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TMI Blog2020 (9) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... n per bigha comes to ₹ 30,000/- to 35,000/- i.e. ₹ 9.00 lacs to ₹ 10.00 lacs per annum and similarly the realization from sale of vegetables is ₹ 30,000/- to ₹ 40,000/- per bigha i.e. ₹ 9.00 lacs to ₹ 10.00 lacs per annum. After considering the agriculture expenses and the house hold expenses, the net savings from Lehsun and Vegetables by the assessee is approximately ₹ 10.00 lacs per annum i.e. around ₹ 25,000/- to ₹ 30,000/- per bigha which is quite reasonable. Thus if we consider the income / savings of the assessee for the last 04 years as has been mentioned in the chart w.e.f. for A.Y. 2010-11 to Assessment Year 2013-14 then it comes to approximately ₹ 40.00 lacs and in this way by considering the income from agriculture as has been calculated in the preceding para, the bifurcation of which is ₹ 12,93,243/- from sale of agriculture crop and approximately ₹ 40.00 lacs from the sale of Lehsun and Vegetables for the last 04 years which is quite sufficient and fully explain the source of investment in the purchase of agricultural land. Assessee has fully proved on record the source of investment in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terated the same arguments as were raised by him before the Revenue authorities and submitted that the Revenue authorities fell in error in confirming the addition u/s 56(2)(vii)(b)(ii) of the Act being difference between the stamp duty value and purchase value of agricultural land, by not accepting the contention of the ld.AR of the assessee that provisions of Section 56 are only applicable on purchase of immovable property being a capital asset . As per ld.AR, since the agricultural land purchased by the assessee is not a capital asset , therefore, the provisions of Section 56 are not attracted in the case of the assessee. The ld.AR of the assessee relied on the written submissions filed by him regarding the Ground No. 1 which are reproduced as under:- 1. The assessee belongs to an agricultural family. The father of assessee Sh. NainaLalMeena has been doing the agricultural activity over last 30 years.During the year the father of assessee has purchased 4 agricultural lands in the name of assessee for ₹ 40,94,290/- including stamp duty and registration charges as mentioned at Pg 2-3 of the assessment order. The Sub-Registrar for stamp duty purpose valued it a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 56(2)(vii)(b) of the Act. 2. For this purpose reliance is placed on the decision of Hon ble ITAT Bench in case of ITO Vs. Sh. Trilok Chand Sain where at Para 14 (PB 25) it is held as under:- On reading of provisions of 56(2)(vii)(b), we find that it refers to any immovable property. Further, provision of section 56(2)(vii)(c) refers to any property other than immovable property. The meaning of the term property has been provided in Explanation (d) to section 56(2)(vii) where the term property has been defined to mean capital asset of the assessee namely immovable property being land or building or both. It has been contended by ld AR that all immovable properties of any nature are not covered in the definition of property. Only those immovable properties which are held as capital assets and is in nature of land or building or both are only covered u/s 56(2)(vii). We agree with the contention of ld AR that where the term property has been defined to mean a capital asset as so specified and where an immovable property as so specified being land, building or both is not held as an capital asset, it will not be subject to the provisions of section 56(2)(vii)(b) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as capital asset and which falls in any of the clauses (i) to (ix) are only covered u/s 56(2)(vii) of the Act. Thus any property which is not a capital asset is not covered within the meaning of moveable or immovable properties u/s 56(2)(vii) of the Act. The ld.AR in order to support his contention had also relied on the decision of ITAT Coordinate Bench in the case of ITO vs Shri Trilok Chand (ITA No. 449/JP/2018 order dated 26-05-2020) wherein also under identical situation, the ITAT Coordinate Bench had decided that provisions of Section 56(2)(vii) are applicable only in the case of capital asset and the operative portion of the order of ITAT Coordinate Bench is reproduced below. 14. On reading of provisions of 56(2)(vii)(b), we find that it refers to any immovable property. Further, provision of section 56(2)(vii)(c) refers to any property other than immovable property. The meaning of the term property has been provided in Explanation (d) to section 56(2)(vii) where the term property has been defined to mean capital asset of the assessee namely immovable property being land or building or both. It has been contended by ld AR that all immovable prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re and assessee is not able to prove the immediate source of investment in the purchase of land. He therefore, treated the investment in agriculture land as unexplained and made addition for the same. 2. The Ld. CIT(A) after considering the evidence of agriculture land holding, crop sown, crop sold and the sale receipts of various crops by the assesee s father held that only the profit out of the sale receipt of various crops can be considered as available for investment and not the entire sale receipt. The total sale receipt for FY 2011-12 to 2013-14 (upto 26.10.2013) is worked out by him at ₹ 12,77,755/- and by applying a rate of 20% he worked out profit on sale of agricultural produce at ₹ 2,55,551/-. To this extent he considered the source of investment as explained and confirmed the balance addition of ₹ 38,38,739/-. 3. It is submitted that after the order of Ld. CIT(A) there is no dispute as to the fact that source of investment in the agricultural land is out of the agricultural income earned by the family out of the ancestral agricultural land of 30 bigha at village Chadawad, Tehsil Sangod, Kota. This land is fully irrigated in which various crops li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the family of past years. 4. The Ld. CIT(A) has considered the agricultural income from FY 2011- 12 to 2013-14 only at ₹ 12,77,755/- as per the ledger account of assessee in the books of Madhav Lal Badri Lal Sons. He has not considered the evidence of agricultural crop sold directly through vikray parchi amounting to ₹ 8,77,649/- as above. He has also not considered the sale of lahsun/ vegetables which is sold in local market/ vegetable market for which krishi mandi vikray parchi is not generated. This apart he has considered that for earning the agriculture income 80% is incurred in expenses which is grossly unreasonable. In fact the assessee belongs to an agricultural family and involves in the agriculture activates themselves. Therefore, the expenditure on agriculture is hardly 40%. Thus, the income from agriculture should be estimated at 60% of the sale receipt. Thus, even as per the evidences available, the income available from the sale of agriculture crop, on the basis taken by Ld. CIT(A), works out at ₹ 12,93,242/- (60% of ₹ 21,55,404/-) as against ₹ 2,55,551/- worked out by him. Further when the income from sale of lahsun and vegetable i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable. FY Receipt evidence from ledger of artiya Madhav Lal Badri Lal Sons (in Rs.) Receipt evidence from krishimandi parchi (in Rs.) Total PB Pg 2010-11 Details not available 3,75,744/- 3,75,744/- 11 2011-12 6,93,594/- 2,52,912/- 9,46,506/- 8 11 2012-13 3,27,035/- 1,87,543/- 5,14,578/- 8 11 2013-14 (upto 16.12.13) 2,57,126/- 61,450/- 3,18,576/- 9 12 Total 12,77,755/- 8,77,649/- 21,55,404/- 3.5 All the above evidences are only an indication of the agricultural income of the assessee and the above details do not include the sale of lahsum and vegetables which are sold in the local market. Thus the average income from sale of Lahsoon according to the assessee per bigha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 9.00 lacs to ₹ 10.00 lacs per annum. Therefore, after considering the agriculture expenses and the house hold expenses, the net savings from Lehsun and Vegetables by the assessee is approximately ₹ 10.00 lacs per annum i.e. around ₹ 25,000/- to ₹ 30,000/- per bigha which is quite reasonable. Thus if we consider the income / savings of the assessee for the last 04 years as has been mentioned in the chart w.e.f. for A.Y. 2010-11 to Assessment Year 2013-14 then it comes to approximately ₹ 40.00 lacs and in this way by considering the income from agriculture as has been calculated in the preceding para, the bifurcation of which is ₹ 12,93,243/- from sale of agriculture crop and approximately ₹ 40.00 lacs from the sale of Lehsun and Vegetables for the last 04 years which is quite sufficient and fully explain the source of investment in the purchase of agricultural land. 3.7 Therefore, in our considered view, the assessee has fully proved on record the source of investment in the purchase of agricultural land. Therefore, keeping in view our above discussions, we direct the AO to delete the addition of ₹ 38,38,739/- as confirmed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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