Sh. Jagtar Singh, Kapurthala V. The Income Tax Officer, Kapurthala

ITA 115/ASR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0937 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-07-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ GARG LD
• Keywords: Business income; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. VIKRAM SINGH YADAV , ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.114(ASR)/2017 ASSESSMENT YEAR:2009-10 SH. SATNAM SINGH M/S GURU TEG BAHADUR COLD STORAGE & ICE FACTORY, VILLAGE MADHOPUR JALLOWAL VIA KALA SANGHIAN, DISTT. KAPURTHALA. [PAN:ABNPS 7942R] VS. INCOME TAX OFFICER WARD-2, KAPURTHAL (APPELLANT) (RESPONDENT) ITA NO.115(ASR)/2017 ASSESSMENT YEARS:2009-10 SH. JAGTAR SINGH M/S GURU TEG BAHADUR COLD STORAGE & ICE FACTORY, VILLAGE MADHOPUR JALLOWAL VIA KALA SANGHIAN, DISTT. KAPURTHALA. [PAN:ABQPS 5058P] VS. INCOME TAX OFFICER WARD-1, KAPURTHAL (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SUDHIR SEHGAL RESPONDENT BY: SH. DHEERAJ GARG (LD. DR) DATE OF HEARING: 25.07.2019 DATE OF PRONOUNCEMENT: 03.09.2019 ORDER PER N.K.CHOUDHRY, JM: BOTH THE APPEALS HAVE BEEN FILED BY THE ASSESSEES AGAINST THE SEPARATE ORDERS DATED 08/12/2016 PASSED BY THE LD. CIT(A)- ITA NOS.114 & 115/ASR/2017 (A.Y.2009-10) SATNAM SINGH & JAGTAR SINGH VS. ITO 2 2, WHEREBY THE LD. CIT(A) HAS PARTLY AFFIRMED THE ASSE SSMENT ORDERS PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCO ME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT'). 2. BOTH THESE APPEALS HAVING COMMON FACTS AND ISSUES, THEREFORE, FOR THE SAKE OF CONVENIENCE AND BREVITY TH E FACTS OF ITA NO.114/ASR/2017 HAVE BEEN TAKEN INTO CONSIDERATIO N AND RESULT OF THE SAME SHOULD ALSO BE APPLICABLE MUTATIS MUTANDIS TO ITA NO.115/ASR/2017. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AND HIS BROTHER SH. JAGTAR SINGH (APPELLANT IN ITA NO.115/A SR/2017) HAVE BEEN JOINTLY CARRYING ON AGRICULTURE ACTIVITIES O VER THE YEARS AND DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION DERIVES INCOME FROM INTEREST ON CAPIT AL WITH M/S. GURU TEG BAHADUR COLD STORAGE AND M/S. SATNAM A GRO COLD STORAGE, THE SISTER CONCERNS RUN BY THE FAMILY. THE ASSE SSEE DECLARED INTEREST INCOME OF RS.2,26,954/- AND AGRICULTU RAL INCOME OF RS.18,50,000/-. THE ASSESSEE ALSO REVISED ITS RE TURN OF INCOME AND DECLARED THE INCOME FROM SHORT TERM CAPIT AL GAIN TO THE TUNE OF RS.45,000/- ON ACCOUNT OF SALE OF SOME IMMOVABLE PROPERTY. THE CASE OF THE ASSESSEE CAME UNDER SCRUTINY THROUGH AIR. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT IN THE YEAR UNDER CONSIDERATION ASSESSEE AND HIS BOTHER HAVE GROWN POTATOES (SEED POTATO AND RATION POTATO) ON 398 ACRES OF LAND (27 ACRES LAND IS OW NED BY THEM AND 371 ACRES HAVE BEEN TAKEN ON LEASE FROM DIFFE RENT PERSONS). THE ASSESSEE CLAIMED THAT TOTAL SALE PROCEEDS OUT O F 398 ACRES LAND CULTIVATED BY THE ASSESSEE AND HIS BOTHER ACCR UED TO RS.8,12,71,018/- AND OUT OF WHICH RS.7,75,71,018/- HAS BEEN ITA NOS.114 & 115/ASR/2017 (A.Y.2009-10) SATNAM SINGH & JAGTAR SINGH VS. ITO 3 CLAIMED AS EXPENSES AND NET AGRICULTURAL INCOME OF RS.37 L AC HAS BEEN SHOWN IN HALF SHARES BY THE ASSESSEE AND HIS BROTHER IN THEIR RESPECTIVE RETURNS OF INCOME. ON EXAMINATION THE SALE BILLS, VOUCHERS AND OTHER DOCUMENTS, IT WAS FOUND BY THE ASSESSING OFFICER THAT DURING THE YEAR UNDER CONSIDERATION TOTAL SALES AS PER SALE BILLS PROCURED FROM THE ASSESSEE WAS RS.11,77,38, 005/- BUT NOT RS.8,12,71,018/- AS SHOWN BY THE ASSESSEE, THEREFO RE, THE BALANCE SALES OF RS.3,64,66,987/- WAS CONSIDERED TO BE UNACCOUNTED SALES I.E. NOT OF AGRICULTURE PRODUCE GROWN B Y THE ASSESSEE. THE ASSESSEE WAS SHOW CAUSED AS TO WHY TRADING PROFIT ON THE AMOUNT OF RS.3,64,66,987/- BE NOT BROU GHT TO TAX. IN RESPONSE TO WHICH THE ASSESSEE VIDE ITS REPLY FILED ON DATED 26.12.2011 NARRATED THE FOLLOWING FACTS BEFORE THE A SSESSING OFFICER. I. WE DISPOSE OF ONLY OUR OWN PRODUCE BY CULTIVATING AGRICULTURAL LANDS. II. THE TRANSFER BILLS ISSUED IN RESPECT OF POTATOES SENT FOR STORAGE AT TINSUKHIA OF THE VALUE OF RS.3,63,94,624/- DO NOT BELONG TO US. III. THE SAID POTATOES PERTAIN TO OTHER AGRICULTURISTS WHO GROW POTATOES ON THEIR LANDS AND THEY ALL JUST ASKED US TO STORE THEIR PRODUCE OF POTATO IN THE CO LD STORAGE TAKEN ON HIRE BY US FROM MAHABIR COLD STORA GE, TINSUKHIA THROUGH AN AGREEMENT DATED 16.01.2009. TH E PROOF OF SENDING THE POTATOES BELONGING TO OTHER CULTIVATORS ARE THE RAILWAY RECEIPTS SHOWING THE NA MES AND ADDRESSES OF THE OWNERS. IV. THE COLD STORE OWNER TO WHOM THE POTATOES WERE SENT FOR STORAGE HAS MISAPPROPRIATED THE PRODUCE AN D HAS NOT GIVEN US THE POTATO OR ANY MONEY IN LIEU OF POTATOES MISAPPROPRIATED BY THEM. WE HAVE FILED A COMPLAINT BEFORE THE SSP, KAPURTHALA AGAINST THE ITA NOS.114 & 115/ASR/2017 (A.Y.2009-10) SATNAM SINGH & JAGTAR SINGH VS. ITO 4 OWNERS OF MAHAVIR COLD STORAGE FROM WHOM WE STILL HAVE TO RECEIVE RS.5,20,66,352/-. V. THE FACT THAT THE POTATOES OF OTHER AGRICULTURISTS WERE SENT THROUGH OUR TRANSFER BILLS, IS EVIDENT FR OM THE COMPLAINT LODGED