The ACIT, 3(1), Bhopal V. M/s. Shanti Seeds Pvt. Ltd., Bhopal

ITA 1/IND/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59455 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 07-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUND DEWAN
• Assessee Lawyers: S S DESH
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AACCS1447C I.T.A.NO. 01/IND/2011 A.Y. : 2007 - 08 ACIT, M/S. SHANTI SEEDS PVT.LTD., 3(1), VS 86, CHHOLA ROAD, BHOPAL. BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI ARUND DEWAN, SR. DR RESPONDENT BY : SHRI S.S.DESHPANDE, C. A. DATE OF HEARING : 24 . 01 .201 2 DATE OF PRONOUNCEMENT : 03.02 .201 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 02.09.2010 FOR THE ASSESSMENT YEAR 2007-08, IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INC OME-TAX ACT, 1961. 2. FOLLOWING GROUND HAS BEEN TAKEN BY THE REVENUE :- -: 2: - 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED IN HOLDING THAT ASSESSING OFFICER WAS UNJUSTIFIED IN TREATING THE AGRICULTURAL INCOME OF RS. 23,29,958/- SHOWN BY THE ASSESSEE ON SALE OF VEGET ABLES AND POTATOES AS INCOME FROM OTHER SOURCES AND THE SAME SHOULD BE ACCEPTED AS THE INCOME FROM AGRICULTURE ONLY. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS OF THE CASE ARE THAT IN ADDITION TO ITS AUTOMOBILE BUSINESS, THE ASSESSEE WAS ENGAGED IN AG RICULTURAL ACTIVITIES PRODUCING VEGETABLES AND POTATOES. DURIN G THE YEAR UNDER CONSIDERATION, IT CARRIED ON AGRICULTURAL ACT IVITIES ON AGRICULTURAL LAND MEASURING 727.935 ACRES, OUT OF W HICH IT POSSESSED 9 ACRES OF AGRICULTURAL LAND IN ITS OWN N AME AND REST OF THE LAND WAS TAKEN ON LEASE FROM VARIOUS PE RSONS. BY USING ADVANCE TECHNOLOGY AND MECHANICAL FARMING, IT WAS CARRYING ON AGRICULTURAL ACTIVITIES. HOWEVER, THE A SSESSING OFFICER DECLINED TO ACCEPT AGRICULTURAL INCOME BY S TATING THAT -: 3: - 3 THE ASSESSEE HAS NOT GIVEN DETAILS OF LAND ON WHICH AGRICULTURE OPERATION WAS DONE, OWNERS NAME, AREA-WISE DETAILS AND KHASRA NUMBER OF THE LAND. HE ALSO OBSERVED THAT TH E ASSESSEE DID NOT PROVIDE BILLS AND VOUCHERS, NAME & ADDRESS FROM WHOM LAND WAS TAKEN ON LEASE. THE ASSESSING OFFICER STATED THAT THE ASSESSEE HAD SUPPLIED ONLY PARTIAL DETAILS OF THE INFORMATION CALLED FOR VIDE LETTER DATED 15.10.2009 . ACCORDINGLY, AGRICULTURAL INCOME SHOWN BY ASSESSEE WAS NOT ACCEPTED AND THE SAME WAS TREATED BY THE ASSESSING OFFICER AS INCOME FROM OTHER SOURCES. 4. BY THE IMPUGNED ORDER, AFTER RECORDING THE FOLLOWIN G FINDINGS, THE LD. CIT(A) ACCEPTED THE ASSESSEES CL AIM FOR AGRICULTURAL INCOME :- I HAVE EXAMINED THE ISSUE IN THE LIGHT OF THE ASSESSMENT ORDER AND THE SUBMISSION GIVEN BY THE LD. AR. FIRST AND FOREMOST, THE LAND HOLDING OF THE APPELLANT ALONGWITH THE PERFORMANCE OF AGRICULTURA L OPERATIONS HAVE NOT BEEN DISPUTED BY THE AO. THE DETAILS OF LAND TAKEN ON LEASE ALONGWITH THE NAME O F THE PERSONS WERE DULY FURNISHED BEFORE THE AO. THE LD. AR HAS PROVIDED COMPLETE DETAIL REGARDING SALE OF VEGETABLES AND POTATOES DURING THE ASSESSMENT -: 4: - 4 PROCEEDINGS AND ALSO BEFORE ME. THE SALE REGISTER O F THE VEGETABLES AND POTATOES ARE MAINTAINED ON DAY TO DAY BASIS AND ARE ALSO SUPPORTED BY INVOICES/SAL E BILLS. THE COPY OF LEDGER ACCOUNT WAS ALSO SUBMITT ED WHICH CONTAINS PARTICULARS OF VEGETABLE/POTATOES SO LD DATE-WISE AND AMOUNT RECEIVED FOR THE RESPECTIVE SALES AND ALL THESE FACTS HAVE NOT BEEN DISPUTED OR DOUBTED BY THE A.O. THUS. THE ACTION OF THE AO IN SUSPECTING THE SALE OF VEGETABLES/POTATOES IS NOT CORRECT. THE BOOKS OF ACCOUNTS OF THE APPELLANT COMPANY ARE AUDITED U/S 44AB CONTAINING QUANTITATIVE DETAILS AND NO DEFECT OR DISCREPANCY H AS BEEN POINTED BY THE AO. THE AO HAS HIMSELF STATED I N THE ORDER THAT THE APPELLANT COMPANY IS CONSTANTLY CARRYING ON AGRICULTURAL ACTIVITY WHICH INCLUDES AL L PRIMARY AND SECONDARY OPERATIONS STARTING FROM SOWING OF SEEDS TO SALE OF AGRICULTURAL PRODUCTS. I N VIEW OF THE ABOVE FACTS, I AM OF THE CONSIDERED VIE W THAT THE AO WAS UNJUSTIFIED IN TREATING THE AGRICULTURAL INCOME OF RS.23,29,958/-- SHOWN BY THE APPELLANT ON SALE OF VEGETABLES AND POTATOES AS INCOME FROM OTHER SOURCES AND THE SAME SHOULD BE ACCEPTED AS THE INCOME FROM AGRICULTURE ONLY. MOREOVER, THE INCOME FROM AGRICULTURAL ACTIVITIES DECLARED IN EARLIER YEARS HAVE BEEN ACCEPTED BY THE DEPARTMENT. IN VIEW OF THE ABOVE, THE INCOME SHOWN -: 5: - 5 BY THE APPELLANT FROM AGRICULTURE AMOUNTING TO RS.23,29.958/- IS ACCEPTED AND THESE GROUNDS ARE DECIDED IN FAVOUR OF THE APPELLANT. 5. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT THE ASSESSEE WAS CARRYING ON AGRIC ULTURAL ACTIVITY SINCE LONG BACK AND IN THE ASSESSMENT YEAR 2005-06, THE ASSESSEES CLAIM FOR AGRICULTURAL INCOME AMOUNT ING TO RS. 14,60,325/- WAS ACCEPTED BY THE DEPARTMENT IN THE S CRUTINY OF ASSESSMENT FRAMED U/S 143(3). WE HAVE ALSO VERIF IED THE DETAILS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WITH REGARD TO THE LAND HOLDING, LAND GIVEN ON LEASE, NA ME AND ADDRESS OF OWNER OF THE LAND AND THE RENT PAID FOR THE SAME. THE ASSESSEE HAS ALSO FILED DETAILS OF SALE IN RESP ECT OF EACH OF ITS PRODUCE LIKE WHEAT, URAD, GRAM, SOYBEAN, MAKKA, VEGETABLES ETC. GIVING QUANTITY-WISE DETAILS OF EAC H PRODUCT AND THE NAME OF PARTIES TO WHOM PRODUCT WAS SOLD. T HE ASSESSEE HAS ALSO FILED COPY OF BILLS FOR THE SALES EFFECTED THE -: 6: - 6 ASSESSEE WAS CARRYING ON AGRICULTURAL ACTIVITIES SI NCE ASSESSMENT YEAR 2005-06 AND THE DETAILS OF SUCH AGR ICULTURAL INCOME WAS GIVEN TO THE ASSESSING OFFICER UP TILL L AY 2009-10. THE DETAILED FINDING HAS BEEN RECORDED BY THE LD.CI T(A) WITH REGARD TO HOLDING OF LAND BY THE ASSESSEE, DETAILS OF LAND TAKEN ON LEASE ALONGWITH NAME OF THE PERSONS, COMPLETE DE TAILS REGARDING SALE OF VEGETABLES AND POTATOES. THE LD. CIT(A) HAS ALSO GIVEN THE FINDING TO THE EFFECT THAT SALE REGI STER OF VEGETABLES AND POTATOES ARE MAINTAINED ON DAY TO DA Y BASIS WHICH ARE ALSO SUPPORTED BY INVOICE/SALE BILLS. COP Y OF LAND HOLDING AND DETAILS OF SALES WERE ALSO SUBMITTED BE FORE THE ASSESSING OFFICER WHICH CONTAINED DETAILS OF VEGETABLES/POTATOTES SOLD DATE-WISE, AMOUNT RECEIVE D FOR THE RESPECTIVE SALES. THE FINDINGS RECORDED BY CIT(A) H AVE NOT BEEN CONTROVERTED BY LD. SENIOR DR DURING THE COURSE