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TMI Blog2011 (11) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... er 1, 2010 for the assessment year 1997-98. I. T. A. No. 414/Mds/2011 is an appeal filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals)-II, Chennai in I. T. A. No. 20/08-09 dated December 1, 2010 for the assessment year 2001-02. I. T. A. No. 415/Mds/2011 is an appeal filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals)-II, Chennai in I. T. A. No. 21/08-09 dated December 1, 2010 for the assessment year 2002-03. I. T. A. No. 416/Mds/2011 is an appeal filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals)-II, Chennai in I. T. A. No. 230/06-07 dated December 1, 2010 for the assessment year 2003-04. I. T. A. No. 417/Mds/ 2011 is an appeal filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals)-II, Chennai in I. T. A. No. 185/05 06 dated December 1, 2010 for the assessment year 2003-04. I. T. A. No.418/Mds/2011 is an appeal filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals)-II, Chennai in I. T. A. No.22/08-09 dated December 1, 2010 for the assessment year 2003-04. I.T.A. No. 419/Mds/2011 is an appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer had estimated and disallowed the balance of the agricultural income disclosed by the assessee and treated the same as income from other sources only for the reason that the assessee could not produce any material evidence to prove the agricultural income. It was the submission that the fact that the assessee owned 13.11 acres of agricultural land was not disputed and in the course of search no evidence had been found to show that the assessee had any other source of income which he had attempted to disclose under the head Agricultural income . It was the submission that in the appeal the learned Commissioner of Income-tax (Appeals) had confirmed the order of the Assessing Officer again on the ground that the assessee could not produce any evidence to substantiate that the assessee had only agricultural income. It was the submission that the assessee owned agricultural land and also the fact that agricultural operations had been carried out, were not disputed. It was the further submission that the addition made by the Assessing Officer-and as confirmed by the learned Commissioner of Income-tax (Appeals)-was liable to be deleted. In reply, the learned seni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission that the assessee had received back certain amounts which had been given by him during the earlier years to debtors. It was the submission that the assessee had produced confirmation letters before the Assessing Officer and independent enquiries had also been made by the Assessing Officer to which the debtors had replied also directly to the Assessing Officer. It was the submission that only because the persons who were not produced for examination the disallowance had been made. It was the further submission that in respect of one of the cases the Assessing Officer has also mentioned that there was difference in the signature when compared with the confirmation letter. It was the submission that the debtors had repaid the amounts to the assessee and the debtors were residents of Thanjavur and they were unwilling to appear before the Assessing Officer at Chennai. It was the submission that the debts varied between ₹ 810, ₹ 4,240 and the maximum amount was an amount of ₹ 19,570. It was the submission that there is no allegation by the Assessing Officer that the claim of debtors was not genuine or with regard to the amounts as mentioned in the confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was a partner. It was the submission that this disallowance had been done in section 154 proceedings. The learned authorised representative drew our attention to the order of the Assessing Officer passed under section 154 wherein the Assessing Officer has categorically mentioned that since the assessee has not proved that this expenditure is incurred to earn the income declared, this expenditure was allowed by mistake . It was the submission that as the Assessing Officer himself has mentioned that the proof of the expenditure needs to be verified, the issue no more remains a mistake apparent from the record but is a highly debatable issue. It was the submission that the order passed under section 154 for all the 3 years was liable to be quashed. In passing it was also mentioned that in the original assessment order passed the agricultural income disclosed by the assessee for all these years had been accepted by the Revenue. In reply, the learned standing counsel on behalf of the Revenue submitted that the disallowance of depreciation was not a debatable issue. It was the submission that the vehicle having not been used in the business of the assessee, depreciation was lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have taxable income that cannot give room to the assessee not to respond to a statutory notice issued by the Assessing Officer. The reasons submitted by the learned authorised representative are not found to be satisfactory nor has the learned authorised representative been able to convince us in regard to the bona fide belief. In the circumstances, we are of the view that the levy of penalty under section 271(1)(b) of the Act as confirmed by the learned Commissioner of Income tax (Appeals) is on the right footing and does not call for any interference. In the circumstances, the appeal of the assessee in I. T. A. No. 418/Mds/ 2011 stands dismissed. In regard to I. T. A. Nos. 419 and 420/Mds/2011 it was submitted by the learned authorised representative that the issue was against the action of the learned Commissioner of Income-tax (Appeals) in confirming the disallowance of depreciation and interest paid on the car used by the assessee for business purposes of the firm in which the assessee was a partner. It was the submission that as the assessee had used the vehicle for business purpose, depreciation was liable to be allowed. In reply, the learned senior standing coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation letters or any other documentary evidence to show that the amount was received from the assessee's sister, the finding of the learned Commissioner of Income-tax (Appeals) on this issue stands confirmed. It was the further submission that in I. T. A. No. 420/Mds/2011 an issue of cash credit disallowed to an extent of ₹ 50,000 had been raised. It was the submission that this cash credit of ₹ 50,000 deposited in the bank account was out of the past savings of the assessee as also out of his agricultural income. It was the submission that the addition may be deleted. In reply, the learned senior standing counsel on behalf of the Revenue vehemently supported the orders of the learned Commissioner of Incometax (Appeals) and the Assessing Officer. We have considered the rival submissions. As it is noticed that the assessee does have agricultural income and also considering the fact that the issue is very much old and it would be practically difficult for the assessee to produce any substantial evidence in this regard, taking a reasonable view the Assessing Officer is directed to reduce the addition of this amount to ₹ 25,000. In the circumstances, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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