COMMISSIONER OF INCOME TAX Vs. RAM DEVI

JUDGEMENT

(1.) 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 s. 158BB of the IT 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 asst. yr. 1991 -92. The Tribunal also noted from the observations of the AO 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 AO. While ascertaining the quantum of the agricultural income, the AO 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 AO 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 AO 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 AO 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.