BY US WITH SSP. KAPURTHALA. THE SA ID PARTY WAS SUMMONED BY SHO, POLICE STATION, KAPURTHALA AND INVESTIGATION IS IN PROGRESS. VI. THE GROWERS WHOSE POTATO WAS SENT TO BE STORED IN THE COLD STORAGE TAKEN ON RENT BY US HAVE GIVEN THEIR AFFIDAVITS TO THIS EFFECT. THE ASSESSING OFFICER DID NOT GET IMPRESS BY THE EXPLANATION/CLAIM OF THE ASSESSEE QUA FILING OF RAILWAY RECEIPTS, AFFIDAVITS OF THE OTHER FARMERS AND POLICE COMPLAINT FI LED BEFORE THE SSP, KAPURTHALA AGAINST MAHAVIR COLD STORAGE, TI NSUKHIA AND WHILE APPLYING THE PROFIT RATE @ 10% ON THE EXCESS SAL E OF RS.3,64,66,987/- MADE AN ADDITION OF RS.36,46,698/- J OINTLY AND RS.18,23,350 SEPARATELY AGAINST THE ASSESSEE AND HIS BROT HER. 4. THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE LD. CIT(A) , WHO THOUGH UPHELD THE FINDING OF THE ASSESSING OFFICER TO THE EFFECT THAT THE RECEIPT OF RS.3,64,66,987/- PE RTAINS TO THE TRADING RECEIPTS ON ACCOUNT OF SALE OF POTATOES, HOWEVER REDUCED THE ADDITION OF RS.18,23,350/- TO RS.7,27,898/- WHILE APPLYING THE PROFIT RATE @ 4% AS AGAINST 10% AS APPLIED BY THE ASSESSING OFFICER. FOR THE SAKE OF BREVITY AND READY REFERENCE THE CONCLUDING PART OF THE ORDER IMPUGNED HEREIN IS REPROD UCED HEREIN BELOW. 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER PA SSED BY THE A.O, DETAILED SUBMISSIONS MADE IN THIS REGARD AND M ATERIAL BROUGHT ON RECORD INCLUDING JUDICIAL CITATIONS STAT ED BY THE APPELLANT AND FIND THAT AN ADDITION OF RS.18,23,350 HAS BEEN MADE BY THE AO ON ACCOUNT OF UNEXPLAINED BUSINESS I NCOME ITA NOS.114 & 115/ASR/2017 (A.Y.2009-10) SATNAM SINGH & JAGTAR SINGH VS. ITO 5 FROM TRADING OF POTATOES. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, IT WAS FOUND BY THE AO THAT TOTAL SALE S AS PER THE SALE BILLS (PRODUCED BEFORE THE AO) WORKS OUT TO RS .11,77,38,005 AS AGAINST THE DECLARED SALES OF RS.8,12,71,018 IN THE BOOKS OF ACCOUNT. THEREFORE, IT WAS HELD BY THE AO THAT RECE IPTS OF RS.3,64,66,987 PERTAIN TO THE TRADING RECEIPTS ON A CCOUNT OF SALE OF POTATOES. THE DETAILED REASONS FOR HOLDING THESE SALES AS FROM TRADING BUSINESS HAVE BEEN DISCUSSED ON PAGE 3 TO 5 OF THE ORDER, WHICH IS REPRODUCED ABOVE. 4.4 THE AO HAS ALSO WORKED OUT THE LEVEL OF AGRIC ULTURAL INCOME DECLARED BY THE APPELLANT OVER A PERIOD OF 3 YEARS AND THE PERCENTAGE OF EXPENSES CLAIMED AGAINST THIS INC OME. THE CONTENTIONS OF THE APPELLANT WITH REGARD TO THESE S ALE BILLS ON ACCOUNT OF TRANSFER OF POTATOES ON BEHALF OF OTHER PARTIES FOR SENDING TO ASSAM AND OTHER EASTERN PARTS OF THE COU NTRY WAS ALSO REJECTED BY THE AO FOR THE REASONS STATED ABOV E. IT WAS HELD BY THE AO THAT AN INCOME OF 10% HAS BEEN EARNED ON THESE BUSINESS RECEIPTS OF RS. 3,64,66,987 AND ACCORDINGL Y, UNDISCLOSED INCOME OF RS. 36,46,698 WAS ASSESSED IN THE HANDS OF BOTH THE BROTHERS WHO CARRIED ON THE BUSIN ESS JOINTLY. THEREFORE, AN ADDITION OF RS.18,23,350 EACH WAS MAD E IN THE HANDS OF THE APPELLANT AND HIS BROTHER. 4.5 THE APPELLANT HAS SUBMITTED THAT AO HAS FAILE D TO APPRECIATE THAT AGRICULTURAL INCOME VARIES FROM YEA R TO YEAR DEPENDING ON NUMBER OF FACTORS LIKE SEASON, USE OF FERTILIZERS, AVAILABILITY OF LABOUR AND OTHER NATURAL CAUSES. IT IS ALSO STATED THAT TRANSFER BILLS OF THE VALUE OF RS.3,63,94,627 (AS AGAINST RS. 3,64,66,987 STATED BY THE AO) HAVE BEEN ISSUED AND THE BALANCE AMOUNT OF RS. 72,359 IS ON ACCOUNT OF WASTA GE AND SHORTAGE. FURTHER, IT IS STATED THAT A GODOWN WAS T AKEN ON HIRE IN ASSAM AND MATERIAL WAS SENT PERTAINING TO OTHER CULTIVATORS TO BE STORED IN ASSAM. THE COMPLETE DETAILS OF AGRI CULTURAL GOODS SENT BY THE OTHER CULTIVATORS THROUGH THE APPELLANT WERE FILED BEFORE THE AO. THE COPY OF THESE RECEIPTS CAN BE VE RIFIED AGAINST THE RAILWAY RECEIPTS, WHICH HAVE ISSUED IN THEIR NA ME. 4.6 FURTHER, IT IS STATED THAT AFFIDAVITS OF TH ESE CULTIVATORS HAVE BEEN FILED CONFIRMING THAT POTATOES HAVE BEEN SENT TO ASSAM THROUGH THE APPELLANT. THE RAILWAY RECEIPTS H AVE BEEN ISSUED IN THE NAMES OF THE CULTIVATORS. IT IS ALSO STATED THAT A COMPLAINT WAS FILED WITH THE POLICE AT KAPURTHALA S TATION BY ALL ITA NOS.114 & 115/ASR/2017 (A.Y.2009-10) SATNAM SINGH & JAGTAR SINGH VS. ITO 6 THE AGRICULTURISTS. THE APPELLANT HAS STATED THAT T HERE WAS NO MALAFIDE INTENTION IN NOT DISCLOSING THE COMPLETE R ECEIPTS. FURTHER, IT IS STATED THAT AO HAS NOT REBUTTED THE CLAIM MADE BY THE FARMERS IN THE AFFIDAVITS. AT LAST, THE APPELLA NT HAS SUBMITTED THAT PROFIT RATE OF 10% IS MUCH HIGHER AS COMPARED TO THE RATE OF PROFIT OF 4.5% DECLARED ON THE AGRICULT URAL PRODUCE AND THEREFORE, NET PROFIT ON TRADING CANNOT BE MORE THAN 0.5% OF THE SALES. 4.7 HAVING CONSIDERED THE SUBMISSIONS MADE IN THIS REGARD, I FIND THAT THERE IS NO DISPUTE THAT SALE BILLS OF RS. 3,63,94,627 HAVE BEEN ISSUED BY THE APPELLANT. HOWEVER, THE FAC T THAT 19 PERSONS HAVE CONFIRMED THE FACT THAT POTATO PACKETS WERE SENT BY THEM THROUGH THE APPELLANT FOR THE PURPOSES OF S TORAGE IN THEIR GODOWN WHICH HAD BEEN TAKEN ON RENT IN ASSAM. THESE PERSONS, WHO ARE AGRICULTURALISTS HAVE CONFIRMED TH IS FACT BY FILING AN