Arvindbhai Dhanjibhai Togadia, Vadodara V. The ITO, Ward-5(2), [Present jurisdiction with ITO, Ward-3(1)(2)], Vadodara

ITA 1268/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8507 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAURABH SINGH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ARVINDBHAI DHANJIBHAI TOGADIA, PROP SHREE GEETA BATTERY SERVICES, AB/46, RBG COMPLEX, BAHUCHRAJ ROAD, KARELIBAUG, VADODARA - 390018 PAN: AAVPT5766F (APPELLANT) VS THE ITO, WARD - 5(2), VADODARA (PRESENT JURISDIC TION WITH ITO, WARD - 3(1)(2), BARODA VADODARA - 390007 (RESPONDENT) REVENUE BY : S H RI SAURABH SINGH , SR. D . R. ASSESSEE BY: S H RI SAKAR SHARMA , A.R. DATE OF HEARING : 27 - 03 - 2 018 DATE OF PRONOUNCEMENT : 19 - 04 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2009 - 10 , ARIS ES FROM ORDER OF THE CIT(A) - 3, VADODARA DATED 01 - 03 - 2016 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE AS SESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING ADDITION OF RS. 7,24,728/ - ON ACCOUNT OF ALLEGED UNEXPLAINED AGRICULTURAL EXPENDITURE. 2. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN C ONFIRMING ADDITION OF RS. 3,95,538/ - ON ACCOUNT OF UNDISCLOSED INTEREST EARNED ON FIXED DEPOSITS MADE WITH BANKS. I T A NO . 1268 / A HD/20 16 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 1268 /AHD/20 16 A.Y. 2009 - 10 PAGE NO ARVINDBHAI DHA NJIBHAI TOGADIA VS. ITO 2 3. BRIEF FACT OF THE CASE IS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS NOT DI SCLOSED HIS BANK A/C MAINTAINED WITH CO - OPERATIVE BANK OF RAJKOT LTD. ON SCRUTINY, THE ASSESSEE HAS STATED THAT THIS BANK A/C HAS NOT BEEN DISCLOSED EITHER IN THE RETURN OF INCOME OF THE ASSESSEE OR IN THE RETURN OF INCOME OF HIS WIFE OR IN THE RETURN OF INCOME OF HIS MOTHER. ON PERUSAL OF THE BANK A/C., THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS DEPOSITED CASH OF RS. 2 6,98,000/ - ON DIFFERENT DATES F R O M 18 TH APRIL, 2008 TO 21 ST MARCH, 2009 AS MENTIONED AT PAGE 3 OF THE ASSESSMENT ORDER. THE ASSE SSEE WAS ASKED TO EXPLAIN SOURCE CASH DEPOSIT ED IN THE SAVING BANK A/C MAINTAINED WITH THE CO - OP. BANK OF RAJKOT. THE ASSESSEE STATED THAT THE SOURCE OF CASH IS FROM AGRICULTURAL INCOME .T HE ASSESSEE HAS GIVEN DETAIL OF AGRICULTURAL LAND HOLDING AS MENTI ONED AT PAGE 3 OF THE ASSESSMENT ORDER. THE ASSESSEE HAS ALSO FURNISHED COPY OF STATEMENT FROM SHRI SANATHALI JUTH SEVA SAHAKARI MANDALI LTD., RAJKOT DATED 2 ND MARCH , 2009 SHOWING THAT THE MANDALI HAS PAID RS. 26 , 87 , 322/ - TO T HE ASSESSEE FOR SALE OF CO TTON ON 6 TH JUNE, 2008. HOWEVER, ON PERUSAL OF THE STATEMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS RECEIVED RS. 12 , 62 , 594/ - ON BEHALF OF OTHER AGRICULTURISTS WHOSE CROPS WERE SOLD THROUGH THE MANDALI IN THE NAME OF THE ASSESSEE. THEREFORE, TH E ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAS RECEIVED GROSS AGRICULTURAL INCOME OF RS. 14,2 4 , 728/ - ONLY ( RS. 26 , 8 7,322 - RS. 12 ,62, 594/ - ). THE ASSESSING OFFICER HAS FURTHER NOTICED THAT IT IS ALSO EVIDENT FROM THE BANK STATEMENT OF THE CO - OPERATIV E B ANK OF RAJKOT THAT ASSESSEE HAS WITHDRAWN AN AMOUNT OF RS. 15,64,000/ - ON VARIOUS DATES. HE FURTHER STATED THAT THE WITHDRAWAL OF AMOUNT S FROM THE B ANK MAKE IT CLEAR THAT ASSESSEE HAS RETURNED THE AMOUNT TO THE PARTIES WHOSE GO O D S W ERE SOLD IN THE NAME OF THE ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER WORKED OUT THE AGRICULTURAL RECEIPT OF THE ASSESSE TO THE AMOUNT OF R S . 14 , 24 , 728/ - ONLY. THEREAFTER THE ASSESSING OFFICER HAS COMPUTED AGRICULTURAL EXPENSES OF 50% OF THE AGRICULTURAL INCOME TO THE AM OUNT OF RS. 7 , 12 , 364/ - AND HELD THAT THE NET AGRICULTURAL INCOME COMES TO I.T.A NO. 1268 /AHD/20 16 A.Y. 2009 - 10 PAGE NO ARVINDBHAI DHA NJIBHAI TOGADIA VS. ITO 3 RS. 7 , 12 , 364/ - WHICH IS NOT DISCLOSED IN THE RETURN OF INCOME. CONSEQUENTLY T HE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. T HE ASSESSE HAS SUBMITTED THAT THE AGRICULTURAL INCOME WAS INVESTED IN THE NAME OF HIS MOTHER TO EARN HIGHER INTEREST . THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS RECEIVED ON MATURITY OF FD R AN AMOUNT OF RS. 35 , 19 , 804/ - AND MADE A NEW FD R OF RS. 46 , 57 , 000/ - WITH CO - OP BANK OF RAJKOT LTD. THE ASSES SING OFFICER OBSERVED THAT ASSESSEE HAS INVESTED RS . 46,55,000/ - IN FDR IN THE NAME OF HIS MOTHER OUT OF HIS ACCUMULATED AGRICULTURAL INCOME BUT THE ASSESSEE HAS NOT DISCLOSED ANY INTEREST INCOME RECEIVED FROM FDR WITH CO - OP BANK OF RAJKOT LTD. IN HIS RET URN OF INCOME. THEREFORE , THE ASSESSING OFFICER COMPUTED INTEREST @ 10.50% ON THE OVERALL BALANCE OF FDR OF RS. 40, 87,402/ - (OPENING BALANCE OF RS. 35 , 19 , 804/ - + CLOSING BALANCE OF R.S. 46 , 55 , 000/ 2 - ) WHICH COMES TO RS. 4 , 29 , 177/ - AND ADDED TO THE TOTAL INCOME OF THE ASSESSE. 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). IN RESPECT OF ESTIMAT ION O F AGRICULTURAL INCOME OF RS. 7,24,728/ - , THE LD. CIT(A) HAS SUSTAINED THE ADDITION BY STATING THAT ON FAILURE OF THE ASSESSEE TO FURNISH ANY SUP PORTING DOCUMENTARY EVIDENCE ESTIMATION OF AGRICULTURAL INCOME TO THE EXTENT OF RS. 7,24,728/ - CAN BE SAID TO BE VERY REASONABLE. THE LD. CIT(A) HAS RESTRICTED THE ADDITION ON INTEREST INCOME TO THE AMOUNT OF RS. 3,85,538/ - AS AGAINST RS. 4,29,177/ - ON THE GROUND THAT NET INTEREST RECEIVED BY HIM ON MATUR E OF FDR AND A CCRUED ON NEW FDR DURING THE YEAR UNDER CONSIDERAT ION WORKED OUT TO RS. 82,084/ - AND RS. 3,13,454/ - RESPECTIVELY AS CERTIFIED BY THE BANK. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED T HE MATERIAL ON RECORD CAREFULLY. REGARDING ADDITION OF RS. 7 , 24 , 728/ - ON ACCOUNT OF UNEXPLAINED AGRICULTURAL EXPENDITURE ON THE BASIS OF UNDISCLOSED BANK A/C THE ASSESSING OFFICER HAS CONFRONTED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSITED . I.T.A NO. 1268 /AHD/20 16 A.Y. 2009 - 10 PAGE NO ARVINDBHAI DHA NJIBHAI TOGADIA VS. ITO 4 THE ASSESSEE EXPLAINED THAT THE SOURCE OF CASH DEPOSIT WAS FROM AGRICULTURAL INCOME. THE AGRICULTURAL INCOME WAS COMPUTED TO THE AMOUNT OF 7 , 24 , 728/ - ON THE BASIS OF SUPPORTING MATERIAL AS SUPRA IN THIS ORDER AND THE ASSESSEE FAILED TO DISPROVE THE SA ME WITH ANY CONTRARY EVIDENCES. THE ASSESSING OFFICER HAS CONSIDERED 50% OF THE AGRICULTURAL RECEIPT AS AGRICULTURAL EXPENDITURE TO BE INCURRED TOWARDS AGRICULTURAL ACTIVITIES. THE AGRICULTURAL EXPENDITURE IS INCURRED FOR CARRYING OUT AGRICULTURAL OPER ATIONS LIKE REMOVAL OF UNABSORBED INGROWTH OTHER OPERATION AND FOR USE OF FERTILIZER AND PESTICIDE ETC. FOR PROPER GROWTH OF AGRICULTURAL PRODUCE. WE OBSERVE THAT 50% DISALLOWANCE OF AGRICULTURAL RECEIPT AS AGRICULTURAL EXPENDITURE IS ON HIGHER SIDE AFT ER TAKING CONSIDERATION THE KINDS OF CROP CULTIVATED BY THE ASSESSEE W E ARE OF THE VIEW THAT EXPENDITURE TO THE EXTENT OF 33% OF THE AGRICULTURAL RECEIPT IN THE CASE OF THE ASSESSEE FOR CARRYING OUT AGRICULTURAL ACTIVITIES WOULD BE REASONABLE AMOUNT. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE OF AGRICULTURA L EXPENDITURE TO 1/3 OF AGRICULTURAL RECEIPT INSTEAD OF O F AGRICULTURAL RECEIPT . IN THE RESULT , T HE APPEAL OF THE ASSESSE IS PARTLY ALLOWED ON THIS ISSUE. 6. REGAR DING UNDISCLOSED INTEREST INCOME EARNED ON FDR TO THE AMOUNT OF RS. 385,538/ - WE CONSIDER THAT LD. CIT(A) HAS CORRECTLY SUSTAINED THIS ADDITION WHICH IS SPECIFICALLY BASED ON THE EVIDENCE S IN THE FORM OF CERTIFICATE ISSUED BY BANK WHICH SPECIFIED THAT AS SESSEE HAS RECEIVED INTEREST INCOME O F RS . 3,8 5 , 538/ - ON THE FDR. THEREFORE , WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE AND THE SAME IS DISMISSED. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 19 - 04 - 201 8 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER I.T.A NO. 1268 /AHD/20 16 A.Y. 2009 - 10 PAGE NO ARVINDBHAI DHA NJIBHAI TOGADIA VS. ITO 5 AHMEDABAD : DATED 19 /04 /2018 / C OPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,