Assistant Comm. of Income-tax, Aurangabad V. Shri Gabbu S. Pawar (HUF), Aurangabad

ITA 1014/PUN/2011

• Counselvise Citation: 101424514 RSA 2011
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-02-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 08-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Keywords: Income from undisclosed sources
• Section: 147; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1014/PN/2011 A.Y. 2003-04 DCIT, CENTRAL CIRCLE, AURANGABAD APPELLANT VS. SHRI GABBU S. PAWAR PLOT NO.14/15, SAHYADRI HILLS, GARKHEDA PARISAR, AURANGABAD PAN: ABFPP0880K RESPONDENT ITA NO.1013/PN/2011 A.Y. 2003-04 DCIT, CENTRAL CIRCLE, AURANGABAD APPELLANT VS. SHRI GOVARDHAN S. PAWAR (HUF) PLOT NO.14/15, SAHYADRI HILLS, GARKHEDA PARISAR, AURANGABAD PAN: ABFPP0880K RESPONDENT APPELLANT BY : SHRI P.L. P ATHADE RESPONDENT BY : SHRI NIK HIL PATHAK DATE OF HEARING: 17.02.2014 DATE OF ORDER : 24.02.2014 ORDER PER BENCH: BOTH THESE APPEALS PERTAIN TO CO-PARCENERS OF SAME FAMILY ON SIMILAR ISSUES FILED AGAINST THE RESPECTIVE ORDE RS OF CIT(A), SO 2 THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO.1014/PN/2011, THE REVENUE HAS FILED TH E APPEAL ON THE FOLLOWING GROUNDS. IN ITA NO.1013/PN/2011 A LSO, THE REVENUE HAS FILED THE APPEAL ON THE SIMILAR GROUNDS TO THAT OF ITA NO.1014/PN/2011. (I) ON THE FACT AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A), AURANGABAD ERRED IN DELETING THE AD DITION OF RS.13,80,076/- MADE ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES DECLARED BY THE ASSESSEE AS AGR ICULTURE INCOME WITHOUT APPRECIATING THE FACT THAT THE ASSES SEE FAILED TO PRODUCE THE COPIES OF SALE PATTIES OF AGR ICULTURAL PRODUCE TO THE EXTENT CLAIMED. (II) ON THE FACT AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT (A), AURANGABAD ERRED IN UPHOLDING THE PLEA OF THE ASSESSEE WITHOUT ANY BASIS THAT IT IS A PRACTIC E PREVAILING IN FARMERS OF RURAL AREA TO SELL AGRICUL TURE PRODUCE IN OPEN MARKET FOR WHICH NO EVIDENCE IS KEP T. (III) ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A), AURANGABAD ERRED IN DELETING THE AD DITION OF RS.13,80,076/- MADE ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES DECLARED BY THE ASSESSEE AS AGR ICULTURE INCOME WITHOUT APPRECIATING THE FACT THAT THE THAT THE ONUS LIES WITH THE ASSESSEE ONLY AS HELD BY THE HON'BLE SUPREME COURT IN THE CASES OF COMMISSIONER OF INCOME TAX VS . R. VENKATASWAMY NAIDU [29 ITR 529] & CIT VS. RAMKRISHN A DEO [35 ITR 312]. (IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED CIT (A), AURANGABAD ERRED IN DELETING THE A DDITION OF RS.29,723/- MADE ON ACCOUNT OF AGRICULTURAL EXPE NSES SHOWN LESS BY THE ASSESSEE. (V) APPELLANT CRAVES, LEAVES OF THE HON'BLE TRIBUNA L TO ADD, AMEND/ALTER OR DELETED ANY THE AFORESAID GROUND HER EIN IF DIRECTED SO. (VI) ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 