OF HEARING BEFORE US. FURTHER MORE, NO GROUND HAS BEEN TAKEN B Y THE REVENUE TO THE EFFECT THAT CIT(A) HAS ACCEPTED ANY ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A. KEEPING IN VIEW THE FINDINGS RECORDED BY THE LD.CIT(A) AND THE PAST TREND OF THE ASSESSEE WHEREIN THE DEPARTMENT ITSELF HAS ACCEPTED ASSESSEE S CLAIM -: 7: - 7 FOR AGRICULTURAL INCOME, WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF CIT(A) FOR ACCEPTING THE AGRICULTURAL INCO ME OF THE ASSESSEE. HOWEVER, IT IS CLEAR FROM THE ORDER OF TH E CIT(A) THAT HE HAS JUST GIVEN HIS FINDING WITH REGARD TO THE DE TAIL OF LAND HOLDING OF ASSESSEE AND PERFORMANCE OF AGRICULTURAL OPERATIONS ON SUCH LAND. HOWEVER, THE CIT(A) HAS NOT RECORDED ANY FINDING WITH REGARD TO CORRECTNESS OF AGRICULTURAL INCOME OFFERED BY THE ASSESSEE . ONCE IT IS HELD THAT ASSE SSEE IS OWNER OF AGRICULTURAL LAND OR TAKEN THE LAND ON LEASE AND ALSO PERFORMED AGRICULTURAL ACTIVITIES, NEXT QUESTION AR ISES AS TO QUANTUM OF AGRICULTURAL PRODUCE AND INCOME EARNED T HEREON. THE ASSESSING OFFICER HAS OUT RIGHTLY DECLINED ASSE SSEES AGRICULTURAL INCOME AND THE CIT(A) ON THE BASIS OF HIS OWNERSHIP OF LAND AND ALSO ON THE PLEA THAT THE ASS ESSING OFFICER HAS NOT DISPUTED CARRYING ON AGRICULTURAL A CTIVITIES, ALLOWED FULL CLAIM OF THE ASSESSEE IN RESPECT OF AG RICULTURAL INCOME RETURNED BY HIM. THE CIT(A) HAS ALSO RELIED ON THE ORDER OF ASSESSING OFFICER FOR ASSESSMENT YEAR 2005 -06, WHEREIN AGRICULTURAL INCOME OFFERED BY THE ASSESSEE WAS ACCEPTED. ON GOING THROUGH THE COMPARATIVE CHART OF -: 8: - 8 AGRICULTURAL INCOME SHOWN BY THE ASSESSEE, FOLLOWIN G POSITION EMERGES :- S. NO. PARTICULARS 2005 - 06 2006 - 07 2007 - 08 1. TOTAL AGRICULTURE RECEIPT 1,25,01,978.28 1,43,64,642.00 1,46,24,818.00 2. RECEIPT OTHER THAN VEGETABLES AND POTATOS 85,97,464.28 1,19,54,427.00 1,22,94,860.00 3. RECEIPT OF VEGETABLES AND POTATOS 39,04,514.00 24,10,215.00 23,29,958.00 4. AGRICULTURE INCOME DISCLOSED 14,60,325.11 17,15,868.00 21,77,635.00 5. PERCENTAGE OF INCOME TO TOTAL AGRICULTURAL RECEIPT. 11.67% 11.93 % 14.88 % 7. IT IS CLEAR FROM THE ABOVE CHART THAT AGRICULTURAL INCOME IN THE ASSESSMENT YEAR 2005-06 WORKS OUT TO BE 11.67 %, IN ASSESSMENT YEAR 2006-07 11.93 %, AND IN THE ASSESSMENT YEAR UNDER CONSIDERATION 14.88%. SINC E NO FINDING HAS BEEN GIVEN BY THE CIT(A) WITH REGARD TO CORRECTNESS OF NET AGRICULTURAL INCOME DISCLOSED BY THE ASSESSE E AS A PERCENTAGE OF TOTAL AGRICULTURAL RECEIPTS, IN OUR C ONSIDERED VIEW, THE CIT(A) SHOULD HAVE TAKEN THE INCOME AS PE R THE PERCENTAGE DECLARED BY THE ASSESSEE IN THE ASSESSME NT YEAR 2005-06, WHICH WAS 11.67 % AND WHICH HAS ALSO BEEN RELIED -: 9: - 9 ON BY THE LD.CIT(A), WHILE DECIDING THE ISSUE IN FA VOUR OF THE ASSESSEE. ACCORDINGLY, WE MODIFY THE ORDER OF CIT(A ) AND DIRECT THE ASSESSING OFFICER TO TAKE AGRICULTURAL INCOME A T 11.67 % OF THE TOTAL AGRICULTURAL RECEIPTS SHOWN BY ASSESSEE. WE DIRECT ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 3 RD FEBRUARY, 2012. (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBE R ACCOUNTANT MEMBER DATED : 3 RD FEBRUARY, 2012. CPU* 2431