2023 (3) TMI 853

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..... s malice is at writ large. In the instant case, the assessee was a Super Senior Citizen of around 90 years of age, and he was not likely to gain by delay in filing these four appeals. Reference is drawn to the decision of Hon ble Supreme Court in the case of Collector, Land Acquisition, Anantnag v. Mst. Katiji Ors. [ 1987 (2) TMI 61 - SUPREME COURT] . Thus, we admit these four appeals by condoning delay in filing of these four appeals beyond the time provided u/s 253(3). Now, we proceed to adjudicate these four appeals on merit in accordance with law. Additions u/s 68 - income from un-disclosed sources - Agriculture Income - exemption of income u/s 10(1) read with Section 2(1A) denied - onus to prove - HELD THAT:- The assessee is claiming exemption of alleged agricultural income under the provisions of Section 2(1A) read with Section 10(1) of the 1961 Act, and the onus is entirely on the assessee to prove that the assessee earned agricultural income as defined u/s 2(1A) of the 1961 Act before any exemption can be granted u/s 10(1) of the 1961 Act. It is well settled that exemption provisions are to be strictly construed and the onus is strictly on the assessee to prove th .....

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..... in Appeal Nos. CIT(A),Allahabad/10409/2014-15, CIT(A),Allahabad/10413/2014-15,CIT(A),Allahabad/10411/2014-15, CIT(A),Allahabad/10043/2014-15 for ay s: 2006-07 to 2009-10 respectively, passed by learned Commissioner of Income Tax (Appeals), Allahabad(hereinafter called the CIT(A) ), the appellate proceedings had arisen before learned CIT(A) from separate assessment order s dated 25th March, 2014, 25th March, 2014, 25th March, 2014 and 24th March, 2014 for assessment year s 2006-07 to 2009-10 respectively passed by learned Assessing Officer (hereinafter called the AO ) under Section 143(3) read with Section 147 of the Income-tax Act,1961(hereinafter called the Act ).We have heard these four appeals through physical hearing mode in Open Court proceedings. 2. At the outset, it is observed that these four appeals were filed late belatedly beyond the time stipulated under Section 253(3) of the Income-tax Act, 1961. The separate Appellate Order(s) passed by Ld. CIT(A) for all the four assessment years are all dated 18th September, 2019, which are stated to have been received by assessee on 29th October, 2019, and hence these appeals were ought to have been filed by assessee with .....

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..... claimed that since no appeal fee as provided u/s 253(6)(c) was deposited prior to filing of the appeal, the Registry of the tribunal did not accept the appeal without the requisite appeal fee having been deposited with Government Treasury. It is also submitted that later the assessee paid part appeal fee with the financial help of his son,and the appeals were filed with tribunal on 04th February, 2022. It is claimed that, later on with the financial help of his daughter, the assessee made up the deficient appeal fee by depositing the requisite fee as stipulated u/s 253(6)(c) with Government Treasury. The assessee himself expired on 18th September, 2022 and death certificate dated 18th October, 2022 issued by Registrar (Birth Death), Nagar Nigam, Zone-3, Katra, Allahabad (Registration no. D-2022:9-91760-003105, dated 18.10.2022) has been filed, which is placed on record in file. The revised From No. 36 is also filed by his son Shri Sudheer Gupta as legal heir of the assessee, wherein it is also stipulated that Mr. Sudheer Gupta and Mrs. Mamta Bhargava are the two Legal Heirs of the assessee, and said revised Form No. 36 is placed on record in file. The ld. Sr. DR fairly submitted .....

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..... od for filing of appeals. It is true that the limitation in the instant case expired on 28.12.2019 itself which was prior to coming into force of exclusion of aforesaid period granted by Hon ble Supreme Court for computing limitation period keeping in view spread of Corona Virus Pandemic, and benefit of aforesaid order of Hon ble Supreme Court cannot be extended to the assessee. But, if we exclude aforesaid period from 15th March, 2020 to 28.02.2022, the delay in filing this appeal has occurred from 29th December, 2019 to 14th March, 2020 which is delay of 76 days. It is also true that lockdowns announced by Central/State Government s occurred in the entire country with the onset of pandemic corona virus spread in India, and the normal life across India was paralysed due to Corona Virus pandemic and also due to lockdowns announced by Government, causing misery and sufferings to citizen across India. Also keeping in view that the assessee was a super senior citizen (DOB 27.07.1932) bed ridden, paralytic and suffering from old age and disease, dependent upon his children for financial support, we in exercise of our powers u/s 253(5) hold that the assessee has shown sufficient cause i .....

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..... e are that the assessee s assessment was reopened by Revenue by invoking provisions of Section 147/148 of the 1961 Act. The AO issued notice u/s 148. The assessee filed return of income in response to notice issued by the AO u/s 148 of the 1961 Act. On perusal of Return of income filed by the assessee in response to notice issued by AO u/s 148, it was observed by AO that the assessee has declared interest income of Rs. 2,870/-, and an agricultural income to the tune of Rs. 7,00,000/- which was claimed as an exempt income. The AO issued statutory notice u/s 143(2) dated 24.12.2013 to the assessee. The assessee participated in reassessment proceedings. The AO, during the course of reassessment proceedings, asked assessee to explain sources of deposits in the bank account, to which assessee submitted that the said bank deposits are from sale proceed of House No. 846, University Road, Allahabad which was sold by the assessee in the capacity of Karta of his HUF, amounts received from son as well agricultural income earned by the assessee, as detailed hereunder: The AO observed from sale deed of the aforesaid property, that Rs. 50 lacs sale proceed was received by assessee by che .....

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..... On being asked by AO, the assessee submitted that the land owner refused to get the said land agreement registered, and this agreement was prepared on plain paper. The AO rejected the contentions of the assessee and observed that no agricultural operations were carried on by the assessee, and an amount of Rs. 5,00,000/- claimed to be deposited by assessee from agricultural income is in-fact income from un-disclosed sources of the assessee, which was added by AO to the income of the assessee under Section 68 of the Act, vide reassessment order dated 25.03.2014 passed by the AO u/s 147 read with Section 143(3) of the 1961 Act. 5a. Aggrieved by the aforesaid re-assessment order passed by AO, the assessee filed first appeal before Ld. CIT(A). So far as addition to the income of the assessee to the tune of Rs. 18 lacs as was made by the AO, the same stood deleted by ld. CIT(A) with directions to the AO to verify and reconcile the bank deposits with the sale deeds w.r.t. sale of House no. 846, University Road, Allahabad and to delete the additions if the amount stood verified and reconciled otherwise to confirm the additions, and the appellate order passed by ld. CIT(A) on this issue .....

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..... e ld. CIT(A). 5b. The ld. CIT (A) rejected the contentions of the assessee by holding as under: Decision: I have gone through the facts and the written submissions filed along with the details filed enclose therein. The assessee deposited RS. 35,00,000/- cash in his bank account out of which he has claimed cash of Rs. 5,00,000/- earned as agricultural income from sale of flowers and grass and also grains and vegetables. The appellant submitted only copy of lease of agricultural land as evidence in favour of doing agricultural activity. Appellant's only contention is that there is a lease agreement on a letter pad showing the land ownership but there is no other evidence showing any human intervention in the planting of these flowers, grass, vegetables and grains. There is no evidence in possession of appellant to prove that any procedures were adopted to produce and maintain these agricultural produces over a time from 1999 to the year in question. There is no evidence to prove that any basic and subsequent operations were duly performed resulting onto this agricultural income like expenditure on human labour, seeds, manure, pesticide, etc.. AO's contention is .....

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..... ted pertaining to job works done. More so, the sale of oil of flowers and grass is not agricultural income, exempt u/s 2(1A) of the Income Tax Act. Applicant has not submitted any details of farmers from Rai Bareilly who purchased grains, vegetables and also flowers and grass for Aroma work in cash. It is surprising that someone who purchases goods from applicant for Rs. 25,000- 65,000/-, their details are no known to him but he knows that after purchasing agricultural produce from applicant these farmers sent it to other places for extraction of oil. Such contradictory facts are nothing but an afterthought of the appellant to explain unsuccessfully explaining the huge cash deposited in bank account as earned form agricultural income. The applicant also submitted that he helped them in extracting the oil in case of need of customers who purchased grass and brought their own at a very low cost and only job work was being done on labour basis and the applicant had no concern with oil sale of its marketing. The applicant's sale was limited only to agricultural produces. If we go by this theory then it shows that appellant was doing complete business of extraction and sale of oil b .....

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..... es including the Income-tax Appellate Tribunal are that the assessee had failed to produce any satisfactory evidence about his being engaged in agricultural activities. The further finding is that the assessee was also not able to state to whom the said agricultural produce was sold. Consequent to the aforesaid finding, the Tribunal has held that the sum of Rs. 28,000 was rightly assessed as income from undisclosed sources in the hands of the assessee. Having heard learned counsel for the parties, we are of the opinion that the findings recorded by the Income-tax Appellate Tribunal are pure findings of fact which are based on appreciation of evidence. The view taken by the Tribunal is a possible view on the evidence that was placed before it in our opinion, the order of the Tribunal does not give rise to any question of law on the findings recorded by it. In the instant case it is well established that appellant has failed to discharge the initial onus of proving that the income earned was in fact agricultural Income. Appellant also failed to prove that any agricultural operations were in fact ever done on the land premises leased by him and finally failed to substantiate tha .....

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..... pital gain on sale of this House property in your hands in A.Y. 2006-07 (for part of the property sold during 2005-06) and in A.Y. 2007- 08. If you have any clarifications to offer, you may do so. 3.You have deposited following cash in your Bank Accounts Punjab Nation Bank Date Amount 13.08.2005 15,00,000/- 10.10.2005 20,00,000/- 01.10.2005 1,00,000/- Standard Chartered Bank Date Amount (Rs.) 31.12.2015 Rs. 5,00,000/- Since you have not given any verifiable explanation in respect of such cash deposits, I intend to treat such cash deposit as unexplained Cash Deposits. If you have any explanation to offer, the same may be offered. On 23rd March, 2017, the assessee made submissions before ld. CIT(A) in response to aforesaid enhancement notice, which is as under: 1. That regarding sale of House for Rs.50,00,000/- in F.Y. 2005- 06 F.Y.2006- 07 was Rs.12,00,000/- and Rs.38,00,000/- r .....

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..... ed in the hands of appellant in individual capacity on the same set of facts. Hence the submission of the appellant is accepted. AO has made the addition of Rs. 18,00,000/- as he could not locate and corelate the details of cheques mentioned in the sale agreement with the bank statements u/s 68 of IT Act. No addition can be made u/s 68 of IT Act on the unexplained deposits in the bank account as they are not books of accounts of the appellant but can be added u/s 69A of IT Act as unexplained money. A perusal of the sale deed and the bank statement shows that the details of cheques mentioned in the sale deed are reflected in the bank statement but the dates are different due to difference in the date of issuing and date of final clearing into the bank account. Further difference is also due to the fact that the sale deed happened in two different financial years. AO is therefore directed to reconcile the same and if any cheque deposited into the bank account cannot be corelated with the two sale deeds then only that amount should be taxed u/s 69A of IT Act. In case of any cheque not getting reconciled the AO is to tax it as per law in the respective assessment year to which th .....

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..... ) are filed with tribunal, which are reproduced as under: In the above appeal, the appellant wants to bring the following facts before your honour for your kind consideration and favorable order:- 1. Addition Agriculture Income: 5,00,000/- a) The appellant started the agriculture work in 1999 by taking lease land at Village Sirsa, Raibareilly from Raja Jagannath Bux Singh Trust for 10 years measuring 12.36 hector, copy of agreement has been filed on Page 1 to 6 of the Paper book filed for A.Y. 2006-07 Lease rent was monthly Rs.6,000/- which has been Paid regularly. b) Then he started growing Palmorosa grass and other herb along with Vegetable and grain. Palmarasa grass and other flower and herbs are used to produce aroma oil and perfumes, Regarding Palmarosa grass details has been filed on Page 7 to 11 of the Paper book. c) The appellant only sold Palmarosa grass and herbs and not involved in manufacturing the Aroma oil, People for nearby areas used to come to purchase the grass for making Aroma oil and they pay cash ranging to 20,000/- to 50,000/- which was deposited in bank. d) The appellant also filed profit and loss account of Agricultur .....

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..... hi Singh and Anita Kesarwani 36,00,000/- Copy of bank account filed on Page 49 to 50 of Paper-book. b) The appellant has shown his investment Rs. 16,00,000/- in computation of filed for A.Y. 2006-07. c) Copy of agreement with Smt.Shashi Singh and Anita Kesarwani date 15/11/2005 has already been filed on Page 32 to 40 of Paper book. d) In Para 8 of agreement it has been mentioned that total investment will be of Rs.40,00,000/- The expenses incurred in constructing the flats detail has been filed on Page 43 to 48. e) This fact has not been enquired at the time of assessment proceeding in A.Y. 2006-07 although the appellant has shown regarding his investment. f) In fact there was no income during the financial year 2005-06 from sale of flats. In financial year 2005-06 and 2006-07 there were only investment by the Partner and in financial year 2007- 08, there was loss in the business, the details have been filed in A.Y. 2008-09. Considering the above, kindly allow the appeal. The Learned counsel for the assessee submitted before the Bench that there were two additi .....

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..... ed by the department. Both the paper books are placed on record in file. Our attention was also drawn to Page no. 45 of the paper-book filed by the Department, wherein affidavit filed by assessee before the AO is placed. 6b. The Ld. Sr. DR on the other hand submitted before the Bench that there are two issues only in this appeal, one is concerning addition of Rs. 5,00,000/- made by the AO wherein claim of the assessee that cash deposits in the bank constitute agricultural income was not accepted by Revenue, and second addition concerns itself with enhancement of income of the assessee by ld. CIT(A) to the tune of Rs. 36,00,000/- towards unexplained cash deposit in Punjab National Bank. It was submitted that the assessee does not have any agricultural income and the assessee has tried to show that the assessee has done agricultural operations on the land taken on lease from a trust in Rai Barielly, copy of lease deed was purportedly filed by assessee before the AO. The ld. Sr. DR submitted that the assessee did not owned any agricultural land and also that this lease deed is an unregistered lease deed. It was submitted that department has also filed written submissions vide depar .....

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..... ubmitted by the assessee to explain sources of cash deposits are unsubstantiated. 6c. The Learned counsel for the assessee submitted in rebuttal that the assessee has taken agricultural land on lease on which agricultural operations were carried on by the assessee. It was submitted that monthly lease rent was Rs. 6,000/- per month which was paid in cash. It was submitted by ld. Counsel for the assessee that there are no evidences available with the assessee with respect to agricultural income earned by the assessee, apart from lease deed which was duly submitted before the authorities. It is claimed that the said lease deed is unregistered because the land owner did not agreed to getting lease deed registered. Our attention was also drawn to page No. 49 to 50 of the assessee s paper-book, wherein PNB bank statement is placed. 6d. The Ld. Sr. DR drew our attention to Page No. D of the departmental paper book, wherein written submissions are placed. It was submitted that there are variation in the agricultural income claimed by the assessee, as in the ITR, the assessee claimed that Rs. 7 lacs was earned from agriculture \, while before AO, it was claimed that agriculture income .....

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..... sessee duly participated in the reassessment proceedings conducted by AO u/s 147/148 of the 1961 Act. There are effectively two issues for adjudication before us. The first issue pertains to claim of the assessee of having earned agricultural income to the tune of Rs. 5,00,000/- during the year under consideration, which was claimed as an exempt income u/s 10(1) read with Section 2(1A) which claim of the assessee was rejected by both AO as well ld. CIT(A), and the said income was held to be earned from undisclosed sources and brought to tax. The second issue concerns itself with the cash deposits of Rs. 36,00,000/- in the bank account maintained by the assessee with PNB, for which no satisfactorily explanation was offered by the assessee and the said addition was made by ld. CIT(A) to the income of the assessee, after issuing enhancement notice. The assessee has undisputedly deposited Rs. 36,00,000/- in cash in his bank account maintained with PNB, while Rs. 5 lacs stood deposited in cash in his bank account maintained with Standard Chartered Bank. The details of cash deposits are as under: Punjab Nation Bank Date .....

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..... s of the land did not wanted to get the lease deed registered. There is no evidences whatsoever submitted by the assessee that the said lease was infact ever extended /renewed after alleged completion of three years. There is no evidence of payment of any lease rent to the owners of the land, except first six monthly lease rent paid on 01.07.1999, for which details of cheque are mentioned, but there are no bank statements to prove/evidence that the cheques was ever cleared from the bank account of the assessee. Thereafter, there is no iota of evidence to prove/substantiate that the assessee ever paid any lease rent to the lessors, and the contentions are made that payments towards lease rents were made in cash, but no rent receipts issued by lessors are enclosed. There is no other evidence whatsoever furnished by assessee to prove/substantiate that he continued to be lessee in the said leased land during the year under consideration. The assessee has claimed that during the year, lease rent was paid in cash, but no evidences such as receipts issued by the owners of the land is filed. The assessee did not file any evidences whatsoever to prove that the said land was under his posses .....

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..... bour but on which forestry operations described in the statement of case had been carried on by the assessee involving considerable amount of expenditure of human skill and labour is agricultural income within the meaning of section 2(1) and as such exempt from payment of tax under section 4(3)(viii) of the Indian Income-tax Act. Section 2(1) of the Act defines agricultural income and states (so far as it is relevant for the purposes of this appeal): (1) 'agricultural income' means (a) any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land revenue in the taxable territories or subject to a local rate assessed and collected by officers of the Government as such ; (b) any income derived from such land by (i) agriculture, or (ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-inkind to render the produce raised or received by him fit to be taken to market, or (iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or received by him, in respect of which no process has be .....

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..... d in the Indian Income-tax Acts as early as 1886, if not earlier ; vide section 5 of the Indian Income-tax Act, 1886 (II of 1886). It has also to be remembered that in spite of this demarcation between agriculture and forests in the Constitution, taxes on agricultural income are a separate head under entry 46 of List II of the Seventh Schedule and would comprise within their scope even income from forestry operations provided it falls within the definition of agricultural income which according to the definition given under article 366(1) means agricultural income as defined for the purposes of the enactments relating to Indian income-tax. The terms agriculture and agricultural purpose not having been defined in the Indian Income-tax Act, we must necessarily fall back upon the general sense in which they have been understood in common parlance Agriculture in its root sense means ager, a field, and culture, cultivation, cultivation of a field which of course implies expenditure of human skill and labour upon land. The term has, however, acquired a wider significance and that is to be found in the various dictionary meanings ascribed to it. It may be permissible to look t .....

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..... Chetii v. Chinnathambi Goundan and Others [1901] ILR 24 Mad. 421, 423 gave the following dictionary meanings of agriculture as culled out from the Century Dictionary and Anderson's Dictionary of Law: The primary meaning of agriculture is the cultivation of the ground ('The Century Dictionary')and in its general sense, it is the cultivation of the ground for the purpose of procuring vegetables and fruits for the use of man and beast including gardening or horticulture and the raising or feeding of cattle and other stock (Anderson's 'Dictionary of Law'). Its less general and more ordinary signification is the cultivation with the plough and in large areas in order to raise food for man and beast ('The Century Dictionary')or, in other words, 'that species of cultivation which is intended to raise grain and other field crops for man and beast.' (Anderson's 'Dictionary of Law'). Horticulture, which denotes the cultivation of garden or orchards, is a species of agriculture in its primary and more general sense . Ramesam, J., in Panadai Pathan and Another v. Ramasami Chetti and Others [1922] ILR 45 Mad. 710 referred to the f .....

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..... viii ) of the Act enacted a provision in regard to the exemption of agricultural income from assessment and it was contended that exemptions should be liberally construed. Reliance was placed on the observations of Viswanatha Sastri, J., in Commissioner of Income-tax, Madras v. K.E. Sundara Mudaliar and Others [1950] 18 ITR 259, 271 : Exemption from tax granted by a statute should be given full scope and amplitude and should not be whittled down by importing limitations not inserted by the Legislature . Mookerjee, J., in Commissioner of Agricultural Income-tax, West Bengal v. Raja Jagadish Chandra Deo Dhabal Deb [1949] 17 ITR 426, 438 also expressed himself similarly : and the present-day view seems to be that where an exemption is conferred by statute, that clause has to be interpreted liberally and in favour of the assessee but must always be without any violence to the language used. The rule must be construed together with the exempting provisions, which must be regarded as paramount . He also quoted a passage from Upper India Chamber of Commerce v. Commissioner of Income-tax, C.P. U.P. [1947] 15 ITR 263 : It is needless to observe that, as .....

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..... and art of farming, caring for, or cultivating forests; the management of growing timber . Webster's New International Dictionary, Vol. I, page 643, while talking of cultivation, says that to cultivate means (1) to prepare, or to prepare and use, for the raising of crops; to till; as, to cultivate the soil; to loosen or break up the soil about (growing crop or plants) for the purpose of killing weeds, etc., especially with a cultivator, as to cultivate the corn; (2) to raise, or foster the growth of, by tillage or by labour and care; to produce by culture; as to cultivate roses; to cultivate oysters . Whether the narrower or the wider sense of the term agriculture should be adopted in a particular case depends not only upon the provisions of the various statutes in which the same occurs but also upon the facts and circumstances of each case. The definition of the term in one statute does not afford a guide to the construction of the same term in another statute and the sense in which the term has been understood in the several statutes does not necessarily throw any light on the manner in which the term should be understood generally. The decided cases d .....

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..... discussion of the legal position and it may be noted that Shephard, J., who was a party to this decision stated in the later case of Murugesa Chetti v. Chinnathambi Gounden [1901] ILR 24 Mad. 421, 423 that he was wrong in the opinion he expressed with regard to a coffee garden in this case. Murugesa Chetty v. Chinnalhambi Goundan [1901] ILR 24 Mad. 421, 424 also was concerned with section 117 of the Transfer of Property Act. The lease there was a lease of land for the cultivation of betel and the Court held that such a lease was an agricultural lease falling under section 117. Bhashyam Ayyangar, J., who delivered the main judgment of the Court discussed the dictionary meanings of the term agriculture and stated that in section 117 of the Transfer of Property Act it was used in its more general sense as comprehending the raising of vegetables, fruits and other garden products as food for men or beast, though some of them may be regarded in England as products of horticulture as distinguished from agriculture. The learned Judge considered the distinction between agriculture and horticulture and observed : The distinction between agriculture when it is used otherwise tha .....

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..... turing cattle was rent within the definitions of section 3 of the Madras Estates Land Act (Mad. Act I of 1908). The Court held that such land was not ryoti land inasmuch as it was not fit for ploughing and raising agricultural crops. The ordinary meaning of agriculture was taken to be the raising of annual or periodical grain crops through the operations of ploughing sowing, etc . (Per Sadasiva Ayyar, J., at p. 741). Chief Commissioner of Income-tax, Madras v. Zamindar of Singam-patti [1922] ILR 45 Mad. 518 was a reference arising out of the assessment for income-tax under Act VII of 1918 of the income derived by the Zamindar of Singampatti from forests and fisheries within the ambit of his Zamindari. The assessee objected to the assessment (i) on the ground that the income was agricultural income within the meaning of section 4 of the Act and, therefore, not chargeable to income-tax ; (ii) that the assessment was illegal as contravening the terms of his permanent sanad for the Zamindari and the provisions of Regulation XXV of 1802. The Court held that where the peishkush of a permanently settled estate was fixed in commutation not only of the rentals of the cultivated .....

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..... or v. Probhat Chandra Barua [1924] ILR 51 Cal. 504 was a case under the Indian Income-tax Act and the classes of income derived from pemanently settled estates were 1. Income from fisheries. 2. Income from land used for stacking timber. 3. Income from pasturage . The income from the first two heads was certainly not agricultural income or income derived from land which is used for agricultural purposes within the meaning of sections 2 and 4 of the Act. But income derived from pasturage was held to be agricultural income which could not lawfully be charged with income-tax. There was a difference of opinion between Rankin, J., and Page, J., in regard to the liability of income from fisheries and income from land used for stacking timber based on the construction of the Permanent Settlement Regulations of 1793. But that is immaterial for our present purposes. What is material is that both the learned Judges were unanimous in their opinion that income from pasturage was income derived from land which is used for agricultural purposes and was therefore within the exemption given by section 4(3)(viii) to agricultural income as defined by section 2(i)( a) of the Act. In Kesho P .....

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..... nature of the product cultivated but should be defined rather by the circumstances in which the cultivation was carried on. He observed at page 902 : I agree with the remark of Shephard, J., in Murugesa Chetti v. Chinnathambi Goundan [1901] ILR 24 Mad. 421 that a man who plants or maintains trees for firewood is not in ordinary parlance an agriculturist. If we take the strict meaning of 'agriculture' according to its derivation it means the cultivation of a field, the cultivation of an open space, as opposed to horticulture, the cultivation of a compartively small enclosed space. The cultivation either of the field in agriculture or of the garden in horticulture cannot be confined, I think, to any particular product. With great respect, I do not agree with the opinion of Bhashyam Ayyangar, J., in Murugesa Chetti v. Chinnathambi Goundan [1901] ILR 24 Mad. 421 that agriculture implies production of things useful as food for man or beast or other products fit for human consumption by way of luxury. That appears to me to be too narrow an interpretation. Still less do I agree with the opinion expressed by Sadasiva Ayyar, J., in Raja of Venkatagiri v. Ayyappa Reddi [1915] .....

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..... on of the term agriculture by having regard to the circumstances in which the cultivation was carried on rather than the nature of the products cultivated and embraced within the scope of the term not merely the production of things useful as food for man or beast or other products fit for human consumption by way of luxury but also such useful products as cotton, jute, flax and hemp, though he stopped short at those products and hesitated to include therein growing of trees in plantation where the land was covered with trees which have to stand on it for a number of years. The last case to be referred in this series is that of Deen Mohammad Mian v. Hulas Narain Singh [1942] 23 Pat. LT 143 where it was held that an orchard is an agricultural land. It was observed: The case of an orchard is quite different. Orchard trees ordinarily are, and can be presumed to have been, planted by a man after preparation of the ground which is cultivation and seasonal crops are gathered. Fruit trees also require seasonal attention such as pruning and digging of the soil around the roots, and it cannot be said that this ceases to be cultivation merely because the whole tree is not repl .....

