2017 (6) TMI 1034 - AT - Income Tax

Addition as income from undisclosed sources instead of agricultural income - Held that - A Khasra Girdawari is the primary document evidencing cultivation of agricultural crops, or absence thereof over land. If such documentary evidence is produced, non-consideration thereof would result in an order passed as a result of non-reading of such material documentary evidence, rendering the order unsustainable in law. Therefore, in the interest of justice, we deem it appropriate to remit this matter to the file of the AO, to be decided afresh in accordance with law on taking into consideration these Khasra Girdawaries, provided the assessee files before him the original certified copies thereof in the vernacular along with the English translation copies filed before us. The assessee shall be afforded adequate opportunity of hearing to support his case and, no doubt, the assessee shall cooperate in the fresh proceedings before AO. All pleas available to the assessee under the law shall remain so available to him. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Addition of income from undisclosed sources instead of agricultural income.
2. Consideration of additional evidence during appellate proceedings.
3. Non-consideration of Khasra Girdawaries as evidence of agricultural cultivation.

Analysis:
1. The case involved an appeal against the addition of income from undisclosed sources instead of agricultural income. The assessee, a partner in a trading firm dealing with timber, declared an income of &8377; 1,14,250/- but showed agricultural income of &8377; 18,00,000/- in the return. The Assessing Officer, after detailed inquiries, estimated the agricultural income at &8377; 9,72,000/- and treated the balance as undisclosed income. The CIT(A) upheld the addition, stating that additional evidence produced by the assessee did not prove the declared agricultural income. The CIT(A) found discrepancies in expenses, authenticity of documents, and production of wheat, leading to the conclusion that the Assessing Officer's decision was justified. The appeal grounds were dismissed, and the addition was upheld.

2. The CIT(A) considered additional evidence produced during appellate proceedings, admitting it for the sake of justice. However, the CIT(A) found that the new evidence did not alter the Assessing Officer's findings. The CIT(A) noted that the evidence could have been presented earlier and did not disprove the authenticity of information collected by the Assessing Officer. The CIT(A) concluded that the Assessing Officer's decision was well-reasoned and required no interference. The assessee's failure to provide substantial evidence regarding agricultural income and expenses led to the dismissal of the appeal grounds.

3. The Tribunal observed that Khasra Girdawaries, essential documents showing agricultural cultivation, were not considered by the authorities in their orders. As these documents were crucial evidence, the Tribunal remitted the matter back to the Assessing Officer for a fresh decision, considering the Khasra Girdawaries. The assessee was directed to submit original certified copies of the documents for review. The Tribunal emphasized the importance of considering such material evidence for a lawful decision. The appeal was treated as allowed for statistical purposes, pending the fresh assessment based on the additional evidence.