×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
09-01-2019, D S DOORS (INDIA), Section 271(1)(c), 274, Tribunal Delhi
This appeal by the assessee is directed against order dated 29/12/2017 passed by the Ld. Commissioner of Income-tax (Appeals), Faridabad [in short ‘the Ld. CIT(A)’] for assessment year 2014-15, raising following grounds:
1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in making enhancement of addition and further erred in reducing the agricultural income as accepted by Ld. AO by Rs.8,34,698/- (i.e. 30% of Rs.27,82,325/-) and that too on account of alleged ad-hoc expenditure
incurred for carrying out agricultural operation and that too without appreciating the facts and circumstances of the case and without following the principles of natural justice.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 1,41,58,064/- on account of agricultural income and that too without appreciating the specific request of the assessee for making independent enquiry in this regard.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in making enhancement of addition with regard to
agricultural expenditure is bad in law and against the facts and circumstances of the case.
4. That the assessee craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other.
2. Briefly stated facts of the case are that the assessee company was engaged in the business of manufacturing of wooden products i.e. doors, window etc. The assessee company purchased agricultural land in assessment year 2011-12. For the year under consideration, the assessee company filed return ofincome declaring taxable income of Rs.3,91,240/- along with agricultural income of Rs.1,69,40,389/-. The case was selected for scrutiny and in the scrutiny assessment completed under section 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) on 28/12/2016, the Assessing Officer accepted the agricultural income of Rs.27,82,325/- and balance amount of Rs.1,41,58,064/-was treated by him as income from undisclosed sources. The Assessing Officer raised various queries including expenditure incurred on agriculture operations and sale proceeds etc. from the assessee for justifying the agricultural income shown in the return of income. The Assessing Officer has reproduced the reply submitted by the assessee on 08/08/2016 in the assessment order, wherein the assessee has claimed income from sale of fire-wood (Rs.34,50,000/-); wheat (Rs.20,40,971/-); mustard (Rs.13,24,660/-); husk (Rs.35,80,000/-); Kharif crops (Rs. 31,90,000/-); Rabi Crops (Rs. 33,54,758/-) etc. The entire agricultural income was claimed to be deposited in cash in bank accounts. In view of no reply on the issue of sale receipts vis-à-vis expenditure incurred, theAssessing Officer again provided numerous opportunities to the assessee to file reply of the quarries raised earlier. He again provided an opportunity to the assessee on 07/11/2006 requesting specific information along with supporting documents.
The reply dated 15/11/2016 filed by the assessee has been reproduced by the Assessing Officer in the assessment order. In this reply also no quantitative detail as to expenses or the sale proceeds was filed by the assessee. The Assessing Officer again issued fresh notice under section 142(1) of the Act raising queries on the assessee. The replies filed by the assessee were considered by the Assessing Officer. In nutshell, the submission of the assessee was that the agriculture operations were carried out by the cultivators and expenses were also incurred by them and the assessee sold its share of produces and resultant receipt was deposited in bank account and claimed the same as agriculture income. Out of the sum claimed as agriculture income, the amount of Rs.27,82,325/-has been claimed as received from produce sold through “J forms” and in respect of the balance agriculture income, the assessee filed affidavits of various purchasers of the agriculture produces. The Assessing Officer also carried out enquiries from independent sources. On