Commissioner Of Income Tax, ... vs Shrimati Ram Devi
2008 Latest Caselaw 1243 Del

             THE HIGH COURT OF DELHI AT NEW DELHI

%                                   Judgment delivered on: 06.08.2008

+             ITA 982/2007


COMMISSIONER OF INCOME TAX, DELHI-XI ...                          Appellant


                                   - versus -


SHRIMATI RAM DEVI                                            ... Respondent

Advocates who appeared in this case:

For the Appellant     : Mr J.R. Goel
For the Respondent    : Dr Rakesh Gupta with Mr T.R. Talwar and
                        Ms Poonam Ahuja


CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE RAJIV SHAKDHER

1. Whether Reporters of local papers may be allowed to see the judgment ?

2. To be referred to the Reporter or not ?

3. Whether the judgment should be reported in Digest ?

BADAR DURREZ AHMED, J (ORAL)

1. This appeal has been preferred against the order of the

tribunal dated 16.03.2007 in respect of the block period 1987-88 to

1997-98. By virtue of the order dated 12.10.2007, the predecessor

Bench had issued notice to the respondent limited to question no. (c)

mentioned in the memo of appeal. We are, therefore, limiting

ourselves to that question alone. The said question relates to the issue

of whether the tribunal was correct in accepting the additional

agricultural income of the assessee by relying on post search facts, and

ignoring the fact that the additional agricultural income already formed

part of the undisclosed income under Section 158 BB of the Income

Tax Act, 1961.

2. This issue has been raised in the context of two orchards

belonging to the assessee; one at Surath (Mandi) and the other at Kullu,

both of which are in Himachal Pradesh. It is an admitted position that

the assessee has various fruit bearing trees in the said orchards. The

fruits that are produced in the said orchards are apples, pears, cherries,

almonds and pecan nuts. This case has had two rounds before the

tribunal. In the first round, the tribunal came to the conclusion that the

agricultural income from the orchard at Surath (Mandi) had been

disclosed by the assessee in respect of the assessment year 1991-92.

The tribunal also noted from the observations of the Assessing Officer

that no income from agriculture was declared / shown in respect of the

other orchard, i.e., the orchard at Kullu. The tribunal, therefore, held

that there was agricultural income during the block period from these

two orchards, which was not shown by the assessee fully.

Consequently, the tribunal gave the following directions:-

"However, we are of the view that to ascertain that how much agricultural income was earned by the assessee during the block period, the matter should go back to the file of the assessing officer. While ascertaining the quantum of the agricultural income, the Assessing Officer will take into consideration the income of the family members whom from similar orchards in their hands. While doing so that AO will also keep in mind the size of the orchards or agricultural land. We further direct that assessee should be allowed opportunity to file necessary details to substantiate her claim."

3. In the second round, the Assessing Officer had rejected the

plea of the assessee with regard to undisclosed income pertaining to the

agricultural income arising from the above two orchards. One of the

points taken by the Assessing Officer was that the assessee had already

shown returns in respect of the said orchards which were on the higher

side compared to the returns of her husband's and son's orchards

within the same area. The Assessing Officer also took note of the fact

that the agreements for sale of fruits which had been placed on record

were common between the assessee, her husband, her son and the third

party.

4. The tribunal in the second round concluded, after looking at

the evidence, that insofar as the orchard at Surath was concerned, in

addition to the income derived from the sale of apples and pears, the

assessee was also deriving income from the sale of other fruits, namely,

cherries, almonds and pecan nuts. This latter income had not been

disclosed earlier and was now disclosed as part of the undisclosed

income. Insofar as the Kullu orchard is concerned, it appears that the

tribunal considered the post search period agreements to arrive at the

conclusions that it did and thereby accepting the assessee's version.

5. We have heard the counsel for the parties at length and we

find that there exists a great deal of confusion with regard to the

quantum of agricultural income which forms part of the undisclosed

income. According to the learned counsel appearing on behalf of the

revenue, there is nothing in the impugned order which would enable us

to ascertain as to whether the undisclosed agricultural income did not

already constitute part of the originally declared income. In fact,

according to him, the only exercise that was required to be done was to

see what was the additional agricultural income apart from what had

already been declared in the returns. Specifically, the learned counsel

stated that the tribunal ought to have examined as to whether the

income from almonds, cherries and pecan nuts had not already been

declared by the assessee and included in her original returns. It is only

if they were not so included that such income could be treated as

undisclosed income.

6. The learned counsel for the assessee / respondent submitted

that there is no infirmity in the order passed by the tribunal. He

submits that in the first round the tribunal had restored the entire issue

to the file of the Assessing Officer to examine the extent of the

agricultural income which had been undisclosed. On the basis of the

evidence collected by the Assessing Officer, the tribunal, being the

final fact finding authority, had accepted the assessee's version and

there can be no quarrel with the same.

7. However, as noted above, we find that there has been a great

deal of confusion with regard to the stand taken by the assessee. From

the order of the tribunal in the first round, it appears as if the assessee

had disclosed income from apples and pears in respect of only the

Surath orchard and no agricultural income at all had been disclosed in

respect of the orchard at Kullu. But, the stand of the assessee in the

second round, as appearing from the order of the tribunal, is that the

assessee had already declared the agricultural income relating to sale of

apples and pears of both the orchards and that it was only cash sales

pertaining to other fruits, namely, cherries, almonds and pecan nuts,

which had not been declared and which were not now being disclosed

as part of undisclosed income. We find that these aspects have not

been examined by the tribunal in the impugned order. In our view, this

requires reconsideration by the tribunal. We, therefore, remit the

matter to the tribunal to consider the entire issue with regard to

additional agricultural income declared as part of undisclosed income

afresh and return a finding in accordance with law.

This appeal stands disposed of.

                                     BADAR DURREZ AHMED, J



August 06, 2008                         RAJIV SHAKDHER, J
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