TMI Blog2013 (11) TMI 1742X X X X Extracts X X X X X X X X Extracts X X X X ..... to the tune of ₹ 6,75,000/-. Since the assessee did not disclose any evidence to prove the receipt of the income as agricultural income and the nature of the operations done therein to earn the income, the said income was assessed under the head of 'income from other sources'. Aggrieved by this, the assessee went on appeal before the Commissioner of Income Tax (Appeals) VIII, Chennai. 3. Before the Commissioner of Income Tax (Appeals), it was contended by the assessee that the assessee had been in receipt of agricultural income right from 1997-98 and the inclusion of the income under the head 'income from other sources' was unsustainable. In the light of the submissions made, the Commissioner of Income Tax (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was only ₹ 2,13,140/-and it was claimed to be out of salary income of ₹ 1,20,000/- and rental income of ₹ 16,800/-, which was offered in the return of income; thus, the balance amount credited in the capital account was less than ₹ 1,00,000/-, and the Assessing Officer himself accepted the agricultural income to the extent of ₹ 1,50,000/-in his remand report; the assessee had admitted the drawings of ₹ 1,18,970/-separately in the capital account; hence, the amount of ₹ 6,75,000/-was not credited in the capital account of the assessee during the year. The Commissioner of Income Tax (Appeals) further found that the Assessing Officer had not examined the assets held by the assessee outside the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the claim of the assessee could not be considered in toto. At the same time, the Income Tax Appellate Tribunal pointed out that the assessee had been showing agricultural income in his return consistently for the earlier assessment years and the Department had also accepted the claim of the assessee for the earlier assessment years. In the circumstances, the Income Tax Appellate Tribunal thought it fit not to treat the entire amount of ₹ 6,75,000/- as agricultural income; instead the Income Tax Appellate Tribunal held that a sum of ₹ 4,00,000/- be treated as 'agricultural income' and balance of ₹ 2,75,000/- be treated as 'income from other sources'. Aggrieved by this, the present appeal has been filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of agricultural income. 8. As far as the appeal before the First Appellate Authority is concerned, in the remand report, the Assessing Officer pointed out that in the absence of sufficient materials, the agricultural income shown at ₹ 6,75,000/- could not be accepted. The Commissioner of Income Tax (Appeals) held that the Assessing Officer had not established that there was any unexplained investment or expenditure by the assessee. We do not find any ground to uphold this line of reasoning on the admitted fact that the assessee had not produced any materials before the Assessing Officer nor the Commissioner of Income Tax (Appeals), the Revenue rightly went on appeal before the Tribunal questioning the order of the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assessment orders were passed even before the expiry of the time allowed to file objections; hence there was a denial of fair opportunity to the petitioner therein. The Kerala High Court pointed out that the Agricultural Income Tax Officer had no jurisdiction to levy tax on that portion of income from the sale of tea which, as per Rule 8 of the Income Tax Rules, was to be treated as income for the purpose of levy of tax under the Income Tax Act. Thus, on the valid claim made by the assessee and finding that there was no proper enquiry, the Kerala High Court thought it fit to set aside the order. 10. As far as the decision of the Andhra Pradesh High Court in the case of R. Narayanarao (supra), is concerned, we find from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of principles of natural justice, as far as the Andhra Pradesh High Court decision is concerned, the same rested on the gross profit estimated by the Officer, when the purchase and sale were guided by the price fixed by the Government and comparable date therein was also available. 12. As far as the present case is concerned, if the assessee had any agricultural operation and earned income, certainly, it was always open to the assessee to bring any such material to substantiate the facts. The facts, therefore, ought to have been brought before the Assessing Officer or before the First Appellate Authority to substantiate the case of the assessee, that he had been in receipt of the income earned out of agricultural operation. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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