Shri Sureshbhai Raghubhai Patel, Valsad V. The Income Tax Officer, Ward-3, Vapi

ITA 1597/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9653 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-11-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 05-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LALA PHILIPS
• Keywords: Income from undisclosed sources
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE S/SHRI RAJPAL YADAV, JM, & MANISH BORAD, AM. ITA NO.1597/AHD/2015 ASST. YEAR: 2011-12 SHRI SURESHBHAI RAGHUBHAI PATEL, KANKADI FALIA, AT & POST- GOVADA, UMBERGAON DIST. VALSAD. VS. INCOME-TAX OFFICER, WARD-3, VAPI. APPELLANT RESPONDENT PAN ARZPP 4354B APPELLANT BY NONE RESPONDENT BY MR. LALA PHILIPS, SR.DR DATE OF HEARING: 16/11/2015 DATE OF PRONOUNCEMENT: 05/02/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A), VALSAD, DATED 18.03.2015 IN APPEAL NO.CIT(A )/VLS/216/13- 14, FOR ASST. YEAR 2011-12. ASSESSMENT WAS FRAMED U/S 143(3) OF THE I.T. ACT, 1961 (IN SHORT THE ACT) BY ITO, WARD- 3, VAPI ON 27.12.2013. ASSESSEE HAS RAISED FOLLOWING GROUNDS O F APPEAL :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT (A) VALSAD HAS ERRED IN LAW AND ON FACTS TO SUSTAIN ADDITION O F RS.2,07,121/- ON ACCOUNT OF ALLEGED AGRICULTURAL EXPENSES INCURRE D FOR EARNING OF AGRICULTURAL INCOME IGNORING THE FACT THAT THE A PPELLANTS IS HAVING ONLY AGRICULTURE INCOME APART FROM MERGER IN TEREST INCOME OF RS.55,551/-. ITA NO. 1597/AHD/2015 ASST. YEAR 2001-12 2 2. ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A), VALSAD HAS ERRED IN SUSTAINING ADDITION OF RS.20,231/- BEING D IFFERENCE IN TOTAL OF GROSS AGRICULTURE INCOME ON THE BASIS OF D ETAILS FILED BEFORE THE AO AND AGRICULTURE INCOME SHOWN IN ROI. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE WHO I S AN INDIVIDUAL HAVING MAIN SOURCE OF INCOME FROM AGRICULTURAL ACTI VITIES FILED HIS RETURN OF INCOME ON 5.7.2011 DECLARING TOTAL INCOME AT RS.55,551/- AND AGRICULTURAL INCOME AT RS.20,91,440/-. CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE U/S 143 (2) OF THE ACT WAS ISSUED ON 3..8.2012 AND DULY SERVED UPON THE ASSESS EE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS EARNED GROSS AGRICULTURAL INCOME AT RS .20,71,209/- WHEREAS IN THE RETURN OF INCOME IT HAS BEEN SHOWN A T RS. .20,91,440/- RESULTING IN EXCESS AMOUNT SHOWN BY RS.20,231/-. AS SESSING OFFICER ALSO OBSERVED THAT ASSESSEE HAS NOT SHOWN ANY EXPEN DITURE WHICH IS USUALLY INCURRED FOR EARNING AGRICULTURAL INCOME AN D THE TOTAL GROSS RECEIPTS FROM SALE OF AGRICULTURAL PRODUCE HAS BEEN SHOWN AS AGRICULTURAL INCOME. DURING ASSESSMENT PROCEEDINGS ASSESSEE SUO MOTO ACCEPTED THAT 10% OF THE GROSS RECEIPTS CAN BE CONSIDERED AS AN EXPENDITURE FOR EARNING AGRICULTURAL INCOME BUT ASSESSING OFFICER FRAMED THE ASSESSMENT ORDER BY ESTIMATING 20% OF GR OSS AGRICULTURAL SALES OF RS.20,71,209/- CALCULATING AT RS.4,14,242/ - AS EXPENDITURE FOR EARNING AGRICULTURAL INCOME AND ACCORDINGLY ADD ED TO THE RETURNED INCOME OF THE ASSESSEE AS UNACCOUNTED INCOME. ASSES SMENT WAS FRAMED BY ASSESSING THE INCOME AT RS.4,93,024/- BY MAKING ADDITION OF RS. 23,231/- FOR EXCESS AGRICULTURAL SALE (HOWEV ER, CORRECT FIGURE IS RS.20,231/- WHICH WAS LATER ON GIVEN EFFECT IN THE CIT(A)S ORDER) AND ITA NO. 1597/AHD/2015 ASST. YEAR 2001-12 3 ADDITION OF RS.4.14,242/- FOR UNACCOUNTED EXPENSES TOWARDS AGRICULTURAL ACTIVITIES. 3. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE CIT(A) WHO SUSTAINED THE ADDITION OF RS..23,231/- AND REDUCED THE ADDITION OF RS.4,14,242/- TO THE EXTENT OF RS.2,07,121/- BY RED UCING THE EXPENDITURE ESTIMATED BY ASSESSING OFFICER @ 10% WH EREAS ASSESSING OFFICER HAS MADE ADDITION BY DISALLOWING 20% OF AGRICULTURAL SALE. 4. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE, THEREF ORE, PROCEED TO DISPOSE OF THIS APPEAL AFTER HEARING THE SUBMISSION S OF LD. DR AND CONSIDERING THE MATERIAL PLACED ON RECORD. 5. GROUND NO.1 IS AGAINST THE ACTION OF CIT(A) FOR SUSTAINING ADDITION OF RS.2,07,121/- ON ACCOUNT OF ALLEGED AGR ICULTURAL EXPENDITURE INCURRED FOR AGRICULTURAL INCOME. WE FI ND THAT LD. CIT(A) HAS MADE FOLLOWING OBSERVATIONS IN RELATION TO THIS GROUND WHICH READS AS UNDER : IN REGARD TO THE SECOND ADDITION THE AR OF THE APP ELLANT SUBMITTED THAT THE SO CALLED DISALLOWANCE MADE BY T HE ASSESSING OFFICER @ 20% OF THE TOTAL AGRICULTURE IN COME ON AD HOC BASIS IS NOT CALLED FOR BECAUSE IT HAS ALREADY BEEN TAKEN CARE OF. IN SUPPORT OF IT HE SUBMITTED SOME PHOTO C OPIES OF THE BILLS ALONG WITH THE DETAILS OF SALES MADE. I HAVE CONSIDERED THE ITA NO. 1597/AHD/2015 ASST. YEAR 2001-12 4 SUBMISSIONS AND FIND THAT THE APPELLANT HAVE TAKEN TWO STANDS ON THIS ISSUE. IN THE ASSESSMENT PROCEEDINGS HE HAS AGREED TO THE AD HOC DISALLOWANCE OF 10% BEING THE EXPENSES I NCURRED FOR EARNING AGRICULTURE INCOME. NOW DURING THE APPE LLATE PROCEEDINGS HE IS CLAIMING THAT ALL THE EXPENSES HA S ALREADY BEEN TAKEN CARE OF AND THERE IS NO NEED OF AD HOC DISALLOWANCE. AFTER CONSIDERING THE SUBMISSIONS OF THE AR OF THE APPELLANT AS WELL AS THE FACTS STATED IN THE AS SESSMENT ORDER I AM OF THE CONSIDERED OPINION THAT THE EVIDE NCES PRODUCED DURING THE APPELLATE PROCEEDINGS WERE NEIT HER CLAIMED TO BE EXISTING NOR PRODUCED BEFORE THE ASSE SSING OFFICER. MOREOVER HE HAS ALREADY AGREED FOR THE DIS ALLOWANCE OF 10% TOWARDS EXPENSES DEEMED TO HAVE BEEN INCURRED F OR EARNING AGRICULTURE INCOME. KEEPING IN VIEW THE ENT IRETY OF CIRCUMSTANCES AS WELL AS SOME BILLS OF EXPENSES PRO DUCED, I FEEL THAT THE AD HOC DISALLOWANCE @ 10% AS AGREED B Y THE APPELLANT WILL BE SUFFICIENT TO MEET THE ENDS OF JU STICE. THEREFORE, ADDITION MADE BY THE ASSESSING OFFICER A T RS.4,14,242/- IS UPHELD TO THE EXTENT OF RS.2,07,12 1/-. HENCE THE GROUND OF APPEAL OF THE APPELLANT IS ALLOWED TO THIS EXTENT. 6. WE HAVE ALSO EXAMINED THE PAPER BOOK SUBMITTED B Y THE ASSESSEE ON 8.9.2015. DURING THE COURSE OF APPELLAT E PROCEEDINGS BEFORE CIT(A) ASSESSEE HAS REFERRED TO SALE BILLS O F AGRICULTURAL PRODUCE WHEREIN APPROXIMATE 10% OF THE SALES PROCEE DINGS WAS REDUCED AND THE BALANCE WAS GRANTED TO THE ASSESSEE . ASSESSEE HAS SUBMITTED THAT THIS 10% WAS TOWARDS DEDUCTION FOR E XPENDITURE. ITA NO. 1597/AHD/2015 ASST. YEAR 2001-12 5 HOWEVER, AFTER EXAMINING THE RECORD WE FIND THAT TH IS DEDUCTION OF APPROXIMATE 10% IS ON ACCOUNT OF COMMISSION, WEIGHI NG CHARGES, LABOUR CHARGES ETC. WHICH ARE INCURRED FOR SELLING AGRICULTURAL PRODUCE. ON THE CONTRARY THE EXPENSES WHICH THE ASSESSING OF FICER WAS REFERRING THERETO DURING THE ASSESSMENT PROCEEDINGS WAS IN RELATION TO EXPENSES INCURRED AS EXPENDITURE ON SEEDS, PESTI CIDES, IRRIGATION EXPENDITURE, LABOUR EXPENSES, ELECTRICITY CHARGES F OR HARVESTING ETC. THERE IS NO MATERIAL AVAILABLE ON RECORD GIVING DET AILS OF SUCH EXPENSES WHICH ARE MANDATORILY REQUIRED FOR EARNING AGRICULTURAL INCOME. THEREFORE, THERE IS NO WEIGHTAGE IN THE SUB MISSIONS OF ASSESSEE THROUGH HIS PAPER BOOK THAT THE EXPENSES F OR EARNING AGRICULTURAL INCOME WAS ALREADY DEDUCTED FROM THE G ROSS AMOUNT OF SALE PROCEEDS. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) WHO HAS ALREADY GRANTED REL IEF TO THE ASSESSEE BY REDUCING THE ADDITION FROM 20% TO 10% AS EXPENDI TURE ON GROSS SALES OF AGRICULTURAL PRODUCE. THIS GROUND IS DISMI SSED. 7. GROUND NO.2 IS IN REGARD TO VARIATION IN SALE PR OCEEDS SHOWN IN THE RETURN OF INCOME AT RS.20,91,440/- VIS--VIS GR OSS AGRICULTURAL INCOME OF RS.20,71,209/-. FROM GOING THROUGH THE RE CORDS AND THE ORDERS OF LOWER AUTHORITIES, THERE IS NO DISPUTE TO THIS EFFECT THAT ASSESSEES MAIN SOURCE OF INCOME IS FROM AGRICULTUR E AND THE GROSS SALE PROCEEDS ARE RS.20,71,209/-. THEREFORE, WE DEE M IT APPROPRIATE TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT THERE WAS ARITHMETICAL MISTAKE IN MAKING THE TOTAL OF AGRICULTURAL SALES F OR THE YEAR AND, WE THEREFORE, DELETE THIS ADDITION OF RS.20,231/-. THI S GROUND IS ALLOWED. ITA NO. 1597/AHD/2015 ASST. YEAR 2001-12 6 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH FEBRUARY, 2016 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 05/02/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 21/01/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 04/02/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 5/2/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: