9911796707
TMI Blog2007 (12) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... or any reasons have been stated that for non-filing of the affidavit of the AR of the assessee. Even otherwise, CIT(A) on examination of the assessment records has noted that the Assessing Officer has specifically mentioned on the said letter filed on 30-3-2000 that place on file, order already passed, no cognizance can be taken . Therefore, evidence on record clearly suggests that the letter was filed after the order of assessment had already been made which evidence has not been rebutted by any evidence much less independent evidence. In the circumstances the decision relied upon in the case of Mehta Parikh Co. v. CIT [ 1956 (5) TMI 4 - SUPREME COURT] are not applicable to the facts of the case of the assessee. We, therefore, hold that the assessment made under section 144 of the Act was justified. Addition on unexplained cash credit under section 68 - HELD THAT:- Applying judicial pronouncement in the case of Electra (Jaipur) (P.) Ltd. v. IAC [ 1987 (12) TMI 76 - ITAT DELHI-A] , which are fully applicable to the facts of the assessee, we hold that the CIT(A) was not justified in not admitting the confirmation from M/s. Vijay Udyog as additional evidence. The Ld. CIT(A) has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 144 of the Income-tax Act. Briefly stated facts are that the assessee an individual filed the return of income on 2-11-1998 declaring a total income of Rs. 67,880. The Assessing Officer in the course of assessment proceedings issued notices dated 18-9-1999 and 23-12-1999 which remained uncomplied with. The authorized representative of the assessee caused appearance in response to the notice dated 17-7-2000 under section 143(2) and sought an adjournment for 4-3-2000, on which date too, he did not cause appearance. Thereafter, a show-cause notice dated 15-3-2000 was issued along with a notice under section 142(1) of the Act and, in response to which part reply was furnished on 20-3-2000 and further time was sought for filing the balance details on 27-3-2000. On this date also, the assessee failed to cause appearance and, accordingly, the Assessing Officer framed assessment under section 144 on 30-3-2000 and computed the income of the assessee at Rs. 14,58,810. On appeal before the CIT(A), the assessee submitted that the reply to the show-cause notice was filed before the Assessing Officer on 30-3-2000 at around 6 PM but the reply was not considered by the Assessing Officer and, henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT concluded that there was no infirmity in the order passed by the Assessing Officer. Accordingly, he upheld the assessment made under section 144 of the Act. 4. Before us, the ld. Counsel for the assessee has contended that the conclusion of the CIT(A) is not based on correct appreciation of the facts on record. The impugned assessment had been made without granting an appropriate opportunity to the assessee. Therefore, the pre-conditions required for invoking the provisions contained in section 144 of the Act has not been complied with. He drew our attention to the submission made before the CIT(A) and affidavit filed by the assessee. On the basis thereof he has submitted that once the counsel for the assessee had acted in accordance with the direction of the Assessing Officer, there was no justification for the Assessing Officer to frame the assessment under section 144 of the Act. On the other hand, the ld. DR has relied upon the order of the Assessing Officer/CIT. 5. We have heard the rival submissions of the parties and perused the material to which our attention was drawn during the course of hearing. There is no dispute that the notice dated 18-9-1999, 23-12-1999 and 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer treated the amount of Rs. 58,869 as the deemed income from undisclosed sources of the assessee under section 68 of the Act. On appeal before the CIT(A) the assessee filed the confirmation of M/s. Vijay Udyog. The Ld. CIT(A) after having obtained the remand report of the Assessing Officer has held that he has gone through the copy of the accounts confirmed by M/s. Vijay Udyog. As per this statement the closing balance as on 31-3-1997 is Rs. 70,862 whereas as per the books of account of the assessee is Rs. 58,889. The difference of Rs. 11,972 could not be satisfactorily explained. Moreover, this is additional evidence filed before him. Hence he has rejected the evidence filed and confirmed the addition made by the Assessing Officer. 7. Before us, the Ld. counsel for the assessee has submitted that the CIT(A) was not justified in rejecting the confirmation filed as an additional evidence. He has submitted that the amount represented credits from purchase made from M/s. Vijay Udyog. He drew our attention to the fact that the confirmation so filed by assessee along with its submission had also been forwarded to the Assessing Officer for his report and since the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew that the assessee should not be disqualified from producing this evidence merely, on the ground that the evidence was not placed before the authorities below. The sole purpose of judiciary as well as of the revenue is to get at the truth. If the truth is that the payment of commission was genuine and was dictated by the business needs, such a payment should not be disallowed merely on the ground that the assessee was unable to lead proper evidence or on the ground that the evidence led was of such a nature as to create a very high degree of suspicion. There should be no objection to consider any evidence produced to test its authenticity relevance and then to act on it. If the evidence is genuine, reliable, proves the assessee's case, then the assessee should not be denied the opportunity. But on the other hand, if the evidence led turns out to be spurious, fabricated or of irrelevant nature, such consequences as are provided for under the law will ensue. It is, therefore, incorrect to shut out an assessee in the process of administration of justice from leading evidence to prove its case. The earlier inability to lead evidence should not be held against the assessee unless it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1967] 65 ITR 364 . 