Dnyaneshwar Ramrao Mukadam, Latur V. Income-tax Officer,

ITA 1195/PUN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1505 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Keywords: Salary income

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 1 195 /PN/201 6 / ASSESSM ENT YEAR : 20 11 - 1 2 SHRI DNYANESHWAR RAMRAO MUKADAM, ANNAPURNA NIWAS, BEHIND PRABHAWATI HOSPITAL, NEW RENAPUR NAKE, LATUR - 413531 . / APPELLANT PAN: A BPPM1804L VS. THE INCOME TAX OFFICER , WARD 3(3), LATUR . / RESP ONDENT / APPELLANT BY : SHRI M.K. KULKARNI / RESPONDENT BY : SHRI ANIL CHAWARE / DATE OF HEARING : 25 . 0 7 .201 6 / DATE OF PRONOUNCEMENT: 29 . 0 7 .201 6 / ORDER PER SUS HMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 2 , AURANGABAD , DATED 04 . 0 4 .20 1 6 RELATING TO ASSESSMENT YEAR 20 11 - 1 2 AGAINST ORDER PASSED UNDER SECTION 14 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESS EE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 1 195 /PN/20 1 6 SHRI DNYANESHWAR RAMRAO MUKADAM 2 1 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) - AURANGABAD WAS NOT JUSTIFIED IN DISMISSING THE APPEAL OF THE ASSESSEE WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE. 2 . ON THE FACTS A ND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) - AURANGABAD WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE A.O. OF RS.6,19,438/ - BY ESTIMATING THE CULTIVATION EXPENSES ON UPWARD SIDE AND PURELY ON ESTIMATION BASIS WHERE IN FACT THE FAMILY H AD NO OTHER SOURCE OF NON - AGRICULTURAL INCOME. THE RESULTANT ADDITION BEING UNWARRANTED BE DELETED. 3. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO ESTIMATION MADE OF CULTIVATION EXPENSES AND ITS DISALLOWANCE. THE CLAIM OF THE ASSESSEE WAS THAT NO DISALLOWANCE ON ESTIMATION BASIS IS WARRANTED WHERE THE FAMILY HAD NO OTHER SOURCE OF INCOME EXCEPT AGRICULTURAL INCOME. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS AN EMPLOYEE OF ZILLA PARISHAD AND HAD SHOWN INCOME FROM SALARY, HOUSE P ROPERTY, OTHER SOURCE AND AGRICULTURE. THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 3,16,440/ - AND AGRICULTURAL INCOME AT RS.19,34,971/ - . THE CASE OF INCOME OF RS. 3,16,440/ - AND AGRICULTURAL INCOME AT RS.19,34,971/ - . THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY AND THE ASSESSEE WAS ASKED TO JUSTIF Y THE NET AGRICULTURAL INCOME SHOWN AT RS. 19,34,971/ - . THE ASSESSEE WAS ASKED TO PRODUCE THE COPIES OF 7/12 EXTRACT FOR AGRICULTURAL LANDHOLDING, SALE BILL PATTIES FOR THE SALE OF AGRICULTURAL PRODUCE, ACER WISE CROPS TAKEN AND DETAILS OF EXPENSES FOR CUL TIVATION WITH BILLS. THE ASSESSEE PRODUCED THE RELEVANT DOCUMENTS ASKED FOR. THE ASSESSING OFFICER ON VERIFICATION NOTED THAT THE DOCUMENTS