3. THE ASSESSEES SHRI GABBU SHAMRAO PAWAR AND SHRI GOVERDHAN SHAMRAO PAWAR (HUF) WHO ARE BASICALLY HAV ING 3 AGRICULTURAL INCOME. THE ASSESSEES ARE ALSO PARTNER S IN M/S AAKASH CONSTRUCTIONS, AURANGABAD. IN THE SEARCH ACT ION U/S.132 IN THE CASE OF SHRI GOVERDHAN S. PAWAR, AUR ANGABAD, A COPY OF BALANCE SHEET AS ON 31.03.2003 OF M/S AAKAS H CONSTRUCTIONS, AURANGABAD WAS FOUND AND SEIZED. IN THE SAID BALANCE SHEET, THE CAPITAL ACCOUNT OF THE ASSESSEES AS PARTNERS NAMELY SHRI GABBU SHAMRAO PAWAR, SHRI GOVERDHAN SHA MRAO PAWAR (HUF), SMT. UMABAI SHAMRAO PAWAR AND SMT. SIT ABAI GABBU PAWAR HAS BEEN CREDITED FOR ADDITION OF 10,00,000/-, 40,00,000/-, 10,00,000/-AND 15,00,000/- RESPECTIVELY. THE ASSESSING OFFICER HAS, THEREFORE, ISSUED NOTICES U/ S 148 TO THE ASSESSEES FOR FILING RETURN OF INCOME OF A.Y.2003-0 4. THE ASSESSING OFFICER HAS ASSESSED THE INCOME OF THE AS SESSEES U/S.144 R.W.S. 147 OF THE ACT AS THE ASSESSEES HAVE NOT FILED ANY RETURN OF INCOME. THE ASSESSING OFFICER HAS ASSESS ED INCOME OF THE ASSESSEES VIZ. SHRI GABBU SHAMRAO PAWAR AND SHR I GOVERDHAN SHAMRAO PAWAR (HUF) AT 14,59,799/- AND 19,33,040/- RESPECTIVELY. 3.1 THE MATTER WAS CARRIED BEFORE THE FIRST APPELLA TE AUTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED AND HAV ING CONSIDERED THE SUBMISSIONS ON BEHALF OF ASSESSEES, CIT(A) GRANTED RELIEF TO THE ASSESSEES. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE AND LEARNED DEPARTME NTAL REPRESENTATIVE SUBMITTED THAT THE CIT(A) WAS NOT JU STIFIED IN DELETING THE ADDITION OF 14,17,100/- MADE ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES DECLARED BY THE ASS ESSEES AS AGRICULTURAL INCOME WITHOUT APPRECIATING THE FACT T HAT THE ASSESSEES HAVE FAILED TO PRODUCE A COPY OF SALE PAT TI OF AGRICULTURAL PRODUCE TO THE EXTENT CLAIMED IN CASE OF GOVERDHAN SHAMRAO PAWAR (HUF). IT WAS THE STAND OF LEARNED D EPARTMENTAL REPRESENTATIVE THAT THE CIT(A) WAS NOT JUSTIFIED IN ACCEPTING THE PLEA OF ASSESSEES WITHOUT ANY BASIS THAT IT IS A PR ACTICE PREVAILING 4 IN THE FARMERS OF RURAL AREAS TO SELL AGRICULTURAL PRODUCE IN OPEN MARKET FOR WHICH NO EVIDENCE IS KEPT. SO, THE CIT( A) WAS NOT JUSTIFIED IN GRANTING THE RELIEF TO THE ASSESSEES. THE DEPARTMENTAL REPRESENTATIVE HAS ALSO OPPOSED THE DE LETION OF 2,57,917/- MADE ON ACCOUNT OF AGRICULTURAL EXPENSES SHOWN LESS BY THE ASSESSEES. ON THE OTHER HAND, THE LEARNED A UTHORIZED REPRESENTATIVE HAS SUPPORTED THE RESPECTIVE ORDERS OF CIT(A). 3.2 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITIONS OF 13,80,076/- AND 14,17,100/- FOR WANT OF SALE PATTIES IN RESPECT OF AGRICULTURAL PRODUCE IN THE CASE OF SHRI GABBU S HAMRAO PAWAR AND SHRI GOVERDHAN SHAMRAO PAWAR (HUF) RESPECTIVELY . THE ASSESSEES HAVE FILED DETAILS OF GROSS RECEIPTS OF A GRICULTURAL INCOME FROM THE YEAR 1996 TO F.Y. 2002-03 TO THE EX TENT OF 51,27,560/-AND 75,39,558/-. THE ASSESSEES FILED SALE PATTIES OF AGRICULTURAL PRODUCE TO THE EXTENT OF 37,47,431/- AND 61,22,450/- IN RESPECT OF THE AGRICULTURAL PRODUCE SOLD THROUGH AGRICULTURAL PRODUCE MARKET COMMITTEES. THE ASSESSE ES COULD NOT FILE THE SALE PATTIES IN RESPECT OF AGRICULTURA L PRODUCE SOLD TO THE EXTENT OF 13,80,076/- AND 14,17,100/- RESPECTIVELY IN OPEN MARKET. FURTHER, THE ASSESSEES COULD NOT FILE ANY OTHER EVIDENCE IN RESPECT OF THE SAID SALE OF AGRICULTURA L PRODUCE TO THE EXTENT OF 13,80,076/- AND 14,17,100/- RESPECTIVELY AS THE SAID SALE HAS BEEN EFFECTED SINCE 1996 I.E. AFTER E XPIRY OF MORE THAN 10 YEARS. NORMALLY, THE INDIAN FARMERS DO NOT HAVE THE SALES RECORD OF THE AGRICULTURAL PRODUCE, MOREOVER, BECAUSE THE SAME WAS NOT LIABLE TO BE TAXED AS GENERAL PERCEPTI ON. THE ASSESSEES HAVE NOT CARRIED OUT ANY BUSINESS ACTIVIT Y IN INDIVIDUAL CAPACITY AND HENCE THEY WERE NOT LIABLE TO MAINTAIN BOOKS OF ACCOUNTS. 4. IN VIEW OF ABOVE FACTS, THE CIT(A) HAS RIGHTLY O BSERVED THAT THE ADDITION MADE IN THE CASE OF SHRI GABBU SHAMRAO PAWAR AND 5 SHRI GOVERDHAN SHAMRAO PAWAR (HUF) OF 13,80,076/- AND 14,17,100/- RESPECTIVELY FOR WANT OF SALE PATTIES W AS NOT JUSTIFIED. THE ASSESSING OFFICER HAS MADE ADDITIONS IN THE CAS E OF SHRI GABBU SHAMRAO PAWAR AND SHRI GOVERDHAN SHAMRAO PAWA R (HUF) OF RS.29,723/- AND RS.2,57,970/- RESPECTIVELY ON ESTIMATE BASIS STATING THAT THE AGRICULTURAL EXPENDITURE EST IMATED BY THE ASSESSEE AT 25% IS ON LOWER SIDE AND ESTIMATING THE SAME AT 35% OF THE GROSS RECEIPT OF AGRICULTURAL PRODUCE ACCEPT ED BY HIM. THERE IS NOTHING ON RECORD TO SUGGEST AND JUSTIFY T HE ESTIMATE OF AGRICULTURAL EXPENDITURE AT 35%. IN RESPECT OF CRO PS GROWN BY THE ASSESSEES SUCH AS MOOG, BAJRA, JAWAR, WHEAT, TO OR, MAKKA, MATAKI ETC., THE AGRICULTURAL EXPENDITURE IS NOT ON HIGHER SIDE AS IN THE CASE OF OTHER CROPS. FURTHER, AGRICULTURAL HOLDINGS AND ACTIVITY OF ASSESSEES HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER IN ANY MANNER. IN SOME AND SUBSTANCE, WE A RE OF THE VIEW THAT ENHANCEMENT OF EXPENDITURE DONE BY THE AS SESSING OFFICER IS NOT BASED ON COGENT REASONING AND SAME I S NOT SUSTAINABLE AS HELD BY THE CIT(A). WE UPHOLD THE S AME. IN VIEW OF ABOVE, CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSING OFFICER WAS NOT CORRECT IN MAKING ADDITION OF 13,80,076/- AND 29,723/- IN RESPECT OF GABBU SHAMRAO PAWAR AND 14,17,100/- AND 2,57,970/- IN RESPECT OF SHRI GOVERDHAN SHAMRAO PA WAR (HUF) AS DISCUSSED ABOVE AND THEY WERE RIGHTLY DELE TED BY CIT(A). WE UPHOLD THE SAME. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF FEBRUARY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER 6 PUNE, DATED: 24 TH FEBRUARY, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A), AURANGABAD 4) THE CIT, AURANGABAD 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE