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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 ..... t 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. Thus 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 assesse - Decided in favour of revenue for statistical purposes. Share trading - Short term capital gain v/s income from other sources - Held that:- 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 account of agricultural income. Facts of the case related to this issue in brief are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried out in Sh. Mukesh Garg Group of cases on 20.01.2010 and in case of assessee on 03.03.2010 at Locker No. 1390, Punjab National Bank, G.T. Road, Ghaziabad, U.P. Thereafter a notice u/s 153A of the Act dated 11.07.2011 was issued to the assessee requiring him to file the return of income for the assessment year 2006-07. In response to the said notice, the assessee filed the return of income on 19.08.2011 declaring total income of ₹ 22,22,160/- and had also shown agricultural income of ₹ 1,04,600/-. 4. During the course of assessment proceedings, the AO asked the assessee to furnish the details as per the following proforma: 1. Name of Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 24.03.2005 with Sh. Jai Prakash in respect of giving land to him for cultivation. As per the said agreement all the expenses related to cultivation such as seeds, khad, water will be 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/evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. CIT(A) also pointed out that this was a search assessment and there was no finding to this effect by the AO that incriminating materials suggestive of agricultural income being not genuine had been found. She, therefore, held that the AO was not justified in holding that the amount of ₹ 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. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned that who is the owner of the land and in which year which type of vegetables/crops were grown by whom. The assessee also did not furnish copy of the Jamabandi. However, the ld. CIT(A) accepted the claim 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and the department had placed no material to show that the assessee s case did not fall within the tests laid down by the CBDT Circular No. 4 of 2007. It was further stated that whether a particular holding of shares was 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85/Kol/2009 dated May 14, 2010 JCIT Vs Shri Deo Kumar Saraf, ITA No. 411/Kol/2009 dated June 18, 2009 ITO Vs Lookad Finance and Leasing Ltd., ITA No. 659/Kol/2008 dated July 24, 2009 Citadell Agencies P. Ltd. Vs 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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