TMI Blog2017 (5) TMI 1510X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence would be furnished in this regard by the assessee. The Assessing Officer shall give reasonable opportunity of hearing to the assessee. In case there is yield from fruits, then 80% of the standard yield reported by NHB should be adopted to work out the income in the hands of the assessee based on their land holding. However, in case the assessee has already shown the yield below 80% of the standard yield reported by the above said Government bodies, then the Assessing Officer is directed not to disturb the same and accept it. Expenses on contractual factor - We have already decided the issue of estimation in the hands of the assessee in the paras hereinabove with our directions. We further hold that no further deduction is to be made on account of contractual farming factor @50%. The basis for the said estimation is pursuant to the facts of Shri Badshah Bagwan and where the statement of the said person was never confronted to the assessee nor the information supplied to the assessee, the said information cannot be applied to decide the issue against the assessee. In any case, in the facts of the case, the assessee has claimed that it has grown vegetables on its agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 2009-10. The Commissioner of Income Tax (Appeals) has decided the appeal of the assessee for assessment year 1999-2000 vide order dated 19-11-2012. The appeals of the assessee for assessment years 2000-01 to 2006-07 have been disposed of by the Commissioner of Income Tax (Appeals) vide common order of even date. The appeals of the assessee for assessment years 2007-08 to 2009-10 have been decided by the Commissioner of Income Tax (Appeals) vide order dated 19-11-2012 common for the three assessment years. The Department has filed cross appeals against the aforesaid orders of Commissioner of Income Tax (Appeals) in ITA Nos. 500 to 510/PUN/2013. Since, the issues raised in these appeals and the cross appeals are identical, these appeals are taken up together for adjudication and are decided by this common order. 2. The ld. Counsel for the assessee has filed an application to bring on record the Legal Representative (LR) of Shoukat Allabksha Bagwan. The assessee Shoukat Allabksha Bagwan has died on 27-08-2014. A photocopy of his death certificate along with the affidavit of his LR Arish Shoukat Bagwan has been filed. The LR of Shoukat Allabksha Bagwan is taken on record and his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of estimated expenditure and contractual farming is purely on assumption and presumption, hence needs to be disapproved. It is humbly prayed that, the book results of the appellant may kindly be approved. 2. The appellant may be allowed to add / rectify the grounds of appeal. Identical grounds have been raised by the assessee assailing the orders of Commissioner of Income Tax (Appeals) in other assessment years i.e. assessment years 2000-01 to 2009-10. 4. The Revenue in ITA No. 500/PUN/2013 for assessment year 1999- 2000 has assailed the order of Commissioner of Income Tax (Appeals) by raising following grounds of appeal : 1. CIT(A) erred in not confirming the additions made by the A.O. on the issue of agricultural income from sale of sugarcane, Vegetables other agricultural income from flowers, fruits, coconuts etc. in toto disregarding the evidences brought out in the assessment order. 2. The Ld. CIT(A) failed to appreciate that the assessee sought to explain the source of the assets found during search through agricultural income and therefore addition on the issue of agricultural income is in essence addition of unexplained investment of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 to 499/PUN/2013 1999-2000 to 2009-10 ITO Vs. Arish Shoukat Bagwan 182 to 192/PUN/2013 1999-2000 to 2009-10 Shahnaz Shoukat Bagwan Vs. DCIT 478 to 488/PUN/2013 1999-2000 to 2009-10 ITO Vs. Shahnaz Shoukat Bagwan 204 to 214/PUN/2013 1999-2000 to 2009-10 Kaish Shoukat Bagwan Vs. DCIT 456 to 466/PUN/2013 1999-2000 to 2009-10 ITO Vs. Kaish Shoukat Bagwan 226 227/PUN/2013 2004-05 2005-06 Soniya Nagari Vinkar Vinkar Vyavasaik Sah. Pat Sanstha Ltd. Vs. DCIT 445 446/PUN/2013 2004-05 2005-06 ITO Vs. Soniya Nagari Vinkar Vinkar Vyavasaik Sah. Pat Sanstha Ltd. The facts in the present set of appeals are identical and thus, the case of the assessee is squarely covered by the Co-ordinate Bench of the Tribunal in the aforementioned appeals. The ld. Counsel for the assessee placed on record a copy of the order of Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee that the sales of agricultural produce including the vegetables and fruits were normally made in cash and such a claim of the assessee could not be totally denied. But since the books of account have not been maintained properly the Tribunal held to be a fit case to estimate the income from the activities undertaken by the assessee on land holding of 74.32 acres. The Tribunal thus directed the Assessing Officer to estimate the income from fruits and vegetables upto 80% of the standard yield reported by the NHB in the case of fruits and ICAR in the case of vegetables. The Tribunal further held that where the assessee had already shown the yield below 80% of the standard yield reported by the above Government bodies, the Assessing Officer should not disturb the same and accept it. The relevant finding of the Tribunal at para 66 reads as under: 66. Considering the above submissions, there is no doubt on the contention of the Ld. A.R. that books of account maintained by the assessee in regular course of the business cannot be outrightly rejected without assigning proper reason for the same but in the present case before us, the availability of books of account regularly mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/12 extracts remained that on many occasions, 7/12 extracts contains the same notations from year to year as information is simply copied from year to year without actual verification. It was further contended that simply because crops are sold in cash, it cannot be said that it was a bogus sale. In normal practice, agricultural produce are mostly sold in cash at the spot. It is the reason that provisions of Section 40A(3) does not apply where the payment in cash is for purchase of agricultural produce from the farmers. Regarding vegetables, the assessee submitted that vegetables are normally grown as inter crops between two main crops and generally the cultivation of vegetables is not mentioned in 7/12 extracts. The Ld CIT(A) has observed that finding of the A.O with regard to sale of fruits is not correct since the copies of 7/12 extracts furnished by the assessee contained details of fruits grown on the land. The fruits are described as mangoes, chikku, banana, coconut, papaya, lemon etc., Regarding vegetable, the ld CIT(A) has observed that compared to the land holding the sale of vegetables at ₹ 15 lakhs over the period of 7 years cannot be said to be an unlikely sum es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available during the course of search or survey operation. No plausible reasons has been assigned by the assessee regarding the non-availability of books of accounts during the course of search or survey. Thus, reliability of such books of account even if furnished at later stage is always questionable. Under these circumstances, we do not fully agree with the conclusion of the Ld CIT(A) that the addition made by the A.O on account of cash sales of fruits and vegetables are liable to be deleted. At the same time, we agree with the contention of the Ld. A.R. which has also been accepted by the ld CIT(A) that sales of agricultural produce including fruits and vegetables are also normally made in cash, hence such claim of the assessee cannot be totally denied. Since the books of account regarding the agricultural activity especially specific about fruits and vegetables, questioned before us have not been maintained in the regular course of the affairs, thus correct income cannot be deduced therefrom. We are therefore of the view, that it is a fit case to estimate the income from these activities of the assessees as holding of land of 74.32 acres by the assessee has not been denied no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax (Appeals) had taken note of the facts of Shri Badshah Bagwan, wherein the statement of one person was recorded who stated that for carrying on the agricultural activities on part of the land, he was getting batai @50% of the receipts. The said statement was withdrawn on a later stage. However, the said fact was adopted by the Assessing Officer and the Commissioner of Income Tax (Appeals) in order to estimate the income in the hands of the assessee. We have already decided the issue of estimation in the hands of the assessee in the paras hereinabove with our directions. We further hold that no further deduction is to be made on account of contractual farming factor @50%. The basis for the said estimation is pursuant to the facts of Shri Badshah Bagwan and where the statement of the said person was never confronted to the assessee nor the information supplied to the assessee, the said information cannot be applied to decide the issue against the assessee. In any case, in the facts of the case, the assessee has claimed that it has grown vegetables on its agricultural land holding and he pleads that the said vegetables are not grown on sharing system basis. We find m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee justifies the source of acquisition of the assets found during the course of search. Once the income is estimated in the hands of the assessee the same is presumably held to have been utilized for the acquisition of the assets and there is no merit in any other addition in the hands of the assessee on account of unexplained investment in assets found during the course of search. We hold so. The appeal filed by the assessee is partly allowed and the appeal filed by the revenue is dismissed. Undisputedly, the issues, facts and circumstances in present set of appeals by the assessee and Department are similar to the appeals by/against other family members of Bagwan Group adjudicated by the Coordinate Bench, therefore, the appeals of the assessee are partly allowed in same terms and the appeals of the Department are dismissed for similar reasons. ITA Nos. 1624 1625/PUN/2016 - Shahnaj Shoukat Bagwan A.Ys. 2012-13 2013-14 (Assessee s Appeal) ITA No. 1626/PUN/2016 Kaish Shoukat Bagwan A.Y. 2013-14 (Assessee s Appeal) ITA No. 1627/PUN/2016 Shoukat Allabksha Bagwan A.Y. 2013-14 (Assessee s Appeal) ITA No. 1628/PUN/2016 Arish Shoukat Bagwan A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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