M/S PINK CITY RESORTS LTD., JAIPUR V. INCOME TAX OFFICER, WARD-5-2, JAIPUR

ITA 1128/JPR/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3270 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 17-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANMOHAN KANDPAL; ACIT OSD
• Section: 143(3); 207; 13

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ T;IQJ U;K;IHB] T;IQJ T;IQJ U;K;IHB] T;IQJ T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH JESK LH-'KEKZ] YS[KK LNL; DS LE{K BEFORE : SHRI RAMESH C.SHARMA, ACCOUNTA NT MEMBER VK;DJ VIHY LA-@ ITA NO. 1128/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2016-17 M/S. PINK CITY RESORTS LTD 395, NARNOLI MANSION SANGANERI GATE, JAIPUR CUKE VS. THE ITO WARD- 5(2), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAACP 9667 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY: SHRI MANMOHAN KANDPAL, ACIT(OSD)-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21/11/2019 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 25 /11/2019 VKNS'K@ ORDER PER RAMESH C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 21-08-2019 FOR THE ASSESS MENT YEAR 2016-17, IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE I. T. ACT, 1961. 2.1 THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO D ISALLOWANCE OF AGRICULTURAL INCOME AMOUNTING TO RS. 8,24,190/-. 2.2 RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS P ERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A LIMITED COMPANY AN D IS ENGAGED IN ITA NO.1128/JP/2019 M/S.PINK CITY RESORTS LTD., JAIPUR VS IT O , WARD-5(2), JAIPUR 2 AGRICULTURAL ACTIVITY. RETURN OF INCOME WAS FILED O N 28.09.2016 DECLARING TOTAL INCOME OF RS. NIL AND AGRICULTURAL INCOME OF RS. 21,66,534/- AND INTEREST INCOME OF RS. 2,52,333/-. THE AO HAS COMP LETED THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 ON 30.12.201 8 DETERMINING TOTAL INCOME AT RS. 8,24,190/- INTER ALIA MAKING THE ADDI TION OF RS. 8,24,190/- BY TREATING THE AGRICULTURAL INCOME AS NON-AGRICUL TURAL. 2.3 BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS CONFI RMED THE ACTION OF THE AO AGAINST WHICH THE ASSESSEE IS IN FURTHER APP EAL BEFORE THIS BENCH. 2.4 IT WAS ARGUED BY THE LD.AR OF THE ASSESSEE THAT DURING THE YEAR THE ASSESSEE HAS SHOWN SALE OF BAJRA FOR 339 QUINTAL OU T OF OPENING STOCK WHICH WAS DECLARED DURING THE LAST YEAR PRODUCTION AND IT WAS KEPT AS CLOSING STOCK IN THE LAST YEAR WHICH WAS SOLD DURIN G THE YEAR. THE AO HAS NOT COMMENTED ANYTHING ADVERSE IN THE ASSESSMENT FR AMED BY HIM IN THE LAST YEAR. HE HAS ACCEPTED THE STOCK OF 307 QUINTAL ON ESTIMATED BASIS AS PER LAST YEAR ASSESSMENT. THE ACTUAL STOCK IN THE L AST YEAR WAS 339 QUINTAL. EVIDENCE REGARDING OLD STOCK AND SALES BILLS FOR FI NANCIAL YEAR 2014-15 ARE AVAILABLE ON PAPER BOOK PAGE NO. 8 TO 13 . THEREFORE THE REJECTION OF CLAIM AND CREDIT OF 207 QUINTAL AGAINST STOCK OF 33 9 QUINTAL IS WITHOUT ANY BASIS. IT IS ALSO NOT KNOWN THAT FROM WHERE THE FIG URE OF 207 QUINTAL IS TAKEN BY THE AO. THE AO DID NOT BRING ANY EVIDENCE ON RECORD THAT THE ITA