sum total of 80 bighas of land in her name Mr. Rajiv Yadav has 90 bighas of agricultural land in his name. These lands are situated at their respective parental villages. Copies of Khasra khatonies to support this fact were attached with the written submission for the asstt. Year 1996-97 as Annexure 3 thereto. As both Rama Yadav her husband did not stay in their villages their land holdings were locked after their close family members. Mr. Yadav's land was looked after by his elder brother Mr. Ramesh Chand Yadav. Mr. Rajiv Yadav's father on his death left behind agricultural land, house, tractors and jewellery to be divided between his two sons (Mr. Rajiv Yadav Mr. Rame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the agricultural land owned by assessee and her husband, estimated yield and family details. Following facts emerge from the report on the agricultural income aspect: a . Assessee belongs to very affluent agricultural families from paternal and in laws sides. She was gifted 62.5 Bighas of agricultural land on 18.3.70 from her maternal grand mother. Further she purchased 16 Bighas of agricultural land in 1984. b . The total holding of agricultural land is as under: ( i ) Assessee Smt. Rama Yadav 80 bighas ( ii ) Husband Shri Rajiv Yadav 90 bighas 170 bighas c . In an statement on oath assessee's brother Yashpal Singh confirmed that he was taking care of these fertile agricultural land and carrying out agricultural operations. The area being criminal infested crop was sold to local purchasers and not taken to Mandi which was 40 kms. away. d . Lekhapal reported that in Shikohabad area potato crop was grown which yields Rs. 6000/- per bigha. However, on an average net saving of Rs. 1,500/- per Bigha was reasonable. 5.2 . In AY 1996-97 - Though CIT(A) held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt of Rs. 8 lacs from Shri Yashpal Singh, the brother of the appellant, a claim in respect of which the addition of Rs. 8 lacs is agitated at ground no. (2), the AO has not believed the argument of Shri Yashpal Singh that agricultural income of various years prior to 1994 continued to accumulate and from that accumulated source a consolidated amount of Rs. 8 lacs was given to the appellant during the instant assessment year. As against this view of the AO, the written submissions do not bring out that Shri Yashpal Singh was actually growing cash crops and accumulating the sale proceeds over the years. Similarly, there is no evidence showing that Shri Yashpal Singh was cultivating the lands of the appellant as claimed. The whole explanation in the written submissions reproduced hereinbefore is more like a story intended to be told to someone who could buy it. There is no corroborative evidence in the for of accounts etc. which could substantiate the claim. Since agricultural income is no taxable and some family members own agricultural lands, an explanation has been prepared which is designed to substitute for a corroborative evidence. Such an explanation is, therefore, not accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing assessee. He lives in the village only. He also inherited vast agricultural land which are regularly cultivated. These facts are duly mentioned in the ADI's report to the effect that Shri Yashpal Singh stays in the village for agricultural operations and in that part of the country transaction are generally carried on cash basis . Assessee discharged her primary burden of proving the identity, genuineness and creditworthiness by filing the confirmation. His land holdings are on record and was always ready for examination by authorities. If AO was not satisfied, this issue also should have been referred to ADI Agra along with other inquiries. ( iii ) AY 99-2000- Shri Ramesh chandra Yadav- Brother in law-Mr. Ramesh Chand yadav is husband's brother). He also inherited a vast land consequent to execution of WILL, which are regularly cultivated by agricultural operations. For investigation into the will and agricultural income he was also examined by ADI Agra and statement on oath was recorded. These facts are duly mentioned in the ADI's report. He stays in village Jaimai to control and supervise agricultural operations and has stated that transactions in that part of the country ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n". It is pleaded that land has been agreed to be sold to sister, brother and broth in law at nearly same rates. The price cannot be subject matter of hard bargain between close family members. Besides that the land in question is situated at Mainpuri Road, which is on Agra Highway with the increased commercial activity on the Highway the land rates shot up in 1995-96 and thereafter they have been stagnant. Even AO has not given any parallel sale instances to justify his adverse observation. ( ix ) AY 2000-2001- Shri ZIA KHAN-This advance of Rs. 4.68 lakhs for 2.5 bigas of land situated at Mainpuri Road Village Chitawali, Tehsil Shikohabad, distt. Firozabad was received from Shri Nawab Zia Khan. This confirmation disclosing his full identity address was furnished. He stays in village Bhadurgarh, a rural area and advance was given in cash. He has confirmed this transactions with full address and identity. Assessee discharged the primary burden of proving the ingredients of sec 68, if AO was not satisfied, he could have summoned him or entrusted the investigation to ADI Agra. 7.1. Ld counsel pleads that AO has given unjustified importance to irrelevant facts as preponderan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneficiaries have seen the assets, therefore, their existence remains unsubstantiated. v . No wealth or income tax return was filed by late Shri Ram Bharosey Yadav or beneficiaries of the will. vi . AO CIT(A) have rightly applied the preponderance of probabilities and human conduct while examining the genuineness of the WILL. vii . Report of ADI Agra is relied on. 8.1 Ld DR further contends that the claim of agricultural income of the assessee is not based on any evidence. Authorities below have rightly estimated the agricultural income of the assessee and her husband to arrive at the availability of funds with her. 8.2 Apropos the claim about the credit in the fund flow statement in respect of Rs. 8 lacs provided by brother Yashpalsingh out of the assesses past agricultural income savings, it is pleaded that the same is baseless. If the assessee had requirement of funds in that case she would have asked the brother to return the savings instead of selling her agricultural land. Besides as per the statement of Yashpalsingh, agricultural income was regularly sent to his sitter. No evidence has been produced to establish as to which year these agricultural savin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s arbitrary and unjust, it is trite law that assesses claim should be accepted unless the contrary is proved whose burden lies on the department. There being no question about the land holding, fertility of land, cash crops and regular agricultural operations and reasonable yield of Rs. 1500/- per bigha, the estimate of authorities below is unjust, arbitrary and baseless. ( vi ) Apropos advances it is pleaded that assessee discharged her primary onus of establishing the identity, genuineness and creditworthiness of the advances related operation. Investigations were already entrusted to ADI Agra; if AO had any doubts on the burden discharged by the assessee, issues about advances also should have been got investigate. AO cannot take a stand of neither investigating the matter nor rebutting the burden discharged by the assessee and going ahead with the additions. 9. We have heard the rival contentions and perused the material available on record. Notices u/s 148 were issued to assessee for all these years on the information received from the co-ordination cell. The issue about validity and genuineness are not before us as they same have not been pressed and only grounds menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a period of 12 years in 1993. 9.6 In our considered opinion, on the basis of material existing on record it cannot be held that Will was fake or an after thought. AO's adverse inference is not based on any cogent evidence but on assumptions and probabilities. In our considered view when the direct evidence is available the issue cannot be decided on assumption without contradicting the statements on record. Consequently the additions in respect of the amount arising out of the Will are deleted. 9.7 Coming to the second issue i.e. estimation of agricultural income, ADIT(Inv.), Agra investigated about the land holdings of the assessee and her husband, which revealed that the assessee owned about 80 bighas of land out of the sources mentioned therein. Statement of Shri Yashpal Singh was recorded, as mentioned above, who stated that the agricultural produces, like wheat, potato, lahsun, peas, mustard, chana etc. were grown on fertile land. 9.8 Lekhpal of village stated that net savings per bigha reasonably came to about Rs. 1500/- after meeting the agricultural expenses. The ADIT' sreport ends with a note, "keeping in view the statement of Shri Yashpal Singh and the repor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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