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TMI Blog2022 (5) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... , the addition made by the AO on account of unexplained agriculture income is confirmed. We find that both authorities are not correct in holding that entire income as admitted by the assessee for having not proved, details of expenditure incurred to be treated as an unexplained income of the assessee. As pleaded by the Ld. AO for assessee s own case for the Asstt.Year 2015-16 on assessee s admission, the same agriculture income at 10% was agreed to be disallowed by the assessee against returned agricultural income of Rs. 21,68,400/-. The same was accepted by the AO, and passed assessment under section 143(3) of the Act on 22.12.2017. Taking into consideration various opportunities given to the assessee, and the fact that the assessee had not explained the expenses incurred in earning the agriculture income of Rs. 37,11,028/-, it is appropriate to make a disallowance at 25% of the expenses incurred for earning this agriculture income seems to be reasonable and meet the ends of justice - Appeal of the assessee is partly allowed X X X X Extracts X X X X X X X X Extracts X X X X ..... sent and served upon the assessee on 19-08-2016 through speed post." 3. As there was no reply from the assessee, the AO made addition of Rs. 37,11,028/- as unexplained income of the assessee and determined total income of Rs. 39,09,928/- and also initiated penalty proceedings under section 271(1)(c) of the Act. 4. Aggrieved against the assessee the assessee filed appeal before the ld. CIT(A), wherein the assessee filed written submissions along with application for additional evidence under Rule 46A of the Income Tax Rules, 1962 providing land ownership deals with supporting documents and also agriculture produce as well as certain bills. The ld. CIT(A) called for remand report from the AO. The concluding portion of the remand report of the AO is as follows: "6. Thus, from the above, it is seen that the assessee has not furnished any proof of agriculture/done by him or on behalf of him some other farmer has done it. There is no mention of any crop in the Form No. 7 or 12 furnished by the assessee. Apart from the above. The assessee has claimed that total expenses were only Rs. 4,68,740/- for the sales consideration received at Rs. 39,80,128/-. The percentage of expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter considering the above submissions of the AO and the assessee, the ld. CIT(A) passed the following order: "4.7. ...... It is noted that the AO issued a show cause notice to the assessee vide letter dtd. 12.8.2016 to prove the genuineness of agricultural income shown of Rs. 37,11,028/-. However, no details were filed hence the addition was made. In the appellate proceedings the appellant filed additional evidence which was forwarded to the AO. The AO in the remand report submitted that the appellant merely filed form No. 7/12 only i.e. for the proof of ownership of land. However, no proof or evidence in support of cultivation of land during the year was filed. The appellant submitted list of buyers and to verify the genuineness the AO in the remand proceedings issued notice to the buyer of the agriculture product. However no reply was received from any buyer. The remand report was forwarded to the appellant to submit comments on the finding of the AO in the remand report. The appellant filed rejoinder and also submitted unsigned confirmation letter from the buyer which cannot be admitted at this stage of appellate proceeding as already twice opportunities have been given i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and further held that no proof for payment of labour, seeds and other expenses giving rise to the agriculture income, were produced by the assessee before the appellate authorities also. Therefore, the entire disallowance is to be upheld and thereby dismiss the appeal of the assessee. 11. We have given our thoughtful consideration and perused the material available on record including paper book filed by the assessee. It is an admitted fact that the assessee filed belated return of income for the Asstt.Year 2013-14 declaring of Rs. 1,98,900/- wherein agriculture income of Rs. 37,11,028/- was also claimed. During the course of regular assessment proceedings, in spite of various notices, the assessee has not furnished any details thereby the AO treated the expenses as unexplained income and added to the income of the assessee. During the appellate proceedings before the Ld. CIT(A), the assessee filed land ownership details with supporting documents and agriculture produce sales bills made to four parties as additional documents before the Ld. CIT(A) by invoking Rule 46A of the IT Rules. The Ld. CIT(A) has called for remand report from the AO, wherein the AO reported that the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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