ASKED FOR. THE ASSESSING OFFICER ON VERIFICATION NOTED THAT THE ASSESSEE HAD TAKEN THE CROP OF SOYA BEEN, TUR, MUG, JWAR, KARDI AND SUGAR CANE. THE ASSESSEE HAD SHOWN SOME INCOME FROM SAL E OF JAGGERY. THE ASSESSING OFFICER COMPUTED THE INCOME FROM JAGGERY AT RS.67,750/ - ON RECEIPTS OF RS.4,03,800/ - . THE ASSESSING OFFICER NOTED THAT THE TOTAL GROSS AGRICULTURAL INC OME WAS SHOWN AT RS.21,52,637/ - AND EXPENDITURE OF RS.39,650/ - RELAT ED TO M ANUFACTURE OF JAGGERY, AS SUCH THE TOTAL EXPENDITURE FOR RS.39,650/ - RELAT ED TO M ANUFACTURE OF JAGGERY, AS SUCH THE TOTAL EXPENDITURE FOR ITA NO. 1 195 /PN/20 1 6 SHRI DNYANESHWAR RAMRAO MUKADAM 3 AGRICULTURAL ACTIVITIES WAS RS.1,78,023/ - . THE ASSESSEE HA D FAILED TO MAINTAIN ANY EVIDENCE IN RESPECT OF THE SAID EXPENDITURE EXCEPT TWO BILLS OF RS. 1,080/ - AND RS.7,650/ - FOR SEEDS AND FERTILIZER. THE ASSESSING OFFICER NOTED THAT THE EXPENSES SHOWN @ 9.3% OF TOTAL AGRICULTURAL RECEIPTS W ERE VERY LESS THAN THE EXPENDITURE REQUIRED FOR AGRICULTURAL ACTIVITIES. IN THIS REGARD, THE ASSESSEE EXPLAINED THAT IN THE IMMEDIATE PREVIOUS YEAR, HE HAD TAKEN THE SOIL FROM THE LAKE ADJACENT TO HIS LAND AND SPREAD OVER AGRICULTURAL LAND, DUE TO WHICH YIELD OF CROP INCREASED. HE ALSO EXPLAINED THAT DUE TO THE SCHEME OF GOVERNMENT, HE HAD PAID LESS ELECTRICITY CHARGES DURING THE YEAR AND SINCE BOTH HIS FATHER AND BROTHER WERE WORKING IN THE FARM, THE WAGES HAD REDUCED. THE ASSESSING OFFICER HOWEVER, REJECTED THE CLAIM OF ASSESSEE AND WAS OF THE VIEW THAT AT LEAST 50% EXPENDITURE W AS REQUIRED FOR FARM ERS TO HAVE CROPS. HOWEVER, HE COMPUTED THE EXPENDITURE @ 35% O F GROSS RECEIPTS AS BEING NECESSARY FOR CARRYING OUT THE AGRICULTURAL ACTIVITIES AND NET AGRICULTURAL INCOME WAS WORKED OUT AT RS.13,55,176/ - AS AGAINST THE NET AGRICULTURAL INCOME OF RS. 19,06,864/ - SHOWN BY THE ASSESSEE. THE BALANCE OF RS.5,51,688/ - WAS TREATED AS INCOME FROM OTHER SOURCES AND INCLUDING THE INCOME FROM TRADING IN JAGGERY, THE TOTAL INCOME FROM OTHER SOURCES WAS WORKED OUT TO RS. 6,19,438/ - . 5. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER. HOWEVER, HE DIRECTED THE ASSESSING OFFICER TO TREAT THE INCOME FROM JAGGERY AS INCOME FROM BUSINESS AND BALANCE ADDITION OF RS. 5,51,688/ - ON ACCOUNT OF ESTIMATION OF EXPENSES RELATABLE TO AGRICULTURAL ACTIVITIES. THE CIT(A) REJECTED THE CLAIM OF ASSESSEE BECAUSE OF ACRES OF LAND HELD BY THE ASSESSEE WAS 15.17 HA. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER IN MAKING AN ADDITION OF RS. 5,51,688/ - . ITA NO. 1 195 /PN/20 1 6 SHRI DNYANESHWAR RAMRAO MUKADAM 4 6. THE ASSESSEE IS IN APPEAL AGAINST THE AFORESAID ADDITION. 7. THE ASSESSEE THOUGH IN THE GROUNDS OF APPEAL MENTIONED THE FIGURE OF RS.6,19,438/ - ON ACCOUNT OF ESTIMATION OF CULTIVATION EXPENSES, HOWEVER, THE ADDITION MADE ON ACCOUNT OF ESTIMATION OF EXPENSES RELATABLE TO THE AGRICULTURAL ACTIVITY WAS RS.5,51,688/ - . THE BALANCE ADDITION IS ON ACCOUNT OF SALE OF JAGGERY, WHICH WAS TREATED AS INCOME FR OM BUSINESS, AGAINST WHICH THE ASSESSEE IS NOT IN APPEAL AND HENCE, THE SAID INCOME OF RS. 61,750/ - FROM JAGGERY IS UPHELD TO BE ASSESSED AS INCOME FROM BUSINESS. 8. NOW, COMING TO THE BALANCE ADDITION OF RS.5,51,688/ - . THE ASSESSEE CLAIMS THAT IT HAD RE CEIVED HIGHER AGRICULTURAL RECEIPTS DURING THE YEAR BECAUSE IN THE IMMEDIATE PREVIOUS YEAR, HE HAD TAKEN THE SOIL FROM THE LAKE ADJACENT TO HIS LAND AND SPREAD OVER AGRICULTURAL LAND . THE YIELD OF CROP WAS CLAIMED TO HAVE BEEN INCREASED BECAUSE OF THAT . F URTHER HE ALSO EXPLAINED THAT HE HAD PAID LESS ER ELECTRICITY CHARGES UNDER THE SCHEME FRAMED BY THE GOVERNMENT OF INDIA AND EVEN THE WAGES EXPENSES HAD REDUCED BECAUSE THE FAMILY MEMBERS HAD PARTICIPATED IN THE AGRICULTURAL ACTIVITIES. ALL THESE FACTORS AS PER THE ASSESSEE, CONTRIBUTED TO HIGHER AGRICULTURAL INCOME DURING THE YEAR. THE ASSESSEE IN TOTAL HAD CLAIMED THE AGRICULTURAL EXPENDITURE OF RS. 1,78,023/ - . THE ASSESSEE HAD NOT MAINTAINED PROPER VOUCHERS IN THIS REGARD AND IN THE ABSENCE OF THE SAME , THE ASSESSING OFFICER HAD ESTIMATED THE AGRICULTURAL EXPENDITURE REQUIRED TO CARRY ON THE AGRICULTURAL ACTIVITIES ON THE LAND OWNED BY THE ASSESSEE. THERE IS NO MERIT IN SUCH ESTIMATION BEING MADE IN THE HANDS OF ASSESSEE IN THE ABSENCE OF ANY EVIDENCE AVAILABLE WITH THE ASSESSING OFFICER TO DIS - BELIEVE THE CLAIM MADE BY THE ASSESSEE . THE ASSESSEE IS MAJORLY CARRYING ON THE AGRICULTURAL ACTIVITIES ALONG WITH HIS FAMILY MEMBERS AND HAS ITA NO. 1 195 /PN/20 1 6 SHRI DNYANESHWAR RAMRAO MUKADAM 5 THUS, CONTROLLED THE OUTGO BY WAY OF AGRICULTURAL EXPENDITURE. FURTH ER, BECAUSE OF CERTAIN ACTIVITIES OF ASSESSEE, THE YIELD DURING THE YEAR HAD INCREASED RESULTING IN HIGHER PROFITS. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS NO MERIT IN MAKING ANY DISALLOWANCE BY WAY OF ESTIMATION OF AGRICULTURAL EXPENSES RELATABLE TO CARRYING ON OF AGRICULTURAL OPERATIONS. ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFFICER AT RS. 5,51,688/ - IS DELETED. HOWEVER, OTHER ADDITION OF RS. 67,750/ - IS UPHELD IN THE ABSENCE OF ANY GROUNDS OF APPEAL RAIS ED BY THE ASSESSEE IN THIS REGARD. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 29 TH DAY OF JU LY , 201 6 . SD/ - (SUSHMA CHOWLA) (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 29 TH JU LY , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 2 , AURANGABAD ; 4. / THE PR. CIT - 2 , AURANGABAD ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE