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2015 (6) TMI 127 - ITAT DELHI

2015 (6) TMI 127 - ITAT DELHI - TMI - Agricultural income - income received from undisclosed sources - Held that:- It is alleged that the assessee could not produce before the AO any details and evidences to substantiate that the expenses such as seeds, khad and water etc. were incurred for cultivation. The assessee also did not furnish the details of the crops grown and the details of sales. She simply stated that an agreement was entered with Shri Jai Prakash wherein it was mentioned that he w .....

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d. CIT(A) accepted the claim of the assessee. It is well settled that the powers of the ld. CIT(A) and the AO are co-terminus but in the present case, it appears that the ld. CIT(A) failed to discharge the duty to perform those function which ought to have been but not done by the AO, and simply on this basis that the AO did not examine the cultivator or the tehsilpatwari, he directed the AO to treat the impugned income as agricultural income. Thus set aside this issue back to the file of the AO .....

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nished documents relating to transaction of shares. On the contrary, the AO categorically stated that the assessee was asked to furnish copy of D-mat account, details of share holding, details of Short Term Capital Gains with confirmed ledger account from brokers in respect of share trading. The AO clearly mentioned at page no. 6 of the assessment order that the assessee failed to furnish contract note, delivery/transfer of shares in D-mat account or any supporting evidence which could prove tha .....

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No. 3683/Del/2012, ITA No. 4153/Del/2012 to ITA No. 4164/Del/2012, ITA No. 4413/Del/2012 - Dated:- 29-5-2015 - Smt. Diva Singh and Sh. N. K. Saini, JJ. For the Appellant : Sh. K.P. Ganguli, Adv. For the Respondent : Sh. Gunjan Prashad, CIT DR ORDER PER BENCH: These appeals relating to the different assessees belonging to the same group are directed against the separate orders of the ld. CIT(A)-XXXI, New Delhi, each dated 11.05.2012 for the assessment years 2006-07 & 2008-09 in the case of S .....

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s and in the circumstances of the case, the ld. CIT(A) has erred in deleting the addition of ₹ 1,04,600/- made by the Assessing Officer on account of treating the agricultural income declared by the assessee as income received from undisclosed sources by applying the provisions of section 68 of the I.T. Act, 1961 without appreciating the fact that the assessee did not furnish the details/evidences in respect of genuineness of the claim of agricultural income. 3. On the facts and in the cir .....

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in brief are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried out in Sh. Mukesh Garg Group of cases on 20.01.2010 and in case of assessee on 03.03.2010 at Locker No. 1390, Punjab National Bank, G.T. Road, Ghaziabad, U.P. Thereafter a notice u/s 153A of the Act dated 11.07.2011 was issued to the assessee requiring him to file the return of income for the assessment year 2006-07. In response to the said notice, the assessee f .....

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enses Claimed Rs. Bifurcation of Expenses with Justification Preparation of Land for Ag Cost of Seeds (all expenses must be including labour expenses) Ploughing Sowing of Crops/Seeds (Labour expenses means no. of days and per day per labour charge) Pesticide Security Charge Water expenses Electric Expenses Harvesting Charges Transportation Charges Sale expenses/Mandi expenses 10. Net Ag Income (Disclosed in Return of Income) 11. % of net income to gross income 12. Other Owners of the land with t .....

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uch as seeds, khad, water will be borne by Sh. Jai Prakash but the same will be deducted at the time of sale of crops. It was also mentioned that Sh. Jai Prakash will grow only vegetables and all the labour expenses will be borne by him. As regards to the division of agricultural produce between the two parties, it had been mentioned that the contractor will pay to the first party i.e. assessee, 60% of the actual sale of the crops after deducting expenses as per the agreement. The AO after consi .....

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o did not produce party alongwith the details/evidences so that the genuineness of the claim could be verified. The AO observed that agricultural operation on the agricultural land was a must ingredient to grow any agricultural produce, to sale of such produce in the market, resulting in income received from such agricultural activities which may qualify the definition of agricultural income as per clause (1) of section 2 of the Act. The AO pointed out that the assessee failed to produce details .....

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the assessee carried the matter to the ld. CIT(A) and submitted that the genuineness of the documents and the agreement dated 24.05.2003 entered between the assessee and cultivator was not doubted and the certificate of the tehsilpatwari was also not held as ingenuine. The agricultural land was owned by the assessee and the agricultural activities were carrying on, therefore, the income derived was agricultural income. The reliance was placed on the judgment of the Hon ble Supreme Court in the c .....

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T(A) further observed that the AO jumped into the conclusion that no agricultural operation was carried on the agricultural land without examining Shri Jai Prakash with whom the assessee entered into agreement. He also observed that the AO had not made any enquiry from tehsilpatwari Sh. Jagdish Prasad Sharma, therefore, the rejection of claim of the assessee without making any enquiry from the cultivator and tehsilpatwari was not tenable. The ld. CIT(A) also pointed out that this was a search as .....

