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TMI Blog2022 (7) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2002-03 and 2004-05.Accordingly, we are of the view that there is no reason to restrict the agricultural income to 40% of the bills produced. The generation of agricultural income without bills cannot be ruled out. Since there was failure on the part of the assessee in substantiating the quantum of agricultural income, in the facts and circumstances of the case, we are of the view that the entire income cannot be accepted. Accordingly, we are of the view that the agricultural income may be accepted to the extent of 70% of the amount declared by the assessee in all the years, i.e., from AY 2001-02 to 2007- 08.Accordingly, we modify the orders passed by Ld CIT(A) on this issue in all the years under consideration and direct the AO to accept agricultural income to the extent of 70% of the amount declared by the assessee in each of the years. Addition u/s 68 - AO noticed that the assessee has shown advance for purchase of a property - as submitted that the said property was proposed to be purchased jointly by the assessee along with others - HELD THAT:- As submission of the assessee that the property was proposed to be purchased jointly and the amount of Rs.8.00 lakhs was contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, it is required to be shown that the funds available with Abhinav Bank has been accepted by the AO. We notice that relevant details are not available on record. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of AO for examining it afresh. Unexplained sundry creditors balance - HELD THAT:- In the interest of natural justice, we are of the view that the assessee may be provided with one more opportunity to prove the sundry creditors by obtaining confirmation from them. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of AO. After affording adequate opportunity to the assessee, the AO may take appropriate decision in accordance with law. Addition of payment of LIC premium as unexplained investment - HELD THAT:- As the assessee claimed that he has withdrawn a sum of Rs.51,480/- from his capital account and the said withdrawal was used to make the LIC payment. Since the explanation was found to be too general, the Ld CIT(A) confirmed the disallowance. In our view also, the explanation so furnished by the assessee does not explain the sources for making LIC pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issues by his detailed order, which we find to be reasonable and in accordance with law. Accordingly, we reject both the legal grounds urged by the assessee. 5. The next issue relates to the addition of agricultural income declared by the assessee treating it as income from other sources. This issue is common in all the assessment years from 2001-02 to 2007-08. The details of agricultural income declared by the assessee, accepted by the AO, disallowed by the AO and that confirmed by Ld CIT(A) are tabulated below:- Asst. Year Declared by assessee Accepted by AO Disallowed and assessed as income Confirmed by CIT(A) 2001-02 1,00,416 Nil 1,00,416 1,00,416 2002-03 3,43,388 69,274 2,74,114 2,74,114 2003-04 1,20,000 Nil 1,20,000 1,20,000 2004-05 1,85,450 13,179 1,72,271 1,72,271 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there is no reason to restrict the agricultural income to 40% of the bills produced. The generation of agricultural income without bills cannot be ruled out. Since there was failure on the part of the assessee in substantiating the quantum of agricultural income, in the facts and circumstances of the case, we are of the view that the entire income cannot be accepted. Accordingly, we are of the view that the agricultural income may be accepted to the extent of 70% of the amount declared by the assessee in all the years, i.e., from AY 2001-02 to 2007- 08.Accordingly, we modify the orders passed by Ld CIT(A) on this issue in all the years under consideration and direct the AO to accept agricultural income to the extent of 70% of the amount declared by the assessee in each of the years. 8. We shall now take up individual issues in each of the assessment years. In AY 2001-02, the assessee is challenging the addition of Rs.8.00 lakhs made u/s 68 of the Act. The AO noticed that the assessee has shown advance of Rs.13.00 lakhs for purchase of a property. It was submitted that the said property was proposed to be purchased jointly by the assessee along with others. It was submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not contain investments in KVPs. Accordingly, the AO computed the corresponding amount of investment relatable to the interest income of Rs.30,000/- taking the interest rate @ 8%, which was computed at Rs.3,75,000/-. The AO assessed the same as unexplained investment in the hands of the assessee. The Ld CIT(A) upheld the addition to the extent of Rs.2,50,000/-. It is the submission of the assessee in the grounds of appeal that the KVPs were purchased in the year 1997 and the said investment was reflected in the Balance Sheet till 31.3.2002. It is also submitted that the said KVPs were found physically during the course of search. We notice that these factual aspects have not been properly appreciated by the tax authorities. We also noticed that the addition has been made by computing the possible value of investment on the basis of interest income declared by the assessee. If the investment has not been made during the year under consideration, there is no requirement of making any addition. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of AO for examining the submissions of the assessee and for taking decision in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is books of accounts have been washed away by floods. Hence the AO assessed the sundry creditors balance as income of the assessee. The Ld CIT(A) also confirmed the same. In the interest of natural justice, we are of the view that the assessee may be provided with one more opportunity to prove the sundry creditors by obtaining confirmation from them. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of AO. After affording adequate opportunity to the assessee, the AO may take appropriate decision in accordance with law. 17. We shall now take up the appeal filed for AY 2006-07. The AO made addition of sundry creditors balance of Rs.2,74,119/- in AY 2006-07 on identical reasoning discussed by him in AY 2005-06. We have set aside the order passed by Ld CIT(A) in AY 2005-06 for the reasons discussed in the preceding paragraph. Accordingly, on identical reasoning, we restore this issue to the file of AO. After affording adequate opportunity to the assessee, the AO may take appropriate decision in accordance with law. 18. The next issue urged in AY 2006-07 relates to the addition of Rs.86,500/-. The AO had made the addition of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,466/- Accordingly, we confirm this addition. 21. We shall now take up the appeal filed by Shri Nilesh Sanap for AY 2007- 08. The AO made addition of Rs.1,54,750/- relating to the value of computer and domestic equipments shown in Balance sheet. Before Ld CIT(A), the assessee submitted that the deposit of Rs.1,00,000/- received and rental income of Rs.90,000/- together explain the sources for purchase of above assets. The Ld CIT(A) confirmed addition to the extent of Rs.1,00,000/- observing that the assessee has not explained the details of deposits. 22. We heard Ld DR on this issue and perused the record. The assessee has explained the sources to be deposit of Rs.1,00,000/- and rental income of Rs.90,000/- received by the assessee. Both these receipts and the investments are reflected in the Balance Sheet. Accordingly, the assessee submitted that even if the Balance Sheet is not accepted, then the deposit amount of Rs.1,00,000/- and rental income of Rs.90,000/- would explain the sources for purchase of computer and domestic appliances. We notice that the AO has accepted the genuineness of deposit of Rs.1,00,000/-. Accordingly, we are of the view that the aggregate amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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