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..... not an agricultural purpose. Similarly in the case of sugarcane the plants stand on the land for two years or a little more, and there are usually two cuttings. Castor plants stand for some years on the soil and the seeds are periodically gathered in. Bamboo is often planted in enclosed lands by digging pits, filling them with sand and manure and then planting the young stalks in a bunch at suitable distances. Watering is done for the first 2 or 3 years. Every year, the land surrounding each bamboo cluster is dug with a spade and small earthen ridges are put up so as to catch and retain rain water. Bamboo plants attain maturity in about 3 or 4 years, and the thorny branches which grow on the main stem are then fit to be cut off and used for fencing purposes..................................... I am unable to see why these operations are not agricultural operations . The cases above noted all of them interpret the term agriculture in its narrower sense, though there is a marked progress from the extremely narrow construction put upon it by Bhashyam Ayyangar, J., in Murugesa Chetti v. Chinnathamhi Goundan [1901] ILR 24 Mad. 421 to the somewhat wider connotation thereof adopt .....

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..... ses of sub-section (3) of section 63 of the Municipalities Act, are or are not lands used solely for agricultural purposes................................. We do not consider that any distinction can be drawn between large and small plots of lands on which roots or grains are cultivated. All such land must be held to be land used solely for agricultural purposes.........................Counsel has urged before us that these so-called waste lands are pasture lands and as such should be held to be lands used solely for agricultural purposes....................... If, therefore, it could be shown that these so-called waste lands were in reality pasture grounds or lands used for rearing livestock , we should certainly decide that they were lands used solely for agricultural purposes . The learned Judges there were influenced by the dictionary meaning of the term agriculture as given in Murray's New Oxjord Dictionary and understood the term agriculture in the wider sense as including user of land for rearing live-stock also. In Panadai Pathan v. Ramaswami Chetti [1922] ILR 45 Mad. 710 a lease of land was given for growing casuarina trees and the question was whether suc .....

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..... are by watering the plants and he was, therefore, of opinion that rearing of casuarina trees was agricultural purpose within the meaning of section 117 of the Transfer of Property Act. It may be observed however that according to both the learned Judges some preparation of the ground or some expenditure of human care and attention in such operations as those of ploughing, sowing, planting, etc., was considered essential for constituting these operations agricultural operations. In Commissioner of Income-tax, Burma v. Kokine Dairy, Rangoon [1938] 6 ITR 502, 509 the question was whether income from a dairy farm and the milk derived from the farm is agricultural income and exempt as such from income-tax. Roberts, C.J., who delivered the opinion of the Court observed: Where cattle are wholly stall-fed and not pastured upon the land at all, doubtless it is trade and no agricultural operation is being carried on : where cattle are being exclusively or mainly pastured and are none the less fed with small amounts of oil-cake or the like, it may well be that the income derived from the sale of their milk is agricultural income. But between the two extremes there must be a numbe .....

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..... er these activities fall within the connotation of the terms agriculture and agricultural purpose which are the only terms to be considered for bringing the income derived therefrom within the definition of agricultural income in section 2(1)(a) of the Indian Income-tax Act. In Moolji Sicka Co., In re [1939] 7 ITR 493 Derbyshire, C.J., understood the term agriculture in a wider sense as including operations not only on the land itself but on the shrubs which grew on the soil and were according to him a part of the soil. The assessee were manufacturers of biri, a kind of cigarette consisting of tobacco wrapped in tendu leaves. The tendu plant was of entirely wild growth and propagated itself without human agency in jungle and waste lands. The assessees had taken several villages on lease for plucking the leaves of such plants and the work done by the assessees consisted in pruning the trees and burning the dead branches and dried leaves lying on the ground. The Court held that the profits accruing to the assessees by the sale of tendu leaves was not exempt as agricultural income but to the extent to which pruning of the tendu shrub occurred, there was in a technical .....

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..... al crops like wheat, rice, ragi, cotton, tobacco, jute, etc. Casuarina is usually raised on dry lands of poor quality, and it is usual to find the same land used alternatively for the cultivation of ordinary cereal crops like groundnut, gingelly, cholam, kambu, etc. and for the raising of casuarina plantations. The land bears the dry assessment whatever be the nature of the crop raised . This enlarged connotation of the term agriculture has been tinged by the dictionary meanings ascribed to it in Murray's Oxford Dictionary and Webster's Dictionary quoted above which understood the term as including the allied pursuits of rearing, feeding and management of live-stock and also including husbandry, farming, horticulture, etc., in the widest sense, as also butter, cheese-making, etc. We shall have to consider at the appropriate stage as to how far such enlargement is warranted by the definition of agricultural income as given in section 2(1)(a) of the Indian Income-tax Act. The cases above noted all of them involve some expenditure of human skill and labour either on the land or the produce of the land, for without such expenditure there would be no question of .....

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..... contrary, it is the result of the absence of cultivation. Trees and bushes yielding these fruits grow not on cultivated soil but on the land not under cultivation and frequently the more neglected and wild the land is the thicker grow these wild bushes and trees yielding such crop. Practically in all cases the crop is the result of want of cultivation and not the result of cultivation. In my judgment it is not established that the income described as phalkar in these cases is income derived from land used for agriculture or from agriculture and is, therefore, not assessable to agricultural income-tax . In Raj Mustafa Ali Khan v. Commissioner of Income-tax, U.P. C.P. [1945] 13 ITR 98, which went up to the Privy Council, the Oudh Chief Court held that income from the sale of forest trees growing on land naturally and without the intervention of human agency, even if the land was assessed to land revenue, was not agricultural income within the meaning of section 2(1)(a) of the Income-tax Act. The Court followed an earlier decision given by it in the case of Maharaja of Kapurthala v. Commissioner Income-tax, C.P. U.P. [1945] 13 ITR 74, 93, in which the Court had discussed th .....

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..... ian Income-tax Act. The Court observed : There is ample authority for holding that income derived from trees which have grown wild is not agricultural income, but, without the aid of authority, we should have no hesitation in saying that to describe it as such would involve a distortion of the meaning of the word 'agriculture' . and such income was accordingly held to be not agricultural income within the meaning of section 2(1) of the Act. (It may be noted that the appellant preferred an appeal to the Privy Council against this decision but the same was dismissed : vide Yuvarajah of Pithapuram v. Commissioner of Income-tax, Madras [1949] 17 ITR 445.) Benoy Ratan Banerji v. Commissioner of Income-tax, U.P., C.P. Berar [1947] 15 ITR 98, was another case in which the assessee derived income from the sale of timber from his Zamindari on which there had been for many years a number of forest trees, khar and wild plants. There was no evidence on the record to show that the growth of the trees in question was the result of any actual cultivation by the assessee at all. The various trees which he sold were of spontaneous growth, not having grown as a result of .....

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..... '. In the judgment of the Chief Court (which was generally approved by their Lordships) it was observed that 'the term agricultural land is used in the Act of 1905 in its widest sense to denote all land which is tilled'.......... The Chief Court had held that land covered by a natural forest was not agricultural land, and this view also would seem to have been confirmed by the Judicial Committee and they further proceeded to observe: We have underlined the word 'tilled' because, in our opinion, that brings out the distinction which we have sought to draw between an agricultural and a nonagricultural purpose. The decisions referred to are Kaju Mal v. Saligram and Kaju Mall v. Saligram [1919] PR No. 19 p. 237 and [1923] ILR 5 Lah. 50 . The Court came to the conclusion that it was essential that the income should be derived from some activity which necessitated the employment of human skill and labour and which was not merely a product of man's neglect or inaction except for the gathering in of the spoils. Not only must the assessee labour to reap the harvest. But he must also labour to produce it, and they accordingly held that the incom .....

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..... noy Ratan Benerji v. Commissioner of Income-tax, U.P., C.P. Berar [1946] 15 ITR 98) and elsewhere in India. The question seems not yet to have been decided whether land can be said to be used for agricultural purposes within the section, if it has been planted with trees and cultivated in the regular course of arboriculture, and upon this question their Lordships express no opinion. It is sufficient for the purpose of the present appeal to say (1) that in their opinion no assistance is to be got from the meaning ascribed to the word 'agriculture' in other statutes and (2) that, though it must always be difficult to draw the line, yet unless there is some measure of cultivation of the land, some expenditure of skill and labour upon it, it cannot be said to be used for agricultural purposes within the meaning of the Income-tax Act. In the present case their Lordships agree with the High Court in thinking that there is no evidence which would justify the conclusion that this condition is satisfied . It may be noted that the Privy Council also proceeded upon the footing that there was nothing to show that the assessee was carrying on any regular operations in forestry a .....

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..... could fall within the definition of agricultural income contained therein. The first case which came up for consideration after the above decision of the Privy Council was the case of Commissioner of Agricultural Income-tax, West Bengal v. Raja Jagadish Chandra Deo Dhabal Deb [1949] 17 ITR 426, 438 before the Calcutta High Court. The assessee was the Zamindar of Chilkigarh in the district of Midnapore the western part of which contained jungle mahal. The income in question was derived from the sale of sal trees which grew in the forest. The forest was notan uncared for virgin forest. The assessee maintained a staff of one forester, 6 guards and 24 chaukas to look after the forest and for the proper cultivation of the same. The sal trees were generally sold off in blocks when about 15 years old. Annually blocks of about 1,000 acres were sold up. All the trees in the blocks sold up were cut down by the purchasers for sale as fuel and house posts. During the rainy season from the stumps of the trees cut down, new shoots came out which grew into mature trees in 15 years, to be cut down again. In order to prevent damage to the young shoots in the early stages of their growth the areas .....

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..... the findings of fact recorded by the Tribunal in the case before them the Court was of opinion that the forest in question was not either a virgin forest or containing trees which grew spontaneously and naturally without any human intervention whatever. The circumstance that there was felling of the trees.the new shoots appearing during the rainy season without any human intervention, guarding of the new shoots from either being trampled under foot or being browsed by animals and the removal of undergrowth of fallen leaves were considered regular operations in forestry in the forests in question which required the application of human efforts sufficient to include them under the head agricultural income . It was further observed : If the view of the Judicial Committee were to exclude all kinds of income from the category of agricultural income unless there was actual cultivation of the soil, reference to 'regular operations of forestry, would have been unnecessary. Not that there must always be 'some measure of cultivation of the land' and 'some expenditure of skill and labour upon it' but that the proof of either would be sufficient to bring the case wi .....

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..... o the decision of the Privy Council in Raja Mustafa Ali Khan v. Commissioner of Income-tax [1948] 16 ITR 330 and after quoting the passage from the judgment above referred to proceeded to observe : Their Lordships have not laid down that some measure of cultivation is absolutely necessary before it can be said that land is used for agricultural purposes. In fact 'some measure of cultivation' is placed on a par with some 'some expenditure of skill and labour.' If either of the two conditions exists, the land could be said as being used for agricultural purposes. Tillage or actual cultivation would not in their view be an essential pre-requisite of 'agriculture' in its wider implication . After referring to a decision of the Calcutta High Court in Hedayet Alt v. Kamalanand Singh [1912] 17 CLJ 411 and Commissioner of Agricultural Income-tax v. Raja Jagadish Chandra Deo Dhabal Deb [1949] 17 ITR 426 the Court observed : The review of the authorities considered above leads to the conclusion that purpose within the meaning of the Assam Act can be agricultural even if its achievement does not involve actual cultivation of the soil. In the words .....

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..... der the circumstances be held to be used for agricultural purposes nor could it be held that any process of agriculture was being carried on. The Court observed that planned and scientific exploitation of a forest of spontaneous growth, though it might yield regular income, would not be income from agriculture as no operations were carried out and no human skill and labour was expended in such a case on the land itself. Raja Benoy Kumar Sahas Roy v. Commissioner of Income-tax, West Bengal [1953] 24 ITR 70, the judgment under appeal before us here, struck a middle path. The Tribunal had found that except the sowing of seeds, the operations carried out, though equally necessary for the maintenance and upkeep of any forest of spontaneous growth, did not involve such expenditure of human labour and skill as to constitute them operations in agriculture. The sowing of seeds were few and far between and the normal process by which the forest grew again, after a part of it had been cut down, was by the growing out of off-shoots from the stumps left, the operations were therefore in the main only operations for the maintenance, preservation, nursing and rearing , of the forest. It .....

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..... dug, and sown with seeds whenever bare patches appeared and while all this was done, if elaborate subsidiary arrangements were also maintained for the protection of the trees and the tending of new shoots springing from the stumps of old trees cut down till they themselves grew into new trees, it might well be said that operations in forestry involving agricultural operations were carried on the forest land and that income derived from the land was derived from agriculture. Sir Kameshwar Singh v. Commissioner of Income-tax, Bihar Orissa [1954] 26 ITR 121, which is the subject matter of C.A. Nos. 112 to 117 of 1956 before us also was a case under the Indian Income-tax Act (XI of 1922). It was found by the Appellate Tribunal that the sal and ebony trees which grew in the forest were conserved by allowing each a circle of 15 feet, that there was cutting down of the trees and jungles which fell within that circle leaving sufficient space for growth and that forest conservancy staff was maintained to look after the forest. The Court construed the observations of the Privy Council in Raja Mustafa AH Khan's case [1948] 16 ITR 330 to mean that in order to show that an income i .....

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..... onymous with ploughing or tillage. But even if it were, I am unable to accept the argument for the simple reason that if precision is the hallmark of Privy Council decisions, as I think it is, then their Lordships would have stopped short with the phrase 'some measure of cultivation of the land'. This, in itself, was quite expressive and no further expressions were needed to clarify the matter. Therefore, when they proceeded to add after a comma, the phrase 'some expenditure of skill and labour upon it', they evidently intended to signify something more than mere cultivation. There is, of course, no conjunctive phrase between the two expressions but in the context the meaning seems to be plain . Ram Labhaya, J., expressed himself in the test laid down by the Privy Council in these words: A test however was laid down for finding out when land may be said to be used for agricultural purposes. The test requires that there must be some measure of cultivation of the land ; some expenditure of skill and labour upon it. It has however to be borne in mind that their Lordships when stating the facts did point out that the case had proceeded on the footing .....

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..... used for agricultural purposes . Unless the land was subject to some measure of cultivation or there was some expenditure of human skill and labour on it in order to derive the rent or revenue, the purpose would not be agricultural. It was observed that the cultivation was not mere tilling but the science and art of cultivating the soil may depend upon the nature of the soil, the atmosphere, and various other factors. It was therefore idle to regard tilling as the sole or indispensable test of agriculture. On the facts before it, the Court held that the operations carried on by the assessee through the forest establishment showed that there had been both cultivation of the soil as well as the application of human skill and labour upon the land as well as on the trees themselves, and that therefore the income derived from the forest was exempt from taxation under section 4(3)(viii) of the Indian Income-tax Act. Before parting with these cases it may be apposite here to note the following observations of Viswanatha Sastri, J., in Commissioner of Income-tax, Madras v. Sundara Mudaliar [1950] 18 ITR 259 at page 277 : In Commissioner of Agricultural Income-tax v. Raja Ja .....

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..... would be that the assessee would not be liable to assessment under the Indian Income-tax Act but he would have to pay the agricultural income-tax which would be levied upon him under the relative Agricultural Income-tax Acts. The only enquiry which would therefore be relevant is whether the income in question is agricultural income within the terms of the definition thereof and that would have to be determined in each case by the Court having regard to the facts and circumstances of the particular case before it. In order that an income derived by the assessee should fall within the definition of agricultural income two conditions are necessary to be satisfied and they are : (i) that the land from which it is derived should be used for agricultural purposes and is either assessed for land revenue in the taxable territories or is subject to local rates assessed and collected by the officers of the Government as such ; and (ii) that the income should be derived from such land by agriculture or by one or the other of the operations described in clauses (ii) and (iii) of section 2(1)( b) of the Indian Income-tax Act. It was at one time thought that the assessment of the la .....

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..... he State. Land revenue is collected annually from the proprietor of the land and is presumably exigible from the income of the land. Cash payment in lieu of a share of the produce due to the State was substituted long ago to facilitate collection of revenue. Income derived from the produce of the land having been subjected to the payment of the annual land revenue, it was thought inequitable to subject the same income again to annual income-tax. Hence the exemption of the agricultural income of assessed lands or lands whose revenue had been remitted either in whole or in part, as in the case of inams. Mines, minerals, and quarries having been reserved by the State, at any rate in respect of lands other than those comprised in a permanently settled estate, income derived from such sources was not exempted from income-tax. The revenue assessment was based on the quality of the soil and the income derived from the produce of the lands, and therefore the exemption from income-tax was limited to agricultural income derived from assessed lands. Such is the reason for exemption from income-tax of agricultural income . Whatever may have been the genesis of the exemption of agricultur .....

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..... in respect of income derived from the permanently settled estate would not be a breach of the Madras Permanent Settlement Regulation No. XXV of 1802. The assessment of land to land revenue or its being subject to local rates assessed and collected by the officers of the Government as such is merely an indication that the land is an agricultural land as distinguished from land which can be used for agricultural purposes but carries the matter no further. We have, therefore, to consider when it can be said that the land is used for agricultural purposes or agricultural operations are performed on it. Agriculture is the basic idea underlying the expressions agricultural purposes and agricultural operations and it is pertinent therefore to enquire what is the connotation of the term agriculture . As we have noted above, the primary sense in which the term agriculture is understood is agar field and cultra cultivation, i.e., the cultivation of the field, and if the term is understood only in that sense agriculture would be restricted only to cultivation of the land in the strict sense of the term meaning thereby, tilling of the land, sowing of the seeds, planting and similar .....

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..... cultivation of the land does not comprise merely of raising the products of the land in the narrower sense of the term like tilling of the land, sowing of the seeds, planting, and similar work done on the land but also includes the subsequent operations set out above all of which operations, basic as well as subsequent, form one integrated activity of the agriculturist and the term agriculture has got to be understood as connoting this integrated activity of the agriculturist. One cannot dissociate the basic operations from the subsequent operations and say that the subsequent operations, even though they are divorced from the basic operations can constitute agricultural operations by themselves. If this intregated activity which constitutes agriculture is undertaken and performed in regard to any land that land can be said to have been used for agricultural purposes and the income derived therefrom can be said to be agricultural income derived from the land by agriculture. In considering the connotation of the term agriculture we have so far thought of cultivation of land in the wider sense as comprising within its scope the basic as well as the subsequent operation .....

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..... that of cultivation of the land and even though it can be extended in the manner we have stated before both in regard to the process of agriculture and the products which are raised upon the land, there is no warrant at all for extending it to all activities which have relation to the land or are in any way connected with the land. The use of the word agriculture in regard to such activities would certainly be a distortion of the term. A critical examination of the definition of agricultural income as given in section 2(1) of the Indian Income-tax Act and the relevant provisions of the several Agricultural Income-tax Acts of the various States also lends support to this position. In the first instance, it is defined as rent or revenue derived from land which is used for agricultural purposes ; and it is next defined as income derived from such land by agriculture or by the activities described in clauses (ii) and (iii) of section 2(1)( b) of the Act. These activities are postulated to be performed by the cultivator or receiver of rent-in kind of such land in regard to the products raised or received by him which necessarily means the produce raised on the land either by hi .....

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..... rations performed by the agriculturist are agricultural operations and enjoy the characteristic of agricultural operations. It is agreed on all hands that products which grow wild on the land or are of spontaneous growth not involving any human labour or skill upon the land are not products of agriculture and the income derived therefrom is not agricultural income. There is no process of agriculture involved in the raising of these products from the land. There are no agricultural operations performed by the assessee in respect of the same, and the only work which the assessee performs here is that of collecting the produce and consuming and marketing the same. No agricultural operations have been performed and there is no question at all of the income derived therefrom being agricultural income within the definition given in section 2(1) of the Indian Income-tax Act. Where, however, the assessee performs subsequent operations on these products of land which are of wild or spontaneous growth, the nature of those operations would have to be determined in the light of the principles enunciated above. Applying these principles to the facts of the present case, we no doubt .....

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..... for purchase of seeds, insecticides, fertilizers/manures, details of labour allegedly working for assessee s alleged agricultural activities, nor any evidence of sale of crops are filed. The assessee has claimed that he was doing oil extraction on job work basis, but no evidence whatsoever to substantiate his claim are filed, and even no income towards job charges was booked nor any expenses incurred were claimed, and no evidence whatsoever is on record. Only one Profit and Loss account account of agricultural work allegedly being carried out by the assessee is filed, in which all alleged transactions are claimed to be in cash, with absolutely no corroboratory evidences are filed. This Profit and Loss account is self serving, and is hereby rejected. Except for a lease deed dated 01.07.1999 which was valid for only for three years, no other corroboratory evidences was brought on record to prove that the assessee did actually carry out agricultural operations during the year under consideration. Even, no evidence of renewal of lease deed beyond first three years of its execution was brought on record and even no evidences of payment of lease rent was brought on record except first in .....

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..... 05 20,00,000/- Deposit by Partner Smt Shashi Singh and Anita Kesarwani 36,00,000/- So, far as claim of cash deposit of Rs. 16 lacs as now claimed by the assessee to be from own saving from agricultural income since 1999, firstly there are no evidences on record of carrying out any agricultural operations by the assessee since 1999, except for the lease deed dated 01.07.1999 filed by the assessee. We have elaborately discussed in preceding para s of the claim of the assessee of carrying out any agricultural operations and rejected the said claim set up by the assessee. Further, the assessee did not file any evidence before any of the authorities of any agricultural operations carried out by him since the so called lease deed dated 01.07.1999 was allegedly executed by the assessee. Further, the assessee did not filed any evidence to prove that such a huge cash of Rs. 16 lacs was held by him since earlier years and its declaration to department for the earlier years as cash in hand in the return of income for the earlier years or even for this year filed by the assessee, is not .....

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..... during the year, no sale of flats purported to be constructed by him on the aforesaid plot of land, has taken place, nor there is any evidence on record that Mrs. Shashi Singh and/or Mrs. Anita Kesarwani gave any amount in cash to the assessee, and moreover, as per Ikrarnama, both Mrs. Shashi Singh and Mrs. Anita Kesarwani were not required to contribute any amount towards this venture, apart from contributing plot of land on which construction was to be carried out, of which both of them namely Mrs. Shashi Singh and Mrs. Anita Kesarwani were the owners. This claim is raised by the assessee of having received Rs. 20 lacs in cash which stood deposited in PNB, from Mrs. Shashi Singh and Mrs. Anita Kesarwani, for the first time before tribunal, and that too without filing any evidence on record to substantiate the aforesaid claim, and this claim is merely a balled claim without any evidence. Thus, we have no hesitation in rejecting this claim of the assessee. Thus, we hold that ld. CIT(A) has rightly made the addition of Rs. 20 lacs, which we affirm, as the said cash deposits are income of the assessee from the undisclosed sources. Thus, we hold that ld. CIT(A) has rightly made the ad .....

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..... and also deposits in Standard Chartered Bank were from income from agriculture, as under: The AO observed that the assessee has submitted that he has deposited Rs. 37 lacs from the proceeds of sale of House No. 846, University Road, Allahabad in Standard Chartered Bank, while 22 lacs deposits were from income from claimed to be allegedly earned from agricultural, and 1,83,000/- was claimed by the assessee from sale of Aroma oil which was deposited in the Standard Chartered Bank. The AO observed that the aforesaid Rs. 37 lacs was cash deposits in the Standard Chartered Bank and are not the sale proceeds from sale of House No. 846, University Road, Allahabad, which led AO to make additions to the tune of Rs. 37 lacs in the hands of the assessee by invoking provisions of Section 68. The AO further observed that the assessee has sold his house no. 846, University Road, Allahabad, for a total consideration of Rs. 50 lacs and the receipts as per sale deeds are reconciled, and this claim of Rs. 37 lacs being received from sale of house is not correct. 10b. The AO further observed that the assessee has claimed that he deposited Rs. 22,00,000/- in the Standard Chartered Bank acc .....

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..... de reassessment order dated 25.03.2014 passed by AO u/s 143(3) read with Section 147 of the 1961 Act. 11a. Aggrieved by reassessment framed by the AO, the assessee filed first appeal before ld. CIT(A), and the assessee submitted that the cash deposited of Rs. 23,83,000/- represents cash deposit out of agricultural income. The assessee enclosed Profit and Loss Account and ledger book of alleged agriculture carried on by the assessee. The assessee raised similar contentions before ld. CIT(A) as was raised by the assessee before ld. CIT(A) for ay: 2006-07(refer contentions of the assessee at para 5a of this order, for ay: 2006-07, reproduced in this order). 11b. The ld. CIT(A) dismissed the appeal of the assessee by holding as under: Decision : I have gone through the facts and the written submissions filed along with the details filed enclose therein. The assessee deposited Rs. 23,83,000/- (Rs. 22,00,000+ 1,83,000) in cash on account of agricultural income and sale of aroma oils. The appellant submitted only copy of lease of agricultural land as evidence in favour of doing agricultural activity. Appellant's only contention is that there is a lease agreement on a .....

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..... of S. 2(1) of the Act. Admittedly appellant has not been able to submit any evidence pertaining to both the basic and the subsequent operations that can show that any form of integrated activity of the agriculture actually happened or any evidence of its sales generating the income. All income is supposedly have been received from farmers in cash.The applicant claimed to have done business of Aroma oll. Applicant submitted that the he extracted the oil from flowers and grass on job work basis. But no details whatsoever of any kind has been submitted pertaining to job works done. More so, the sale of oil of flowers and grass is not agricultural income, exempt u/s 2(1A) of the Income Tax Act. Applicant has not submitted any details of farmers from Rai Bareilly who purchased grains, vegetables and also flowers and grass for Aroma work in cash. It is surprising that someone who purchases goods from applicant for Rs. 25,000 - 65,000/-, their details are no known to him but he knows that after purchasing agricultural produce from applicant these farmers sent it to other places for extraction of oil. Such contradictory facts are nothing but an afterthought of the appellant to explai .....

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..... le by the appellant. In the case of The CIT vs Sri Ramakrishna Deo (1959) 35 ITR 312, 316, 317(SC) Held: The law is well settled that it is for a person who claims exemption to establish it, and there is no reason why it should be otherwise when the exemption claimed is under the Incometax Act.Held that the burden is on the appellant to prove that the income sought to be taxed was agricultural income. Avdhesh Kumar Jain vs Commissioner of Income-Tax (1989) 178 ITR 443 (All) HELD: 2. The concurrent findings of the tax authorities including the Income-tax Appellate Tribunal are that the assessee had failed to produce any satisfactory evidence about his being engaged in agricultural activities. The further finding is that the assessee was also not able to state to whom the said agricultural produce was sold. Consequent to the aforesaid finding, the Tribunal has held that the sum of Rs. 28,000 was rightly assessed as income from undisclosed sources in the hands of the assessee. Having heard learned counsel for the parties, we are of the opinion that the findings recorded by the Income-tax Appellate Tribunal are pure findings of fact which are based on appr .....

