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TMI Blog2022 (1) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts narrated in IT(SS)A No.20/SRT/2017, in the case of Pankajbhai Gijubjhai Patel, for assessment year 2008-09, have been taken into consideration for deciding the above appeals en masse. 3. Grounds of appeal raised by the assessee, in IT(SS)A No.20/SRT/2017, for AY 2008-09, are as follows: "1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in disallowing the claim of agriculture income to the tune of Rs. 42,240/- by treating the same as income from other sources and further erred in enhancing the disallowance of claim of agriculture income by Rs. 3,01,848/- by treating the same as income from other sources. 2. It is therefore prayed that disallowance made by assessing officer and confirmed by learned Commissioner of income-tax (Appeals) may please be deleted." 4. The relevant material facts, as culled out from the material on record, are as follows. A search action under section 132 of the Act was carried out at the premises of the Varun Group of Surat on 18.06.2013 and joint residence of the assessee was also covered in the said act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d belonging to the assessee and his family members. 6. The assessee was further asked by the assessing officer, vide assessing officer letter dated 18.12.2015, to furnish complete details of expenses along with nature of the same claimed against gross agriculture income with supporting documents bills, vouchers etc. details of production of each crop per hector. The modus operandi of the sales of the agricultural produce, whether the produce is sold in the open market or to a government owned society. Whether the agriculture produce is directly sold by him or through someone and if so the name and address of this person. The details of labour cost incurred by him and his family member. 7. In response to notice issued by the Assessing Officer, the assessee submitted written submission before him, which is, reproduced below: a. The agricultural land is held by the family members of the assessee jointly and the same is used by the members of the family for the purpose of cultivation. b. The assessee family comprised of various family members of different families of brothers and cousins' brothers and since all of them are engaged in agricultural activities, the day-to-day detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. seeds pesticides, other agricultural equipment have been produced by the assessee therefore judicious and fair view was taken by assessing officer, disallowing 40% of the other agricultural income. During the year under consideration the other agriculture income is shown at Rs. 1,05,600/-. Accordingly 40% of such income i.e. Rs. 42,240/- was treated as income from other sources and added to the total income of the assessee. 9. Aggrieved, the issue was taken up before the first appellate authority for relief. Before the CIT (A), it was contended by the assessee that there is sufficient land holding to prove the agricultural income. After due consideration of the assessee's submission, the ld CIT(A) had rejected the claim of the assessee and confirmed the addition of Rs. 42,240/- made by the assessing officer. The ld CIT(A) also enhanced the addition by Rs. 3,01,848/-. 10. Aggrieved, the assessee has come up with the present appeal. During the course of hearing, Learned Counsel pleads before the Bench that net holding of the agriculture land of this assessee and his family members is at 3,84,250.77 square meters. Further, it was also submitted by ld Counsel that nature of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paddy, vegetables etc. Learned Counsel submits before us a chart showing details of agricultural income, assessee-wise, vide paper book page-19. In this chart, the assessee has shown year-wise and assessee-wise, cash received and cheques received from Chalthan Sugar Mandli, against the sale of agricultural products such as sugar cane, jowar, tuwer, fruits, paddy, vegetables etc. This chart has been examined by the ld CIT(appeals) and ld CIT(A) did not bring any cogent evidence on record to demonstrate that figures shown in the chart are wrong except to say that assessee's submission is not acceptable, as the assessee has shown abnormal agricultural income in some years. To substantiate the claim of agricultural income, the assessee submitted the following evidences and documents, which are reproduced below: (a) For Assessment Year 2008-09 : The assessee submitted details of agricultural land of family members, vide paper book page No.20. The assessee submitted the statement taken by search team u/s 132(4) of the Act, which is placed at page 21- 31 of the paper book. The assessee has submitted for A.Y. 2008-09, the balancesheet which is placed at page 33 of the paper book, the agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. We note that a search action u/s 132 of the Act was carried out at the joint residence of Rajesh G Patel and Pankajbhai G Patel on 18.06.2013. In the assessment order, it was observed that the search was carried out at the premises of Varun Group of Surat. In fact, assessee has no relation with the said group and in the course of the search proceedings; no connection was established with the said Varun Group. During the post search proceedings, the statement of assessee was recorded on 03.07.2013. The assessee did not file the return of income for assessment years (AYs) 2008-09 and 2010-11 before the date of search. However, for assessment years 2011-12 and 2012-13, the assessee filed the return of income before the date of search. For assessment years, 2013-14 and 2014-15, assessee filed the return of income after the date of search as the time limit for filing the return of income had not expired. In response to notice issued u/s 153A on 18.06.2013, assessee filed the return of all the years. In the original return of income and in the revised return filed u/s 153A, assessee has shown the agricultural income. In the revised return filed u/s 153A for assessment years 2011-12 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at basis for other years. For this purpose, he clubbed all the agricultural income of the assessee and his family members shown by them for A.Y. 2011-12 in the return of income filed before the date of search in the table given at Page 23 of his appellate order and on that basis, he estimated the income of other years. Thereafter, he proceeded to distribute the difference to be added in the ratio of cash agricultural income shown by the assessee and his family members. The Ld.CIT(A) has given his finding at Para No 7.1 and 7.2 of the appellate order. 16. We note that Ld.CIT(A) has observed in Para 7(i) of appellate order that no breakup of details of land cultivated by each of the members of the assessee and his family members have been kept and made available in either assessment proceedings or in the appellate proceedings. In the connection, ld Counsel submits that all the family members are involved in agricultural operation and they have not got any other source of income then agriculture income and accordingly the issue raised by the Ld,CIT(A) is of no consequence. The learned CIT(A) observed in Para 7(iii) of his order that assessee did not produce any evidence of growing ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance was made from income from agricultural income which were received by assessee through account payee cheque/banking channel in certain years. In any way, assessee was having only agricultural income as source of income and no contrary evidence was found in the course of search. Even the assessing officer has observed in the assessment order at first Para of Page No 3 that "During the course of search proceedings at residence of the assessee, large number of bills/sugarcane sold to Chalthan Sugar Co-operative were found and seized the statement of key members of family i.e. Shri Rajubhai Gijubhai Pate Shri Pankajbhai Gijubhai Patel and Shri Kamleshbhai Dhansukhlal Patel have mostly revolved around agricultural activity. This statement clearly shows that assessee- group is engaged in agricultural activities only. 17. We note that assessee has shown less agricultural income from assessment years 2013-14 and 2014-15, because of urbanization made in certain areas in which the assessee and his family members were holding agriculture land. The ld Counsel submits that there is bound to be variation in the agricultural income due to different factors like monsoon, climate cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had no other source of income at the relevant time or in the past, it could safely concluded that the assessee had no other income other than income from business" 19. We note that in the case of Rajesh G. Patel, no addition can be made for assessment year 2008-09, as it is unabated assessment for which no incriminating material was found in regard to the addition made by the assessing officer. Similarly in case of Pankajbhai, no addition can be made for assessment years 2008-09 and 2010-11, as the time limit for completion of assessment has already expired when the search was conducted for assessment year 2008-09 to assessment year 2010-11. Hence, unless there is any incriminating material found during the course of search relatable to such concluded year, the statute does not confer any power on the ld Assessing Officer to disturb the findings given thereon and income determined thereon, as finality had already been reached thereon, and such proceeding was not pending on the date of search to get itself abated. For this reliance can be placed on the decision of Hon'ble Delhi High Court in the case of CIT vs Kabul Chawla reported in (2016) 380 ITR 573 (Del) wherein it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." 38. The present appeals concern AYs 2002-03, 2005-06 and 2006-07, on the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. 20. We note that assessee family have grown different crops like sugarcane, paddy, juvar, tuver, vegetables etc. and the same being taken on seasonal basis and since all the agricultural activities on different land were carried out together from time to time for a period of whole year. The ld Counsel states that it is not practically possible to maintain details of various different nature of expenses. The assessee has sold the sugarcane to Chaltha Vibhag Khand Sahakari Mandali (Sugar factory). The other products were sold in the open market. The agricultural products are sold by the assessee directly. In respect of crops, the casual labou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and their family members (except Shri Kiritbhai Patel) have no business activity or any other source of income except agricultural income. It is evident from revenue records in Form no 7 & 12 and copy of accounts from sugar factory that the assessee has grown various crops which are reflected in the revenue records also. Moreover there is no contrary evidence to suggest that the assessee has any other source of income out of which he could have earned the income which is shown by him. In the course of the search no evidence has been found indicating that the assessee group is engaged in any other activities other than agricultural activity. The assessee Shri Rajesh G. Patel, in the statement recorded u/s 131 on 03.07.2013 stated that he has bought 150 to 200 vinghas land. He was earning about Rs. 1,25,00,000/- net agricultural income. In reply to question no 8, he stated that he is selling the sugar cane in Chalthan and Maroli sugar factory and also to private parties. He also stated that he was earning about 15,00,000/- to Rs. 20,00,000/- for sale of other agricultural produce per year. In reply to question no 9, he stated that about 20 workers are employed for agricultural operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been made purely on selective misinterpretation, without dealing with the explanations/ evidences of the assessee. Besides, no incriminating material were found by the search team, hence, no addition can be made for assessment years 2008-09 to assessment years 2010-11, without incriminating material, as the time limit for completion of assessment has already expired when the search was conducted for assessment years 2008-09 to assessment year 2010-11. Hence, we are not inclined to accept the contention of the Ld CIT(A) in sustaining the addition and enhancing the addition based on surmises and conjectures, and hence the addition so sustained and enhanced are deleted. Hence this ground of the assessee is allowed. 23. We have adjudicated the assessee's appeal taking lead case in IT(SS)A No.20/SRT/2017, in the case of Pankajbhai Gijubjhai Patel, for assessment year 2008-09. Other appeals of the assessees have identical and similar issues therefore our observations made in IT(SS)A No.20/SRT/2017, in the case of Pankajbhai Gijubjhai Patel, for assessment year 2008-09, shall apply mutatis mutandis to the aforesaid other appeals of assessees. 24. In the result, all appeals filed by as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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