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TMI Blog2014 (12) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... t of income from other sources - revenue authorities have not disputed the land holding i.e. 40.03 hectors of assessee and agricultural activity - a similar addition made in AY 2004-05 was deleted by CIT(A) and revenue have not preferred appeal against the same - in AY 2006-07, agricultural income on the same holding has been accepted by the AO – thus, the CIT(A) rightly deleted the addition – the order of the CIT(A) is upheld – Decided against revenue. - ITA No.635/PN/2013 - - - Dated:- 30-4-2014 - SHRI SHAILENDRA KUMAR YADAV AND SHRI R.K. PANDA, JJ. For the Appellant : Shri P.L.Pathade For the Respondent : Bharat Shah ORDER Per: Shailendra Kumar Yadav: This appeal has been filed by the revenue against the order of Commissioner of Income Tax (Appeal), [in short CIT(A)] Kolhapur, dated 18.12.2012 for A.Y. 2005-06 on the following grounds. 1. On the facts and circumstances of the case and in law, the CIT(A) erred in deleting the addition made on account of Agricultural Income of ₹ 3,02,73,124/- 2. The appellant craves leave to add, alter, amend and modify the above ground raised, any other grounds at the time of proceedings before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion here that the revenue has not preferred an appeal against the order of CIT(A) on the issue of agricultural income in A.Y. 2004-05. Moreover, in A.Y. 2006-07, the agricultural income was accepted by the Assessing Officer and he only disputed the expenditure for earning the same, meaning thereby agricultural income has not been disputed in A.Y. 2006-07 as well. So, this takes care of issue of land holding and land under cultivation as well as agricultural produce / yield thereon. 4.1 Regarding verification of sale bills, we find that revenue authorities have not disputed the land holding of assessee i.e. 40.03 hectors for which the assessee has filed details and 7/12 extracts before authorities below as well as before us. Regarding agricultural produce / yield thereon and the assessee mainly growing cash crops on the said agricultural holding. Coming to the point of verification of sale bills, during the assessment proceedings on examination of various bills and vouchers produced on behalf of assessee, the Assessing Officer noticed the following issues: a) Bills issued by Kapleshwar Flower Stall, Cherish Flowers, Upendranagar, Dadar Mumbai and Sonal Flowers, Senapati Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was further stated that due to paucity of time, confirmation on the letter head of the parties could not be given and that if required confirmations could be produced and certain parties could also be produced for examination. It was further contended on behalf of assessee that sale bills were sent by the agents who sell their agricultural products. They had their own method of maintaining these bills and assessee did not have any control over them. It was also contented as per sale bills and patties received, necessary entries were made in assessee's books of account. The assessee had also relied on the appellate order of CIT(A)'s predecessor in assessee's own case for A.Y. 2004-05 on this account. Moreover, the remand report was called for in this regard from concerned Assessing Officer. In remand report, the Assessing Officer had not properly cooperated in the proceedings. The Assessing Officer vide its remand report dated 08.04.2010 stated that the discrepancy in the sale bill is not only observation based on which an addition of excess income was made but various other observations were also made in this regard. The Assessing Officer has stated that it was establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt for the goods that he has accepted. Such receipts from a particular trader are periodically bunched together and a journal voucher (JV) is passed in the books for the total amount due from the particular trader. The JVs are serially numbered. Thus, it is wrong to say that the bills are serially numbered and to the same party. 4.4 The assessing officer has given the instance of Kalpeshwar flower stall, Cherish flowers and Sonal Flowers in support of his finding that the bills issued are serially numbered. These sale patties are nothing but a receipt for goods received by the distributor who further sells them in the market. These are not instances of sales by the entities mentioned in the assessment order to the assessee. It is not the case of the assessing officer that the assessee had not made a sale through these persons. Whether or not these persons had made purchases from other parties could not be stated only by examination of the sale patties sent by the distributors to the assessee. The Assessing Officer has chosen to forego this opportunity provided to him in appellate proceedings. Regarding genuineness of transaction, the CIT(A) observed that the address of Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the letters issued under section 133(6) would have come back unserved. The Assessing Officer disregarded the direction of office of CIT(A) in availing the opportunity to examine the persons through whom the flowers were sold. Therefore, the Assessing Officer did not avail of the opportunity to confirm his doubts whether the parties existed or not. Since the opportunity to rebut the assessee's claim that the sales were genuine and that the method of accounting was correct and that the parties were existing has been waived by Assessing Officer when he chose to disregard the direction to examine the witnesses. 4.5 In this background, the CIT(A) rightly held that allegation that the sale patties are doubtful, does not have any merit. Considering the land holding and agricultural activity and sale thereof as discussed above, the CIT(A) held that the Assessing Officer did not have sufficient evidence to reject the production figures returned by assessee in respect of agricultural products, crops and flowers and treated the part of income from other sources. In sum and substance, we find that revenue authorities have not disputed the land holding i.e. 40.03 hectors of assessee and ..... 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