ITO, Panchkula V. Sh. Mohammed Mustaq, Panchkula

ITA 1115/CHANDI/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 8392 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 31-08-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 04-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Additional evidence; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH A BEFORE HONBLE SHRI D K SRIVASTAVA, AM AND HONBLE MS. SUSHMA CHOWLA, JM I.T.A NO. 1115/CHANDI/2009 ASSESSMENT YEAR: 2006-07 I.T.O. WARD -3, PANCHKULA V SHRI MOHAMMED MUSTAQ S/O SHRI FAZALIDIN PROP. M/S CLASSIC AGRICON SCO 394, SEC 20, PANCHKULA PAN: AHNPM 4216 A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI N.K. SAINI RESPONDENT BY: SHRI TEJ MOHAN SINGH ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 29.9.2009, ON THE FOLLOWING GROUNDS: (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE ORDER OF LD. CIT(A) IS PERVERSE AS HE HAS GRAVELY ERRED IN UPHOL DING THE CLAIM OF THE ASSESSEE REGARDING EARNING OF HUGE AGRICULTURAL INC OME OF RS. 23,60,274/- INSPITE OF THE FACT THAT THE ASSESSEE HAD NOT MAINT AINED AND BOOKS OF ACCOUNT AND COULD NOT PRODUCE ANY EVIDENCE REGARDING THE PU RCHASE OF AGRICULTURAL INPUTS AND OTHER EXPENSE INCURRED ON AGRICULTURAL ACTIVITIES. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN UPHOLDING GENUS THE CLAIM OF THE ASSESSEE REGARDING EARNING OF HUGE AGRICULTURAL INCOME MERELY ON A PRESUMPTION THAT S INCE THERE WAS SOME EVIDENCE OF CARRYING ON OF AGRICULTURAL OPERATIONS BY THE ASSESSEE, HIS CLAIM OF EARNING SUCH A SUBSTANTIAL AMOUNT OF AGRICULTURAL INCOME WAS JUSTIFIED. (III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WHILE GRANTING RELIEF TO THE ASSESSEE, HAS ERRED IN ENTER TAINING AND IN CONSIDERING THE ADDITIONAL EVIDENCE WITHOUT FOLLOWING THE MANDATORY PROCEDURE LAID DOWN IN RULE 46A OF THE INCOME TAX RULES, 1962. (IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ADMITTING KHASRA GIRDAWARI FOR FINANCIAL Y EAR 2005-06 WITHOUT RECORDING ANY REASONS FOR ITS ADMISSION AND WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE AND TO REBUT THE S AME. (V) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN HOLDING THAT CARNATION FLOWERS HAD BEEN GR OWN ON THE IMPUGNED LAND AND AGRICULTURAL INCOME OF RS. 23,60,274/- HAD BEE N EARNED BY RELYING ON HIS INSPECTION OF ANOTHER FARM. ITA NO. 1115/CHANDI/2009 2 (VI) THE APPELLANT CRAVES FOR LEAVE TO ADD OR AMEN D THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED. (VII) IT IS PRAYED THAT THE ORDER OF HE LD. CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2 THE ASSESSEE IS PROPRIETOR OF M/S CLASSIC AGRICON AT PANCHKULA. HE FILED HIS RETURN OF INCOME ON 17.10.2006 RETURNING INCOME AT RS. 2,02,988/-. BESIDES, HE HAS ALSO RETURNED AGRICULTURAL INCOME AT RS. 26,22,527/ -. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN GREEN HOUSE COMPONENTS. HE ALSO CLAIMS TO BE CARRYING ON THE BUSINESS OF GROWING CUT FLOWERS. IT IS FROM THE BU SINESS OF GROWING OF CUT FLOWERS THAT THE ASSESSEE CLAIMS TO HAVE GENERATED AGRICULTURAL INCOME AMOUNTING TO RS. 26,22,527/-. THE ASSESSING OFFICER HAS NOT ACCEPTED THE CLAIM OF THE ASSESSEE REGARDING AGRICULTURAL INCOME. HE, THEREFORE, TRE ATED THE AGRICULTURAL INCOME AS INCOME FROM BUSINESS. AGGRIEVED BY THE ACTION OF T HE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) UPON WHICH THE LD. CIT(A), DIRECTED THE ASSESSING OFFICER TO ACCEPT THE CLAIM OF THE AS SESSEE AFTER RELYING UPON THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE HI M. THE DETAIL OF SUCH ADDITIONAL EVIDENCE ARE GIVEN IN PARAS 7.1, 7.2 & 7.3 OF HIS APPELLATE ORDER. 3 AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A), THE DEPARTMENT IS IN APPEAL BEFORE THIS TRIBUNAL. IT IS THE GRIEVANCE OF THE DE PARTMENT THAT THE LEARNED. CIT(A) HAS ADMITTED AND ACTED UPON THE SAID ADDITIONAL EVIDENC E WITHOUT GIVING ANY OPPORTUNITY TO THE AO TO REBUT THE SAME. 4 AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT THE LD. CIT(A) HAS ACTED ON ADDITIONAL EVIDENCE FIL ED BEFORE HIM FOR THE FIRST TIME ON THE BACK OF THE ASSESSING OFFICER WITHOUT GIVING A NY OPPORTUNITY TO THE ASSESSING OFFICER TO REBUT THE SAME AND THEREFORE HE WOULD HA VE NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR D ECIDING THE MATTER AFRESH AFTER FOLLOWING THE PROCEDURE LAID DOWN IN RULE 46A OF IN COME-TAX RULES, 1962. 5 WE HAVE HEARD BOTH THE PARTIES. BOTH THE PARTIES AGREE THAT THE LD. CIT(A) HAS ACCEPTED THE ADDITIONAL EVIDENCE ON THE BACK OF THE ASSESSING OFFICER WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO REBUT T HE SAME. THEREFORE, THEY ARE KEEN TO GO BACK TO THE LD. CIT(A) FOR A FRESH DECISION I N CONFORMITY WITH THE LAW. WE ARE IN AGREEMENT WITH THEIR SUBMISSION AND ACCORDINGLY SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR A FRESH DECISION AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. THE LD . CIT(A) WILL CONSIDER THE ADMISSIBILITY OF ADDITIONAL EVIDENCE STRICTLY IN AC CORDANCE WITH RULE 46A OF INCOME-TAX ITA NO. 1115/CHANDI/2009 3 RULES, 1962. WE ORDER ACCORDINGLY. RESULTANTLY, T HE APPEAL FILED BY THE DEPARTMENT IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 .11.2010. SD/- SD/- (SUSHMA CHOWLA) (D K SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER CHANDIGARH, THE 30.11.2010 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR