2019 (2) TMI 349 - AT - Income Tax

Disallowance of agricultural income - assessee could not produce any cogent evidence for the agricultural income claimed to have returned by the assessee - Held that - As before the Tribunal, the assessee has not produce any evidence for the above claim of agricultural income. Accordingly, the ground raised by the assessee for the assessment year 2005-06 stands dismissed. Unexplained investment in purchase of agricultural land - Held that - Since the assessee has not accounted for the above purchase of properties in the cash flow statement and could not explain the discrepancy, we find no reason to interfere with the orders of the authorities below and accordingly dismiss the ground raised by the assessee. Agreement entered for purchase of property - advances receipt - Held that - During the course of recording statement from the assessee at Chennai, a fax copy of the document was obtained. The document sowed that the agreement was signed by both Shri Maya Venkatesan (assessee) and his brother Shri M. Kannan. When the document was shown to the assessee, again he reiterated that he did not enter into such an agreement along with his brother. An advance of ₹.40 lakhs had been paid by both and the payment stood unexplained, the assessee s share of half of the advance payment of ₹.20 lakhs was treated as unaccounted income and added. Since the assessee has not rebutted the findings of the Assessing Officer during the course of appellate proceedings, the ld. CIT(A) confirmed the addition. Even before the Tribunal, the assessee has not filed any material rebutting the findings of the Assessing Officer. - decided against assessee.

Summary

Issues:
- Disallowance of agricultural income returned by the assessee
- Addition of undisclosed income from property purchases
- Addition of undisclosed income related to a property agreement

Analysis:

Issue 1: Disallowance of Agricultural Income
The appeals were against orders confirming disallowance of agricultural income returned by the assessee for different assessment years. The assessee claimed to have taken agricultural land on lease, conducted agricultural activities, and derived income from it. The Assessing Officer allowed only a portion of the claimed agricultural income for each year, treating the rest as non-agricultural income. The CIT(A) allowed 50% of the disallowance for some years but confirmed the disallowance for the assessment year 2005-06. The Tribunal noted that the Assessing Officer had personally investigated the claims, considering factors like land fitness, cultivation nature, and income. Ultimately, the Tribunal upheld the CIT(A) decision for the assessment years 2002-03 and 2003-04, dismissing the appeals.

Issue 2: Addition of Undisclosed Income from Property Purchases
The Assessing Officer found that the assessee had purchased agricultural lands but did not account for them in the cash flow statement. The investments were treated as undisclosed income and taxed. The CIT(A) confirmed this decision, as the assessee failed to explain the discrepancy. The Tribunal upheld the lower authorities' decision, as the assessee provided no evidence to challenge the findings.

Issue 3: Addition of Undisclosed Income from Property Agreement
The assessee had entered into a sale agreement for a property but denied the transaction during investigation. The advance payment made was unexplained, leading to half of it being treated as unaccounted income. The CIT(A) upheld this addition, and the Tribunal found no reason to interfere, as the assessee failed to rebut the findings. Consequently, the appeals on this issue were dismissed.

In conclusion, all the appeals filed by the assessee were dismissed by the Tribunal, upholding the decisions of the lower authorities regarding the disallowance of agricultural income and additions of undisclosed income from property transactions.