M.Murugaiah, Tirunelveli V. ITO, Tirunelveli

ITA 12/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9751 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 16-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-01-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: R VIJAYARAGHAVAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.12/MDS/2015 / ASSESSMENT YEAR : 2009-10 SHRI M. MURUGAIAH NO.3/277, MELA STREET PARAMKUNDRAPURAM VADIYUR, V.K.PUDUR TIRUNELVELI 627 861 VS. THE INCOM E TAX OFFICER WARD I(2) TIRUNELVELI [PAN BTKPM 6 4 24 L ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE /RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT / DATE OF HEARING : 16 - 02 - 2016 ! / DATE OF PRONOUNCEMENT : 01 - 04 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE WAS DISMISSED FOR NO N- PROSECUTION BY THIS TRIBUNAL BY AN ORDER DATED 25.3 .2015. HOWEVER, THE ASSESSEE FILED A MISCELLANEOUS PETITION IN M.P .NO.82/MDS/2015. THIS TRIBUNAL BY AN ORDER DATED 20.11.2015 RECALLED ITS EARLIER ORDER DATED 25.3.2015. ACCORDINGLY, THE APPEAL WAS RESTO RED ON FILE AND POSTED FOR FINAL DISPOSAL. ITA NO. 12/15 :- 2 -: 2. SHRI R.VIJAYARAGHAVAN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS DISCLOSED ` 44,26,495/- AS OPENING CAPITAL BALANCE IN THE BALANCE SHEET. THE ASSESSE E EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE CULTIVATED LANDS FOR MORE THAN TEN YEARS AND EARNED THE ABOVESAID AMOUNT OF ` 44,26,495/-. HOWEVER, THE ASSESSING OFFICER DISBELIEVED THE CLAI M OF THE ASSESSEE AND FOUND THAT THE ASSESSEE MIGHT HAVE EARNED 25% OF THE OPENING CAPITAL BALANCE FROM AGRICULTURAL ACTIVITY. ACCORD INGLY, THE BALANCE OF ` 33,19,872/- WAS TREATED AS INCOME FROM BUSINESS. R EFERRING TO THE PAPER BOOK FILED BY THE ASSESSEE, THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE HAS TAKEN LANDS ON LEASE AND CULTIVATED TH E SAME WITH VARIOUS CROPS. THE VILLAGE ADMINISTRATIVE OFFICER HAS ALSO CERTIFIED THAT THE ASSESSEE IS CULTIVATING THE LAND AND EARNED AG RICULTURAL INCOME FOR THE LAST TEN YEARS. THEREFORE, THE CIT(A) OUGHT TO HAVE ALLOWED THE CLAIM OF THE ASSESSEE. REFERRING TO THE ORDER OF THE CIT(A), THE LD. COUNSEL SUBMITTED THAT WITHOUT CONSIDERING THE MATE RIAL AVAILABLE ON RECORD, THE CIT(A) CAME TO THE CONCLUSION THAT THE ASSESSEE HAS MADE AN ACCOMMODATION ENTRY AND ACCORDINGLY, HE CONFIRME D THE ORDER OF THE ASSESSING OFFICER. ON A QUERY FROM THE BENCH W HETHER THE COPIES OF ADANGAL EXTRACTR WAS PRODUCED BEFORE THE AUTHORI TIES BELOW, THE LD. COUNSEL CLARIFIED THAT HE IS NOT AWARE OF THE FACT WHETHER IT IS PRODUCED BEFORE THE AUTHORITIES BELOW OR NOT. THE LD. COUNS EL CLARIFIED THAT THE ITA NO. 12/15 :- 3 -: CERTIFICATE FROM THE VILLAGE ADMINISTRATIVE OFFICER , WHICH IS AVAILABLE IN THE PAPER BOOK WAS PRODUCED BEFORE THE LOWER AUTHOR ITIES. 3. ON THE CONTRARY, SHRI P. RADHAKRISHNAN, LD. DEPARTM ENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE CLAIMS THAT HE CULTIVATED THE LANDS FOR MORE THAN TEN YEARS. HOWEVER, NO MAT ERIAL EVIDENCE WAS PRODUCED TO ESTABLISH THE CULTIVATION. THE COPIES OF THE AGREEMENTS FOR TAKING THE LANDS ON LEASE INDICATE THAT THE A SSESSEE MIGHT HAVE TAKEN THE LANDS ON LEASE FOR EARNING AGRICULTURAL I NCOME. THE ASSESSEE HAS TO NECESSARILY CULTIVATE THE LANDS. T HE CERTIFICATE PRODUCED FROM THE VILLAGE ADMINISTRATIVE OFFICER DO ES NOT INDICATE THAT THE ASSESSEE CULTIVATED THE LAND AND EARNED AGRICU LTURAL INCOME. IN THE ABSENCE OF ANY MATERIAL TO SUGGEST THAT THE AS SESSEE HAS CULTIVATED THE LANDS AND EARNED AGRICULTURAL INCOME , ACCORDING TO THE LD. DR, THE CIT(A) HAS RIGHTLY CONFIRMED THE ADDITI ON. IN FACT, THE ASSESSING OFFICER ALLOWED 25% OF THE CLAIM OF THE ASSESSEE EVEN THOUGH NO MATERIAL IS AVAILABLE ON RECORD. THEREFO RE, THE ASSESSEE CANNOT HAVE ANY GRIEVANCE AT ALL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. GOV ERNMENT OF TAMILNADU IS MAINTAINING CULTIVATION ACCOUNT AT THE VILLAGE LEVEL. THE ADANGAL EXTRACT OR VILLAGE ACCOUNT NO.2 WILL INDICA TE THE CULTIVATION ITA NO. 12/15 :- 4 -: MADE BY THE RESPECTIVE PERSONS. IN FACT, THE ADANG AL EXTRACT IS PREPARED SURVEY NUMBERWISE BY THE VILLAGE ADMINISTR ATIVE OFFICER AT THE INTERVAL OF SIX MONTHS. THEREFORE, THE VILLAGE ADMINISTRATIVE OFFICER HAS TO CERTIFY ON THE BASIS OF THE ADANGAL EXTRACT THAT WAS MAINTAINED BY HIM IN THE REGULAR COURSE OF OFFICIAL FUNCTIONIN G. THE COPY OF THE CERTIFICATE ISSUED BY THE VILLAGE ADMINISTRATIVE OF FICER DOES NOT REFER TO THE ADANGAL EXTRACT WHICH WAS EXPECTED TO BE MAINTA INED BY HIM. A CASUAL CERTIFICATE GIVEN BY THE VILLAGE ADMINISTRAT IVE OFFICER WILL NOT ESTABLISH THE FACT THAT THE ASSESSEE CULTIVATED TH E LANDS. TO SUBSTANTIATE THE CERTIFICATE, THE ASSESSEE HAS TO NECESSARILY OBTAIN THE ADANGAL EXTRACT FROM THE VILLAGE ADMINISTRATIVE OFF ICER. IN THE CASE BEFORE US, THE ASSESSING OFFICER HIMSELF ACCEPTED T HAT 25% OF THE CAPITAL BALANCE TO THE EXTENT OF ` 11,06,623/- MAY BE FROM AGRICULTURAL INCOME. THEREFORE, THE ASSESSING OFFI CER HAS NOT DOUBTED THE CULTIVATION IN TOTO. AT THE SAME TIME, THE ASS ESSING OFFICER HAS NO BASIS FOR RESTRICTING THE CLAIM AT 25%. WHEN THE ASSESSEE HAS PRODUCED THE CERTIFICATE FROM THE VILLAGE ADMINISTR ATIVE OFFICER, THE ASSESSING OFFICER MIGHT HAVE EXAMINED THE VILLAGE A DMINISTRATIVE OFFICER AFTER CALLING FOR THE RELEVANT RECORDS FROM HIM. UNFORTUNATELY, NO SUCH EXERCISE WAS DONE BY THE ASSESSING OFFICER. IN THOSE FACTUAL CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT RESTRICTING THE AGRICULTURAL INCOME AT 25% IS NOT J USTIFIED. BY TAKING ITA NO. 12/15 :- 5 -: INTO CONSIDERATION THE COPIES OF THE AGREEMENTS FOR TAKING THE LANDS ON LEASE AND CERTIFICATE GIVEN BY THE VILLAGE ADMINIST RATIVE OFFICER, THE ESTIMATION MADE BY THE ASSESSING OFFICER IN THE ASS ESSMENT ORDER IS NOT JUSTIFIED. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ESTIMATING THE AGRICULTURAL INCOME AT 50% OF THE OP ENING CAPITAL BALANCE WOULD MEET THE ENDS OF JUSTICE. ACCORDINGL Y, THE ORDERS OF THE LOWER AUTHORITIES ARE MODIFIED AND THE ASSESSING OF FICER IS DIRECTED TO TAKE 50% OF THE OPENING CAPITAL BALANCE OF ` 44,26,495/- AS INCOME FROM AGRICULTURE. THE REMAINING 50% SHALL BE TREAT ED AS INCOME FROM BUSINESS. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST APRIL, 2016, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 1 ST APRIL, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF