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Sri Laxmi Narasimha Grape Garden Versus The Income Tax Officer, Ward-8 (2) , Hyderabad.

2016 (8) TMI 915 - ITAT HYDERABAD

Agricultural land - no documentary evidence to prove that the agricultural land was in the name of the firm - Held that:- As rightly pointed out by the Ld. D.R. the assessee had sufficient time, atleast before the CIT(A), to prove that it owns agricultural lands and carried on agricultural activity in large scale which could have yielded more than ₹ 18 lakhs income. No evidence whatsoever was furnished either before the A.O. or CIT(A). Even before the Tribunal, no evidence whatsoever was p .....

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, the A.O. is duty bound to give a proper opportunity of being heard. But it does not lessen the burden of the assessee to support its stand atleast before the First Appellate Authority. - In the instant case, the Ld. CIT(A) categorically observed that even after 4 ½ years the assessee did not furnish even an iota of evidence to contradict the stand taken by the A.O. Though some additional evidence is sought to be produced before the Tribunal, the explanation for not filing the same before .....

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the CIT(A) and dismiss the appeal filed by the assessee-firm. - ITA.No.1064/Hyd/2015 - Dated:- 20-7-2016 - SHRI D. MANMOHAN, VICE PRESIDENT For The Assessee : Mr. Mahesh Kumar Rathi For The Revenue : Mr. B. Kurmi Naidu ORDER This appeal by the assessee firm is directed against the order passed by the CIT(A)-II, Hyderabad and it pertains to the A.Y. 2008-2009. 2. As could be noticed from the record, the assessee declared gross receipts of ₹ 18,62,777 referable to agricultural income earned .....

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ulimamidi (v) in Maheswaram (M), Ranga Reddy District. When the assessment was taken-up for scrutiny, the A.O. noticed that there was no documentary evidence to prove that the agricultural land was in the name of the firm; it was also not proved that the assessee earned agricultural income to the extent shown in the books. Since it had declared more than ₹ 18 lakhs as sale proceeds it is the duty of the assessee to prove the cultivation of crop, expenditure incurred thereon, and the source .....

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r. B. Chandrasekhar, Commission. Agent, whereas the same was shown by you as if it was issued to Mr. Shahed Ali, Commission Agent. Also the book no.3292 was issued by the Government on 1-8-2009, as such it should not contain the transactions prior to 1-8-2009, whereas in your material, it has the transactions for the F. Y. 2007-08. Based on the facts and circumstances, why the transactions shown by you in your material cannot be supposed as bogus? More over, the agricultural land admeasuring Acr .....

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he above proposal. 2.1. The assessee was asked to furnish copy of the return of income along with audit report, P & L A/c, balance sheet etc., However, none appeared on behalf of the assessee and there is no response either from the A.R. of the assessee or the partners of the firm. Therefore, A.O. had no other alternative except to complete the assessment on the basis of the material available on record. Since the assessee-firm could not prove the source of income, the A.O. allowed a nominal .....

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In the statement of facts furnished before the CIT(A), it was submitted that the partnership firm consists of 04 persons which carries on business of growing crop, vegetables and other agricultural produce and sale thereof. It was submitted that the assessee appeared with their Auditor from time to time before the A.O. and produced the evidence called for, which was examined. The A.O. deputed ITI to verify the genuineness of the activity. Since there is no other business other than agriculture, .....

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ssessment can be said to have been completed in violation of principles of natural justice i.e., by not affording a reasonable opportunity of hearing. 2.3. On the other hand, the conclusion of the CIT(A) was that even if it is assumed that no proper opportunity was given by the A.O, atleast before the CIT(A) assessee ought to have filed some evidence to prove its agricultural activities but no such evidence was produced to substantiate its claim and thus, there is no reason to interfere with the .....

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ment is bad in law. It was also contended that the estimation of agricultural income at ₹ 3,62,777 is not proper since the agricultural activity was carried on at a place which is close to City but the same was not taken into consideration by the A.O. It was further contended that one of the partners Mr. M. Mahesh resides at the farm exclusively to take care of agricultural operations, with professional help. It was further submitted that the assessee has no other source of income, apart f .....

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880 and hence, the case do not call for addition of ₹ 15 lakhs. 4. On behalf of the assessee additional evidence was filed vide letter dated 14.06.2016 wherein the MRO certificates and extracts of pattadar pass books of partners, copies of electricity pass books and photographs of garden were placed. It was submitted that the assessee could not trace this information at the time of hearing before the A.O. or CIT(A). The CIT(A), on the other hand, observed that reckoned from the date of fil .....

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i.e., whether it refers to financial year 2007-08. Similarly, certificates and pattadar pass books filed by assessee do not help in any way to appreciate as to what was the nature of crops grown in the relevant previous year and what would have been the income in that year. The photocopies appear to be the latest photographs whereas one needs to consider as to whether any activity was carried on in the F.Y. 2007-08; when assessee claims exemption it is for them to prove that agricultural operati .....

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rtaining to the F.Y. 2007-08. Even if it is assumed that the A.O. has not given proper opportunity it is for the assessee to prove its case atleast before the CIT(A) by furnishing necessary evidence in support of its stand that the assessee-firm indeed owns agricultural land and it had carried on agricultural activity in the F.Y. 2007-08. Assessee-firm did not furnish any evidence before the CIT(A) though sufficient time was available. Therefore, I do not see any justification to admit the addit .....

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e that the letter addressed by the A.O. to the Managing Partner Mr. Laxmi Narasimha Garden was served on 08.01.2011. This was in support of his contention that the A.O. passed the order without giving a proper opportunity of being heard. In the written submissions filed along with covering letter dated 14.06.2016 the assessee mainly submitted that the A.O. had not given a proper opportunity of being heard, but he failed to furnish any reasons as to why the firm could not produce any evidence atl .....

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efore the administrative authority has a right to know the evidence put to use against him. In otherwords, if A.O. proposes to make an addition, the assessee should be given a fair opportunity to explain its position. Detailed written submissions were filed on the same lines. It was further contended that the A.O. erroneously estimated income from agriculture at merely ₹ 10,000 per acre which has no basis since assessee is in this line of activity for over a period of 15 years. He also sub .....

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returning gross receipts from agriculture over the past several years which matches with the income declared in this year. 7. On the other hand, Ld. D.R. submitted that the reason for disallowance of the claim is well-known to the assessee since detailed reasons were mentioned in the assessment order and, if the assessee is aggrieved by the said order, atleast before the First Appellate Authority the assessee ought to have furnished proper details to prove that the firm owns agricultural land, .....

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tent of ac.14.18 guntas according to the Tahsildar the agricultural income would be about ₹ 4 lakhs and for an extent of ac.29.16 gunts of land the income would be around ₹ 6 lakhs (land being reflected as dry land). Such being the case, 8 years prior to the date of certificate, going by the Cost Inflation Method the agricultural income in the F.Y. 2007-08 could not have been more than ₹ 10,000 per acre. He mainly submitted that it is for the assessee-firm to prove that it has .....

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ble to tax as income from other sources; the A.O, therefore, was justified in treating the same as Income from other sources . 8. I have carefully perused the record. As rightly pointed out by the Ld. D.R. the assessee had sufficient time, atleast before the CIT(A), to prove that it owns agricultural lands and carried on agricultural activity in large scale which could have yielded more than ₹ 18 lakhs income. No evidence whatsoever was furnished either before the A.O. or CIT(A). Even befo .....

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