Case Law Details

Case Name : Surender Kumar Vs ITO (ITAT Delhi)
Appeal Number : ITA No. 3658/Del/2007
Date of Judgement/Order : 18/12/2009
Related Assessment Year : 2004-05


5. We have heard both the parties and gone through the material available on record. We have also perused the revenue records indicating the land-holding and crops grown Thereon. As per the Jamabandi the lands are owned jointly by these persons. Some of the lands are owned jointly by seven persons and some by four and certain lands individually. However, as per the statement recorded by the Assessing Officer and affidavits filed, it is seen that Shri Krishan Kumar son of Shri Sant Lai owns 25 acres of agricultural land. Shri Inderjeet Rajpura also owns 25 acres of agricultural land in the same village. Smt. Urmila Devi Yadav owns 7 acres of land. Since the lands are owned jointly actual area on which a particular crop was raised by a particular person has not been identified. For example as per revenue records, the agricultural land falling in Khewat No. 25/22 Khatauni No. 31, the landholding is 56 Kanal 2 Maria and is owned by seven persons equally. As per Khasra- Girdawari which gives the details of crops grown the nature of agricultural land is ‘chahi’ (irrigated). During period of Kharif no crops were grown on majority of the lands. The lands remained uncultivated. However, Bajra has been grown on land measuring 77 Kanal 3 Maria roughly around 9.5 acres. They had also grown Gwar in 29 Kanal roughly 3.62 acres and fodder (chari) in 24 Kanal 13 Maria roughly 3.5 acres. The creditors could not have earned anything from Gwar and Chari as these crops are grown for the purpose of fodder/ animal feed. It is also not a case of assessee that creditors have earned from these crops. Thus on 9.5 acres of land jointly owned by 7or 4 co-owners ‘bajra’ crop was raised. The yield of Bajra from 9.5 acres of agricultural lands cannot be more than 95 Qtls taking 10 quintal/acre as average yield which is treated a good yield. As against this the sale of ‘bajra’ shown by Krishan Kumar is at 27.06 Qtls.; by Inderjeet Rajpura at 73.70 qtls.; and by Smt Urmila Devi 78 Qtls. The total sale of Bajra has been shown by 3 persons at 178.76 Qtls. There are 7 co-owners in majority of the lands. Therefore, out of 95 qtls. of ‘bajra’ which could have come to their share would be about 14 quintals each. Moreover, Bajra is used in villages either for own consumption as well as for cattles. Therefore, the sale certificate issued by M/s Sant Trading Co. in form-J is not supported by actual crop of ‘bajra’ raised on lands and consequently cannot be considered as genuine. As regards Rabi crop, two crops have been grown wheat and mustard. In majority of the land mustard has been grown. The area under wheat was at 292 Kanal 4 Maria roughly 36.5 acres. Here again, there are 7 owners in majority of the land. The production per acre of wheat ranges from 16 to 20 quintals and hence from 36.5 acres lands 584 to 720 qtls. of wheat could have been grown. However, as per. Form- J Shri Krishan Kumar had sold 657.85 qtls. of wheat; Shri Inderjeet Rajpura at 620.67 qtls.; and Smt. Urmila Devi at 466.35 Qtls. The total sales of wheat by these three persons have been shown at 1,744.87 Qtls. The expected wheat production estimated by us as above is to be divided amongst seven co-owners of the lands. Even if it is assumed that other co-owners have not grown anything even in that situation the production of wheat will not be more than 584 to 720 qtls. from the land held by them. Moreover, there are two more aspects to this which have to be taken into account in respect of any agriculturist. Firstly, the agriculturist cannot sell his entire production as he has to retain wheat for his own consumption. He will sell for his other needs like clothes and households. Other than this he has to incur expenditure on tilling, seeds, fertilisers, weeding out, watering and harvesting. The cost of production in case of wheat is not less than 30% of the production. Similar is the case in respect of Bajra though the input wil! be slightly lower as the crop is dependent on monsoon conditions. Taking into account the input and the personal needs, the agriculturist will not be able to sell his entire production. It is also a fact that the surplus production available for sale would depend upon his needs. Even if it is estimated that the cost of input is 25% of the production and similar amount is needed for the household maintenance etc., the agriculturist cannot sell more than 50% of the agriculture produce. If that is the case, the bajra not more than 50 quintals could have been sold by all the seven shareholders. As regards wheat produce about 250 to 350 qtls. could have been sold by all the seven shareholders. The share of Krishan Kumar, Inderjeet and Urmila Devi will be much lower though it is not possible to quantify the same at our stage as the exact land in which they had grown the particular crop has not been made available. In any case, even if it is assumed that the entire crop grown belonged to these three persons, in that situation also they could not have sold more than 50 qtls. of Bajra and around 250 to 350 qtls. of wheat and not as claimed by them at 178.76 quintal of Bajra and 1744.87 qtls. of wheat. From these facts it is clear that the assessee has attempted to prove the credit worthiness by filing details of land holding and copies of sale bills without realizing the facts that the sale of agricultural produce shown in the bills was not possible. In view of these facts the sale bills produced by the assessee are not reliable piece of evidence. Hence, the creditworthiness of creditors is not proved.

5.1 Under sec.68, when an amount is found to be credited in the books of the assessee, he has to prove the identity of creditor, his creditworthiness and genuineness of transactions. No doubt, the source of income is there with the creditors but it does not conclusively prove that the amount has come from that source. The nexus between the source and the cash credit is to be established. In the instant case, as discussed above, these creditors were not in a position to lend any money to the assessee. The Assessing Officer has recorded a finding that as and when the money was needed, the amount was introduced in his books in the name of the family members. Merely filing of affidavits and revenue records will not be sufficient to prove that the loans raised were genuine. Therefore, in our considered opinion, the assessee has not been able to discharge the onus with evidence that the amount introduced in the books of account has really come from the creditors. Since the creditworthiness and genuineness of transactions have not been discharged the provisions of sec. 68 are squarely applicable. Accordingly, in our considered opinion, the Id. CIT(A) was justified in confirming the addition of Rs. 10,36,000/-. The decision relied upon by the assessee in the case Vinod Kumar Rai is not applicable to facts of the case assessee. In that case the issue related to proceeding under section 263 of the Act and hence distinguishable on facts.

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