N.Kamatchiammal, Pollachi V. ACIT, Coimbatore

CO 37/CHNY/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3540 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-01-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 09-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T BANUSEKAR
• Assessee Lawyers: N MADHAVAN
• Section: 69C; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.87/MDS/2016 & C.O. NO.37/MDS/2016 (IN I.T.A. NO.87/MDS/2016) ' (' / ASSESSMENT YEAR : 2011-12 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 4, ANNEXE BUILDING, 5 TH FLOOR, 63, RACE COURSE ROAD, COIMBATORE 641 018. V. SMT. N. KAMATCHIAMMAL, NO.15, KAMRAJ ROAD, MAHALINGAPURAM, POLLACHI 642 002. PAN : ABKPK 5100 E (*+/ APPELLANT) ( RESPONDENT & CROSS-OBJECTOR) *+ , - / APPELLANT BY : SHRI N. MADHAVAN, ADDL. CIT ./*+ , - / RESPONDENT BY : SH. T. BANUSEKAR, CA 0 , 1$ / DATE OF HEARING : 23.01.2018 2!( , 1$ / DATE OF PRONOUNCEMENT : 28.02.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, COIMBAT ORE, DATED 29.10.2015 AND PERTAINS TO ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS FILED CROSS-OBJECTION AGAINST THE VERY SAME ORDER OF 2 I.T.A. NO.87/MDS/16 C.O. NO.37/MDS/16 THE CIT(APPEALS). THEREFORE, WE HEARD BOTH THE APP EAL AND THE CROSS-OBJECTION TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. SHRI N. MADHAVAN, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THE ASSESSING OFFICER MADE DISALLOWA NCE IN RESPECT OF THE INCOME CLAIMED UNDER THE HEAD AGRICULTURE ON THE BASIS OF THE DETAILS COLLECTED FROM AGRI TECHNICAL GUIDE 201 3. ACCORDING TO THE LD. D.R., THE ASSESSEE HAS INFLATED THE COST ON ACCOUNT OF COCONUT PRODUCTS. THE ASSESSEE HAS NOT PRODUCED AN Y SALES VOUCHERS FOR SALE OF AGRICULTURAL PRODUCE. THEREFO RE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HAS RECOMPUTED THE AGRICULTURAL INCOME ON THE BASIS OF THE DETAILS OBTAINED FROM AG RI TECHNICAL GUIDE 2013. ACCORDING TO THE LD. D.R., THE ASSESSE E HAS CLAIMED AGRICULTURAL INCOME OF 41,33,500/- OUT OF WHICH, THE ASSESSING OFFICER DISALLOWED 24,83,382/- AND ASSESSED THE SAME UNDER THE HEAD INCOME FROM OTHER SOURCES. 3. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER POIN TED OUT THAT THE ASSESSEE CLAIMED TO HAVE PURCHASED AGRICULTURAL PRODUCE FOR HER PROPRIETORSHIP CONCERN M/S EXPOVAN. ON VERIFIC ATION OF DETAILS FURNISHED BY THE ASSESSEE, ACCORDING TO THE LD. D.R ., IT WAS FOUND THAT THE ASSESSEE HAS PRODUCED THE DETAILS OF VOUCH ERS PARTLY AND 3 I.T.A. NO.87/MDS/16 C.O. NO.37/MDS/16 ENTIRE VOUCHERS WERE NOT PRODUCED. ACCORDING TO TH E LD. D.R., THE ASSESSING OFFICER FOUND THAT THERE WAS CASH PAYMENT FOR THE PURCHASE MADE FROM DR. R. MAHENDRAN TO THE EXTENT O F 1.23 CRORES. THEREFORE, THE ASSESSING OFFICER DOUBTED T HE PURCHASES MADE TO THE EXTENT OF 1,60,32,296/-. IN THE ABSENCE OF ANY VOUCHERS, ACCORDING TO THE LD. D.R., THE CIT(APPEAL S) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. 4. ON THE CONTRARY, SH. T. BANUSEKAR, THE LD. REPRE SENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE IS AN AGR ICULTURIST HOLDING FERTILE LAND. THE LAND WAS IRRIGATED THROUGH RIVER . THE ASSESSEE ALSO HAS FACILITIES FOR IRRIGATION OF LAND BY WELL. ACCORDING TO THE LD. REPRESENTATIVE, THE LAND WAS SITUATED IN THE FOOT-H ILLS OF ANAIMALAI. THE ASSESSEE, ACCORDING TO THE LD. REPRESENTATIVE, CULTIVATED VANILLA, NUTMEG AND ARICA AS INTERCROPS IN THE COCO NUT THOPE. ACCORDING TO THE LD. REPRESENTATIVE, COCONUT IS THE MAIN CROP. THE ASSESSEE HAS ADOPTED ALL HI-TECH PROCEDURES FOR CUL TIVATION. SINCE THE ASSESSEE HAS CULTIVATED HYBRID VARIETY OF COCON UTS, THE AVERAGE YIELD WAS 156 NUTS PER COCONUT TREE. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE IRRIGATED THE COCONUT TREES THROUGH DIP-IRRIGATION. ON A QUERY FROM THE BENCH, WHAT IS THE AREA OF THE CULTIVATION? THE LD. REPRESENTATIVE COULD NOT PROD UCE ANY DETAILS 4 I.T.A. NO.87/MDS/16 C.O. NO.37/MDS/16 WITH REGARD TO AREA OF CULTIVATION. THE LD. REPRES ENTATIVE FURTHER SUBMITTED THAT ALL THE DETAILS WERE FURNISHED BEFOR E THE CIT(APPEALS). THE CIT(APPEALS), AFTER EXAMINING TH E DETAILS FILED BY THE ASSESSEE, FOUND THAT THE ASSESSING OFFICER I S NOT JUSTIFIED IN ASSESSING THE AGRICULTURAL INCOME 24,83,382/- UNDER THE HEAD INCOME FROM OTHER SOURCES. 5. THE LD. REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT SIMILARLY, THE DISALLOWANCE MADE UNDER SECTION 69C OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') TO THE EX TENT OF 1,60,32,296/- WAS ALSO DELETED BY THE CIT(APPEALS) ON THE GROUND THAT THE ASSESSING OFFICER HAS NOT CONDUCTED ANY SA MPLE VERIFICATION WITH REGARD TO PURCHASE MADE BY THE AS SESSEE. REFERRING TO THE ASSESSMENT ORDER, THE LD. REPRESEN TATIVE SUBMITTED THAT WHEN THE ASSESSING OFFICER FOUND THAT 1.23 CRORES WAS PAID TO DR. R. MAHENDRAN THROUGH BANKING CHANNEL, IT IS NOT CORRECT TO SAY THAT PURCHASE TO THE EXTENT OF 1,60,32,296/- WAS NOT MADE. THE ADDITION OF 1,60,32,296/- WAS MADE WHICH IS NOT COVERED BY SAMPLE. ACCORDING TO THE LD. REPRESENTATIVE, IF TH E TEST CHECKS WERE COMPLETELY MADE, IT MAY NOT REQUIRE ANY ADDITION. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, THE CIT(APPEAL S) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. 5 I.T.A. NO.87/MDS/16 C.O. NO.37/MDS/16 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS AGRICULTURAL INCOME OF 41,33,500/- OUT OF WHICH, THE ASSESSING OFFICER TREATED 24,83,382/- AS INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER HAS ALSO MADE ADDIT ION OF 1,60,32,296/- UNDER SECTION 69C OF THE ACT. THE AS SESSEE CLAIMS THAT ALL THE DETAILS WERE FURNISHED BEFORE THE ASSE SSING OFFICER AND THE CIT(APPEALS). HOWEVER, IT IS NOT KNOWN WHAT IS THE AREA CULTIVATED BY THE ASSESSEE DURING THE RELEVANT YEAR UNDER CONSIDERATION. IN THE ABSENCE OF THE DETAILS OF TH E LAND, WE CANNOT ESTIMATE THE INCOME ON THE BASIS OF THE SO-CALLED C ROPS CULTIVATED BY THE ASSESSEE. EVEN THOUGH THE ASSESSEE CLAIMS T HAT CHITTA / ADANGAL WAS FILED BEFORE THE CIT(APPEALS) AND THE A SSESSING OFFICER, A COPY OF WHICH IS NOT FILED BEFORE THIS T RIBUNAL. THEREFORE, WE ARE UNABLE TO EXAMINE THE CORRECTNESS OF THE EST IMATION MADE BY THE ASSESSING OFFICER ON THE BASIS OF AGRI TECHN ICAL GUIDE 2013. 7. NOW COMING TO THE ADDITION MADE UNDER SECTION 69 C OF THE ACT, IT APPEARS THAT THE ASSESSEE IS A WHOLESALE DE ALER IN CHILLY, VANILLA, NUTMEG AND TURMERIC. THE ASSESSEE CLAIMS THAT SHE PURCHASED VANILLA AND NUTMEG FROM FARMERS THROUGH B OUGHT NOTES. THE ASSESSEE CLAIMS THAT ALL THE BOUGHT NOTES WERE AVAILABLE WITH 6 I.T.A. NO.87/MDS/16 C.O. NO.37/MDS/16 HER. THE ASSESSING OFFICER APPEARS TO HAVE CALLED FOR VOUCHERS ON RANDOM BASIS. NO ADDITION WAS MADE IN RESPECT OF T HE VOUCHERS FILED BY THE ASSESSEE. HOWEVER, THE ADDITION WAS M ADE WITH REGARD TO THE VOUCHERS WHICH WERE NOT VERIFIED BY THE ASSE SSING OFFICER. THEREFORE, THE CIT(APPEALS) DELETED THE ADDITION. THE FACT REMAINS THAT THE VALIDITY OF THE VOUCHERS TO THE EXTENT OF 1,60,32,296/- WAS NOT VERIFIED EITHER BY THE ASSESSING OFFICER OR BY THE CIT(APPEALS). IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASS ESSING OFFICER. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BEL OW ARE SET ASIDE IN RESPECT OF THE ISSUES RAISED BY THE REVENUE IN THE APPEAL AND BY THE ASSESSEE IN THE CROSS-OBJECTION. THE ENTIRE IS SUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASS ESSING OFFICER SHALL RE-EXAMINE THE MATTER AND BRING ON RECORD THE AREA OF THE LAND CULTIVATED AND THE NATURE OF CROPS CULTIVATED DURIN G THE YEAR UNDER CONSIDERATION AND THEREAFTER DECIDE THE ISSUE AFRES H IN ACCORDANCE WITH LAW. 8. THE ASSESSING OFFICER SHALL ALSO EXAMINE WHETHER THE PURCHASE OF VANILLA AND NUTMEG WERE MADE DIRECTLY F ROM FARMERS OR THROUGH MIDDLEMEN. IT ALSO NEEDS TO BE BROUGHT ON RECORD HOW THE PAYMENT WAS MADE. THEREFORE, THE ASSESSING OFFICER SHALL RE- 7 I.T.A. NO.87/MDS/16 C.O. NO.37/MDS/16 EXAMINE THE MATTER AND BRING ON RECORD THE DETAILS OF PRODUCTS PURCHASED BY THE ASSESSEE AND THE NATURE OF PAYMENT MADE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WI TH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 9. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D THE CROSS- OBJECTION OF THE ASSESSEE STAND ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED ON 28 TH FEBRUARY, 2018 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 28 TH FEBRUARY, 2018. KRI. , .156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ./*+ /RESPONDENT 3. 0 81 () /CIT(A)-3, COIMBATORE 4. PRINCIPAL CIT-2, COIMBATORE 5. 69 .1 /DR 6. :' ; /GF.