Principal Commissioner of lncome Tax, Bangalore vs Softbrands India Private Limitedz).

Counsel for the Appellant : Mr. A.V.A. Siva Kartikeya Counsel for the Respondent : Mr. J.V. Prasad, Senior Standing Counsel for lncome Tax Department The Court delivered the following: -7 THE H o N'BLE THE CHIEFJU STICE ALOK ARADHE AIVD THE H oN'BLE SRI {USTICEJ .SREE NTVAS RAO TNCOME TAX TRIBUNAL APPEAL No. I 27o f 2008 WDGMENT : (petr the Hon,ble the Chief Justice Alok Aradhe) Mr. A.V.A..Siva Kartikeya, learned counsel for the appeliant. Mr. J.V.prasad, learned Senior Standing Counsel for Income Tax Depertment for the respondent.

2. This appeal under Sectio n 26OAof the Income Tax Act, 1961 (hereinafter referred to as the ActJ has been filed by the assessee. The subject matter of the appeal pertains to assessment year 2OOO_01. The appeal was admitted on following substanl.ial question of law: "Whether the Assessin Section 6eA of,,r",r"":.?T.*,:i}"l*ljl addition of Rs.2,25,OOO/-, which was the returned by the assessee as an agricultural invoked made an amount rncome?,, . .'t

3. Facts giving rise to filing of this appeat briefly stated are that the assessee is carrying on the business of supplying building construction material. The assessee filed the return of income for the assessment year 200O_O 1 on 2O.O5.2OO2, in which the assessee disclosed his income for business as Rs.82,45O/- and agricultural income of Rs.2,25,000/-. The Assessing Officer completed the assessment under Section 143(3) of the Act and determined the income of the assessee at Rs.3,OZ,4SO /-. The Assessing Oflicer by al order dated 30. 1 7.2OO4 made an addition under Section 69A of the Act of Rs.2,25,000/- as agricultural lncome.

4. The assessee thereupon filed an appeal before the Commissioner of Income Tax (Appea,ls)-Vl, Hyderabad. The Commissioner of Income Tax (Appeals) by an order dated

17.03.2005, inter alia held that no basis has been disclosed by the assessee for his share of income as Rs.2,25,OOO/-. The Commissioner of Income Tax (Appeals) also took note of the letters dated 23.09.2OO4 and 2a.O9.2OO4 issued by Executive Ofhcer, Hayathnagar Mandal, Ranga Reddy District and Deputy Collector and MaFdil Revenue Officer, Hayathnagar 3 Marrda,l, Rang,a Reddy District respectively and recorded a finding that no crops were grown on the said land and the salrle was shown as plots in the land revenue records. Accordingly, the appeal was dismissed.

5. Being aggrieved, the assessee filed al appea-l before the Income Tax Appellate Tribunal, Hyderabad Bench 'B'. The Income Tax Appellate Tribunal by an order dated 19.OI.2OO7 has affirmed the order passed by the Commissioner of Income Tax (Appeals) and has dismissed the appeal. Hence, this appeal. 6 . Learned cotrnsel for the assessee submitted that the Income Tax Appellate Tribunal ought to have appreciated that Section 69A of the Act had no application to the obtaining factual matrix of the case in as much as the assessee had disclosed a sum of Rs.2,25,000/_ as his agricultural income. It is further submitted that the Mandal Revenue Officer had given a report for frnancial year 2OO|_O2 in respect of agricultural income of the assessee and therefore for the previous year, it could not be held that the rand in question has already been plotted and no agricultural operation is carned out. Therefore, it is contended that the I I i I I I H 4 frnding recorded by the Income Tax Appellate Tribunal is perverse.

7. On the other hand, learned Senior Standing Counsel for the Revenue has submitted that no substantial question of law arises for consideration in this appeal and the matter is concluded against the assessee by findings of fact.

8. We have considered the rival submissions made on both sides and have perused the record.

9. Section 694, of the Act deals with unexplained money. We lind substance in the subrnission made by learned counsel for the assessee that prorrisions of Section 69A of the Act per se may not apply to the case of the assessee. The issue which requires consideration in this appeal is whether the assessee carried out arly agricultural operations for the assessment year 2000-01. The Inspector of Income Tax deputed by Assessing Officer for spot enquiry has reported after visiting the land that the same has been marked into plots and is not used for cultivation. The material collected by the Assessing Officer during the course of the enquiry was forwarded to the assessee and his ,' 5 comments were sought for. However, the assessee did not offer aly explalation. The Commissioner of Income Tax (Appeals) has taken into account the letters dated23'09'2004 and 28.09.2004 issued by Executive Officer, Hayathnagar Mandal, Ralga Reddy District and Deputy Collector ald Maldal Revenue Officer, Hayathnagar Mandal, Ranga Reddy District respectively, in which it is stated that no crops were grown on the: land and the sarne was shown as plots in the land revenue records. The Income Tax Appellate Tribunal has also found that the assessee has failed to establish that the land in question was under cultivation. Thus, the authorities under the Act, on the basis of meticulous appreciation of evidence on record have found that the land in question was already plotted and no agricultural operations were carried out by the assessee. Therefore, the claim of agricultural income is not tenable. The aforesaid frndings of fact are based on meticulous appreciation of evidence on record and by no stretch of imagination can be said to be perverse. It is well settled in law that this Court in exercise of powers under Section 26Or\ of the Act cannot interfere with the finding of fact until and unless the same is demonstrated to be - H r rwy8l 6 perverse. (see Syeda Rahimunnisa vs. Malan Bi by LRsl and Principal Commissioner of lncome Tax, Bangalore vs Softbrands India Private Limitedz).

10. In view of preceding analysis, the substantial question of law framed by this Court is answered against the assessee and in favour of the Revenue. 1 1 . In the result, we do not find any merit in the appeal. The same fails and is hereby dismissed. Miscellaneous applications, if any pending, shall stand closed. There shall be no order as to costs. //TRUE COPY// gal-l.v.s.s.c.s.M. sARM JOINT Gts S ION OFFICER To, t. The lncome Tax Appellate Tribunal, Hyderabad 'B' Bench' z. The Commissioner of lncome Tax (Appeals) - Vl, 12th Floor, Gagan Hyderabad. Vihar, M.J. Road, Hyderabad - 500001 Hyderabad

3. The lncome-tax Officer, Ward -10(4), Hyderabad 4. One CC to Mr. A.V.A. Siva Kartikeya, Advocate [OPUC] 5. One CC to Mr. J.V. Prasad Senior Standing Counsel for lncome Tax Department {OPUCI

6. Two CD Copies DUgh \qr L (2ot6l 10 SCC 315 2 (2OLq 406 rTR 513 t ) l ilE STA l 6 c)4 2 i J,\,il Z[25 , [],s;tr * r ;.ttl-'.;;' '::----" rtr\( z o .\ ,+ HIGH COURT DATED:,0210112O25 ORDER lTTA.No.l27 of 2008 DISMISSING THE APPEAL 8 co8 \q- €flrs