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TMI Blog2015 (7) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... ing papers available at page no. 1 to 51 which contain land ownership proof of the assessee, Master Akhil Garg and Master Aman Garg, confirmation copy of accounts and purchase vouchers/bills for the sale of timber by Master Akhil Garg, proof of ownership of agricultural land of both minor sons of the assessee, copy of the auction (Boli) Registers of the commission agent, clarification/confirmation from commission agent about continuity/usage of ‘J’ Form bill book, bill/confirmation pertaining to agricultural expenses.On the basis of critical analysis of documentary proof submitted by the assessee supporting to proof of ownership of agriculture land, proof of sale of agriculture credit and timber and receipt of consideration through banking channel, we observe that the assessee submitted all possible documentary proof supporting his claim of agriculture income from sale of agriculture crop and timber. The assessee has also submitted proof of trees which were recorded in the revenue records on the agricultural land in the name of assessee and his minor sons. CIT(A) wrongly adopted average yield and sale price of wheat and paddy as shown in the website of Government of Haryana. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ately ₹ 3.5 lakh has been paid by the assessee and the entire interest paid on current account cannot be disallowed. However, we make it clear that the AO may disallow the interest amount which is related to the payment of EMIs on HDFC loans by the assessee between the period 29.11.2007 to 28.3.2008 and remaining amount of interest paid by the assessee on Bank of Baroda current account deserves to be allowed and we direct the AO to allow the same accordingly. With these directions, ground no. 3 of the assessee is deemed to be allowed for statistical purposes with the limited direction to the AO as mentioned hereinabove. - Decided in favour of assessee for statistical purposes. Addition on low household withdrawals - CIT(A) upheld the addition on the basis of facts mentioned in the remand report of the AO that the address mentioned in the assessee’s ration card and assessee’s father-in-law’s ration card were different, therefore, it cannot be said that the assessee’s father-in-law and mother-in-law were sharing their withdrawals for meeting the household expenses - Held that:- from the copies of the ration card placed before us, we note that the address of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / - as interest paid on loan, taken for purchase of property, against which the rent received and shown as income by the appellant. 5. On the facts circumstances of the case, the Ld. CIT (Appeals) XXVII New Delhi has erred in upholding the assessment order u/s 143 (3) Dated 16/12/2 10 for the A/Y 2008- 09, passed by the Ld. Assessing Officer Ward 36(2) New Delhi for addition to the extent of ₹ 1,08,000/- on account of low household withdrawals by the appellant. 2. Briefly stated, the facts giving rise to this appeal are that the assessee filed return of income for the year under consideration at taxable income of ₹ 3,20,480/- on 25.9.2008. The AO completed the assessment u/s 143(3) of the Act determining total taxable income of the assessee at ₹ 21,92,670 after making various additions such as addition of ₹ 11,51,483/- by treating agricultural income shown by the assessee as undisclosed income, disallowance of internet of ₹ 78,942/-, disallowance of deduction of interest claimed u/s 24 of the Act of ₹ 4,91,761 and addition of ₹ 1,50,000 on account of low household withdrawals during the financial period under consideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Feed and sale of timber) amounting to ₹ 40,000 and ₹ 45,000 respectively has not been considered as agriculture income. Ld. AR has further drawn our attention towards paper book page no. 15 to 22 and 31 and submitted that out of total expenditure, agriculture expenses of ₹ 2,15,000 claimed by the assessee with regard to agricultural activities include a sum of ₹ 45,000 related to the sale of timber and this fact was ignored by the CIT(A) while calculating the agriculture income on comparative basis. Ld. AR vehemently contended that the assessee had actually sold the wheat and paddy between ₹ 850/- to ₹ 870/- per qtl. and ₹ 1400 to ₹ 1950 per qtl. respectively and the CIT(A) had arbitrarily and hypothetically determined the average sale rate of wheat and paddy at ₹ 800/- and ₹ 1500/- per qtl. respectively. 7. Ld. AR has also drawn our attention towards paper book page no. 1 to 6, 13, 23, 24, 30 to 51 and submitted that the assessee actually grew crops on her land which were sold in the grain market through commission agents and the crops were sold as per prevailing market rates and there is no excessive claim in this re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... careful consideration of above submissions, we are of the view that the authorities below have not denied and fact that there was agriculture land of 8.32 hectare in the hands of the assessee and agricultural activities were carried on and crops were grown/produced on the agriculture land which were sold in the grain market through commission agents. As per the assessee, the wheat and paddy were sold between ₹ 850 to ₹ 870 and ₹ 1400 to ₹ 1950 respectively and the CIT(A) adopted the rates shown on the website of Haryana Government and determined the average sale rate as ₹ 800 for wheat and ₹ 1500 per qtl. for paddy. From careful reading of the assessment order and appellate order, we note that authorities below have not brought out any fact or allegation on record to dispute or raise any doubt regarding papers available at page no. 1 to 51 which contain land ownership proof of the assessee, Master Akhil Garg and Master Aman Garg, confirmation copy of accounts and purchase vouchers/bills for the sale of timber by Master Akhil Garg, proof of ownership of agricultural land of both minor sons of the assessee, copy of the auction (Boli) Registers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote that at page 30 31, we see the proof of ownership of agricultural land in the name of Master Aman and Master Akhil S/o Parveen which show agriculture land of 53 canal, 16 marla in their names and page 31 also reveals that there were a number of trees and agriculture crop was also exploited therefrom which brought agriculture income for the assessee. From page no. 32 to 43, we see the copies of auction register (Boli H Register) wherein on several occasions, names of assessee Mrs. Sangita and her minor sons Master Akhil and Master Aman have been mentioned. This register not only shows the date of sale of agriculture crop but also explains quantity and rate of the sold agriculture, produce and the name of the purchaser which also supports this fact that the agriculture crop was grown and carried to grain market for sale through commission agents. Page no. 44 and 45 shows details of purchase vouchers ( J Forms) issued by M/s Parveen Trading company. Paper Book page no. 46, 47 and 48 are the copies of the receipt issued by Shri Chaman Lal wherein Mr. Chaman Lal states that during FY 2007-08, he conducted work of sowing of crop and transportation of agricultural crop and timber th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of the assessee to the extent of ₹ 3,35,330 and the balance amount of ₹ 8,16,153 was treated assessee s income from undisclosed sources and the addition was sustained to this extent. From para 18 of the impugned order, we note that the CIT(A) has considered the yield of wheat and paddy as per Haryana Government website and also considered rates of wheat and paddy as shown in Haryana Government website. The CIT(A) calculated the quantity and sale price of wheat and paddy as per government data which is not a proper and justified approach. On the basis of foregoing discussion and observation of the AO and the CIT(A), we note that the revenue authorities have not disputed this fact that the assessee and her minor sons hold agriculture land as per revenue record. We also observe that as per revenue records, there were number of trees on the land held by the assessee and her minor sons, therefore, transaction of sale of timber by the assessee and her minor sons cannot be doubted. In view of agriculture land ownership proof, confirmation of purchasers and commission agents, auction register, J Form Bill book and bill/confirmation pertaining to agriculture expenses, we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /vouchers, bank statement and other relevant documents showing agriculture activities which brought agriculture income to the assessee. 17. As we have already observed that the authorities below did not properly consider claim of the assessee about agriculture income and AO dismissed the claim of the assessee at the threshold on the basis of incorrect and wrong observations. During the first appellate proceedings, the CIT(A) allowed a part of the claim and restricted the disallowance to ₹ 8,16,153/- without any logical basis and sustainable reasoning and by taking a hyper technical and incorrect approach and data. 18. In this situation, we are of the considered view that the issue of agriculture income requires proper examination and verification at the end of the AO and we restore this issue to the file of AO for de novo fresh adjudication after affording due opportunity of hearing for the assessee and without being influenced by the earlier assessment order and the impugned order. The AO shall adjudicate and address all the issues and points regarding claim of agriculture income of the assessee and after giving due consideration to the supporting documents, evidence a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of interest for making EMI payments from her account with Bank of Baroda cannot be allowed again. Supporting the impugned order and action of the AO, ld. DR submitted that the assessee is not allowed to make double claim on interest once as interest component of EMI and secondly as interest paid on current account from which EMI was paid. 21. On careful consideration of above submissions, we are of the considered view that undisputedly, the assessee obtained loan of ₹ 35 lakh from HDFC Bank Rohini for purchase of 1/3rd share of property at Rohini and it is also not in dispute that the EMI of said loan was paid by the assessee to HDFC Bank through her current bank account with Bank of Baroda. Under above noted facts, we further observe that the interest paid on the capital borrowed from two HDFC bank accounts was allowed by the CIT(A) which was paid with other coborrowers amounting to ₹ 1,31,005/- and ₹ 2,56,733. The impugned interest of ₹ 1,03,655 was paid in respect of current account with Bank of Baroda from which the EMIs were paid. 22. This is also a contention of ld. counsel of the assessee that the credit facility from Bank of Baroda was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of Bank of Baroda cannot be allowed. If we analyse the facts, then we clearly observe that the first instalment of HDFC loan was paid by the assessee on 29.11.2007. Prior to that, there are number of transactions which are related to the agriculture and other economic activities of the assessee including amount of loan advanced to M/s Des Raj Ram Kumar and other firms. In the peculiar facts and circumstances when the interest received from M/s Des Raj Ram Kumar has been offered to tax by the assesse under the head of income from other sources, then the amount of entire interest paid on current account out of which loans were advanced cannot be disallowed at the threshold merely because instalment of property loan to HDFC bank approximately ₹ 3.5 lakh has been paid by the assessee and the entire interest paid on current account cannot be disallowed. However, we make it clear that the AO may disallow the interest amount which is related to the payment of EMIs on HDFC loans by the assessee between the period 29.11.2007 to 28.3.2008 and remaining amount of interest paid by the assessee on Bank of Baroda current account deserves to be allowed and we direct the AO to allow the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition of ₹ 1,08,000. Ld. counsel also pointed out that the authorities below ignored this very fact that the assessee lives in a small town of Haryana and major part of day to day necessities of grocery, vegetables and fruits is fulfilled from the agriculture land and cattle maintained by the assessee and the all the major family members have their own independent source of income and contributing to the household expenses of joint family. Ld. counsel also submitted that the copies of the ration card available at page 57 and 58 of the paper book make it clear that the assessee, her husband and three minor children along with in laws reside in house no. 967, sector 17 of Udham Singh Colony. In this situation, household withdrawals cannot be held as insufficient and addition in this regard is not sustainable. 27. Replying to the above, ld. DR supported the action of the AO and submitted that the drawings of ₹ 70,000 shown by the assessee cannot be held as sufficient to meet the day-to-day expenses of the assessee and, therefore, the AO was right in making addition on account of low household withdrawals. Ld. DR further pointed out that the CIT(A) also took a ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Parveen Garg had made withdrawal of ₹ 1,22,000 and total withdrawals including withdrawal made by the assessee of ₹ 70,000 comes to ₹ 3,80,000 out of which school fee of ₹ 40,000 and electricity bill of ₹ 20,000 had been paid and remaining balance available for household expenses was ₹ 3,20,000. In view of copies of the ration card available at page no. 56 57, we are of the considered view that the CIT(A) blindly accepted the contention of the AO that the address mentioned on the ration card of the assessee and her in laws are different. Per contra, from the copies of the ration card placed before us, we note that the address of the assessee and her in laws is the same and any withdrawals made by her in laws cannot be ignored for the purpose of calculating the total withdrawals by the joint family and its sufficiency to meet household expenses during the period under consideration. The lower authorities also ignored this very fact that the assessee is living in a joint family with her in laws without any air-conditioning, generator set facility or any domestic help/servant facility. The AO has not disputed this fact that the assessee holds ..... X X X X Extracts X X X X X X X X Extracts X X X X
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