11. On appeal before the CIT(A) the assessee filed the detailed written submissions and evidence to support the claim that sum of Rs. 7,05,954 declared as income represents income from agriculture activity. It was submitted that the Assessing Officer has incorrectly held that there is a farm house on the agriculture land owned by the assessee. The assessee further contended that books of account along with vouchers evidencing the agriculture income had been produced in the course of assessment proceedings, therefore, he was not justified in holding that details of agriculture activity had not been furnished in the course of assessment proceedings. The assessee further placed reliance on the reply dated 29-3-2000 filed with the Assessing Officer on 30-3-2000, which was not considered by the Assessing Officer while making the assessment. It was submitted that the decision in case of H.H. Maharaja Vibhuti Narain Singh (supra) is inapplicable as the same is not under the Income-tax Act but under Agriculture Tax Act of a State. Reference was also made to the decision of the Apex Court in the case of CIT v. Raja Benay Kumar Sahas Roy [1957] 32 ITR 466 . Also evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1994-95 wherein an addition of Rs. 4,09,954 made by Assessing Officer and confirmed by CIT(A) was deleted. The relevant observations of the ITAT 'G' Bench of New Delhi are as under:-- ".....There is reference to relevant Khasra Girdawari of accounting year 1993-94 where cultivation of flowers and nursery was shown on land in question. Copies of Khasra Girdawari are on record in which flowers' cultivation is duly reflected. Therefore, anything stated to be contrary in the impugned order by the learned CIT(A) has to be ignored. The entries in Khasra Girdawari are further supported by the report of the Inspector who visited place twice and confirmed that nursery was being run at agricultural land owned by the assessee. He noted several plants and saplings in polythene bags for sale of customers. There is further statement on oath of Shri Maheshwari who was stated to an expert in this line of a business, and admittedly helped the assessee in carrying on nursery business. At page 59 of the Paper Book, there is a copy of statement of the assessee recorded under section 131 on 29-1-1997. It is seen from the statement that she was subjected to a very lengthy cross-examinat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the factor along with several factors to hold that income returned by the assessee as agricultural income be accepted for rate purposes. This way the addition of Rs. 4,09,754 made as income from other sources is directed to be deleted." 14. It is evident from the above that the assessee has been cultivating the land since assessment year 1993-94 and same has been accepted by the revenue department. In fact in assessment year 1994-95 too the Assessing Officer partially accepted the claim of the assessee but, however, on appeal the Tribunal has accepted the entire claim of the assessee. In that year the Assessing Officer made the extensive investigation with regard to the nature of activity carried on by the assessee and it was only on the consideration of such material, it was held that assessee was engaged in agricultural activities. The report of the inspector obtained in the course of assessment proceedings for assessment year 1994-95 has also been placed at page 55 of the paper book, which clearly shows that the operation of land are being undertaken with help of human skill and labour. It also establishes that there is no rest house or dwelling houses constructed there ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be an expert in this line of business in assessment year 1994-95 and also managing the operation of the assessee even in the instant year. The income and expenditure account of agriculture activities for the instant year have been placed on record. As regards the observation of the Assessing Officer that the land lies in the jurisdiction of MCD or within eight kilometers of Municipal limit of Delhi, therefore, the income derived from the agriculture activity cannot be income within the meaning of section 2(1A) of the Act is not based on correct appreciation of facts of the case. Section 2(1A) of the Act defines the agriculture income which reads as under :-- "2(1A).--'agricultural income' means-- (a )any rent or revenue derived from land which is situated in India and is used for agricultural purposes; (b )any income derived from such land by-- (i )agriculture; or (ii )the performance be a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market; or (iii)the sale by a cultivator or receiver of rent-in-kind of the produce raised or received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are the land should be situated in India and should be used for agriculture purpose. As regards the observation of the Assessing Officer that nurseries are primarily grown in earthen pots and not on the land and therefore nursery income is not in accordance with the decision in the case of H.H. Maharaja Vibhuti Narain Singh (supra), it may be mentioned that the decision is not under the Income-tax Act but under Agriculture Tax Act of a State, therefore, the said decision is not applicable to the fact and circumstances of the present case. Further, in the case of CIT v. K.E. Sundara Mudliar [1950] 18 ITR 259, the Hon'ble Madras High Court has held that irrespective of the nature of the produce or product of the land, whatever is grown on land aided by human labour and effort, whatever does not grow wild or spontaneously on the soil without human labour or product would be an agriculture product and the process of producing it would be 'agriculture' within the meaning of that expression in section 2 of the Act. Further, in the case of CIT v. Saundarya Nursery [2000] 241 ITR 530 (Mad.) it is held that plants sold by the assessee in pots were the result of primary as well as subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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