Rughani Vrajlal Jadavji (HUF), Veraval V. The Income Tax Officer, Ward-1(4), RAJKOT-GUJARAT

ITA 136/RJT/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2363 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 24-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K CHAKRAVARTYSR
• Assessee Lawyers: RANJIT LALCHANDANI
• Keywords: Business income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] , ! , ! #$ BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.136/RJT/2014 ( / ASSESSMENT YEAR : 2008-09) SHRI RAGHANI VRAJLAL JADAVJI- HUF BUNDAR ROAD VERAVAL 362 265 / VS. THE ITO WAR-1(4) VERAVAL !) ./ ./ PAN/GIR NO. AACHR 1797 P ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+. / APPELLANT BY : SHRI RANJIT LALCHANDANI, ADV. ,-)+/. / RESPONDENT BY : SHRI V.K.CHAKRAVARTY,SR.D.R. 0/ / DATE OF HEARING 29/12/2015 12 / / DATE OF PRONOUNCEMENT 20/01/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-IV, RAJKOT [CIT(A) IN SHORT] DATED 02/01/2014 PERTAINING TO ASSESSMENT Y EAR (AY) 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- ITA NO.136 /RJT /2014 SHRI RUGHANI VRAJLAL JADAVJI-HUF VS. ITO ASST.YEAR 2008-09 - 2 - 1. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THE INCOME FROM SELLING OF AMBA KALAM WAS INCOME FROM BUSINESS AND NOT THE AGRICULTURAL INCOME. THE APPELLANT SUBMITS THAT THE INCOME FROM SELLING OF AMBA KALAMS WAS AGRICULTURAL INCOME. THE COMMISSIONER OF INCOME TAX (APPEALS) WAS THEREF ORE NOT JUSTIFIED IN DETERMINING THE INCOME FROM SALE OF AM BA KALAMS AMOUNTING TO RS.842608/- AND ERRED IN HOLDING THAT THE SAID AMOUNT WAS TAXABLE UNDER INCOME TAX ACT. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN U PHOLDING THAT CHARGING INTEREST U/S.234A AMOUNTING TO RS.9090/- I S JUSTIFIED. THE CHARGING OF INTEREST U/S.234A IS UNWARRANTED AND UN JUSTIFIED. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN U PHOLDING THAT CHARGING INTEREST IS UNWARRANTED AND UNJUSTIFIED. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN U PHOLDING THAT CHARGING INTEREST U/S.234C AMOUNTING TO RS.12953/-. CHARGING OF INTEREST U/S.234C IS UNWARRANTED AND UNJUSTIFIED. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 08/12/2010, THEREBY THE ASSESSING OFFICER (AO IN SHORT) HAS TRE ATED THE INCOME ARISING OUT OF SELLING OF AMBA KALAM A S BUSINESS INCOME IN RESPECT OF AGRICULTURAL INCOME AS CLAIMED BY THE AS SESSEE. THE ASSESSEE BEING AGGRIEVED BY THE ASSESSMENT ORDER, PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. GROUND NO.1 IS AGAINST TREATING THE PAYMENT RECE IVED FROM SELLING OF AMBA KALAM AS BUSINESS RECEIPTS IN RESPECT OF AGRICULTURAL INCOME. ITA NO.136 /RJT /2014 SHRI RUGHANI VRAJLAL JADAVJI-HUF VS. ITO ASST.YEAR 2008-09 - 3 - THE LD.COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED T HAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN TREATING THE AMOUNT REC EIVED FROM SELLING OF AMBA KALAM AS BUSINESS RECEIPTS. HE SUBMITTED TH AT THE AUTHORITIES BELOW OUGHT TO HAVE ALLOWED THE SAME AS AGRICULTURA L INCOME. THE LD.COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSI ONS AS WERE MADE BEFORE THE LD.CIT(A). TO BUTTRESS THE CONTENTIONS THAT THE AO WAS NOT JUSTIFIED IN TREATING THE PAYMENT RECEIVED FROM SEL LING OF AMBA KALAM AS BUSINESS RECEIPTS IN RESPECT OF AGRICULTURAL INC OME. THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE JUDGEMENT O F HONBLE HIGH COURT OF MADRAS RENDERED IN THE CASE OF CIT VS. SOUNDARYA NURSERY REPORTED AT 241 ITR 530 (MAD.). 3.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE EXPLANATION-3 TO SECTI ON 2(1A) BY THE FINANCE ACT, 2008, W.E.F. 01/04/2009, THE INCOME DE RIVED FROM SALE OF SAPLINGS AND SEEDLINGS SHALL BE DEEMED TO BE AGRICU LTURAL INCOME. PRIOR TO THIS, SUCH RECEIPTS WERE TREATED AS BUSINESS REC EIPTS. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGEMENT RELIED UPON BY THE LD.COUN SEL FOR THE ASSESSEE. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT IN THE EARLIER ASSESSMENT YEARS, THE AO HAD ALLOWED THE CLAIM OF THE ASSESSEE BEING AGRICULTURAL INCOME SINCE THERE WAS SOME AMBIGUITY WITH REGARD T O CHARGING OF TAX, SAME HAS BEEN CLARIFIED BY WAY OF EXPLANATION-3 TO SECTION 2(1A) OF THE ITA NO.136 /RJT /2014 SHRI RUGHANI VRAJLAL JADAVJI-HUF VS. ITO ASST.YEAR 2008-09 - 4 - ACT. UNDER THE IDENTICAL FACTS, THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF CIT VS. SOUNDARYA NURSERY (SUPRA) HELD THAT THE INCOME FROM THE SALE OF PLANTS GROWN IN POTS AND THE SALE OF SEEDS DERIVED ON ACCOUNT OF CULTIVATION BY THE ASSESSEE WAS AGRICULTURAL INCOME . THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE H ONBLE HIGH COURT OF MADRAS IN THE CASE OF CIT VS. SOUNDARYA NURSERY(SUP RA), WE HEREBY DIRECT THE AO TO TREAT THE AMOUNT RECEIVED ON SELLI NG OF AMBA KALAM AS AGRICULTURAL INCOME. EVEN PRIOR TO THE AY 2008-09, THE HONBLE HIGH COURT OF MADRAS HAD HELD THAT THE INCOME FROM SALE OF PLANTS GROWN IN POTS AND THE SALE OF SEEDS DERIVED ON ACCOUNT OF CU LTIVATION BY THE ASSESSEE WAS AGRICULTURAL INCOME. THUS, GROUND NO. 1 OF ASSESSEES APPEAL IS ALLOWED. 5. GROUND NO.2 TO 4 ARE CONSEQUENTIAL IN NATURE AND HELD ACCORDINGLY. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 20 TH DAY OF JANUARY, 2016 AT AHMEDABAD. SD/- SD/- ( ) ( ) ! ! ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/ 01 /2016 . .,.. ./ T.C. NAIR, SR. PS ITA NO.136 /RJT /2014 SHRI RUGHANI VRAJLAL JADAVJI-HUF VS. ITO ASST.YEAR 2008-09 - 5 - / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 6 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-IV, RAJKOT 5. 9:, , , /DR,ITAT,RAJKOT 6. :EFG0 / GUARD FILE. / BY ORDER, -9, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) & ' , / ITAT, RAJKOT 1. DATE OF DICTATION 12.1.16 (DICTATION-PAD 7 - P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 13.1.16 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 20.1.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20.1.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER