Gujarat High Court
Laxman R Jalu - Huf vs Income Tax on 11 February, 2013
Author: Akil Kureshi
Bench: Akil Kureshi
LAXMAN R JALU - HUF....Appellant(s)V/SINCOME TAX OFFICER....Opponent(s) O/TAXAP/578/2012 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 578 of 2012 =========================================================== LAXMAN R JALU - HUF....Appellant(s) Versus INCOME TAX OFFICER....Opponent(s) ================================================================ Appearance: MRS SWATI SOPARKAR, ADVOCATE for the Appellant(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MS JUSTICE SONIA GOKANI Date : 11/02/2013 ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Assessee is in appeal against the order of the Income Tax Appellate Tribunal (for short 'ITAT') dated 22.07.2011. Following substantial questions of law have been presented for our consideration:
(i) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in confirming the order of the Assessing Officer making an addition of Rs.20,20,212/- on account of unexplained introduction of capital under the guise of accumulated surplus out of agricultural income?
(ii) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in confirming the order of the Assessing Officer making an addition of Rs.1,45,950/- treating the claim of the assessee as agricultural income even though the assessee had furnished the agreement showing that the agricultural land was jointly cultivated by the assessee with his father and uncle and income and expenditure account had been maintained in respect of agricultural income?
(iii) Whether, in the facts and circumstances of the case, the order passed by the Income Tax Appellate Tribunal was not factually incorrect, perverse, contrary to record and ex facie illegal?
(iv) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in reversing the order passed by the CIT(A) without even considering the grounds on which the CIT(A) had held in favour of the Appellate and without making even an attempt to find error in the said order ?
2. Briefly stated, the issue arises in the following background.
2.1 Appellant-assessee had, for the first time, filed return of income in the Assessment Year 2005-2006. Assessee had claimed a sum of Rs.20,20,210/- as a opening balance for the year under consideration. Assessing Officer called upon him to furnish the details of such carried forward balance of the earlier years. In response to such notice, the assessee contended that the opening balance is accumulated balance of surplus of agricultural income of past so many years. However, no evidence was furnished to such explanation. The Assessing Officer, once again, asked him to produce supporting evidence to substantiate such a claim. In response to such further opportunity rendered by the Assessing Officer, the assessee stated that he is in possession of an agricultural land of Village:Vadasada, Taluka:Manavadar, District:
Junagadh. On such land, he is carrying out agricultural operation and earning income. He produced profit & loss account, capital account and balance sheet, which he had maintained from Financial Years 1998-99 to 2002-2003. He also produced affidavits of one Shri Rambhai Jalu, his father and Shri Bhimabhai Karsanbhai Jalu, his uncle, who were owners of the land in question.
The Assessing Officer, however, was not convinced by such explanation. He concluded that the assessee has failed to discharge primary onus to prove genuineness of the opening balance of capital shown for the year under consideration. He could not furnish any evidence in support of his claim of opening balance of Rs.20,20,210/- and accordingly, the same is brought to taxation u/s. 68 of the Act, as unexplained cash credit.
Assessee carried the matter in appeal. CIT(A) reversed the order of the Assessing Officer. He relied on the sales bills furnished by the assessee. He observed the fact that the assessee lives in Surat and conducts agricultural activity in Junagadh, cannot be a ground to reject the claim of having earned agricultural income, particularly when all corroborative evidences were produced.
2.4 The revenue thereupon approached the Tribunal. The Tribunal reversed the order of CIT(A) and allowed the revenue's appeal. It is observed that the crucial aspect of retaining cash in hand over a period of years and advancing funds on loan without providing the details of the recipient of the loan, or producing their confirmation, makes the whole claim of the assessee unbelievable.
3. Learned counsel for the assessee vehemently contended that the CIT(A) has committed a serious error in disbelieving the assessee's claim of carrying out agricultural operations and of having earned, over a period of time, agricultural income which resulted into excess being retained by him. Such accumulated surplus was shown as a opening balance for the year under consideration. In short, his contention was that the Assessing Officer as well as the Tribunal had committed a serious error of law in not properly appreciating the evidence on record. Second aspect of the counsel was that, in any case, the same could not have been brought to taxation u/s. 68 of the Act, during the Assessment Year under consideration. He contended that the amount was shown as opening balance which was disregarded by the Assessing Officer. In that view of the matter, the amount could be brought to taxation only in the earlier years only when the income was rightly earned.
We are, however, of the opinion that none of the grounds raised by the assessee can be accepted. Firstly, CIT(A) and the Tribunal both came to the conclusion that the claim of the assessee that he had carried on agricultural operation and earned income in the earlier years was not genuine. The Assessing Officer had given sufficient opportunities to the assessee to substantiate his claim. After considering the explanation rendered, he on the basis of evidence on record, found that such claim was not well founded. It was noticed that the land was not owned by the assessee. It was situated in Junagadh District, whereas, the assessee was permanent resident of Surat. It was also noticed that 7/12 record did not quite accurately tally with the sale proceeds bills produced by the assessee. 7/12 record mainly shows crop of cotton whereas, the assessee had produced the bills of selling of Tuver, Mangfali and Wheat etc. The Tribunal also confirmed the view of the Assessing Officer.
We are of the opinion that the entire issue is based on appreciation of evidence. After giving sufficient opportunities to the assessee to establish his claim, Assessing Officer found that the assessee's claim was not genuine and when we find that such findings of the Assessing Officer as confirmed by the Tribunal, do not suffer from any perversity, at least so far as the findings are concerned against the assessee, they do not give rise any question of law.
6. In this background, we may examine the counsel's second contention. We may recall his contention that when the said sum of Rs.20,20,210/- was the opening balance for the year consideration, the same should not have been brought to taxation u/s. 68 of the Act. We are afraid that this contention suffers from misconception with the assessee's claim and the said sum being a opening balance was accepted by the revenue authority. The Assessing Officer in terms had rejected such claim as being non-genuine. In other words, the Assessing Officer refused to accept the assessee's stand that Rs.20,20,210/-, being a opening balance of the years. He committed no error in holding it as explained cash credit.
In the result, Tax Appeal is dismissed.
(AKIL KURESHI, J.) (MS SONIA GOKANI, J.) Chandrashekhar* Page 5 of 5