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..... before ld. CIT(A) that the assessee only deposited an amount of Rs. 60,83,000/- in Bank, and not Rs. 88,10,338/- in the bank. The assessee submitted details of deposits as under: Amount Sale of House 37,00,000/- Agriculture Income 22,00,000/- Aroma Oil Gross Receipts 1,83,000/- Total 60,83,000/- The assessee submitted that the AO erred in taking deposits at Rs. 88,10,338/-, while correct deposits in Standard Chartered Bank were Rs. 60,83,000/-. 11e. The ld. CIT(A) dismissed the appeal of the assessee on the issue of cash deposit of Rs. 27,27,338/-, by holding as under Decision: I have gone through the facts and the written submissions filed along with the details filed enclose therein. With regard to the cash deposits in Standard Chartered Bank no evidence explaining the nature of receipts was submitted during the assessment or appellate proceedings by the appellant. Appellant has failed to discharge the initial onus of proving that the cash deposited is not his in .....

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..... was submitted that total deposits in Standard Chartered Bank was Rs. 88,03,603/- and not Rs. 88,10,338/- as held by the AO. The copy of bank statement of Standard Chartered Bank was enclosed by the assessee. 12b. The ld. Sr. DR on the other hand submitted that there are deposits of Rs. 88,00,603/- in Standard Chartered Bank ( exclusive of interest income earned of Rs. 2500+ Rs.2815 +Rs. 4106 credited on 30.06.2006, 31.12.2006 and on 31.03.2007 ), out of which cash deposits were to the tune of Rs. 27,61,500/- while cheque deposits were to the tune of Rs. 60,39,103/-. It was submitted that the assessee has claimed agricultural income of Rs. 22,00,000/- and sale of Aroma Oil of Rs. 1,83,000/-, but no evidence were filed to prove agricultural activities were carried out by the assessee. It was submitted that the assessee is not able to prove that any agricultural activities were in-fact carried on by the assessee. It was also submitted that the assessee is changing stand as to the agricultural income earned by him. It was submitted that the assessee in ITR filed with Revenue claimed that gross receipt from sale of Aroma oil were Rs. 2.50 lacs, while now it is claimed that income fr .....

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..... ness income of Rs. 85,000/- and interest income of Rs. 3,500/-, thus, gross total income declared being Rs. 88,500/-. Additionally, the assessee declared agricultural income of Rs. 22,00,000/-, which was claimed as an exempt income. The AO issued statutory notices u/s 143(2) and 142(1) of the 1961 Act. The assessee participated in reassessment proceedings. During reassessment proceedings, the assessee claimed agricultural income of Rs. 22,00,000/- and income from aroma business to the tune of Rs. 1,83,000/-. The authorities below rejected the claim of the assessee as to earning of agricultural income, in the absence of any evidence to support his contentions. The factual matrix being the same as was prevailing in ay: 2006-07 and our decision for ay: 2006-07 shall apply mutatis mutandis to the ay: 2007-08 as factual matrix being similar in ay: 2007-08 to that prevailing in ay: 2006-07. Thus, the additions of Rs. 23,83,000/- as sustained by ld. CIT(A) stood upheld by us. The assessee fails on this issue and his appeal on this issue stood dismissed. We order accordingly. 13b. So far as addition of Rs. 37,00,000/- with respect to deposits in Standard Chartered Bank, the ld. CIT(A) h .....

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..... ted verification purposes for bringing to tax correct income, we are directing AO to verify and bring to tax correct income chargeable to tax. We order accordingly. 14. In the result, appeal filed by the assessee in ITA no. 4/Alld/2022 stand dismissed in the manner indicated above. We order accordingly ITA NO. 5/ALLD/2022-Assessment Year 2008-09 15. The grounds of appeal raised by assessee in ITA No. 5/Alld./2022 for assessment year 2008-09, in memo of appeal filed with tribunal reads as under:- 1. That on the facts and circumstances of the case the authority below should have accepted the agriculture Income at Rs.37,43,000/-. 2. That the addition of Rs.28,13,159/- the difference in Bank deposit is only due to information of AIR. 3. That similar the addition of Rs. 1,01,90,683/- is also based on the difference of cash deposit and AIR information which should have been verified by the Authority below. 3. That the order passed by authority below is unjust. 16. The brief facts of the case are that the assessee s assessment was reopened by AO by invoking provisions of Section 147/148 of the Act. Reasons for reopening of concluded assessment we .....

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..... d this agreement was prepared on the plain paper. The AO rejected the contentions of the assessee and observed that no agricultural operations were carried on by the assessee, and an amount of Rs. 37,43,000/- claimed to be deposited by assessee from agricultural income is in-fact income from un-disclosed sources of the assessee, which was added by AO to the income of the assessee by invoking provisions of Section 68 of the 1961 Act, vide reassessment order dated 25.03.2014 passed by the AO u/s 147 read with Section 143(3) of the 1961 Act. 16b. The AO further observed that the assessee has deposited total amount of Rs.77,86,514/- in his bank account maintained with Standard Chartered Bank bearing Account No. 62510015697. The AO asked assessee to explain the same. The assessee submitted that he deposited Rs. 49,73,355/- in his bank account, but the assessee did not explain details of deposit of Rs. 28,13,159/-, which led AO to made additions to the tune of Rs. 28,13,159/- as income from undisclosed sources in the hands of the assessee by invoking provisions of Section 68 of the 1961 Act, vide reassessment order dated 25.03.2014 passed by the AO u/s 147 read with Section 143(3) of .....

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..... n at a very low cost and only job work was being done on labour basis and the applicant had no concern with oil sale of its marketing. The applicant's sale was limited only to agricultural produces. In support lease agreement was filed before the A.O. signed by both the parties which was not believed by the A.O. only on the ground that it was written on plain paper where has it has been written on the trust letter pad copy of lease deed enclosed herewith. That the applicant is enclosing the detail of gross receipt of agriculture income rule of Aroma plants etc. Applicant enclosed the profit and loss account of agriculture income in details . 17b. With respect to the Addition of Rs. 37,43,000/- as was made by the AO, the Ld. CIT(A) rejected the contention of the assessee of having carried out any agricultural activities, by holding as under : Decision: I have gone through the facts and the written submissions filed along with the details filed enclose therein. The assessee deposited Rs. 37,43,000/- in cash on account of agricultural income in Standard Chartered Bank Account no. 62510015697. The appellant submitted only copy of lease of agricultural land as .....

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..... ion and marketing, are not products of agriculture and the income derived from them is not agricultural income within the meaning of S. 2(1) of the Act. Admittedly appellant has not been able to submit any evidence pertaining to both the basic and the subsequent operations that can show that any form of integrated activity of the agriculture actually happened or any evidence of its sales generating the income. All income is supposedly have been received from farmers in cash. The applicant claimed to have done business of Aroma oil. Applicant submitted that the he extracted the oil from flowers and grass on job work basis. But no details whatsoever of any kind has been submitted pertaining to job works done. More so, the sale of oil of flowers and grass is not agricultural income, exempt u/s 2(1A) of the Income Tax Act. Applicant has not submitted any details of farmers from Rai Bareilly who purchased grains, vegetables and also flowers and grass for Aroma work in cash. It is surprising that someone who purchases goods from applicant for Rs. 25,000 65,000/-, their details are no known to him but he knows that after purchasing agricultural produce from applicant these farmers s .....

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..... il is sold commercially so persons who are the buyers can be identified easily by applicant. However no details are made available by the appellant. In the case of The CIT vs. Sri Ramakrishna Deo (1959) 35 ITR 312, 316, 317(SC).Held: The law is well settled that it is for a person who claims exemption to establish it, and there is no reason why it should be otherwise when the exemption claimed is under the Income-tax Act.Held that the burden is on the appellant to prove that the income sought to be taxed was agricultural income. Avdhesh Kumar Jain vs Commissioner of Income-Tax (1989) 178 ITR 443 (All). Held: 2. The concurrent findings of the tax authorities including the Income-tax Appellate Tribunal are that the assessee had failed to produce any satisfactory evidence about his being engaged in agricultural activities. The further finding is that the assessee was also not able to state to whom the said agricultural produce was sold. Consequent to the aforesaid finding, the Tribunal has held that the sum of Rs. 28,000 was rightly assessed as income from undisclosed sources in the hands of the assessee. Having heard learned counsel for the parties, we are of .....

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..... ut can be added u/s 69A of IT Act as unexplained money. Therefore I am left with no alternative but to confirm the addition made by AO. AO is directed to tax this amount u/s 69A OF IT Act. This ground is dismissed. 17e. With respect to additions being made by the AO to the tune of Rs. 1,01,90,683/- u/s 68 of the 1961 Act, the assessee submitted before ld. CIT(A) as under: Appellant s submission: During the appellate proceedings, the A.R. of the appellant has submitted as under- 3.Cash Deposit Rs.1,01,90,683/-: The appellant has deposited Rs.77,86,514/- in bank and not Rs.1,79,77,197/-. The appellant had also sold flat for Rs.48,51,000/- the details has been submitted at the time of assessment proceedings before the A.O. The appellant had to suffer loss in construction work due to dispute in partnership. The affidavit is also filed. 17f. The Ld. CIT(A) dismissed the appeal of the assessee by holding as under: Decision: I have gone through the facts and the written submissions filed along with the details filed enclose therein. With regard to the cash deposits in Standard Chartered Bank Account no. 62510015697, no evidence explaini .....

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..... hip with Mrs. Shashi Singh and Mrs. Anita Kesarwani. It was submitted that cash of Rs. 46.54 lacs was deposited in Standard Chartered Bank during the year under consideration and further cheques of Rs. 26,96,355/- were deposited in the said bank account. It was submitted that AIR information that Rs. 1.79 crores in cash were deposited in the bank accounts of the assesse is an erroneous information. It was submitted that no opportunity was granted to the assessee before making such a huge addition to the income of the assessee.Our attention was drawn to Page 89A and 89B of Departmental PB, wherein AIR information is placed, and it was submitted that first AIR information RRR dated 30.08.2008 and posted dated in ITS was 19.06.2009 which is an original return and amount of cash deposited in bank is allegedly stated to be Rs. 1,29,09,797/-, while at PB/Page 89B is a supplementary AIR return RRR filed on 12.08.2009 and posting date is 17.03.2010, wherein cash deposits in the bank account were to the tune of Rs. 50,67,400/-. It was submitted that the authorities below erroneously added both the amounts reflected in original return and supplementary return, while only supplementary retur .....

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..... ursuance to notice issued u/s 148 of the 1961 Act. The assessee participated in reassessment proceedings. The assessee declared interest income of Rs. 3,250/-. The assessee claimed loss of Rs. 47,15,200/- under the head Profits and Gains from Business or Profession . The assessee also declared agriculture income of Rs. 34,00,000/- in the return of income filed with Revenue, which was claimed as an exempt income. The AO issued statutory notice u/s 143(2) and 142(1) of the 1961 Act. The assessee participated in reassessment proceedings. During reassessment proceedings, the assessee claimed agricultural income of Rs. 34,00,000/-, which was claimed as an exempt income u/s 10(1) read with Section 2(1A). The authorities below rejected the claim of the assessee as to earning of agricultural income, in the absence of any evidence to support his contentions. The factual matrix being the same as was prevailing in ay: 2006-07 and ay: 2007-08 and our decision for ay: 2006-07 and ay: 2007-08 shall apply mutatis mutandis to the ay: 2008-09 as factual matrix being similar in ay: 2008-09 to that prevailing in ay: 2006-07 and ay: 2007-08. Thus, the additions of Rs. 34,00,000/- as sustained by ld. .....

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..... gregating both the AIR returns, in complete disregard that second return is merely an supplementary return which is in-fact a revised return filed by the bank after correcting errors while filing original return. The amount of cash deposits in the supplementary return of Rs. 50,67,400/- also matches with the cash deposits actually made by the assessee in his Standard Chartered Bank account, during the year under consideration. This error need to be corrected, so that correct income be brought to tax, and the AO is directed to bring to tax correct income, after giving opportunity of being heard to the assessee. Proceeding further, there are other additions made by the authorities below, relatable to the cash deposits by the assessee in his Standard Chartered Bank, which has also led to double additions causing serious prejudice to the assessee. Thus, in the fitness of the matter, this issue is also restored to the file of the AO for denovo assessment after giving proper opportunity to the assessee, and the AO to ensure that multiple additions on account of same cash deposit do not occur, as the same is not permissible. The assessee to explain sources of deposits in the bank account, .....

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..... dences for work done to improve agricultural operations, and other evidences to prove that agricultural operations were in-fact carried on by the assessee, but the assessee only produced Profit and Loss account of agricultural activities, and claim was made by assessee before AO that income from agriculture was deposited in the bank account, but the assessee could not produce any evidence/documents before the AO to substantiate/prove that agricultural operations were in-fact carried on by the assessee. So far as agricultural land is concerned, the assessee claimed that the land belonged to Raja Jagannath Bakhsh Singh Trust and lease agreement was executed on plain paper and same was not registered. On being asked by AO, the assessee submitted that the land owner refused to get the said land agreement registered, and this agreement was prepared on the plain paper. The AO rejected the contentions of the assessee and observed that no agricultural operations were carried on by the assessee, and an amount of Rs. 5,00,000/- claimed to be deposited by assessee from agricultural income is in-fact income from un-disclosed sources of the assessee, which was added by AO to the income of the .....

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..... es which was not believed by the A.O. only on the ground that it was written on plain paper where has it has been written on the trust letter pad copy of lease deed enclosed herewith. That the applicant is enclosing the detail of gross receipt of agriculture income rule of Aroma plants etc. Applicant enclosed the profits and loss account of agriculture income in details. 23b. The Ld. CIT(A) dismissed the appeal of the assessee by holding as under: Decision: I have gone through the facts and the written submissions filed along with the details filed enclose therein. The assessee deposited Rs. 5,00,000/- in cash on account of agricultural income in Standard Chartered Bank Account no. 62510015697. The appellant submitted only copy of lease of agricultural land as evidence in favour of doing agricultural activity. Appellant's only contention is that there is a lease agreement on a letter pad showing the land ownership but there is no other evidence showing any human intervention in the planting of these flowers, grass, vegetables and grains. There is no evidence in possession of appellant to prove that any procedures were adopted to produce and maintain these agric .....

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..... ncome. All income is supposedly have been received from farmers in cash. The applicant claimed to have done business of Aroma oil. Applicant submitted that the he extracted the oil from flowers and grass on job work basis. But no details whatsoever of any kind has been submitted pertaining to job works done. More so, the sale of oil of flowers and grass is not agricultural income, exempt u/s 2(1A) of the Income Tax Act. Applicant has not submitted any details of farmers from Rai Bareilly who purchased grains, vegetables and also flowers and grass for Aroma work in cash. It is surprising that someone who purchases goods from applicant for Rs. 25,000 - 65,000/-, their details are no known to him but he knows that after purchasing agricultural produce from applicant these farmers sent it to other places for extraction of oil. Such contradictory facts are nothing but an afterthought of the appellant to explain unsuccessfully explaining the huge cash deposited in bank account as earned form agricultural income. The applicant also submitted that he helped them in extracting the oil in case of need of customers who purchased grass and brought their own at a very low cost and only job work .....

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..... he Income-tax Act. Held that the burden is on the appellant to prove that the income sought to be taxed was agricultural income. Avdhesh Kumar Jain vs Commissioner of Income Tax (1989) 178 ITR 443 (All) HELD: 2. The concurrent findings of the tax authorities including the Income-tax- Appellate Tribunal are that the assessee had failed to produce any satisfactory evidence about his being engaged in agricultural activities. The further finding is that the assessee was also not able to state to whom the said agricultural produce was sold. Consequent to the aforesaid finding, the Tribunal has held that the sum of Rs. 28,000 was rightly assessed as income from undisclosed sources in the hands of the assessee. Having heard learned counsel for the parties, we are of the opinion that the findings recorded by the Income-tax Appellate Tribunal are pure findings of fact which are based on appreciation of evidence. The view taken by the Tribunal is a possible view on the evidence that wasplaced before it in our opinion, the order of the Tribunal does not give rise to any question of law on the findings recorded by it. In the instant case it is well established that appellant .....

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..... 78 ITR 443 (All)it is held that the appellant has failed to shift the onus to prove that cash deposited in both the bank accounts is from agricultural operations and therefore I am left with no alternative but to confirm the addition made by AO. No addition can be made u/s 68 of IT Act on the unexplained deposits in the bank account as they are not books of accounts of the appellant but can be added u/s 69A of IT Act as unexplained money. AO is directed to tax this amount u/s 69A of the IT Act. This ground is dismissed. 24. Aggrieved by the dismissal of the appeal by ld. CIT(A), the assessee has now filed an appeal before the Tribunal, the Ld. Counsel for the assessee filed written submissions before tribunal, which are reproduced as under: The Learned Counsel for the assessee submitted that similar contentions as were made by him for explaining agricultural income, while arguing his case for ay: 2006-07 before the Bench, shall apply. It was submitted that the assessee earned agricultural income of Rs. 5,00,000/- during the year under consideration, while Rs. 1,67,277/- was earned from sale of agricultural implements. It was submitted that the assessee has stopp .....

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..... ntire amount of Rs. 6,67,277/- is not deposited in the SCB, but it is the claim of the assessee that Rs. 5,00,000/- was earned from agricultural income for which exemption is sought u/s 10(1) read with Section 2(1A), the onus is on the assessee to substantiate that he is entitled for exemption as he meets all the conditions for exemption, as exemption provisions are to be strictly construed. The assessee has filed in his return of income, claim of earning alleged agricultural income of Rs. 5,00,000/- which was claimed as an exempt income. The onus is on the assessee to substantiate the earnings of agricultural income, and exemption provisions are to be strictly construed. The assessee has not produced any evidence to justify and substantiate the carrying out of agricultural operations, during the year under consideration. So far as alleged sale proceed of agricultural implements of Rs. 1,67,277/-, again there is no evidence on record to substantiate the same. The factual matrix being the same as was prevailing in ay: 2006-07, ay: 2007-08 and ay: 2008-09 and our decision for ay: 2006- 07, ay: 2007-08 and ay: 2008-09 shall apply mutatis mutandis to the ay: 2009-10 as factual matrix b .....

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