By Sri v. Chandrasekhar, Adv., A/W_Sri. Bhairav Kuttaiah, Adv

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22 DAY OF JANUARY 2071 PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’BLE MR. JUSTICE NATARAJ RANGASW AMY BETWEEN: LT.A. NCO.168 OF 2012 JINESH (HUF).REPRESENTED BY ITS.KARTHA SRI. JINESHNO.15, 80 FEET ROADWILSON GARDEN HOUSE BUILDINGCO-OPERATIVE SOCIETY LAYOUTKOTHANUR MAIN ROADJP NAGAR, BANGALORE - 560 078. (BY SRI. V. CHANDRASEKHAR, ADV., A/W_SRI. BHAIRAV KUTTAIAH, ADV.,) — APPELLANT. AND" THE INCOME TAX OFFICER|WARD 4(3) UNITY BUILDING, MISSION ROADBANGALORE - 560 QO27/ .., RESPONDENT (BY SRI. E.I. SANMATHI, ADV.) THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX|ACT 1961, ARISING OUT OF ORDER DATED 25.01.2012 PASSEDIN ITA NO.983/BANG/2009 FOR THE ASSESSMENT YEAR 2005-06.PRAYING TO (i) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW,STATED THEREIN. | (ii) ALLOW THE APPEAL AND SET ASIDE THE ORDER DATED.25.01.7012|PASSEDBY|THE|TTATBEARINGTTANO.983/BANG/2009 IN THE INTEREST OF JUSTICE AND EQUITY.| THIS I.7T.A. COMING ON FOR’ HEARING, THIS’ DAY, |ALOK ARADHE J.,DELIVERED THE FOLLOWING: | JUDGMENT This appeal under Section 260A of the Income TaxAct, 1961 (hereinafter referred to as the Act for short)has been preferred by the assessee. The subject matter|of the appeal pertains to the Assessment year 2005-06.The appeal was admitted by a bench of this Court videorder dated 04.09.2012 on the following substantial|questions of law:| (1)Whnetner the tribunal was Justifiedin law in not answering the specific groundraised by the appellant that there is no.existenceofHUFand|consequentlytheassessment made does not survive on the’facts and circumstances of the case?(il)Whether the tribunal was Justifiedin law in confirming tne action of the lower|autnorities when the appellant was not in.recelptOfaccrualofdhhyrealIncome considered by the appellant as agriculturalincome on the facts and circumstances of the.Case?| (11) |Whether the tribunal was JustifiedIn|law.In|confirming.thetreatment.ofagricultural income offered by the appellant forthe Assessment Year 2005-06 as unexplainedcasn credit liable for taxation and brining into|taxaS|IncomefromotherSOUTCeCSand|consequently passed a perverse order on the|facts and circumstances of the case? (iv)Withoutprejudicewhetherthetribunal is Justified in law in holding that theprovisions of Section 68 Is applicable when theappellanthas.notmaintainedbooksOF|accounts on the facts and circumstances of theCase?|(Vv)Whether the tribunal was Justifiedin law in not condoning the delay of 145 days.In|filingtheappealOf)thefactsand|circumstances of the case?| 2.|Facts leading to filing of this appeal brieflystated are that the assessee filed the return of income|for the Assessment Year 2005-06 declaring taxable income of Rs./75,350/- earned by way of liaisoncommission on. sale of agricultural produce. Theassessee also disclosed in its return that it had earned|agricultural income of Rs.28,35,500/-. The return filedby the assessee was subjected to scrutiny assessment|under Section 143(3) of the Act and the Assessing|Officer by an order dated 31.12.2017 inter alia held thatthe assessee had not carried out any agricultural land|alleged to have leased out by him and that the aforesaidland was barren and bereft of any crops. Accordingly,| )additionofRs.28,35,500/-. The assessee thereupon preferred an.appealbeforetheCommissionerOf Income.Tax(Appeals) who by an order dated -05.03.2009 dismissedthe appeal preferred by the assessee. The assesseethereuponapproachedtheIncome.TaxAppellate|Tribunal (hereinafter referred to as the tribunal’ forshort). The tribunal by an order dated 25.01.2012dismissed the appeal preferred by the assessee. In the. aforesaidfactualbackground,| this court. aforesaidfactualbackground,| this court. 3Learned counsel for the assessee submittedthat the assessee disputes the existence of HUF and theSame was disputed by submitting a communication|dated 27.12.2019 by the wife of the assessee.Therefore, the return filed by the assessee is in thestatus of HUF is non est in law and the Assessing Officer|had no jurisdiction to assess the assessee in the status|of HUF. It is also urged that the appellant was to take onlease certain agricultural lands and develop the same to.CalTy outagriculturalactivities.TneaSSe@SS€Aapproacned the bank to avail the loan for the saidpurpose. It is also pointed out that from the statementof the landlords relied upon by the Assessing Officer, itis evident that the assessee had not made anyunexplained investment by way of lease advance,pooking under construction, development of farm and.animal sneds etc. It is also contended tnat tne! Assessing Officer is not correct in making an addition of Rs.28,35,500/- as income from other sources where the)statement of affairs have been proved to be false by his.very findings. The tribunal ought to have held that the|Assessing Officer was wrong in treating the agricultural|income shown by the assessee in his return of income.from unexplained sources when there is no real receiptof income by the assessee. It is also submitted that thetribunal nas not adjudicated the grounds raised by tneassessee and has merely referred to the order ofCommissioner of Income Tax (Appeals) and has paraphrased the findings recorded by the Commissioner of Income Tax (Appeals). It is also submitted that thetribunal erred in not condoning the delay. In Support ofaforesaid submissions, reliance nas been placed on.decisions in-‘SUSHIL KUMAR MEHTA VS. GOBIND|RAM BOHRA (DEAD) THROUGH HIS LRS (1990) 1.SCC 193, ‘PULLANGODE RUBBER PRODUCE CO. LTDVS. STATE OF KERALA, (1973) 91 ITR 18 (SC),| ‘CIT VS. MR.P.FIRM, MUAR', (1965) 56 ITR 679SC),"'BHANDARTMETALSYS, SATE|OF|KARNATAKA’, ILR 2004 KAR 2025, ‘NIRMALA lL.MEHTA VS. A.BALASUBRIMANIAM CIT’, (2004) 269ITR 1, ‘S.R.KOSHTI VS. CIT’, (2005) 276 ITR 165,‘CIT VS.SHOORJI VALLABHDAS AND CO.', (1962)46ITR144(SC),'CITVS,CHAMANLALMANGALDAS (1960) 39 ITR 8 (S), ‘GODHRA.ELECTRICITYCO. LID,YS,CIT,(1997)OlTAXMANN 351 (SC). 4On the other hand, learned counsel for therevenue submitted that the Assessing Officer as well as.the Commissioner of Income Tax (Appeals) and thetribunal Nave concurrently upheld the addition made bythe Assessing Authority for a sum of Rs.28,35,500/-. It is also urged that the issue is held in favour of the|revenue and the findings are based on appreciation ofevidence on record. Our attention nas aiso been invited|to the findings recorded by the Assessing Authority as. well as in para 6.4 to 6.5 of the Commissioner of IncomeTax (Appeals) and in para 10 by the tribunal and has.held that the assessee does not own agricultural land|and the sale of agricultural produce has rightly been|disbellieved. It is further submitted that the aforesaidfindings are finding of fact and therefore, no substantialquestion of law arises for consideration in this appeal. In.Support of aforesaid submissions, reliance has been.placed on decision of the Supreme Court in"VIJAYKUMAR TALWAR VS. COMMISSIONER OF INCOME|TAX’, SSO ITR 1. 5.|We have considered the SUDMISSIONS made.by learned counsel for the parties and nave perused therecord. Tne Assessing Officer Dy placing reliance on thestatements of the landlords has found that they are theowners of the land and they had entered into adevelopment agreement with the assessee. However,they have denied that they nave received any advancesfrom the assessee in this regard and no construction. 5.|We have considered the SUDMISSIONS made.by learned counsel for the parties and nave perused therecord. Tne Assessing Officer Dy placing reliance on thestatements of the landlords has found that they are theowners of the land and they had entered into adevelopment agreement with the assessee. However,they have denied that they nave received any advancesfrom the assessee in this regard and no construction. activity / agricultural activity has been carried out by the|assessee on the lands and the possession of the land.has also not been handed over to the assessee..Therefore,theAssessingOfficerhasadded|theagricultural income of Rs.28,35,500/- to the _ totaincome returned as ‘income from other sources’ which.are unexplained. The Commissioner of Income Tax.(Appeals) in para 6.4 has held that though the assessee|nad entered into a lease agreement with land owners.but the date of agreement was not mentioned and the|stamp paper was purchased on 22.03.2003, whichindicates that lease agreement was executed on that|day or the subsequent day. It is further submitted thatfrom perusal of the agreement it is clear that the land is.earmark for growing / developing of land for different:crops and no trees of any kind were found on the landprior to execution of the lease agreement. It has further|been found that the buildings or animal sheds were not.constructed on tne lands whicn was leased out to tne! assessee as the possession of the land in question was.never handed over to the assessee. Similarly, thetribunal in para 10 of the order has recorded the findingthat the assessee was neither in possession of theagricultural land nor he performed any _ agriculturaactivity.Therefore,thequestionofearming anyagricultural income does not arise. © 6.|The aforesaid findings are pure findings offactswhichhavebeenrecorded ON|meticulous.appreciation of evidence on record. The aforesaidfindings have not been shown to be perverse. It is well|settled that this court in exercise of powers underSection 260A of the Act cannot interfere with the findingof fact until and unless the same is demonstrated to beperverse.[See: SYEDA RAHIMUNNISA VS. MALAN|BI BY L.RS. AND ORS. (2016)10 SCC 315 andsPRINCIPALCOMMISSTONER|OF|INCOMETAX,BANGALORE & ORS. VS. SOFTBRANDS INDIA P.|LTD., (2018) 406 ITR 513] In view of preceding analysis, the substantialquestions of law are answered accordingly. In the result,we do not find any merit in this appeal, the same fails.and is hereby dismissed. SS| Sd/-JUDGE.Sd/-JUDGE.