Mr.C R Lokesh, Bangalore V. Income-tax Officer, Ward 3(4), Bangalore

ITA 1181/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1549 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 29-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZINIK VASHAI
• Assessee Lawyers: V SRINIVASAN
• Keywords: Business income

Judgement Text

ITA.1181/BANG/2010 PA GE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A', BANGALORE BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SHRI. GEORGE GEORGE K, JUDICIAL MEMBER I.T.A NO.1181/BANG/2010) (ASSESSMENT YEAR : 2005-06) MR. C. R. LOKESH, NO.55/14, 3RD MAIN, 7TH CROSS, WILSON GARDEN, BANGALORE 560 027 .. APPELLANT V. INCOME-TAX OFFICER, WARD -3(4), BANGALORE .. RESPONDENT APPELLANT BY : SHRI. V. SRINIVASAN, CA RESPONDENT BY : SMT. JACINTA ZINIK VASHAI, ADDL. C IT O R D E R PER DR. O. K. NARAYANAN, VICE PRESIDENT : THIS APPEAL IS FILED BY THE ASSESSEE. RELEVANT AS SESSMENT YEAR IS 2005-06. THE APPEAL IS DIRECTED AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME-TAX(A)-II AT BANGALORE, DATE D. 06.08.2010. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED U /S.144 OF THE IT ACT, 1961. 2. THE ASSESSEE IS CARRYING ON THE BUSINESS OF A FL ORIST IN BANGALORE. HE RETURNED A BUSINESS INCOME OF ` 69,343/- AND AGRICULTURAL INCOME OF ` .16,46,800/-. THE ASSESSING OFFICER FOUND ITA.1181/BANG/2010 PA GE - 2 THAT THE ASSESSEE HAS NOT MAINTAINED PROPER VOUCHER S, BILLS AND EVEN ACCOUNTS IN SUPPORT OF THE BUSINESS INCOME DECLARED BY HIM. THE ASSESSING OFFICER ALSO POINTED OUT THAT THE GROSS P ROFIT DECLARED BY THE ASSESSEE IS VERY LOW COMPARED TO THE GENERALLY PREV AILING GROSS PROFIT RATE IN THE LINE OF BUSINESS CARRIED ON BY THE ASSE SSEE, WHICH MIGHT BE SOMEWHERE BETWEEN 150 TO 200%. IN VIEW OF THE DETA ILED DISCUSSION ON THE ABOVE GROUNDS, THE ASSESSING OFFICER TREATED ` .6 LAKHS OUT OF AGRICULTURAL INCOME AS THE BUSINESS INCOME OF THE A SSESSEE AND DETERMINED A TOTAL INCOME OF ` .6,69,343/-. THE AGRICULTURAL INCOME HAS BEEN REDUCED TO ` .10,46,800/-. 3. THE ASSESSMENT WAS TAKEN IN FIRST APPEAL. THE D ETAILS OF LAND HOLDINGS AND NATURE OF AGRICULTURAL ACTIVITIES CARR IED ON BY THE ASSESSEE WERE EXPLAINED BEFORE THE COMMISSIONER OF INCOME-TA X(A). THE COMMISSIONER OF INCOME-TAX(A) FOUND THAT OUT OF 7 A CRES 18 GUNTAS OF AGRICULTURAL LAND, ASSESSEE'S FATHER HOLDS 3 ACRES 39 GUNTAS AND GRANDFATHER HOLDS 4 ACRES 9 GUNTAS. IN ADDITION TO THE ABOVE PRIMARY HOLDING PATTERN, THE ASSESSEE'S FATHER IS HAVING TH REE SONS INCLUDING THE ASSESSEE. IN VIEW OF THE ABOVE SITUATION, THE COMM ISSIONER OF INCOME-TAX(A) FOUND THAT THE EFFECTIVE LAND AVAILAB LE IN THE HANDS OF THE ASSESSEE WOULD BE 2 ACRES 39 GUNTAS ALONE AND T HEREFORE THE ENTIRE AGRICULTURAL INCOME CANNOT BE TREATED AS INCOME OF THE ASSESSEE. THE ITA.1181/BANG/2010 PA GE - 3 COMMISSIONER OF INCOME-TAX(A) ALSO FOUND THAT THE F LOWERS AND VEGETABLES ARE NOT CULTIVATED IN THE ENTIRE EXTENT OF LAND ; INSTEAD CROPS LIKE CHILLY, RAGI, NILGIRI ARE ALSO CULTIVATED AGAI NST THE SUBMISSION MADE BY THE ASSESSEE THAT THE ENTIRE LAND HOLDINGS WERE UTILIZED FOR GROWING FLOWERS AND VEGETABLES. HE ACCORDINGLY FOU ND THAT THE ADDITION MADE BY THE ASSESSING AUTHORITY WAS REASON ABLE AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. 4. THE ASSESSEE IS AGGRIEVED AND THEREFORE THE SECO ND APPEAL BEFORE US. 5. THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPE AL ARE THE SAME RAISED BEFORE THE COMMISSIONER OF INCOME-TAX(A) AND DISCUSSED BY HIM IN A DETAILED MANNER. EVENTHOUGH THE ASSESSEE HAS ACCOUNTED FOR THE ENTIRE LAND HOLDINGS OF HIS FAMILY IN HIS HANDS , HE HAS NOT EXPLAINED THE QUERY MADE BY THE COMMISSIONER OF INC OME-TAX(A) ON THE QUESTION OF SHARE OF LAND/SHARE OF INCOME ATTRI BUTABLE ATLEAST TO HIS TWO BROTHERS. WHEN THERE IS NO RECONCILIATION OF L AND HOLDINGS AND SHARE OF INCOME BETWEEN THE ASSESSEE'S FATHER AND H IS BROTHERS, IT IS NOT POSSIBLE TO ACCEPT THE ARGUMENT OF THE ASSESSEE THA T THE ENTIRE AGRICULTURAL INCOME WOULD BE AVAILABLE IN THE HANDS OF THE ASSESSEE. THEREFORE, THE FINDING OF THE COMMISSIONER OF INCOM E-TAX(A) ON THE ITA.1181/BANG/2010 PA GE - 4 SHARE OF AGRICULTURAL INCOME AVAILABLE IN THE HANDS OF THE ASSESSEE IS FOUND SUSTAINABLE. REGARDING THE NATURE OF CROPS A LSO, THE ASSESSEE HAS NOT EXPLAINED HOW HE COULD EARN THIS MUCH OF IN COME BY CULTIVATING FLOWERS AND VEGETABLES AS WELL AS OTHER CROPS LIKE CHILLY, RAGI, NILGIRI, ETC., IT IS ALSO EQUALLY IMPORTANT TO SCAN THE BUSINESS RESULT DECLARED BY THE ASSESSEE. THE ASSESSEE HAS DECLARED A BUSINESS INCOME OF ` .69,343/- FOR WHICH THE ASSESSEE HAS NOT MAINTAINED PROPER BOOKS OF ACCOUNT ALONG WITH BILLS AND VOUCHERS. TH E PROFIT DECLARED BY THE ASSESSEE IS VERY LOW COMPARED TO THE RETURN PREVAILING IN THE LINE OF BUSINESS CARRIED ON BY THE ASSESSEE. WHEN THE DEFICIENCY IN THE BUSINESS PROFIT HAS NOT BEEN EXPLAINED BY THE ASSES SEE AND ALSO WHEN THE ASSESSEE HAS NOT EXPLAINED TO THE SATISFACTION OF THE LOWER AUTHORITIES REGARDING HIS RIGHTFUL SHARE OF AGRICUL TURAL INCOME AND EVEN THE QUANTUM OF INCOME THAT WOULD HAVE BEEN EARNED F ROM MULTI CROPS, WE FIND THAT THE ASSESSING AUTHORITY IS JUSTIFIED I N NOT ACCEPTING THE QUANTUM OF BOTH BUSINESS PROFITS AND AGRICULTURAL I NCOME RETURNED BY THE ASSESSEE. THE ASSESSING AUTHORITY IS THEREFORE JUSTIFIED IN TREATING A PORTION OF THE AGRICULTURAL INCOME AS BUSINESS INCO ME LIABLE FOR TAXATION. AS FAR AS THE ADJUSTMENT FACTOR OF ` .6 LAKHS IS CONCERNED, WE FIND IT IS EXTREMELY REASONABLE. ITA.1181/BANG/2010 PA GE - 5 6. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CA SE, WE FIND THAT THE APPEAL FILED BY THE ASSESSEE IS LIABLE TO BE DI SMISSED. ORDER PRONOUNCED ON TUESDAY, THE 22ND DAY OF FEBRUA RY, 2011, AT BANGALORE. SD/- SD/- (GEORGE GEORGE K) (DR. O. K. NARAYANAN) JUDICIAL MEMBER VICE PRESIDENT