Assistant Commissioner of Income Tax, Jabalpur V. M/s Malpani Manufactruring and Marketing Co. Pvt. Ltd, Jabalpur

ITA 105/JAB/2013

• Counselvise Citation: 10522914 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK SHUKLA
• Assessee Lawyers: G N PUROHIT
• Section: 143(3)

Judgement Text

I.T.A. NO. 105/JAB/2013 ASSESSMENT YEAR 2007-08 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR [CORAM: I C SUDHIR JM AND PRAMOD KUMAR AM] I.T.A. NO. 105/JAB/2013 ASSESSMENT YEAR: 2007-08 A.C.I.T. CIRCLE 1(1), .APPELLANT JABALPUR. VS. M/S MALPANI MANUFACTURING MARKETING CO. PVT. LTD. .RESPONDENT 1292, HANUMANTAL, JABALPUR. (PAN: AACDM 1275 B) APPEARANCES BY: ABHISHEK SHUKLA FOR THE APPELLANT G.N. PUROHIT FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING: 11 TH FEBRUARY, 2015 DATE OF PRONOUNCING THE ORDER: 31 ST MARCH, 2015 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HA S CHALLENGED THE CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 18 TH JULY, 2012, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 FOR THE ASSESSMENT YEAR 2009-10, ON THE FOLLOWING GROUNDS: 1. THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FA CT THAT THERE WERE DISCREPANCIES IN THE CERTIFICATE PRODUCED FROM PERS ONS WHOSE LAND WERE TAKEN ON SIKMI. 2. THE CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT THE AO HAD DURING THE ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE TO P RODUCE THE SAID PERSONS FROM WHOM LAND WERE TAKEN ON SIKMI ON 4.12.2009 FOR VERIFICATION BUT THEY I.T.A. NO. 105/JAB/2013 ASSESSMENT YEAR 2007-08 PAGE 2 OF 4 WERE NOT PRODUCED BY THE ASSESSEE. THE ONUS TO PROD UCE THE PERSONS AND ALSO TO PROVE THE FACT WAS ON THE ASSESSEE WHICH HAS NOT BEEN DISCHARGED. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN HAVING TAKEN 65 .45 ACRES OF LAND, ON SIKMI, FOR AGRICULTURAL PURPOSES. AS THE ASSESSING OFFICER NOTICED CERTAIN DISCREPANCIES IN THE SUPPORTING DOCUMENTS, AND AS AO NOTED THAT T HE AUDITOR HAD ALSO NOT VERIFIED THE RELEVANT DETAILS, HE DISALLOWED THE EX PENSES AND TREATED THE AGRICULTURAL INCOME AS INCOME FROM UNDISCLOSED SOUR CES. AGGRIEVED, ASSESSEE CARRIED THE MATER IN APPEAL BEFORE THE CIT(A) WHO R EVERSED THE STAND TAKEN BY THE AO BY OBSERVING AS FOLLOWS : 5. IN THE NEXT GROUND OF APPEAL, THE APPELLANT AGI TATES THAT ON THE STATEMENT OF SHRI KAILASH AGARWAL, THE AO HELD AGRI CULTURAL EXPENSES TO BE FALSE. NO OPPORTUNITY TO CROSS EXAMINE WAS GIVEN TO THE APPELLANT. 5.1. THE AO SUBMITTED THAT THE APPELLANT WAS GIVEN AMPLE OPPORTUNITY TO EXPLAIN ITS VIEW AGAINST THE STAND OF THE AO. BUT T HE APPELLANT FAILED TO APPEAR ON THE DATE OF HEARING. LOOKING TO THE NON-C OOPERATION OF THE APPELLANT, THE ONLY ALTERNATIVE LEFT IS TO COMPLETE THE ASSESSMENT TAKING BEST POSSIBLE MEASURES. THUS, WITHOUT RESORTING TO LUMP- SUM ADDITIONS, TOOK CARE TO ESTABLISH THE BASIS TO THE ADDITIONS, AND TO THI S EFFECT, THE STATEMENT OF SHRI KAILASH AGARWAL PROP. M/S. AGARWAL TRADING COMPANY WAS RECORDED. THUS, IT HAS BEEN STATED THAT THE ADDITION HAS BEEN RIGHTLY MADE ON THE BASIS OF THE STATEMENT OF SHRI KAILASH AGRAWAL. 5.2 THE AO IS DIRECTED VIDE LETTER DATED 27/02/201 2 TO ALLOW THE APPELLANT AN OPPORTUNITY TO CROSS EXAMINE SHRI KAIL ASH AGRAWAL. I FIND THAT AS PER DIRECTIONS, THE AO HAD CONFRONTED THE STATEM ENT OF SHRI KAILASH AGARWAL TO THE LD. COUNSEL SHRI AVINASH MISHRA TO W HOM OPPORTUNITY TO CROSS EXAMINE SHRI KAILASH AGARWAL WAS GIVEN. COPY OF STA TEMENT AND THEIR CROSS EXAMINATION AS RECORDED HAS BEEN BROUGHT ON RECORD. THE AO HAD NO COMMENTS TO MAKE ON THE CROSS EXAMINATION. THE COUN SEL VIDE HIS REJOINDER DATED 01.07.2012 STATED THAT SHRI KAILASH AGARWAL I N CROSS EXAMINATION HAS ADMITTED THAT HE KNOWS SHRI MALPANI, BUT HE HAS NEV ER VISITED HIS SHOP. THE PURCHASES WERE MADE BY THE EMPLOYEES. THE WITNESS A LSO DID NOT PRODUCE THE SALE VOUCHERS AND OTHER DOCUMENTS FOR VERIFICATION. HE ALSO ADMITTED THAT IN CASE OF CASH SALE, NAME AND ADDRESS OF CUSTOMER IS NOT MENTIONED ON VOUCHERS. THE COUNSEL SUBMITTED THAT THE CATEGORICA L STATEMENT MADE BY THE WITNESS BEFORE THE AO THAT HE HAS NOT SUPPLIED ANY GOODS SHOWN IN VOUCHER TO I.T.A. NO. 105/JAB/2013 ASSESSMENT YEAR 2007-08 PAGE 3 OF 4 THE APPELLANT COMPANY IS NOT RELIABLE AND ADVERSE I NFERENCE CANNOT BE DRAWN ON SUCH STATEMENTS. DECISION (GROUND NO.5): I FIND THAT THE AO HAD NO ADVERSE C OMMENT TO MAKE ON THE CROSS EXAMINATION OF THE WITNESS BY THE APPE LLANT. I ALSO TEND TO AGREE WITH THE COUNSEL. THE CATEGORICAL STATEMENT MADE BY THE WITNESS BEFORE THE AO IS UNRELIABLE AS IT WAS NOT SUPPORTED BY ANY VOU CHERS, DOCUMENTS AND IN CASE OF CASH SALE, THE NAME AND ADDRESS OF THE CUST OMER WAS NOT MENTIONED ON THE VOUCHERS. THE WITNESS ALSO ADMITTED THE FACT OF SUPPLY OF GOODS TO THE EMPLOYEES OF MR. MALPANI. IN VIEW OF THIS, THIS GRO UND OF APPEAL IS SUSTAINED. DECISION (GROUND NO. 4): ON CAREFUL PERUSAL OF MATERIAL ON RECORD AND SUBMISSIONS OF THE COUNSEL, I FIND THAT THE DOCUMEN TS AND EVIDENCE PRODUCED REVEAL THAT THE AGRICULTURAL OPERATIONS WERE IN EXI STENCE AND INCOME WAS EARNED DURING THE YEAR. THE AO HAD NOT BROUGHT OUT ANY MATERIAL EVIDENCE ON RECORD TO HOLD THAT THERE WAS NO AGRICULTURAL IN COME AND THE INCOME DISCLOSED WAS FROM OTHER SOURCES. THE EXPENSES CLAI MED WERE SUPPORTED WITH RELEVANT VOUCHERS ETC. THE STATEMENT OF THE WITNESS SHRI KAILASH AGRAWAL, ON THE BASIS OF WHICH, THE AO HELD THAT THE EXPENSES W ERE BOGUS HAS BEEN HELD TO BE UNRELIABLE AND UNSUBSTANTIATED BY DOCUMENTARY EV IDENCE AND HENCE, ADVERSE INFERENCE COULD NOT BE BROUGHT ON SUCH STAT EMENTS. IN VIEW OF ABOVE, I DIRECT THE AO TO ACCEPT THE AGRICULTURAL INCOME A S RETURNED BY THE APPELLANT COMPANY AT RS.4,33,700/-. THE ADDITION MADE AT RS.1 ,60,000/- ON ACCOUNT OF EXPENSES ON AGRICULTURE INCOME IS HEREBY DELETED. T HIS GROUND OF APPEAL IS ALLOWED. 3. THE ASSESSING OFFICER IS AGGRIEVED AND IS IN APP EAL BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF T HE APPLICABLE LEGAL POSITION. 5. WE FIND THAT THE ASSESSING OFFICER HAS RAISED A GRIEVANCE THAT THESE LANDOWNERS WERE NOT PRODUCED BY THE ASSESSEE BUT TH EN IT HAS NOT EVEN BEEN THE CASE OF THE ASSESSING OFFICER THAT THE PERSONAL ATT ENDANCE OF THE LANDOWNERS, AT THE ASSESSMENT STAGE, WAS REQUIRED. THE DISCREPANCI ES POINTED OUT BY THE ASSESSING OFFICER WERE RATHER VAGUE AND BASED ON SW EEPING GENERALIZATIONS. IN ANY CASE, THERE IS NO MATERIAL BEFORE US TO CONTROV ERT THE FINDINGS OF THE LEARNED I.T.A. NO. 105/JAB/2013 ASSESSMENT YEAR 2007-08 PAGE 4 OF 4 CIT(A). ONCE THE AGRICULTURAL EXPENSES ARE HELD TO BE GENUINE, AND ASSESSING OFFICER DOES NOT CHALLENGE SUCH FINDINGS IN APPEAL, THERE CANNOT BE ANY MERITS IN CHALLENGING FACT OF AGRICULTURAL INCOME OR EXISTENC E OF AGRICULTURAL LAND IN RESPECT OF WHICH SUCH EXPENSES ARE INCURRED. TO THA T EXTENT, THERE IS AN INHERENT CONTRADICTION IN THE APPROACH OF THE ASSESSING OFFI CER. WE, THEREFORE, UPHOLD THE RELIEF GRANTED BY THE CIT(A) AND DECLINE TO INTERFE RE IN THE MATTER. 6. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUN CED IN THE OPEN COURT TODAY ON 31 ST MARCH, 2015. SD/- SD/- I C SUDHIR PRAMOD KUM AR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: THE 31 ST DAY OF MARCH, 2015 *AKS/- COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR