Thammanna Pramila, Bangalore V. CIT, Bangalore

ITA 1083/BANG/2011

• Counselvise Citation: 108321114 RSA 2011
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 15-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SUNDARARAJAN JT
• Assessee Lawyers: S R R K SHARMA
• Keywords: Opportunity of being heard; Additional evidence; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N. BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NOS. A.Y. APPELLANT VS. RESPONDENT 1083/BANG/2011 2006-07 SMT. THAMMANNA PRAMILA, NO.256 A, 100 FT. ROAD, PEENYA III PHASE, LAGGARE VILLAGE, BANGALORE. PAN: AAXPT 9573G THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 6(1), BANGALORE. 1084/BANG/2011 2006-07 D.C.THAMMANNA-HUF NO.256 A, 100 FT. ROAD, PEENYA III PHASE, LAGGARE VILLAGE, BANGALORE. PAN: AADHD 3421P THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 6(1), BANGALORE. 1085/BANG/2011 2006-07 D.T. SANTOSH, NO.256 A, 100 FT. ROAD, PEENYA III PHASE, LAGGARE VILLAGE, BANGALORE. PAN: AGDPA 5390Q THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 6(1), BANGALORE. 221/BANG/2012 2008-09 SMT. VATSALA REVANNA, NO.95, A MAIN ROAD GOVINDARAJANAGAR, BANGALORE. PAN: ACCPV 8380N THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1), BANGALORE. 1250/BANG/2011 2006-07 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6(1), BANGALORE. SMT. THAMMANNA PRAMILA, BANGALORE. PAN: AAXPT9573G ITA NOS.1083 TO 1085/11 ETC. PAGE 2 OF 13 CO NO. 17/BANG/12 (IN ITA NO. 1250/B/11) 2006-07 SMT. THAMMANNA PRAMILA, BANGALORE. PAN:AAXPT 9573G THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6(1), BANGALORE. ASSESSEES BY : SHRI S.R.R.K. SHARMA, C.A. REVENUE BY : SHRI A. SUNDARARAJAN, JT.CIT(DR) DATE OF HEARING : 13.09.2012 DATE OF PRONOUNCEMENT : 21.09.2012 O R D E R PER BENCH ITA 1083/B/11 IS AN APPEAL BY THE ASSESSEE AND IT A 1250/B/11 IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 05 .09.2011 OF THE CIT(APPEALS)-III, BANGALORE FOR THE ASSESSMENT YEAR 2006-07. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION (CO)AGAIN ST THE VERY SAME ORDER OF THE CIT(APPEALS). AT THE OUTSET, WE HAVE TO CLARIFY THAT THE GROUNDS RAISED IN THE CO BY THE ASSESSEE IS IDENTIC AL TO GROUND NO.2 RAISED BY THE ASSESSEE IN THE ORIGINAL APPEAL IN IT A NO.1083/B/11 AND THEREFORE THE DISCUSSION ON GROUND NO.2 IN THE ASSE SSEES APPEAL WOULD COVER THE GROUND RAISED IN THE CO. ITA 1083/BANG/2011 (ASSESSEES APPEAL) 2. THE GROUND NO.1 RAISED BY THE ASSESSEE READS AS FOLLOWS:- ITA NOS.1083 TO 1085/11 ETC. PAGE 3 OF 13 THE CIT(A) HAS WRONGLY DISALLOWED 85% OF THE BIO- FERTILIZERS OF RS.10,12,338/- U/S.JJA (SIC) 80JJA. EVEN AFTER A CCEPTING PRODUCTION OF BIO-FERTILIZERS AND PURCHASE OF VERMI S AND SALE OF FERTILIZERS ON THE PLEA THAT THE APPELLANT HAS NOT MAINTAINED PROPER EVIDENCES OF PURCHASES AND SALES. THE APPEL LANT HAS MAINTAINED PROPER BOOKS OF ACCOUNTS AND VOUCHERS WH ICH HAS BEEN AGREED BY THE CIT(A). THEREFORE, THE DISALLOW ANCE MAY BE STRUCK DOWN. 3. THE ASSESSEE IS AN INDIVIDUAL. SHE CLAIMED DEDU CTION OF A SUM OF Q 11,86,280 U/S. 80JJA OF THE INCOME TAX ACT, 1961 ( THE ACT). UNDER THE PROVISIONS OF SECTION 80JJA, 100% OF PROFITS AND GA INS DERIVED FROM THE BUSINESS OF COLLECTING OR PROCESSING OR TREATING OF BIO-DEGRADABLE WASTE FOR GENERATING POWER OR PRODUCING BIOFERTILIZERS, W ILL BE ALLOWED AS DEDUCTION IN COMPUTING TOTAL INCOME OF THE ASSESSEE FOR A PERIOD OF FIVE CONSECUTIVE ASSESSMENT YEARS BEGINNING WITH THE ASS ESSMENT YEAR RELEVANT TO PREVIOUS YEAR IN WHICH SUCH BUSINESS CO MMENCES. 4. THE ASSESSEE CLAIMED THAT SHE PRODUCED BIO-FERTI LIZERS BY THE FOLLOWING PROCESS. SOLID ORGANIC WASTE FROM URBAN AREAS, AGRO-BASED INDUSTRIES AND AGRICULTURAL LAND IS COLLECTED. THE N SOME SELECTED SPECIES OF EARTHWORMS WHICH CAN CONVERT WASTE INTO MANURE A RE IDENTIFIED. THE WASTE COLLECTED IS PUT INTO A BOX OR TANK. THE WAS TE IS MIXED WITH COW- DUNG OR SLURRY. THE SURFACE OF THE BOX OR TANK IS PLASTERED. HOWEVER A HOLE IS PROVIDED IN THE SURFACE TO PROVIDE NEEDED A ERATION. THE WASTE IS KEPT IN THE TANK FOR TWO WEEKS. THEREAFTER THE EAR TH WORMS ARE RELEASED INTO THE SURFACE AT THE RATE OF 1000 TO 2000 PER SQ .MTRS. WORMS, ON THEIR OWN ENTER THE ORGANIC MATTER THROUGH THE HOLES AND CRACKS ON SOLID ITA NOS.1083 TO 1085/11 ETC. PAGE 4 OF 13 SURFACE. AFTER A LAPSE OF SIX WEEKS THE MUD PACK, ARE REMOVED AND COMPOST ALONG WITH WORMS ARE COLLECTED. THE MANURE SO COLLECTED IS KEPT AS A SMALL PYRAMID AND LEFT FOR 6 TO 8 HOURS. WORM S THAT MOVE DOWN AND FORM A CLUSTER AT THE BASE ARE SEPARATED BY SLOWLY PUSHING AND SPREADING THE MANURE FROM THE TOP. THE MANURE IS SEPARATED A ND READY FOR USE. THE ASSESSEE ALSO PRODUCED BEFORE THE ASSESSING OFF ICER COMPLETE LITERATURE AND DRAWINGS OF THE UNITS AND THE PROCES S. 5. THE ASSESSING OFFICER DID NOT ALLOW THE CLAIM O F THE ASSESSEE FOR DEDUCTION U/S.80JJA OF THE ACT. ACCORDING TO THE AO , BIO-FERTILIZER WAS NOT PRODUCED BY ERECTING PLANT & MACHINERY. MORE OVER, HE WAS OF THE VIEW THAT THERE WAS NO EVIDENCE REGARDING SETTING UP OF BIOFERTILIZER UNIT. THE AO ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE F OR DEDUCTION U/S. 80JJA OF THE ACT. 6. BEFORE THE CIT(A), THE ASSESSEE POINTED OUT THAT BIOFERTILIZERS ARE NOT PRODUCED BY ERECTING PLANT & MACHINERY AND IT W AS NOT PRODUCED IN A FACTORY. THE BIOFERTILIZER UNIT WILL NOT BE AT ONE PLACE AND IT CAN BE SET UP ANY WHERE ON THE LAND FOR EACH PROCESS. THERE IS N O REGULAR EMPLOYMENT OF WORKERS AND THE LABOURERS AVAILABLE ON HAND ARE UTILIZED FOR ASSISTANCE AND REITERATED SUBMISSIONS MADE BEFORE THE AO. 7. THE LD. CIT(APPEALS) AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE HELD THAT DEDUCTION U/S. 80JJA OF THE ACT HAS TO BE ALLOWED, BUT FOR WANT OF PROPER EVIDENCE REGARDING PURCHASE AND SALE OF THE PRODUCE, HE ALLOWED A RELIEF OF 15% OF Q 11,86,280 TO THE EXTENT OF Q 1,77,942 AS ITA NOS.1083 TO 1085/11 ETC. PAGE 5 OF 13 DEDUCTION U/S. 80JJA OF THE ACT. THE OBSERVATIONS OF THE LD. CIT(A) IN THIS REGARD WERE FOLLOWS:- 6.1. AFTER VERIFYING THE CONTENTIONS OF APPELLANT, I AM IN AGREEMENT THAT THERE IS PRODUCTION OF BIO-FERTILIZE RS AND FOR THE PRODUCTION OF THE SAME, ERECTION OF PLANT AND M ACHINERY IS NOT REQUIRED AND ALSO THERE ARE VOUCHERS FOR PUR CHASE OF VERMIS AND SALE OF FERTILIZERS. APART FROM THE EVIDENCES FOR THE ABOVE TRANSACTIONS THE BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED AND THE PROFIT IS COMPUTED WHICH IS FILED ALONG WIT H RETURN OF INCOME. THE ARRANGEMENTS FOR INSPECTION COULD NOT B E MADE ON ACCOUNT OF THE CAMPAIGN OF THE ELECTION. FURTHER, T HE BIO- FERTILIZER MANUFACTURED HAS BEEN ACCEPTED DURING AL L THE FOUR PREVIOUS YEARS. THEREFORE, THE DEDUCTION U/S.8OJJA HAS TO BE ALLOWED BECAUSE OF ALL MATERIALS PRODUCED BY APPELL ANT. 6.2. THE CONTENTIONS OF THE APPELLANT CAN NOT BE F ULLY ACCEPTED BECAUSE THE QUANTUM OF BIO FERTILIZER BEIN G SOLD TO THE EXTENT OF RS. 24,00,000 APPEARS TO BE ON THE HIGHER SIDE. THE APPELLANT HAS ALSO NOT MAINTAINED PROPER EVIDENCES OF PURCHASE OF BIOMAS AND OTHER DEGRADABLE UNITS FOR THE PRODUC TION OF BIO FERTILIZER, NO PLANT AND MACHINERY IS NEEDED FOR TH E SAME, HOWEVER, THE ONUS IS ON THE APPELLANT TO MAINTAIN P ROPER EVIDENCES OF PURCHASES AND SALES OF A PRODUCE FOR W HICH DEDUCTION U/S.80JJA IS BEING CLAIMED. AT THE SAME T IME, THE APPELLANT OWNS CONSIDERABLE LAND WITH SEVERAL TREES STANDING ON THE LAND WHICH ARE A CONTINUOUS SOURCE OF BIOMASS A ND ALSO THE AGRICULTURAL WASTE SUCH AS STRAW, GRASS, LEAVES, TW IGS ETC, WHICH ARE ALSO THE INPUTS FOR BIO FERTILIZER UNIT. IT WOU LD MEET THE ENDS OF JUSTICE IF THE APPELLANT IS ALLOWED A RELIEF OF 15% OF RS.11,86,280/- WHICH WORKS OUT TO RS.1,77,942/- AS DEDUCTION U/S.8OJJA OF THE ACT. 8. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE ASSESSEE HAS RAISED GROUND NO.1 BEFORE THE TRIBUNAL. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS. IN OUR OPI NION, THE CONCLUSIONS DRAWN BY THE LD. CIT(A) FOR DISALLOWING CLAIM OF THE ASSESSEE FOR DEDUCTION U/S. 80JJA OF THE ACT TO THE EXTENT O F 85% CANNOT BE ITA NOS.1083 TO 1085/11 ETC. PAGE 6 OF 13 SUSTAINED. IN THIS REGARD, WE FIND THAT SIMILAR CL AIM OF THE ASSESSEE HAS BEEN ACCEPTED IN THE PAST. THE FACT THAT THE ASSES SEE HAD AGRICULTURAL INCOME CANNOT BE THE BASIS TO DISALLOW THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S. 80JJA OF THE ACT. IT WAS SUBMITTED BEFORE US THAT THE ASSESSEE HAS EVIDENCE TO SUBSTANTIATE PURCHASES AND SALES OF BIOFERTILIZERS AND SINCE SUCH EVIDENCE WAS VOLUMINO US, THE SAME COULD NOT BE PRODUCED. WE ARE OF THE VIEW THAT IT WILL B E JUST AND PROPER TO SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND REM AND THE QUESTION OF QUANTUM OF DEDUCTION TO BE ALLOWED U/S. 80JJA OF TH E ACT TO THE ASSESSING OFFICER FOR CONSIDERATION AFRESH. THE AS SESSEE WILL PRODUCE EVIDENCE TO SUBSTANTIATE THE INCOME FROM PRODUCTION OF BIOFERTILIZERS AND THE AO WILL CONSIDER THE SAME AND DECIDE THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE MA KE IT CLEAR THAT IN PRINCIPLE, THE ASSESSEE IS ENTITLED TO DEDUCTION U/ S. 80JJA OF THE ACT AND WHAT IS TO BE DECIDED BY THE AO IS ONLY THE QUANTUM OF DEDUCTION THAT IS TO BE ALLOWED. THUS, GROUND NO.1 IS TREATED AS ALL OWED FOR STATISTICAL PURPOSES. 10. GROUND NO.2 RAISED BY THE ASSESSEE IN HER APPEA L AND THE CROSS OBJECTION AND THE ONLY GROUND RAISED BY THE REVENUE IN ITS APPEAL (ITA NO.1250/BANG/11 ) IS COMMON. THE SAME IS WITH REGARD TO THE ACTION OF THE LD. CIT(A) IN SUSTAINING THE ADDITION MADE BY T HE AO TO THE EXTENT OF 50% OF THE DEVELOPMENTAL EXPENDITURE WHILE COMPUTIN G CAPITAL GAIN. 11. THE FACTS ARE THAT THE ASSESSEE SOLD A SITE AT CHANDRA LAYOUT, BANGALORE, ON 10.03.2006 FOR A SALE CONSIDERATION O F Q 79,92,000. IN THE ITA NOS.1083 TO 1085/11 ETC. PAGE 7 OF 13 COMPUTATION OF CAPITAL GAINS, THE ASSESSEE CLAIMED THE COST OF ACQUISITION OF THE PROPERTY OF Q 37 LAKHS AND DEVELOPMENTAL EXPENSES OF Q 30,20,000. THE AO REJECTED THE CLAIM OF THE ASSESS EE FOR DEDUCTION OF DEVELOPMENT EXPENSES WHILE COMPUTING SHORT TERM CAP ITAL GAINS. 12. THE LD. CIT(A) ON THIS ISSUE ALLOWED 50% EXPENS ES CLAIMED BY THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS:- 70. THE ASSESSING OFFICER HAS DISALLOWED DEVELOPME NTAL EXPENSES OF THE PROPERTY SOLD ON THE GROUND THAT TH E BILLS WERE NOT FURNISHED AND BOOKS OF ACCOUNTS HAVE NOT BEEN M AINTAINED. THE APPELLANT SUBMITS THAT SHE WAS COMPLETELY BUSY WITH THE ELECTION OF HER HUSBAND AND SHE WAS NOT ABLE TO ATT END TO ANY MATTER DURING THAT PERIOD. THE APPELLANT ALSO SUBMI TS THAT THE PAYMENT OF THE DEVELOPMENTAL EXPENSES HAVE BEEN EVI DENCED BY PUNJAB NATIONAL BANK ACCOUNT, COPY SUBMITTED ALONG WITH THE RETURN OF INCOME AND IT ALSO APPEARS IN WEALTH TAX STATEMENTS. THE APPELLANT ALSO SUBMITTED THE COMPLETE DETAILS O F THE DEVELOPMENTAL EXPENDITURE OF BUILDING ALL AMENITIES IN DETAIL WITH QUANTITY RATE AND AMOUNT PAID. IT IS EXHAUSTIV E AND DETAILED EXPLANATION OF THE DEVELOPMENTAL EXPENSES. IN VIEW OF THE INCORPORATION OF THE EXPENDITURE IN BOOKS OF ACCOUN TS WHICH ARE TALLIED AND THE COMPLETE DETAILS OF THE EXPENSES PR ODUCED THE DEVELOPMENTAL EXPENDITURE WILL HAVE TO BE ALLOWED. HOWEVER, IT IS SEEN THAT THE EVIDENCES MAINTAINED BY THE APPELL ANT IN RESPECT OF DEVELOPMENTAL EXPENDITURE IS NOT COMPLETELY VERI FIABLE AND MANY OF THESE EXPENDITURES ARE MADE IN CASH NOT SUP PORTED BY PROPER VOUCHERS. HENCE, IT WOULD BE FAIR IN THE INT EREST OF JUSTICE TO RESTRICT THE CLAIM OF THE APPELLANT BY 50% OF TH E CLAIM OF THE EXPENDITURE. THEREFORE, THE ADDITION OF DEVELOPMENT AL EXPENDITURE MADE BY THE AO OF RS.30,20,000/- IS RES TRICTED TO RS.15,10,000/-. 13. IN HER APPEAL, THE ASSESSEE CLAIMS THAT THE ENT IRE DEDUCTION CLAIMED ON ACCOUNT OF DEVELOPMENT EXPENSES SHOULD H AVE BEEN ALLOWED. IN ITS APPEAL, THE REVENUE CLAIMS THAT THE CIT(A) H AS ADMITTED ADDITIONAL ITA NOS.1083 TO 1085/11 ETC. PAGE 8 OF 13 EVIDENCE PRODUCED BEFORE HIM FOR THE FIRST TIME WIT HOUT ALLOWING THE AO OPPORTUNITY TO EXAMINE THOSE EVIDENCE. 14. AT THE TIME OF HEARING, IT WAS NOTICED THAT THE RE WAS A VIOLATION OF PROVISION OF RULE 46A OF THE I.T. RULES AND THEREFO RE THE ADDITIONAL EVIDENCE BY THE ASSESSEE SHOULD BE CONSIDERED BY TH E AO. WE ARE ALSO OF THE VIEW THAT THE AO IN THE SET ASIDE PROCEEDING S WILL CONSIDER THE CLAIM OF THE ASSESSEE THAT THE ENTIRE DEVELOPMENT E XPENSES CLAIMED SHOULD BE ALLOWED AS DEDUCTION. WE THEREFORE SET A SIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND REMAND THE ISSUE TO TH E ASSESSING OFFICER FOR FRESH CONSIDERATION IN THE LIGHT OF ADDITIONAL EVID ENCE FILED BY THE ASSESSEE AS PER THE DIRECTIONS GIVEN ABOVE. THESE GROUNDS ARE THUS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 15. THUS, THE APPEALS FILED BY THE ASSESSEE AND THE REVENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA 1084/BANG/2011 AND 1085/BANG/2011 (ASSESSEES A PPEALS) 16. ITA NOS.1084 & 1085/B/2011 ARE APPEALS BY THE A SSESSEES VIZ., D.C. THAMMANNA HUF AND D.T. SANTOSH RESPECTIVELY. THESE APPEALS ARE DIRECTED AGAINST THE ORDERS DATED 05.09.2011 OF THE CIT(APPEALS)-III, BANGALORE RELATING TO A.Y. 2006-07. 17. THE GROUNDS OF APPEAL BY BOTH THE ASSESSEES IN THESE APPEALS ARE IDENTICAL TO GROUND NO.1 RAISED BY THE ASSESSEE VIZ ., SMT. THAMMANNA PRAMILA IN ITA 1083/BANG/2011. THE BASIS OF DISALL OWANCE BY THE AO AND THE LD. CIT(A) ARE ALSO IDENTICAL. WE HAVE ALR EADY HELD THEREIN (PARA ITA NOS.1083 TO 1085/11 ETC. PAGE 9 OF 13 9 OF THIS ORDER) THAT THE ISSUE REQUIRES FRESH CONS IDERATION BY THE AO AND THE ASSESSEE WAS ALSO DIRECTED TO PRODUCE EVIDENCE IN SUPPORT OF HER INCOME FROM PRODUCTION OF BIOFERTILIZERS. WE THERE FORE, FOLLOWING THE ORDER IN THE CASE OF SMT. THAMMANNA PRAMILA (ITA 1083/BA NG/2011), SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND REMAND TH E ISSUE TO THE AO FOR FRESH CONSIDERATION IN THE LIGHT OF THE DIRECTIONS GIVEN IN THE CASE OF SMT. THAMMANNA PRAMILA. FOR STATISTICAL PURPOSES, THE APPEALS OF THE ASSESSEES ARE TREATED AS ALLOWED. ITA 221/BANG/2011 (ASSESSEES APPEAL) 18. THIS APPEAL BY THE ASSESSEE VIZ., SMT. VATSALA REVANNA, IS AGAINST THE ORDER DATED 14.11.2011 OF THE CIT(APPEALS)-I, B ANGALORE RELATING TO A.Y. 2007-08. 19. THERE IS DELAY OF 25 DAYS IN FILING THIS APPEAL WHICH HAS BEEN EXPLAINED AS OWING TO THE ASSESSEE HAVING TO ATTEND RELIGIOUS FUNCTION AT CHENNAI. AN AFFIDAVIT HAS ALSO BEEN FILED TO THIS EFFECT. CONSIDERING THE REASONS GIVEN, WE CONDONE THE DELAY IN FILING THE A PPEAL. 20. GROUND NO.1 RAISED BY THE ASSESSEE IN THIS APPE AL IS IDENTICAL TO GROUND NO.1 RAISED BY THE ASSESSEE, SMT. THAMMANNA PRAMILA IN ITA 1083/BANG/2011. AS ALREADY STATED, THE FACTS ARE A LSO IDENTICAL AS IN THE CASE OF SMT. THAMMANNA PRAMILA. HOWEVER, IN THE CA SE OF THIS ASSESSEE THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASS ESSEE FOR DEDUCTION U/S. 80JJA FOR THE REASON THAT THE ASSESSEE FAILED TO JU STIFY THE CLAIM. 21. ON APPEAL BY THE ASSESSEE, THE LD. CIT(A) HELD AS FOLLOWS:- ITA NOS.1083 TO 1085/11 ETC. PAGE 10 OF 13 9. I HAVE CONSIDERED THE ABOVE. I OBSERVE THAT TH E A.O. HAS NOT DOUBTED THE GENUINENESS OF THE PLANT PRODUCING BIO- FERTILIZER AND THEREFORE THERE IS NO CONFLICT BETWE EN THE ORDER OF A.Y. 2005-06 AND THE PRESENT ORDER. THE ONLY DIFFER ENCE IN BETWEEN THESE TWO ASSESSMENT YEARS IS REGARDING THE OPERATION OR CARRYING ON OF BUSINESS IN SUCH PLANT. IN THE A. Y. 2005-06 THE TOTAL TURNOVER WAS BELOW RS.40 LAKHS AND THE SLIPS MAINTAINED AT THAT TIME PASSED THE TEST OF ACCOUNTS ADDED WITH TH E INSPECTORS REPORT TO ALLOW A PORTION OF CLAIM I.E., 93% AND DI SALLOW 7%. BUT IN INCOME TAX EACH A.Y. IS DIFFERENT AND INDEPE NDENT. THE MAJOR DIFFERENCE IN THIS YEAR IS THAT ASSESSEE SHOW S TURNOVER OF RS.44,22,000/- BUT HAS FAILED TO MAKE THE STATUTORY AUDIT U/S. 44AB OF I.T.ACT. THEREFORE THE SLIPS SHOWING QUANTI TATIVE DETAILS OF PRODUCTION ONLY CANNOT EVEN BE DESIGNATE D AS VOUCHERS/BILL, MUCH LESS THE ACCOUNTS. THUS THE AO. IS JUSTIFIED TO HOLD THEM NOT BOOKS. THE ASSESSEE HAS, BESIDES T HIS, NOT BEEN ABLE TO PRODUCE ANY OTHER DOCUMENTS TO PROVE THAT A CTUALLY IT HAS PRODUCED THE BIO FERTILIZERS AND SOLD THEM. HENCE I TOO FIND IT DIFFICULT TO BELIEVE THAT IN THIS YEAR, THE BUSINES S OF BIO FERTILIZERS HAD BEEN CARRIED ON ACTUALLY. ON THE OT HER HAND THE ASSESSEE OWNS ONE PETROL PUMP UNDER THE NAME OF SAI RANGA FILLING STATION DECLARING TURNOVER OF 1.33 CRORES. IT MAY THUS BE PRESUMED THAT A PART OF INCOME FROM THIS FILLING ST ATION IS BEING DIVERTED TO BIO FERTILIZER BUSINESS TO CLAIM DEDUCT ION U/S.80JJA OF I.T.ACT. IN THE LIGHT OF SUCH DISCUSSION THE AO S ACTION OF DISALLOWANCE IS HELD JUSTIFIED. GROUND OF APPEAL IS DISMISSED. 22. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE ARE OF THE VIEW THAT AS HELD IN THE CASE OF SMT. THAMMANNA PRAMILA (ITA 108 3/B/11), THE ISSUE SHOULD BE RESTORED TO THE FILE OF THE AO FOR FRESH CONSIDERATION. ADMITTEDLY IN A.Y. 2005-06, THE INSPECTOR HAD FILED A REPOT AC CEPTING THAT 93% OF THE INCOME DECLARED BY THE ASSESSEE SHOULD BE CONSIDERE D AS INCOME FROM PRODUCTION OF BIOFERTILIZER. IN THIS YEAR, THE REV ENUE HAS REJECTED THE CLAIM FOR THE SIMPLE REASON THAT THERE WAS ABSENCE OF AUD IT REPORT U/S. 44AB OF THE ACT. WE ARE OF THE VIEW THAT SUCH AN OUTRIGHT REJECTION OF THE CLAIM OF THE ASSESSEE CANNOT BE SUSTAINED. WE THEREFORE DIR ECT THE ISSUE BE ITA NOS.1083 TO 1085/11 ETC. PAGE 11 OF 13 CONSIDERED AFRESH BY THE AO WITH A DIRECTION TO THE ASSESSEE TO PRODUCE EVIDENCE IN SUPPORT OF ITS CLAIM OF INCOME FROM PRO DUCTION OF BIOFERTILIZER. THE AO WILL CONSIDER THE CLAIM OF THE ASSESSEE IN T HE LIGHT OF THE DIRECTIONS GIVEN BY US IN THE CASE OF SMT. THAMMANN A PRAMILA IN ITA NO.1083/B/11. THE AO WILL AFFORD OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUE AFRESH. 23. CONCISED GROUND NO.2 RAISED BY THE ASSESSEE REA DS AS FOLLOWS:- THE ESTIMATION OF AGRICULTURAL INCOME AT RS.40,00 0/- PER ACRE BY THE CIT(A) WITHOUT CONSIDERING CROPS GROWN AND C ERTIFICATES OF REVENUE AUTHORITIES AND THE WATER SOURCES WITH B OREWELLS IS ERRONEOUS. 24. THE ASSESSEE HAD CLAIMED AGRICULTURAL INCOME OF Q 13,39,850/- FROM AGRICULTURAL LAND HOLDING OF 9 ACRES 19 GUNTAS IN WHICH THERE WAS CULTIVATION OF COCONUT, ARECANUT AND BETEL LEAVES L OCATED IN MAGADI, KASABA HOBLI AND MANGO AND OTHER FRUITS CULTIVATED IN AGRICULTURAL LAND OF 7 ACRES 12 GUNTAS IN VILLAGE RAMOHALLI. THE ASSESS EE IN SUPPORT OF HIS CLAIM OF AGRICULTURAL INCOME RELIED ON THE CERTIFIC ATE OF REVENUE AUTHORITIES REGARDING PRODUCTION OF AGRICULTURAL PRODUCE. THE AO HOWEVER ESTIMATED THE AGRICULTURAL INCOME AT Q 45,000 PER ACRE. ON APPEAL BY THE ASSESSEE, THE CIT(A) HELD AS FOLLOWS:- 11. I HAVE CONSIDERED THE ABOVE. I OBSERVE THE DE TAILS OF AGRICULTURAL LAND HAD NOT BEEN PRODUCED. IN A.Y. 20 05-06, THE ASSESSEE WAS HAVING 10 ACRES OF AGRICULTURAL LAND A S CAN BE SEEN FROM THE ASSESSMENT ORDER DATED 03-12-2007 OF A.Y. 2005-06. THE APPELLANT W.T. RETURN VALUES SUCH AGRICULTURAL LAND AT RS.15,82,000/- AND SHOWS IT AS VALUE OF 9/23 ACRES OF LAND. THESE AGRICULTURAL LANDS ARE LOCATED IN MAGADI AND RAMOHALLI ITA NOS.1083 TO 1085/11 ETC. PAGE 12 OF 13 WHICH IS WITHIN 25 KMS OF BANGALORE. THEREFORE I HO LD THE A.OS ACTION OF CONCLUDING THAT THE ASSESSEE IS OWN ER OF ONLY 9 ACRES OF AGRICULTURAL LAND IS CORRECT. THE ASSESSEE HAS CLAIMED TO HAVE EARNED ON AVERAGE RS.1,48,872/- PER ACRE. THE A.O. HAS ESTIMATED SUCH INCOME AT RS.15,000/- PER ACRE. I HO LD BOTH ARE AT EXTREMES AND UNREASONABLE. I HOLD RS.40,000/- PER A CRE IS REASONABLE UNDER THE CIRCUMSTANCES AND FACTS OF THE CASE AND THEREFORE THE AGRICULTURAL INCOME IS LIMITED TO RS. 3,6O,000/- ONLY. THUS ADDITION OF RS.9,79,85O/- IS CONFIRMED AND THE APPELLANT GETS RELIEF OF RS.2,25,000/-. APPEAL IS ALLOWED PAR TLY ON THIS GROUND. 25. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE ASSESSEE HAS RAISED GROUND NO.2 BEFORE THE TRIBUNAL. 26. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT WAS BR OUGHT TO OUR NOTICE IN THE COURSE OF HEARING THAT IN CASE OF OTHER FAMI LY MEMBERS OF THE ASSESSEE ON IDENTICAL FACTS, THE TRIBUNAL HAS CONSI DERED AGRICULTURAL INCOME ON A PARTICULAR BASIS. IN THIS REGARD IT WA S SUBMITTED THAT IN THE CASE OF MRS.THAMMANNA PRAMILA IN ITA NO.164 TO 169/ BANG/2007 ORDER DATED 31.3.2008, 73% OF THE AGRICULTURAL INCOME DE CLARED WAS DIRECTED TO BE ACCEPTED. WE ARE OF THE VIEW THAT SINCE THE F ACTS AND CIRCUMSTANCES AND THE BASIS ON WHICH THE IMPUGNED DISALLOWANCE WA S MADE ARE IDENTICAL IN THE CASE OF THE ASSESSEE AS WELL AS TH E OTHER FAMILY MEMBERS, IT WOULD BE JUST AND PROPER TO DIRECT THE AO TO CON SIDER THE ISSUE AFRESH IN THE LIGHT OF THE DECISIONS OF THE TRIBUNAL REFERRED TO BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE US. THUS, THIS GROUND OF APPEA L IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.1083 TO 1085/11 ETC. PAGE 13 OF 13 27. IN THE RESULT, ALL THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES, CO 17/BANG/12 IS, HOWEVER, DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF SEPTEMBER, 2012. SD/- SD/- (N.BARATHVAJA SANKAR) ( N.V. VASUDEVAN ) VICE-PRESIDENT JUDICIAL MEMBER BANGALORE, DATED, THE 21 ST SEPTEMBER, 2012. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. C IT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.