2021 (2) TMI 35 - HC - Income Tax

Receipt or accrual of any real income - Agricultural income - income returned as 'income from other sources' which are unexplained - HELD THAT - As submitted that from perusal of the agreement it is clear that the land is earmark for growing / developing of land for different crops and no trees of any kind were found on the land prior to execution of the lease agreement. It has further been found that the buildings or animal sheds were not constructed on the lands which was leased out to the assessee as the possession of the land in question was never handed over to the assessee. Similarly, the tribunal has recorded the finding that the assessee was neither in possession of the agricultural land nor he performed any agricultural activity. Therefore, the question of earning any agricultural income does not arise. The aforesaid findings are pure findings of facts which have been recorded on meticulous appreciation of evidence on record. The aforesaid findings have not been shown to be perverse. It is well settled that this court in exercise of powers under Section 260A of the Act cannot interfere with the finding of fact until and unless the same is demonstrated to be perverse. See SYEDA RAHIMUNNISA VS. MALAN BI BY L.RS. AND ORS. 2016 (10) TMI 1233 - SUPREME COURT and PRINCIPAL COMMISSIONER OF INCOME TAX, BANGALORE ORS. VS. SOFTBRANDS INDIA P. LTD 2018 (6) TMI 1327 - KARNATAKA HIGH COURT In view of preceding analysis, the substantial questions of law are answered accordingly.

Issues:
1. Existence of Hindu Undivided Family (HUF) for assessment.
2. Treatment of agricultural income as unexplained cash credit.
3. Applicability of Section 68 without maintaining books of accounts.
4. Delay in filing the appeal condonation.
5. Assessment of income from agricultural produce.

Analysis:

Existence of Hindu Undivided Family (HUF) for assessment:
The appellant disputed the existence of HUF, claiming that the Assessing Officer had no jurisdiction to assess in the status of HUF. The appellant also argued that the Assessing Officer erred in treating agricultural income as unexplained cash credit, emphasizing that the statement of affairs proved false. However, the court found that the findings were based on evidence, and no substantial question of law arose.

Treatment of agricultural income as unexplained cash credit:
The Assessing Officer added a sum to the appellant's total income as income from other sources, considering the agricultural income unexplained. The Commissioner of Income Tax (Appeals) and the tribunal concurred, stating that the appellant did not own agricultural land or engage in agricultural activities. The court upheld these findings as factual and not perverse.

Applicability of Section 68 without maintaining books of accounts:
The appellant argued against the applicability of Section 68 due to not maintaining books of accounts. However, the court found that the appellant did not possess or cultivate agricultural land, leading to the dismissal of this argument.

Delay in filing the appeal condonation:
The appellant raised concerns about the delay in filing the appeal, urging for condonation. The court, considering the evidence and precedents, found no merit in this argument.

Assessment of income from agricultural produce:
The Assessing Officer disbelieved the sale of agricultural produce by the appellant, leading to the addition of a significant sum to the total income. The Commissioner of Income Tax (Appeals) and the tribunal upheld this decision based on evidence, concluding that the appellant did not engage in agricultural activities.

In conclusion, the court dismissed the appeal, emphasizing that findings were factual and not perverse, thereby rejecting the arguments presented by the appellant on various grounds.

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