TMI Blog2016 (11) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... ue raised in appeal needs to be considered afresh in the light of additional evidences submitted by the assessee. - Decided in favour of assessee for statistical purposes. - ITA No.946/PN/2014 - - - Dated:- 27-9-2016 - MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM For The Appellant : Shri V. C. Shah and Shri M. S. Patil For The Respondent : Shri Anil Chaware ORDER PER ANIL CHATURVEDI, AM : This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-III, Pune dated 03.02.2014 for the assessment year 2008-09. 2. The relevant facts as culled out from the materials on record are as under :- 2.1 Assessee is an individual who is stated to be deriving income from civil construction business. Assessee electronically filed his return of income for assessment year 2008-09 on 30th September, 2008 declaring total income of ₹ 4,43,480/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) of the Income Tax Act, 1961 (in short the Act ) vide order dated 30.12.2010 and the total income was determined at ₹ 29,58,930/-. Aggrieved by the order of Assessing Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case and in law the learned CIT(A) erred in sustaining the disallowance of salaries at 10% amounting to ₹ 84450/- which is done by the Assessing officer on mere conjectures and surmises and by ignoring the fact that your appellant as a proprietor alone could not look after execution of contracts and he had to employ persons having adequate knowledge of different types in execution of contracts. 7. Your appellant craves leave to add to, amend, alter or delete any of the above grounds as may be advised. 3. At the outset, the ld. AR submitted that though the assessee has raised various grounds but the sole controversy which is to be decided is with respect to addition of ₹ 23,31,000/- made under section 69A of the Act. 4. During the course of assessment proceedings, on the basis of information generated through ITD application in the Annual Information Report that was filed by the Corporation Bank, Solapur, it was noticed by the Assessing Officer that the assessee had deposited cash of ₹ 23,31,000/- in Saving Bank A/c No.01/009099 with Corporation Bank, Solapur, during the year and had also made withdrawal/transfer through cheques. Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f of the so-called agricultural income that are filed during the present proceedings (as the same have not been mentioned in the assessment order and therefore assumed not to have been filed during assessment) are the 7/12 extracts and some self-made vouchers to evidence sale of agricultural produce. 5.1 To understand and decide the issue as to whether the appellant s contention that the source for the cash deposits arises from the agricultural income of the HUF is correct and can be accepted, the evidences filed as proof of the HUF agricultural income are discussed and analysed hereinafter. It is necessary, in the first place, to reproduce the details of the lands held by the appellant and his wife, which apparently represents the so-called HUF of the appellant, in various places in Solapur District, which are stated to be as under: Place Gat No./Survey No. Holder s name Area Kumthe 101 assessee 4H 55R Kumthe 74/1 assessee 1H 51R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s statement that the lands were owned by the HUF cannot therefore also be accepted for the reason that there is no evidence furnished to show that the loans have been borrowed by the HUF for the only activity that has allegedly been carried out throughout the year and that is, agricultural activity. The onus of conclusively proving that the lands in question were owned by the HUF has thus not been discharged by the appellant. Rather, the presumption that naturally arises on the borrowings made is that the same have been mortgaged by the appellant in his individual capacity for his normal business purposes. 5.3 Secondly, the lands are located at very great distances from the appellant's place of residence. For example, around 30 acres (13H 16R) of land at Kumthe in Solapur district is seen to be located at a distance of 189 kilometers from Solapur, where the appellant's main business activities are carried out. The lands at Chincholi are located approximately 274 kms from Solapur. Bhogao, where the appellant owns around 5 acres of land, is situated 292 kms away from Solapur. The appellant has not mentioned who takes care of these lands, which are located at great di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon. Supreme Court in Raja Benoy Kumar Sahas Roy (supra}. 5.4 The plea of the appellant is that the HUF has not maintained any books of accounts. Even so, no expenses are also found to be incurred and no supporting evidences are filed in this behalf, in case such expenses have actually been incurred. The addresses of the parties to whom the alleged crops, predominantly jowar and kadaba, are sold are not mentioned. The vouchers evidencing the sale of such produce are admittedly self-made. It seems that the appellant, other than relying upon the 7/12 extracts and self-made vouchers, does not have any authoritative proof of agricultural operations that are being claimed to have been carried out by the HUF. On the other hand, by furnishing the information that the sources of cash deposit in the appellant's bank account were from the HUF's agricultural income at the last minute, the appellant has tried to pre-empt any meaningful inquiries by the Assessing Officer into the genuineness and correctness of the claim, As held by the Honorable Supreme Court in R. Vekataswamy Naidu case (supra), the onus was primarily on the appellant to demonstrate that the agricultural income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court that The question whether the source of the investment should be treated as income or not under section 69 has to be considered in the light of the facts of each case. In other words, a discretion has been conferred on the ITO under section 69 to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping ill view the facts and circumstances of the particular case . There is no quarrel with the proposition expounded by the Hon'ble Supreme Court in the aforementioned case. However, in the facts of the appellant's case, he is a civil contractor who is earning substantial incomes from carrying out contracts. He has been filing returns of Income for several years and is aware of the implications of having taxable income. If the so-called HUF had substantial income from agriculture to the tune of more than ₹ 30 lakhs, the appropriate way was to file returns of the HUF. No agricultural income has been shown by the appellant or his HUF in the past or even subsequent years. The lands in question have been presumably mortgaged against loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee before Hon ble Tribunal may be sent to the lower authorities for its verification and that they be directed to examine the same and thereafter decide the issue. The ld. DR, on the other hand, supported the order of Assessing Officer and CIT(A) and submitted that explanation of cash deposits being out of sale of land was never made before the lower authorities and it is new explanation that is submitted by the ld. AR before the Hon ble Tribunal and that the same be ignored. 7. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to addition of unexplained investment of ₹ 23,31,000/-. Before us, it is inter-alia assessee s submission that the source of cash deposits are out of sale proceeds of agricultural produce and out of sale proceeds of land. The ld. AR has also submitted an affidavit of the assessee wherein he has explained the sources of deposits of cash. The affidavit which is submitted by the ld. AR is reproduced hereunder and reads as under :- AFFIDAVIT I Ramesh Sidramapaa Patil resident of 39/7 Railway Lines behind Saint Joseph High School Solapur state on solemn affirmation as foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99 referred to in the assessment order Annexure D on 25th July, 2007. I had further withdrawn from The Solapur District Central Co-op. Bank Ltd. a sum of ₹ 8,31,000/- on 7th March, 2008 (Annexure E ) page 53 and same was deposited in my account with Corporation Bank Annexure D (page 52). Both these bank accounts being one with The Solapur District Central Co-op. Bank Ltd. and another with Corporation Bank are in respect of my agricultural activity carried on by me after getting land from my father who had inherited the same. As explained in assessment proceedings and also to CIT(A) I have agricultural land in excess of 90 acres and I get sale proceeds of agricultural produce. I do not maintain any books of accounts and hence same were never produced. I was required by my tax consultant to show proof of agricultural sale produce receipts and hence same were given. I was never told by him that proceeds of sale price of agricultural land and any co-relation with deposits are required to be given. The above stated accounts being for my agricultural activity of ancestral land were never given to the accountant who prepared the books or C.A. who conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, on behalf of the assessee, a prayer for admission of additional evidence has been made and it is submitted that the evidences are material and would help in deciding the issue. Considering the submissions of ld. AR, the additional evidences submitted are admitted. However, since these evidences were not available before the lower authorities, we are of the view that in the interest of justice and fair play, the issue raised in appeal needs to be considered afresh in the light of additional evidences submitted by the assessee. We, therefore, remit the issue to the file of the ld. Assessing Officer to decide the issue afresh after considering the submissions of the assessee and in accordance with law. Needless to state that the Assessing Officer shall grant adequate opportunity of hearing to the assessee. We also direct the assessee to co-operate by furnishing promptly, any other details called for by the Assessing Officer. Since we are restoring the matter to the Assessing Officer, we refrain to comment on the merits of the issue on hand. Thus, the ground of assessee is allowed for statistical purposes. 9. In the result, the appeal of the assessee is allowed for statistical p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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