OLEANDER FARMS P. LTD, NAVI MUMBAI V. ITO 10(3)(4), MUMBAI

ITA 1504/MUM/2010

• Counselvise Citation: 150419914 RSA 2010
• Duration Of Justice: 4 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-12-2013
• Assessment Year: 1996-1997
• Appeal Filed On: 25-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: MRS SANJUKTA CHOWDHURY
• Keywords: Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI R.C SHARMA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 1504/MUM/2010 ASSESSMENT YEAR: 1996-97 M/S. OLEANDER FARMS PVT. LTD D-73/1, TTC INDUSTRIAL AREA, MIDC TURBHE, NAVI MUMBAI- 400 705 VS. ITO-10(3)(4) MUMBAI (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :-AAACO 6556 G ASSESSEE BY : SHRI PRAMOD KUMAR PARIDA & MRS. SANJUKTA CHOWDHURY REVENUE BY : SHRI M. L. PERUMAL DATE OF HEARING : 03.04.2014 DATE OF PRONOUNCEMENT : 22.04.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD.CIT(A)-22, MUMBAI DATED 01.10.2010 CONFIRMING TH E PENALTY OF RS.5,98,000/- LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME-TAX AC T FOR THE ASSESSMENT YEAR 1996- 97. 2. BRIEFLY STATED, THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT UNDER CONSIDERATION DECLARING A LOSS OF RS.1,52,476 /-. THE SOURCES OF INCOME SHOWN BY THE ASSESSEE WERE (I) INTEREST ON LOANS RS. 58,5 50/-, (II) INCOME FROM LEASE AND HIRE PRUCHASE RS. 2,227/-, (III) INCOME FROM TRADI NG IN INVESTMENTS RS. 11,357/- (IV) INTEREST ON DEBENTURES RS. 44,975/- AND (V) INCREAS E IN STOCK RS. 10,05,005/-. IN ADDITION, THE ASSESSEE HAD SHOWN A GROSS RECEIPT OF RS.1,05,67,691/- FROM AGRICULTURE AND A NET PROFIT OF RS.49,47,180/- FROM THE SAME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT EMERGED THAT THE ASSESSE E CARRIED OUT AGRICULTURAL ACTIVITIES IN THE FORM OF GROWING DIFFERENT KINDS O F FLOWERS, VEGETABLES AND MUSHROOM ITA NO. 1504/MUM/2010 M/S. OLEANDER FARMS PVT. LTD ASSESSMENT YEAR: 1996-97 2 IN AROUND 40 ACRES OF LEASED LAND AT KARJAT AND ABO UT 10 TO 12 ACRES OF LAND AT TALEGAON AND ACCORDING TO THE ASSESSEE THESE ACTIVI TIES RESULTED IN PRODUCTION AND SALE OF THESE PRODUCTS TO THE EXTENT OF RS.1,05,67, 691/-. AFTER HARVEST, THE DETAILS OF PRODUCE OF EACH ITEM WAS ENTERED IN A DAILY OPERATI ONS REGISTER AT THE FARM, AFTER WHICH THE GOODS WERE TRANSPORTED TO THE ASSESSEES HEAD OFFICE AT D-73/1 TTC INDUSTRIAL AREA, TURBHE, NAVI MUMBAI ALONG WITH DEL IVERY CHALLANS. FROM THE ASSESSMENT ORDER, IT IS SEEN THAT DURING THE COURSE OF SURVEY U/S 133 ON 17.2.1999, THE AO MADE AN ADDITION OF RS. 40 LAKHS AND THE SAI D ADDITION WAS MADE ON THE BASIS OF STATEMENT OF SHRI VIREN AHUJA, DIRECTOR OF THE ASSESSEE COMPANY. ON APPEAL AGAINST THE ASSESSMENT ORDER, THE LD.CIT(A) NOTED T HAT THE BASIS OF ADDITION WAS ASSESSEES INABILITY TO PRODUCE THE COMPLETE DELIVE RY CHALLANS AND SALES VOUCHERS TO SUBSTANTIATE THE DEPOSITS IN ITS BANK ACCOUNT OF CA SH, STATED TO BE REALIZATION FROM SALES OF AGRICULTURAL PRODUCE. THE LD.CIT(A) FURTHE R NOTED THAT THE AO HAD NOT BROUGHT ON RECORD ANY FACTS SUPPORTED BY DOCUMENTAR Y EVIDENCE, TO ESTABLISH THAT THE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESS EE WERE NOT FROM ANY OTHER SOURCE EXCEPT SALE OF AGRICULTURAL PRODUCE. ACCORDI NGLY, THE LD.CIT(A) SUSTAINED THE ADDITION OF RS. 13 LAKHS BECAUSE OF THE REASON THAT THE ASSESSEE HIMSELF HAD PAID TAX OF RS. 10 LAKHS WHICH INCLUDES INTEREST ALSO. I N THE APPEAL FILED BY THE REVENUE BEFORE THE TRIBUNAL AGAINST THE DECISION OF THE LD. CIT(A) DELETING THE ADDITION OF RS 27 LAKHS, MADE BY THE AO, THE TRIBUNAL DISMISSED TH E APPEAL AND SUSTAINED THE SAID DELETION. IN VIEW OF THE ADDITION OF RS. 13 LAKHS S USTAINED IN THE QUANTUM PROCEEDINGS, THE AO INITIATED PENALTY PROCEEDINGS U /S 271(1)(C) AND CONSEQUENTLY LEVIED A PENALTY OF RS. RS.5,98,000/-, WHICH WAS UP HELD BY THE LD.CIT(A). AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE IS IN APPEAL BE FORE US. 3. BEFORE US, THE LD.AR OF THE ASSESSEE HAS RELIED ON THE DECISIONS OF THE TRIBUNAL IN THE CASES OF ACIT VS. INDICA EXPORT 129 TTJ (DEL) 269, ACIT VS. MALU ELECTRICALS P. LTD. 127 TTJ (NAG) 599 AND SMT. RAJRANI MITTAL VS. ITO (2010) 360 SOT 47 (DEL) TO SUPPORT THE CLAIM OF THE ASSESSEE THAT THE CAS E DOES NOT ATTRACT THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AND THUS PRAYED THAT THE LEVY OF PENALTY CONFIRMED BY THE LD.CIT(A) OUGHT TO BE DELETED. ON THE OTHER HAND, THE LD.DR HAS STATED THAT THE CONFIRMING OF THE LEVY OF PENALTY B Y THE LD.CIT(A) IS JUSTIFIED AND THE ITA NO. 1504/MUM/2010 M/S. OLEANDER FARMS PVT. LTD ASSESSMENT YEAR: 1996-97 3 VOLUNTARY DISCLOSURE DURING THE SURVEY CANNOT ABSOL VE THE ASSESSEE FROM THE RIGOR OF PENALTY PROCEEDINGS. IN THIS CONNECTION, THE LD.DR HAS RELIED ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF MAK DATA P. LTD. VS. CIT (2013) 358 ITR 593 (SC). 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD. IT IS NOT DISPUTED THAT THE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE AMOUNTING RS.1,05,67,691/- ARE NOT FROM ANY OTHER SOURCE EXCE PT SALE OF AGRICULTURAL PRODUCE. ALSO, THERE IS NOTHING ON RECORD TO ESTABLISH THAT THE ASSESSEE HAS EARNED THE INCOME FROM ANY OTHER SOURCE. THE PERUSAL OF THE AP PELLATE ORDERS IN THE QUANTUM PROCEEDINGS INDICATES THAT THE BASIS OF ADDITION IS THE ASSESSEES INABILITY TO PRODUCE THE COMPLETE DELIVERY CHALLANS AND SALES VOUCHERS T O SUBSTANTIATE THE DEPOSITS IN ITS BANK ACCOUNT OF CASH, STATED TO BE REALIZATION FROM SALES OF AGRICULTURAL PRODUCE. IT IS ALSO SEEN THAT IT IS NOT THE CASE OF THE DEPARTMENT THAT THE AMOUNT SURRENDERED BY THE ASSESSEE HAS BEEN FOUND INVESTED IN SOME OTHER ASSETS OR IS FOUND IN CASH. THE ADDITION OF RS. 13 LAKHS HAS BEEN SUSTAINED IN THE QUANTUM PROCEEDINGS BECAUSE OF THE REASON THAT THE ASSESSEE HIMSELF HAS PAID TAX O F RS. 10 LAKHS WHICH INCLUDES THE INTEREST ALSO. CONSIDERING THE SAID FACTS, WE ARE O F THE CONSIDERED OPINION THAT THE ASSESSEE HAS NEITHER FURNISHED ANY INACCURATE PARTI CULARS NOR CONCEALED THE INCOME FOR THE PURPOSE OF INVOKING SECTION 271(1)(C) OF TH E ACT. IN VIEW OF THAT MATTER, THE IMPUGNED PENALTY SUSTAINED BY THE LD.CIT(A) STANDS DELETED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF APRIL, 2014. SD/- SD/- (R.C. SHARMA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.04.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.