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(A) had given a negative finding that the AO could have examined Shri Jai Prakash, the contractor or Shri Jagdish Prasad Sharma, tehsilpatwari. He further submitted that the assessee had also not produced any document/evidence in support of her claim. He also submitted that the ld. CIT(A) would have done all those things which the AO ought to have done but such an exercise was not done. Therefore, the ld. CIT(A) was not justified in negating the view taken by the AO. The reliance was placed on t .....

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e the assessment order was passed by him which clearly shows that the order was passed in haste without applying the mind and the ld. CIT(A) after appreciating the facts in right prospective rightly held that the income of ₹ 1,04,600/- shown by the assessee was the agricultural income not the income from undisclosed sources as considered by the AO. He further submitted that the assessee entered into an agreement with Shri Jai Prakash on 24.03.2005. The said agreement between the assessee a .....

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). It was submitted that the assessee discharge the onus cast upon her, therefore the ld. CIT(A) rightly directed the AO to treat the impugned income as an agricultural income. 10. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is alleged that the assessee could not produce before the AO any details and evidences to substantiate that the expenses such as seeds, khad and water etc. were incurred for c .....

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s were given nor it is mentioned that who is the owner of the land and in which year which type of vegetables/crops were grown by whom. The assessee also did not furnish copy of the Jamabandi. However, the ld. CIT(A) accepted the claim of the assessee. It is well settled that the powers of the ld. CIT(A) and the AO are co-terminus but in the present case, it appears that the ld. CIT(A) failed to discharge the duty to perform those function which ought to have been but not done by the AO, and sim .....

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Ground No. 3 relates to Short Term Capital Gains of ₹ 13,49,105/- which was considered by the AO as income from other sources . The facts related to this issue in brief are that the assessee had shown an income of ₹ 13,49,105/- under the head Short Term Capital Gains from share trading. The AO asked the assessee to furnish copy of D-mat account, details of share holding and Short Term Capital Gains with confirmed ledger account from brokers in respect of share trading. The assessee f .....

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for gains only and that too year to year, whereas factual position was absolutely different as the share trading was the most uncertain trade. The AO pointed out that generally broker is used to settle every transaction within a day or two and payments are demanded immediately after every purchase transaction but in the all group of cases payments had been made for share transactions after long gap. The AO also pointed out that the assessee failed to furnish contract note, delivery/transfer of s .....

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action as claimed to have been undertaken were not genuine and the income earned from undisclosed sources had been routed through Short Term Capital Gains for the purpose of giving tax at lower rate. She, therefore, treated the Short Term Capital Gains claimed by the assessee, as income from undisclosed sources and assessed the same as income from other sources . 12. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the share transactions were in the nature of .....

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the following case laws: CIT Vs Holck Larsen (1986) 160 ITR 67 (SC) CIT Vs Associated Industrial Development Co. P. Ltd. (1971) 82 ITR 586 (SC) 13. The ld. CIT(A) after considering the submissions of the assessee observed that the assessee furnished documents relating to transactions of shares, broker s ledger account & bills. He further observed that the AO had asked the assessee to bring the broker before her but there was no allegation of taking accommodation entries. He also observed th .....

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tions in pool account of brokers. The ld. CIT(A) observed that the AO had not conducted any enquiry from the brokers and as regards to the payment interval, he was of the view that it could not be a sufficient evidence to hold that the transactions in shares were bogus and that the conduct of the assessee did not point to the trading character of the transaction. The ld. CIT(A) held that the transactions in shares of the assessee had given rise to Short Term Capital Gains and it could not be tre .....

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mat account was not required to be maintained. He further submitted that it was not the case of the Department that the assessee had not shown investment in share in her balance sheet nor that the investments in shares and mutual fund were false and untrue. It was further submitted that the share transactions were in the nature of investment and the profit received there from was assessable as Short Term Capital Gains as shown by the assessee. The reliance was placed on the following case laws: .....

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.B. Stock Holdings Ltd. (No.2) (2010) 325 ITR 320 Bombay Gymkhana Ltd. Vs ITO (2008) 115 TTJ (Mum) 639 Coloma Commercial Co. Ltd. Vs ACIT, ITA No. 585/Kol/2009 dated May 14, 2010 JCIT Vs Shri Deo Kumar Saraf, ITA No. 411/Kol/2009 dated June 18, 2009 ITO Vs Lookad Finance and Leasing Ltd., ITA No. 659/Kol/2008 dated July 24, 2009 Citadell Agencies P. Ltd. Vs ACIT (2007) 11 SOT 273 (Bom) Sar Investment P. Ltd. Vs DCIT (2010) 40 SOT 566 (Ahd), ITA No. 2116/Ahd/2007 dated July 23, 2010 16. We have c .....

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