Shri Ajay T.Patel,HUF, Surat V. The Income tax Officer,Ward-3(2), Surat

ITA 153/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9118 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 17-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMIR VAKIL
• Keywords: Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

,, IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.153/AHD/2014 ( / ASSESSMENT YEAR : 2008-09) AJAY T.PATEL (HUF) 704, SHIVAM APARTMENT RANDER ROAD SURAT-395 009 / VS. THE INCOME TAX OFFICER WARD-3(2) SURAT $ ./ ./ PAN/GIR NO. : AAIHA 4404 L ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI M.K. PATEL, AR ($'*) / RESPONDENT BY : SHRI SAMIR VAKIL, SR.DR +,*- / DATE OF HEARING 23/02/2017 ./0*- / DATE OF PRONOUNCEMENT 01/03/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV, SURAT [CIT( A) IN SHORT] DATED 25/10/2013 FOR THE ASSESSMENT YEAR (AY) 20 08-09 IN THE MATTER OF ASSESSMENT UNDER S.143(30 R.W.S. 147 OF THE OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT'). 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER:- ITA NO.153/AHD/ 2014 AJAY T.PATEL (HUF) VS. ITO ASST.YEAR 2008-09 - 2 - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF THE INCOME TAX (APEPALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN DISALLOWING THE PAYMENT OF NA CHARGES OF RS.4,11,421/- AND CONSIDER ING THE SAME AS UNEXPLAINED INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF THE INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN CONSIDERING THE AGRICULTURE INCOME OF RS.2,90,780/- (INSTATED OF RS .2,07,700/-) AS UNEXPLAINED INCOME. 3. BRIEFLY STATED, THE ASSESSEE CLAIMS TO BE EXCLUS IVELY ENGAGED IN THE AGRICULTURAL ACTIVITY FOR QUITE SOME TIME. DURING THE SCRUTINY ASSESSMENT FOR AY 2008-09, IT WAS NOTICED BY THE ASSESSING OFF ICER (AO) THAT THE ASSESSEE-HUF ALONG WITH THREE OTHER HUF AS CO-OWNER S EACH HAVING 25% SHARES HAVE SOLD NON-AGRICULTURAL (NA) LAND. T HE ASSESSEE ALONG WITH OTHER CO-OWNERS WAS FOUND TO HAVE BEEN INCURRE D EXPENSES OF RS.16,45,686/- ON ACCOUNT OF NA CHARGES. THE SHARE OF EXPENSES IN THE HANDS OF THE ASSESSEE WAS FOUND TO BE RS.4,11,421/- . THE AO ALSO INTER-ALIA NOTED THAT THE ASSESSEE HAS SHOWN NET AG RICULTURAL INCOME OF RS.2,07,700/- ONLY AND THE GROSS AGRICULTURAL INCOM E WAS NOT SHOWN IN THE RETURN OF INCOME. THE AO OBSERVED THAT THE AG RICULTURAL INCOME HAS NOT BEEN SUBSTANTIATED AND THE EVIDENCE FILED IN SU PPORT OF THE INCOME DISCLOSED SUFFERS FROM PATENT INFIRMITIES AS SPECI FIED IN THE ASSESSMENT ORDER. THE AO ALSO QUESTIONED THE SOURCE OF NA CHA RGES OF ITA NO.153/AHD/ 2014 AJAY T.PATEL (HUF) VS. ITO ASST.YEAR 2008-09 - 3 - RS.4,11,421/- AND TREATED THE SAME AS UNEXPLAINED. THE LD.AR SUBMITTED THAT THE NA CHARGES WERE PAID FROM THE AC CUMULATED AGRICULTURAL INCOME SINCE THE YEAR 1990. THE AGRIC ULTURAL INCOME DURING THE YEAR 2008-09 STOOD AT RS.2,07,700/-. THE RELEV ANT COPIES OF 7/12 EXTRACT INDICATING THAT THE ASSESSEE WAS AGRICULTUR IST, CASH MEMOS FOR SALE OF VEGETABLES, AS ALSO CASH FLOW AND THE CAPITAL AC COUNT WERE FURNISHED TO THE LEARNED ITO DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, THE AO REFUSED TO APPRECIATE THE EVIDENCES IN PERSPECTIVE AND PROCEED TO DISALLOW NA CHARGES AS OF RS.4,11,421/- AS UNEXPLAI NED INCOME AND ALSO MADE ADDITION ON ACCOUNT OF ALLEGED AGRICULTURAL IN COME OF RS.2,90,780/- (GROSS) AS UNEXPLAINED INCOME. THE LD.AR FURTHER A DDED THAT SIMILAR ISSUE AROSE IN THE HANDS OF OTHER HUF NAMELY, AJAY T.PATEL (HUF) VS. ITO IN ITA NO.2329/AHD/2012 FOR AY 2006-07, ORDER D ATED 31/01/2017. 5. THE LD.DR ON THE OTHER HAND, RELIED ON THE ORDER OF THE CIT(A). 6. WE HAVE PERUSED THE RECORDS AS WELL AS THE DECIS ION OF THE COORDINATE BENCH IN THE CASE OF AJAY T.PATEL (HUF) [SUPRA]. THE COORDINATE BENCH HAS SET ASIDE THE MATTER TO THE FI LE OF THE CIT(A) FOR DE NOVO ADJUDICATION. THE RELEVANT PART OF THE ORDER IS R EPRODUCED HEREUNDER:- 2. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, LE ARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THERE IS NO DISPUTE T HAT THE ASSESSEE DID ITA NO.153/AHD/ 2014 AJAY T.PATEL (HUF) VS. ITO ASST.YEAR 2008-09 - 4 - OWN THE AGRICULTURAL LAND BUT THE INCOME DECLARED B Y THE ASSESSEE HAS BEEN REJECTED ON THE GROUND THAT AGRICULTURAL INCOM E, AS DISCLOSED, HAS NOT BEEN SUBSTANTIATED AND THE EVIDENCE FILED IN SU PPORT OF THE INCOME DISCLOSED SUFFERS FROM PATENT INFIRMITIES. HE SUBMI TS THAT WHAT HAS BEEN MISSED OUT IS THAT ADMITTEDLY THE ASSESSEE DOES OWN THE AGRICULTURAL LAND, AND EVEN IF THE INCOME SHOWN BY THE ASSESSEE IS REJECTED AS NOT SUPPORTED BY ACCEPTABLE EVIDENCE, AGRICULTURAL INCO ME IS TO BE ESTIMATED NEVERTHELESS ON SOME REASONABLE BASIS. LE ARNED COUNSEL PRAYS THAT THE MATTER BE RESTORED TO THE FILE OF TH E CIT(A) FOR THIS PURPOSES, AND FOR RE-ADJUDICATION IN LIGHT OF HIS F INDINGS ON ESTIMATED INCOME FROM AGRICULTURAL SOURCES. THAT IS THE SHORT POINT PRESSED BY THE LEARNED COUNSEL. 3. LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY SUBMI TS THAT EVEN IF AGRICULTURAL INCOME, AS SHOWN BY THE ASSESSEE, IS T O BE REJECTED, THERE HAS TO BE AN ESTIMATION OF INCOME FROM THE AGRICULT URAL LAND OWNED BY THE ASSESSEE, AND HE DOES NOT OBJECT TO THE MATTER BEING REMITTED TO THE FILE OF THE CIT(A) FOR THIS PURPOSE. 4. IN VIEW OF THE ABOVE DISCUSSIONS, I DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF LEARNED CIT(A) FOR ADJUDICATI ON DE-NOVO IN THE LIGHT OF THE ABOVE OBSERVATIONS. WHILE DOING SO, LEARNED CIT(A) WILL GIVE A FRESH OPPORTUNITY OF HEARING TO THE ASSESSEE AND SH ALL TAKE INTO ACCOUNT SUCH SUBMISSIONS AS THE ASSESSEE MAY MAKE IN THE RE MANDED PROCEEDINGS AND DECIDE THE MATTER IN ACCORDANCE WIT H LAW AND BY WAY OF A SPEAKING ORDER. I ORDER ACCORDINGLY. 7. FOLLOWING THE PARITY OF REASONING, WE CONSIDER I T EXPEDIENT THAT BOTH THE DISALLOWANCE/CONDITIONS MADE AS NOTED ABOV E ALSO REQUIRES TO BE REVISITED DE NOVO BY THE AO IN ACCORDANCE WITH LAW AFTER GRANTING PR OPER OPPORTUNITY OF HEARING OF THE ASSESSEE. ITA NO.153/AHD/ 2014 AJAY T.PATEL (HUF) VS. ITO ASST.YEAR 2008-09 - 5 - 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. THIS ORDER PRONOUNCED IN OPEN COURT ON 01/ 03/2017 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 01/ 03 /2017 4..+,.+../ T.C. NAIR, SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-IV, SURAT 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 27.2.17 (DICTATION-PAD 9- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23.2.17 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.1.3.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 1.3.17 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