NO.1128/JP/2019 M/S.PINK CITY RESORTS LTD., JAIPUR VS IT O , WARD-5(2), JAIPUR 3 ASSESSEE WAS NOT HAVING 339 QUINTAL OF BAJRA. THE A SSESSEE HAS SOLD THE CROP IN STATE AGRICULTURE MANDI THROUGH REGISTERED DEALER AND PAYMENT WAS ALSO RECEIVED BY CHEQUE. THEREFORE, THERE IS NO REASON TO DISALLOW THE CLAIM OF THE ASSESSEE FOR THESE AGRICULTURE PRODUCE S COMING IN THE OPENING STOCK IN THE BOOKS OF ACCOUNTS OF THE ASSES SEE. THEREFORE, THE ADDITION SO MADE DESERVES TO BE DELETED. 2.4.1 IT WAS FURTHER CONTENDED BY THE LD.AR OF THE ASSESSEE THAT THE AO REJECTED THE CLAIM OF THE ASSESSEE FOR PRODUCTION O F BAJRA ON THE BASIS OF REPORT OF TEHSILDAR OBTAINED BY HIM THAT THE AVERAG E PRODUCTION OF BAJRA IN THE AREA IS 30 QUINTAL PER HECTARE WHICH WAS A G ENERAL REPORT WHEREAS THE ASSESSEE HAS WELL IRRIGATED LAND WITH ALL FACIL ITIES AND HIS PRODUCTION IS HIGHER THAN OTHER LANDS IN THE AREA. SO THE TOTAL P RODUCTION IN 22.4 HECTARE WAS 803 QUINTAL AND AVERAGE OF WHICH IS 35.8 QUINTA L PER HECTARE. THE AO HAS GIVEN THE BENEFIT OF 25 QUINTAL PER HECTARE. THE PRODUCTION OF ANY CROPS DEPEND UPON FERTILITY OF LAND, IRRIGATION FA CILITY, SEEDS AND MANURE USED BY HIM. SINCE THE COMPANY IS ONLY HAVING AGRIC ULTURE ACTIVITIES AND DIRECTORS ARE EXPERIENCED IN THE FIELD, THEREFORE, THE AVERAGE PRODUCTION OF 35.8 IS NOT ON HIGHER SIDE WHEN THE REPORT OF TEHSI LDAR HAS REPORTED AVERAGE PRODUCTION OF 30 QUINTAL PER HECTARE IN THE AREA. THEREFORE THE ADDITION MADE ON ASSUMPTION AND PRESUMPTION AND WIT HOUT CONSIDERING ITA NO.1128/JP/2019 M/S.PINK CITY RESORTS LTD., JAIPUR VS IT O , WARD-5(2), JAIPUR 4 THE ACTUAL FACTS OF THE CASE, THE ADDITION SO MADE FOR RS. 1,50,660/- OUT OF TOTAL SALE CONSIDERATION OF RS. 5,02,200/- DESERVES TO BE DELETED. ESPECIALLY WHEN THE ASSESSEE COMPANY HAS SOLD THE C ROP IN STATE AGRICULTURE MANDI THROUGH REGISTERED DEALER AND PAY MENT WAS ALSO RECEIVED BY CHEQUE. THEREFORE THERE IS NO REASON TO DISALLOW THE CLAIM OF THE ASSESSEE FOR THESE AGRICULTURE PRODUCES. 2.4.2 THE LD.AR OF THE ASSESSEE FURTHER SUBMITTED A S TO UNEXPLAINED SALE OF MATAR THAT DURING THE YEAR UNDER CONSIDERATION T HE ASSESSEE HAS SHOWN INCOME BY SALE OF MATAR (PEA) FOR RS. 5,69,050/-. T HE ASSESSEE HAS SHOWN THAT TOTAL MATAR CROP IS CULTIVATED ON 4.92 HECTARE LAND AND IT HAS SHOWN AVERAGE YIELD OF PRODUCTION AT 103 QUINTAL PER HECT ARE WHICH IS VERY NORMAL IN THE AREA BECAUSE THE SEASON OF MATAR IS A LMOST FOR 6 MONTHS AND THE SAME TREE REPEATED PRODUCTION 3 TO 4 TIMES IN A MONTH. THE AO HAS COLLECTED DATA FROM AGRICULTURE DEPARTMENT AND APMC WHICH ARE AVERAGE DATA AND IS NOT APPLICABLE FOR ALL TYPES OF LAND. S INCE THE LAND OF THE ASSESSEE WAS VERY FERTILE, THEREFORE, THE PRODUCTIO N WAS MORE THAN AVERAGE LAND OF THE AREA. SO HE HAS TAKEN 17.82 QUINTAL PER HECTARE AND ALSO ESTIMATED THE SALE PRICE AS PER HIS OWN AND MADE AN ADDITION OF RS. 2,29,150/- OUT OF TOTAL SALE OF MATAR SHOWN BY THE ASSESSEE FOR RS. 5,69,050/- WHICH IS BACKED BY CREDIBLE EVIDENCES. T HE AO DID NOT MAKE ITA NO.1128/JP/2019 M/S.PINK CITY RESORTS LTD., JAIPUR VS IT O , WARD-5(2), JAIPUR 5 ANY ENQUIRY AND ALSO DID NOT BRING ANY EVIDENCE ON RECORD THAT THE SALE OF MATAR SHOWN BY THE ASSESSEE IS NOT GENUINE. UNDER T HESE CIRCUMSTANCES THE ADDITION SO MADE BY THE AO IGNORING THE SUBMISS ION OF THE ASSESSEE DESERVES TO BE DELETED. 2.4.3 THE LD.AR OF THE ASSESSEE FURTHER INVITED THE ATTENTION OF THE BENCH TO THE ORDER OF THE AO FOR THE IMMEDIATELY PRECEDIN G ASSESSMENT YEAR WHEREIN THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT AND THE AO HAS ACCEPTED THE AGRICULTURE INCOME ON SAME LAND HOLDIN G UNDER THE SAME FACTS AND CIRCUMSTANCES TO THE EXTENT OF RS. 27,00, 104/- OUT OF TOTAL INCOME DECLARED BY THE ASSESSEE FOR RS. 33,94,942/- . THE LD CIT(A) HAS ACCEPTED THE TOTAL INCOME OF RS. 31,27,010/- AND ON LY RS. 2,67,932/- WAS DISALLOWED. SO THE TOTAL AGRICULTURE INCOME ACCEPTE D BY THE DEPARTMENT WAS RS. 31,27,010/- WHEREAS IN THIS YEAR THE INCOM E IS ONLY RS. 21,66,534/- WHICH WAS NOT ACCEPTED BY THE AO. T HIS IS CONTRARY TO LAW AND FACTS. 2.4.4 AS PER THE LD.AR OF THE ASSESSEE, THE ONLY BA SIS OF MAKING THE ADDITION BY THE AO WAS REPORTS OBTAINED FROM TEHSIL DAR AND STATE AGRICULTURE DEPARTMENT WHICH IS NOT UNIVERSALLY APP LICABLE AND IT DEPENDS UPON VARIOUS FACTORS LIKE TYPE OF LAND, IRRIGATION FACILITIES, SOIL, RAIN, SEEDS AND QUALITY OF MANURE USED BY THE FARMER. THEREFORE IT IS NOT APPLICABLE ITA NO.1128/JP/2019 M/S.PINK CITY RESORTS LTD., JAIPUR VS IT O , WARD-5(2), JAIPUR 6 FOR EACH LAND. THE ASSESSEE COMPANY HAS DISCLOSED T HE AGRICULTURAL INCOME ON THE BASIS OF VARIOUS SALE VOUCHERS OF SAL E OF AGRICULTURAL PRODUCE TO KRISHI UPAJ MANDI SAMITI VIDE COMMISSION AGENTS LAXMI NARAYAN & COMPANY, GARG & COMPANY ETC. 2.5 ON THE OTHER HAND, THE LD. DR RELIED ON THE FIN DINGS RECORDED BY THE LOWER AUTHORITIES AND CONTENDED THAT THE AO HAS VER Y REASONABLY DISALLOWED THE AGRICULTURAL INCOME OF RS. 8,24,190/ -. ACCORDINGLY, IT WAS CONTENDED THAT THE ORDER OF THE AO SHOULD BE UPHELD . 2.6 I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFUL LY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS DISCLOSED NET AGRICULTURAL INCOME OF RS. 21,66,534/- FROM AGRICULTURAL HOLDING S AROUND 90 BIGHAS OF IRRIGATED AGRICULTURE LAND. COPY OF KHASRA GIRDAWAR I AND PATWAR HALKA REPORT IS AVAILABLE ON PAPER BOOK PAGE NO. 6 TO 7. THIS INCLUDES INCOME BY AGRICULTURAL BY-PRODUCT OF RS.5,69,050/- AND SALE O F TREES OF RS. 3,73,500/-. THIS MEANS THAT PER BIGHA PER ANNU M AGRICULTURAL INCOME WAS SHOWN AT RS. 24,073/- WHICH IS VERY REASONABLE LOOKING TO THE COST OF AGRICULTURAL PRODUCTS SUCH AS GWAR, MUSTARD ETC. HO WEVER THE AO HAS ACCEPTED NET AGRICULTURAL INCOME TO THE EXTENT OF R S. 13,42,344/- BY ESTIMATING THE AGRICULTURE INCOME AS PER AGRICULTUR E DEPARTMENT/TEHSILDAR ITA NO.1128/JP/2019 M/S.PINK CITY RESORTS LTD., JAIPUR VS IT O , WARD-5(2), JAIPUR 7 REPORTS WHICH IS GENERAL IN NATURE AND BASED ON SUR VEY OF WHOLE STATE/DISTRICT WHEREAS THE AGRICULTURE YIELD DEPEND S UPON QUALITY OF LAND/IRRIGATION FACILITIES, MANURE AND SEEDS QUALIT Y AND THE GENERAL REPORT/SURVEY REPORT IS NOT APPLICABLE EVERYWHERE . FROM THE RECORD, I FOUND THAT THE ENTIRE AGRICULTURAL PRODUCE OBTAINED BY WAY OF CROPS IS FULLY VOUCHED AND HAS BEEN SOLD THROUGH KRISHI UPAJ MANDI. THE SALE IS BEYOND DOUBT. THE AO HAS NOT BROUGHT ANY MATERIAL O N RECORD TO DISPROVE THE SALE VOUCHERS AND NO ENQUIRY HAS BEEN CONDUCTED FROM THE PARTIES THROUGH WHOM THE AGRICULTURAL PRODUCE WAS SOLD. ANY ENQUIRY MADE FROM THESE PARTIES WOULD HAVE DISCLOSED THE TRUTH BUT TH IS WAS NOT DONE BY THE AO. HE HAS PREFERRED TO ACT ON ESTIMATE AND GUESS W ORK. AT FIRST THE AO ESTIMATED THE GROSS AGRICULTURAL PRODUCE ON THE BAS IS OF A REPORT FROM THE TEHSILDAR BUT WHEN THE SAME WAS AGITATED BY THE ASS ESSEE CLAIMING THAT THE LAND OWNED BY THE ASESSEE WAS MORE FERTILE AND CAPABLE OF YIELDING MORE CROPS IN COMPARISON TO AN AVERAGE LAND AS REPO RTED BY THE TEHSILDAR. HOWEVER, THE AO DID NOT ACCEPT THE CONTENTION OF TH E ASSESSEE. THIS SHOWS THE VARIATION ON WORKING OF AGRICULTURAL INCO ME ON ESTIMATE BASIS. FURTHER THE AO HAS ESTIMATED PRICE AS WELL YIELD W HEREAS HE IS NOT A SPECIALIST FOR THIS AND MADE AN ADDITION OF RS. 8,2 4,190/-. THUS I FOUND THAT MERELY ON ESTIMATE BASIS THE AO HAS REJECTED T HE ASSESSEE'S CLAIM OF ITA NO.1128/JP/2019 M/S.PINK CITY RESORTS LTD., JAIPUR VS IT O , WARD-5(2), JAIPUR 8 AGRICULTURAL PRODUCE WHICH IS DULY SUPPORTED BY THE BILLS AND VOUCHERS. THE AO ACTED ON THE BASIS OF SUSPICION AND DOUBT. I T IS SETTLED POSITION OF LAW THAT SUSPICION HOWEVER STRONG CANNOT TAKE THE P LACE OF EVIDENCE. IN THIS CASE THE VOUCHERS OF SALE CANNOT BE REJECTED O N THE BASIS OF SUSPICION AND DOUBT. FOR THIS PURPOSE, RELIANCE CAN BE PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS 1. UMA CHARAN SHAW & BROTHERS 37 ITR 271 (SC) 2. CIT VS. ANUPAM KAPOOR 299 ITR 179 (P&H) 3. CIT VS. DHIRAJ LAL GIRDHARI LAL 26 OTR 736 4. DHAKESHWARI COTTON MILLS 26 ITR 775 (SC) 5. STATE VS. GULZARI LAL TONDON 1979 AIR 1382 (SC) 6. J.A. NAIDU VS. STATE OF MAHARASTRA 1979 AIR 1537 (S C) FURTHER MORE, I ALSO OBSERVED THAT IN THE IMMEDIATE LY PRECEDING YEAR THE SCRUTINY ASSESSMENT WAS FRAMED AND AGRICULTURAL INC OME SO DISCLOSED BY THE ASSESSEE WAS ACCEPTED BY THE DEPARTMENT AT RS. 31,27,010/- WHEREAS DURING THIS YEAR THE DEPARTMENT HAS ACCEPTED ONLY A SUM OF RS. 21,66,534/- AS AGAINST DISCLOSED AGRICULTURAL INCOM E OF RS. 27,00,104/-. 2.6.1 IN VIEW OF THE ABOVE DISCUSSIONS, I DO NOT F IND ANY JUSTIFICATION FOR THE DISALLOWANCE OF AGRICULTURAL INCOME OF THE ASSE SSEE SO MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A). ITA NO.1128/JP/2019 M/S.PINK CITY RESORTS LTD., JAIPUR VS IT O , WARD-5(2), JAIPUR 9 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/11/2019 . SD/- JESK LH 'KEKZ (RAMESH C. SHARMA) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25 /11/ 2019 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. PINK CITY RESORTS LTD., JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO , WARD- 5(2), JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.1128/JP/2019) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR