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TMI Blog2015 (6) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. CIT(A) is not correct in law and facts. 2. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the addition of Rs. 1,04,600/- made by the Assessing Officer on account of treating the agricultural income declared by the assessee as income received from undisclosed sources by applying the provisions of section 68 of the I.T. Act, 1961 without appreciating the fact that the assessee did not furnish the details/evidences in respect of genuineness of the claim of agricultural income. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that assessee's claim of short term capital gain of Rs. 13,49,105/- on the transactions shares cannot be treated as income from other sources. 4. The appellant craves leave to add, amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." 3. First issue vide Ground No. 2 relates to the deletion of addition made by the AO on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borne by Sh. Jai Prakash but the same will be deducted at the time of sale of crops. It was also mentioned that Sh. Jai Prakash will grow only vegetables and all the labour expenses will be borne by him. As regards to the division of agricultural produce between the two parties, it had been mentioned that the contractor will pay to the first party i.e. assessee, 60% of the actual sale of the crops after deducting expenses as per the agreement. The AO after considering the submissions of the assessee observed that mere filing of copy of agreement dated 24.03.2005 did not prove that the agreement was effective in actual and cultivation activities or agricultural operation was made effective as per agreement. He also pointed out that nothing was mentioned in the agreement to the period for which the same will remain effective. The AO also pointed out that the assessee did not furnish any details of expenses incurred and the crops grown on the land and also did not produce party alongwith the details/evidences so that the genuineness of the claim could be verified. The AO observed that agricultural operation on the agricultural land was a must ingredient to grow any agricultural produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine had been found. She, therefore, held that the AO was not justified in holding that the amount of Rs. 1,04,600 was not agricultural income of the assessee. 8. Being aggrieved the Department is in appeal. The ld. CIT DR strongly supported the order of the AO and reiterated the observations made in the assessment order. He further submitted that the ld. CIT(A) had given a negative finding that the AO could have examined Shri Jai Prakash, the contractor or Shri Jagdish Prasad Sharma, tehsilpatwari. He further submitted that the assessee had also not produced any document/evidence in support of her claim. He also submitted that the ld. CIT(A) would have done all those things which the AO ought to have done but such an exercise was not done. Therefore, the ld. CIT(A) was not justified in negating the view taken by the AO. The reliance was placed on the following case laws: * JCIT Vs Swarup Vegetable Products Industries Ltd. (2005) 96 ITD 468 (Del.) * CIT Vs M.P. Portfolio (P) Ltd. (2014) 264 CTR 258 (Del) 9. In his rival submissions the ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the AO had not provided du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im of the assessee. It is well settled that the powers of the ld. CIT(A) and the AO are co-terminus but in the present case, it appears that the ld. CIT(A) failed to discharge the duty to perform those function which ought to have been but not done by the AO, and simply on this basis that the AO did not examine the cultivator or the tehsilpatwari, he directed the AO to treat the impugned income as agricultural income. We, therefore, considering the totality of the facts deem it appropriate to set aside this issue back to the file of the AO to be decided afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. The assessee is also free to adduce any evidence in support of her claim. 11. The next issue vide Ground No. 3 relates to Short Term Capital Gains of Rs. 13,49,105/- which was considered by the AO as "income from other sources". The facts related to this issue in brief are that the assessee had shown an income of Rs. 13,49,105/- under the head Short Term Capital Gains from share trading. The AO asked the assessee to furnish copy of D-mat account, details of share holding and Short Term Capital Gains with confirmed ledger acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as by way of investment or formed part of the stock in trade was a matter which was within the knowledge of the assessee who held the shares. The reliance was placed on the following case laws: * CIT Vs Holck Larsen (1986) 160 ITR 67 (SC) * CIT Vs Associated Industrial Development Co. P. Ltd. (1971) 82 ITR 586 (SC) 13. The ld. CIT(A) after considering the submissions of the assessee observed that the assessee furnished documents relating to transactions of shares, broker's ledger account & bills. He further observed that the AO had asked the assessee to bring the broker before her but there was no allegation of taking accommodation entries. He also observed that nothing had been found during the course of search which could indicate the possibility of indulging in accommodation entries and nothing was brought on record from the seized records or subsequent investigations to prove that the assessee was indulged in accommodation entries. According to the ld. CIT(A) the AO has to prove her allegation of accommodation entries as per Rule of Evidence and that all the shares need not be routed through D-mat account but those were provisions for the transactions in pool account of br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT (2007) 11 SOT 273 (Bom) * Sar Investment P. Ltd. Vs DCIT (2010) 40 SOT 566 (Ahd), ITA No. 2116/Ahd/2007 dated July 23, 2010 16. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it appears that the ld. CIT(A) had not given cogent reason while accepting the claim of the assessee. He simply stated that the AO did not ask the assessee to bring the broker and that the assessee had furnished documents relating to transaction of shares. On the contrary, the AO categorically stated that the assessee was asked to furnish copy of D-mat account, details of share holding, details of Short Term Capital Gains with confirmed ledger account from brokers in respect of share trading. The AO clearly mentioned at page no. 6 of the assessment order that the assessee failed to furnish contract note, delivery/transfer of shares in D-mat account or any supporting evidence which could prove that shares were transferred in D-mat account of the assessee and that simply filing of ledger account/bills of broker did not prove that delivery of shares was made. On the said observations of the AO, the ld. CIT(A) is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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