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TMI Blog2023 (6) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... nfected due to some disease or pest attacks and this leads to uprooting of the infected plantation after which new plantation was done. The assessee has cultivated high quality grapes and sold the entire grapes to the company which has been verified from the record of raw material and consumption and no discrepancy was found in the stock of the company during the search and seizure action carried on the company. During the course of appellate proceeding before us the Counsel has also referred the copy of Income Tax Settlement Commission order dated 27.09.2019 adjudicated in the case of M/s Sula Vineyard Pvt. Ltd. wherein they had finally come to the conclusion that inflation was to be restricted to approximately 6% and the company had accordingly offered the same to tax. The Settlement Commission has treated the statement of Mr. Raman Bhawar and Vinayak Nehe as not reliable for the purpose of calculating inflating grapes purchases. Further in the list of parties from whom the company used to purchase grapes at inflated rate, the assessee s name was not at all present there. - Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was 35 acre (approximately). From the details provided by Shri Vinayak Nehe in respect of Samant Farm the total cultivated land area was 9 acres out of total area of 17 acres. From the detail provided by Raman Bhawar in respect of Kadam Farm the AO noticed that total land under grape cultivation was 82 acre out of total 107 acres. The A.O worked out the ratio of area under cultivation and the general production yield was computed. On the basis of aforesaid information the assessing officer computed mismatch in the agricultural receipts for different years as under: A.Y. Dindori Farm Kadam Farm Samant Farm Total Agriculture Receipt Total Agriculture Receipt as per ROI Excess Agriculture Income claimed 2012-13 NA 5076000 730800 5806800 19703628 13896828 2013-14 5263196 7310000 671445 13244641 23696200 10451559 2014-15 4740084 9156000 856800 14752884 28592184 13839300 2015-16 4559067 7207200 806400 12572667 33565563 20992896 2016-17 3095836 7137000 739440 10972276 41892065 30919789 2017-18 5547593 18446000 1255800 25249393 44752436 19503043 On analysis of the information the A.O observed that there was inflation of agricultural rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,31,78,951/- therefore, considering the inflation of 56.01% the assessing officer computed inflated agricultural income at Rs.1,85,83,510/- and treated the same as unexplained credit/income from other sources and added to the total income of the assessee u/s 68 of the Act. 6. Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) had deleted the addition made by the assessing officer. The relevant part of the decision of ld. CIT(A) is reproduced as under: "6.3 I have carefully perused and considered the findings of the AO in the assessment order, written submission of the appellant and material available on record. During the year, the appellant has sold entire grapes grown in his farm to Sula Vineyards Pvt. Ltd. Total Grapes sold during the year from all the three Farm amounted to Rs. 194,34,300/-. After total Expenses of Rs. 1,52,22,324/-, the appellant earned profit of Rs. 42,11,976/- During the course of the appellate proceedings, the appellant has submitted a copy of the Income-tax Settlement Commission's order u/s 245D(4) in the case of Sula Vineyards Pvt. Ltd. From perusal of the 245D(4) order it is noticed that the search action was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Nana Shelke, which was claimed to be a proposal for harvest season of 2017 for inflation of purchase of grapes. These pages show plan of extra booking of grapes of 2199 MT over and above the actual purchase of grapes of 9313 MT. It means 23.6% inflation of grapes was planned for the harvest season 2017 (relevant to FY 2016-17). The applicant had accepted the Inflation in purchase of grape. The appellant also pointed out mistakes in data as per Katcha slips and Farmer Vehicle Register maintained at the Dindodri and Gangapur units. Based on the data provided by Shri. Nana Shelke (GM Vineyard operations) in respect of forty farmers, who were paid excess cheques for grapes and who then returned the cash, inflation for all the seven years in aforesaid forty names of farmers comes to 11.24 crores which when compared with the total purchases booked comes to 6.07%. The ITSC observed that out of the 4 evidences found during the course of search, none is suitable to be adopted alone to work out the inflation in the year for which data is found itself. In the course of search some data regarding cash generated and cash expenses during FY 16-17 was found in the mobile of Shri T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and who then returned the cash to Sula Vineyards Pvt. Ltd It is also noticed that the appellant's name is not mentioned in the list of 40 parties submitted by Mr. Nana Shelke. In view of the above facts and circumstances of the case, entire sale of grapes by the appellant to Sula Vineyards Pvt. Ltd. cannot be considered as sold at inflated rate. Hence, the addition of Rs.1,19,56,162/- made by the AO in respect of inflated agricultural receipts is deleted. Accordingly, this ground of appeal of the Appellant is allowed." 7. During the course of appellate proceedings before the ld. D.R referred the order of the assessing officer and contended that assessee has inflated agricultural production of grapes and ld. CIT(A) has failed to consider the draft plan which showed that there was inflation of agricultural income by the assessee. The ld. D.R also submitted that the two employees Vinayak Nehe and Raman Bhawar had not retracted their statement and supported the order of the ld. CIT(A). 8. On the other hand, the ld. Counsel submitted after referring the copies of seized paper placed at page no. 245 to 252 of the paper book that name of the assessee Shri Rajeev Samant wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has cultivated high quality grapes and sold the entire grapes to the company which has been verified from the record of raw material and consumption and no discrepancy was found in the stock of the company during the search and seizure action carried on the company. During the course of appellate proceeding before us the ld. Counsel has also referred the copy of Income Tax Settlement Commission order dated 27.09.2019 adjudicated in the case of M/s Sula Vineyard Pvt. Ltd. wherein they had finally come to the conclusion that inflation was to be restricted to approximately 6% and the company had accordingly offered the same to tax. The Settlement Commission has treated the statement of Mr. Raman Bhawar and Vinayak Nehe as not reliable for the purpose of calculating inflating grapes purchases. Further in the list of parties from whom the company used to purchase grapes at inflated rate, the assessee's name was not at all present there. Therefore, we don't find any merit in the appeal of the revenue, accordingly, both the grounds of appeal of the revenue are dismissed. ITA No. 2543/Mum/2021 Ground No.1 & 2 10. As the facts and issues involved in these grounds of appeal are same as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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