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2013 (7) TMI 390 - HC - Income TaxOnus of proving - agriculture income - source of deposit of huge cash in investment in shares - the assessee is claiming loss Held that - No details regarding the expenses on cultivation was filed except copy of the books of account. No evidence in support of purchase of seeds, fertilizers and pesticides were made available. What infrastructure the company had for doing this agricultural activities were also not furnished. In the light of the above observations as well as the observations of the Assessing Officer in his assessment order, the plea of the appellant regarding agricultural income cannot be accepted. Appellant failed to provide adequate material on the points raised by the AO as well as the CIT (Appeals) and even before the learned Appellate Tribunal - the appellant was not the owner of the land and the agreements were full of discrepancies pointed out by the AO - it was for the appellant to produce the owner to the satisfaction of the AO for examining or by acceptable evidence or otherwise as also in meeting with the various defects/discrepancies pointed - but the appellant did not produce the said land owners and to meet with the various points. Validity of transaction - Purchase and sale of shares is available but no details of opening and closing stock given. No details given as to shares of which company have been purchased or sold - Without such details, one cannot ascertain the quantum of profit or loss - appellant was not able to prove from reliable evidence as to deposit of amount in cash in the bank of the amount and investing/trading in shares despite of several opportunities provided to him appeal decided against the assesse.
Issues:
Assessment of agricultural income, Investment in shares, Failure to provide evidence and comply with notices, Addition of income by Assessing Officer, Appeals before Commissioner of Income-tax (Appeals) and Income-tax Appellate Tribunal, Burden of proof on appellant. Assessment of Agricultural Income: The appellant, a private limited company, declared its income for the assessment year 1994-95 as agricultural income, claiming exemption. However, upon investigation, the Assessing Officer found discrepancies in the appellant's claims regarding agricultural income and shares investment. Despite multiple opportunities to provide evidence, the appellant failed to comply with the notices and produce necessary documentation. The Assessing Officer made additions to the income based on lack of substantiation for the claimed agricultural income and shares dealings. The Commissioner of Income-tax (Appeals) called for a remand report, which highlighted inconsistencies in the lease agreements, sale proceeds, and agricultural produce receipts. The Commissioner of Income-tax (Appeals) confirmed the additions, concluding that the appellant's story of agricultural income was unsubstantiated. Investment in Shares: Regarding the investment in shares, the Income-tax Appellate Tribunal noted that the appellant failed to provide details of opening and closing stock, shares purchased or sold, and the quantum of profit or loss. As the appellant claimed a loss, the onus was on them to provide necessary details, which they failed to do. Consequently, the Income-tax Appellate Tribunal upheld the decision that the loss in shares could not be allowed due to insufficient evidence provided by the appellant. Failure to Provide Evidence and Comply with Notices: Throughout the assessment process, the appellant did not adequately respond to notices or provide essential documentation to support their claims of agricultural income and shares investment. Despite opportunities to present evidence at various stages, the appellant failed to meet the burden of proof required to substantiate their income sources. The lack of compliance with notices and failure to provide necessary details led to adverse findings against the appellant. Addition of Income by Assessing Officer: The Assessing Officer made additions to the appellant's income due to the lack of substantiation for agricultural income and shares dealings. The appellant's failure to provide evidence and comply with the assessment process resulted in the Assessing Officer passing an ex-parte order under section 144 of the Income-tax Act. The additions made by the Assessing Officer were later confirmed by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal, highlighting the appellant's inability to prove the sources of income satisfactorily. Appeals before Commissioner of Income-tax (Appeals) and Income-tax Appellate Tribunal: The appellant appealed the Assessing Officer's order before the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal. Despite producing additional material before the Commissioner of Income-tax (Appeals), the appellant's claims were not substantiated, leading to the confirmation of additions to their income. The Income-tax Appellate Tribunal upheld the decisions of the lower authorities, emphasizing the appellant's failure to provide credible evidence to support their claims. Burden of Proof on Appellant: The appellant, as the party making claims regarding agricultural income and shares investment, bore the burden of proving the authenticity of their sources of income. However, the appellant failed to discharge this burden by not providing adequate evidence, complying with notices, or addressing the discrepancies highlighted by the authorities. The courts found that the appellant's failure to meet the burden of proof resulted in the dismissal of their appeal, as they could not substantiate their claims convincingly.
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