AFFIDAVIT IN THE COURSE OF ASSESSMENT PRO CEEDINGS. A COPY OF THE RENT AGREEMENT FOR THE GODOWN TAKEN ON RENT IN ASSAM BY THE APPELLANT WAS ALSO FILED BEFORE THE AO . IT IS FURTHER STATED BY THE APPELLANT THAT ALL THE RAILWA Y RECEIPTS, ISSUED BY THE RAILWAY AUTHORITIES FOR TRANSPORTATIO N OF POTATO PACKETS TO ASSAM HAVE BEEN DRAWN IN THE NAME OF RESPECTIVE AGRICULTURALISTS. 4.8 THE APPELLANT HAS ALSO SUBMITTED THAT A POLICE COMPLAINT WAS LODGED WITH THE STATION AT KAPURTHALA , ON 19.10.2011 THAT THESE POTATO PACKETS HAVE HIM SENT BY THE AGRICULTURISTS. FURTHER, IT IS STATED THAT A NOTICE UNDER SECTION 160 OF CR. PC HAS BEEN ISSUED IN CONSEQUENC E TO THE COMPLAINT LODGED BY THESE AGRICULTURALISTS AGAI NST THE OWNERS OF COLD STORAGE IN ASSAM. 4.9 THUS, AFTER GOING THROUGH THE EVIDENCE BROU GHT ON RECORD BY THE APPELLANT 1 HOLD THAT THESE POTATO PA CKETS HAVE NOT BEEN GROWN BY THE APPELLANT AND V U. GROWN BY THE 19 PERSONS WHOSE AFFIDAVITS HAVE BEEN FILED BY THE APPELLANT. HOWEVER, THE FACT WHICH CANNOT BE IGNORE D THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, WHILE EXAM INING THE SALE BILLS THE TOTAL TURNOVER OF THE APPELLANT HAS BEEN WORKED OUT AT RS.11,77,38,005 AS AGAINST THE DECLAR ED SALES OF RS.8,12,71,018 IN THE BOOKS OF ACCOUNT. TH EREFORE, IT WAS STATED BY THE AO THAT RECEIPTS OF RS. 3,64,6 6,987 PERTAIN TO THE TRADING RECEIPTS ON ACCOUNT OF SALE OF POTATO. ITA NOS.114 & 115/ASR/2017 (A.Y.2009-10) SATNAM SINGH & JAGTAR SINGH VS. ITO 7 4.10 THE FACT THAT INCOME DECLARED BY THE APPELL ANT IN THE PRECEDING SUCCEEDING YEARS HAS BEEN ACCEPTED BY THE DEPARTMENT DOES NOT MEAN THAT PROFIT RATE CANNOT BE VARIED IN THE PERIOD UNDER CONSIDERATION ON THE BASIS OF H ARD EVIDENCE WITH REGARD TO THE TRADING RECEIPTS, AS CO MPUTED BY THE AO. THE FACT WHICH CANNOT BE DENIED THAT EVI DENCE PERTAINING TO THESE RECEIPTS IN THE FORM OF SALE BI LLS HAS BEEN PRODUCED BY THE APPELLANT HIMSELF BEFORE THE A O IN THE COURSE OF ASSESSMENT PROCEEDINGS. 4.11 THUS, AFTER CONSIDERING THE EXPLANATIO N GIVEN BY THE APPELLANT, I HOLD THAT TRADING RECEIPTS HAVE TO BE ASSESSED AT RS.3,63,94,627 (AS AGAINST RS. 3,64, 66 , 987 STATED BY THE AO) AND THE BALANCE AMOUNT OF RS.72,3 59 IS TO BE TREATED A ACCOUNT OF WASTAGE AND SHORTAGE. NO W, THE ISSUE WHICH ARISES FOR CONSIDERATION IS THE PERCENT AGE OF PROFIT WHICH IS TO BE APPLIED FOR WORKING OUT THE I NCOME EARNED ON THESE UNDISCLOSED RECEIPTS OF THE TRADING BUSINESS. 4.12 AO HAS STATED IN THE ORDER THAT THE PROFI T RATE OF 10% IS TO BE APPLIED ON THESE RECEIPTS OF TRADING B USINESS, WHEREAS APPELLANT HAS STATED THAT NET PROFIT RATE O F 0.5% IS TO BE APPLIED ON THESE RECEIPTS, AS AN ALTERNATI VE PLEA. I FIND THAT A PROFIT RATE OF 4.5% HAS BEEN DECLARED O N THE AGRICULTURAL RECEIPTS OF THE APPELLANT FOR THE PERI OD UNDER CONSIDERATION. AO HAS NOT GIVEN ANY BASIS FOR ADOPT ING A PROFIT RATE OF 10% ON THESE TRADING RECEIPTS AND AL SO THE APPELLANT HAS NOT FURNISHED THE REASONING FOR TAKIN G A PROFIT RATE OF 0.5% ON THESE RECEIPTS. THUS, I AM L EFT WITH NO ALTERNATIVE BUT ALSO TO ADOPT AN ESTIMATED RATE OF 4% AS IT IS A COMMON KNOWLEDGE THAT A TRADER EARNS AS MUCH A S OR EVEN MORE THAN WHAT AN AGRICULTURISTS EARN IN PRACT ICE. ACCORDINGLY, I HOLD THAT IT WOULD BE JUST AND FAIR TO APPLY A PROFIT RATE OF 4% ON THE UNDECLARED RECEIPTS OF RS.3,36,94,627, WHICH WORKS OUT TO THE PROFIT OF RS.14,55,785 AND ONE HALF SHARE OF THE APPELLANT WO ULD COME TO RS.7,27,892. 4.13 IN VIEW OF THE ABOVE FACTS, I CONFIRM AN A DDITION OF RS.7,27,892 OUT OF THE TOTAL ADDITION OF RS.18,23,3 50 MADE ITA NOS.114 & 115/ASR/2017 (A.Y.2009-10) SATNAM SINGH & JAGTAR SINGH VS. ITO 8 BY THE AO ON ACCOUNT OF EXPLAINED INCOME EARNED FRO M THE BUSINESS OF TRADING OF POTATOES. 5. ON BEING AGGRIEVED, THE ASSESSEE PREFERRED THE INSTANT APPEAL AND IN SUPPORT OF ITS CASE REITERATED THE CONTENT IONS AS RAISED BEFORE THE AUTHORITIES BELOW AND VEHEMENTLY SUB MITTED THAT ORDER UNDER CHALLENGE IS PERVERSE AND SUFFERS FROM IMPROPRIETY AND ILLEGALITY AND THEREFORE LIABLE TO BE SET ASIDE. 6. ON THE CONTRARY, THE LD. DR REFUTED THE CLAIM OF THE ASSESSEE AND SUBMITTED THAT ORDER IMPUGNED HEREIN IS NOT ONLY BASED ON ANALYZATION OF FACTS BUT ALSO BASED ON THE LO GICAL REASONINGS AND IS A WELL-REASONED ORDER, THEREFORE, DOE S NOT REQUIRES ANY INTERFERENCE BY THIS COURT. 7. HAVING HEARD THE PARTIES AT LENGTH AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THIS IS NOT IN CONTROVERSY THAT THE EXCESS AMOUNT OF RS.3,64,66,987/- WAS DETECTED AS UNACCOUNTED SALE I.E. NOT OF AGRICULTURE PRODUCES GROWN B Y THE ASSESSEE, HOWEVER, THE ASSESSEE HAS CLAIMED THAT THE SAID SALE AMOUNT DOES NOT BELONG TO THE ASSESSEE AS THE PRODUCES AMOUNTING TO RS.3,63,94,624/- HAVE BEEN GROWN BY OTH ER AGRICULTURIST AND HAVE BEEN SENT THROUGH RAILWAY CONSI GNMENTS TO MAHABIR COLD STORAGE, TINSUKHIA FOR STORAGE PURPOSE S IN ORDER TO SELL THE SAID PRODUCE IN MARKET OF ASSAM LATER ON. HOW EVER, THE COLD STORAGE OWNER MISAPPROPRIATED THE PRODUCES THE REFORE THE ASSESSEE AND OTHER FARMERS FILED THE POLICE COMPLAINT BEFORE THE SSP, KAPURTHALA AGAINST THE OWNER OF THE MAHABI R COLD STORAGE, TINSUKHIA IN THE MONTH OF OCTOBER, 2011. THE ASSESSEE ALSO CLAIMED THAT VARIOUS FARMERS WHO HAVE GROWN POTATO ES AND SENT THE SAME TO BE STORED IN THE COLD STORAGE TAKEN B Y RENT BY ITA NOS.114 & 115/ASR/2017 (A.Y.2009-10) SATNAM SINGH & JAGTAR SINGH VS. ITO 9 THE ASSESSEE, HAVE GIVEN THEIR AFFIDAVITS BY AFFIRMING T HE GROWING OF POTATOES, SENDING THE SAME THROUGH RAILWAY CONSIGNMENT, FOR STORAGE IN MAHABIR COLD STORAGE, TINS UKHIA, MISAPPROPRIATION BY THE OWNER OF SAID COLD STORAGE AND FILING OF POLICE COMPLAINT AGAINST THE SAID OWNER. 7.1 THE ASSESSING OFFICER THOUGH CONSIDERED THE AFORESAID SUBMISSIONS AND DOCUMENTS OF THE ASSESSEE, HOWEVER, DID NOT AGREE AND IN RESPECT OF POLICE COMPLAINT OBSERVED THAT T HE POLICE COMPLAINT IS NOT SUPPORTED BY ANY PREVIOUS CORRESPONDENCE AND EMAIL ETC. EXCHANGED WITH THAT PARTY FOR MAKING ANY E FFORTS TO RECOVER ITS MONEY AND FURTHER OBSERVED THAT THE ACTION IN THE FORM OF POLICE COMPLAINT WAS TAKEN ONLY IN THE MONTH O F OCTOBER, 2011 I.E. MORE THAN 2 AND YEARS AFTER AND DURING THE PENDENCY OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER IN RESPECT OF AFFIDAVITS OF THE FARMERS CONCLUDED THAT THESE ARE SELF SERVING DOCUMENTS. THE ASSESSING OFFICER FINALLY WHILE CONSIDERING THE FACTS AND CIRCUMSTANCES SPECIFICALLY THE BILL S ISSUED BY THE ASSESSEE MADE THE ADDITION WHILE APPLYING G ROSS PROFIT RATE. THE ASSESSEE BEFORE THE LD. CIT(A) REITERATED THE SA ME FACTS AS SUBMITTED BEFORE THE ASSESSING OFFICER, HOWEVER, AT LAST CLAIMED THAT THE PROFIT RATE @ 10% AS APPLIED BY THE ASSESSING OFFICER WAS MUCH HIGHER AS COMPARED TO THE RATE OF PROFI T OF RS.4.5% DECLARED ON THE AGRICULTURE PRODUCE AND THEREF ORE, NET PROFIT ON TRADING ACCOUNT CANNOT BE MORE THAN 0.5% OF THE SALES. THE LD. CIT(A) THOUGH AFFIRMED THE FINDINGS OF THE A SSESSING OFFICER, HOWEVER, REDUCED THE PROFIT RATE. ITA NOS.114 & 115/ASR/2017 (A.Y.2009-10) SATNAM SINGH & JAGTAR SINGH VS. ITO 10 7.2 CONSIDERING AND ANALYZING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR CONSIDERED VIEW, THE POLICE COMPLAINT FILED BEFORE THE SSP, KAPURTHALA AND ITS OU T COME IS PARAMOUNT FOR PROPER AND REAL ADJUDICATION OF THE ISS UE UNDER HAND, WHEREAS AT THE TIME OF ARGUMENT OF THESE APPEAL NEITHER THE ASSESSEE NOR THE REVENUE DEPARTMENT HAS DRAWN OUR ATTENTION TO THE LATEST DEVELOPMENT OF THE POLICE COMP LAINT FILED BY THE ASSESSEE QUA CRIMINAL OFFENCE OF MISAPPROPRIATION ALLEGEDLY COMMITTED BY THE OWNER OF SAID COLD STORAGE . THOUGH, THE ASSESSING OFFICER CONSIDERED THE AFFIDAVITS AS SELF SER VING DOCUMENT, HOWEVER IN ORDER TO ASCERTAIN THE REAL AND CO RRECT PICTURE OF THE INSTANT CASE DID NOT EXAMINE ANY OF THE PERSONS, WHO HAVE GIVEN THE AFFIDAVIT. IT IS A SETTLED LAW THA T THE AFFIDAVIT SWORN BY THE PERSONS, CANNOT BE THROWN OUT OR SIDELINED UNLESS AND UNTIL REBUTTAL IS MADE OF THE SAME. THE ASSESSEE HAS A LSO PRODUCED THE RAILWAY RECEIPTS IN ORDER TO SHOW THE SENDI NG OF POTATOES BY THE FARMERS DIRECTLY TO MAHAVIR STORAGE, T INSUKHIA. THOUGH THE ASSESSEE WITH REGARDS TO BILLS ISSUED BY THE ASSE SSEE AND PRODUCED VOLUNTARILY BEFORE THE ASSESSING OFFICER DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, CLAIMED THAT THE SALES BILL S WERE ISSUED ON BEHALF OF OTHER FARMERS OF THE JIMIDAR UNION AND GIVEN TO M/S MAHAVIR COLD STORAGE, TINSUKHIA, ASSAM AS THE OWNER OF THE SAID COLD STORAGE WANTED A BILL TO OBTAI N LOAN FROM THE BANK AGAINST THE POTATOES STORED WITH THEM, BY THE ASSESSEE AND OTHER FARMERS, HOWEVER, IN OUR VIEW, IN ABSENCE OF ANY OTHER CORROBORATIVE MATERIAL THESE BILLS CANNOT BE DISCARDED, T HEREFORE EXAMINATION AND CONSIDERATION OF AFFIDAVITS OF THE FA RMERS, RAILWAY RECEIPTS AND THE POLICE COMPLAINT FILED BEFORE THE SSP AND ITS OUTCOME ARE VERY MUCH NECESSARY AND ESSENTIAL IN I TS ITA NOS.114 & 115/ASR/2017 (A.Y.2009-10) SATNAM SINGH & JAGTAR SINGH VS. ITO 11 RIGHT PERSPECTIVE FOR PROPER AND REAL ADJUDICATION OF THE ISSUE IN HAND. HENCE, WE ARE INCLINED TO SET ASIDE THE ORDERS PA SSED BY THE AUTHORITIES BELOW AND TO REMAND THIS CASE TO THE FI LE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER EXAMINING THE FAR MERS RANDOMLY WHO HAVE GIVEN AFFIDAVITS, RAILWAY CONSIGNMEN T RECEIPTS AND THE POLICE OFFICIALS WHO HAVE DEALT WITH PO LICE COMPLAINT AND RESULT OF THE POLICE COMPLAINT. SUFFICE TO SAY DUE OPPORTUNITY IS REQUIRED TO BE GIVEN TO THE ASSESSEES. 8. IN THE RESULT, BOTH THE APPEALS UNDER CONSIDERATION F ILED BY THE ASSESSEES STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03.09.2019. SD/- SD/- ( VIKRAM SINGH YADAV ) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUD ICIAL MEMBER DATED: 03.09.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SH. SATNAM SINGH & SH. JAGTAR SINGH M/S GURU TEG BAHADUR COLD STORAGE & ICE FACTORY, VILLAGE MADHOPUR JALLOWAL VIA KAL SANGHIAN, DISTT. KAPURTHALA (2) THE ITO, WARD-2, KAPURTHALA (3) THE CIT(A)-2, JALANDHAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER