Shri T Kishore Kumar, Hyderabad V. Dy.CIT, Central Circle - 2, Hyderabad

ITA 1363/HYD/2014

• Counselvise Citation: 136322514 RSA 2014
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 28-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Gift; Search and seizure; Additional evidence
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1362/HYD/2014 A.Y. 2004-05 ITA NO. 1363/HYD/2014 A.Y. 2005-06 SRI T. KISHORE KUMAR HYDERABAD PAN: ACXPT3615P VS. THE DEPUTY CIT CENTRAL CIRCLE-2 HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI K.A. SAI PRASAD RESPONDENT BY: SRI RAMAKRISHNA BANDI DATE OF HEARING: 02 .1 2 .2014 DATE OF PRONOUNCEMENT: 24. 12.2014 O R D E R PER ASHA VIJAYARAGHAVAN, JM: THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF THE CIT(A)-I, HYDERABAD DATED 23.05.2014 FOR A.YS. 2004-05 AND 2005-06. 2. FACTS OF THE CASE ARE THAT THE ASSESSEE AN INDIVIDU AL IS A PARTNER IN M/S. ADITYA HOSPITAL, HYDERABAD. F OR THE A.YS. 2004-05 AND 2005-06 HE DID NOT FILE ANY REGUL AR RETURN OF INCOME. OPERATIONS U/S. 132 OF INCOME-TA X ACT, 1961 WERE CONDUCTED ON 25.03.2010 IN THE CASE OF AD ITYA HOSPITAL. IN THE LIGHT OF THE SAID SEARCH PROCEEDI NGS NOTICES U/S. 153C WERE ISSUED ON 27.09.2011. IN RE SPONSE TO THE SAID NOTICE THE ASSESSEE FILED ON 25.11.2011 HIS RETURN OF INCOME ADMITTING NIL TAXABLE INCOME. HE CLAIMED ITA NOS. 1362 & 1363/HYD/2014 SRI T. KISHORE KUMAR ========================== 2 NET AGRICULTURAL INCOME OF RS. 10,57,768 FOR A.Y. 2 004-05 AND RS. 7,41,439 FOR A.Y. 2005-06. 3. THE ASSESSEE DID NOT FILE REGULAR RETURN OF INCOME FOR ASSESSMENT YEARS UNDER CONSIDERATION. OPERATION U/S. 132 WAS CONDUCTED ON 25-3-2010 IN THE CASE OF ADITY A HOSPITALS. IN LIGHT OF THE INFORMATION FOUND RELATI NG TO THE ASSESSEE IN THE COURSE OF SEARCH PROCEEDINGS, NOTIC ES U/S. 153C WERE ISSUED TO THE ASSESSEE, IN RESPONSE TO WH ICH, HE FILED HIS RETURNS OF INCOME DECLARING 'NIL' INCO ME FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION AND AGRICULTURAL INCOME OF RS. 10,57,768 FOR A.Y. 2004- 05 AND RS. 7,41,439 FOR A.Y. 2005-06. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED CERT AIN RECEIPTS FOR SALE OF AGRICULTURAL PRODUCE WHICH INC LUDED COCONUT, GRAPES AND MANGOES, BUT HE DID NOT PRODUCE ANY EVIDENCE FOR EXPENDITURE THROUGHOUT THE YEAR IN THE ABSENCE OF FULL DOCUMENTARY EVIDENCES REGARDING THE ENTIRE AGRICULTURAL INCOME AND EXPENSES INCURRED ON AGRICULTURAL ACTIVITIES, THE ASSESSING OFFICER REJE CTED 50% OF THE CLAIM OF AGRICULTURAL INCOME AND TREATED A S UM OF RS. 5,28,880 IN THE A.Y. YEAR 2004-05 AND RS. 3,70,720 IN THE A.Y. 2005-06 AS INCOME FROM OTHER SOURCES. 4. AGGRIEVED THE ASSESSEE HAS RAISED THE FOLLOWING COMMON GROUND FOR BOTH THE YEARS BEFORE THE CIT(A) : 'THE ASSESSING OFFICER IS NOT CORRECT IN TREATING 50% OF THE AGRICULTURAL INCOME AMOUNTING TO RS. 5,28,800 IN THE A.Y. 2004-05 AND RS. 3,70,720 IN THE A.Y. 2005-06 AS INCOME FROM OTHER SOURCES IGNORING THE EVIDENCES FILED.' ITA NOS. 1362 & 1363/HYD/2014 SRI T. KISHORE KUMAR ========================== 3 5. DURING THE COURSE OF APPEAL PROCEEDINGS, THE AR OF THE ASSESSEE FURNISHED COMPUTATION OF TOTAL INCOME AND AGRICULTURAL RECEIPTS FOR A.YS. 2004-05 AND 2005-06 . HE CONTENDED THAT THE ASSESSEE HAS EARNED AGRICULTURAL INCOME FROM GRAPE, MANGO ARCADE AND COCONUT TREES F ROM 22 ACRES IN SY. 151 & 153 AT SRINAGAR VILLAGE, MAHE SH- WARAM MANDAL, R.R. DISTRICT. IN SUPPORT OF HIS CLAI M, HE FILED RECEIPTS OF AGRICULTURAL MARKET COMMITTEE, HYDERABAD FOR BOTH THE YEARS UNDER CONSIDERATION. 6. THE CIT(A) OBSERVED THAT IN THE RETURN OF INCOME, AGRICULTURAL INCOME OF RS. 10,52,768/- AND RS. 7,41 ,439 FOR A.YS. 2004-05 AND 2005-06 RESPECTIVELY WITH A NOTE THAT THE AGRICULTURAL INCOME IS FROM GRAPE AND MANGO ARCADE AND COCONUT TREES FROM 22 ACRES IN MAHESHWARAM MANDAL, R.R. DISTRICT HAS BEEN FURNISHED BY THE ASSESSEE. THE C IT(A) ALSO NOTED THAT THE ASSESSEE DID NOT FILE ANY REGUL AR RETURN OF INCOME BUT ONLY FILED A RETURN U/S. 153C OF THE ACT AFTER THERE HAS BEEN A SEARCH AND SEIZURE OPERATION U/S. 132 IN CONNECTION WITH SEARCH AND SEIZURE OPERATION IN ADI TYA HOSPITALS, IN WHICH THE ASSESSEE IS A PARTNER. THE CIT(A) VERIFIED THE DETAILS/EVIDENCES FILED. THE CIT(A) NO TED THAT THE ASSESSING OFFICER DID NOT DISPUTE THE FACT THAT THE ASSESSEE HAD RECEIVED AGRICULTURAL INCOME AND HE HA S ONLY RESTRICTED THE CLAIM OF INCOME BEING AGRICULTURAL T O 50% IN ABSENCE OF FULL DOCUMENTARY EVIDENCES AND TREATED T HE REMAINING 50% AS INCOME FROM OTHER SOURCES. BESIDES , THE ASSESSEE HAS NOT GIVEN ANY DETAILS OF EXPENDITURE I NCURRED FOR GETTING THAT KIND OF AGRICULTURAL INCOME. THE C IT(A) OBSERVED THAT THE ASSESSEE HAS FILED ONLY INCOME DE TAILS PARTLY, BUT NOT ANY EXPENDITURE DETAILS. THE CIT(A) FURTHER OBSERVED THAT THERE HAS BEEN NO REGULAR RETURN FILE D TO ESTABLISH THAT THE CLAIM MADE BY THE ASSESSEE IS GE NUINE ITA NOS. 1362 & 1363/HYD/2014 SRI T. KISHORE KUMAR ========================== 4 AND WHATEVER AGRICULTURAL INCOME OFFERED WAS IN RES PONSE TO NOTICE U/S. 153C WHICH GOES TO SHOW THAT THE ASSESSEE HAS TRIED TO TAKE ADVANTAGE OF THE SITUATI ON BY CLAIMING MORE AGRICULTURAL INCOME WITHOUT ANY SUPPO RTING EVIDENCES. THE CIT(A) CONCLUDED THAT THE ENTIRE CLA IM OF AGRICULTURAL INCOME CANNOT BE ACCEPTED AND DISALLOW ANCE OF 50% OF CLAIM AS INCOME FROM OTHER SOURCES, MADE BY THE ASSESSING OFFICER, IS JUSTIFIED. ACCORDINGLY, THE CIT(A) UPHELD THE DISALLOWANCES MADE BY THE ASSESSING OFFI CER FOR BOTH THE ASSESSMENT YEARS. 7. AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSESSEE PREFERRED THE ABOVE APPEALS BEFORE US. 8. THE LEARNED COUNSEL FOR THE ASSESSEE SRI K.A. SAI PRASAD FILED ADDITIONAL GROUND AS FOLLOWS: 'IN AN ASSESSMENT U/S. 153C THERE IS NO SCOPE FOR GENERAL DISALLOWANCES AND OTHER ADDITIONS WITHOUT ANY REFERENCE TO THE SEIZED MATERIAL.' 9. HOWEVER, THE ASSESSEE REQUESTED THE BENCH TO PERMIT HIM TO WITHDRAW THE ABOVE ADDITIONAL GROUND. ACCORDINGLY, THIS ADDITIONAL GROUND IS DISMISSED BE ING WITHDRAWN. 10. THE LEARNED COUNSEL ALSO FILED SOME ADDITIONAL EVIDENCE BY WAY OF PAPER BOOK CONTAINING COPY OF STATEMENT OF AGRICULTURAL RECEIPTS FOR A.Y. 2004-05 AT PAGE 3 AND COPY OF AGRICULTURAL RECEIPTS FOR A.Y. 2005-0 6 AT PAGE 6 OF THE PAPER BOOK. THE LEARNED COUNSEL ARGUED TH AT THE ASSESSEE HAS BEEN CARRYING ON THE AGRICULTURAL OPER ATIONS FOR MAINTAINING GRAPE AND MANGO ORCHARDS AND COCONU T TREES AND HAD OBTAINED AGRICULTURAL INCOME FROM THE A.Y. 2001-02 ONWARDS AND GAVE THE PARTICULARS AS BELOW: ITA NOS. 1362 & 1363/HYD/2014 SRI T. KISHORE KUMAR ========================== 5 ASSESSMENT YEAR GROSS AGRI. INCOME (RS.) AGRI. EXPENSES INCURRED (RS.) NET AGRI. INCOME (RS.) 2001-02 1066150 392505 693645 2002-03 1199894 416590 783304 2003-04 1027053 392127 834926 2004-05 1271630 218862 1052768 2005-06 1031152 289713 741439 11. IT WAS ALSO SUBMITTED THAT THE LIFE OF THE GRAPE GARDEN IS GENERALLY 10 TO 12 YEARS AND YIELD IS VER Y PROFITABLE. IT WAS ALSO STATED THAT AGRICULTURAL L ANDS WERE GIFTED BY ASSESSEE'S MOTHER DR. E. ADI LAKSHMI WHO WAS ASSESSED TO TAX WITH DCIT, CIRCLE-5(1), HYDERABAD A ND SHE HAD BEEN GETTING AGRICULTURAL INCOME FROM A.Y. 1992 -93 WHICH SHE HAD BEEN DECLARING IN HER INCOME-TAX RETU RN. THE LEARNED COUNSEL STATED THAT THE LOWER AUTHORITI ES HAD STATED THAT THE ASSESSEE FILED ONLY DETAILS OF INCO ME BUT NOT THE DETAILS OF EXPENSES WHICH IS INCORRECT AS THE A SSESSEE HAS DECLARED NET AGRICULTURAL INCOME WHICH HAS ACCR UED TO HIM WHICH MEANS THAT THE EXPENDITURE HAD ALREADY BE EN TAKEN INTO ACCOUNT THAT IS TO SAY THAT IT IS ONLY T HE NET INCOME FROM AGRICULTURE DECLARED BY THE ASSESSEE. 12. THE LEARNED DR, ON THE OTHER HAND, STATED THAT THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE IS ON HIGHER SIDE CONSIDERING THAT THE REGION WHERE THE LAND IS SITUATED IS NOT VERY FERTILE AND IT IS ONLY AN ARID REGION. 13. WE HAVE HEARD BOTH THE PARTIES. WE HAVE GONE THROUGH THE RECORD AND FIND THAT THE NET AGRICULTUR AL INCOME FROM A.Y. 2001-02 TO 2005-06 HAS BEEN SUBSTA NTIAL IN THE CASE OF THE ASSESSEE AS STATED IN THE CHART, AT PARA 10 OF THIS ORDER. FURTHER, EARNING OF AGRICULTURAL INCOME HAS NOT BEEN DOUBTED BY THE LOWER AUTHORITIES. THE CIT(A) ALSO STATED THAT THE ASSESSEE FILED RECEIPTS OF AGR ICULTURAL ITA NOS. 1362 & 1363/HYD/2014 SRI T. KISHORE KUMAR ========================== 6 MARKETING COMMITTEE, HYDERABAD FOR BOTH THE YEARS U NDER CONSIDERATION AT PARA 5 OF HIS ORDER. ADDITIONAL E VIDENCE GIVEN BY THE ASSESSEE AT PAGE 3 OF THE PAPER BOOK I S REPRODUCED HEREUNDER: AGRICULTURAL RECEIPTS FOR A.Y. 2004-05 S. NO. RT. NO. DATE RT. NO. AMOUNT (RS.) 1. 94735 15/3/2004 806 58751 2. 94727 17/3/2004 948 59025 3. 94726 19/3/2004 948 60014 4. 80548 20/3/2004 806 19234 5. 94725 21/3/2004 948 62566 6. 94740 22/3/2004 948 61386 7. 94741 24/3/2004 948 62447 8. 80589 25/3/2004 806 18274 9. 94742 25/3/2004 948 66502 10. 94743 27/3/2004 948 64069 11. 94744 29/3/2004 948 61636 12. 80591 30/3/2004 806 9700 13. 94745 31/3/2004 948 62646 TOTAL 666250 14. FOR ASSESSMENT YEAR 2005-07 HAS ALSO BEEN REPRODUCED BELOW: AGRICULTURAL RECEIPTS FOR A.Y. 2004-05 S. NO. RT. NO. DATE RT. NO. AMOUNT (RS.) 1. 94746 1/4/2004 948 66895 2. 94752 3/4/2004 948 41751 3. 94747 3/4/2004 948 66502 4. 94748 5/4/2004 948 68286 5. 94749 6/4/2004 948 37997 6. 94751 8/4/2004 948 48450 7. 94750 11/4/2004 948 53170 8. 454940 10/2/2005 4550 54694 9. 454942 15/2/2005 4550 44915 10. 454944 20/2/2005 4550 42151 11. 454945 23/2/2005 4550 47333 12. 454947 26/3/2005 4550 50193 13. 454948 1/3/2005 4550 48024 14. 454950 5/3/2005 4550 50765 15. 454951 9/3/2005 4550 50230 ITA NOS. 1362 & 1363/HYD/2014 SRI T. KISHORE KUMAR ========================== 7 16. 335279 12/3/2005 3353 39353 17. 438599 12/3/2005 4386 53510 18. 454928 13/3/2005 4550 60750 19. 335280 15/3/2005 3353 48825 20. 335274 15/3/2005 3353 24200 21. 454931 15/3/2005 4550 36610 22. 454913 18/3/2005 4550 48700 23. 454935 19/3/2005 4550 46830 24. 335276 20/3/2005 3353 23200 25. 454934 21/3/2005 4550 41000 26. 454932 27/3/2005 4550 56850 27. 454937 29/3/2005 4550 50320 28. 454938 30/3/2005 4550 36010 TOTAL 1337513 15. FROM THE ABOVE RECEIPTS OF AGRICULTURAL INCOME, WE FIND THAT THE ASSESSEE IS HAVING SUFFICIENT AGRICUL TURAL INCOME AND HAS STATED THE SAME IN THE RETURN. ON T HIS ISSUE, WE MAY CLARIFY THAT THE ASSESSEE AT THE REQU EST OF THE BENCH POINTED OUT THAT THE RECEIPTS AT PAGE 3 A RE ONLY UP TO MARCH 2004 AND IN THE SUBSEQUENT ASSESSMENT Y EAR I.E., A.Y. 2005-06 RECEIPTS ARE FROM APRIL TO 30.3. 2005. HENCE THE RECEIPTS FOR BOTH THE A.YS. 2004-05 AND 2 005-06 HAVE TO BE TAKEN TOGETHER AND THE TOTAL INCOME DECL ARED BY THE ASSESSEE IN THE RETURNS FOR A.YS. 2004-05 AND 2 005-06 AMOUNTING TO RS. 10,57,768 AND RS. 7,41,439 HAVE BE EN PRODUCED. THEREFORE, WE ARE OF THE OPINION THAT TH E ASSESSEE HAS SATISFACTORILY DISCHARGED HIS ONUS OF (1) HOLDING OF AGRICULTURAL LAND WHICH HAS BEEN GIFTED FROM HIS MOTHER DR. ADI LAKSHMI, (2) INCOME FROM THE SAID LA ND FROM GRAPE AND MANGO ORCHARDS AND COCONUT TREES WHICH HA S ACCRUED FROM THE A.Y. 2001-02 AND EVEN FROM AN EARL IER PERIOD IN HANDS OF HIS MOTHER AND (3) THE NET AGRI CULTURAL INCOME HAS BEEN ARRIVED AT SUPPORTED BY AGRICULTURA L RECEIPTS WHICH HAVE BEEN ENLISTED AT PAGES 3 AND 6 OF THE PAPER BOOK FOR A.YS. 2004-05 AND 2005-06, RESPECTIV ELY. THE OVERALL RECEIPTS FOR THE TWO YEARS PUT TOGETHER ADD UP TO THE INCOME RETURNED BY THE ASSESSEE. ITA NOS. 1362 & 1363/HYD/2014 SRI T. KISHORE KUMAR ========================== 8 16. IN THESE CIRCUMSTANCES, DISALLOWANCE OF 50% OF THE CLAIM, HOLDING THE SAME TO BE INCOME FROM OTHER SOU RCES BY THE CIT(A), IS NOT JUSTIFIED. 17. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 24 TH DECEMBER, 2014. SD/ - (P.M. JAGTAP) ACCOUNTANT MEMBER SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD, DATED 24 TH DECEMBER, 2014 TPRAO COPY FORWARDED TO: 1. SRI T. K I SHORE KUMAR, C/O. M/S. CH. PARTHASARATHY & CO., 1-1-298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, ST. NO. 1, ASHOKNAGAR, HYDERABAD-500 020. 2. THE DEPUTY CIT, CENTRAL CIRCLE - 2, HYDERABAD. 3. THE CIT(A) - I , HYDERABAD . 4. THE CIT (CENTRAL) , HYDERABAD . 5. THE DR 'A' BENCH, ITAT, HYDERABAD